Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2015 Supreme(Bom) 899

In the High Court of Bombay at Nagpur
B.R. GAVAI & INDIRA K. JAIN, JJ.
M/s. Shewalkar Developers Ltd. – Appellant
Versus
Rupee Co-operative Bank Ltd. & Others – Respondents
Writ Petition No. 867 of 2013
Decided on : 18-06-2015

Advocates Appeared:
For the Petitioner: A.C. Dharmadhikari, S.O. Ahmed
For the Respondents: R1, R2, R.H. Chandurkar, R3, P.M. Chandekar

Consistency in orders passed by different benches of the same court is crucial to maintain the quality of certainty in law.

Headnote:
Extraneous Reasons - Jurisdictional Conflict - Maharashtra Co-operative Societies Act, 1960, Section 101; Securitisation and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002, Section 13(2)
Fact of the Case:

The petitioner, a borrower of a bank, sought to challenge a notice issued by the bank under the SARFAESI Act. The court found that the order sought and granted by the Cooperative Court was based on extraneous reasons.
Finding of the Court:

The court found that the order passed by the Cooperative Court was based on extraneous reasons and should be quashed and set aside. It also highlighted the importance of consistency in orders passed by different benches of the same court.
Issues: Jurisdictional conflict, validity of orders passed by different benches of the same court, extraneous reasons for granting orders
Ratio Decidendi: Consistency in orders passed by different benches of the same court is crucial. Orders based on extraneous reasons should be quashed and set aside.
Final Decision: The petitioner's conduct during the proceedings led the court to dismiss the writ petition on the ground of equity. The rule was discharged with no order as to costs.

Judgement Key Points

Key Points: - (!) The Court emphasizes the need for consistency in orders passed by different benches of the same court to maintain certainty in law. - (!) The Division Bench found that the Cooperative Court’s order was based on extraneous reasons and stayed/quashed it; the matter involved review of extraneous considerations in relief. - (!) The Apex Court/Axon-like discussion stresses that lack of consistency harms judicial discipline and certainty. - [4000492010010] The Court repeatedly states the importance of one Court acting with discipline and following coordinate judgments to avoid chaos. - [4000492010015] The Single Judge’s order contravened a Division Bench’s stay order; highlights the need to respect higher/coordinate bench rulings. - [4000492010016] The Supreme Court’s stance on following coordinate decisions and not overruling them without referral; emphasizes predictability. - [4000492010020] The notice/order of the Cooperative Court dated 8.10.2012 is quashed and set aside by this High Court in extraordinary jurisdiction. - [4000492010019] The petitioner’s conduct is considered in denying relief, citing equity and improper conduct during pendency. - (!) Final discharge: Rule discharged; no costs; implies remedy in setting aside unlawful order. - (!) Directive to investigate the Cooperative Court judge for potential misconduct.

What is the significance of consistency in orders across different benches of the same High Court?

What is the legality of orders passed by a Cooperative Court when found to be based on extraneous reasons?

What is the appropriate remedy where an order is set aside for extraneous reasons, and how should judicial discipline and territorial/jurisdictional consistency be enforced?

Judgment :-

B.R. Gavai, J.

1. Rule. Rule made returnable forthwith. Heard finally by consent of the learned Counsel for the parties.

2. The learned Counsel for the petitioner seeks liberty to withdraw the petition. However, taking into consideration the seriousness of the matter and in order to give due respect to the orders passed by the Coordinate Bench of this Court on earlier occasions, we refuse the permission to withdraw the petition and proceed to decide the same.

3. The petition arises out of very peculiar facts. The petitioner is a borrower of the respondent nos.1 and 2 – Bank. Since the petitioner was liable to pay dues of the Bank, it appears that the respondent nos.1 and 2 – Bank had initiated proceedings for recovery. A dispute came to be filed by the present petitioner being a Dispute No.263/2012. In the said dispute, an application for temporary injunction also came to be filed below Exh.5.

4. The learned Judge of the Co-operative court initially granted ex parte order on 12.9.2012. It appears that the relief which was sought by the petitioner was to the effect that the Assistant Registrar Cooperative Societies should not grant any recovery certificate under the provisions of Section 101 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as “the said Act”). The learned Judge of the Co-operative Court vide order dated 8.10.2012 passed the following order:

“(i) Application below Exh.5 is allowed.

(ii) Ex-parte ad-interim relief in terms of Prayer Clause 1 granted by this court on 12/09/2012 is hereby confirmed till the disposal of dispute.

(iii) No order as to costs.

(iv) Order pronounced in open court.”

5. It further appears that subsequently the present petition was filed, thereby raising the challenge to the notice issued by the respondent no.1, dated 3.1.2013, under the provisions of Section 13 (2) of Securitisation and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”). The present petition came to be filed challenging the said notice on the ground that the respondent – Bank had no jurisdiction to issue the said notice. The petition came up for hearing before the Division Bench of this Court (A.P. Lavande and A.B. Chaudhari, JJ.) on 28.2.2013. It appears from the order passed by the Division Bench that upon a query by the learned Judges as to whether the petitioner was at least inclined to pay the principal amount, the learned Counsel for the petitioner expressed his inability to do so. One of the grounds raised by the petitioner at the time of hearing was that the petitioner himself had to recover an amount of rupees two crores and odd from the respondent no.1 – Bank. It was also urged before the Court that since there is already an order of injunction passed by the learned Cooperative Court, there is no question of depositing any amount in the present petition. The learned Judges in the order observed that an amount of Rs.4,41,32,643.43 was shown as a principal amount in the notice impugned in the present petition. The learned Judges of this Court after referring to the reason given by the learned Co-operative Court observed in paragraph nos.7 and 8 thus:

“7. Prima facie, we are shocked to see the way in which the learned Judge of the Cooperative Court has granted blanket injunction from recovery of huge amount of Rs. Five Crores and odd at one stroke even without asking for deposit of a single paisa. The reasons cited above are preposterous and contrary to the settled legal position in respect of recovery of money dues due to Banks. The impugned orders are clearly in contravention of the Apex Court judgment in the case of Shiv Kumar Chadha vs. Municipal Corporation of Delhi and others; (1993) 3 Supreme Court cases, 161. To our mind, the above orders made by the Judge, Cooperative Court, Nagpur are based on a cock and bull story and made for extraneous reasons and, therefore, we call upon the petitioner to explain why

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