Bombay High Court
Mittal Precision Steel Tubes P Ltd vs Asst. Commissioner Of Income Tax, ... on 6 April, 2021
Author: R. D. Dhanuka
Bench: R. D. Dhanuka, V. G. Bisht
bdp
1/12
wpst-97464.20 & 12560.19.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION (STAMP) NO. 97464 OF 2020
WITH
WRIT PETITION (STAMP) NO. 12560 OF 2019
Mr. Balu Santu Borade,
Age 48 years, Occupation Farming
Having his address at -
Borade Mala, Ganesh Nagar,
Near Saptashshrungi Mandir,
Pimpalgaon Khamb,
Dist. Nashik - 422 010. ... Petitioner
Versus
1. Nashik Agricultural Produce Market
Committee Nashik
Dindori Road, Market Yard, Panchawati,
Nashik.
2. The District Deputy Registrar,
Office of the District Dy. Registrar,
Nashik.
3. The Special Auditor
For Co-operative Societies,
Nashik.
4. The State of Maharashtra,
Through the Department of Co-operation,
Marketing and Textile Mantralaya, Mumbai. ... Respondents
******
Mr. Atul G. Damle, Senior Advocate i/by Mr. Amol P. Mhatre,
Advocates for the Petitions in both Writ Petitions.
Mr. Kishor Patil, Advocate for the Respondent No.1-Nashik APMC
Market Committee in both Writ Petitions.
Mr. P. K. Dhakepalkar, Senior Advocate i/by Mr. Pramod N. Joshi,
Mr.Pratik B. Rahade and Mr. N. M. Poojari, Advocates for Respondent
Nos. 2 and 3 in WPST/97464/2020 and for Respondent Nos.2 and 4 in
WPST/12560/2019.
Mr. Atul P. Vanarase, AGP for the Respondents-State in both Writ
::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 :::
bdp
2/12
wpst-97464.20 & 12560.19.doc
Petitions.
******
CORAM : R. D. DHANUKA &
V. G. BISHT, JJ.
DATE : 6th APRIL, 2021
ORAL JUDGMENT (Per R. D. Dhanuka, J.) :-
. The petitioner has filed Writ Petition (Stamp) No. 97464 of 2020 under Article 226 of the Constitution of India inter-alia praying for a writ of certiorari for quashing and setting aside the impugned order dated 5th August, 2020 passed by the learned Minister for the Department of Co-operation, Marketing and Textile in Revision Application No. 54 of 2015. In Writ Petition (Stamp) No. 12560 of 2019 filed by the petitioner, the petitioner seeks an order and direction against the respondent nos. 2 to 4 to conduct and complete enquiry under Section 40 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963) in implementation of the orders dated 3rd August, 2015 and 26th August, 2015 passed by the District Deputy Registrar and for other reliefs (for short 'the said Act of 1963').
2. By consent of parties both these writ petitions were heard together and are being disposed of by a common order.
Some of the relevant facts for the purpose of deciding these writ petitions are as under :-
3. It is the case of the petitioner that the petitioner is the member of the respondent no.1 Marketing Committee constituted under the said Act of 1963. The Managing Committee of the respondent no.1 had obtained huge loan from various financial institutions like Maharashtra ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 3/12 wpst-97464.20 & 12560.19.doc State Co-operative Bank, Nashik District Central Co-operative Bank for upgrading the Market Committee. The respondent no.1 had incurred huge expenses and sold several of its plots without getting the properties valued. The respondent no.2 accordingly conducted an enquiry and passed an order on 28th August, 2014 thereby appointing Special Auditor to conduct audit of the respondent no.1. The said special auditor submitted a report on 22 nd June, 2015 regarding the loss alleged to have been sustained by the respondent no.1 and recommended independent enquiry under Section 40 of the said Act of 1963. On 3rd May, 2015 and 26th August, 2015, orders were passed for appointing special auditor to conduct enquiry under Section 40 of the said Act of 1963. It was the case of the petitioner that there was however no enquiry conducted since 2015 by the said special auditor vide orders dated 3rd May, 2015 and 26th August, 2015.
4. The said Maharashtra State Co-operative Bank (hereinafter referred to as 'the said MSC Bank') had sacntioned loan of Rs.53.55 crores in favour of the respondent no1. The respondent no.1 had mortgaged various properties in favour of the said MSC bank to secure the said loan. There were disputes between the respondent no.1 and the said MSC bank regarding the said loan granted to the respondent no.1 by the said MSC bank. The said MSC bank adopted proceedings under the Securitization Act claiming an amount of Rs.72.08 crores on 7 th March, 2008 and issued notice under Section 13(2) of the said Securitisation Act against the respondent no.1. The said MSC bank took physical possession of all the mortgaged properties on 24th January, 2009 and tried to sell those properties by public auction. Various notices were issued by the said MSC bank for conducting auction of those properties.
::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 :::bdp 4/12 wpst-97464.20 & 12560.19.doc
5. The respondent no.1 thereafter forwarded a proposal to the said MSC bank for One Time Settlement and also filed proceeding before the Debts Recovery Tribunal bearing No. SA No. 280 of 2012. On 5 th November, 2012, the Debts Recovery Tribunal permitted the said MSC bank to sell few of the properties for satisfying the claim of Rs.72 crores of the said MSC bank. The respondent no.1 was restrained by the said Debts Recovery Tribunal from raising any objection on the sell process being conducted by the said MSC bank pursuant to the said order passed by the Debts Recovery Tribunal. The respondent no.1 thereafter submitted One Time Settlement proposal. The said MSC bank accepted the said One Time Settlement submitted by the respondent no.1 by giving total credit of Rs.44.30 crores by settling the entire claim of Rs.76.99 crores.
6. The said MSC bank thereafter sold the properties of the respondent no.1 at Peth Road monitored by the said MSC bank. The entire sale proceeds was approved by the said MSC bank. The entire sale proceeds in the sum of Rs.77.11 crores were received by the said MSC bank directly. The said MSC bank also thereafter issued sale certificate to the auction purchasers under an order passed by the Debts Recovery Tribunal.
7. During the period between the 2012-2013 and 2013-2014, the yearly audit of the respondent no.1 was conducted by the District Special Auditor, Grade-I. No objection in the accounts or with regard to any transactions were recorded or found in the said audit report. On 28th August, 2014, the District Deputy Registrar directed the special auditor to conduct audit. The said order was challenged by the respondent no.1 before the State Government by filing an Appeal No. ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 5/12 wpst-97464.20 & 12560.19.doc 29 of 2015. On 30th March, 2015, learned Minister granted stay of the said order dated 28th August, 2014.
8. It is the case of the respondent no.1 that for the year 2013-2014, regular audit was conducted through the Government Panel Auditor who submitted a report on 22nd June, 2015 without taking the respondent no.1 in confidence and without verifying the material. The respondent no.1 raised objection against the said report submitted by the Government Panel Auditor by passing resolution dated 28th August, 2015.
9. The respondent no.1 thereafter approached the Director of Marketing under Rule 116(7) and requested for appointment of a new auditor with a direction to re-audit the accounts of the respondent no.1. The respondent no.2 however passed two orders dated 3 rd August, 2015 and 26th August, 2015 respectively for holding enquiry under Section 40 of the said Act of 1963. On 27th August, 2015, the respondent no.1 filed Appeal No. 29 of 2015 before the learned Minister and requested for stay of the enquiry ordered under Section 40 of the said Act of 1963. The special auditor however issued notices on 5 th September, 2015, 7th September, 2015 and 30th October, 2015. The respondent no.1 therefore again approached the learned Minister for staying the proceedings on 6th October, 2015.
10. The respondent no.1 filed Revision Application No. 315 against the order dated 28th August, 2014, which was fixed for hearing before the learned Minister. On 6th January, 2016, the learned Minister rejected the said Revision Application and confirmed the order dated 28th August, 2014 and also the orders dated 3 rd August, 2015 and 26th August, 2015. The respondent no.1 thereafter filed a Writ Petition in ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 6/12 wpst-97464.20 & 12560.19.doc this Court impugning the said orders dated 6th January, 2016 and 28th January, 2014 and also the notices dated 28th January, 2016 and 27th February, 2016 issued by the special auditor. The respondent no.1 filed a Writ Petition bearing No. 12008 of 2015 against the said MSC bank, District Deputy Registrar and others relating to One Time Settlement proposal submitted by the respondent no.1 before the said MSC bank. On 5th August, 2019, the Division Bench of this Court was of the opinion that all questions regarding the audit report / charging of interest / acts of the committee / acts of the said MSC bank were co- related and therefore the Secretary of the Department of Co-operation and Marketing should try to settle the dispute between the parties.
11. The State Government accordingly formed a Committee. In addition to the officers of the MSC bank, District Deputy Registrar and Special Auditor were presiding officers of the said Committee. The Committee was constituted under Principal Secretary of the State Government. The said committee submitted a report and suggested that if the respondent no.1 pays Rs.7,02,72,125/- with interest thereon, the entire issue would stand resolved. On 16 th July, 2020, the report was accepted by all the parties. The respondent no.1 accordingly paid an amount of Rs.20,88,00,03,000/- on 15th July, 2020 to the said MSC bank and settled the entire dispute.
12. It is the case of the respondent no.1 that the said Appeal No. 54 of 2015 was however pending before the State Government. The said committee in the report observed that the said MSC bank could not have rejected the One Time Settlement proposal given by the respondent no.1. The matter could be finally disposed of and settled, if the respondent no.1-committee would have paid a specified amount.
::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 :::bdp 7/12 wpst-97464.20 & 12560.19.doc The said committee was of the opinion that all the proceedings including Writ Petition No. 1965 of 2016 as well as other proceedings before the District Deputy Registrar should be withdrawn by the respondent no.1 so that there could be 'no due certificate' which could be issued by the said MSC bank. The respondent no.1 had accordingly withdrawn the said Writ Petition No. 1965 of 2016.
13. It is the case of the respondent no.1 that the said committee produced the entire record of all the subsequent events which took place before the learned Minister and pointed out that there was no purpose left on that day for the purpose of holding any enquiry. The District Deputy Registrar and the special auditor who were parties to the said Revision Application No. 54 of 2015 also filed their say and accepted that no purpose would be really served by continuing the order or direction dated 3rd August, 2015 to have any enquiry afresh against the respondent no.1. After considering the report submitted by the said committee and the say of the District Deputy Registrar and the Special Auditor, the learned Minister allowed the said Appeal No. 54 of 2015 by setting aside the order dated 3 rd August, 2015 as well as modified order dated 26th August, 2015 by passing an order on 5 th August, 2020.
14. Mr. Damle, learned Senior Counsel for the petitioner in both these petitions submits that there were serious irregularities in the acts and other conduct committed by the Managing Committee of the respondent no.1. The District Deputy Registrar had thus rightly ordered an enquiry and the audit. The learned Minister had already rejected the Revision Application filed by the respondent no.1 by order dated 6th January, 2016. The learned Minister thus could not have set ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 8/12 wpst-97464.20 & 12560.19.doc aside the orders against which the appeal filed by the respondent no.1 was already dismissed by order dated 6th January, 2016 by passing a fresh order on 5th August, 2020. He submits that the petitioner is a member of the respondent no.1 and had paid the membership fees all throughout. His name was also included in the voters list. He invited our attention to the documents annexed by the petitioner in one of the pleadings filed by his client.
15. It is submitted by the learned Senior Counsel that since the Revision Application was already dismissed, the learned Minister could not have reviewed directly or indirectly the earlier order dismissing the Revision Application. The respondent no.1 had not even pointed out the earlier order passed by the learned Minister dismissing the Revision Application filed by the respondent no.1 The impugned order passed by the learned Minister allowing Revision Application subsequently is thus ex-facie illegal and deserves to be set aside.
16. Mr. Dhakepalkar, learned Senior Counsel for the respondent no.1 on the other hand invited out attention to various documents forming part of the record and tendered a synopsis to demonstrate as to how sequence of events had taken place all this time. It is submitted by the learned Senior Counsel that in view of the dispute between the respondent no.1 and the said MSC bank, the said MSC bank had initiated action under Section 13(2) of the Securitisation Act and had started taking steps to sell the mortgaged properties of the respondent no.1 The Debts Recovery Tribunal had permitted the said MSC bank to auction the properties and had restrained the respondent no.1 from interfering with the said sale process allowed to be conducted by the said MSC bank. The MSC bank had accordingly taken steps to sell one ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 9/12 wpst-97464.20 & 12560.19.doc of the property of the respondent no.1 mortgaged by the respondent no.1 with the said MSC bank and had recovered sale proceeds directly.
17. The respondent no.1 had also submitted One Time Settlement proposal to the respondent no.1 bank. The State Government formed a Committee. In addition to the officers of the MSC bank, District Deputy Registrar and Special Auditor were presiding officers of the said Committee. The said committee was constituted under Principal Secretary. The said committee had recommended settlement of the dispute with the said MSC bank. The MSC bank accepted the said One Time Settlement proposal submitted by the respondent no.1. On the basis of the report of the said committee, which was accepted by all the parties, the respondent no.1 had already paid the amount of Rs.20,88,00,03,000/- on 15th July, 2020 to the said MSC bank in full and final settlement of their dues.
18. Learned Senior Counsel invited out attention to the report submitted by the said committee and also the say of the District Deputy Registrar and the special auditor who had passed the impugned orders earlier before the learned Minister in the pending Revision Application filed by the respondent no.1 and placed all the subsequent event of record. The authorities themselves pointed out before the learned Minister that in view of all the subsequent events and the audits having been conducted from time to time in the meanwhile showing no default on the part of the respondent no.1, there was no purpose of holding any enquiry as ordered earlier against the respondent no.1.
19. It is submitted by the learned Senior Counsel that the respondent no.1 did not pursue the writ petition filed by the respondent no.1 for seeking implementation of the impugned orders passed by the District ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 10/12 wpst-97464.20 & 12560.19.doc Deputy Registrar. The petitioner has no locus to challenge the impugned order passed by the learned Minister. There are about 25,000 members of the respondent no.1 committee. This Court shall not entertain writ petition filed by a single member who has been put up by a rival member of the managing committee with ulterior motives.
20. It is submitted by the Senior Counsel that on the basis of the subsequent events and in view of the special auditor and the District Deputy Registrar, representing that no purpose would be served by conducting the said enquiry initiated long back, the learned Minister was justified in setting aside those orders of enquiry in the pending proceedings.
21. A perusal of the record indicates that the District Deputy Registrar had ordered an enquiry and the audit of the respondent no.1. There was a dispute between the respondent no.1 and the said MSC bank relating to the said loan transactions. The dispute was ultimately settled between the respondent no.1 and the said MSC bank. The Debts Recovery Tribunal had directed the said MSC bank to sell one of the property of the respondent no.1 and had simultaneously restrained the respondent no.1 from interfering with the said sale process being conducted by the said MSC bank. The sale proceeds arising out of the said sale of the said property was received by the bank directly.
22. The State of Maharashtra had appointed a committee comprising of various persons including the District Deputy Registrar and the special auditor under the Principal Secretary. Several meetings were held by the said committee. The said committee had made proposal for settlement of the dispute. The matter was accordingly settled between ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 11/12 wpst-97464.20 & 12560.19.doc the respondent no.1 and the said MSC bank in all respect. During this period, various audit reports were submitted by the Auditors in respect of the accounts of the respondent no.1 and did not find any fault committed by the respondent no.1. The authorities who had passed orders against the respondent no.1 were parties before the learned Minister in the said pending appeal and apprised the learned Minister of all subsequent developments in the matter after dismissal of the Revision Application filed by the respondent no.1.
23. In our view, in the facts and circumstances of this case, the learned Minister was right in allowing the said Appeal which had remained pending for sometime by taking into consideration the subsequent events which have not been disputed by the petitioner.
24. The petitioner who claims to be one of the member of the respondent no.1 appears to have filed these two petitions at the instance of a rival committee member and not for advancing any public cause in the interest of the respondent no.1.
25. In our view, there is no merits in the submission of Mr. Damle, learned Senior Counsel for the petitioner that there were several charges of misappropriation alleged by the District Deputy Registrar against the respondent no.1 while passing an order of conducting an audit and enquiry against the respondent no.1 and not only the allegations of sale of the property of the respondent no.1 bank at lower price then the actual market price. All such allegations on the basis of which an order of enquiry was passed and for conducting an audit, were subsequently withdrawn by the authorities who had passed such order by filing say before the learned Minister. The enquiry ordered by the authorities was stayed by the learned Minister and thereafter by ::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 ::: bdp 12/12 wpst-97464.20 & 12560.19.doc this Court by directing authorities not to precipitate any action against the respondent no.1. All such past allegations thus being stale and in view of the subsequent events, we do not find any infirmity in the impugned order passed by the learned Minister. Both the Writ Petitions are devoid of merits. In view of the learned Minister already having set aside the orders which are sought to be implemented by the petitioner in the Writ Petition (Stamp) No. 12560 of 2019, the said Writ Petition has become infructuous.
24. We therefore pass the following order :-
(a) Writ Petition (Stamp) Nos. 97464 of 2020 and 12560 of 2019 are dismissed.
(b) There shall be no order as to costs.
(V.G. BISHT, J.) (R.D. DHANUKA, J.)
::: Uploaded on - 12/04/2021 ::: Downloaded on - 05/09/2021 11:52:36 :::