Pornima Sales Corporation v. The Liquidator

for the plaintiff before the Civil Court to implead the Liquidator as a party defendant to the suit as he steps into the shoes of the cooperative society.

3. The learned advocate has relied on the judgment of the Division Bench of this Court in the case of Baburao Dadarao Kolhe vs. State of Maharashtra, 2004 2004 2004 LLJ 2 705 LLJ 2 705 and in the case of State Bank of India v/s. LLJ 2 705 Amravati Zilla Krishi Audyogik Sahakari Sangh Maryadit, 2004 Mh.L.R. 2 756. 2004 Mh.L.R. 2 756. 2004 Mh.L.R. 2 756.

4. The learned advocate for the respondent Liquidator submits that no suit is maintainable after the society has been wound up. He further contends that the Liquidator has been authorised to decide the claims of any creditors under section 107 read with section 105 of the MCS Act. According to the learned advocate, : 3 : sufficient powers are vested with the Liquidator to decide such claims as have been made by the petitioner in this case and therefore there is no need to implead the Liquidator as party defendant. He has also relied on the judgment of the Punjab and Haryana High court in the case of Smt.Gian Devi & anr. vs. Bachan Motor (1989) 1 Comp. LJ 37 (P&H). Financiers (P) Ltd., (1989) 1 Comp. LJ 37 (P&H). (1989) 1 Comp. LJ 37 (P&H).

5. In my view, the submissions made by the learned advocate for the petitioner must be accepted. The claim of the Petitioner before the civil Court was opposed by the Society. The amount has not been quantified as yet by the Civil Court and, therefore, the Liquidator, on his own, cannot decide such a claim. It would be necessary for the Court to quantify the amount which is payable to the Petitioner when the Liquidator may oppose the claims or the suit filed by the petitioner. It is only when the amount is quantified and the suit is decreed that the Liquidator can decide how to dispose of the claims filed by various creditors on a pro-rata basis.

6. Section 105 only deals with such claims as are undisputed by the Society. When claims are made against the Society after it is wound up the Liquidator is vested with the necessary powers to investigate the claim and decide the priority of such claims. The : 4 : Liquidator cannot consider u/s 105, those claims which were pending adjudication when the Society was wound up. The Division Bench of this Court in the case of Baburao Dadarao Kolhe (supra) was considering a case where the Liquidator was to be appointed in proceedings pending under the MRTU & PULP Act. The Liquidator contended that by virtue of the provisions of section 107 of the MCS Act, the proceedings before the Industrial Court could not continue. The Division Bench has held thus:

3. ... In this view of the matter, in our opinion, there would be no possibility of two authorities, adjudicating on the same issue. an adjudication by a judicial forum, in matters pending prior to the passing of the order of winding up, would be desirable. In our opinion, the reasons put forth by the second respondent for rejecting the application, moved by the petitioners, under section 107 of the Maharashtra Cooperative Societies Act, 1960, are unsustainable in law. In such a situation, we are of the view that as a matter of course, the Registrar ought to have granted permission, prayed for by the petitioners under Section 107 of the Maharashtra Co-operative Societies Act, 1960. Our attention is invited to a judgment reported in 2002 III CLR 981, wherein a division Bench of this Court has doubted the very need for seeking leave of the Registrar under Section 107 of the Maharashtra co-operative Societies Act, 1960, for prosecuting complaints under M.R.T.U. and P.U.L.P. Act, 1971. We too voice our doubt about the application of Section 107 to the proceedings pending on the file of the Industrial court, under the provisions of M.R.T.U. and p.U.L.P. Act, 1971. The Division bench in the said judgment, which is rendered in similar situation, held that a matter of course, the registrar ought to have granted permission. We are in respectful agreement with the view taken by the Division Bench. : 5 :

7. A similar situation had arisen in the case of State Bank of India (supra) where the Division Bench considered whether the suit which had been filed can continue after the Sakhar Karkhana which was a cooperative society goes into liquidation. The Division Bench set aside the order passed by the Civil Court dismissing the suit on the ground that it had no jurisdiction after the appointment of the Liquidator. The Division Bench permitted the plaintiff therein to take appropriate steps to apply to the Registrar Cooperative Societies to seek leave u/s 107 of the MCS Act to prosecute the suit against defendant No.1 i.e. the Karkhana.

8. In the case of Smt.Gian Devi (supra), an unsecured creditor had claimed certain amounts under the Companies Act against a Company which was in liquidation and in these circumstances the Court held that the creditors must file applications before the Liquidator for realising their claims. The High Court was of the view that a petition u/s 446 of the Companies Act was not maintainable as the Company had already been wound up and the liquidator had been appointed. It was held that claims must be filed u/s 52 of the Companies Act before the Liquidator. There can be no quarrel with this proposition. However, the facts in this case are significantly different, inasmuch as, the civil Suit was : 6 : pending when the Society was wound up. Claims made after the winding up of the Society would fall within the ambit of u/s 105 of the Maharashtra Cooperative Societies Act.

9. In this view of the matter, the petition is allowed. The order impugned in the petition is set aside and the application seeking leave to implead the Liquidator as a party respondent in the civil Suit being Suit No.96 of 2005 is permitted.