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2017 Supreme(Bom) 155
IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
SANGITRAO S. PATIL, J.
Omkar Switchgears A Partnership Firm – Petitioner
Versus
The State of Maharashtra – Respondents
W.P. No. 9895 of 2011
Decided on : 07-02-2017
Advocate Appeared:
For the Petitioner:Mr. S.G Dodya, Advocate with Mr.S.H.Navandar, Advocate
For the Respondents:Mr. S.R. Yadav (Lonikar), A.G.P., Mr. Rajendra S. Deshmukh, Advocate, Mr. L.D. Vakil, Advocate
Important Point: Persons who purchase at a Court auction who are strangers to the decree are afforded protection by the Court because they are not in any way connected with the decree.
Headnote:Maharashtra Co-Operative Societies Act, 1960 - Section 101-Maharashtra Co-operative Societies Rules, 1961, Rules 86-B, E, F-Constitution of India, Article 14-Recovery proceedings against Partnership Firm.-Initiation of recovery proceedings against Partnership firm and its partners and issuance of recovery certificate without giving any opportunity of hearing to partners, was in violation of Rule 86-B, E, F of Rules.
In the case of Vithal Laxman Fatangare (supra), while setting aside the recovery certificates, the Court directed the Deputy Registrar to conduct de novo enquiry as prescribed in the Rules. In the present case also the same course will have to be directed to be adopted by Deputy Registrar. If ultimately the petitioners succeed in establishing before the Deputy Registrar that nothing was due and payable from them to respondent No. 3 Bank, they would be entitled the amount paid by respondent No. 8 towards purchase price of the above numbered plot along with interest at the appropriate rate.
Rule, returnable forthwith. With the consent of the learned counsel for the parties, heard finally.
2. The petitioners have prayed for quashing and setting aside the Recovery Certificates dated 26.12.2008, issued by respondent no.2–Deputy Registrar, Cooperative Societies, Aurangabad, in Dispute Nos.658 of 2008, 659 of 2008 and 660 of 2008 for recovery of the amounts of Rs.26,54,216/, Rs.1,25,42,797/and Rs.34,63,362/respectively, from the petitioners (a) and (b) and respondent no.7, who are the partners of “Omkar Switchgears”, a registered partnership firm. They have further prayed for setting aside the auction sale held on 21.01.2010 and sale certificate dated 01.07.2011, issued by respondent no.4 Special Recovery Officer and respondent no.3–Cooperative Bank, in respect of the plot bearing No.F99, admeasuring 5,000 square meters, situate in Waluj Industrial Area, Ranjangaon, Taluka Gangapur, District Aurangabad, in favour of respondent no.8 the auction purchaser namely M/s. Technocraft Toolings.
3. The facts, in short, which are necessary for the purpose of deciding this Writ Petition, are that in order to recover the amounts advanced to the partnership firm of the petitioners, respondent no.2–Deputy Registrar, initiated recovery proceedings under Section 101 of the Maharashtra Cooperative Societies Act, 1960 (“the Act”, for short) bearing Dispute Nos. 658 of 2008, 659 of 2008 and 660 of 2008 and ultimately issued certificates dated 26.12.2008 for recovery of the above-referred amounts. The above-numbered plot of the petitioners came to be attached for recovery of the amounts mentioned in the recovery certificates. Respondent no.4–Special Recovery Officer, issued proclamation dated 21.12.2009 for conducting auction sale of the attached plot of the petitioners, for realisation of the amounts shown in the recovery certificates. The said auction sale was scheduled to be held on 21.01.2010 at 12.00 noon, on the above mentioned plot itself. Accordingly, the auction sale was conducted on 21.01.2010, wherein five bidders participated. Respondent no.8 being the highest bidder, its bid for Rs.1,60,00,000/came to be accepted and after negotiations it came to be finalised at Rs.1,70,00,000/. Respondent no.8 deposited the amount of Rs.30,00,000/by issuing two cheques with respondent no.4 on the day the auction sale was conducted. After receiving the balance amount from respondent no.8, respondent no.4 delivered possession of the above numbered plot to respondent no.8 on 30.01.2010. Respondent no.4 further issued a sale certificate in respect of that plot in favour of respondent no.8 on 01.07.2011.
4. The learned Counsel for the petitioners submits that the partnership firm and the petitioners (a) and (b) were not the parties to the proceedings under Section 101 of the Act conducted before respondent no.2– Deputy Registrar. Their names were not mentioned in the applications filed by respondent no.3. Respondent no.2– Deputy Registrar did not issue notices to the partnership firm and all partners of the firm, though it was mandatory as per Rule 86B of the Maharashtra Cooperative Societies Rules, 1961 (“the M.C.S. Rules, 1961”, for short) framed under the Act. He submits that respondent no.2 did not follow the principles of natural justice prior to issuing recovery certificates. He then submits that as per Rule 86E, it was mandatory on the part of respondent no.2 to ask respondent no.3Society to prove the contents of its application and also to deal with the contention of defences. The petitioners should have been given an opportunity to file reply in support of their defence. On receiving the reply, respondent no.2 ought to have provided an opportunity of hearing to the parties. As per Rule 86F, after hearing the arguments of the parties, respondent no.2, was obliged to deliver a reasoned judgment and pass an order for the grant or rejection of the application and thereafter, should have issued the certificates in “Form V”. He submits
