Gujarat High Court
Dilipbhai vs State on 10 July, 2008
Author: Ravi R. Tripathi
Bench: Ravi R.Tripathi
SCA/7842/2008 6/ 6 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 7842 of 2008 With SPECIAL CIVIL APPLICATION No. 7843 of 2008 To SPECIAL CIVIL APPLICATION No. 7844 of 2008 with SPECIAL CIVIL APPLICATION No.7892 of 2008 ================================================= DILIPBHAI NANJIBHAI PATEL & 1 - Petitioner(s) Versus STATE OF GUJARAT & 2 - Respondent(s) ================================================= Appearance : Mr.MIHIR JOSHI, SENIOR ADVOCATE WITH Mr.VIMAL M PATEL for Petitioners in SCAs No.7842/08, 7843/08 & 7844/08; Mr.P.S. Champaneri, learned advocate in SCA No.7870/08; and Mr.Manav A. Mehta, learned advocate in SCA No.7892/08. Mr.APURVA DAVE, ASST GOVERNMENT PLEADER for Respondent(s) : 1, DS AFF.NOT FILED (N) for Respondent(s) : 1 - 2. NOTICE SERVED for Respondent(s) : 2, NOTICE SERVED BY DS for Respondent(s) : 3, MR TUSHAR MEHTA for Respondent(s) : 3, ================================================= CORAM : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI Date : 10/07/2008 COMMON ORAL ORDER
Heard learned senior advocate Mr.Joshi, with Mr.Vimal M. Patel, learned advocate for the petitioners (SCAs No.7842/08, 7843/08 & 7844/08), Mr.P.S. Champaneri, learned advocate for petitioners in SCA No.7870/08 and Mr.Manav A. Mehta, learned advocate for petitioners in SCA No.7892/08.
2. Rule.
3. Mr.Apurva Dave, learned Assistant Government Pleader for the respondent-State vehemently opposes grant of interim relief. He submitted that the State Cooperative Tribunal has passed order after taking into consideration all the relevant aspects; therefore, interim relief is not required to be granted.
4. Taking into consideration the peculiar facts of the case, which are also set out in detail in the judgement and order dated 16th March 2006 of this Court (Coram: M.S. Shah & Sharad D. Dave, JJ.) in Special Civil Applications No.15859/ 04, 15862/ 04 and 15863/04, more particularly, in paras 9, 10, 11 and 12, which read as under:
ýS9. It is further submitted by the learned counsel for the petitioners that when they were in office, they had already initiated recovery proceedings including filing of complaints under Section 138 of the Negotiable Instruments Act and also the summary suit, but it is the administrator appointed by the State Government, who entered into MOU with the defaulting party being C.R. Bhansali, proprietor of CRB Capital Ltd. on 26.9.2002, foregoing interest on the entire amount of Rs.3 Crores which was agreed to be repaid by the defaulter in ten annual installments and it is the administrator appointed by the State Government who agreed to stay all recovery proceedings, including the criminal proceedings pending in the Court of the learned Chief Metropolitan Magistrate, Ahmedabad under Section 138 of the Negotiable Instruments Act.
It is also pointed out that the aforesaid MOU was entered into by the administrator after obtaining approval of the Joint Registrar (Advance) of the Co-operative Societies, Gujarat State on 23.9.2002. It is, therefore, submitted that the State Government which itself has stayed recovery proceedings, cannot be permitted to accuse the former Directors of any default or any mala fide intention which is necessary for invoking powers under Section 93 of the Act as well as under Section 76B of the Act.
10. Having heard the learned counsel for the petitioners, we find that in view of the stay of recovery proceedings granted by the Administrator, the petitioners could not have been required to make the payment of the amounts determined under Section 93 of the Act and, therefore, the learned Single Judge was justified in granting the interim relief on 21.12.2004. But now upon our having granted interim stay of the MoU dated 26.9.2002 between the Administrator and CR Bhansali of CRB Capitals Ltd., the recovery proceedings can now be proceeded with and there will be no impediment to any recovery being made from CR Bhansali and others who are liable to repay the amounts to Baroda District Central Cooperative Bank Ltd. But considering the fact that the liability determined by the Registrar under Section 93 of the Act is to the tune of Rs.3 Crores approximately and that the condition imposed by the Tribunal for granting stay in favour of the petitioners comes to hardly about 10 to 15% of their liability determined under Section 93, the interim orders passed by the Tribunal do not require any interference in so far as the Tribunal has imposed the condition of depositing certain amounts by the petitioners herein.
11. In the facts and circumstances of the case, however, it also appears to the Court that the interests of justice would be served if the petitioners are granted some time to pay the amounts as stipulated in the conditional stay order passed by the Tribunal. At the same time, since the order of the District Registrar imposing disqualification under Section 76B was passed on the basis of orders under Section 93 of the Act and the Tribunal has granted conditional interim stay, we are of the view that the petitioners have made out a case for staying the direction for disqualification, subject to compliance with the conditions stipulated by the Tribunal in the interim stay orders and subject to compliance with the final orders, if any, which may be passed at the final hearing of the appeals by the Tribunal.
12. These petitions are accordingly partly allowed in so far as the Tribunal did not grant any interim stay against any disqualification proceedings arising from the liability under Section 93 of the Act. During pendency of the appeals before the Tribunal, there shall be stay against disqualification arising from the liability under Section 93 of the Act, provided the respective petitioners deposit, without prejudice to their rights and contentions, the amounts as stipulated in the interim stay orders passed by the Tribunal. As far as the amounts stipulated by the Tribunal in the said conditional stay orders are concerned, we do not interfere with the said conditions but grant the petitioners time to deposit the amounts as stipulated in the interim stay orders of the Tribunal in six equal monthly installments commencing from 10th April 2006. The Tribunal shall endeavour to complete the hearing and decide the appeals by 31st December 2006.
Rule is accordingly made absolute only to the aforesaid extent with no order as to costs.ýý and taking into consideration the averments made in grounds (N) and (O), which read as under.
ýS(N) That similar other banks have deposited the money with the said bank including GIIC, which is a government undertaking. Similar inquiry was conducted against the directors of Mehsana District Madhyasth Sahkari Bank Ltd. and Kheralu nagrik Sahkari Bank Ltd wherein the inquiry officer for the similar act of deposit by the aid Bank with the said company came to the conclusion that there is no gross negligence and no action has been taken. However, the petitioners have been discriminated and liability has been fastened u/s 93 of the aid Act for the similar act of deposit made with the said company. Therefore, the act of respondent no.2 is in violation of Article 14 of the Constitution of India and action has been taken with a mala fide intention to see that the petitioners do not participate in future elections that may be held with the respondent no.3 and in respect of other similar societies.
(O) That, on one hand the respondent no.1 has entered into a Memorandum of Understanding with the said company whereby the execution proceedings and the criminal proceedings are stayed sine die and proceeding are initiated against the petitioners fastening the liability u/s 93 of the said Act and recovery for the very same dues which can be legally recovered pursuant to the execution proceedings and criminal proceedings from the said company. The said conduct itself shows the mala fide motive of the respondents to fasten the liability u/s 93 of the said Act with a sole intention to initiate disqualification proceedings arising from the liability u/s 93 of the said Act.ýý the Court deems fit to grant interim relief. Interim relief in terms of para 23(B) in Special Civil Applications No.7842/08, 7843/08 & 7844/08; para 7(B) in Special Civil Applications No.7870/08 & 7892/08 is granted. Direct service is permitted.
(RAVI R. TRIPATHI, J.) karim