1. Petitioners along with their son availed credit facilities from the respondent bank. On default being committed, the bank initiated proceedings under Section 69 of the Kerala Co-operative Societies Act, 1969 and obtained eleven separate Awards determining the liability of the petitioners. On the Awards being put to execution, the property, that was mortgaged to secure the repayment of the loans was sold in auction and was purchased by the 6th respondent. The property having an extent of 23.5 Cents along with a building was sold for a sum of Rs.25,00,000/- (Rupees Twenty five lakhs only). Since the amount received by the bank was insufficient to clear the entire liability, another property of the petitioners has also been attached.

2. The learned counsel appearing for the petitioners would submit that though the sale has been confirmed , no sale certificate has been issued so far. It is submitted that the sale held in the month of July- 2025 has to be set aside on a short ground. It is submitted that no reserve price was fixed in the sale notification and going by the law laid down by this Court in Haridasan K.B. Vs. Palliyakkal Service Cooperative Bank (Ltd) No.2232; 2022 KHC 1063 , the same cannot be sustained in law. The learned counsel for the petitioner would also submit that the property was clearly worth at least Rs.85 lakhs and the property was sold much below the market value.

3. The learned counsel appearing for the 1st respondent bank submits that a proper valuation was conducted before bringing the property to sale. It is submitted that the property was sold above the price fixed in the valuation. The learned counsel referred to Ext.R1(a) valuation report in this regard, which values the property that was sold at Rs.10,20,000/-. It is submitted that since proper valuation was conducted before the property was sold, the petitioners cannot be prejudiced by the fact that no reserve price was fixed in the sale notification. It is submitted that the 6th respondent has remitted the entire amount payable by him and the auction purchaser may be put to great prejudice, if the sale is set aside by this Court.

4. The learned counsel appearing for the 6th respondent has also made submissions in tune with the submissions made by the learned counsel appearing for the 1st respondent bank. He contends that if at all this Court is inclined to set aside the sale, 6th respondent is to be reasonably compensated.

5. The learned counsel appearing for the petitioners then submits that if the petitioners are given four months time, the petitioners will be in a position to clear the liability by arranging for private sale of the mortgaged property.

6. Having heard the learned counsel appearing for the petitioner, the learned counsel appearing for the 1st respondent bank and the learned counsel appearing for the 6th respondent , I am of the view that the sale, which is impugned in the writ petition has to be set aside on the short ground that the sale was conducted without publishing the reserve price in the sale notification. In Haridasan K.B.(supra), this Court held as follows:-

                  ‘’2. It is submitted that under Rule 81(e) of the Kerala Cooperative Societies Rules, 1969 (the Rules for short), there is a requirement that the publication should also be done by beating of tom tom, which according to the petitioner has not been done in the case on hand. Another violation pointed out is that under Rule 81(e) (iv) of the Rules, there is a requirement that the sale notification states about every other matter which the Sale Officer considers material for a purchaser to know in order to judge the nature and value of the property. The petitioner submits that neither was a valuation done nor was any reserve price fixed before the sale and these aspects are evident from the sale notification which does not speak about any such reserve price or valuation of the property that is sought to be sold. His submission is that one of the most material aspect which has to be stated is the approximate value of the property that is sought to be sold and the same is missing in the sale notification. Reliance is placed on the judgment of this Court in Peoples Urban Co-op. Bank Ltd. V. Mohanan reported in (1992 KHC 437) to submit that non-compliance with Rule 81(e) of the Rules cannot be considered to be a mere irregularity to be ignored and that the proclamation of sale has to be published by the beat of tom tom which is mandatory. The petitioner also relies on the decision in Antony P.X. V. State of Kerala and Others reported in (2017 (3) KLT 39), wherein this Court held that even though there is no imperative stipulation against sale of the entire property, reading of proviso to Rule 85 clearly demonstrates that, so far as may be practicable, no larger section of immovable property shall be sold than what would be sufficient to discharge the amount due with interest and expenses of attachment, if any, and sale. This Court had considered the effect of Rules 81(e) and 85 in the said decision to arrive at the conclusion mentioned above. This Court also held that the principles contained in Order XXI Rule 64 of the Code of Civil Procedure applies to the sale proceedings carried out by Cooperative Societies. In Sosamma John V. Thrissur Co-operative Agricultural & Rural Development Bank and Others reported in (2018 (2) KHC 498), this Court was dealing with the sale under the Kerala State Co-operative Agricultural and Rural Development Bank Rules, 1986. This Court held that when sale of the mortgaged property is carried out even without fixing a fair and accurate value of that property, the sale is liable to be set aside. Rule 8(e) of the Kerala State Co-operative Agricultural and Rural Development Bank Rules is similar to Rule 81(e) of the Kerala Co-operative Societies Rules, when it comes to the requirement of a proclamation of sale. This Court found that sub-clause (iv) of Clause (e) of Rule 8 of the said Rules is in pari materia with sub-rule (2) of Rule 66 of Order XXI of the Code of Civil Procedure, 1908, as per which the proclamation shall be drawn up as fairly and accurately as possible and Clause (e) of sub-rule (2) mandates that every other thing which the Court considers material for a purchaser to know, in order to judge the nature and value of the property shall be included in the proclamation notice. Rule 11 of the Rules is similar to Rule 85 of the Kerala Co-operative Societies Rules, whereby it is prescribed that only that portion of the mortgaged property which will be required to meet the amount due need be sold. The facts in Sosamma John (supra) are also more or less similar to the one on hand. This Court after considering the entire law on the subject, set aside the sale notice and directed issuance of fresh sale notice after complying with the mandate of the provisions under sub-clause (iv) of Clause (e) of Rule 8 and sub-rule (1) of Rule 11 of the Rules, after fixing a fair and accurate value of the mortgaged property and taking a decision as to whether sale of a portion of the said property is sufficient to satisfy the amounts due. It was also directed that the decision should be taken with notice to the petitioner before the Court and the creditor Bank and after affording them an opportunity of being heard. The Hon'ble Supreme Court has in the decision in Tech Invest India (P) Ltd. v. Assam Power & Electricals Ltd. reported in [(2016) 1 SCC 704] and Ram Kishun & Ors. V. State of UP & Ors. reported in [(2012) 11 SCC 511] held that fixing of a reserve price is a requirement in a public auction. A similar view has been taken in Shri Ambadevi Sanstha V. Joint Charity Commissioner reported in [(2019) 17 SCC 419].’’

                  Therefore, the sale which has been held without publishing the reserve price cannot be sustained in law.

7. However, I am of the opinion that the 6th respondent is right in contending that the 6th respondent is entitled to be compensated as he is an innocent purchaser for value and he had paid the entire amount payable by him in the month of July-2025. When a sale is set aside on in terms of the provisions contained in Rule 82 of the Co-operative Societies Rules, 1969, a sum equivalent to 5% of the purchase money has to be paid to the auction purchaser.

8. Taking a cue from the above provision, I am of the view that the 6th respondent will be reasonably compensated, if the petitioners are directed to pay a sum equivalent to 7% of the sum of Rs.25 lakhs within a period of one month from today, directly to the 6th respondent.

9. In the light of the above, this writ petition is allowed in the manner indicated below:-

(i) The sale of the property of the 2nd petitioner in favour of the 6th respondent to recover the amounts due to the 1st respondent bank will stand set aside subject to the condition that the petitioners pay to the 6th respondent a sum equivalent to 7% of the sum of Rs.25,00,000/- (Rupees Twenty five lakhs only), within a period of one month from today;

(ii) The petitioners shall be given four months time from today to arrange for private sale of the mortgaged property;

(iii) If the petitioners are able to identify a purchaser for the property in a manner that would clear the entire liability due to the 1st respondent, the bank shall give permission for sale of the property subject to the condition that the entire amount due to the bank is deposited directly to the bank by the proposed purchaser;

(iv) If the petitioners fail to identify a purchaser for the property in the manner indicated above, the respondent bank is at liberty to continue with the proceedings initiated to recover the amounts due to the bank.

(v) The attachment obtained by the bank over any other property of the petitioners will continue till the entire liability is cleared. The writ petition is ordered accordingly.