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2007 Supreme(Bom) 1013
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
P.V.KAKADE AND P.R.BORKAR, JJ.
Adarsh Ginning and Pressing Factory - Petitioner.
Versus
State of Maharashtra - Respondents.
WRIT PETITION NO. 3981 OF 2003.
W I T H
CIVIL APPLICATION NO. 7918 OF 2004
Decided on : 25.7.2007.
Mr. S.V. Gangapurwala, advocate for the petitioner.
Mr. S.K. Kadam, A.G.P. for respondent nos. 1 to 3.
Mr. P.S. Agrawal, advocate for respondent nos. 4 & 5.
Mr. P.M. Shah, Senior Counsel holding for Mr. Amol Sawant, advocate for respondent no. 6.
Headnote:Maharashtra Co-operative Societies Act, 1960 - Sections 90 and 101 - Multi-State Co-operative Societies Act, 2002, Sections 74 and 126(2) - Respondent Bank a Multi- State Co-operative Bank covered by Section 74 of Act - Power to hear-lies with Central Co-operative Court - Question of jurisdiction of Co-operative Court under Section 91 - Challenge to certificate of recovery - Refund of price paid by auction purchaser also claimed - Differences cannot be solved by Multi- State Co-operative Societies Act - Government circular dated 8.1.2001 empowers Co-operative Court under MSCS Act to deal - Issue of certificate under Section 101 of MSCS Act valid - Operation of Multi -State when in operation respondents 2, 3 and 5 were authorities - Recovery certificate obtained by respondent 4 Bank valid and not illegal. - Since the provisions of the Multi-State Co-operative Societies Act, 1984 were not allowed to apply to Multi-State Co- operative Societies (till the Multi-State Act, 2002 came into force) b y the various orders of the Court, it cannot be said that the recovery certificate obtained by respondent No. 4 Bank is invalid or illegal. In view of Section 126 of the Multi-State Act, 2002 steps should have been taken for execution of the recovery certificate under the Multi-State Act, 2002.
Maharashtra Co-operative Societies Act, 1960 - Section 101 - Multi-State Co- operative Societies Act, 2002, Sections 126(2), 84 and 74 - Reference of dispute - Issuance of certificate - Since provision of Multi-State Co-operative Societies Act were not allowed to apply to Multi-State Co-operative Societies Act, 2002 by the various order of the Court - Hence recovery certificate cannot be invalid.
P.R.BORKAR,J. :
1. The petitioner which is a debtor of respondent nos. 4 Peoples Co-operative Bank Limited, has filed this petition for declaration that the Government Circular bearing No. Bank/Recovery/Suits/t-3/2000 dated 8.1.2001 and No. Admn/2A/M.S.A./2002/Suit/2002 dated 16.1.2003 be quashed and set aside as ultra vires, and also for direction to quash and set aside the recovery certificate issued by respondent no. 3 on 28.10.2002 in Application No. 200/2002. Civil Application No. 7918 of 2003 is filed by respondent no. 6, which has purchased secured assets pending this petition, for refund of purchase money.
2. Admittedly the petitioner is a partnership firm which had started Adarsh Ginning and Pressing factory at Pimpalgaon-Divshi, Taluka Gangapur, District Aurangabad. Respondent no. 4 Peoples Cooperative Bank Limited Hingoli is a Multi State Cooperative Bank (hereinafter referred to as ’the Bank’). The Bank was initially registered under the provisions of the Maharashtra Cooperative Societies Act, 1960. However, on 9.12.1999 by registration No. MSCS/CR/98/99 it was registered as a Multi State Cooperative Bank.
3. The petitioner had applied for loan as it felt that it would get business of Ginning and Pressing of cotton. Respondent no. 4 Bank sanctioned loan of Rs. 42 lac on 12.5.1999. The loan was to be repaid upto 2004. The petitioner executed a registered mortgage deed and mortgaged the factory property. At that time, Kapus Ekadhikar Yojana (the cotton monopoly scheme) was run by the Government. The petitioner was completely dependant upon Government for supply of cotton, but the petitioner could not get business as expected. There was change in the Government policy in respect of Kapus Ekadhikar Yojana which could not be implemented in effective manner and the petitioner could not repay the loan.
4. Respondent no. 4 Bank filed proceedings before respondent no. 3 Deputy Registrar of Cooperative Societies against the petitioner and its partners and guarantors under Section 101 of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as, "the State Act, 1960"). After appearance the petitioner filed an application stating that respondent no. 4 Bank was governed by the provisions of the Multi State Cooperative Societies Act, 2002 (hereinafter referred to as, "the Multi State Act, 2002") and, therefore, the proceedings can be filed only before Central Registrar and respondent no. 3 had no jurisdiction to try and act under Section 101 of the State Act, 1960. It is further stated that arguments were advanced on 20.10.2002 on the provisions of the Multi State Act, 2002 and the matter was reserved for orders on the point of applicability of the Multi State Act, 2002. However, respondent no. 3 relying on Circular dated 8.1.2001, granted the recovery certificate without deciding the point of jurisdiction.
5. The petitioner thereafter filed Revision Petition No. 89 of 2002 before the Divisional Joint Registrar, Cooperative Societies, Aurangabad. The Divisional Joint Registrar passed an order on 27.1.2003 directing the petitioner to deposit 50% of the total amount in the Bank within 15 days. As against that order of deposit of 50% amount, the petitioner filed Writ Petition No. 338 of 2003, which came to be dismissed on the ground that the petition was against an interim order. However, all questions were kept open. On 9.9.2003 the petitioner withdrew the Revision Petition.
6. On 14.3.2003 respondent no. 4 Bank through its Special Recovery Officer i.e respondent no. 5 issued notice for recovery. Respondent no. 5 Special Recovery Officer also sealed the factory of the petitioner. It is stated that neither the State Act, 1960 nor the Multi State Act, 2002 confer power of sealing the property. Thereafter the petitioner filed dispute before the Cooperative Court, Aurangabad bearing No. 180 of 2002. The Cooperative C
