Bombay High Court
M/S. Priyesh Land Developers Through ... vs The Pen Co-Operative Urban Bank Ltd. ... on 7 April, 2021
Equivalent citations: AIRONLINE 2021 BOM 619
Author: R. D. Dhanuka
Bench: R. D. Dhanuka, V. G. Bisht
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 13001 OF 2016
M/s. Priyesh Land Developers
a Partnership Firm, having its Registered
address at 9/10, Chandan Mansion,
Dadar (West), Mumbai - 400 028.
Through its Partner
Mr. Priyesh Desai
Age 39 years, Occu: Business
Residing at 6, Taher Mansion,
Nepeansea Road, Mumbai - 400 036. ... Petitioner
Versus
1. The Pen Co-operative Urban Bank Ltd.
a Co-operative Bank duly Registered under
the Maharashtra Co-operative Societies Act, 1960
having its Regd. Office at Shivaji Chawk, Taluka
Pen Dist. Raigad and also a branch at Bhagirathi
Niwas, N. C. Kelkar Marg, Adjacent to Lagu Bandhu,
Dadar (W), Mumbai - 400 028.
Through its Administrative Board/Administrator
Appointed by the Registrar of the Co-operative
Societies.
2. The State of Maharashtra
Through The Principal Secretary,
Department of Co-operation,
Mantralaya, Mumbai - 400 032.
3. The Commissioner for Co-operation and
The Registrar of Co-op. Societies,
Maharashtra State, Central Building,
Pune - 1.
4. Divisional Joint Registrar,
Co-operative Societies,
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Konkan Division, Konkan Bhavan,
CBD Belapur, Navi Mumbai.
5. Mr. Nemichand Jaywantraj Mehta,
Age: 52 years, residing at G-6/7,
Basera CHS Ltd., Sector - 17, Vashi,
Navi Mumbai. ... Respondents
ALONG WITH
CIVIL APPLICATION NO. 3128 OF 2016
IN
WRIT PETITION NO. 13001 OF 2016
Shishir Prabhakar Dharkar
Ex-Chairman of the Pen Co-op.
Urban Bank Ltd., having residence at
905/6, Amarnath Towers Sanjeev
Enclave lane near fisheries college,
Versova, Andheri West,
Mumbai - 400 061. ... Applicant
In the matter between :-
M/s. Priyesh Land Developers
a Partnership Firm, having its Registered
address at 9/10, Chandan Mansion,
Dadar (West), Mumbai - 400 028.
Through its Partner
Mr. Priyesh Desai
Age 39 years, Occu: Business
Residing at 6, Taher Mansion,
Nepeansea Road, Mumbai - 400 036. ... Petitioner
Versus
1. The Pen Co-operative Urban Bank Ltd.
a Co-operative Bank duly Registered under
the Maharashtra Co-operative Societies Act, 1960
having its Regd. Office at Shivaji Chawk, Taluka
Pen Dist. Raigad and also a branch at Bhagirathi
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Niwas, N. C. Kelkar Marg, Adjacent to Lagu Bandhu,
Dadar (W), Mumbai - 400 028.
Through its Administrative Board/Administrator
Appointed by the Registrar of the Co-operative
Societies.
2. The State of Maharashtra
Through The Principal Secretary,
Department of Co-operation,
Mantralaya, Mumbai - 400 032.
3. The Commissioner for Co-operation and
The Registrar of Co-op. Societies,
Maharashtra State, Central Building,
Pune - 1.
4. Divisional Joint Registrar,
Co-operative Societies,
Konkan Division, Konkan Bhavan,
CBD Belapur, Navi Mumbai.
5. Mr. Nemichand Jaywantraj Mehta,
Age: 52 years, residing at G-6/7,
Basera CHS Ltd., Sector - 17, Vashi,
Navi Mumbai. ... Respondents
ALONG WITH
WRIT PETITION (STAMP) NO. 5832 OF 2021
The Pen Co-operative Urban Bank Ltd.
a Co-operative Bank duly Registered
under the Maharashtra Co-operative
Societies Act, 1960 having its Regd.
Office at Shivaji Chawk, Taluka Pen
Dist. Raigad and also a branch at Bhagirathi
Niwas, N. C. Kelkar Marg, Adjacent to
Lagu Bandhu, Dadar (W),
Mumbai - 400 028. ... Petitioner
Versus
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1. M/s. Priyesh Land Developers
a Partnership Firm, having its Registered
address at 9/10, Chandan Mansion,
Dadar (West), Mumbai - 400 028.
Through its Partner
Mr. Priyesh Desai
Age 39 years, Occu: Business
Residing at 6, Taher Mansion,
Nepeansea Road, Mumbai - 400 036.
2. Depositors Association of the Pen
Co-operative Urban Bank Ltd.
Through Mr. Naren Vasudev Jadhav
Having residence at Madhumilan,
M.G. Rd., Pen - 402 107.
3. Shishir Prabhakar Dharkar
Ex-Chairman of the Pen Co-op.
Urban Bank Ltd., having residence at
905/6, Amarnath Towers Sanjeev
Enclave lane near fisheries college,
Versova, Andheri West,
Mumbai - 400 061. ... Respondents
******
Mr. Virag Tulzapurkar, Senior Advocate a/w Mr. V. P. Sawant, Senior
Advocate i/by Mr Prabhakar M Jadhav for the Petitioner in
WP/13001/2016.
Mr. Kirit J. Hakani a/w Mr. Rahul Hakani and Ms. Niyati Hakani for
the Petitioner in WPST/5832/2021 and for Respondent No. 1 in
WP/13001/2016.
Mr. Manish Bohra i/by Singhania Legal Services for the Applicant in
CAW/3128/16 and for Respondent No.3 in WPST/5832/21.
Mr. S.S. Kulkarni i/by Mr. Sachin Chavan for the Applicants in
CAW/3127/16.
Mr. Rajan S. Pawar, AGP for Respondent-State in WP/13001/2016.
Mrs. Ashwini A. Purav, AGP for Respondent-State in WPST/5832/21.
Mr. V. P. Sawant, Senior Advocate a/w Mr. P. M. Jadhav for the
Respondent No.1 in WPST/5832/20.
******
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CORAM : R. D. DHANUKA &
V. G. BISHT, JJ.
RESERVED DATE : 11th MARCH, 2021
PRONOUNCED DATE: 7th APRIL, 2021
JUDGMENT (Per R. D. Dhanuka, J.) :-
. By Writ Petition No. 13001 of 2016 filed under Article 226 of the Constitution of India, the petitioner prays for an order and direction against the State of Maharashtra, the Commissioner for Co-operation and the Registrar of Co-operative Societies and the Divisional Joint Registrar, the respondent nos. 2, 3 and 4 respectively to make payment of Rs.22,48,04,507/- being surplus sale proceeds of the suit property together with interest @ 17% p.a. thereon from 1 st March, 2014 till the payment of realization (hereinafter The Pen Co-operative Urban Bank Limited is referred to as 'the said bank') (for short The Maharashtra Co-operative Societies Act, 1960 is referred to as 'the said MCS Act').
2. The Writ Petition (Stamp) No. 5832 of 2021 is filed by the said bank inter-alia praying for declaration that the Deed of Conveyance whereby operating as absolute transfer of the ownership of the mortgaged property mentioned in the Consent Award dated 7th February, 2002 passed by the Maharashtra State Co-operative Appellate Court in Appeal No. 13 of 2002 so as to constitute the said bank as the absolute owner thereof. The said bank has also prayed in the alternative prayer clause (a) for a writ of certiorari for quashing and/or setting aside the Deed of Composition dated 12 th February, 2002. Petitioner also seeks a writ of mandamus against the Maharashtra State Co-operative Appellate Court to modify the Consent Award dated ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 6/70 wp-13001.16.doc 7th February, 2002 by providing for contractual rate of interest i.e. interest @ 18% p.a. to be compounded quarterly on the decretal amount of Rs.12,52,95,492.65/- from the date of the consent award till the date of recovery of the amount by sale of the mortgaged property.
3. Though several petitions were on board along with these petitions, since the parties to these petitions concluded their arguments finally in these two petitions and the parties to the other petitions did not commence their arguments though opportunity was given immediately after closure of the arguments in these two petitions, we have proceeded with the judgment in these two petitions. Even otherwise these two petitions are not interconnected with the other petitions and can be disposed off without hearing the other matters. The other petitions are adjourned for a period of four weeks. Some of the relevant facts for the purpose of deciding these two petitions are as under :-
4. The petitioner had taken loans and advances from the said bank and had executed and registered a Simple Mortgage Deed in respect of its property being piece and parcel of land admeasuring 595402.04 sq. mtrs. bearing Survey No.38/1 and Survey No.44 (Part), Village Tumb, Sanjan, Taluka Umbergaon, Dist. Valsad, Gujarat on 8th February, 1999. The two Gut numbers were subsequently consolidated and was given new Survey No.44/1.
5. It is the case of the said bank that the petitioner committed default in repayment of the said loan obtained from the said bank. The ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 7/70 wp-13001.16.doc said bank filed three disputes against the petitioner and also against the sister concern of the petitioner, its partners and guarantors to the said loan transaction being Case Nos. 34 of 2001, 35 of 2001 and 36 of 2001 in the Co-operative Court at Raigad on 22nd January, 2001. Case No.34 of 2001 was filed against M/s. Anuj Land Developers Pvt. Ltd. and others for recovery of sum of Rs.1,79,05,981/- with interest @ 18% p.a. Case No. 35 of 2001 was filed against the M/s. Priyesh Land Developers i.e. the petitioner for recovery of sum of Rs.2,44,78,553/- with interest @ 18% p.a. Case No. 36 of 2001 was filed against the petitioner and others for recovery of sum of Rs.2,52,85,401/- with interest @ 18% p.a.
6. It is the case of the said bank that during the pendency of the said three disputes filed by the said bank, Mr. Bharat Shah and M/s. Pilgrim Mercantile Private Limited applied to the Co-operative Court for their impleadment as party opponent in the said disputes. The Co-operative Court impleaded those two applicants as party opponents to the said three disputes. It is the case of the said bank that on 28 th September, 2001, the committee of the Board of Directors of the said bank passed a resolution that the matter be settled with the petitioner by recovering the dues with interest and to takeover/acquire the mortgage property.
7. On 12th October, 2001, the Co-operative Court was pleased to pass Consent Award in those three dispute in terms of the consent terms signed, executed and admitted by the petitioner and the said bank. On 7th February, 2002, Ms. Heema Pradeep Desai, a partner of the petitioner filed an Appeal before the Co-operative Appellate Court ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 8/70 wp-13001.16.doc challenging the said consent award passed by the Co-operative Court. The parties to those proceedings filed fresh consent terms in those proceedings before the Co-operative Appellate Court. It is the case of the said bank that the said fresh consent terms were contrary to the provisions of the MCS Act and more particularly Section 96 thereof. The transfer of property in terms thereof in favour of the said bank was by way of Deed of Composition and was contrary to the decision of the said bank to get absolute transfer of ownership of the said mortgaged property by way of Deed of Conveyance. The Co-operative Appellate Court passed the Consent Award on 7th February, 2002 by setting aside the Consent Award dated 12th October, 2001 passed by the Co- operative Court.
8. On 12th February, 2002, the petitioner executed a Registered Deed of Composition in terms of the consent award dated 7 th February, 2002. It is the case of the said bank that the said Composition Deed was duly registered and the possession of the said property was given to the Chief Executive Officer of the said bank in trust for the sole benefit of the said bank. On the basis of the said Deed of Composition, the Revenue Authority mutated the said property in the name of the said bank on 17th February, 2004.
9. On 15th February, 2002, 22nd February, 2002 and 1st March, 2002, the Special Recovery Officer of the said bank issued three public notices in the Times of India (English) and Janmabhoomi (Gujarati) on 15th February, 2002, in the Indian Express (English) and Mumbai Samachar (Gujarati) on 22nd February, 2002 and in Indian Express ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 9/70 wp-13001.16.doc (English) and Mumbai Samachar (Gujarati) on 1 st March, 2002 for selling the said property by public auction.
10. The Special Recovery Officer made an application to the Divisional Joint Registrar, Co-operative Societies, Konkan Division, Navi Mumbai to pass an order under Section 100 of the said MCS Act. It is the case of the said bank that the said Special Recovery Officer applied for the said certificate on alleged failure to get the buyer, inadvertently or under deliberate misconception of then management of the said bank despite transfer of the said property by way of Conveyance i.e. Composition Deed of the said property unto the Chief Executive Officer of the said bank as trustee. On 2 nd March, 2002, the Divisional Joint Registrar issued a certificate under Section 100 of the said MCS Act as prayed by the Special Recovery Officer of the said bank. On 17th February, 2004, the Revenue Authority carried out mutation of the said property in the name of the said bank in the revenue record on the basis of the said Deed of Composition.
11. On 24th September, 2010, under the directions of the Reserve Bank of India (hereinafter referred to as 'RBI'), Registrar, Co-operative Societies, Maharashtra State superseded the Board of Directors of the said bank and appointed a Board of Administrator under Section 110A of the MCS Act because of deteriorating financial condition of the said bank and on other grounds. The RBI thereafter cancelled the banking licence of the said bank by order dated 9 th February, 2012. The Writ Petition No. 2495 of 2014 challenging the said order of cancellation of banking licence by the RBI and confirmation thereto by the Appellate ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 10/70 wp-13001.16.doc Authority is pending before this Court.
12. On 21st November, 2012, the petitioner filed a dispute bearing no. 215 of 2012 in the Co-operative Court No.3, Mumbai inter-alia praying for resumption of the said property and for a declaration that a Deed of Composition dated 12th February, 2002 was illegal, void and bad in law. The Co-operative Court did not grant any interim relief in the said dispute. The appeal preferred by the petitioner against the said order refusing to grant interim relief came to be dismissed by the Co- operative Appellate Court.
13. It is the case of the said bank that on 16 th December, 2013 with prior approval of Registrar, Co-operative Societies, Maharashtra State the said bank obtained approval as to the upset price and issued a public notice for auction of the said property under Rule 85 of the MCS Rules. Since, there were inadequate offers pursuant to the said public notice, the Board of Administrator of the said bank decided to re- auction the property. On 22nd January, 2014, the said property was sold for total price of Rs.35,01,00,000/-.
14. On 27th March, 2014, the said bank executed three Sale Deeds of dated 27th March, 2014 in favour of Mr. Nemichand Jaywantraj Mehta. The respondent no.3 approved the said sale by an order dated 27 th January, 2014. It is the case of the petitioner that the said order was passed without giving notice and hearing to the petitioner.
15. Sometime in the year 2014, the petitioner filed Special Civil Suit ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 11/70 wp-13001.16.doc No. 119 of 2014 in the Vapi Court, which is now transferred to the Court of Principal Senior Civil Judge, Umbergaon, Dist. Valsad (Gujarat) and is now numbered as Special Civil Suit No. 119 of 2014. The petitioner prayed for declaration that Mortgage dated 8 th February, 1999, which was obtained by the said bank, was totally illegal, not binding on the petitioner and at any rate was and is not enforceable. In alternate to the said prayer, the petitioner also prayed for declaration that the mortgage was not a security for the purpose of the alleged transaction claimed by the said bank and two others who were not liable to be enforced so far as the alleged claim introduced by the said bank was in collusion with the two other creditors to the tune of Rs.6,23,63,636/- and were and are not entitled to recover the same through said bank and that the petitioner was not liable to pay the same.
16. In the said suit, the petitioner also prayed in the alternate for a declaration that Consent Aaward dated 7th February, 2002 and the alleged Mortgage Deed dated 8th February, 1999 came to an end automatically and stood extinguished as per the terms and conditions of the said consent award itself and therefore were not enforceable. The declaration sought was that the said bank was not entitled to recover any amount from the petitioner, more than Rs.6,76,69,935/-.
17. The petitioner also prayed for a declaration that the Composition Deed dated 12th February, 2002 was illegal, void-ab-initio and contrary to the law and not binding on the petitioner and was not enforceable against the petitioner. The petitioner prayed for a declaration that the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 12/70 wp-13001.16.doc said alleged Deed of Composition did not create any right, title and interest in favour of the said bank or the other two defendants insofar as the suit property is concerned. The petitioner prayed for a declaration that the certificate alleged to have been obtained by the said bank, dated 2nd March, 2002 was on the face of it illegal, void-ab-initio and contrary to the provisions of Section 100 of the MCS Act and Rule 85 of the MCS Rules. The petitioner prayed for a declaration that the petitioner alone was the owner of the suit property and has exclusive right, title and interest over the suit property. The petitioner prayed for a declaration that three Deeds dated 27th March, 2014 executed by the said bank in favour of the auctioned purchasers of the said property were void and any rate voidable, ab-initio and are not binding upon the petitioner.
18. The petitioner also prayed for a declaration that the said bank was not entitled to retain the surplus amount of sale proceeds i.e. more than the decretal amount of Rs.6,76,69,935/- or Rs.12,52,95,492/- and was liable to refund and pay the sum of Rs.27,99,30,065/- to the petitioner with interest @ 12% p.a. from 27 th March, 2014. The said suit is still pending before the said Court in Gujarat. On 10 th March, 2015, the petitioner issued a notice through its advocate to the Board of Directors of the said bank and called upon to refund the surplus amount of Rs.22,48,04,507.35/- out of the sale proceeds on auction of the said property without prejudice to the petitioner's rights and contentions in the pending Special Civil Suit No. 119 of 2014 before the Court of Civil Judge, Senior Division, Vapi.
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19. In the said notice, it was made clear by the petitioner that if the said bank would comply with the said notice by making payment of the surplus amount of Rs.22,48,04,507.35/- with accrued interest, the petitioner will withdraw the said Special Civil Suit No. 119 of 2014 and shall give up their grievances against the said bank. There was no reply by the said bank to the said notice issued by the petitioner through its advocate. The petitioner thereafter filed this Writ Petition in the month of April 2015 for various reliefs.
20. Mr.Tulzapurkar, learned senior counsel for the petitioners invited our attention to the prayer clauses of this writ petition. He submits that prayer clause (c) of the writ petition is dropped in view of the deletion of the subsequent purchaser from the cause title of the petition. He invited our attention to various clauses of the consent terms dated 7 th February, 2002 filed by the parties in Appeal No. 13 of 2002 before the Maharashtra State Co-operative Appellate Court and more particularly clauses 1, 2, 5, 11, 15, 17, 19, 20, 27 and 28. He also invited our attention to various clauses of the Deed of Composition dated 12 th February, 2002 between the petitioner, Chief Executive Officer of the respondent no.1 as 'the trustee' appointed in the capacity as the ex- officio representative of the said bank and the respondent n o.1 referred to as the creditor no.1, Mr. Bharat H.Shah, referred to as the creditor no.2 and M/s.Pilgrim Mercantile Private Limited, referred to as the creditor no.3 in the said Deed of Composition.
21. Learned senior counsel invited our attention to the recitals 35 to 37 and 39 of the said Deed of Composition and clauses 1 and 5 thereof.
::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 :::bdp 14/70 wp-13001.16.doc He submits that under the said Deed of Composition, the parties agreed that the loan of the creditor no.1 bank in respect of the three loan accounts reflected in Dispute Nos.34 of 2001, 35 of 2001 and 36 of 2001 were recovered and also the liabilities of the creditor nos. 2 and 3 were cleared. The respondent no.1 bank was in a position to get clear and unencumbered the suit property no.1 which stood consolidated in one gut of 92 acres and 2 gunthas bearing survey no.44 in conveyance. He submits that under the said Deed of Composition, the petitioners agreed to convey the suit property in favour of the trustees by way of a Composition Deed to deal with the suit property no.1 and in best interest of the creditors and shall negotiate and settle the entire claim of the creditors in the best possible manner.
22. The petitioners also represented to the creditors that in view of the fact that there was clearing off all the outstanding dues of all the creditors, they should be prepared to accept something less than what was actually due and payable to them. It is submitted by the learned senior counsel that the parties accordingly quantified the amount payable to each of the creditors as on 12th October, 2001 at Rs.12,52,95,492.65. He submits that under recital no.37, it was clearly provided that because of the request made by the debtor, the creditor no.1 bank i.e. the respondent no.1 herein had agreed that it will not levy any interest in respect of the outstanding loans in respect of Dispute Nos. 34 of 2001, 35 of 2001 and 36 of 2001 after 12 th October, 2001 after the Co-operative Court, Raigad, Alibaug passed the consent terms.
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23. The creditor nos. 2 and 3 also confirmed that their liabilities and the amounts due from the petitioner were thereby recovered as specifically mentioned in clauses 24 to 26 of the consent terms. The petitioner confirmed that the said property no.1 consisting of single gut of land of 92 acres and 2 gunthas without any encumbrances had a clear marketable title to the satisfaction of the creditor bank.
24. It is submitted by the learned senior counsel that under the said Deed of Composition, the petitioner as well as all other debtors were discharged. The said property owned by the petitioner vested in the Chief Executive Officer of the said bank who was appointed as trustee of the said property. He invited our attention to the Certificate for Transfer of Property under section 100 of the said MCS Act issued by the Divisional Joint Registrar, Co-operative Societies, Konkan Division, Konkan Bhavan, CBD Belapur, Navi Mumbai certifying that in execution of the award passed under section 96 of the MCS Act by the Maharashtra State Co-operative Appellate Court, Mumbai in Appeal No.13 of 2002 in favour of the respondent no.1 bank on the 7 th day of February, 2002 for sale of the property of the petitioner.
25. The Registrar certified that the said property could not be sold for want of buyers. The Divisional Joint Registrar accordingly ordered that under section 100 of the MCS Act, the right, title and interest of the petitioners in the said property shall vest in the said bank and shall be delivered to the said bank subject to the terms and conditions laid down in the schedule appended thereto. In the schedule appended to the said certificate issued under section 100, it was provided that the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 16/70 wp-13001.16.doc said property was transferred to the bank in full satisfaction of the amount due from the debtor M/s. Priyesh Land Developers as per paragraph (17) of the judgment dated 7 th February, 2002. The said certificate under section 100 was issued on 2nd March, 2002.
26. It is submitted that in view of the said consent terms dated 7 th February, 2002 and the said Deed of Composition also filed along with the consent terms before the Maharashtra State Co-operative Appellate Court. On 7th February, 2002, the Maharashtra State Co-operative Appellate Court passed the consent award in the said proceedings. Learned senior counsel invited our attention to the public notice issued by the respondent no.1 bank on 25th September, 2011 and 6th November, 2011 intending to sell the suit property. He submits that the said sale was subsequently effected by the respondent no.1 bank. On 27th March, 2014 the respondent no.1 bank executed three sale deeds in favour of Mr. Nemichand Jaywantraj Mehta who was successful bidder.
27. Learned senior counsel invited our attention to various clauses of the said sale deed and would submit that the entire transaction between the petitioners and the said bank was referred in the said sale deeds including the steps taken by the respondent no.1 from time to time as trustees to sell the said property after obtaining the certificate under section 100 of the MCS Act. It was also recorded that neither the consent award dated 7th February, 2002 nor the said certificate under section 100 of the MCS Act had been challenged by the mortgagers/original owners or any person till date.
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28. It is submitted that in the said sale deed also it was clearly provided that the powers were exercised under Rule 85 of the Maharashtra Co-operative Societies Rules, 1961 and accordingly valuation report from the Government valuer was obtained on 11 th October, 2013. Special Recovery Officer had also applied to the Commissioner for Co-operation and the Registrar of Co-operative Societies for necessary approval/permission including approval of upset price was obtained. The Commissioner for Co-operation and the Registrar of Co-operative Societies had permitted the vendor to fix upset price vide order dated 16th November, 2013 and to sell and transfer the said property on the terms and conditions mentioned therein. A copy of the said order of the Commissioner for Co-operation and the Registrar of Co-operative Societies was also annexed to the sale deed. The consideration price mentioned in the sale deeds was in the sum of Rs.35,01,00,000/-. He submits that it is not in dispute that the entire sale price mentioned in the said three sale deeds was paid by the auction purchasers to the trustee.
29. Learned senior counsel invited our attention to the annexure 5 to the said sale deed and page 187 of the writ petition and would submit that the amount of Rs.12,52,95,492.65 against the names of the five creditors of the banks were mentioned. Similarly the statement of loans adjusted from the NBA account was also mentioned at Rs.39,22,19,517.79. It is submitted by the learned senior counsel that the said transfer of the said property in favour of the respondent no.1 bank was not an absolute transfer but was a trustee. The said bank was ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 18/70 wp-13001.16.doc required to negotiate the best price to be fetched on the sale of the said property in the interest of the petitioner who was the owner of the said property. The stamp duty was rightly not paid as payable on a Deed of Conveyance on the said consent terms or on the Deed of Composition.
30. It is submitted that the said sale was subject to the confirmation of the Registrar, Co-operative Societies. The surplus amount left, if any, after sale of the said property and after adjusting the said amount of Rs.12,52,95,492.65 was required to be returned to the petitioners. Various steps were required to be taken by the trustees for the benefit of the defaulters. He strongly placed reliance on Rule 85 of the MCS Act and in particular Rule 85(9) to Rule 85(14) of the MCS Rules. He submits that the respondent no.1 bank was required to maintain the said property till the said property was sold as trustees and was even permitted to give the said property on lease for the benefit of the defaulter.
31. It is submitted that the rental income that would have been fetched on the said property was for the benefit of the defaulter. He also placed reliance on sub-rule 15 of Rule 85 and would submit that on execution of the said consent terms and the Deed of Composition, the said property stood transferred in favour of the respondent no.1 bank as the trustee to enable the trustees to sale the said property for the benefit of the defaulter. The liabilities of the petitioner and other two creditors were thus crystalized on the date of the filing of the said consent terms and the Deed of Composition and the defaulter was discharged from any further liabilities. The said sale effected by the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 19/70 wp-13001.16.doc respondent no.1 as the trustee of the petitioner was duly confirmed by the Registrar, Co-operative Societies under Rule 107 of the MCS Act.
32. Learned senior counsel placed reliance on the judgment of this Court in case of Balkishan Manekchand Zavar and others vs. Jalgaon People's Co-operative Bank Ltd., 1998 (2) Mh.L.J.147 and in particular paragraphs 1, 3 to 7 and 11 and would submit that neither under section 100 of the MCS Act nor Rule 85 of the Rules uses the word 'sale'. The object of transfer is that the property which cannot be sold in execution could be used by the society for recovery of the dues. The society is thus under obligation to make an endevour to sell the property by achieving the best price for the benefit of the defaulter. It is the obligation of the society to either lease the property or to use the said in such a manner that it derives the profit.
33. It is submitted that if such income would have derived by the respondent no.1 on giving the said property on lease or by using the same in such a manner that it would have derived the profit, the dues of the petitioners and the other creditors would have cleared before sale of the said property. The respondent no.1 was under obligation to restore the said property back to the defaulter if the dues of the bank would have been recovered from such income. It is submitted that this Court has clearly held in the said judgment that under Rule 85(13) of the MCS Rules, the society was required to make an endevour to sell the property to the best advantage of the society and that of the defaulter which property was transferred under section 100(1) of the MCS Act in favour of the society as the trustee. He submits that neither the said ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 20/70 wp-13001.16.doc consent terms nor the consent award made by the Maharashtra State Co-operative Appellate Court nor the said Deed of Composition or the said certificate issued under section 100 of the MCS Act by the Divisional Joint Registrar, Co-operative Societies has been set aside by any Court in any proceedings till date.
34. Learned senior counsel for the petitioners placed reliance on the judgment of this Court in case of Chhatrapati Sambhaji Maharaj Sahakari Patsanstha Maryadit vs. Assistant Registrar, Co-operative Societies, Satara & Anr., 2012(1) Mh.L.J. 746 and in particular paragraphs 8 and 10 and would submit that the transfer of the land owned by the petitioners in favour of the respondent no.1 for realization of the dues payable by the petitioners to the respondent no.1 was not transfer or sale of the property in favour of the respondent no.1 society and thus was not a conveyance under Article 25 of the Bombay Stamps Act, 1958 (now Maharashtra Stamps Act, 1958). Learned senior counsel invited our attention to the interim order passed by this Court in this writ petition and would submit that this Court has already restrained the respondent no.1 from disbursing the said amount claimed by the petitioners as surplus amount.
35. Learned senior counsel invited our attention to the various objections raised by the respondent no.1 in affidavit in reply filed by the said bank. He submits that neither the said Mr. Bharat H.Shah nor M/s.Pilgrim Mercantile Private Limited, creditor no.3 were required to be joined as parties to the writ petition filed by the petitioners. He submits that both those creditors were admittedly discharged from their ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 21/70 wp-13001.16.doc obligation and thus the petitioners not having prayed for any reliefs against those two creditors are rightly not impleaded as parties to the writ petition. He also tendered a compilation of the judgments and the copy of the relevant provisions of the MSC Act and the rules for consideration of this Court.
36. Learned senior counsel invited our attention to the averments made in paragraph 31 of the writ petition and would submit that the petitioner has filed a civil suit before the Civil Judge, Senior Division, Vapi being Special Civil Suit No. 119 of 2014 inter-alia praying for refund of the amount and other reliefs to save the period of limitation.
37. Mr.Hakani, learned counsel for the said bank invited our attention to the prayers in the suit filed by the petitioner before the learned Civil Judge, Senior Division, Vapi/Valsad and would submit that the petitioner cannot be allowed to prosecute both the remedies at the same time based on the same cause of action.
38. Learned counsel for the respondent no.1 bank invited our attention to the consent award passed the the Maharashtra State Co- operative Court, the averments made in various disputes filed by the respondent no.1 bank as well as in the in the civil suit filed by the petitioner. He submits that the Maharashtra State Co-operative Court had rejected the interim relief prayed for by the petitioner. The appeal preferred by the petitioner against the said refusal to grant the said interim relief came to be dismissed. The petitioner had thereafter ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 22/70 wp-13001.16.doc applied for withdrawal of the said dispute on 20 th June, 2014. The Maharashtra State Co-operative Court granted permission to the petitioner to withdraw the said dispute by an order dated 24 th June, 2014. No liberty to file a fresh dispute was granted by the Maharashtra State Co-operative Court in favour of the petitioner.
39. Learned counsel for the respondent no.1 bank invited our attention to the letter dated 23rd March, 2013 addressed by the petitioner to the respondent no.1 bank showing its readiness and willingness to deposit Rs.5.50 crores with interest at the rate of 10% p.a. with the bank. The said letter was not addressed without prejudice to the rights and contentions of the petitioner and was addressed much after the consent award rendered by the Maharashtra State Co- operative Appellate Court. Learned counsel invited our attention to certificate under section 100 of the MCS Act issued by the Divisional Joint Registrar and also the Deed of Composition and would submit that under the said Deed of Composition, the Chief Executive Officer of the respondent no.1 bank was referred to as the Trustee who was the Trustee for the purposes of looking after the interest of the respondent no.1 bank and not the Trustee for effecting sale of the property to achieve the best sale price as sought to be canvassed by the petitioner.
40. It is submitted that even by the letter dated 31st December, 2013 addressed by the petitioner to the Administrator of the respondent no.1 bank, the petitioner had offered Rs.21.50 crores as upfront payment. He tendered a copy of the Dispute filed by the respondent no.1 against the petitioner before the Co-operative Court, Alibag in C.C. 35/ 2001 ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 23/70 wp-13001.16.doc inter-alia praying for recovery of Rs.2,44,78,553/-. He invited our attention to the consent award rendered by the Maharashtra State Co- operative Appellate Court and would submit that there was reference made to the Deed of Composition in the said consent award.
41. Learned counsel invited our attention to various clauses of the said consent award and would submit that by the said consent award, immovable property then owned by the petitioner was transferred in favour of the respondent no.1 bank absolutely on ownership basis and not as a Trustee with power to sell the said property for the benefit of the petitioner as one of the defaulter as canvassed by the petitioner. The petitioner thus could not have made any claim for recovery of any surplus amount, if any, after adjusting the dues of the petitioner and the amount payable to other two creditors belonging to the respondent no.1 exclusively.
42. Insofar as the certificate issued by the Divisional Joint Registrar under section 100 of the MCS Act which was strongly relied upon by the petitioner and which was referred in the Sale Deeds executed by the respondent no.1 bank in favour of the auction purchasers is concerned, it is submitted that the said certificate was obtained fraudulently by the erstwhile Manager of the respondent no.1 bank in collusion with the petitioner according to the learned counsel.
43. Learned counsel strongly contended that though there was no provision of waiver of future interest in the consent award obtained by the parties from the Maharashtra State Co-operative Appellate Court, ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 24/70 wp-13001.16.doc the erstwhile Manager of the respondent no.1 bank in collusion with the petitioner, provided for a waiver of future interest in the said Deed of Composition which was contrary to the provisions of the consent award and thus no reliance could be placed on the said clause providing for waiver of future interest by the petitioner to the respondent no.1 bank. To this extent, there was inconsistency in the provisions of the consent award and the Deed of Composition according to the learned counsel. There is inconsistency between clause 37 of the Deed of Composition and the consent award.
44. Learned counsel for the respondent no.1 bank strongly placed reliance on section 96 of the MCS Act and would submit that even the Court cannot award interest while passing a decree less than the contractual rate of interest. When the Maharashtra State Co-operative Appellate Court passed an order in terms of the consent award, the Maharashtra State Co-operative Appellate Court did not consider whether the said consent terms was in conformity with section 96 of the MCS Act or not and without being satisfied that whether the said consent award was in the interest of the respondent no.1 bank or not, passed the said consent award in violation of section 96 of the MCS Act.
45. Learned counsel for the respondent no.1 relied upon clause (iii) of the said Deed of Composition and would submit that the said certificate was to be issued by the Trustee only after settling the claims of the creditor nos.2 and 3. He submits that by the said consent award dated 7th February, 2002, the earlier consent terms dated 12th October, ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 25/70 wp-13001.16.doc 2001 filed between the parties before the Appellate Court came to be set aside. The respondent no.1 bank had not passed any resolution for waiver of the future interest by passing a resolution in the General Body of the bank and thus no such future interest could have been waived by the respondent no.1 bank in the said Deed of Composition.
46. Insofar as the writ petition filed by the respondent no.1 bank is concerned, learned counsel submits that that there was no question of invocation of section 100 of the MCS Act in this case. The said certificate was obtained fraudulently. The said consent award and the Deed of Composition itself was a Deed of Conveyance in favour of the respondent no.1 thereby transferring immovable property of he petitioner absolutely in favour of the respondent no.1, the said certificate issued by the Divisional Joint Registrar under section 100 of the MCS Act was issued illegally and was of no effect. The immovable property of the petitioner was not transferred in favour of the respondent no.1 under the said certificate issued under section 100 of the MCS Act but was transferred under the said Deed of Composition. The petitioner itself had challenged the said certificate issued under section 100 of the MCS Act in the suit pending before the learned Civil Judge, Senior Division, Vapi / Balsad.
47. Learned counsel for the respondent no.1 bank relied upon Rule 85(13) of the MCS Rules and would submit that the Court has to decide the expenses on sale incurred by the respondent no.1 bank, other expenses and the payment of arrears issued to the defaulters. He invited our attention to Form-R appended to the MCS Rules. Learned ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 26/70 wp-13001.16.doc counsel relied upon letter dated 29th January, 2014 addressed by the bank to the auction purchasers confirming the sale price in respect of the property auctioned in favour of the auction purchaser at Rs.35,01,00,000/-. He submits that the consent terms filed between the parties were the main agreement between the parties and subsequently the documents were to be executed in conformity with the said consent terms. There was a clear intention of the petitioner and the respondent no.1 that the said immovable property of the petitioner was given absolutely to the respondent no.1. The conduct of the parties would also clearly indicate that the transfer of the said property was absolute and not for the purposes of sale in favour of the respondent no.1 as a Trustee for the benefit of the petitioner defaulter. The petitioner did not ask for return of the said immovable property for a period of 11 years from the date of execution of the consent terms i.e. tll 2013.
48. Insofar as the issue of stamp duty not paid as payable on execution of the Conveyance Deed is concerned, it is submitted that even if the stamp duty was not paid sufficiently that would not conclude that the said consent award or the Deed of Composition did not confer absolute title in favour of the respondent no.1. In any event, the stamp duty was to be borne by the respondent no.1 on auction of the said immovable property which has been duly reflected in the balance sheets of the respondent no.1.
49. Learned counsel for the respondent no.1 placed reliance on section 9 of the Banking Regulation Act, 1949 and would submit that the respondent no.1 bank is permitted to sell or dispose of non-banking ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 27/70 wp-13001.16.doc assets within a period of 7 years. He also relied upon section 29 of the said Banking Regulation Act, 1949 and Form-A and would submit that the Co-operative Bank was required to disclose "Non - Banking Assets" in the said Form-A in compliance with section 29 of the Banking Regulation Act, 1949. He relied upon Form-B and would submit that the property and loss account of the Co-operative Bank has to be disclosed and filed in the said form prescribed under Form-B. The respondent no.1 had also disclosed the income arising from the sale or dealing with the non-banking assets. The loss arose, if any, in case of sale of non-banking assets has to be reflected on the expenditure side.
50. Learned counsel for the respondent no.1 relied upon section 56 of the Banking Regulation Act, 1949 and also section 29(5) read with Schedule 11 and would submit that inter office adjustment is permissible. He tendered a copy of the income statement for the period 31st March, 2014 and 31st March, 2013. He also submitted a statement showing profit on sale of non-banking assets of Rs.22,48,04,507=35 as on 31st March, 2014.
51. Learned counsel for the respondent no.1 placed reliance on the statement of loans adjustment from non-banking assets account at page 187 of the writ petition. He submits that the sale price of Rs.35,01,60,000/- was reflected in the said statement of loans adjustment. After showing entitlement of the respondent no.1 for payment of interest on the original amount of Rs.12,52,95,492=65, the respondent no.1 was entitled to recover an amount of ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 28/70 wp-13001.16.doc Rs.39,22,19,517=79 as on 16th December, 2013 which was more than the sale consideration received by the respondent no.1 on sale of the said immovable property at Rs.35,01,60,000/-.
52. Learned counsel for the respondent no.1 placed reliance on Order 23 Rule 1, sub rule 4 of the Code of Civil Procedure, 1908 and would submit that the petitioner having withdrawn the dispute unconditionally, could not have to file a fresh dispute. He submits that the pleadings filed by the petitioner in the said civil suit which is pending before the Civil Judge, Senior Division, Vapi / Balsad are totally inconsistent with the pleadings in this writ petition filed by the petitioner. The petitioner cannot be allowed to approbate and reprobate at the same time. The respondent no.1 has also paid taxes on the said immovable property from the date of transfer of the said property in favour of the respondent no.1 absolutely.
53. Insofar as reliance strongly placed by the petitioner on Section 100 of the MCS Act and Rule 85 of MCS Rules, while effecting the sale of immovable property by the parties is concerned, learned counsel for the respondent no.1 submits that following of directions issued by the Registrar, Co-operative Societies and to get the best sale price of the said immovable property was to comply with the principles of natural justice, transparency and fair play.
54. Mr. Bohra, learned counsel for the respondent no.3 in the writ petition filed by the bank supported the case of the respondent no.1 bank in the said writ petition. The respondent no.1 is Ex-Chairman of ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 29/70 wp-13001.16.doc the respondent no.1 bank and was the Chairman thereof at the time of filing of consent award.
55. Mr. Kulkarni, learned counsel appearing for one of the party, who was allowed to intervene in these proceedings, addressed this Court on the questions of law raised by the parties and supported the case of the respondent no.1 bank. He tendered a compilation of documents for consideration of this Court. He invited our attention to some of the orders passed by this Court in one of the writ petition which was also on board which was part of the said compilation and would submit that the provision of MPID Act were applied in this matter and thus this Court shall consider the effect of that MPID Act particularly while disposing of these two petitions.
56. Insofar as the Writ Petition (Stamp) No. 5832 of 2021 filed by the said bank is concerned, Mr. Virag Tulzapurkar with Mr. V. P. Sawant, learned senior counsel for the original petitioner invited our attention to the prayer clauses in the said writ petition. He submits that the declaration sought by the petitioner in prayer clause (a) that the Deed of Composition dated 12th February, 2002 is in pith and substance a Deed of Conveyance operating as absolute transfer of the ownership of the mortgaged property as mentioned in the consent award dated 7 th February, 2002 is not maintainable and cannot be granted in a writ petition. He submits that in the prayer clause (b), the bank has prayed for an order and direction for quashing and setting aside the Deed of Composition dated 12th February, 2002 which was an agreement entered into between the private parties and thus cannot be set aside in ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 30/70 wp-13001.16.doc a writ petition.
57. Insofar prayer clause (c) is concerned, it is submitted by the learned senior counsel that the prayer for an order and direction against the Maharashtra State Co-operative Appellate Court to modify the consent award dated 7th February, 2002 by providing the contractual rate of interest to be compounded quarterly on the decreetal amount also cannot be granted by this Court in writ petition. His client is not agreeable for any such modification of the consent award and thus no such relief can be granted by this Court in a writ petition. It is submitted that the respondent nos. 2 and 3 in the writ petition are private parties. Respondent no. 4 i.e. State of Maharashtra is a formal party and no relief is sought against the respondent no.4. None of the reliefs thus claimed by the petitioner-bank in the said writ petition are maintainable. He submits that the writ petition thus filed by the bank is thoroughly misconceived and shall be dismissed with exemplary cost.
58. In his rejoinder argument advanced by the learned senior counsel for the bank and few others, it is submitted by the learned senior counsel that there is no question of considering any equity by this Court by interfering with the consent award based on the consent terms filed by the parties which has been acted upon. It is submitted that the in the said Deed of Composition executed by and between the parties, the bank had not waived the interest prior to the date execution of the said Deed of Composition but had waived future interest in view of the liability of the petitioner having been already crystallised. The said consent terms filed by the parties which is culminated in a consent ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 31/70 wp-13001.16.doc award passed by the Co-operative Appellate Court has not been challenged by any party since 2002. The bank did not file any proceedings for setting aside the said consent terms in appropriate Court. He submits that in any event, the bank in its petition has only prayed for the modification of the consent award by inserting the agreed rate of interest, without consent of the petitioner.
59. It is submitted by the learned senior counsel for the petitioner that the bank has not disputed the said certificate issued by the Divisional Joint Registrar under Section 100 of the MCS Act. There was a reference to Section 100 of the MCS Act and Rule 85 of the MCS Rules in all the documents including Sale Deed executed between the bank and the auction purchasers. The Registrar, Co- operative Societies also issued various directions to the respondent no.4 bank to comply with the provisions of Rule 107 of the MCS Rules and to get the best price of sale of the said immovable property owned by the petitioner.
60. It is submitted by the learned senior counsel that stamp duty was rightly not paid under the provisions of Maharashtra Stamp Act payable on Deed of Conveyance. No benefits in the said property were transferred in favour of the bank under Section 100 of the MCS Act and Rule 85 of the MCS Rules. The said immovable property was transferred in favour of the bank as a Trustee.
61. Insofar as the submissions made by Mr. Hakani, learned counsel for the bank on the prayers made by the petitioner in the Civil Suit filed ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 32/70 wp-13001.16.doc by the petitioner before the learned Civil Judge, Senior Division, Vapi/ Valsad is concerned, it is submitted by the learned senior counsel that the said suit was filed by the petitioner so as to save the period of limitation. The petitioner has already made a statement in this writ petition that if the amount is paid by the respondent no.1 as as claimed by the petitioner, the petitioner would withdraw the said suit.
62. Learned senior counsel invited our attention to the 2 nd paragraph of the written statement filed by the bank in the said Special Civil Suit No. 119 of 2014 filed by the petitioner and more particularly paragraphs 9 to 12, 29 and 32 of the said written statement and would submit that the bank itself had strongly placed reliance on the said Deed of Composition. The bank has also placed reliance on the certificate issued by the Divisional Joint Registrar under Section 100 of the MCS Act in course of the execution of the consent award dated 7 th February, 2002 duly signed and executed by the parties. It is also contended that the said certificate issued by the Divisional Joint Registrar is final subject to appeal or revision.
63. Learned senior counsel submits that in the said written statement, the bank had contended that the reliefs prayed by the petitioner in the said suit were incapable of being granted as the legal ownership of the suit property was transferred in favour of the bank on 2 nd March, 2002 by virtue of certificate under Section 100 of the MCS Act. The said suit property was sold to the auction purchasers. The validity of the public auction was under Rule 85 of the MCS Rules and was subject to the jurisdiction of the Authority under the MCS Act. The said certificate ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 33/70 wp-13001.16.doc under Section 100 of the MCS Act has not been challenged by the petitioner herein by filing Revision Application under Section 154 of the MCS Act. The auction was conducted by the bank under the provisions of Section 100 of the MCS Act and Rule 85 of the MCS Rules. The bank contended in the said written statement that no case was made out by the petitioner herein for cancellation of Sale Deeds. The bank also contended that it is not permissible for the Court in the said suit to go behind the consent award which was based on consent terms and Deed of Composition, which was admittedly signed, executed and acted upon by the parties.
64. Learned senior counsel placed reliance on Rule 85 of the MCS Rules and would submit that the surplus amount in the hands of the said bank was liable to be returned to the petitioner upon sale of the property owned by the petitioner. The impugned action on the part of the bank is contrary to Rule 85 of the MCS Rules read with Section 100 of the MCS Act. The respondent nos. 2 to 4 have not taken any action against the respondent no.1. The writ petition filed by his client is thus maintainable. He submits that the said Chief Executive Officer who was a signatory to the Deed of Composition was a trustee in the said transaction. Learned senior counsel also placed reliance on Rules 85(12) and 85(13) of the MCS Rules and would submit that the respondent bank was under an obligation to maintain a separate amount showing all the expenses incurred including payment to set aside the encumbrances, land revenue and other dues on the property and all the income derived from it in respect of the property transferred to the bank under Rule 85(5) of the MCS Rules.
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65. It is submitted that the bank was required to use its best endeavour to sell the property by following the due procedure provided in Rule 107 of the MCS Rules for the best advantage of the bank as well as that of the defaulter. The bank was required to give first option to the defaulter who originally owned the property. The said sale was subject to confirmation by the Registrar. The proceeds of sale were to be applied to defray the expenses of the sale and other expenses incurred by the bank and to the payment of arrears due by the defaulter under the order and the surplus, if any was required to be returned to the defaulter. The respondent no.1 bank was also entitled to drive income from the said immovable property given by the petitioner to the bank for the purposes set out in the Consent Award, Deed of Composition and in the certificate issued under Section 100 of the MCS Act.
66. It is submitted by the learned senior counsel that Section 96 of the MCS Act pressed in service by the respondent no.1 bank does not apply. The parties in this case had entered into an agreement i.e. Deed of Composition by which parties had agreed that the respondent no.1 bank had waived its right to claim future interest from a specified date mentioned therein. The Maharashtra State Co-operative Appellate Court was satisfied that the terms were proper and valid as recorded in the said consent award passed by the said Court. The said consent award has not been impugned by the respondent no.1. The parties had agreed to modify the provision in respect of the interest on loan as provided in the loan agreement by agreeing to the waiver in respect of the future interest.
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67. Insofar as the issue raised by Mr. Hakani, learned counsel for the bank under Order 23 Rule 1 is concerned, the learned senior counsel for the petitioner submits that when the fresh consent terms was tendered by the parties, by the consent of all the parties, no objection was raised by the respondent no.1. The Deed of Composition was duly annexed to the said consent award. He invited our attention to paragraphs 15, 17 and 20 of the consent award.
68. Insofar as the plea of equity raised by the bank is concerned, it is submitted by the learned senior counsel that the equity does not override the law. The bank cannot be allowed to rob the property of the petitioner under the guise of the equity. Learned senior counsel placed reliance upon the judgment of Supreme Court Raghunath Rai Bareja and Anr. v/s. Punjab National Bank and Ors. (2007) 2 SCC 230 and more particularly in paragraphs 29 to 36 in support of submission that equity follows the law. He also placed reliance on the judgment of Narinder S. Chadha and Ors. v/s. Municipal Corporation of Greater Mumbai and Ors., (2014) 15 SCC 689 and would submit that when there is a conflict between law and equity, it is the law which has to prevail.
REASONS AND CONCLUSION :-
69. We have heard the learned counsel for the parties at length and have perused the pleadings, documents, the provisions of law and the judgments referred and relied upon by the parties.
::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 :::bdp 36/70 wp-13001.16.doc Following questions of law fell for consideration of this Court in this matter :-
(a) Whether the transfer of immovable property of the petitioner in favour of the respondent no.1 under Section 100 of the MCS Act read with Rule 85 of the MCS Rules amounts to absolute transfer of ownership or was as a Trustee ?
(b) Whether the sale price in respect of the property transferred under Section 100 of the MCS Act on auction was to be recovered in the best interest of the defaulter as well as the bank ?
(c) Whether the liability of the petitioner under the loan obtained by the petitioner from the respondent no.1 bank and towards the creditors Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. was discharged by virtue of Consent Terms and the Deed of Composition entered into between the parties on the date of filing Consent Terms and on the date of Deed of Composition ?
(d) Whether the writ petition filed by the petitioner for various reliefs in respect of the said immovable property is maintainable in view of the pendency of the suit filed by the petitioner in respect of the said property before the learned Civil Judge, Senior Division, Vapi/ Valsad ?
(e) Whether the petitioner could have filed a fresh dispute before the Co-operative Court though no leave was granted while filing earlier ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 37/70 wp-13001.16.doc dispute by the Co-operative Court ?
(f) Whether in view of Section 96 of the MCS Act, the Co-operative Appellate Court could have made a consent award allowing the bank to waive future interest on the amount payable by the petitioner ?
(g) Whether the respondent no.1 bank having relied upon Section 100 of the MCS Act and Rule 85 of the MCS Rules in various pleadings and the documents are estopped from contending that the transfer of the immovable property of the petitioner under Section 100 of the MCS Act read with Rule 85 of the MCS Rules was absolute and not transferred in favour of a beneficiary to achieve the best sale price in the interest of defaulter and the bank ?
Following question of law fell for consideration of this Court in Writ Petition (Stamp) No. 5832 of 2021 :-
(a) Whether the said Deed of Composition dated 12th February, 2002 was itself in pith and substance a Deed of Conveyance operating as absolute transfer of the ownership of the mortgage property in favour of the respondent no.1 bank ?
(b) Whether declaration sought by the bank that the Deed of Composition entered into between private parties was a Deed of Conveyance can be granted by this Court exercising writ jurisdiction under Article 226 of the Constitution of India ?
(c) Whether this Court exercising writ jurisdiction under Article 226 ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 38/70 wp-13001.16.doc of the Constitution of India can direct the Maharashtra State Co-
operative Appellate Court to modify the consent award in absence of any consent for such modification by all the parties ?
(d) Whether this Court under Article 226 of the Constitution of India can quash and set aside the Deed of Composition dated 12 th February, 2002 entered into between the two private parties, which document is in the nature of an agreement between the parties ?
(e) Whether writ petition filed by the bank under Article 226 of the Constitution of India is maintainable in absence of any relief against the Government or other Authority falling under Article 12 of the Constitution of India ?
70. We shall now deal with each of these questions fell for consideration of this Court in detail. It is not in dispute that the said immovable property was mortgaged by the petitioner as a security in favour of the respondent no.1 bank. There was a default committed by the petitioner in making repayment of the said loan to the respondent no.1. The respondent no.1 bank had filed three disputes against the petitioner for recovery of the said amount under Section 91 of the MCS Act. Two of the other creditors of the petitioner had prayed for impleadment in those disputes. The parties thereafter negotiated for settlement and ultimately filed consent terms in the Co-operative Court. The Co-operative Court passed a consent award dated 12th February, 2001 in terms of the consent terms in Dispute No. 35 of 2001. The said consent award however was challenged by the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 39/70 wp-13001.16.doc petitioner by filing Appeal No. 13 of 2002. On 7 th February, 2002, the parties filed consent award before the Maharashtra State Co-operative Appellate Court by which the earlier consent award dated 12 th February, 2001 came to be set aside and the fresh consent award dated 7th February, 2002 came to be passed in the said appeal.
71. A perusal of the said consent award indicates that the said consent award was passed by consent of all the parties to the said appeal. The respondent no.4 to the said appeal was deleted as the entire claim of the bank in the Dispute No. 35 of 2001 was settled by way of a composition of the property of the petitioner herein. In clause 2 of the said consent terms, it was provided that the claim of the respondent no.1 bank was being settled by way of a Deed of Composition. Respondent no.1 was reasonably confident that the sale of the property of the petitioner herein specified in Exhibit 'I' would satisfy not only the loan of the petitioner in dispute no. 35 of 2001 but also the other principal borrowers namely M/s. Priyesh Land Developers Pvt. Ltd. and M/s. Anuj Land Developers Pvt. Ltd. who were the opponents in Dispute Nos. 34 of 2001 and 36 of 2001 respectively. It was further provided that the liabilities of respondent nos. 6 and 7 i.e. Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. were being settled by way of said consent terms.
72. In clause 5 of the said consent terms, it was provided that as a collateral security to the said three loans, the petitioner herein had executed a Deed of Simple Mortgage in respect of the suit land. The petitioner had also stood as a surety for the repayment of the said loans.
::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 :::bdp 40/70 wp-13001.16.doc The partners of the petitioner had handed over an irrevocable power of attorney to the respondent no.1 bank allowing the bank to dispose off the property at Sanjan in case of the default in repayment of the laon in respect of any of the cases. The three disputes filed by the bank were disposed of because of the parties to the said consent terms were of the view that the property of the petitioner at Sanjan was not only adequate to settle all three claims of the respondent no.1 bank reflected in dispute nos. 34 of 2001, 35 of 2001 and 36 of 2001 which were then pending before the Co-operative Court, Raigad/Alibag but also the claims of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. It was provided that the petitioner was obliged and had agreed to pay all the liabilities of all the three companies as the petitioner was a common guarantor in all the three disputes.
73. In clause 9 of the said consent terms, it was provided that the parties to the said appeal had again renegotiated the terms of those consent terms for the purpose of fully and finally settling all the claims of all the parties involved and after having satisfied themselves of the correctness and validity thereof and filed the fresh consent terms in the said appeal. The appellant in the said appeal Ms. Heema Pradeep Desai and Shri Pradeep Hariprasad Desai through his legal heirs who was also one of the partner and Shri Priyesh P. Desai, another partner accepted the liability for repayment of the said loans referred in the said consent terms.
74. In clause 11 of the said consent terms, it was agreed that prior to the filing of the said disputes and also during the pendency of the said ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 41/70 wp-13001.16.doc disputes before the Co-operative Court, the petitioner was constantly persuading the respondent no.1 bank and was requesting them to takeover their property at Sanjan toward the full and final settlement as the market value of the said property was much more in value then which was outstanding in all three loans accounts and also the liabilities of said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd.
75. In clause 12 of the said consent terms, it was provided that the respondent no.1 bank in its Recovery Committee meeting dated 8 th October, 2001 decided to acquire the property in terms of power given to them in the Board of Directors meeting held on 29 th September, 2001. In clause 15 of the said consent terms, it was agreed by all the parties to the said appeal to ratify and confirm that from the date of the execution of the said consent terms, the said property would be conveyed in the name of the Chief Executive Officer of the respondent no.1 bank in trust for the purpose of composition i.e. for clearance of the outstanding loans not only in respect of the present dispute i.e. Dispute Nos. 35 of 2001 but also in respect of Dispute Nos. 34 of 2001 and 36 of 2001 and also for clearing up the liability of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd.. The title certificate certified that the said property was without any encumbrances to the satisfaction of the respondent no.1 bank was annexed to the said consent terms.
76. It was agreed that the entire property prescribed in Exhibit '1' in favour of the Chief Executive Officer of the respondent no.1 bank in ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 42/70 wp-13001.16.doc Trust would be transferred without any encumbrances of the whatsoever nature as well as that of respondent nos. 2, 3 and 5 to 7 to the said consent terms and that a Deed of Composition which was annexed thereto shall be registered with the Sub-Registrar of Assurances at Sanjan for giving ture and meaningful effect to those consent terms. The said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. authorized Shri Bharat Shah on its behalf and also on behalf of the M/s. Pilgrim Mercantile Pvt. Ltd. to execute the said Deed of Composition and for the purpose of releasing the property from charge, if required.
77. In clause 17 of the said consent terms, the parties confirmed that following loans and liabilities with interest due thereon were being cleared by the said Deed of Composition :-
a) Dispute No. 35 of 2001 - Rs.2,08,69,712/- as on 12.10.2001
b) Dispute No. 34 of 2001 - Rs.2,01,56,736/- as on 12.10.2001
c) Dispute No. 36 of 2001 - Rs.2,19,05,408.65 as on 12.10.2001
d) Liability of Respondent No.6 - settled at Rs.4,40,00,000/-
(Settled in place of Rs.6.29.69.292/-)
e) Liability of Respondent No.7 - Rs.1,83,63,636/-
Rs.12,52,95,492.65/- Total Liability
78. In clause 18 of the said consent terms, it was recorded that the petitioner herein had confirmed that it did not have any property other than what was mentioned in Exhibit '1' annexed thereto which was free of litigation, encumbrances and which could be sold and that the amounts shown above could be appropriated and/or recovered. The ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 43/70 wp-13001.16.doc respondent no.1 bank as well as Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. after going through the relevant record were satisfied with the petitioner that at that moment the petitioner did not have any property which was free of litigation/encumbrances and which could be sold and that the amounts shown in clause 17 could be appropriated and/or recovered.
79. In clause 19 of the said consent terms, it was agreed that the respondent no.1 bank, Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. had initiated the entire matter inter-se with the petitioner herein and its partner and had decided to convey the property described in Exhibit '1' thereto i.e. the suit property in Trust in favour of the Chief Executive Officer of the respondent no.1 bank in settlement of the dues to the bank of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. and dispute nos. 34 of 2001, 35 of 2001 and 36 of 2001. The parties had decided to execute the Deed of Composition by which the property was conveyed in favour of the Chief Executive Officer of respondent no.1 bank in Trust. It was agreed that in addition to the Deed of Composition referred to in the said consent terms, the petitioner shall also execute all other documents as may be required by the Chief Executive Officer of the respondent no.1 bank for giving a true and meaning full effect to the said transaction.
80. In clause 20 of the said consent terms, it was recorded that the Maharashtra State Co-operative Appellate Court had gone through the Deed of Composition and other relevant documents to be executed between the parties thereto and records its satisfaction and directed the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 44/70 wp-13001.16.doc parties to complete the said transaction within a period of one month by the said Deed of Composition and other relevant documents before the Competent Authorities for the purpose of having the said property conveyed in the name of the Chief Executive Officer of the respondent no.1 bank. In clause 22 of the said consent terms, it was provided that the respondent no.1 bank as well as Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. had jointly assessed the value of the plot and reasonably believed that the single continuous gut of the suit property could fetch value not only to the extent of claim of the respondent no1. Bank in the three disputes filed by it and also to the disputes filed by the respondent nos. 6 and 7. It was further provided in the said clause that the respondent no.1 bank stated that upon the conveyance of the said property in favour of the Chief Executive Officer of the respondent no.1 bank in Trust, the entire claim/charge of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. in the said appeal and the loans of the opponents in those three disputes were settled.
81. The Court clarified that all the opponents in all three disputes in their capacity as the principal borrowers, guarantors and sureties were thereby discharged from the loan liabilities in those three disputes. All the three disputes were marked as settled and were disposed off by the said order. The claim of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. in the dispute no. 35 of 2001 was also settled. They also declared that did not have claim in respect of the suit property. Dispute Nos. 34 of 2001 and 36 of 2001 filed by the bank against the opponents in the said dispute also were settled in view of the said consent award. The claim of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. at ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 45/70 wp-13001.16.doc Rs.4,40,00,000/- who had taken a cash credit facility of Rs. 2,50,00,000/- from the respondent no.1 bank was also settled.
82. In clause 29 of the said consent terms, it was recorded that the parties to the consent terms agreed that all the expenses, advocates fees, registration fees and all other incidental expenses and charges shall be debited in the loan account of the petitioner. The entire loan of M/s.Pilgrim Mercantile Pvt. Ltd. also was settled under the said consent terms. No stamp duty was paid on the consent award.
83. A perusal of the record indicates that the General Manager of the respondent no.1 bank thereafter issued two public notices dated 6 th November, 2001 published in the newspapers. In the said public notice, it was mentioned that the bank had obtained no objection certificate from the property owner i.e. the petitioner and had decided to sell the said property for recovery of money. We have also perused the Deed of Composition dated 12th February, 2002 entered into between the petitioner as the debtor, the Chief Executive Officer of M/s. The Pen Co-operative Urban Bank Limited as the 'The Trustee' appointed in the capacity as an ex-officio representative of the respondent no.1 bank of the Second Part and M/s. The Pen Co-operative Urban Bank Limited as 'Creditor No.1', Shri Bharat H. Shah as 'Creditor No.2' and M/s.Pilgrim Mercantile Pvt. Ltd. as 'Creditor No.3'. In the said Deed of Composition also there was reference to the loans obtained by the petitioner, about the mortgage of the immovable property by the petitioner in favour of the respondent no.1 bank, the transaction between the respondent no.1 and the other two creditors i.e. the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 46/70 wp-13001.16.doc respondent nos.6 and 7. There was also a reference made to three disputes filed by the respondent no.1 bank against the petitioner and the respondent nos. 6 and 7.
84. In the recital 23 of the said Deed of Composition, it was recorded that the respondent no.1 bank had published a notice in the Times of India on 6th November, 1999 calling for bids for purchase of the said property, however, did not get any satisfactory response to the said advertisement. Similar notice was given by the respondent no.1 bank on 25th September, 2001 in Mid-day, however, no satisfactory bidders applied for purchase of the said property. In recital 26 of the said Deed of Composition, it was recorded that the debtor did not have any other means to repay the said loans to the bank and also the liabilities of the other two creditors i.e. Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd.
85. In paragraph 29 of the recital, it was recorded that the bank in its Recovery Committee meeting held on 8th October, 2001 decided to accept the request of the debtor as the said request was in the interest of the bank. In recital 35 of the said Deed of Composition, it was recorded that the debtor had represented to each of the creditors that it was willing to convey the suit property in favour of the Trustee by way of a Composition Deed who shall deal with the said property in the best interest of the creditors and shall negotiate to settle the entire claims of the creditors in the best possible manner. The debtor also made representation to the creditors that in view of the fact that it was clearing off all the outstanding dues of all the creditors, they should be ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 47/70 wp-13001.16.doc prepared to accept something less than what was actually due and payable to them. The said clause further provided the amounts due to respondent no.1 bank, M/s. Anuj Land Developers Pvt. Ltd., M/s. Pilgrim Mercantile Pvt. Ltd. and M/s. Priyesh Land Developers Pvt. Ltd.. The balance in those accounts as on 12 th October, 2001 was Rs.12,52,95,492.65/-.
86. In recital 37 of the said Deed of Composition, it was recorded that because of the request made by the debtor, the respondent no.1 bank had agreed that it may not levy any interest in respect of the outstanding loans in respect of dispute nos. 34 of 2001, 35 of 2001 and 36 of 2001 after 12th October, 2001 after the Co-operative Court, Raigad/Alibag passed the consent order. In recital 38 of the said Deed of Composition, it was recorded that the creditor nos. 2 and 3 i.e. Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. confirmed that their liabilities and the amounts due from the petitioner were recovered as specifically mentioned in clauses 24 to 26 of the consent terms.
87. In recital 39 of the said Deed of Composition, it was recorded that the debtor i.e. the petitioner herein had agreed in the said consent terms dated 7th February, 2002 that the Deed of Composition would be executed by and between the parties thereby the suit property no.1 would be conveyed in the name of the Chief Executive Officer of the respondent no.1 bank and that he would be appointed as the Trustee of the property and that the said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. had agreed to the said Deed of Compensation as per the terms and conditions mentioned in the said consent terms filed ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 48/70 wp-13001.16.doc before the Maharashtra State Co-operative Appellate Court, Mumbai.
88. In clause 1 of the said Deed of Composition, it was recorded that in pursuance of the said Deed of Composition and in consideration of the satisfaction of the entire outstanding liabilities of the creditors i.e. the respondent no.1 bank, Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. they absolutely conveyed, granted and signed the said plot in favour of the Trustee i.e. Chief Executive Officer of the respondent no.1 bank with a clear understanding that all the creditors thereby declared that were no more required to receive any amount from the petitioner and that the creditors gave absolute discharge to the petitioner.
89. In clause 5(i) of the said Deed of Composition, it was recorded that the petitioner covenants with the Trustee and in Trust for the purpose declared in the said document. The Trustee shall stand possessed of the said property and to clear the liabilities of the said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. in the manner mentioned in clauses 24 to 26 of the consent order dated 7 th February, 2002 passed by the Maharashtra State Co-operative Appellate Court. It was further recorded that in pursuant of the said agreement and in consideration of the premises, the respondent no.1 and the other two creditors thereby released and discharged the petitioner from all the said debts and from all actions, claims or demands or any of them against the debtor in respect thereof.
90. In clause 5(iii) of the said Deed of Composition, it was recorded ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 49/70 wp-13001.16.doc that the petitioner and the said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. confirmed that after they receive the payment more particularly specified in clauses 24 to 26 of the consent order dated 7th February, 2002, the liability of Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. would stand automatically discharge and that the Trustee shall issue necessary certificate after settling the claim of the said Shri Bharat Shah and M/s. Pilgrim Mercantile Pvt. Ltd. against the petitioner. The Trustee shall be entitled to transfer the entire land referred to in the said document in in favour of the person or body as per the instructions of the bank and/or held the said property on behalf of the respondent no.1 as per the instruction of respondent no1.
91. In clause 5(iv) of the said Deed of Composition, it was recorded that since after execution of the said agreement, the property vests in the Trustee, who is the Chief Executive Officer of the bank and it was his duty to keep the property well protected and that there are no encumbrances on the said property and shall pay the taxes, dues, Government cess in respect of the said property regularly. In the said Deed of Composition, the consent terms entered into between the parties was also annexed.
92. A perusal of the certificate issued under Section 100 of the MCS Act by the Divisional Joint Registrar, Co-operative Societies, Konkan Division, indicates that there is a reference to the execution of award passed by the Maharashtra State Co-operative Appellate Court in Appeal No. 13 of 2002 in favour of the respondent no.1 on 7 th February, 2002 for sale of the said property of the petitioner in the said ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 50/70 wp-13001.16.doc certificate. The Divisional Joint Registrar certified that the said property could not be sold for want of buyers. He also ordered under Section 100 of the MCS Act that the right, title and interest of the petitioner on the said property shall vests in the bank and shall be delivered to the bank subject to the terms and conditions laid down in the Schedule annexed to the said Deed of Composition. In the Scheduled it was provided that the said property was transferred to the respondent no.1 bank in full satisfaction of the amount due from the petitioner as per paragraph 17 of the judgment dated 7th February, 2002. It is not in dispute that the said certificate issued under Section 100 of the MCS Act has not been impugned by the respondent no.1 bank before effecting sale of the said property or even thereafter all these years.
93. A perusal of the Sale Deed dated 27 th March, 2014 executed between the respondent no.1 bank and Mr. Nemichand Jaywantraj Mehta indicates that the said Sale Deed also refers to the loan transaction between the parties. There is also a reference to certificate issued under Section 100 of the MCS Act read with Rule 85 of the MCS Rules pursuant to which the said property was transferred unto to respondent no.1 under certificate dated 2nd March, 2002. The Revenue Authority has mutated the records and entered the name of the respondent no.1 as owner/holder of the said property. In recital 'I', it was recorded that the respondent no.1 had decided to sell and dispose off the said property by public auction and in discharge of its obligations under Rule 85 of the MCS Rules and had accordingly obtained the valuation report from the Government dated 11 th October, ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 51/70 wp-13001.16.doc 2013. The respondent also applied to the Commissioner for Co- operation and the Registrar of Co-operative Societies for necessary approval/permission including approval of upset price.
94. On 16th November, 2013, Commissioner for Co-operation and Registrar of Co-operative Societies permitted the respondent no.1 bank to fix upset price and to sell and transfer the said property on the terms and conditions mentioned therein in the said Sale Deed. There was also reference to the attempts made by the respondent no.1 for auction sale of the said property by issuing public notice in various newspapers in past. The tender bid of the auction purchasers was approved by the Commissioner for Co-operation and the Registrar of Co-operative Societies on 27th January, 2014. The said auction purchasers had paid the entire consideration of Rs.35,01,00,000/- to the respondent no.1 bank for purchase of the said suit property.
95. In Clause (U) of the said Sale Deed, it was recorded by the respondent no.1 that the petitioner was in alleged arrears of outstanding loans and advances including interest, cost and expenses and other creditors as per the said consent terms amounting to Rs.39,22,19,517.29/- as on 16th December, 2013 and that they had failed to pay/deposit the said alleged outstanding dues and/or entire consideration and expenses of sale till the date of execution of a Sale Deed. The Vendor decided to complete the sale sanctioned by the Registrar of Co-operative Societies by executing all those Sale Deeds. Similar two Sale Deed dated 27th March, 2014 were executed between the respondent no.1 bank and Mr.Nemichand Jaywantraj Mehta.
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96. A perusal of the averments made by the respondent no.1 in the affidavit in reply dated 23rd June, 2015 in this writ petition indicates that it was the case of the respondent no.1 bank itself that the transfer of the immovable property was effected under section 100 of the MCS Act. In paragraph 16 of the said reply, it is submitted by the respondent no.1 bank itself that the said certificate under section 100 of the MCS Act was issued in proper and lawful manner and that too with the knowledge of the petitioner. The petitioner has challenged the said certificate only after the sale of the said property by auction. In paragraph 6 of the said affidavit, it is the case of the respondent no.1 itself that the transfer was effected under section 100 of the MCS Act in substance of law from the Chief Executive Officer of the respondent no.1 (Ex-trustee of the creditors) to the respondent no.1.
97. Mr. Tulzapurkar, learned senior counsel for the petitioner also invited our attention to the written statement filed by the respondent no.1 in the Civil Suit filed by the petitioner before the Civil Judge Senior Judge, Vapi / Valsad on 2nd July, 2014. In paragraph 9 of the written statement, the respondent no.1 has strongly placed reliance on the Deed Composition and has contended that the said Deed of Composition was executed in execution of the consent award dated 7 th February, 2002.In paragraph 10 of the said written statement, it is admitted by the respondent no.1 that the said certificate under section 100 of the MCS Act was issued in the course of execution of the consent award dated 7th February, 2002 duly signed, executed and admitted by the petitioner.
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98. In paragraph 11 of the said written statement, it is admitted by the respondent no.1 that the suit property was transferred in favour of the bank on 2nd March, 2002 by virtue of the certificate under section 100 of the MCS Act. In paragraph 12 of the said written statement, it is contended by the respondent no.1 that the certificate under section 100 of the MCS Act has not been challenged by the petitioner by filing the Revision Application under section 154 of the MCS Act. The auction purchaser has acquired / purchased the said property in public auction under section 100 of the MCS Act and Rule 85 of the MCS Rules.
99. In paragraph 26 of the written statement, it is admitted by the respondent no.1 that in view of non-availability of the buyer of the said property in execution of the consent award, the said property was sold and the respondent no.1 was discharged from its obligation under section 100 of the MCS Act and Rule 85 of the MCS Rules. In paragraph 29 of the said written statement, it is admitted that by virtue of section 163 of the MCS Act, the said certificate is final and conclusive and cannot be questioned in the Civil Court. In paragraph 32 of the said written statement, it is admitted that section 100 of the MCS Act does not create ownership in favour of the respondent no.1 to hold the property and sell the same at an appropriate time.
100. A perusal of the record summarized aforesaid would clearly indicate that the said property of the petitioner was transferred in favour of the Chief Executive Officer of the respondent no.1 bank as a Trustee under section 100 of the MCS Act read with Rule 85 of the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 54/70 wp-13001.16.doc MCS Rule to fetch the best price in the interest of the defaulter, the respondent no.1 and the other two creditors. Both the parties have relied upon the said certificate under section 100 of the MCS Act and have acted upon the said certificate by following the procedure prescribed under Rule 85 and 107 of the MCS Rules. The action taken by the respondent no.1 all through out was pursuant to the resolution passed by the Board of Directors of the respondent no.1 for auctioning the said property and in recovering the money due from the petitioner to the respondent no.1 bank.
101. The respondent no.1 also has itself relied upon the said certificate under section 100 of the MCS Act issued by the Divisional Joint Registrar and has acted upon the said certificate. The validity of the said certificate is also accepted in affidavit in reply filed in this writ petition and also in the said written statement filed in the suit filed by the petitioner before the learned Civil Judge, Senior Division, Vapi / Valad. A perusal of the sale deeds executed by the respondent no.1 in favour of the auction purchaser also clearly indicates that the respondent no.1 has taken further steps pursuant to the said certificate under section 100 of the MCS Act by auctioning the property of the petitioner and by executing the sale deed in favour of the successful bidder. The respondent no.1 is thus estopped from contending that the said certificate issued by the Divisional Joint Registrar on the application of the Chief Executive Officer of the respondent no.1 was fraudulent or is not binding upon the respondent no.1.
102. Under section 100 of the MCS Act in any execution of an order ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 55/70 wp-13001.16.doc sought to be executed under section 98 or for recovery of any amount under section 101 of the MCS Act or Section 137 any property which cannot be sold for want of buyers and if such property is in occupancy of the defaulter or some other person on his behalf, such property shall be transferred to the society who has applied for execution of the said order in the manner prescribed. Under Rule 85 of the MCS Rules, if any property which cannot be sold for want of buyers without any execution of an order sought to be executed under sections 98, 101 and 137, a certificate can be issued by the Registrar at the instance of the society applying for execution of the said order.
103. Under Rule 85 (6), it is provided that the certificate granted under sub-rule (5) shall state whether the property is transferred to the society in full or partial satisfaction of the amount due to it from the defaulter. Under Rule 85(9), the society shall be required to pay expenses incidental to sale including the cost of maintenance of live stock, if any, according to such scale as may be fixed by the Registrar from time to time. Under Rule 85(12), it is provided that the Society to which property is transferred under sub-rule (5) shall maintain for each such defaulter a separate account showing all the expenses incurred including payment to outside encumbrances, land revenue and other dues on the property and all the income derived from it.
104. In Rule 85 (13), it is provided that the society to which property is transferred under sub-rule (5) shall use its best endeavor to sell the property by following the procedure as provided in Rule 107 as soon as as practicable within such period but not more than a period of three ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 56/70 wp-13001.16.doc years from the date of entering the name of the society in the record of rights of the transferred property to the best advantage of the society as well as that of the defaulter, the first option being always given to the defaulter who originally owned the property. The sale shall be subject to confirmation by the Registrar. The proceeds of the sale shall be applied for defraying the expenses of the sale and other expenses incurred by the society and referred to in sub-rule (9) and (12) and to the payment of the arrears due by the defaulter under the order in execution and the surplus (if any), shall then be paid to the defaulter.
105. Under Rule 85 (14), it is provided that until the property is sold, the society to which property is transferred under sub-rule (5) shall use its best endeavors to lease it or to make any other use that can be made of it so as to derive the largest possible income form the property. Rule 85(15) provides that when the society to which property is transferred under sub-rule (5) has realized all its dues, under the order in execution of which the property was transferred, from the proceeds of management of the property, the property, if unsold shall be restored to the defaulter.
106. A perusal of the record indicates that the respondent no.1 while auctioning the property of the petitioner, had followed the procedure as prescribed under Rule 85 read with the certificate issued by the Divisional Joint Registrar under section 100 of the MCS Act. A conjoint reading of the Rule 85 (12) to (15) of the MCS Rules clearly indicates that the society acts as Trustee on behalf of the defaulter in respect of such property transferred in its favour. Under section 100 of ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 57/70 wp-13001.16.doc the MCS Act, the Trustee has to use its best endeavor to lease such property or to make any other use that can be made by it to derive largest possible income from the property. If out of such income that could have been generated by the respondent no.1 upon transfer of such property in its favour under section 100 of the MCS Act and if all the dues of the petitioner would have been appropriated against such income to be fetched from the said property, in that event the respondent no.1 was liable to restore the said property to the defaulter.
107. In our view, the submission of the learned counsel for the respondent no.1 bank now that no reliance on the said certificate under section 100 issued by the Divisional Joint Registrar by the petitioner can be placed or that the said certificate is not binding upon the respondent no.1 is totally contrary to the case of the respondent no.1 itself all through out while acting upon the said certificate in various documents and pleadings. There is no merit in the submission made by the learned counsel for the respondent that the transfer of the said immovable property of the petitioner in favour of the respondent no.1 was absolute and on ownership basis by virtue of the consent award and Deed of Composition.
108. If the argument of the learned counsel for the respondent no.1 that the said immovable property was transferred absolutely in favour of the respondent no.1 on ownership basis by virtue of the consent award or said Deed of Composition is accepted, the respondent no.1 was not required to follow any procedure under section 100 of the MCS Act read with Rule 85 and 107 of the MCS Rules for sale of the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 58/70 wp-13001.16.doc said property. The respondent no.1 was not required to take approval of the Registrar for fixing up of upset price of the said property under section 107 of the MCS Rules or for approving the tender bid of the auction purchaser from the Commissioner of Co-operation and Registrar, Co-operative Societies. The respondent no.1 in that event was also not required to maintain any separate account in the name of the defaulter in respect of the expenses incurred, if any, on sale of the property. Such procedure is not required to be followed by an absolute owner of the said property.
109. Learned counsel for the respondent no.1 does not dispute that neither the said consent award nor the said Deed of Composition was stamped attracting payment of stamp duty payable on the Deed of Conveyance under Article 25 of the Schedule of the Maharashtra Stamp Act. As a matter of fact neither the said consent award nor the Deed of Composition was stamped. Only the sale deeds executed by the respondent no.1 in favour of the auction purchaser was stamped by paying stamp duty payable under Article 25 of the Schedule to Maharashtra Stamp Act. Neither the consent award nor the Deed of Composition thus conveyed the ownership of the said immovable property of the petitioner in favour of the respondent no.1 and thus cannot be considered as Deed of Conveyance as sought to be canvassed by the learned counsel for the respondent no.1 across the bar.
110. A copy of the public notice issued by the Administrator of the respondent no.1 on 25th November,2013 for sale of the immovable ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 59/70 wp-13001.16.doc property clearly indicates that the reference is made to the said certificate issued under section 100 read with Rule 85 of the MCS Rules dated 2nd March, 2002 in the said public notice pursuant to which the bids were invited for sale of the said property by public auction.
111. Learned single Judge in case of Balkisan Manikchand Zavar & Ors. (supra) has held on combine reading of sections 98 and 100 read with Rule 85 of the MCS Rules that the land transferred to the bank in pursuance of the certificate issued by the Collector is not a transfer by sale and such transfer did not create ownership of the said land in favour of the respondent no.1 bank. The bank ought to be held to possess the lands on its transfer as a Trustee till such time the said land was sold by the auction sale. Sub rule 14 of Rule 85 provides that until the property is sold, the society to which the property is transferred under sub rule 5 shall use its best endeavors to lease of it or to make any other use that can be made of it so as to derive the largest possible income form the property. It is held that the Sub-rule 15 of the said Rule states that when the society to which property is transferred under sub-rule (5) has realized all its dues, under the order in execution of which the property was transferred, from the proceeds of management of the property, the property, if unsold shall be restored to the defaulter.
112. Learned single Judge of this Court in the said judgment was pleased to set aside the findings of the Maharashtra State Co-operative Appellate Court that on transfer of land in favour of the bank in pursuance or the certificate issued by the Collector, the ownership of ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 60/70 wp-13001.16.doc the said land vested in favour of the bank as grossly erroneous. In paragraph 11 of the said judgment,this Court held that the transfer of the said land in favour of the bank was only by way of Trustee and the land was liable to be restored to the petitioner on payment of awarded amount at any time before the auction sale and that the said transfer did not create any ownership right in favour of the respondent no.1. The principles laid down in the said judgment squarely applies to the facts of this case. We do not propose to take a different view in the matter.
113 The learned single Judge in case of Chhatrapati Sambhaji Maharaj Sahakari Pat Sanstha Maryadit (supra) has held that neither section 100 of the MCS Act nor Rule 85 of the MCS Rules uses the word 'sale'. The object of the transfer is that the property which cannot be sold in execution could be used by the society for recovery of dues. Therefore, the society is under obligation to make an endeavor to sell the property and to realize the dues till the property is sold. It is the obligation of the society to either lease the property or use the same in such a manner that it derives profit. If the income derived from the property is sufficient to clear the dues of the society and after the dues are cleared if the property remains unsold, the society is under an obligation to restore the same to the defaulter. This Court also interpreted Rule 85 (13) read with section 100 of the MCS Act and held that the language of the said provision would clearly indicate that the said property is transferred in favour of the society as a Trustee.
114. In paragraph 10 of the said judgment it is held that it cannot be ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 61/70 wp-13001.16.doc said that by transfer under section 100(1) of the MCS Act, the property stand absolutely transferred to the society or the estate in the property is vested in the society. The said transfer is not a sale. The transfer under the provisions of section 100(1) of the MCS Act is for realization of the dues payable to the society and such transfer will not be a conveyance under section 2(g) of the Maharashtra Stamp Act and would not attract the stamp duty payable on the conveyance under Article 25 of Schedule I of the Maharashtra Stamp Act. The principles laid down in the said judgment squarely applies to the facts of this case. We do not propose to take any different view in the matter.
115. In this case also the said property of the petitioner was transferred in favour of the Chief Executive Officer of the respondent no.1 under section 100 of the MCS Act read with Rule 85 of the MCS Rules as a Trustee and not on ownership basis. The submission of the learned counsel for the respondent no.1 that the Chief Executive Officer who was described as "Trustee" in the Deed of Composition and in various other documents was as a Trustee of the respondent no.1 bank and not of all the parties is totally devoid of merit and is ex-facie contrary to the law laid down by this Court in aforesaid two judgments. It was for the respondent no.1 to take steps to sell the said property by following the provisions of Rule 85 read with other Rules of the MCS Rules within the time prescribed. If the said transfer under Section 100 was to be considered absolute transfer in favour of the respondent no.1 by the petitioner, there was no mandatory obligation or duty on the part of the respondent no.1 to fetch the best sale price or to act in the best interest of the defaulters as well as the bank while selling the said ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 62/70 wp-13001.16.doc property for recovery of its dues.
116. The Legislative intent under section 100 of the MCS Act read with Rule 85 of the MCS Rules is clear beyond reasonable doubt that the said property which was one of the security given to the bank by the defaulter to secure the said loan was transferred in favour of the society to realize its dues upon sale of the said property and to generate the income out of the said property till the said property was actually sold and not an absolute transfer in favour of the respondent no.1. On perusal of the consent award and the Deed of Composition, it is clear that the liability of the petitioner towards the respondent no.1 bank under the loans obtained by the petitioner and towards respondent nos.6 and 7 were discharged. There was no question of the respondent no.1 bank demanding any amount over and above the amount already crystallized in the consent award and in the Deed of Composition.
117. Insofar as the submission of the learned counsel for the respondent no.1 that the writ petition filed by the petitioner is not maintainable on the ground that the civil suit filed by the petitioner in respect of the said property is still pending before the learned Civil Judge, Senior Division, Vapi / Valsad is concerned,we have perused the averment made by the petitioner in paragraph 31 of the writ petition. It is stated that if the respondent no.1 is ready and willing to make payment and pays Rs.22,48,04,507/- being surplus sale proceeds within such time as may be fixed by this Court, the petitioner will withdraw the pending Special Civil Suit No.119 of 2014 and also would withdraw all his grievance against the respondents as set out in ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 63/70 wp-13001.16.doc this petition.
118. We are inclined to accept the submission made by Mr.Tulzapurkar, learned senior counsel for the petitioner that with a view to save limitation, the petitioner had filed the said civil suit before the learned Civil Judge, Senior Division, Vapi / Valsad. The said suit is still pending though was filed in the year 2014. The time spent in prosecuting the writ petition does not save limitation in filing the civil suit. The petitioner had thus to be on safer side filed the civil suit. The petitioner has not proceeded with that said suit during the pendency of this writ petition.
119. Be that as it may, in this petition, the petitioner has prayed for an order and direction against the respondent nos.2 to 4 i.e. State of Maharashtra, Commissioner for Co-operation and Registrar of Co- operative Societies and the Divisional Joint Registrar to issue directions/instructions to the respondent no.1 bank under the provisions of the MCS Act and more particularly under section 78 (4) to make payment of Rs.22,48,04,507/- being surplus sale proceeds of the property together with interest. We are inclined to accept the statement made in paragraph 31 of the writ petition and also the statement made by the learned senior counsel for the petitioner across the bar that if the respondent no.1 makes payment to the petitioner of the said amount after these proceedings are decided in favour of the petitioner, the petitioner would withdraw the civil suit.
120. Insofar as the submission of the learned counsel for the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 64/70 wp-13001.16.doc respondent no.1 that the petitioner could not have filed the fresh dispute before the Co-operative Court since no leave under Order 23 Rule 1 of the Code of Civil Procedure, 1908 was obtained by the petitioner while withdrawing the earlier dispute is concerned, in our view this submission of the learned counsel is without any substance. No such objection was raised when the dispute was filed by the petitioner. The said issue now raised across the bar by the learned counsel cannot be thus considered by this Court.
121. Insofar as the submission of the learned counsel for the respondent no.1 that the Co-operative Appellate Court could not have passed the consent award thereby permitting the bank to waive interest on the loan even in the consent award is concerned, the submission made by the learned counsel is ex-facie contrary to section 96 of the MCS Act. Under the said provision, it is provided that in case of money claim preferred by the society against the member, the amount of award representing the interest shall not be less than the amount of interest accrued thereon in accordance with the contractual rate of interest but where such money claim relates to any loan referred to in section 44-A, the provisions of that section shall apply to such money claim as they apply to the loan under section 44-A.
122. In our view, Section 96 of the MCS Act would apply in case of contested matter. The Co-operative Court in that case cannot pass an award awarding interest at the rate lower than the contractual rate of interest. There is however, no bar in the parties, agreeing to reduce rate of interest or any rate lower than the contractual rate of interest by ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 65/70 wp-13001.16.doc agreement before the Co-operative Court. The parties may agree and vary the existing terms prescribed in the agreement by entering into fresh agreement or by modifying the terms. The Court cannot refuse to pass an award or decree based on fresh agreement arrived at by the parties by applying the provisions of Section 96 of the MCS Act.
123. In our view, the consent terms filed by the parties before the Maharashtra Co-operative Appellate Court was also by way of an agreement between the parties thereby the respondent no.1 giving up the claim for future interest and more particularly in view of the liability of the petitioner towards the respondent no.1 bank and other two creditors i.e. the respondent nos.6 and 7 having been crystallized by handing over immovable property of the petitioner to the respondent no.1 for the purpose of sale. In this case, the Co-operative Court has not passed the said award on adjudication of claims made by the respondent no.1 bank against the petitioner and others under section 96 of the MCS Act. In our view, reliance thus placed by the learned counsel on the said provision is totally misplaced and would not assist the case of the respondent no.1.
124. Since this Court is of the view that the transfer of the said property by the petitioner in favour of the respondent no.1 under the said consent award and the Deed of Composition was not absolute transfer conferring any ownership rights in favour of the respondent no.1 and was transferred as a Trustee, the respondent no.1 was liable to refund the surplus amount after adjusting crystallized dues payable by ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 66/70 wp-13001.16.doc the petitioner to the respondent no.1 under the consent award and the Deed of Composition and after adjusting the expenses, if any, permissible, if any, under Rule 85 of the MCS Rules.
125. In our view for the reasons recorded aforesaid, there is no substance in the submissions made by Mr.Kulkarni, learned counsel for the Intervenor on some of the legal issues fell for consideration of this Court and dealt with as aforesaid.
Reasons and conclusion in Writ Petition (Stamp) No.5832 of 2021
126. We have perused the prayers in the writ petition filed by the Bank. There are no reliefs prayed by the Bank against the State of Maharashtra. The State of Maharashtra is a formal party impleaded in the writ petition. All three reliefs are against the private party. The writ petition is not maintainable on this ground alone.
127. Be that as it may, insofar as prayer clause (a) is concerned, a perusal of said prayer in the writ petition filed by the Bank clearly indicates that the Bank seeks a declaration that the Deed of Composition is in pith and substance a Deed of Composition and confers absolute ownership of the mortgaged property in the Bank. The petitioner seeks declaration of ownership in the property in favour of the respondent no.1 is concerned. In our view, no such relief can be granted in the writ petition. The said Deed of Composition was executed by and between the private parties, the validity thereof thus cannot be challenged in a writ petition.
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128. Insofar as prayer (b) is concerned, the petitioner seeks writ of certiorari for quashing and setting aside the Deed of Composition. For the reasons recorded aforesaid, this relief in respect of the said document executed between the private parties cannot be granted by this Court by exercising writ jurisdiction. Insofar as prayer (c) is concerned, the petitioner seeks modification of the consent award by providing contractual rate of interest i.e. at the rate of 18% p.a. to be compounded quarterly on the decretal amount of Rs.12,52,95,492=65 from the date of the consent award till the date of recovery of the amount by sale of the mortgaged property. In our view, this Court while exercising writ jurisdiction under Article 226 of the Constitution of India cannot direct the subordinate Court to modify the consent award which was rendered on an agreement entered into between the parties by way of consent terms and that also without the consent of all the parties. Be that as it may, the respondent no.1 relied upon the said consent award passed by the Maharashtra State Co-operative Appellate Court and had acted thereupon.
129. There is no substance in the submission made by Mr.Hakani, learned counsel for the respondent no.1 that the said certificate issued under section 100 of the MCS Act or the said Deed of Composition was executed fraudulently. The respondent no.1 cannot be allowed to raise such plea across the bar. The allegations of fraud has to be with details and particulars and cannot be allowed to be vague. The respondent no.1 itself has acted upon the said certificate and said Deed of Composition. No such argument thus can be advanced at this stage ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 68/70 wp-13001.16.doc by the respondent no.1. Be that as it may, the respondent no.1 has failed to substantiate these allegations.
130. There is no dispute that the respondent no.1 had not paid stamp duty payable under Article 25 on the said consent award or on the Deed of Composition. It is an admitted position that the stamp duty under Article 25 of the Schedule to Maharashtra Stamp Act was paid only on the sale deed executed by the respondent no.1 in favour of the auction purchaser. The argument of the learned counsel is contrary to the judgment of this Court in case of Balkishan Manekchand Zavar & Ors. (supra).
131. There is no substance in the submission made by the learned counsel for the respondent no.1 that if the respondent no.1 is directed to refund the surplus amount to the petitioner, it will affect large number of depositors, who had deposited their hard money with the respondent no.1. Mr.Tulzapurkar, learned senior counsel for the petitioner rightly submitted that equity follows the law. If the liability is clear, no notions of equity can substitute the same. When there is conflict between law and equity, it is the law which has to prevail. The submission made by the learned senior counsel is supported by the judgment of the Hon'ble Supreme Court in case of Narinder S. Chadha & Ors. and also Raghunath Rai Barej & another. In our view, while considering the equity in favour of the depositors, this Court cannot ignore the law which is in favour of the petitioner and do injustice to the petitioner. The principles of law laid down by the Hon'ble Supreme Court in the aforesaid two judgments apply to the ::: Uploaded on - 07/04/2021 ::: Downloaded on - 05/09/2021 15:27:17 ::: bdp 69/70 wp-13001.16.doc facts of this Court. We are respectfully bound by the judgments.
132. This Court cannot grant any reliefs in favour of the Bank also for the reason that the sale of the said property has been already confirmed in favour of the auction purchaser long back. He has already paid the entire consideration to the Bank long back and has become exclusive owner of the said property. He is in exclusive possession of the said property. The said auction purchaser is not a party in any of these petitions.
133. We therefore, pass the following order :-
a) Writ Petition No.13001 of 2016 is made absolute in terms of prayer clause (a) excluding the prayer for interest as prayed by the petitioner. Such directions should be issued by the respondent nos.2 to 4 to the respondent no.1 within two weeks from today.
b) The respondent no.1 shall remit the said amount of Rs.22,48,04,507/- to the petitioner within four weeks from the date of receipt of such directions from the respondent nos.2 to 4 without fail.
c) Rule is made absolute in aforesaid terms.
d) Writ Petition (Stamp) No.5832 of 2021 is dismissed.
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e) In view of dismissal of writ petition, civil applications,
pending if any, stand disposed of.
f) There shall be no order as to costs.
(V.G. BISHT, J.) (R.D. DHANUKA, J.)
134. Mr. Hakani, learned counsel for the respondent no.1 seeks stay of the operation of this order for the period of six weeks from today.
Similar application is also made by Mr. Kulkarni, learned counsel for the intervener.
135. We are not inclined to grant any stay on the applications made by learned counsel for the respective parties, in view of the fact that we have granted two weeks time to the respondent nos. 2 to 4 to issue directions to the respondent no.1 in terms of prayer clause (a) and have granted four weeks time to the respondent no.1-bank to remit the said amount after receipt of such directions from the respondent nos. 2 to 4.
136. Applications for stay are accordingly rejected.
(V.G. BISHT, J.) (R.D. DHANUKA, J.)
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