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2021 Supreme(Guj) 99

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VINEET KOTHARI, GITA GOPI, JJ.
SMITABEN MAHIN MODI - Appellant
Versus
STATE OF GUJARAT & others - Respondent
LETTERS PATENT APPEAL NO. 1011 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11088 of 2014
With
LETTERS PATENT APPEAL NO. 984 of 2015
In
SPECIAL CIVIL APPLICATION NO. 12323 of 2014
With
LETTERS PATENT APPEAL NO. 985 of 2015
In
SPECIAL CIVIL APPLICATION NO. 12324 of 2014
With
LETTERS PATENT APPEAL NO. 986 of 2015
In
SPECIAL CIVIL APPLICATION NO. 12325 of 2014
With
LETTERS PATENT APPEAL NO. 987 of 2015
In
SPECIAL CIVIL APPLICATION NO. 12326 of 2014
With
LETTERS PATENT APPEAL NO. 988 of 2015
In
SPECIAL CIVIL APPLICATION NO. 12327 of 2014
With
LETTERS PATENT APPEAL NO. 989 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11641 of 2014
With
LETTERS PATENT APPEAL NO. 990 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11642 of 2014
With
LETTERS PATENT APPEAL NO. 991 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11643 of 2014
With
LETTERS PATENT APPEAL NO. 992 of 2015
In
SPECIAL CIVIL APPLICATION` NO. 11644 of 2014
With
LETTERS PATENT APPEAL NO. 993 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11645 of 2014
With
LETTERS PATENT APPEAL NO. 994 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11646 of 2014
With
LETTERS PATENT APPEAL NO. 1012 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11089 of 2014
With
LETTERS PATENT APPEAL NO. 1013 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11090 of 2014
With
LETTERS PATENT APPEAL NO. 1014 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11091 of 2014
With
LETTERS PATENT APPEAL NO. 1015 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11092 of 2014
With
LETTERS PATENT APPEAL NO. 1016 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11093 of 2014
With
LETTERS PATENT APPEAL NO. 1017 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11094 of 2014
With
SPECIAL CIVIL APPLICATION NO. 16610 of 2014
With
LETTERS PATENT APPEAL NO. 845 of 2016
In
SPECIAL CIVIL APPLICATION NO. 13778 of 2009
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2016
In
LETTERS PATENT APPEAL NO. 845 of 2016
In
SPECIAL CIVIL APPLICATION NO. 13778 of 2009
With
SPECIAL CIVIL APPLICATION NO. 14011 of 2019
Decided On : 10-02-2021

Advocates Appeared:
For the Appellant : MR MAUNISH T PATHAK
For the Respondent: MR UTKARSH SHARMA AGP, MR DHARMESH V.SHAH

Point of Law: No person can suffer from act of court and in case an interim order has been passed and petitioner takes advantage thereof and ultimately the petition is found to be without any merit and is dismissed, interest of justice requires that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court must be neutralised

Headnote:
Gujarat Cooperative Societies Rules, 1965 - Rule 41 - Madras Cooperative Societies Act, 1932 - Sections 60, 110,103,19,114,108,37,97(1)(c),107, 98,99 , 107(3),155,161,20 ,109(1),109(2) - Challenge – Application - Deemed termination of liquidation proceedings - Respondent no.4 to 6 therein, which were directed to be wound up under section 107(3) of Act, petitioner – Bank therein was appointed as liquidator - However on expiry of seven years period liquidator passed an order erminating liquidation proceedings under section 114 of Act on ground that liquidation proceedings were deemed to have been terminated - It was this order which was challenged before State Government under section 155 of Act - However pending revision application under section 155 of Act Bank as liquidator requested Government to invoke powers under section 161 of Act to exempt societies from provisions of section 114 of Act - Whether State Government has power to exempt applicability of whole or a part of provisions of this Act to any society or not and whether it has been so done in these cases or not ?
Finding of the court: Court do not propose to say anything further on interpretation of provisions of Gujarat Cooperative Societies Act 1961 involved before us and in our opinion controversy in hand is squarely covered by aforesaid Supreme Court decision in case of Goa State Cooperative Bank Ltd - As far as facts of this case are concerned we had passed a detailed interim order in present case on which is also quoted below for ready reference - We grant a period of four weeks time - Appellants may give concrete proposals to respondent-banks for settlement of their dues within a period of One Week from today which may be considered by respondent Cooperative Banks within a period of Two Weeks from receipt of such proposal - Both sides may try to negotiate settlement - This may be done without prejudice to their rights to raise legal contentions before this Court in present Writ Appeals - We are informed at Bar today by learned counsel for appellant and that a proposal for Settlement was given to Respondent Bank represented by learned Senior Counsel but same has been turned down by Respondent Bank as learned Senior Counsel - Submitted that Scheme of Settlement required a minimum payment of interest at rate of 6% per annum as principal amount of debt which was not offered to be paid for Settlement by said Borrowers / Guarantors and therefore said proposal could not be accepted
Result: Civil Application also stand disposed of

JUDGMENT :

VINEET KOTHARI, J.

1. The present batch of Letters Patent Appeals arise out of the order of the learned Single Judge dated 05.05.2015 dismissing the Special Civil Applications filed by the Borrowers / Guarantors of the respondent Natpur Cooperative Bank Ltd., in liquidation. The observation of learned Single Judge while dismissing the Writ Petitions, are quoted below for ready reference:

“[14] Section 110 of the Act provides for powers to be exercised by the liquidator which include powers to institute and defend the suits and other legal proceedings, civil or criminal, on behalf of the society, in the name of his office; to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims present or future, certain or contingent, subsisting or supposed to subsist between the society and a contributory or alleged contributory or other debtor or person apprehending liability to the society; all questions in any way relating to or affecting the assets or the winding up of the society, on such terms as may be agreed and take any security for the discharge of any such call, liability, debt, or claim and give a complete discharge in respect thereof and to determine, from time to time, after giving an opportunity to answer the claim, the contribution to be made or remaining to be made by the members or past members or by the estate, nominees, heirs or legal representatives of deceased members, or by any officer, past officer or the estate or nominees, heirs or legal representative of deceased officer to the assets of the society, such contribution being inclusive of debts due from members or officers; to make application under section 103 of the Act and to take such action as may be necessary under section 19 with the prior approval of the Registrar, if there is reason to believe that the society can be reconstructed.

[15] The above powers would strongly go to suggest that the legislature never intended that authority of the liquidator would just end on closure of the winding up proceedings as per section 114 of the Act.

[16] Section 103 of the Act provides for mode of recovery of money on the order passed by the liquidator or the Registrar on the certificate signed by the Registrar or a liquidator which is to be deemed a decree of Civil Court and money can be recovered on the basis of certificate by application to be made either by the society or liquidator in-charge of the society with the help of the Collector. Such application is to be made within 12 years from the date fixed in the order and if no date is fixed then from the date of order. Now when liquidator is also permitted to make such application within 12 years from the date of order passed, in no way it can be said that the legislature ever intended to curtail tenure of authority of the liquidator by section 114 of the Act when it provided for closing winding up proceedings. Similarly availability of powers with the liquidator to take action under section 19 for reconstruction of the society would also go to show that legislature would never have intended to curtail the powers of the liquidator to act as liquidator on expiry of maximum seven years period from the date of winding up order. Therefore, it does not appear that section 114 of the Act would curtail the authority and power of liquidator to continue to act even after completion of period of seven years from the date of winding up order. To hold so would run counter to the provisions of section 108 and section 110 of the Act.

[17] Section 114 of the Act provides for closing of the liquidation proceedings within period of three years and it will be thereafter within extended period of four years in aggregate.

[18] The idea behind such provision is to see that the winding up proceedings get concluded without unnecessary delay which would be in the interest of the society. But such would never mean that society which is otherwise entitle to get its dues recovere

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2021 Supreme(Guj) 99

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