WRIT PETITION NO. 8409 OF 2004

2nd December 2019

Petitioner Counsel: Mr. R. M. Haridas
Respondent Counsel: Mr. R. M. Haridas Ms. Uma Palsuledesai
Act Name: Maharashtra Co-operative Societies Act, 1960 Multi-State Cooperative Societies Act, 2002 Securitisation And Reconstruction Of Financial Assets Andenforcement Of Security Interest Act, 2002

HeadLine : Constitution of India, Art. 226 – Multi-State Co-operative Societies Act (2002), S. 84 – Maharashtra Co-operative Societies Act (1960), S. 101 – Writ petition – Against order refusing recovery proceedings initiated by petitioner-co-operative bank under Act of 1960 – Co-operative bank is governed by Multi-State Co-operative Societies Act, 2002 – Petitioner-bank entitled to remedy u/S. 84 of Act of 2002 – Petition liable to be dismissed.

Section :
Section 101 Maharashtra Co-operative Societies Act, 1960 Section 84 Multi-State Cooperative Societies Act, 2002 Section 14 Securitisation And Reconstruction Of Financial Assets Andenforcement Of Security Interest Act, 2002

JUDGEMENT

Pradeep Nandrajog, CJ.

1. Only after we read the pleadings in Writ Petition No.230 of 2008, can we make sense out of the ill-drafted and ill-concealed proceedings initiated by Kapol Co-operative Bank Ltd. leading to it filing Writ Petition No.8409 of 2004, in which challenge is to an order dated 28.06.2004 passed by the Revisional Authority under the Maharashtra Co-operative Societies Act, 1960.

2. Kapol Co-operative Bank sought recovery of Rs. 64,76,349/- by filing an application under Section 101 of the Maharashtra Co-operative Societies Act before the Assistant Registrar, Co-operative. In the said application M/s. Devansh Pharma Chem. Loyalka Apartment Co-op. Hsg. Soc. Ltd. was impleaded as Respondent No.1. Mr. Janak J. Gandhi (HUF) stated to be a proprietor of the Co-operative Society as Respondent No.2. Vasantgauri J. Gandhi also as Respondent No.2 and Girish C. Shah as Respondent No.3. It was pleaded that the Respondent was a member of the Applicant Bank. It was pleaded that the Respondents had filed an application for loan. It was pleaded that the Respondent created equitable mortgage of flat No.3 of the 1st Respondent society. It was pleaded that Janak J. Gandhi (HUF), Vasantgauri J. Gandhi and Girish C. Shah gave personal sureties.

3. From the pleadings in Writ Petition No.230 of 2008 it emerges that the flat stated to have been offered as security was by creating an equitable mortgage. It was jointly owned by late Smt. Vasantgauri J. Gandhi and her husband Jivanlal Gandhi. She died in the year 2003. Grievance in the said Writ Petition is to an order obtained by the Bank under Section 14 of the SARFAESI Act, 2002 from the Chief Metropolitan Magistrate, Mumbai on 04.12.2007.

4. Reverting to the Petition filed by the Bank, claim by the Bank was dismissed by the Assistant Registrar vide order dated 10.12.2003 giving reason that the Bank did not file any documents to prove its case.

5. Said order was challenged in a revision which has been dismissed on 28.06.2004. The reason is interesting. The first reason is that the Co-operative Bank was governed by the Multi-State Co-operative Societies Act, 2002 and thus no proceedings could be initiated under the Maharashtra Co-operative Societies Act, 1960. The second reasoning is that the Bank did not prove its case by filing so called bills of exchange.

6. Thus as regards Writ Petition No.8409 of 2004, the same requires to be disposed of holding proceedings initiated by the Bank under the Maharashtra Co-operative Societies Act, 1960 to be non est and as a result the impugned order dated 28.06.2004 as also the order dated 10.12.2003 are declared non est. The Bank would be entitled to remedies as contemplated by Section 84 of the Multi-State Cooperative Societies Act, 2002.

7. As regards Writ Petition No.230 of 2008, noting that the Petitioners therein are the sons of late Smt. Vasantgauri J. Gandhi who had died before the impugned order dated 04.12.2007 was passed and she being one of the stated mortgagor of the mortgaged property, the order dated 04.12.2007 is quashed. We quash the said order and simultaneously note the stand of counsel for the Bank that the Bank would not initiate any action under SARFAESI to recover its dues.

8. The Bank would proceed only under Section 84 of the Multi-State Co-operative Societies Act, 2002.

9. Civil Application No.2318 of 2019 is disposed of as infructuous.

Decision : Order accordingly.