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[Cites 5, Cited by 0]

Bombay High Court

Dr. Annasaheb Choughle Urban vs Prakash Rajaram Patil on 31 October, 2012

Author: A.M.Khanwilkar

Bench: A.M.Khanwilkar, R.Y.Ganoo

                                                           WP.3388.2012.judgment.doc


        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              CIVIL APPELLATE JURISDICTION




                                                                      
                     WRIT PETITION NO. 3388 OF 2012




                                              
    1.    Dr. Annasaheb Choughle Urban
    Cooperative Bank Ltd.,




                                             
    Peth Vadgaon, Taluka Hatkanangle,
    District Kolhapur Branch Sangli
    District Sangli




                                 
    2.    Special Recovery Officer,
    Dr. Annasaheb Choughle Urban
                       
    Cooperative Bank Ltd.,
    Peth Vadgaon, Taluka Hatkanangle,
    District Kolhapur                                 :-       Petitioners
                      
           versus

    1.    Prakash Rajaram Patil,
      

    Age adult, Occ. Agriculturist,
    Residing at Post Kande, Taluka Shirala,
   



    District Sangli

    2.    Shashikant Prakash Patil,
    Age adult, Occ. Agriculturist,





    Residing at Post Kande, Taluka Shirala,
    District Sangli

    3.    Sharad Prakash Patil,
    Age adult, Occ. Agriculturist,





    Residing at Post Kande, Taluka Shirala,
    District Sangli

    4.    Akaram Dnyanu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli


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    5.    Laxman Dnyanu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                                                      
    District Sangli




                                              
    6.    Shamrao Pandurang Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




                                             
    7.    Balasaheb Namdeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                 
    District Sangli

    8.
                     
          Bhimrao Siddhu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
                    
    District Sangli

    9.    Ananda Pandurang Sawant,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
      


    District Sangli
   



    10. Pandurang Namdeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,





    District Sangli

    11. Parvati Pandurang Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,





    District Sangli

    12. Sulbha Sarjerao Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




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    13. Sunanda Balasaheb Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                                                         
    District Sangli




                                                 
    14. Jagganath Siddhu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




                                                
    15. Kiran Mahadeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                   
    District Sangli
                        
    16. Pradeep Ganpati Kadam,
    Age adult, Occ. Agriculturist,
                       
    17. Mohan Joshi,
    Member vidhan Parishad,
    Vidhan Bhavan, Mumbai

    18. Secretary,
      


    Maharashtra Vidhan Bhavan,
   



    Mumbai

    19.    State of Maharashtra                          :-       Respondents





                                     ***
    Mr. S. S. Patwardhan, for the Petitioners.
    Mr. Sanjeev Sawant i/b. Mr. Shridhar A. Patil, for Respondent Nos. 
    1 to 16.
    Mr. D. J. Khambatta, Advocate General on notice. 





    Mr. Nitin Deshpande, A.G.P., for respondent Nos. 17 to 19.


                                         CORAM:-         A.M.KHANWILKAR &
                                                         R.Y.GANOO,JJ.

                     Judgment Reserved on :- OCTOBER 18, 2012
                     Judgment Pronounced on:- OCTOBER 31, 2012

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    JUDGMENT :

- (Per A.M.Khanwilkar, J.) This Writ Petition under Article 226 of the Constitution of India has been filed to issue direction to the Committee on Petitions, constituted under the Maharashtra Legislative Council Rules, to refrain from entertaining the application dated 24 th July, 2010, submitted by Respondent No. 17, along with undated representation of Respondent Nos. 1 to 16 Exhibit 'B' collectively.

The alternative relief claimed is to issue direction or Writ of Mandamus to direct Respondent No. 18 to place the representation of the Petitioner Bank, dated 24th October, 2011 Exhibit 'I', before the abovesaid Committee with further direction that the same be heard and disposed of in a time bound manner.

2) Briefly stated, the Petitioner Bank had advanced an aggregate amount of Rs. 90 lacs to 20 borrowers on 29 th March, 2004. The Bank advanced another some of Rs. 9 lacs to three other borrowers on 30th March, 2007. That advance was given against the security of mortgage created by each of the 23 persons in the Bank's favour. In due course, however, the loan amount became hopelessly irregular and non performing assets. As a Page 4 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc result, the Bank processed the proposal of the said 23 borrowers and found that 16 borrowers were small/marginal farmers as defined in the loan waiver scheme floated by the Government. As on 31st December, 2007, these 16 persons were collectively eligible for loan waiver of Rs.30,33,489. The Bank, accordingly, gave credit of the corresponding amount in the respective accounts of the said 16 persons. After the said adjustment, as on 31 st March, 2010, the sum of Rs. 28,52,927/- still remained due and payable by them to the Petitioner Bank collectively. So far as the seven remaining persons, who were not small farmers, they were eligible for a partial waiver of 25% of the outstanding amount in their accounts as on 31st December, 2007. However, the said seven persons failed to deposit the necessary amount in order to become entitled for loan waiver. The amount due and payable by the said seven borrowers, as on 31st March, 2010, is stated to be 1,17,35,606/-.

3) Since the abovesaid payment became over due, the Petitioner Bank had no option but to initiate proceedings under Section 101 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the Act"). The Registrar of the Co-

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J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc operative Societies, Maharashtra State, Pune, who is the Statutory Authority to issue Recovery Certificates, after hearing the Petitioner Bank and the 23 defaulters, vide order dated 3 rd June, 2008, issued separate Recovery Certificates under Section 101 of the Act. On the basis of the said Recovery Certificates, the Petitioner Bank resorted to execution of Recovery Certificates, under Rule 107 of the Maharashtra Co-operative Societies Rules, 1961 (hereinafter referred to as "the Rules").

4) Indisputably, according to the Petitioners, these proceedings are judicial proceedings and steps taken by the Petitioner Bank, for recovery of the outstanding dues, against all its borrowers, are as per the procedure established by law. The borrowers could have resorted to remedy of revision application under Section 154 of the Act, against the said proceedings.

Instead of resorting to that remedy, the Respondent Nos. 1 to 16 herein, however, approached the Respondent No. 17 on 24 th July, 2010. The Respondent No.17 is incidentally a member of the Vidhan Parishad. The Respondent No.17, in turn, requested the Chairman of the Committee on Petitions of the Maharashtra Page 6 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc Legislative Assembly to place the application made by Respondent Nos. 1 to 16 before the Committee on Petitions constituted under Part XVI of the Maharashtra Legislative Council Rules. On receipt of the said request, the matter proceeded before the said Committee. The Committee considered the said application and ordered stay of recovery of defaulted amount from Respondent Nos. 1 to 16 until further orders to be passed by it. This is noticed from the communication dated 21st August, 2010, sent by the office of Respondent No. 18 to the office of Respondent No. 19.

The same reads thus:

"egkjk"Vª fo/kku eaMG &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& izs"kd% iz/kku lfpo] egkjk"Vª fo/kkueaMG lfpoky;] izfr] iz/kku lfpo egkjk"Vª 'kklu] lgdkj o lL=ks|ksx foHkkx ¼lgdkj½ ea=ky;] eqacbZ 400032 fo"k; %& MkW- vk..kklkgsc pkSxqys vcZu dks- vkWijsfVOg cWad] isBoMxko] rk- gkrd.kaxys ft- dksYgkiwj ;k cWadsdMwu f'kjkGk ¼ft- lkaxyh½ rkywD;krhy 'ksrd&;kauh ?ksrysY;k dtkZP;k ijrQsMhr 'ksrd&;kaoj gksr vlysyk vU;k; ;k fo"k;kojhy Jh- eksgu tks'kh fo- i-l- ;kauh nk[ky dsysyk fouarh vtZ-
Page 7 of 20
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¼dk;Zo`Rr lkscr tksMys vkgs-½ lferhP;k ojhy fu.kZ;kP;k vuq"kaxkus ;ksX; rh dk;Zokgh d:u dsysY;k dk;Zokghph ekfgrh lferhyk rkrMhus ikBfo.;kr ;koh- ;k fo"k;kP;k lanHkkZr fo/kkuifj"kn fouarh vtZ lferh] lIVsacjP;k ifgY;k lIrkgkr foHkkxkP;k lfpokaph lk{k ?ks.kkj vkgs- rjh ojhy ekfgrh fnukad 3- vkWx"V] 2010 jksth ;k rRiwohz ;k lfpoky;kdMs ikBfo.ksckcr vki.kkal fouarh vkgs- lferhP;k cSBdhph rkjh[k vki.kkal ;'kkodk'k dGfo.;kr ;sbZy-
vkiyk] lgh@& ¼Jh/kj jktksik/;s½ mi lfpo egkjk"Vª fo/kkueaMG lfpoky;"

5) The Principal Secretary, Department of Co-operation, Government of Maharashtra, was summoned by the said Committee, which then met on 8th September, 2010. The said Committee, upon considering the submissions made before it, including by the Bank, ordered that recovery of the defaulted loan Page 8 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc amount by Respondent Nos. 1 to 16 deserves to be stayed. The Petitioners then approached this Court by way of Writ Petition No. 10162/2010. The said Writ Petition was, however, dismissed by the Division Bench of this Court on 4th February, 2011. The said order of the Division Bench reads thus:

"P.C:
Heard learned counsel for the petitioners.
2] The question sought to be raised in this petition cannot be gone into in the writ jurisdiction of this Court under Article 226 of the Constitution of India. Petition is, therefore, dismissed.
3] This order will not come in the way of the petitioners if they want to appear before the same Authority for canvassing their contentions."

6) Pursuant to the abovesaid order of the High Court, the Petitioners moved the Respondent No. 18, vide letter dated 24 th October, 2011. The Petitioners submitted representation to be placed before the said Committee for vacation of the stay order granted by it. Since no response was received, the Petitioners once again approached the Respondent No. 18 for placing the Petitioners' representation before the Committee, for vacating the stay, vide reminder letters dated 24 th November, 2011 and 17th December, 2011. However, no response has been received by the Petitioners thereto.

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7) In the representation filed by the Petitioners, it is asserted that the Committee has no jurisdiction to interdict the execution of the Recovery Certificates. The scope of Petitions to be entertained by the Committee on Petitions has been delineated in Rule 233 of the Maharashtra Legislative Council Rules, which reads thus:

"233. Petitions may be presented or submitted to the House with the consent of the Chairman on-
(i) a Bill which has been published under rule 111 or which has been introduced in the House;
(ii) any matter connected with the business pending before the House; and
(iii) any matter of general public interest provided that it is not one-
(a) which falls within the cognisance of a court of law having jurisdiction in any part of India or a court of enquiry or a statutory tribunal or authority or a quasi-judicial body, or a commission;
(b) which relates to a matter which is not within the cognisance of the State Government;
(c) which can be raised on a substantive motion or resolution; or
(d) for which remedy is available under the law, including rules, regulations, bye-laws made by the Central Government or by State Government or an authority to whom power to make such rules, regulations, bye-laws, etc. is delegated."

From the bare language of Rule 233, it is obvious that clauses (i) and (ii) have no application at all to the fact situation of this case.

Assuming that the grievance of Respondent Nos.1 to 16 was in the Page 10 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc nature of matter of general public interest - which obviously it was not - even in that case, it was covered by the excepted category specified in sub-clauses (a) and (d) of the cause (iii). A priori, the Committee on Petitions had no jurisdiction to entertain the grievance of Respondent Nos.1 to 16. Sub-clause (a) applies to cases which fall within the cognizance of a Court of Law having jurisdiction in any part of India or a Court of enquiry or a statutory Tribunal or Authority or a quasi-judicial body or a Commission.

The matter pertaining to the justness of the Recovery Certificates issued by the Appropriate Authority in exercise of its statutory powers conferred by the Act of 1960 r/w Rules of 1961 or regarding taking the same to its logical end and execution thereof, indisputably, falls within the cognisance of a Court of law or Authority, etc., as is, provided for by law. Further, it is open to the borrower or any person affected by such proceedings to take recourse to remedy of revision u/s 154 of the Act of 1960. Matters in respect of which remedy is available under law, including Rules, Regulations, Bye-laws made by the Central Government or by State Government or an Authority to whom power to make such Rules, Regulations, Bye-laws, etc. is delegated, also cannot be Page 11 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc entertained by the Committee on Petitions under Rule 233, by virtue of sub-clause (d) of Rule 233 (iii).

8) The grievance made by Respondent Nos. 1 to 16, which was placed before the Committee on Petitions, according to the Petitioners, was beyond the purport of Rule 233. As a result, the Committee has had no jurisdiction to entertain the same much less grant stay to the recovery proceedings. It is further urged that in view of the basic structure of the Constitution of India providing for separation of powers of Executive, Legislature and Judiciary;

and in view of express legal provisions in the Act of 1960 and Rules framed under that Act, being Rules of 1961, providing for remedy against the Recovery Certificates and the execution proceedings initiated by the Petitioner Bank, it is axiomatic that the Committee on Petitions can exercise its jurisdiction on these matters much less to interdict the recovery against respondent Nos.1 to 16. Indeed, the State Legislature or the Parliament, as the case may be, inspite of the doctrine of separation of power, in a given case, may be competent to undo the effect of a judgment of the Court but, the Committee on Petitions, by no stretch of Page 12 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc imagination, can exercise its power to do so and including in terms of Rule 233.

9) Further, it was contended before us that the impugned direction issued by the said Committee, is, essentially in the nature of a political decision, which cannot undo the Recovery Certificates issued by the Competent Authority in exercise of its statutory duty, or interdict the execution thereof. Notably, the direction issued by the Committee on Petitions was not in respect of general public interest but only to favour the select few borrowers (Respondent Nos.1 to 16) of the Petitioner Bank. The relief given to the select few borrowers of the Petitioner Bank was bound to unwittingly prejudice the interest of large number of stakeholders, investors and shareholders of the Petitioner Bank. If so, the impugned decision of the Committee is against the general public interest and not to further the same, and is opposed to the purport of Rule 233 itself. Similarly, it is opposed to the extant Regulations and contractual obligations, which were and/or are binding on the Petitioner Bank as also its members and more particularly the borrowers. It would stifle the co-operative movement and push Page 13 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc the Petitioner Bank to face liquidity crunch, sooner or later, and moreso, it would entail in favouring undeserving and ineligible persons who have failed to fulfill their contractual and legal obligations. The interference by the Committee on Petitions was not only extra judicial but also extra Constitutional power exercised by a Constitutional functionary. With this grievance, the Petitioners have once again approached this Court by way of Writ Petition under Article 226 of the Constitution of India, for the reliefs already adverted to in the first paragraph, as the Committee has failed and neglected to consider the representation made by the Petitioner Bank for immediate vacation of the stay of recovery of outstanding loan amount from Respondent Nos. 1 to 16, on the basis of Recovery Certificates, by way of execution proceedings, as provided by Rules of 1961.

10) The Respondent No. 19 has filed short affidavit. After having adverted to the relevant facts, at the end of Paragraph 4, it is stated that the letter dated 21 st August, 2010, from the Maharashtra Legislative Secretary and the minutes of the meeting dated 8th September, 2010 of the Petition Committee were never Page 14 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc treated as stay order on the recovery process. As regards the Petitioners' claim that the execution proceedings initiated by the Petitioner Bank has been interdicted, it is stated that in a meeting held on 23rd July, 2012, under the chairmanship of the Minister (Co-operation), which was attended by the Chairman, Vice Chairman and Chief Executive Officer of the Petitioner Bank and after discussion of the proposal given by the Petitioner Bank regarding one time settlement of the loan amount, the Bank has decided to charge 8% interest on reducing balance under the one time settlement scheme and it would submit the proposal through the Commissioner of Co-operation, in that behalf. The minutes were recorded by consent of parties and on the basis thereof, the proposal submitted by the Petitioner Bank was examined by the Commissioner of Co-operation on 20th September, 2012. Further, the State Government has considered the said proposal and has approved the same, which fact has been communicated vide letter of the Commissioner for Co-operation dated 8th October, 2012.

11) In other words, during the pendency of this Petition, the dues payable by Respondent Nos. 1 to 16 in respect of their Page 15 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc Loan Accounts has under gone change and the Petitioner Bank has agreed to act upon that proposal. Further, the proposal has been duly approved by the Appropriate Authority. This statement is made on affidavit, which has been taken on record. The fact that the said affidavit is taken on record does not mean that this Court is putting its seal of approval on the said arrangement. It is possible that some investor(s), creditor(s) or member(s) of the Petitioner Bank may come forward to challenge the authority of the persons, who have agreed to the said proposal or for that matter, about the authority of the concerned Authority to grant approval to such proposal on grounds as may be permissible in law. The activities of the Petitioner Bank - being a Co-operative Society - are indisputably in public domain. The action of the Petitioner Bank not only must be just and proper qua its borrowers but has to be in conformity with the extant regulations lest it may offend the rights of the investors and members of the Bank including under Article 14 and 21 of the Constitution of India.

The Petitioner Bank can sustain the agreement entered with the Respondents 1 to 16 only if it is backed by law or by policy of the State or its own policy. We may not be understood to have Page 16 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc expressed any opinion one way or the other in that behalf.

12) Indeed, on the basis of the reply affidavit filed by Respondent No. 19 it may appear that the reliefs as claimed in this Petition are worked out. Inasmuch as, in view of the proposal submitted by the Petitioner Bank to revise the loan accounts of the concerned borrowers by charging only 8% interest on reducing balance, under the one time settlement scheme, the Petitioner Bank will not be in a position to take the Recovery Certificates, already issued against the said Respondents, forward in the same form. Ostensibly, this change has happened not because of any order passed by the Committee on Petitions but on the basis of arrangement agreed upon by the Bank, may be because of the mediation of the Minister of Co-operation, in the meeting held on 23rd July, 2012.

13) Thus, it is unnecessary to dwell upon the argument that the order of the Committee on Petitions was to stay the recovery of the amount pertaining to the concerned loan accounts qua the Respondent Nos. 1 to 16 herein. That stay was in the Page 17 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc context of the amount in the loan accounts preceding the issuance of the said Recovery Certificates. The Petitioner Bank cannot pursue execution proceedings on the basis of the said Recovery Certificates, after the waiver agreed upon in the meeting held under the chairmanship of Minister of Co-operation on 23 rd July, 2012.

14) Be that as it may, a new dispensation has been agreed upon by the Petitioner Bank and Respondent Nos. 1 to 16, which will have to be now taken forward. Assuming that the Committee on Petitions had granted stay of recovery proceedings, that will be no impediment for the Petitioner Bank to proceed in the matter as per the new arrangement. Even if there was some doubt about, whether it is open to the Petitioner Bank to proceed with the recovery process against Respondent Nos. 1 to 16 because of the letter dated 21st August, 2010 sent by the Maharashtra Legislative Secretary and the minutes of the meeting dated 8th September, 2010 of the Committee on Petitions, we have no manner of doubt that the Committee on Petitions had no jurisdiction to deal with the subject matter presented before it in the form in which the Page 18 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc application made by the Respondent Nos. 1 to 16 was couched.

The subject matter was indisputably in respect of issues which fell within the cognizance of a Court of law having jurisdiction in any part of India or Court of inquiry or a statutory Tribunal or Authority or quasi judicial body or a Commission, as provided in the Act of 1960 and the Rules of 1961. These matters are explicitly excluded from the scope of Petitions under Rule 233. It falls under excepted category provided in sub-clause (a) of clause

(iii) of Rule 233. As a matter of fact, the grievance was nothing to do with matter of general public interest at all but concerning the individual interests of Respondent Nos. 1 to 16. Further, the said Respondent Nos.1 to 16 could invoke remedy under section 154 of the Act. Even for that reason, the Committee on Petitions could not have interdicted the judicial or quasi judicial process of execution of Recovery Certificates against Respondent Nos. 1 to

16.

15) Accordingly, we hold that the Petitioner Bank is free to pursue the recovery proceedings against Respondent Nos. 1 to 16, in accordance with law, irrespective of the letter dated 21 st Page 19 of 20 J.V.Salunke,PA ::: Downloaded on - 09/06/2013 19:20:42 ::: WP.3388.2012.judgment.doc August, 2010 issued by the office of Maharashtra Legislative Secretary or the minutes of the meeting dated 8 th September, 2010 of the Committee on Petitions. We also hold that the Committee on Petitions has had no jurisdiction to interdict the recovery process resorted to by the Petitioner Bank against Respondent Nos.1 to 16. At the same time, we make it clear that we are not expressing any opinion either way with regard to the correctness and legality of the agreement arrived at for and on behalf of the Petitioner Bank by the Chairman, Vice Chairman and Chief Executive Officer to modify the rate of interest payable by Respondent Nos. 1 to 16. If that action is challenged in any proceedings, being illegal or prejudicial to the interests of the investors, members or creditors of the Bank, that challenge will have to be considered on its own merits, in accordance with law.

16) The Petition is disposed of on the above terms.

        (R.Y.GANOO,J.)             (A.M.KHANWILKAR,J.)




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