IN WP/1862/2024Vishal Subhash Bhore Through its Power of Attorney Vikas Subhash Bhoreand Anr.VERSUSThe State v. S. Kadam
Case Details
( 1 ) WP-1862-2024IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO. 1862 OF 2024WITHCIVIL APPLICATION NO. 7232 OF 2024IN WP/1862/2024Vishal Subhash Bhore Through its Power of Attorney Vikas Subhash Bhoreand Anr.VERSUSThe State of Maharashtra through its Secretary and Ors.Mr. A. N. Irpatgire, Advocate for Petitioners. Mr. R. K. Ingole, AGP for Respondent Nos. 1 to 3, 8 and 9.Mr. V. S. Kadam Advocate for Respondent No.4 and 5. Mr. P. S. Dighe Advocate for Respondent No.6. CORAM:KISHORE C. SANT, J.RESERVED ON:27th NOVEMBER 2024PRONOUNCED ON:4th DECEMBER 2024PC :-1.The Petitioner No.1 before this Court is the principal borrower, whofailed to repay the amount of loan taken from one Prabhat SahakariPatpedhi Ltd.-Respondent No.5. The Petitioner No.2 is the guarantor tothe said loan. Respondent Nos.1 to 3, 8 and 9 are the State Authorities.Respondent No.4 is the Recovery Officer of Respondent No.5-Patpedhi.Respondent No.6 is the person who has purchased the property in anauction that was attached by the Patpedhi pursuant to recoveryproceedings against the petitioners. Respondent No.7 is the second
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( 2 ) WP-1862-2024guarantor. 2.The challenge in the petition is to the Recovery Certificate and theproceedings under Rule 86-F of the Maharashtra Co-operative SocietiesRules, 1961. It is prayed to declare that the said certificate is nullity andcannot be enforced. It is further prayed that the sale confirmationcertificate dated 4th July 2023 and certificate of purchase dated 27thSeptember 2023, be quashed. Further order passed by the learnedAdditional District Magistrate, Dharashiv dated 19th December 2023 alsois prayed to be quashed and interim reliefs are prayed seeking stay tothe certificate issued by the learned Additional District Magistrate underRule 107 of the Maharashtra Co-operative Societies Rules, 1961. 3.The facts in the petition are not disputed. Few facts which arerelevant for the purpose of deciding the petition are as under:Petitioner No.1 availed cash credit facility of Rs.12,00,000/- fromthe Patpedhi. The cash credit facility was sanctioned. The petitioner No.2and Respondent No.7 stood guarantor. The property i.e. houseNo.27/341/1 admeasuring 74.3 sq.m. on CTS No.4500/B owned bypetitioner No.1 was mortgaged towards security. The petitioners,however, failed to repay the amount of loan. On 22nd April 2019, the saidloan account came to be declared as Non-Performing Asset (N.P.A.). ( 3 ) WP-1862-2024Pursuant to that, a notice came to be issued by Patpedhi on 15th June2020, asking for repayment of the amount of Rs.13,22,600/- as is stoodby that time. On 18th January 2021, the society filed an application underSection 101 of the Maharashtra Co-operative Societies Act for issuance ofrecovery certificate. The Assistant Registrar Co-operative Societies,Osmanabad issued notice to the petitioners. The petitioners however,failed to cause appearance before the Assistant Registrar in spite ofreceipt of notice. A notice was therefore published in news-paper on 8thJune 2021. In spite of service by publication of notice, the petitionersfailed to appear. The Assistant Registrar, therefore, issued recoverycertificate for an amount of Rs.13,51,769/- on 17th June 2021. Therecovery officer again issued notice to the petitioners calling upon themto pay the outstanding dues. In spite of these opportunities, thepetitioners failed to make the payment. 4.The recovery officer, pursuant to recovery certificate, proceededfurther to take action of attachment of the property mortgaged with thePatpedhi. Thereafter, the recovery officer filed an application for fixingthe upset price of the property before the District Deputy Registrar("DDR" for short). The DDR issued notice to the petitioners in the saidproceeding. The petitioners however failed to remain present even beforethe DDR. Thereafter, they filed an application for adjournment. The DDR ( 4 ) WP-1862-2024again issued notice on 19th August 2022 for hearing on 25th August 2022.On which date, only petitioner No.2 remain present and sought time.Time was granted till 1st September 2022. The petitioner No.2 againasked for an adjournment and the matter was adjourned to 29thSeptember 2022. However, even on that day, they remained absent. TheDDR therefore, passed an order fixing the upset price at Rs.11,19,352/-.5.In spite of fixing the upset price, the petitioners did not turn up tomake payment of outstanding. It was, therefore, decided to put theproperty for auction and again notice was issued on 7th November 2022.However, still there was no response from the petitioners. The recoveryofficer, thereafter issued auction notice in daily news-paper ‘Punyanagari’on 21st November 2022. Pursuant to the auction, the respondent No.6took part in the auction proceedings alongwith other bidders. RespondentNo.6 offered the highest bid for Rs.20,50,000/-. There was no objectionraised by the petitioners to the said auction proceedings. As theRespondent No.6 was the highest bidder, his offer came to be accepted.The auction purchaser deposited the requisite amount on acceptance ofhis bid on 25th January 2023. Even after the auction, the Patpedhi againissued notice to the petitioners on 27th January 2023, as there was noresponse, the society accepted remaining amount from Respondent No.6on 14th February 2023. ( 5 ) WP-1862-20246.After all this exercise, the recovery officer made an application tothe DDR of the societies for confirmation of sale. Notice was again issuedby the DDR to the petitioners on 1st March 2023. However, even then theamount is not paid. On 23rd March 2023 again only petitioner No.2appeared before the DDR and sought time. Time was granted. On 20thApril 2023, the petitioner No.1 appeared and again sought time.However, still no amount was paid. The DDR thus proceeded to confirmthe sale in favour of Respondent No.6 by an order dated 4th July 2023.Thereafter, the petitioners issued cheque on 10th August 2023 for anamount of Rs.5,00,000/-. However, the said cheque came to bedishonoured. Lastly, on 27th September 2023, the Patpedhi executed salecertificate in favour of the auction purchaser. On issuing sale certificate,the Patpedhi applied to the Collector for possession of the property on25th October 2023. The Collector issued order dated 19th December 2023directing to hand over the possession. Pursuant to the said order, theTahsildar issued letter to Circle Officer asking him to take possession ofproperty on 15th January 2024. It is only after this, the petitioners havedirectly come to this Court by filing a writ petition on 10th February 2024.7.On this from the dates and even as stated earlier, right frominitiation of proceedings under Section 101 of the Maharashtra Co-operative Societies Act, till issuing sale certificate, the petitioners never ( 6 ) WP-1862-2024appeared before any of the authorities to participate in any of theproceedings except asking for adjournment. He never offered to pay anyamount. Only one cheque was issued that also came to be dishonoured.The petitioners have not challenged any of the action taken by Patpedhior order passed any of the authorities. Now, the ground is taken in thewrit petition that, the upset price was not properly fixed by the DDR. Noproper procedure is followed under Rule 86-F of the Maharashtra Co-operative Societies Rules. The upset price is fixed at much lessor pricethan the market value. The Patpedhi has acted in collusion withRespondent No.6. The amount offered by Respondent No.6 is also muchon the lower side than the market value and thus, now the petitionershave sought relief of cancellation of the entire action. As stated earlier,even 101 certificate is not challenge by the petitioner. 8.Learned Advocate for the petitioners vehemently argued all thegrounds. However, could not answer as to why 101 certificate was notever to challenged by the petitioners. There is also no answer as to whythe subsequent orders passed by the DDR, order of fixing upset price,action of auction was not filed. There is no answer as to why in spite ofafter confirmation of sale, no opportunity was availed. The only answergiven about the dishonoure of cheque is that the cheque was presentedafter two months of giving the cheque to Patpedhi. It is also argued that ( 7 ) WP-1862-2024for two months, the petitioners maintained sufficient balance in theaccount. However, deliberately the society did not present its chequewhen there was sufficient balance in the account. It is only when it wasfound that there was no sufficient balance in the account of thepetitioner, the cheque was presented with malafide. The petitioners thusprayed for allowing the writ petition. 9.As against that, the Respondent - Patpedhi and learned Advocatefor Respondent No.6 vehemently argued that, no case is made out to callfor any interference at the hands of this Court. The conduct of thepetitioners do not deserve any relief. Every time opportunity was givento the petitioners. However, for the reasons based known to thepetitioners, they never paid an amount nor challenged such actionspromptly. There is no justification offered in the petition as to why thenotices were not replied and as to why the petitioners did not participatein any of the proceedings in spite of giving several chances. On everyaction and passing orders, sufficient opportunities were given to thepetitioners and still there was no response given. They thus pray forrejection of the writ petition. 10. Learned AGP appearing for Respondent Nos.1 to 3, 8 and 9 alsosupports the action of the authorities. It is submitted that every authorityhas acted strictly in accordance with law. Notices were issued to the
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( 8 ) WP-1862-2024petitioners every time. There is nothing to show that the authorities havenot followed any procedure. He also prays for rejection of the writpetition.11.Learned Advocate for the Respondent No.6 relied on the judgmentof this Court in the case of Shivangi D. Shah Vs. Greater Bombay Co-operative Bank Ltd and Ors.1., wherein this Court at principal seat hasobserved in paragraph No.20, which reads as under:-“20. Be that as it may, there is other formidable reason for whichthe contention raised in the present writ petition ought to bediscarded. Counsel for the respondent No.5 has rightly invited myattention to Rule 107(14) which mandates that any grievance withregard to sale has to be raised within thirty days from the date ofthe sale by the concerned persons, whether be in relation tomaterial irregularity or mistake or fraud in publishing orconducting the same. The petitioners did not take recourse to thatremedy and specifically raise this contention and more over failedto specifically raise the same in the proceedings, to which, theyresorted to at a later point of time before the appropriate authorityby way of miscellaneous application or Revision Application.Assuming that the petitioners could be permitted to challenge thesame on the grounds now pressed into service, the petitionersought to have asked for declaration before the appropriate Courtand that too within reasonable period much less within the periodof limitation specified by the Law. The petitioners have chosen toamend the writ petition to take up the ground now pressed intoservice by filing application for the first time on 29th May, 2007which indeed has been granted by this Court under order dated17th July 2007, subject to objection to be raised by the concernedrespondents at the hearing of the petition. In other words,allowing the said Chamber Summons does not necessarily meanthat the petitioners would be free to raise this contention thoughprecluded on account of Rule 107(14) of the Rules. 12009 (Supp.) Bom.C.R. 560 ( 9 ) WP-1862-202412.After hearing the parties, this Court finds that ample opportunitieswere given to the petitioners. The petitioners did not file revisionapplication challenging 101 certificate. There is no allegation in thepetition that the petitioners were not properly served with the noticebefore passing any order. On the contrary, the proceedings and theorders would show that the notices were duly served on the petitioners. Itis only after the satisfaction that the petitioners were served, theauthorities proceeded to pass order. The recovery certificate was issuedon 17th June 2021 under 101. While issuing 101 certificate, the notice wasduly served still the petitioners did not appear in the proceedings. By wayof abundant precaution, notice was published in news paper on 8th June2021 and still the petitioners remain absent.13.Thus, the conduct of the petitioners shows that they neverchallenged any of the action. Without challenging the basic certificateunder 101, they cannot avoid liability to pay the amount. On one hand, itis seen that by the action of not challenging 101 certificate, he hasaccepted the liability and on the other hand, he is challenging the actualrecovery. At every stage, he had the knowledge of the proceeding.Petitioners maintained silence till actual handing over of possession ofthe property. A person cannot avoid a consequences of the recoverycertificate in absence of challenging the certificate. Except the allegation ( 10 ) WP-1862-2024that the Patpedhi in collusion with Respondent No.6 has fixed the upsetprice at much lower rate at market value nothing is challenged. Furtherallegation to upset price was fixed at Rs.11,19,312/-. However, still thebid offered by Respondent No.6 was of Rs.20,50,000/-. It cannot be saidthat it is in collusion. Nothing is brought on record to show the authoritieshave any reason to have collusion with the Respondent No.6.14.Thus, considering all these, in view of the Maharashtra Co-operativeSociety Rule 107(14), a person has to challenge the same within 30 daysfrom the date of such sale. In the present case, nothing is shown as towhat prevented the petitioners from challenging the same in spite ofhaving knowledge. It was necessary for the petitioners to challenge thesame under Rule 107(14). It needs to be observed that while exercisingthe jurisdiction under Article 227 of the Constitution of India, the Courtalso has to see the conduct of the petitioner. The petitioners may invokethe extra ordinary jurisdiction as to show that he has availed the remedyand the authorities have acted beyond jurisdiction and their power or thepower is exercised with material irregularities. The petitioners by avoidingto resort to the remedies provided under law should not be allowed toapproach High Court directly and allege malafides on the part of therespondents. The petitioner as to show that he has availed all thepossible remedies before coming to this Court. In the present case, the
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( 11 ) WP-1862-2024facts are very glaring that the petitioners were given the opportunities atevery stage. It is the petitioner who did not avail those opportunities.Even after passing orders, though remedies were available to challengerecovery certificate, they did not prefer any revision. Thereafter, therewas remedy available to approach to the higher authority under Rule107(14) of the Maharashtra Co-operative Societies Rule. He did not availthat remedy. In such case, this Court is not at all inclined to entertain thispetition.15.For all above reasons, the petition must fail. Hence, the followingorder.ORDER(i)Writ Petition stands dismissed.(ii)No order as to costs.(iii)Pending Civil Applications stand disposed off. [KISHORE C. SANT, J.] D.A. Ethape