ORAL JUDGMENT

Heard learned advocate Mr.Dipen Desai for the petitioner, learned Assistant Government Pleader Mr.Dhawan Jayswal for the respondent No.1 and learned advocate Mr.Bharat Jani with learned advocate Ms.Palak A. Shastri and learned advocate Mr.Pranav U. Raval for the respondent No.2.

1. Rule, returnable forthwith. Learned Assistant Government Pleader Mr.Dhawan Jayswal waives service of notice of rule for the respondent No.1 and learned advocate Mr.Bharat Jani waives service of notice of rule for the respondent No.2.

2. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs :

“A. The Hon'ble Court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, order or direction, quashing and setting aside the impugned order dated 13/14.10.2016 passed by the respondent No.2-Director of Sugar at Annexure-A to the petition.

B. The Hon'ble Court be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or direction, directing that any amount realized from sale/disposal of any movable or immovable properties of the respondent no.3 after the impugned order of the respondent no.2, shall be paid to the petitioner towards payment of outstanding loans.

C. Pending final hearing and disposal of the petition, the Hon'ble Court be pleased to stay the execution, operation and implementation of impugned order dated 13/14.10.2016 passed by the respondent No.2-Director of Sugar at Annexure-A to the petition.

D. The Hon'ble Court may be pleased to grant such other and further relief/s as deemed just and proper by this Hon'ble Court in the interest of justice.

D. The Hon'ble Court may be pleased to grant such other and further relief/s as deemed just and proper by this Hon'ble Court in the interest of justice.”

3. The brief facts of case are as under :

3.1.The petitioner is a Co-operative Society registered under the Gujarat Co-operative Societies Act, 1961 and is Bank within the meaning of Banking Regulation Act, 1949.

3.2.The respondent No.3-Shri Talala Taluka Sahakari Khand Udyog Mandali Limited a Co- operative Society registered under the provisions of Gujarat Co-operative Societies Act is a member of the petitioner-bank.

3.3. The respondent No.3 had obtained loan from the petitioner-Bank. Out of the total amount of loan, loan amount of approximately more than Rs.10 Crore remained to be paid which is divided into two loans namely restructure loan account No.1 in which outstanding amount was of Rs.4.91 Crore whereas, in restructure loan account No.2 amount of Rs.5,52,32,944/- remained to be paid by the respondent no.3. Towards the said loan accounts i.e. as far as restructure loan account No.1, outstanding interest accumulated as on 30.09.2016 was approximately Rs.1.4 Crore, whereas, in restructure loan account No.2, outstanding interest accumulated till 30.09.2016 was approximately Rs.1.58 Crore. Therefore, an amount of approximately Rs.13.43 Crore was outstanding from the respondent No.3-Society.

3.4. As a security towards the said loan, the factory and all the movable and immovable properties have been mortgaged with the petitioner bank and entries to that effect have also been mutated in the revenue records and therefore, the petitioner-bank is a secured creditor of respondent No.3-Society.

3.5. The respondent No.3 vide Resolution dated 05.12.2015 resolved to take the society in suo-

motu liquidation.

3.6. The respondent No.2 Director of Sugar issued show-cause notice to the respondent No.3 to show cause as to why the society should not be taken into liquidation in exercise of powers under Section 107 of the Act.

3.7. It is the case of the petitioner that thereafter, the Board of Directors of the respondent No.3 vide Resolution dated 28.04.2016 resolved to request the Director of Sugar to drop the proceedings of Section 107 and in turn vide letter dated 09.05.2016 requested the respondent