Bombay High Court
Maratha Sahakari Bank Ltd. Through Its ... vs The Divisional Joint Registrar ... on 19 October, 2018
Author: Sandeep K. Shinde
Bench: K. K. Tated, Sandeep K. Shinde
WP-3990-18.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3990 OF 2018
Maratha Sahakari Bank Ltd. )
Matushree Co-operative Housing )
Society Ltd. Near Natraj Studio, )
196, Sir M.V. Road, Andheri (East), )
Mumbai - 400 069 through its )
Authorized representative )
Mr. Sanjay Sitaram Rawool ) ..... Petitioner
Versus
1.The Divisional Joint Registrar, )
Co-operative Societies, )
Malhotra House, 6th Floor, )
Opp. G.P.O., Fort, Mumbai - 400001 )
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2.Deputy Registrar, )
Co-operative Societies, )
The Gr. Mumbai Nagari Sahakari )
Bank Association Ltd. )
4th Floor, Bhartiya Krida Mandir )
Building, Naigaon Road No.26, )
Wadala, Mumbai - 400 031. )
3.M/s Shanti Traders )
(Partnership Firm) )
Shop No.121, Chamar Godi, )
Mallet Bunder Road, )
Dockyard Road (E), )
Mumbai - 400 009. )
4.Harakchand Ranmal Shah(Partner) )
(Borrower) )
Flat No.A/27, B/27, 10th Floor, )
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"A" Wing, Konark Indraprasth CHS, )
Sarvoday Nagar, Mulund (W), )
Mumbai - 400 080. )
5.Shantilal Ranmal Shah (Partner))
(Borrower) )
A/25, Konark Indraprasth CHS, )
Sarvoday Nagar, Mulund (W), )
Mumbai - 400 080. )
6.Mrs. Hansa Harakchand Shah )
(Co-borrower) )
Flat No.A/27, 10th Floor, )
"A" Wing, Konark Indraprasth CHS, )
Sarvoday Nagar, Mulund (W), )
Mumbai - 400 080. )
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7. Mr. Sunder Pijinappa Kotian )
( Guarantor ) )
Flat No.204, Vardhyani Building, )
Ghodbunder Road, Kavesar Waghbil, )
Annu Nagar, Thane (W), )
Thane - 400 607 )
8.Mr. Keshavji Bhoja Gada (Guarantor))
12, Ambardarshan Building, )
G.G. Road, Gaondevi, Dombivali (W), )
Thane - 121 202. )...Respondents
...
Mr. Mahesh N. Devalekar for Petitioner in all petitions.
Mr. Manoj Patil for the Respondent Nos.3 to 5, 7 to 9.
Mr. A.P.Vanarase, AGP for the State.
CORAM : K. K. TATED &
SANDEEP K. SHINDE JJ.
DATE : 19 OCTOBER, 2018
ORAL JUDGMENT : [Per Sandeep K. Shinde, J.]
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WP-3990-18.odt The question that falls for consideration in this Petition under Articles 226 of the Constitution of India is, "whether execution of a certificate issued under Section 101 of the Maharashtra Co- operative Societies Act, 1960 (In short 'Said Act') could be subject to judgment and award in a Dispute No.CC-IV-74/2015 ." 2 The facts of the case are as under:
A certificate under Section 101 of the said Act was issued by Respondent No.2 in Recovery Application No.101/2323/2013 against Respondent Nos.4 to 11 on 20.10.2015 upon an application by the Petitioners. The said application was filed on 13.12.2013.
Respondent No.3 is the borrower-firm of which Respondent Nos.4 and 5 are borrowers; whereas Respondent No.6 is co-borrower; and Respondent Nos.7 and 8 are the guarantors. The certificate of recovery is in sum of Rs.69,69,929/-. The certificate contains a condition that execution of recovery certificate is subject to judgment and award in dispute no.CC. IV/74/2015. Clause 9 of the said recovery certificate reads as under:Shivgan 5/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 :::
WP-3990-18.odt "ojhy fuosnukoj fuca/kdkapk vfHkizk;& mifuca/kd dk;kZy;kl myVrikl.khps vf/kdkj ukghr- gh ckc lgdkj U;k;ky;kP;k d{ksr ;srs- izzfroknh ;kauh lgdkj U;k;ky;kr nkok dza- CC-IV/74/2015 nk[ky dsyk vkgs- lnj nkok gk vtZnkj cWadsus ekx.kh dsysY;k jdesP;k laca/khr vkgs- lgdkj U;k;ky;krhy nkO;kP;k vafre fudkykps vf/ku jkgwu olqyh nk[kyk nsr vkgs-
laca/khr nkok fudkyh fu?kkyk vkgs o R;kojhy dks.krhgh dk;Zokgh lgdkj U;k;ky;kr izaychr ukgh ;kph [kk=h olqyh vf/kdkjh ;kauh olqyhiqohZ djkoh-"
3 That pending recovery proceedings under Section 101 of the said Act, Respondents filed disputes in the Co-operative Court, inter-alia disputing the recovery. In view of this, the recovery certificate was issued subject to the judgment and award in the disputes. A note of caution was underlined whereby Recovery Officer was directed to execute recovery certificates only if no dispute is pending in the Co-operative Court.
4 It may be stated that the Special Recovery Officer issued demand notice dated 13.11.2015 under Section 156 of the said Act read with Section 10 of the MCS Rules to the borrowers and the sureties, who are Respondent Nos.3 to 11 for recovery of due amount.
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WP-3990-18.odt 5 The Respondent No.3 herein filed Revision No.106 of 2016 against the demand notice dated 13.11.2015 which was allowed by the Divisional Joint Registrar, who, vide order dated 9.8.2016 quashed and set aside demand notice dated 13.11.2015 on the following grounds:
"....Hence, it seems that the Respondent Deputy Registrar have passed conditional orders. Further it seems that the aforesaid disputes are pending before Hon'ble Co-op. Court for adjudication. It is pertinent to note that the decision of the Hon'ble Court shall be binding upon the concerned parties. Further the aforesaid Recovery Certificates have been issued on 20/10/2015, however it is not brought notice that the aforesaid Recovery Certificates have been challenged before the Court/Authority of competent jurisdiction and the aforesaid two conditions laid by the Respondent Deputy Registrar has been deleted/canceled. Therefore, the said Recovery Certificates are subsisting in the eyes of law. Therefore, until the disputes pending before Hon'ble Co-op. Court are decided, the recovery execution initiated by the Respondent SRO is improper."
6 It may be stated that the Petitioner-Bank had filed Writ Petition No.5361 of 2017 on 25.01.2017 under Article 227 of the Constitution of India and challenged Clause 9 of the certificate as stated here-in-above, however, withdrew it on 15.1.2018. Shivgan 7/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 :::
WP-3990-18.odt 7 In the disputes filed in Co-operative Court, it is averred that the cause of action arose when the bank issued notices demanding the entire purported loan amount. In the said dispute, a declaration is sought in the form of perpetual, mandatory and prohibitory injunction against the bank from proceeding any further in recovery application no.101/2481/2013 and 101/95/2013 under Section 101 of the said Act.
8 Petitioners being aggrieved by Clause 9 as aforesaid have preferred this Writ Petition inter-alia seeking following reliefs:
"(a) This Hon'ble Court may kindly be pleased to issue writ of Certiorari or any other writ, direction or order in the like nature thereby quashing and setting aside the order dated 20.10.2015 passed by the Deputy Registrar to the extent of condition imposed at Para 9 of the said order and order dated 09.08.2016 by Divisional Joint Registrar;
(b) This Hon'ble Court may please to call the record and proceeding of both the matter dispose of by Deputy Registrar and the Divisional Joint Registrar for examining the legality of the order;
(c) This Hon'ble Court may further please to direct the Hon'ble Co-operative Court to dispose of the matter filed by Respondent Nos.3 to 11 against the present Petitioner in expedite manner;
(d) This Hon'ble Court may please to pass any order or direction may be given in favour of Petitioner Bank for Shivgan 8/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt execution of recovery certificate to be taken place in expedite manner.
(e) Any other further order be granted as this Hon'ble Court may deem fit and proper."
9 Heard the learned counsel for the Petitioner, contesting Respondents and the learned AGP for the State. 10 The issue as framed in paragraph 7, here-in-above fell for consideration before the Division Bench of this Court in the case of Vasundhara Ashokrao Patil v. Rajaram Bapu Sahakari Bank td. And Ors. AIR 2003(5) BCR 27 wherein it is held in paragraph 6 that 'the provisions of Section 91 and 101 are separate and distinct and act in different spheres. By virtue of Section 101, a summary and speedy remedy has been provided to certain types of societies. Further, it is to be noted that by virtue of Section 101, finality is attached to the certificate granted by the Registrar under this section'. In paragraph 6, the Division Bench has held that 'the opening words of Section 101 i.e., "Notwithstanding anything contained in sections 91, 93 and 98" gives overriding effect to the said section' and further held that 'only remedy Shivgan 9/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt of the party aggrieved is to file revision application under Section 154 of the Maharashtra Co-operative Societies Act.' 11 In the case in hand, though the recovery certificate itself is not subject matter of dispute but clause 9 of the recovery certificate and the pleadings in the dispute shows contesting respondents have invoked the jurisdiction of the Co-operative Court under Section 91 during the pendency of the recovery proceeding under Section 101 of the said. The pleadings in a dispute application as well as clause 9 of the recovery certificate would show that issue in the dispute is the same, i.e., recovery of amount due and payable by the borrowers to the Bank.
12 In view of these facts, we are of the opinion that clause 9 is contrary to the object and the scheme of Section 101 of the said Act. In the course of the argument, the learned counsel appearing for Respondents conceded to a fact that jurisdiction under Section 91 and 101 are distinct in nature and do not overlap each other. Thus, Clause Shivgan 10/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt 9 in the recovery certificate, is on the face of it, runs counter to scheme and object of Section 101 of the Said Act. Section 101 was inserted in the statute book by Maharashtra Act No. 27/1969. Intention of legislature while enacting the provisions of Section 101 was to provide speedy remedy to class of societies referred to in section against the defaulting members. Moreover, opening words of Section 101 gives overriding effect to the said Section. Insertion of such clause and making the execution of recovery certificate subject to disputes pending in the Co-operative Court which admittedly relates to the recovery proceedings is illegal and, therefore, we quash and set aside the same.
13 It may be stated that contesting respondents had participated in the recovery proceedings through their advocates but simultaneously filed a dispute under Section 91 which, in our view, was ill-advised and, with sole intention to stall the recovery proceedings initiated under Section 101 of the said Act. Shivgan 11/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt 14 The learned counsel for contesting respondents would submit that petitioners have not approached writ Court with clean hands in-as-much as Petitioners have not disclosed a fact that earlier Writ Petition for same relief was withdrawn by them. It is, therefore, submitted that Petitioners are not entitled to approach this Court being under Article 226 which is extraordinary, equitable and discretionary jurisdiction. He has thus relied upon the judgment of the Supreme Court in the cases of (1) K.D.Sharma v. Steel Authority of India Ltd. & Ors.
2009 AIR (SC)(Supp)1309;
(2) Prestige Lights Ltd. v. State Bank of India 2007 AIR (SCW) 5350;
(3) Udyami Evam Khadi Gramodyog Welfare Sanstha and Anr. v. State of UP and Ors. 2007 AIR (SC) 1223.
15 It may be stated that the bank had filed Writ petition No.2317 of 2017 on 23.12.2016 and withdrew the same on 15.1.2018. This petition was filed on 22.12.2017 under Article 226 of the Constitution of India and first petition was withdrawn after filing of the present Petition. Admittedly, as in the first petition, subject issue was not addressed or dealt with, we do not see any reason to Shivgan 12/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt hold that the petitioners have not approached this Court with clean hands. On the contrary, it may be stated that contesting respondents have approached the Co-operative Court under Section 91 when the proceedings under Section 101 of the said Act were pending against them and as such, ensured that the recovery certificate is not executed against them. In the circumstances, we do not see any merit in the contention of the contesting respondents. 16 That for the reasons aforesaid, we allow the petition and quashed and set aside Clause 9 of the Recovery Certificate dated 20.10.2015. We make it clear that execution of the recovery certificate no.101/2479/2013 dated 20.10.2015 issued by Respondent No.2 is not subject to disputes no. CC-IV-74/2015 and/or any matter relates thereto if pending in the Co-operative Court. Shivgan 13/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 ::: WP-3990-18.odt 17 Writ petition is allowed in the aforesaid terms and disposed of accordingly with no order as to costs.
(SANDEEP K. SHINDE, J.) (K. K. TATED, J.) Shivgan 14/14 ::: Uploaded on - 22/10/2018 ::: Downloaded on - 25/10/2018 23:18:52 :::