Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Bom) 1725

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
SANDEEP V. MARNE, J.
Bhanudas @ Suryabhan S/o. Ramchandra Shinde - Petitioner
Versus
The State of Maharashtra, Through it’s The Principal Secretary, Co-operative Department, Mantralaya & Ors. - Respondents
Writ Petition No. 6581 of 2022
Decided On : 15-11-2022

Advocates Appeared:
For the Petitioner: Mr. K.N. Shermale.
For the Respondent: Mr. S.S. Dande, AGP, Mr. S. K. Shinde.

The judgment emphasizes the importance of respecting the jurisdiction and decisions of the Civil Court in matters related to the Maharashtra Money Lending (Regulation) Act, 2014, and criticizes the initiation of parallel proceedings by the complainant.

Headnote:
Money Lending - Jurisdiction of Authorities under Maharashtra Money Lending (Regulation) Act, 2014 - Section 18(2) - Summary
Fact of the Case:

Two sale deeds were executed by respondent no.5 in favor of the petitioner, leading to a dispute over the nature of the transaction. Respondent no.5 alleged that the petitioner acted as an unauthorized money lender and failed to reconvey the lands despite the return of the loan amount. The District Registrar (Money Lending) initiated proceedings against the petitioner under the Act of 2014, despite the pendency of a Civil Suit seeking reconveyance of the lands and a declaration that the transaction was a mortgage by conditional sale. The Civil Court dismissed the suit, holding the transaction as a sale and not a mortgage by conditional sale.
Finding of the Court:

The court found that the authorities under the Act of 2014 lacked jurisdiction to entertain the complaint of respondent no.5 due to the pendency of the Civil Suit and the decision of the Civil Court. The court also criticized respondent no.5 for suppressing the filing of the Civil Suit and initiating parallel proceedings. It held that the orders passed by the authorities under the Act of 2014 were illegal and set them aside. The court granted a stay on the operation of its order for eight weeks.
Issues: 1. Jurisdiction of authorities under the Act of 2014 in light of the pendency and decision of the Civil Suit. 2. Suppression of filing of Civil Suit by respondent no.5 and initiation of parallel proceedings. 3. Conflict between the findings of the Civil Court and the authorities under the Act of 2014.
Ratio Decidendi: The court held that the authorities under the Act of 2014 lacked jurisdiction to entertain the complaint of respondent no.5 due to the pendency of the Civil Suit and the decision of the Civil Court. It also criticized respondent no.5 for suppressing the filing of the Civil Suit and initiating parallel proceedings. The court emphasized that the orders passed by the authorities under the Act of 2014 must yield to the judgment and order delivered by the Civil Court.
Final Decision: The court quashed and set aside the orders passed by the authorities under the Act of 2014. It granted a stay on the operation of its order for eight weeks.

JUDGMENT :

1. Rule. Rule made returnable forthwith. With the consent of parties, matter is taken up for final hearing at the admission stage.

THE CHALLENGE

2. A somewhat unique issue arises in the present petition. Whether an authority exercising powers under the provisions of the Maharashtra Money Lending (Regulation) Act, 2014 (for short 'the Act of 2014) can pass an order contrary to a decree passed by a Civil Court? The issue arises in the light of challenge set out up by Petitioner to the order dated 30.03.2022 passed by the Divisional Joint Registrar, Co-operative Societies passed in Second Appeal No.8/2008 thereby confirming the order dated 14.06.2018 passed by the District Registrar (Money Lending) and District Sub Registrar Co-operative Societies, Ahemadnagar in Appeal No.69/2017.

FACTUAL MATRIX

3. Shorn of unnecessary details, facts of the case are that two sale deeds came to be executed by respondent no.5 in favour of petitioner on 13.11.2009 transferring the right, tittle and interest in respect of lands admeasuring 80R each in Gut No.135/4 for consideration of Rs.3,00,000/- each (total consideration of Rs.6,00,000/-). There is a difference of opinion between petitioner and respondent no.5 as to the nature of transaction. While the petitioner has considered the transaction as a sale deed, respondent no.5 assumes the same as mortgage by conditional sale.

4. It is a case of respondent no.5 that he was in need of money and petitioner, acting as an unauthorized money lender, advanced loan of Rs.6,00,000/- to respondent no.5 and took the land as a security towards the said loan. Despite respondent no.5 willing to return the amount of Rs.6,00,000/-, petitioner failed to reconvey the lands. This led to making of a representation by respondent no.5 to the Minister for Agriculture and Marketing on 03.04.2013 alleging that petitioner has been acting an unauthorized money lender and transferring in his name lands of poor farmers.

5. It is the case of petitioner that on account of respondent no.5 approaching the Minister, the District Registrar (Money Lending) initiated proceedings against him under the provisions of the Act of 2014, despite the fact that respondent no.5 had already instituted Special Civil Suit No.20/2012 in the Court of 2nd Joint Civil Judge, Senior Division, Sangamner seeking reconveyance the lands and a declaration that the transaction was in the nature of mortgage by conditional sale.

6. Searches were conducted at the residence of petitioner and certain documents, on the basis of which, prima facie doubt was raised that he was indulging in money-lending activities. In the proceedings initiated before the District Registrar (Money Lending), initially an order of remand was passed on 30.05.2016 directing Sub Registrar, Cooperative Societies, Sangamner to conduct de novo enquiry and submit a report. Accordingly, upon conducting a de novo enquiry, the Sub Registrar, Co-operative Societies, Sangamner submitted report dated 10.08.2017 prima facie opining that there was a possibility of petitioner engaging in money lending transactions. The District Registrar (Money Lending) and District Deputy Registrar, Cooperative Societies, Ahemadnagar passed order dated 14.06.2018 under the provisions of Section 18(2) of the Act of 2014 declaring that the sale deeds dated 13.11.2009 executed by respondent no.5 in favour of petitioner was void and restored the ownership of the lands in the name of respondent no.5.

7. An Appeal came to be preferred by petitioner before the Divisional Joint Registrar, Co-operative Societies, Nashik bearing Appeal No.8/2018. By order dated 30.03.2022, the Appeal has been rejected.

8. In the meantime, Special Civil Suit No.20/2012 instituted by Respondent No. 5 came to be dismissed by the 2nd Joint Civil Judge, Senior Division, Sangamner vide judgment and order dated 30.10.2015 holding that the transaction that took place between petitioner and respondent no.5 was that of sale and not of mortgage by condi