2015(5) ALL MR 151


Bhandara Zilla Parishad Wa Panchayat Samiti Karamachari Sahakari Sanstha Ltd. Vs. Divisional Joint Registrar, Co-operative Societies & Ors.

Writ Petition No.1928 of 2012

7th November, 2014.

Petitioner Counsel: Mr. SUBHASH PALIWAL
Respondent Counsel: Mr. M.A. KADU, Asstt. G. P., Mr. A.M. GHARE

Maharashtra Co-operative Societies Act (1960), Ss.18C, 79, 91 - Bifurcation of societies - Recovery of amount - Balance sheet prepared on bifurcation was certified by Chartered Accountant - Continuous functioning of old society casting some financial liabilities, were required to be ascertained and apportioned between the parties - Bifurcation process would be complete only after order u/S.18-C is fully implemented. (Paras 32, 34)

Cases Cited:
U.P. State Co-operative Land Development Bank Ltd. Vs. Chandra Bhan Dube Ors., AIR 1999 SC 753 [Para 20]
Indian Council For Enviro-Legal Action Vs. Union of India & Ors., (2011) 8 SCC 161 [Para 20]


B. P. DHARMADHIKARI, J. :- By this petition filed under Article 226 & 227 of Constitution of India, the petitioner Society seeks a direction to respondent no. 1 Divisional Joint Registrar, Co-operative Societies to exercise powers under Section 79 of Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as '1960 Act'). Other prayer in the alternative is to direct respondent no.2 Co-operative Society, Gondia to handover to the petitioner the assets as detailed in para 15 of the petition. There is one more alternate prayer & by it petitioner seeks a direction to respondent no. 3 State of Maharashtra to complete the process of bifurcation of the Co-operative Societies.

2. The facts are not in dispute. Earlier Bhandara district comprised of two areas which now form separate districts namely, Bhandara and Gondia. It was having a single Co-operative Society by name "Bhandara Zilla Parishad Wa Panchayat Samiti Karmachari Sahakari Sanstha, Bhandara" with Registration No. 102. Area of Bhandara and Gondia towns was then divided and two distinct districts i.e. Bhandara district and Gondia district were formed. Because of coming into existence of two independent revenue districts, it was also proposed to sub-divide above mentioned single Society. Proposal for said purpose was finalized on 12/9/2006. The proposal was then processed and orders under Section 18C of 1960 Act have been issued by respondent no. 3 State Government on 30th May, 2007 / 2nd June, 2007.

3. This petition is filed by a new Society which has been consequently registered for Bhandara district with prayers mentioned supra. The petitioner Society has been registered as an independent/new Society on 23/11/2007, while respondent no.2 Society has been registered on 15/3/2008.

4. Seeking the relief of recovery of amount due and payable to petitioner by respondent no.2, Writ Petition No. 4040/10 was filed by present petitioner before this Court. In that Writ Petition after hearing petitioner, learned AGP as also counsel for respondent no.2 Society, this Court found that reliefs claimed could not have been granted in exercise of jurisdiction. It accepted contention of respondents that petitioner had remedy of filing dispute under Section 91 of 1960 Act or then to file a civil suit against respondent no.2. Petitioner then filed CAW No.1878/2011 in said disposed of Writ Petition No. 4040/2010 and this Court then clarified its order by declaring that petitioner Society can approach any authority or forum available to it for redressal of its grievance, in accordance with law.

5. After said clarification, petitioner moved an application under Section 79 r/w 18C of 1960 Act before respondent no.1. That application came to be registered as Case No. 4/2011. The petitioner then sought a direction to respondent no. 2 Gondia Society to clear its statutory monitory liability by paying to petitioner the amount with interest @ 12.5%. Respondent no.2 Gondia Society objected to the tenability of those proceedings. They pointed out that proceedings under Section 18C were taken up by State Government and consequently directions were also issued by State Government. As such, respondent no.1 could not have interfered in the matter.

6. Respondent no.1 accepted this objection while delivering order on 21st February, 2012. Application moved by petitioner was rejected.

7. It is after that rejection that present Writ Petition has been filed.

8. When this Writ Petition came up for consideration before the earlier Division Bench, in the light of rejection of Writ Petition No. 4040/2010 and a later order dated 29th July, 2011 clarifying the earlier order, Division Bench found the second approach in Writ Petition misconceived. The said order dated 5th July, 2012 reads as under :

"We do not think that this writ petition can be entertained because after the clarification given by the learned Government Pleader on instructions that the process of bifurcation is complete, the petitioner has approached this Court for seeking recovery of money from respondent no.2. The respondent no.2 has denied that liability. For the very same relief and relying on the very same obligation of the Registrar, Writ Petition No. 4040 of 2010 was filed by the very petitioner in this Court, which came to be dismissed on 14/6/2011 by an order at page 62. Once the clarification that is given on page 64, does not mean that the Court restricted the remedy available to the petitioner in law. If the petitioner has understood that order only as a liberty to move the Registrar and within the statutory frame work and outside that no remedy being available to him to it, that understanding of the petitioner is no ground to entertain the second writ petition for the same relief. The writ petition is, therefore, dismissed. No costs."

9. Petitioner Society then approached before Hon'ble Apex Court in Civil Appeal No. 4892/2014. Hon'ble Apex Court delivered its judgment on 25th April, 2014. The said order of Hon'ble Apex Court reads as under:

"1. Leave granted.

2. The petitioner had borrowed a loan from the Bhandara District Central Cooperate Bank for disbursing loans to its members and members of Gondia Zilla Parishad Wa Panchayat Samiti Karmachari Sahakari Sanstha Ltd - respondent no.2.

3. Bhandara District was bifurcated into Gondia and Bhandara Districts. Consequently, the Bhandara Zilla Parishad Wa Panchayat Samiti Karmachari Sahakari Sanstha, Bhandara was divided into two Co-operative Societies as under :

i] Bhandara Zilla Parishad Wa Panchayat Samiti Karmachari Sahakari Pat Sanstha Ltd; Bhandara ("Petitioner")

ii] Gondia Zilla Parishad Wa Panchayat Samiti Karmachari Sahakari Pat Sanstha Ltd; Gondia ("Respondent No. 2")

4. It is the case of the petitioner that respondent no.2 agreed to pay Rs. 1,38, 22, 089/- due from its members, by monthly installments of Rs. 20 lakhs each, to the petitioner. It is further the case of the petitioner that respondent no.2 did not pay the complete amount. The petitioner, therefore, filed a writ petition in the High Court for suitable directions to respondent no.2. That writ petition was dismissed on the ground that an alternate remedy of filing a dispute under Section 91 of the Maharashtra Co-operative Societies Act, 1960 ("the Act") or filing a suit for recovery of the amount is open to the petitioner. The petitioner, therefore, moved the High Court for clarification.

5. By order dated 29/7/2011, the High Court clarified that the petitioner can approach any authority or forum available to the petitioner for redressal of his grievance in accordance with law. Pursuant to this, the petitioner approached respondent no.1-Divisional Joint Registrar, Co-operative Societies, Nagpur. Respondent no.1 by his order dated 21/2/2012 rejected the application filed by the petitioner under Section 79 of the Act on the ground that the application was not maintainable. The petitioner filed writ petition in the High Court praying that respondent no.1 may be directed inter alia to exercise his powers under Section 79 of the Act. The High Court by the impugned order dismissed the writ petition.

6. We find the High Court's order to be very cryptic. The High Court has not really addressed the issue as to whether under Section 79 of the Maharashtra Co-operative Societies Act, 1960, respondent no.1 could have adjudicated the issue and given a direction to respondent no.2 to pay the alleged dues of the petitioner, if the amount is found due. The question which the High Court ought to have considered was whether the petitioner's application filed under Section 79 of the Act was maintainable or not.

7. In the circumstances, we remit the matter to the High Court.

8. We request the High Court to hear the parties and decide the issue of maintainability of the application filed by the petitioner under Section 79 of the Act and other incidental relevant issues. We must note that respondent no.2 has disputed its liability. We have, however, not gone into the merits of the case. We make it clear that we have not expressed any opinion on the merits of the case.

9. Looking to the nature of the grievance of the petitioner, we request the High Court to dispose of the writ petition as expeditiously as possible.

10. The appeal is disposed of in the afore-stated terms."

10. Thus, the writ petition has been restored back to this Court for expeditious consideration and it was listed before this Bench on 27th October, 2014 and we adjourned it to 3rd November, 2014 by way of last chance. Accordingly we have heard the matter.

11. Adv. Ghare, appearing for respondent no.2 has raised preliminary objection, however, we will deal with said objection little latter in this judgment.

12. Adv. Paliwal, appearing for petitioner has submitted that the order of bifurcation dated 2nd June, 2007 has attained finality. In terms of directions contained therein, new societies were under Administrator. The balance-sheets and profit & loss account of both societies were then prepared separately by the Administrators. The said job was completed by a competent Chartered Accountant Shri Vinod Chhangani, who submitted his report dated 2/9/2008 to the respective Administrator. Said Chartered Accountant completed his exercise by adhering to the resolution of State Government dated 15th March, 1984. Accordingly the bifurcated balance sheets were then placed before a joint meeting conducted for said purpose on 10th October, 2008. He states that all concerned attended that meeting. The respondent no.2 Gondia Society accepted its liability to pay a principal amount to petitioner. The said society was also given opportunity to repay that amount in equal installments of Rs. 20 Lacs. Adv. Paliwal submits that on 10/10/2008 the said liability worked-out to Rs. 1,38,22,089/-. This liability was reduced because of subsequent repayment and as per annual report of respondent no.2 society, the amount payable to petitioner worked-out to Rs. 1,14,80,353/- plus interest amount of Rs. 2,59,487/-.

13. As this admitted and accepted liability has not been paid, the petitioner society is finding it difficult to extend necessary services to its members. He submits that the members, who have been allotted to respondent no.2 Gondia society are effecting repayment of installment of loan disbursed to them by petitioner to respondent no.2 society. Respondent no.2 society not being a member of the Credit Co-operative Society at Bhandara, which has disbursed that loan, respondent 2 society has to pay that amount in equal installments of Rs. 20 Lacs to the petitioner. As that is not happening, the Credit Society is charging penal interest to petitioner. He, therefore, contends that in order to see that process of bifurcation is completed, respondent no.3 State Government has to ensure that amount payable to petitioner is received by it from respondent no.2. He further relies upon provisions of Section 79 of 1960 Act with Section 18C to urge that the provisions of sub-section 2 of Section 79 cloth respondent no.1 with ample powers in this respect.

14. He also submits that the order passed by respondent no.1 on 21st February, 2012 is the cause of action for approaching this Court.

15. Learned AGP appearing for respondents no.1 and 3 invites attention to orders of this Court dated 5th July, 2012. It is further pointed out that there is no express challenge in writ petition to order dated 21st February, 2012 passed by respondent no.1. Our attention is also drawn to the order dated 2nd June, 2007 to show that State Government has already bifurcated erstwhile Bhandara Society into petitioner and respondent no.2 society w.e.f. 1St April, 2007. The minutes of meeting conducted on 10/10/2008 are also relied upon to show that the members, share holding & property) have been divided between the two new societies. 53.5% membership continues with petitioner while 47.5% is with respondent no.2 Gondia society. It is urged that in this view of matter & situation, when the respondent no.1 is not concerned with bifurcation, the grievance against respondent no.1 or for that purpose against respondent no.3 is misconceived. Learned AGP, therefore, seeks dismissal of writ petition.

16. Adv. Ghare submits that prayers in present writ petition and Writ Petition No. 4040/2010 are identical and overlapping. This Court has already held that its jurisdiction cannot be invoked. Opportunity was given to petitioners to approach Co-operative Court under Section 91 where disputed questions can be resolved by giving parties an opportunity to lead evidence. The order has been clarified later on by very same Bench on 29th July, 2011 by permitting petitioner to approach any authority or forum available, in accordance with law for redressal of such grievance. He reads out prayer clauses in present writ petition to demonstrate that there is no challenge to order dated 21st February, 2012 passed by respondent no.1 in this matter. He submits that the prayers have been looked by this Court in its order dated 5th July, 2012 in the light of earlier orders. In said order, the Division Bench noted statement made by learned Government Pleader that process of bifurcation is complete. It then holds that in the light of clarification issued, there was no reason to entertain second writ petition for the same relief. He contends that this position has not undergone by any change even after remand by Apex Court. The fact that order dated 21st February, 2012 is not challenged is pleaded and an objection to that effect has been raised before this Court in written submissions on 4/7/2012. Though there are several developments thereafter, petitioners have not taken steps to amend the petition.

17. He further submits that the elected body (members of respondent no.2 Co-operative society) has taken charge from Administrator on 2nd August, 2009. That body has not accepted the acts of Administrator and denied the liability. The meeting dated 10/10/2008 was not attended by any elected representative and hence resolution passed therein are not binding on respondent no.2.

18. He relies upon the order of bifurcation dated 2nd June, 2007 to submit that the exercise of bifurcation was to be completed in terms of proposal dated 12/9/2006. The proposal dated 12/9/2006 has been placed before this Court by petitioners late along with rejoinder after orders of Hon'ble Apex Court. As per that proposal, the liability of respondent no.2 was only Rs. 54,82,168/-. He submits that admittedly respondent no.2 has paid amount of Rs. 55,00,000/- and the said liability is cleared.

19. Without prejudice to these submissions, he further points out that the proposal dated 12th September, 2006 vide clause 23 refers to combine balance sheet and then the divided one as on 31/3/2005 certified by Shri Sumit Heda, Chartered Accountant. The actual division of assets and property/liability was to be done after getting the balance sheet certified by District Special Auditor, Grade-I, Co-operative Societies, Bhandara. Order of bifurcation dated 2/6/2007 also stipulates that if necessary, the respondent no.1 shall consult that Special Auditor at Bhandara. He contends that said balance sheet prepared by Shri Heda has been ignored. A Chartered Accountant Shri Chhangani has prepared a bifurcated balance sheet as on 31/8/2008. That balance sheet is never approved by the District Special Auditor, Grade-I at Bhandara. Meeting dated 10/10/2008 accepts said balance sheet prepared by Chartered Accountant Shri Chhangani as correct and proceeds to distribute/apportion the assets and liabilities. He contends that thus this exercise is contrary to orders passed under Section 18C. According to him, in the situation, recourse to Section 79 of 1960 Act is misconceived. The present petition as filed is also misconceived and liable to be dismissed.

20. In his reply argument, Adv. Paliwal adopted analogy of Section 78 of 1960 Act, to urge that act of Administrator is binding upon the subsequent elected body. He contends that consultation with District Special Auditor is not must. The competent authorities of Co-operative Department have accepted divided/bifurcated balance sheets. He further submits that in annual general meeting of respondent no.2 Society itself conducted by its elected body, the liability as reflected in bifurcated balance sheet has been accepted. He contends that thus without raising proper pleas and without submitting requisite documents, so many defences are being argued to avoid the legal claim and entitlement of the petitioner. He relies upon judgment reported at AIR 1999 SUPREME COURT 753 U.P. State Co-operative Land Development Bank Ltd. vs. Chandra Bhan Dube Ors. to demonstrate that in this situation a writ can be issued by this Court even to respondent no.2. (2011) 8 SCC 161 - Indian Council For Enviro-Legal Action vs. Union of India & Others is cited to demonstrate the unjust enrichment. He reads opening paragraph of writ petition to submit that there is challenge to order dated 21st February, 2012 in writ petition. He also adds that controversy stands conclude by the orders of Hon'ble Apex Court in the matter.

21. Perusal of the proposal dated 12.09.2006, shows a complete scheme for bifurcation not only of accounts, but, also of the assets and liabilities, share holding, deposits etc. It speaks of separate divided balance sheet as on 31.01.2006 for Bhandara and Gondia Districts. Its second item is societies balance sheet of 31.01.2006 ending on financial year. We need not to delve into the details of this proposal, but, important clause there in i.e. Clause 26 speaks of a combined balance sheet and divided balance sheet of Bhandara and Gondia Districts as on 31.03.2005. The divided balance sheet are certified by Shri Sumit Heda, Chartered Accountant. It further speaks of position after bifurcation. It stipulates that after bifurcation of society, the division of property and funds shall be done after getting the balance sheet certified by the District Special Auditor, Grade-I, Co-operative Societies, Bhandara. Thus, not only the proposal dated 12.09.2006, but, the order dated 02.06.2007, both refer to the District Special Auditor, Grade-I, Co-operative Societies, Bhandara.

22. It is an admitted position that the balance sheet on the basis of which demand is raised, has not been looked into by the District Special Auditor, Grade-I, Co-operative Societies, Bhandara.

23. It is in this background, that we have to look into a communication dated 02.09.2008 sent by the Chartered Accountant Vinod Changani. He has forwarded that communication to the Administrator of the Bhandara Zilla Parishad and Panchayat Samiti Employees Credit Co-operative Societies. He has forwarded 5 copies of bifurcated balance sheet along with the details of basis for arriving at the figures. He states that he has followed guidelines dated 15.03.2004, issued by the State Government for said purpose. As circular is even silent on certain items, he has formed his opinion by adopting normally accepted accounting practices. Along with the petition, the petitioner has filed two pages of the said balance sheet. There, basis for bifurcation has been given by said CA. Its perusal shows the observation that loans and borrowings needed to be bifurcated on actual area basis, but, respondent no.2 Gondia Society cannot become member of Bhandara District Central Co-operative Bank. Hence, entire loan is taken by the petitioner Society. The Chartered Accountant has in Clause 6 stated that the balance sheet has been prepared by the Society namely the petitioner Society, and he does not in any way certify that said balance sheet as on 31.08.2008 is drawn correctly and whether it is in conformity with the books of accounts. He has expressly mentioned that he is not expressing any opinion that the balance sheet as on 31.08.2008 was true and correct.

24. Thus, a balance sheet prepared by the petitioner Society reflecting the position as on 31.08.2008 has been used by the Chartered Accountant for the purpose of bifurcation of balance sheets. It is not very clear whether the divided balance sheet certified by Sumit Heda, Chartered Accountant has been looked into by Shri Changani.

25. The elected body of Respondent no. 2 conducted its first meeting and Annual Report (1st) submitted by Sanjay Bankar as Secretary of respondent no.2 Society needs to be viewed in this background. This report shows that the original society has been bifurcated on 31.08.2008.

26. The proposal for bifurcation is dated 12.09.2006, it speaks of divided balance sheet certified by the Chartered Accountant as on 31.03.2005. The actual order of bifurcation is dated 02.06.2007 and petitioner as also respondent no.2 Society stands created from 01.04.2007. The later Chartered Accountant Shri Changani, prepares a balance sheet after bifurcation as on 31.08.2008. These different dates therefore, raise some questions about accounting & may need reconciliation by experts.

27. This Court while deciding Writ Petition No. 4040/2010 considered the nature of the controversy and refused to entertain the writ petition. It found that remedy under Section 91 of the Maharashtra Co-operative Societies Act or a suit for recovery was an apt remedy. Order was later on clarified and petitioner was given liberty to approach any forum available in law. The petitioner therefore, filed Case No.4/2011 before the respondent no.1. This Case No.4/2011 is rejected on 21.02.2012. In Writ Petition in opening paragraph, the petitioner has mentioned that it is aggrieved by refusal of respondent no.2 to discharge its statutory liability under Section 18(c) of the Act, and the said refusal on the part of respondent no.1 to exercise powers under Section 79(2), the petition is being filed. Prayer (1)(i) in this background seeks a mandamus to direct the respondent no.1 to exercise powers under Section 79 of the Maharashtra Co-operative Societies Act. Thus, petitioner insists that refusal on 21.02.2012 by the respondent no.1 to entertain application under Section 79 of the Act is erroneous and he should be directed by a writ of mandamus to decide it on merits. Perusal of contents of petition mentioned supra or challenges therein, therefore show that the order dated 21.02.2012 is assailed by the petitioner. The challenge brings on record refusal or omission on the part of the said respondent to exercise his powers under Section 79 of the Act. The petitioner therefore, seeks a mandamus to direct that authority to discharge its statutory obligations.

28. After case no.4/2011 was filed, respondent no.2 society has filed its reply in it raising only preliminary objection about its maintainability. The objection in nutshell point out passing of order under Section 18C by the State Government and no nexus thereof with the respondent no.1. It is therefore, urged in the preliminary objection that Section 79 of the 1960 Act is not available to the petitioner as said authority had no power to interfere with the orders of superior. Respondent no.2 has not filed any reply on merits before the said Authority, either denying or disputing the liability. However, during arguments Shri Ghare, the learned counsel has urged that the elected body after resuming powers has passed a resolution disputing the liability, but, no such document or resolution is placed on record before us by the respondent no.2.

29. The impugned order accepts the contention of respondent no.2. Respondent no.1 has noted earlier order of High Court and then finds that he has not passed orders under Section 18C. He therefore, has held that application seeking directions to the Gondia Society to pay certain amounts, is not maintainable and no such direction can be issued under Section 79 of the Maharashtra Co-operative Societies Act.

30. Section 79 of the 1960 Act reads as under :

"79. Registrar's power to enforce performance of obligations.

(1) The registrar may direct any society or class of societies, to keep proper books of accounts with respect to all sums of money received and expended by the society, and the matters in respect of which the receipt and expenditure take place all sales and purchases of goods by the society, and the assets and liabilities of the society, and to furnish such statements and returns and to produce such

records as he may require from time to time; and the officer or officers of the society shall be bound to comply with his order within the period specified therein.

(2) Where any society is required to take any action under this Act, the rules or the bye-laws, or to comply with an order made under the foregoing sub-section, and such action is not taken -

(a) within the time provided in this Act, the rules or the bye-laws, or the order as the case may be, or

(b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing.

the Registrar may himself, or through a person authorized by him, take such action, at the expense of the society; and such expense shall be recoverable from the society as if it were an arrear of land revenue.

(3) Where the Registrar takes action under sub-section [2], the Registrar may call upon the officer or officers of the society whom he considers to be responsible for not complying with the provisions of the Act, the rules or the bye-laws, or the order made under sub-section [1] and after giving such officer or officers an opportunity of being heard, may require him or them to pay to the society the expenses paid or payable by it to the State Government as a result of their failure to take action and to pay to the assets of the society such sum not exceeding twenty-five rupees as the Registrar may think fit for each day until the Registrar's directions are carried out."

31. Thus sub-section [1] is an enabling provision. It empowers the Registrar/respondent no.1 to issue directions to keep proper books of accounts, etc. Sub-section [2] is a provision wider in sweep than sub-section [1] & provides a measure if the Society does not obey the direction. It envisages not only a direction under its sub-section (1) but of other directions or commands to any society to take any action issued under the other enabling provisions of the Maharashtra Co-operative Societies Act or Rules or Bye-laws. Thus a case of non-implementation of a direction issued by the Registrar/respondent no.1 under Section 79[1] is covered under later part of sub-section [2] while its opening part refers to any directions issued within the fore corners of the Co-operative Societies Act or then under any Rules or Bye-laws made thereunder.

32. Section 18C is a provision dealing with re-organization of the society on account of alternation of limits or local areas in which it operates. The respective counsel were unanimous in urging that Section 18C is a complete code in itself. We are not required to delve in that controversy in the present matter. Facts show that here on 02.06.2007, the State Government has directed bifurcation & formation of two societies from 01.04.2007. Thus two societies came into existence from the said date. The petitioner society and the respondent no.2 cannot question this order or the process by which they are born. The details of said order or process have been mentioned by us supra. Whether bifurcation needed to proceed on the strength of a balance sheet certified by Sumit Heda, Chartered Accountant as per Clause 26 of the proposal dated 12.09.2006 & while undertaking that exercise, the competent Authority namely the District Deputy Registrar, Bhandara should have consulted the District Special Auditor, Grade-I, Co-operative Societies, Bhandara, are the moot questions. From the facts presented to this Court, it is apparent that the societies i.e. the petitioner society has been registered as such on 23.11.2007 and the respondent no.2 society has been registered on 15.03.2008. Thus, on the strength of the balance sheet certified by Shri Heda, the accounts of the societies which continued to function jointly as one society till then need to be reconciled and on that basis, process of bifurcation could have been undertaken. That apparently has not been done in the matter. We are not doubting in any way the exercise carried out by the later Chartered Accountant namely Shri Vinod Changani, however, how his exercise needs to be evaluated is explained by that Chartered Accountant only. He has expressly stated that the balance sheet was prepared by the society and he could not and did not certify that balance sheet as on 31.08.2008. Thus, he obviously did not use the balance sheet prepared by Shri Heda in terms of Clause 26 of the proposal dated 12.09.2006.

33. The proposal in Clause 23 mentions amount of Rs. 54,82,162/- to be recovered by the petitioner from the respondent no.2. It is not in dispute that amount of Rs. 55 lakhs has been paid by the respondent no.2 to the petitioner. The respondent no.2 contends that it does not owe any other amount to petitioner. We are not in a position to accept this contention in this matter due to its disputed nature. Prima facie it is seen that clause 24 of the proposal speaks of list of court cases & therefore, undetermined or contingent liabilities. Thus, liability to be adjudicated in court cases may also be required to be apportioned between the parties. Thus, prima facie the proposal dated 12.09.2006 does not peg down the liability of respondent no.2 only at Rs.54,82,162/-.

34. The earlier/old society has continued to function beyond 31.03.2005 i.e. beyond the date contemplated in clause 26 of the order. It has also continued even beyond 01.04.2007 i.e. the date contemplated in order under S. 18C of the State Government. Thus, this continuous functioning of old society for both the areas i.e. Bhandara and Gondia may also have cast some financial liabilities. Those liabilities may also be required to be determined and apportioned in between the petitioner and the respondent no.2. Because of this situation emerging from perusal of record, we are not inclined to accept the contentions of Shri Paliwal, the learned Counsel that the respondent no.2 has admitted its liability & agreed to pay an amount of Rs. 1,14,80,353/- and interest of Rs. 2,59,487/- upon it. In this situation, it is apparent that though two societies have come into existence, the bifurcation, as such is not complete & order under S.18C of 1960 Act is not fully implemented. The statement made by the learned Government Pleader on 05.07.2012 & recorded by this Court in this writ petition that process of bifurcation was complete therefore does not appear to be correct. The process needs to be carried further in terms of the proposal dated 12.09.2006, as also the order of bifurcation dated 02.06.2007. The directions issued on 02.06.2007 are definitely directions under the 1960 Act and can be enforced in terms of Section 79(2) by the Authority to whom those powers are delegated. Here, it is not in dispute that those powers are delegated to respondent no.1.

35. In this situation, we find the refusal or omission on the part of the respondent no.1 to take cognizance of application filed before it unsustainable. The order dated 21.02.2012 is accordingly quashed and set aside. The application filed by the petitioner is restored back to the file of the respondent no.1 for taking its cognizance on merits and in accordance with law. The petitioner as also the respondent no.2 are directed to appear before that Authority on 01.12.2014. The respondent no.2 shall file its reply on merit in said proceedings within a further period of four weeks.

36. The respondent no.1 shall thereafter proceed to take suitable decision on petitioner's application as per law within next three months. With these directions and leaving all rival contention open, present Writ Petition is partly allowed and disposed of. No costs.

Ordered accordingly.