2007 Supreme(Bom) 1452

Bombay High Court
R. M. S. KHANDEPARKAR, DR. D. Y. CHANDRACHUD
AMBAJOGAI PEOPLES COOPERATIVE BANK LTD., AMBAJOGAI, TALUKA AMBAJOGAI dist.BEED -Appeallant
Versus
SHRIMAULI BUILDERS -RESPONDENTS
ARBITRATION PETITION 66 Of 2005
Decided On: 10/09/2007

Headnote:Maharashtra Co-operative Societies Act, 1960 - Sections 9, 101, 156 and 163 - Maharashtra Co-operative Societies Rules, 1961, Rule 107 - Civil Procedure Code, 1908, Order XXI, Rule 37 - Discarding the legality of recovery certificate - Justification of. - Upon a request made to the Court in whose custody the property is situated, in terms of Rule 107(7)(iii) the question of title or priority has to be decided by the Court. None of the counsel appearing before the Court in the present proceedings has disputed the position that the question of priority is a matter to be decided by the Single Judge. There is merit in the contention of the appellant that the Single Judge was in error in discarding the legality of the recovery certificate issued in favour of the appellant on the basis of a prima facie finding that the recovery certificate was vitiated by fraud or collusion between the appellant and the first respondent. The appellant is justified in submitting that this amounts virtually to setting aside the recovery certificate on the basis of a prima facie finding. The contention of the appellant is also that there were neither any pleadings nor any evidence to justify the determination. In fact, a perusal of the order of the Single Judge would indicate that the question of priority has not been decided. Court does not consider it appropriate to decide questions of title and priority for the first time, in appeal. It was fairly conceded before the Court by all the counsel that it would be appropriate and proper that the Single Judge should decide the questions of title and priority afresh after hearing the parties on such submissions as they may seek to advance.

       Maharashtra Co-operative Societies Act, 1960 - Sections 101 and 163 - Arbitration and Conciliation Act, 1996, Section 9 - Maharashtra Co-operative Societies Rules, 1961, Rule 107 - Civil Procedure Code, 1908, Order XXI, Rule 37 - Questions of title or priority - Determination of. - The property to be attached consisted of money which had been deposited in pursuance of the directions passed by the Court in an arbitration petition instituted by the third respondent under Section 9 of the Act. Whether the appellant was entitled to any part of those proceeds is a separate matter altogether which will be dealt with subsequently. At this stage it would suffice to note that the attachment if at all could only be effected by a request made to the Court where the monies were lying deposited in terms of the provisions of clause (iii) of sub-rule (7) of Rule 107. The Judges order filed by the appellant can be regarded and treated as a request for attachment in terms of the aforesaid provision. By the Judges Order, however, the appellant sought the permission of the Court not only to attach but to withdraw certain sums of money which were lying in deposit. Obviously there could be no question of the appellant being permitted to withdraw any amount unless the question of title and priority was determined in terms of the proviso to clause (iii) of sub-rule (7) of Rule 107. The Judges Order, properly speaking, must be confined to making such a request in terms of Rule 107(7)(iii), and it would be for the Court to determine questions of title or priority.

       Maharashtra Co-operative Societies Act, 1960 - Sections 101 and 163 - Arbitration and Conciliation Act, 1996, Section 9 - Maharashtra Co-operative Societies Rules, 1961, Rule 107 - Code of Civil Procedure, 1908, Order XXI, Rule 37 - Certificate of recovery - Deposition of amount before the Court - Award passed to deposit Rs. 91 lakhs against respondent 1 - Applicability of comprehensive code to recover amount - Provision available under Section 156, MSCS Act - Priority of claim be decided which holds amount - Direction to single Judge to decide priority first. - A perusal of the order of the single Judge would indicate that the question of priority has not been decided. Court does not consider it appropriate to decide questions of title and priority for the first time, in appeal. It was fairly conceded before the Court by all the counsel that it would be appropriate and proper that the single Judge should decide the questions of title and priority afresh after hearing the parties on such submissions as they may seek t o advance.