Supreme Court Upholds Auction Sale, Holding Deposit Timeline Under Rule 107(11)(h) Is Directory and Can Be Waived by Creditor Bank

Case Name: M/s. Adishakti Developers v. The State of Maharashtra & Ors. (with connected appeals)
Citation: 2026 INSC 197
Date of Judgment/Order: 25 February 2026
Bench: Hon’ble Mr. Justice Manoj Misra, and Hon’ble Mr. Justice Pamidighantam Sri Narasimha

Held: The Supreme Court held that non-deposit of the entire auction amount within the 15-day period stipulated under Rule 107(11)(h) of the Maharashtra Co-operative Societies Rules, 1961 does not automatically render the auction sale void where the creditor bank, for whose benefit the condition exists, accepts the payment without objection, and that such requirement is directory and capable of waiver; the Court further held that once the recovery certificate and ex parte award attained finality, the property of the judgment-debtor was amenable to attachment and sale, and the revisional jurisdiction under Section 154 of the Maharashtra Co-operative Societies Act, 1960 could not be invoked to nullify a concluded auction sale in the facts of the case.

Summary: The case arose out of an auction conducted to recover dues of Mahanagar Co-operative Bank from M/s. Borse Brothers pursuant to an ex parte award passed by the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960, followed by issuance of a recovery certificate; the property of one of the partners, Panditrao Borse, was attached and auctioned, and M/s. Adishakti Developers emerged as the highest bidder, paid the auction amount in instalments accepted by the Bank, and obtained confirmation of sale, possession, and registered conveyance; nearly four years later, the legal representatives of Panditrao Borse filed a revision under Section 154 challenging the auction on the ground that the entire sale consideration was not deposited within 15 days as required by Rule 107(11)(h), and the Joint Registrar set aside the sale, which order was affirmed by the High Court; the Supreme Court examined the scope of Section 154, the interplay with Rule 107 remedies, the finality of the award and recovery certificate, the object of the 15-day deposit requirement, and the doctrine of waiver, and concluded that the stipulation was intended to safeguard the creditor’s interest, that the Bank having accepted the full amount without protest effectively waived strict compliance, and that the auction could not be annulled on a technical infraction when no prejudice was demonstrated.

Decision: The Supreme Court allowed the civil appeals, set aside the common judgment and order dated 26.03.2018 of the High Court of Judicature at Bombay as well as the revisional order cancelling the auction sale, upheld the validity of the auction, confirmation, and conveyance in favour of M/s. Adishakti Developers, and granted consequential reliefs restoring the auction purchaser’s rights, with connected matters disposed of accordingly.