Bombay High Court
Mohan Kewalram Tejwani vs Special Recovery Officer & Sales ... on 8 March, 2012
Author: Chief Justice
Bench: Mohit S. Shah, Anoop V. Mohta
kambli 1 WP(l)-2001 & 2772-12
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.2001 OF 2012
...
Mohan Kewalram Tejwani ...Petitioner
v/s.
Special Recovery Officer & Sales Officer
Jankalyan Sahakari Bank Ltd. & Ors. ...Respondents
WITH
WRIT PETITION (L) NO.2772 OF 2012
...
Mrs.Lalita Mohan Tejwani ...Petitioner
v/s.
Jankalyan Sahakari Bank Ltd. & Ors. ...Respondents
...
Mr.Mathew J. Nedumpara for petitioners.
Dr.Birendra Saraf with Mr.Nikhil Rajani i/b V.Deshpande & co. for
respondents Nos. 1& 2 in WP (L) No.2772-12.
Mr.Ashish Kamat with Mr.B.V.Samant for respondent No.1 in WP(L)-
2001-12.
Mr.A.M.Sethana for Union of India.
...
CORAM: MOHIT S. SHAH, C.J. &
ANOOP V. MOHTA, J.
DATE : 8 March 2013
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ORAL ORDER: (PER CHIEF JUSTICE)
In these writ petitions under Article 226 of the Constitution, petitioners who are husband and wife and who had borrowed sums of Rs.1.50 crores and Rs.1.25 crores in the year 2006 from the respondent- Jankalyan Sahakari Bank Ltd., and against whom recovery certificates for sums of Rs.1.64 crores and Rs.1.86 crores respectively with interest liability at the rate of 13% from 1 November 2012 had been issued have challenged the constitutional validity of Section 101 and Section 154(2A) of the Maharashtra Co-operative Societies Act, 1960 (herein after referred to as "the Act") . Petitioners have also challenged the proceedings before the Deputy Registrar of Co-operative Societies under Section 101 of the Act and orders passed therein and the demand notice issued by the said officer. Petitioners have also prayed for an injunction to restrain the Bank from proceeding under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( hereinafter referred to as "SARFESI Act".
2. The Maharashtra Co-operative Societies Act, after providing for settlement of disputes between a co-operative society and its members before the Co-operative Court under Section 91 of the Act as one of the modes of settlement of disputes, also provides in Section 101 of the Act that notwithstanding anything contained in Sections 91, 93 and 98, on an application made by an Urban Co-operative Bank for recovery of arrears of its dues, the Registrar may, after making an inquiry in the prescribed manner, grant a certificate for recovery of the amounts stated therein to be due as arrears.
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Sub-section (3) thereof provides that certificate granted by the Registrar under sub-section (1) shall be final and a conclusive proof of the arrears stated to be due therein and the same shall be recoverable according to the law for the time being in force for the recovery of land revenue.
Sub-section (1) of Section 154 of the Act provides for revision before the State Government against the order of the Registrar, and before the Registrar against the order of the Deputy Registrar, where no appeal lies against such decision. Sub-section (2A) of Section 154 reads as under:-
"(2A) no application for revision shall be entertained against the recovery certificate issued by the registrar under section 101 unless the applicant deposits with the concerned society, fifty per cent amount of the total amount of recoverable dues."
The petitioners have challenged constitutional validity of the above provision.
3. Constitutional validity of Section 154(2A) of the Act came to be challenged before a Division Bench of this Court in Smt.Kausalya Sampat Vs. The Vasant Sahakari bank Ltd. & ors., 2004 (4) ALL MR
557. After considering the decisions of the Supreme Court in Mardia Chemicals Ltd. Vs. Union of India, 2004(4) SCC 311, Vijay prakash D.Mehta Vs. Collector of Customs (preventive) Bombay, (1988) 4 SCC 402, Shyam Kishore Vs. Municipal Corporation of Delhi, (1993) 1 SCC 22 and State of Tripura vs. Manoranjan Chakraborty, (2001) 10 SCC 740, the Division Bench of this Court upheld the constitutional validity of the aforesaid provision and observed as under:-
3 of 8 ::: Downloaded on - 09/06/2013 18:16:33 ::: kambli 4 WP(l)-2001 & 2772-12 "14. In the light of the consistent view of the Honourable Supreme Court of India interpreting a similar provision in large number of statutes which are in para materia to the provisions of Sub-section (2A) of Section 154 of the Maharashtra Co-operative Societies Act, 1960, we are of the view that the provisions of Sub-section (2A) of Section 154 are constitutionally valid and are not violative of the petitioner's fundamental rights under Articles 14 and 19 of the Constitution of India. We are also of the opinion that the case of Mardia Chemicals Ltd., and others (supra) has no application to the facts of the present case. The said case was not an appellate or revisional proceedings but were original proceedings and, therefore, imposition of a condition of deposit of dues was held to be impermissible in law. The present case is not of a original proceeding and, therefore, we are of the view that the judgment in the case of Mardia Chemicals Ltd., and others, do not apply herein. We therefore uphold the validity of the said Sub-section (2A) of Section 154 of the Maharashtra Co-operative Societies Act, 1960.
15. We are further of an opinion that by providing for deposit only of 50% of the total dues under a recovery certificate the legislature has itself whittled dawn the rigour of the said provisions. Thus absence of power to dispense with deposit by revisionary authority does not make the provision arbitrary or discriminatory. The section itself provides for uniform dispensing of the 50% of the amount already adjudicated as dues by the lower authority.
(emphasis supplied)
4. We respectfully agree with the view expressed in the aforesaid decision, which is otherwise also binding on us as a co- ordinate Bench of this Court.
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5. As regards the question whether the Revisional Authority has power either to waive condition of deposit of 50% amount of recoverable dues or relax the quantum of 50%, following above decision of the Division Bench, a learned Single Judge of this Court in Greater Bombay Co-operative Bank Ltd. v/s. Shri Dhillon P. Shah & Ors., 2004(1) All MR 25, has taken the view that no such power is given to the Revisional Authority either to waive this condition or relax the quantum of 50%.
6. Coming to the question of constitutional validity of Section 101 of the Act, learned counsel for petitioners has submitted that the respondent-bank ought to have filed a suit against the petitioners before the Co-operative Court under Section 91 of the Act. It is submitted that the summary procedure under Section 101 of the Act is unconstitutional as the bank has an option of invoking one or the other provision, and therefore, the provisions of Section 101 are arbitrary,discriminatory and violative of petitioners' fundamental rights.
7. Similar contention was urged before the Supreme Court in M/s.Transcore v/s. Union of India & Anr., AIR 2007 SC 713. In that case the bank had filed original application against the borrower under the Debt Recovery Tribunal Act, 1993 before the Debt Recovery Tribunal. Thereafter, the bank took recourse to Securitisation Act ( SARFESI Act). The Supreme Court has in the aforesaid decision examined the controversy , particularly with reference to "the doctrine of election." Rejecting the said contention, the Supreme Court has held that there are three elements of election, namely existence of two or more remedies, inconsistencies between such remedies and a choice of 5 of 8 ::: Downloaded on - 09/06/2013 18:16:33 ::: kambli 6 WP(l)-2001 & 2772-12 one of them. If any one of the three elements is not there, "doctrine of election" will not apply. The Supreme Court has held the Securitisation Act is an additional remedy under the DRT Act. Together they constitute one remedy and therefore the doctrine of election does not apply. The Supreme Court also referring to Snell's Equity (Thirty-first Edition, page 119) observed that doctrine of election is applicable only when there are two or more co-existent remedies available to the litigants at the time of election, which are repugnant and inconsistent.
8. In the present case also the respondent-bank had initially taken recourse to the Securitisation Act, but petitioners challenged the said proceedings and the writ petition is pending before this Court, wherein petitioners have raised a contention that the respondent-bank being the co-operative bank cannot invoke the Securitisation Act. In view of pendency of the said writ petition, the respondent-bank has taken recourse to provision under Section 101 of the Maharashtra co-
operative Societies Act. Petitioners are now contending that because the respondent-bank had taken recourse to the Securitisation Act, it is now estopped from invoking the remedy under Section 101 of the Co- operative Societies Act.
9. Having heard the learned counsel for parties, we do not find any repugnancy and inconsistency between remedies of Section 91 and Section 101 of the Co-operative Societies Act and remedies under the Securitisation Act.
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10. It is necessary to note that while Section 91 providing for a settlement of dispute between the co-operative society and its member is available to all co-operative societies, the recovery proceedings under Section 101 of the Act are available only to certain specified societies including the Urban co-operative society for recovery of arrears of its dues, which can be ascertained on the basis of documents like loan agreements and the accounts maintained by the bank and therefore a summary procedure would be adequate for ascertaining the amounts due. Such co-operative societies, therefore, stand on a different footing from the other co-operative societies. If the petitioner desires to contend that the procedure prescribed for recovery under Section 101 of the Act has not been followed, the petitioners have the alternate remedy of revision under Section 154 of the Act. We are, therefore, of the view that the matter is covered against petitioners by the aforesaid decision of the Supreme Court in M/s.Transcore v/s. Union of India, (supra).
11. Coming to the challenge to proceedings under Section 101 of the Act, we do not find that any ground is made out for interfering with the proceedings under Section 101 of the Act, which the respondent-bank is entitled to invoke being an Urban Co-operative Bank. We, therefore, do not find any merit in the petition. The Petitions are, therefore, summarily dismissed.
12. At this stage, learned counsel for petitioners prays for stay of operation of this judgment for some time in order to have further recourse in accordance with law.
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13. Learned counsel for the respondent-bank opposes the prayer and submits that petitioners, who are husband and wife, owe more than Rs.3.5 crores to the respondent-bank and that the respondent-
bank is, therefore. entitled to proceed with the recovery proceedings.
14. In the facts and circumstances of the case, we do not find any justification to grant stay of operation of this judgment, particularly when no stay was granted in these writ petitions at any time. In case petitioners are aggrieved by the decision in the proceedings under Section 101 of the Act, petitioners have an efficacious alternate remedy of approaching the Registrar of Co-operative Societies in revision under Section 154 of the Act, subject to the condition stipulated in sub-section (2A) of Section 154. Prayer for stay is, therefore, rejected.
CHIEF JUSTICE (ANOOP V MOHTA, J.) 8 of 8 ::: Downloaded on - 09/06/2013 18:16:33 :::