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2024 Supreme(Guj) 209

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Sangeeta K. Vishen, J.
M/s Urvashi Impex A Proprietorship Concern – Petitioner
Versus
State of Gujarat – Respondent
R/Special Civil Application No. 19561 of 2023
Decided On : 25-01-2024

Advocates:
Advocate Appeared:
For the Petitioner: Aditya R Gundecha
For the Respondent: Ms Krushita Dave, AGP, Mr Dipen Desai

Default in payment and failure to challenge previous orders can lead to the dismissal of a writ petition challenging attachment notices.

Headnote:

Attachment Notice - Challenge to Attachment Notice - Gujarat Cooperative Societies Act, 1961, Section 159 - The court discussed the attachment notice issued by the bank under Section 159 of the Gujarat Cooperative Societies Act, 1961. The petitioner challenged the attachment notice and the order rejecting the restoration application. The court considered the principles laid down in previous judgments and the conduct of the parties in the earlier rounds of litigation. The court found that the petitioner had defaulted in payment and had lost at all stages of the proceedings. The court dismissed the writ petition and vacated the interim relief granted earlier.

Fact of the Case:

The petitioner availed a cash credit facility from the bank and defaulted on payments due to inflation. The bank filed a summary suit for recovery, which was decreed against the petitioner. The petitioner challenged the decree and subsequent orders, including the attachment notice issued by the bank.

Finding of the Court:

The court found that the petitioner had defaulted in payment and had lost at all stages of the proceedings. The court dismissed the writ petition and vacated the interim relief granted earlier.

Issues: Default in payment, challenge to attachment notice, rejection of restoration application, suppression of material facts, extension of stay

Ratio Decidendi: The petitioner's default in payment, failure to challenge previous orders, and suppression of material facts led to the dismissal of the writ petition. The court also refused to extend the stay granted earlier.

Final Decision: The court dismissed the writ petition, vacated the interim relief, and rejected the request to extend the stay.

JUDGMENT :

With the consent of the learned Advocates appearing for the respective parties, the matter is taken up for final disposal.

2. Captioned writ petition is by the petitioner, seeking to challenge the attachment notice no. T.T.C.B./Recovery/368/2023-34 dated 25.10.2023 (hereinafter referred to as "the attachment notice") issued by the respondent no. 2 Textile Traders Cooperative Bank Ltd. (hereinafter referred to as "the bank"). Petitioner, had availed of a cash credit facility of Rs.1,50,00,000/-. Apropos which registered equitable mortgage for securing the said cash credit facility was executed between the petitioner on one hand and the bank on other. According to the petitioner, owing to inflation, there was a default in paying the installment which, led to the issuance of the notice by the bank. The petitioner, had filed reply to the notice admitting the amount and expressing willingness to pay the remainder amount.

2.1. Since the same was not paid, summary suit no. 152 of 2018 came to be filed by the bank against the petitioner and respondent nos. 3 and 4 for recovery of the amount of Rs.1,50,00,000/- before the learned Board of Nominees which, came to be decreed against the petitioner and the respondent nos. 3 and 4 on 09.09.2020, which, was subject matter of challenge before the Gujarat Cooperative Tribunal (hereinafter referred to as "the tribunal") by filing Appeal no. 19 of 2020 together with stay application. Vide order dated 10.03.2021, the stay application has been rejected.

2.2. Thereafter, the appeal filed before the tribunal was listed for hearing. Neither the petitioner nor the learned Advocate remained present, and hence, the appeal came to be rejected by passing an order dated 20.04.2022. Application seeking restoration of the appeal was filed which, also came to be rejected by passing an order dated 05.01.2023. The said order was subject matter of challenge in the writ petition being Special Civil Application No. 1025 of 2023 which was heard on 25.01.2023 and was kept on 30.01.2023 and after hearing both the parties, the co-ordinate bench, was pleased to dismiss the said writ petition. According to the petitioner, the order is awaited and in absence of any order, the petitioner could not approach the higher forum.

2.3. In the meantime, the bank issued the attachment notice dated 25.10.2023 seeking attachment of the equitable mortgage namely the residential premises of the petitioner. Being aggrieved, the petitioner, has filed the captioned writ petition, inter alia, praying for quashing and setting aside the attachment notice. The petitioner has also challenged the order dated 05.01.2023 rejecting the restoration application.

3. Mr. Aditya Gundecha, learned Advocate appearing for the petitioner submitted that the petitioner has in the earlier round of litigation, challenged the order dated 05.01.2023 passed by the tribunal which, was listed for hearing on 25.01.2023 and for further hearing on 30.01.2023 and this Court was pleased to dismiss the writ petition, reserving the order. The order was not uploaded and the petitioner was awaiting the same. The bank has issued the attachment notice dated 25.10.2023, which exercise, is impermissible considering the fact that the petitioner would like to file an appeal against the dismissal of the writ petition by this Court.

3.1. In support of such contention reliance is placed on the judgments of this Court in the case of Viksun Steel Company vs. State of Gujarat reported in 2016 (0) AIJEL-HC- 234137. It has been held and observed that when the appeal together with the stay application, preferred within the prescribed period of limitation, is pending, the authorities were expected to stay their hands till the stay application is decided, unless the stay application is not decided on account of default on the part of the petitioner or it is found that the petitioner is unnecessarily delaying the hearing of the stay application.

3.2. Reliance is also placed on the judgm

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