Bombay High Court
Shri Jaganrao Narharrao Harne vs The Sub Divisional Officer on 25 November, 2008
Author: B.P.Dharmadhikari
Bench: B.P.Dharmadhikari
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
WRIT PETITION NO. 4200/2005
1. Shri Jaganrao Narharrao Harne,
aged 54 years, Occ. Agriculturist,
R/o. At post Higni Gawandgaon,
Tq. Anjangaon Surji,
Distt. Amravati.
2. Shri Arun s/o Ramkrishna Choulchande,
Aged 48 years, Occ. Agriculturist,
R/o. At Post Lakhad,
Tq. Anjangaon Surji,
Distt. Amravati. ...Petitioners.
...versus...
1. The Sub Divisional Officer,
Amravati,
(Returning Officer for the election of
the Amravati District Central Cooperative
Bank Limited, Amravati),
Amravati, Tq. & Distt. Amravati,
2. Shri Anant S/o Gunwant Sabale,
aged about years, Occ. Agriculturist,
R/o. At Post Dahigaon Recha,
Tq. Anjangaon Surji,
Distt. Amravati. ...Respondents
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Shri S.A.Gordey, Adv. for the petitioners
Shri T.R.Kankale, A.G.P. for Respondent No.1
Shri M.M.Agnihotri, Adv. for Respondent No.2
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CORAM : B.P.Dharmadhikari, J.
DATE : 25th November, 2008
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2
ORAL JUDGMENT
1. By this petition filed under Article 226, 227 of the Constitution of India, the petitioners who were candidates in the elections of a specified Cooperative Society viz. Amravati District Central Cooperative Bank have challenged the order of Returning Officer, dated 12.08.2005 by which the said Returning Officer has rejected their objection to the nomination paper filed by Respondent no.2. The said Returning Officer is respondent no. 1 before this Court.
ig The objection raised was that deceased father of Respondent no. 2 had declared himself to be personally responsible for repayment of loan received from Amravati District Central Cooperative Bank by Ambadevi Cooperative Sugar Factory of which he was a Chairman. The provisions of Section 73FF of Maharashtra Cooperative Societies Act were invoked in support. The Returning Officer found that there was no material before him to conclude that respondent no. 2 could be said to be a defaulter within the meaning of said provisions. The writ petition thereafter has been admitted for final hearing.
2. The petitioners admittedly contested the said election which was then scheduled on 10.9.2005. Respondent no. 2 submitted his nomination for the ::: Downloaded on - 09/06/2013 14:05:18 ::: 3 said election in constituency meant for Credit Cooperative Societies. Both petitioners raised objection to that nomination pointing out that respondent no. 2 is the son of one Gunwant Sabale, who borrowed loan for Sugar factory from Amravati District Central Cooperative Bank and for its repayment gave his personal and collective guarantee to the said Bank. As the loan was not repaid, the Amravati District Central Cooperative Bank filed dispute under Section 91 vide Case No. 465/2002 before Cooperative Court, Amravati, for recovery of loan amount of Rs. 7,77,57,658/-. During pendency of that dispute, Gunwant Sabale expired on 28.5.2003 and then Amravati District Central Cooperative Bank moved applications before Cooperative Court for brining on record his legal heirs including the present respondent no.2. As responsibility of Gunwant Sabale was personal, it devolved upon his legal heirs and respondent no. 2, being his son, was also liable to clear that loan amount and as that was not cleared, he was defaulter and therefore, disqualified to contest the election. The said objection was replied to by respondent no. 2 pointing out that the names of legal heirs were not brought on record within the stipulated time and hence dispute No. 465/2002 was not then pending. In support of his stand that he was not defaulter, he produced certificate dated 31.3.2005 of ::: Downloaded on - 09/06/2013 14:05:18 ::: 4 Amravati District Central Cooperative Bank. The respondent no. 1 - Returning Officer also obtained opinion of District Government Pleader at Amravati who expressed that son of a defaulter cannot himself be disqualified as defaulter. After looking into the respective stands and the opinion, respondent no.1 rejected the objection as raised by the petitioners.
3. In this background, I have heard Advocate Shri Gordey, for petitioners, Advocate Agnihotri for Respondent no.2 and learned Assistant Government Pleader for respondent no.1.
4. After pointing out the facts as mentioned above, Advocate Gordey has argued that as deceased Gunwant Sabale had taken personal guarantee and also declared that after him, his property and his legal heirs were also responsible for repayment of loan taken by Sugar Factory from the Bank, automatically after 28.5.2003, respondent no. 2 became the borrower and therefore, liable to repay the loan of Amravati District Central Cooperative Bank. He states that as there were defaults and loan was not paid, the Bank was required to file dispute under Section 91 and Gunwant expired during pendency of that dispute. He further states that from stand and contentions of respondent no.2, it is clear that said amount was not ::: Downloaded on - 09/06/2013 14:05:18 ::: 5 paid to the Bank till filing of nomination paper by respondent no. 2 and even thereafter. He further points out that before Cooperative Court, application for bringing legal heirs on record, application for setting aside abatement and application for condonation of delay was already moved and he relies upon judgment of Division Bench of this Court reported in 1983 Mh.L.J. 1020 (Gopal Madanlal Kalantri vs. Divisional Joint Registrar, Co.Op.Societies, Amravati & others), particularly paragraph 17 & 18, to state that legal heirs of such borrowers are also liable for repayment of loan. He contends that the objection has not been rightly considered by the Returning Officer and he further adds that the Returning Officer also abdicated his jurisdiction in favour of District Government Pleader.
He, therefore, states that acceptance of nomination paper of respondent no. 2 is vitiated and as respondent no. 2 has contested the election, the election itself is materially affected and needs to be quashed. He further points out that though it has been brought on record that the result of said election has been questioned in election petition filed before Commissioner, Amravati Division, Amravati, under Section 144(T) of Maharashtra Cooperative Societies Act, still as the election petitioners are different persons and in view of the glaring illegality, this Court ::: Downloaded on - 09/06/2013 14:05:18 ::: 6 must exercise jurisdiction under Article 226 & 227 of the Constitution of India and interfere in the matter.
5. Advocate Agnihotri for respondent no. 2 contends that till filing of objection by petitioners before Returning Officer, the respondent no. 2 was not aware of alleged liability of his deceased father. He states that when liability itself was not known, the respondent no. 2 could not have been lebelled as defaulter and could not have been treated as such. He further pointed out that if deceased father was liable in any way to Amravati District Central Cooperative Bank, after his death the Bank ought to have intimated respondent no. 2 accordingly and no such demand was made by the bank at any point of time and even no notice for any such defaults was sent to him. He points out that if the Bank recognized respondent no. 2 as defaulter, it would not given him a 'no due certificate' on 31.3.2005. He further states that as respondent no. 2 had no knowledge of any dispute before Cooperative Court and the respondent no. 2 was not brought on record in that court at any point of time. He states that said dispute was not even pending when the nomination paper was filed and was accepted. He further points out that what is the fate or stage of that dispute as on today has not come on record and in such circumstances, when Cooperative ::: Downloaded on - 09/06/2013 14:05:18 ::: 7 Court itself has not found deceased Gunwant as responsible for repayment of loan, treating or accepting said Gunwant to be liable for such repayment and further presuming present respondent no. 2 as defaulter for not discharging liability of his deceased father, will be premature exercise in futility.
He argues that section 73 FF does not contemplate such disqualification.
6. In the alternative, he also states that even if it is presumed that his father gave any guarantee to Amravati District Central Cooperative Bank , the father would at the most be a guarantor and therefore, a surety for repayment of loan. He invites attention to provisions of Rule 58 of Maharashtra Cooperative Societies Act to urge that prior to 16.10.1987 the said rule envisaged disqualification of surety also, but later on that has been removed and only borrower can be declared as defaulter. In above circumstances, according to him, when deceased Gunwant could not have been declared as defaulter at all, there is no occasion for raising objection that present respondent no. 2, being his son, has incurred any disqualification.
7. In order to point out that the word 'defaulter' implies previous knowledge of liability and therefore, an intention to commit default, he has ::: Downloaded on - 09/06/2013 14:05:18 ::: 8 invited attention to the meaning of said phrase as given in Blacks Law Dictionary, 8th Education and also judgment of the Hon'ble Supreme Court reported in AIR 1989 SC 572 (Brij Sunder Kapoor etc. etc. vs. 1st Additional District Judge and others) delivered in the context of rent control order.
8. He argues that applications before Cooperative Court as disclosed by petitioners are for setting aside abatement, for condonation of delay and for brining legal heirs on record. The orders passed by Cooperative Court on these applications are not on record and the respondent no. 2 has till date not received any notice from Cooperative Court even on these applications. He states that unless and until the Cooperative Court accepts respondent no. 2 as legal representative of Gunwanta, the objection as raised is misconceived. He also argues that it has not been brought on record that respondent no. 2 inherited any property from deceased Gunwanta, so as to constitute him a legal representative and he also relied on judgment reported in (Gopal Madanlal Kalantri vs. Divisional Joint Registrar, Co.Op.Societies, Amravati & others) (Supra) to show that Division Bench has held that legal representative is responsible to the extent of estate of deceased inherited by him. According to him, therefore, it was obligatory for ::: Downloaded on - 09/06/2013 14:05:18 ::: 9 petitioners to bring on record that respondent no. 2 has inherited some estate from deceased Gunwanta.
9. Lastly he argues that the petitioners had an alternate remedy and all these disputed questions would have been settled after recording evidence of parties in that alternate forum. He points out that raising same contentions, election petition under Section 144(T) is already pending before the Election Tribunal i.e. Divisional Commissioner, Amravati Division, Amravati, and petitioner no. 2 has been joined as party respondent no. 2 in that election petition. He contends that any adverse finding by this Court in the present writ petition, will definitely affect the consideration in the election petition and he, therefore, states that it would have been proper for petitioners to file election petition.
10. The provision which is sought to be invoked i.e. Section 73FF is for disqualification from membership of committee. Its language and its effect shows that it is a penal provision. It, therefore, needs to be construed strictly. The relevant portion thereof i.e. Section 73FF (1)(i), which reads as under
73FF. Disqualification for membership of Committee (1) Without prejudice to the other ::: Downloaded on - 09/06/2013 14:05:18 ::: 10 provisions of this Act or the rules made thereudner in relation to the disqualification of being member of a committee, no person shall be eligible for being appointed, nominated, elected, co-
opted or, for being a member of a committee, if he-
(i) is a defaulter of any society;
........."
The section, therefore, makes it clear that a person who is defaulter of any society is not eligible and is disqualified for being membership of the committee and for being elected as such. While explaining the meaning of term 'defaulter', the legislature has stated the cases (mentioned in sub-clauses) in which person shall be treated as defaulter. However, the definition is exclusive and not exhaustive. The sub-clause (a) states that a member who had defaulted in repayment of crop loan on due date is defaulter. Sub Clause (b) mentions that a member who defaults in payment of any installments of loan granted to him is defaulter. Sub Clause (c ) states that a member who has taken "anamat" or advance or who has purchased any goods or commodities on credit or availed himself of any services for which charges are payable, become a defaulter, if after receipt of notice of demand by him from concerned society or within thirty days from the date of withdrawal of anamat or advance by him, he ::: Downloaded on - 09/06/2013 14:05:18 ::: 11 does not repay the full amount of such anamat or advance or pay the prices of such goods or commodities, then he is disqualified. The person who has incurred any disqualification under sub-section (1), ceases to be a member of the Committee and his seat thereupon is deemed to be vacant. The language does not contemplate any passive disqualification i.e. as is sought to be argued in the present matter for the acts or omission of other person or even a relative. Disqualification contemplated is direct and personal.
11. The document allegedly executed by deceased Gunwant in favour of Amravati District Central Cooperative Bank produced at Annexure-3 with this writ petition is titled as 'individual and joint security'. It mentions that the Bank has sanctioned loan of Rs. 6,00,000/- as interim measure. If the sugar factory for any reason fails to clear the amount of loan within stipulated period, all Members and Directors of Board of Director of said sugar factory, in that capacity, shall be personally and jointly responsible for its repayment to the Amravati District Central Cooperative Bank . The document further clarifies that in that event the loan is to be treated as loan personally and jointly borrowed by them for their own purposes i.e. for private purposes. It also clarifies ::: Downloaded on - 09/06/2013 14:05:18 ::: 12 that till the loan is repaid, the charge therefor shall survive& devolve even on legal heirs of individual. It is to be noted that Amravati District Central Cooperative Bank is not party to this writ petition.
The document is yet not interpreted by any competent forum. The Cooperative Court, Amravati, may be required to consider this document if the dispute revives or is pending before it. In that circumstances, it will not be proper for this Court to finally pronounce upon the nature of liability undertaken by the signatories thereto. Whether it is joint and several liability, accepted in official capacity or whether it is joint and several liability accepted in personal capacity may be the question required to be gone into. The issue also raises certain other disputed questions of fact which cannot be gone into in the present matter.
However, looking to the document and nature of demand, it is difficult to hold that present respondent no. 2 can straightway at this stage be held responsible for liability allegedly accepted by his father under the said document.
12. The legal representative is the person who received some benefit from the estate of the deceased. As per judgment of Division Bench mentioned above i.e. (Gopal Madanlal Kalantri vs. Divisional Joint Registrar, Co.Op.Societies, Amravati & others) ::: Downloaded on - 09/06/2013 14:05:18 ::: 13 (Supra), admitted legal representative can be made liable for loan of deceased only to the extent or in proportion of the estated received by him. If respondent no. 2 is to be treated as legal representative of deceased Gunwant, it was necessary for petitioners to bring on record some details of properties which respondent no. 2 inherited from Gunwantrao. On the contrary no such details are available on record. In these circumstances, it is not possible for this Court to hold at this stage that respondent no. 2 is legal representative of deceased Gunwant for the purposes of the liability which has been mentioned in the above mentioned document of surety.
13. In view of this position on record, if respondent no. 2 was to be treated as defaulter, the petitioners ought to have proved that the liability accepted by his father was within his knowledge or was communicated to him and thereafter the amount was demanded from him. As there is no such material on record, I find that the contention of petitioners that respondent no.2 needs to be treated as defaulter for the purposes of Section 73 FF (i) cannot be accepted.
14. In view of this position, I find that the other aspects raised by respective learned counsel before me ::: Downloaded on - 09/06/2013 14:05:18 ::: 14 need not be and cannot be considered any further in present writ petition.
15. As pointed out by Advocate Agnihotri, election petition filed by two persons is already pending before the competent Forum. The said persons are not parties before this Court. As already observed above the Bank is also not a party in the present matter. Hence, I have only considered the facets which were necessary for me to find out whether without any evidence on record it is feasible for this Court to reach to any finding straightway on the basis of record produced before it & hold that respondent no. 2 is a defaulter. I am unable to accept the contention of the petitioner that on the basis of material produced on record in present writ petition, respondent no. 2 can be shown as defaulter.
16. I, therefore, do not find any jurisdictional error or perversity in the order passed by respondent no.1 accepting the nomination paper of respondent no.2. The writ petition is, therefore, dismissed, with no order as to costs.
JUDGE Rvjalit ::: Downloaded on - 09/06/2013 14:05:18 :::