Mr. Amit S. Savale, Advocate for the v. Lavte, AGP for
Facts
(1) wp-6044-2024 & ors..odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO. 6044 OF 2024KASHINATH SAKHARAM PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6029 OF 2024RAJARAM DULLABH PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6135 OF 2024ANITA KAILAS PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6136 OF 2024GIRISH RAJARAM PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6138 OF 2024SAKHARAM DULLABH PATIL DIED THROUGH LRS KAILASSAKHARAM PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6134 OF 2024YOGITA SUBHASH PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERS
Legal Reasoning
(5) wp-6044-2024 & ors..odtperiod of Liquidator has been enhanced to 15 years as peramendment under Section 109(1) of the MCS Act, 1960. In presentcase, after termination of liquidation proceeding by order dated28.06.2024, the Registrar is pleased to appoint receiver/custodianunder provisions of Rule 89(17) of the MCS Rules, 1961.Subsequently, said order was modified on 09.07.2024. He wouldsubmit that in terms of Section 156 of the MCS Act, 1960 read withRule 2(h) of MCS Rules, 1961, Recovery Officer has every authorityto continue with the recovery proceedings independent ofliquidation proceedings. He points out that recovery certificatesissued under Section 101 of the MCS Act, 1960 against thepetitioners have attained finality. The challenge raised by thepetitioners by filing Revision under Section 154 and writ petitionshave been failed. The petitioners made various attempts to stallrecovery proceedings. The recovery proceeding is delayed by morethan five years. In pursuance of the directions of this Court inWrit Petition No.4582/2024, respondent no.2 has taken actionregarding possession of properties attached. The huge dues ofMaharashtra State Co-operative Bank and depositors are awaitingfor disbursement of the amount. He would submit that nowRegistrar has appointed receiver/custodian, who can takepossession of the properties in pursuance of the impugned order.The petitioners do not have any right or locus to raise grievance atthis stage. Therefore, he seeks to dismiss the writ petitions.8.Having considered submissions advanced, apparentlypetitioners have lost battle and suffered final order under Section101 of the MCS Act, 1960. Their mortgaged or charged propertiesare sought to be possessed by respondent no.3 by initiatingproceeding before respondent no.2. The Recovery Officer isempowered under Section 156 of the MCS Act, 1960 r/w Rule 2(h) (6) wp-6044-2024 & ors..odtof the MCS Rules, 1961 to take steps for recovery of dues, althoughterm of Liquidator is expired. From the provisions of MaharashtraCo-operative Societies Act or Rules it is not discernible that term ofRecovery Officer is co-terminus with Liquidator. The RecoveryOfficer appointed under MCS Act would continue to function andanswerable to Registrar and in case of appointment ofreceiver/custodian, mortgaged property can be given into hispossession. In present case, admittedly Registrar has appointedreceiver/custodian in exercise of powers under Rule 89(17) of MCSRules, 1961 and possession of mortgaged properties can be handedover to receiver/custodian. 9.Pertinently, Recovery Officer appointed under Section 156 ofthe MCS Act, 1960 is empowered to exercise the powers ofRegistrar under Section 156 in the district. The exercise of suchpowers are not dependent upon term of Liquidator. Therefore,assuming that term of Liquidator was expired, there was noexpress or implied bar on the authority of the Recovery Officer totake steps by filing application to respondent no.2 seekingpossession of mortgaged properties of borrowers. Therefore,contentions raised on behalf of the petitioners are liable to berejected. Pertinently, petitioners have lost right in the propertiesmortgaged with the Bank. They cannot put hurdle in recoveryproceedings by putting some technical reasons. In that view of thematter, Writ Petitions san merit, hence, dismissed.10.Rule is discharged. (S. G. CHAPALGAONKAR) JUDGE Devendra/August-2024
Arguments
(2) wp-6044-2024 & ors..odtANDWRIT PETITION NO. 6153 OF 2024VANDANA KASHINATH PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6139 OF 2024KAILAS SAKHARAM PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERSANDWRIT PETITION NO. 6311 OF 2024SUBHASH TUKARAM PATIL AND OTHERSVERSUSTHE STATE OF MAHARASHTRA THROUGH THE SECRETARYAND OTHERS…Mr. Amit S. Savale, Advocate for the Petitioners.Mr. A. V. Lavte, AGP for Respondent Nos.1, 2, 4 and 5.Mr. A. G. Choudhari, Advocate for Respondent No.3.... CORAM : S. G. CHAPALGAONKAR, J. DATED : 26th AUGUST 2024.JUDGMENT:- 1.Rule. Rule made returnable forthwith. By the consent of theparties, matters are taken up for final hearing at the stage ofadmission.2.The petitioners impugn order dated 24.05.2024 passed by theCollector and District Magistrate, Nandurbar bearing OutwardNo.2024@x`g@d{k&2@M&2@dkfo&324, thereby directing ExecutiveMagistrate/Tahsildar, Shahada to hand over possession of theproperties to Recovery Officer of Shri. P. K. Anna Patil JanataSahakari Bank Limited, Nandurbar through Circle Officer in (3) wp-6044-2024 & ors..odtpursuance to the application filed by Special Recovery Officerunder Rule 107(11) of Maharashtra Co-operative Societies Rules,1961 (for short ‘MCS Rules, 1961’).3.Mr. Savale, learned Advocate appearing for petitionerssubmits that petitioners were borrowers of loans from respondentno.3-Co-operative Credit Society. Since there was default inpayment of loans, respondent no.3 obtained recovery certificatesagainst petitioners under Section 101 of the Maharashtra Co-operative Societies Act, 1960 (for short ‘MCS Act, 1960’). Infurtherance to such certificate, properties of the petitioners wereattached and charge was created.4.The respondent no.3 initiated proceeding under Rule 107(11)(d) of the MCS Rules, 1961 and sent proposal to respondent no.2 forphysical possession of the properties. Consequently, impugnedorder dated 24.05.2024 has been passed directing respondent no.4to hand over possession of the properties to respondent no.3.5.Mr. Savale would submit that impugned order is passedwithout giving opportunity of hearing to petitioners. He submitsthat respondent no.3-Special Recovery Officer has no authority tocontinue with recovery proceeding or approach respondent no.2 totake steps in accordance with Rule 107(11) (d) of MCS Rules, 1961.Consequently, order passed by respondent no.2 and actionproposed by respondent no.4 is null and void. He would submitthat in terms of Section 109 of the MCS Act, 1960, the term ofLiquidator expires after 10 years from the date of his appointment.In present case, term of Liquidator was expired. The respondentno.3-Special Recovery Officer cannot independently function, whenterm of Liquidator under whose instruction respondent no.3 was (4) wp-6044-2024 & ors..odtfunctioning was expired. According to him, on expiry of term ofLiquidator, Credit Society is no more in existence and RecoveryOfficer lacks jurisdiction to take steps, particularly move anyproceeding before the District Magistrate-respondent no.2. Mr.Savale would invite attention of this Court to the provisions ofSection 105(c) and Section 156(b) of MCS Act, 1960 to contend thaton appointment of Liquidator under Section 103 of the MCS Act,1960, the power to sell immovable or movable property or deal withsuch property would vest with Liquidator. He would submit thatunder Section 156 of the MCS Act, 1960, the Registrar or anyperson appointed by him would have powers to make recovery.However, Recovery Officer so appointed does not possessindependent power to take steps for recovery. He would, thereforesubmit that on expiry of term of Liquidator, he become functus-officio. Consequently, Recovery Officer would also loose hisauthority to take any steps in furtherance to the recovery of duesunder Society under the Act. 6.By inviting attention of this Court to Rule 89(17) of MCSRules, 1961 he submits that on conclusion liquidation proceedings,an actionable claims shall vest with Registrar, who may appoint acustodian or receiver to realize such remaining assets andactionable claims. However, in present case, on the date whenimpugned order was passed, the Registrar had not appointedcustodian. Hence, proceeding initiated by Recovery Officer is ultravires and impugned order passed by the District Magistrate basedon requisition of Recovery Officer is null and void.7.Per contra, Mr. Choudhari, learned Advocate appearing forrespondent no.3 referring to the affidavit-in-reply filed by Mr.Virendrasinh Raghuwanshi, Special Recovery Officer submits that