Amrut Annasaheb Dhumal v. The State of Maharashtra Through its Minister & Ors.)
Facts
1 WP / 14520 / 2023IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABADWRIT PETITION NO. 14520 OF 2023Amrut Annasaheb DhumalAge : 59 years, Occu. Agri.,R/o : At Post Musalwadi, Tq. Rahuri,Dist. Ahmednagar .. Petitioner Versus1] The State of Maharshtra, Through its Minister Co-operation and Marketing Maharashtra State, Mantralaya, Mumbai – 32.2] Additional Chief Secretary, Co-operation & Marketing, Maharashtra State, Mantralaya, Mumbai – 32.3] The Commissioner for Co-operation, Maharashtra State, Pune Central Building – 411 0014] The Commissioner for Sugar, Maharashtra State, Sahkar Sankul, Pune5] The Collector, Collector Office, Ahmednagar, Tq. & Dist. Ahmednagar6] The Regional Jt. Director (Sugar), 2nd Floor, Trilok Chambers, Lal Taki Road, Ahmednagar7] The Deputy District Registrar, Co-operative Society, Ahmednagar, Tq. & Dist. Ahmednagar8] The Tehsildar, Tehsildar Office, Rahuri, Tq. Rahuri, Dist. Ahmednagar
Legal Reasoning
9 WP / 14520 / 202312. True it is that the respondent no. 10 - sugar factory seemsto have preferred appeal to the State against the order of respondentno. 3 - Commissioner of Sugar, imposing penalty and there is stay tothe recovery, still, the fact whether the licence was obtained orotherwise can certainly be looked into by the respondent no. 6, inexercise of the powers under Chapter VII and VIII of the Act. 13.Obviously, under Article 226 of the Constitution of India thisCourt cannot undertake threadbare scrutiny of the allegations but whenprima facie some substance can be made out from the allegationsreported by the petitioner to the respondent no. 6 vide hiscommunication dated 20-09-2023, pursuant to the directions of thisCourt dated 14-09-2023 in writ petition no. 11354 of 2023, therespondent no. 6 was duty bound to consider the allegations and evenif he was of the opinion that the allegations were not sufficient enoughto exercise that power, he could have expressly stated so. It appearsthat, by the communications dated 16-10-2023 and 01-11-2023, hemerely responded to the part of the complaint made by the petitioner,without expressly dealing with the allegations pertaining to the allegedillegal crushing of the sugar for the crushing season 2021-22 and illegalexcavation found by the Tehsildar, Rahuri. This is clearlydemonstrative of abdication of duty by a public officer and would besufficient to issue a writ of mandamus.
Arguments
2 WP / 14520 / 20239] The Ahmednagar District Central Co-operative Bank Ltd., Ahmednagar, Head Office, Station Road, Near S.T. Stand, Ahmednagar, Through its Chairman10] Dr. Baburao Bapuji Tanpure Co-operative Sugar Factory Ltd., Shrishivajinagar, Tq. Rahuri, Dist. Ahmednagar Through its Managing Director.. RespondentsWITHCIVIL APPLICATION NO. 6789 OF 2024(Amrut Annasaheb Dhumal V. The State of Maharashtra Through its Minister & Ors.); CIVIL APPLICATION NO. 2383 OF 2024 (Namdeo Pandurang Dhokne Patil V. Amrut Annasaheb Dhumal & Ors.)ANDCIVIL APPLICATION NO. 3271 OF 2024(Shamrao Shankarrao Nimse Patil Vs. The State of Maharashtra Through its Minister and others)...Advocate for petitioner and applicant in CA/6789/2024 : Mr. Ajeet B. Kale AGP for the respondent – State : Mrs. P.J. BharadAdvocate for respondent no. 9 : Mr. R.N. Dhorde, Sr. Advocate i/b. Mr. V.R. DhordeAdvocate for respondent no. 10 : Mr. S.S. ThombreAdvocate for the applicant : Mr. A.V. Hon (CA/2383/2024)None present for the applicant in CA/3271/2024... CORAM : MANGESH S. PATIL & SHAILESH P. BRAHME, JJ.RESERVED ON : 02 SEPTEMBER 2024PRONOUNCED ON : 20 SEPTEMBER 2024JUDGMENT (MANGESH S. PATIL, J.) :Heard. Rule. It is made returnable forthwith. The AGPwaives service for respondents no. 1 to 8. Mr. Dhorde waives service 3 WP / 14520 / 2023for respondent no. 9 and Mr. Thombre waives service for respondentno. 10. 2. The petitioner is coming with following prayers : “(C) To hold and declare that the action of taking over the possessionof the assets of the respondent no. 10 sugar factory by therespondent no. 9 is contrary to the provisions of law, illegal andviolative of the provisions of the SARFAESI Act, 2002 and forthat purpose issue necessary writs and orders.(D) To direct the respondents to hold an inquiry with respect to thereconstruction of loans obtained by trhe Board of Directors ontheir Hamipatra in the year 2016-2021 and illegal handing overof the assets of the respondent no. 10 sugar factory by the 4member administrative board by unanimously withdrawing thesuit filed at DRT, Aurangabad, and for that purpose issue writsor direction. (E) To hold and declare that the possession obtained by therespondent no. 9 bank of the assets of the respondent no. 10sugar factory is illegal direct the respondent no. 9 bank to handover the secured assets back to the respondent no. 10 co-operative sugar factory and for that purpose issue necessarywrits and orders.(F) To direct the respondent no. 9 to recover the amount of thereconstructed loans of the respondent no. 10 sugar factory inview of the Hamipatra submitted by the Board of Directorsagainst the said loan, from the personal assets of the thenBoard of Directors and for that purpose issue necessary writsand orders.(G) To direct the respondent no. 6 to conduct an inquiry regarding thefrauds and financial irregularities committed by the last Board ofDirectors by appointing one person committee and to recoverthe amount from the Board of Directors as a contribution to theassets of the respondent no. 10 Co-operative sugar factory U/s156(1)(d) of the Maharashtra Co-operative Socities Act, 1960.”3. Mr. Kale, learned advocate for the petitioner would submitthat respondent no. 10 is a co-operative sugar factory duly registeredas such under the Maharashtra Co-operative Societies Act, 1960 (Act)and is governed by the provisions of the Act as well as the rules of 4 WP / 14520 / 20231961 framed thereunder. He started strenuously arguing as to themanner in which the board of directors mismanaged the affairs of thesugar factory, leading it to indebtedness and even its factory and otherassets were required to be attached under section 13(2) andsubsequently taken possession of under section 14 of the TheSecuritisation and Reconstruction of Financial Assets and Enforcementof Securities Interest Act, 2002 (SARFEASI Act) by the respondentno. 9 – bank. On being pointed out that already the petitioner wasbefore this Court with exactly the same prayers in writ petitionno. 11354 of 2023 and by the order dated 14-09-2023, he was allowedto withdraw that writ petition and was allowed to merely pursue theother remedies available under the Act and to approach theauthorities / state functionaries for redressal of the grievance andexpected these authorities to consider the grievance and to takeappropriate decision on its merits in accordance with law, and raising aspecific query as to how the petitioner would continue with prayerclauses (C) to (F) (supra), Mr. Kale, on instructions, submitted that thepetitioner would not press for these prayers and would only proceedwith prayer clause (G), whereby he is soliciting appointment of acommittee for enquiring into the fraud and financial irregularities undersection 78 of the Act and soliciting a writ of mandamus against therespondent no. 6 - the Regional Joint Director (Sugar). 5 WP / 14520 / 20234. Mr. Kale would submit that pursuant to the liberty grantedby this Court on 14-09-2023, the petitioner approached the respondentno. 6 and submitted representation on 20-09-2023 (Exhibit - V), givingdetails regarding the rampant misdeeds committed by the then boardof directors right from the year 2015. He would submit that it was alsopointed out as to how the then board of directors, without any right orauthority much less for sufficient reason, withdrew the proceedingsbefore the Debts Recovery Tribunal (DRT) wherein a challenge wasput up to the auction of the respondent no. 9 - bank and inspite of theDRT having granted stay to the further auction in a proceeding undersection 13(4) of the SARFAESI Act. It was also pointed out as to howthe then board of directors in a clandestine manner indulged in somesettlement with the respondent no. 9 and managed to hand over thesugar factor by entering into a settlement contrary to the interest of theco-operative sugar factory. 5. Mr. Kale would further submit that it was also pointed outthat crushing of sugarcane was undertaken even without obtainingcrushing licence for the year 2021-22, from the respondent no. 4 -Commissioner of Sugar, and he had imposed penalty ofRs.16,30,85,000/- because of such illegal action of the board ofdirectors. Even the respondent no. 8 - Tehsildar, Rahuri, on 08-12-2021, had expressly reported about the illegal excavation of mines and 6 WP / 14520 / 2023minerals and had imposed huge fine of Rs.54,81,59,400/-. In spite ofsuch serious allegations, substantiated by such strong evidence, therespondent no. 5 failed to exercise the powers under section 78 of theAct.6. Mr. Kale would, lastly, submit that in spite ofpersuasion, the respondent no. 5 simply refused to exercise thepowers and instead of undertaking an enquiry, has rejected hisapplication by communications dated 16-10-2023 and 01-11-2023 thathe had no power to question the proceedings being undertaken underthe SARFAESI Act, without even a whisper about the request toundertake an enquiry under the relevant provisions of the Act. 7. The learned AGP for respondents no. 1 to 8 andMr. Thombre for the respondent no. 10 would submit that therespondent n. 6 is the Regional Joint Director (Sugar) and Sub-Registrar of the Co-operative Societies. He has been appointed afterthe tenure of the board of directors was over and by resorting toprovisions of section 77-A(1) and has been continued as such even forthe subsequent period, by resorting to section 73AAA read with section157 of the Act. They would submit that since it is a proceeding underthe SARFAESI Act whereby the respondent no. 9 - bank has recoveredpossession of the secured assets of the sugar factory, under theprovisions of the SARFAESI Act, the respondent no. 6 has righly 7 WP / 14520 / 2023refused to undertake any enquiry into the manner in which the thenboard of directors allegedly withdrew the suit in the DRT andsurrendered possession to the respondent no. 9 - bank. They wouldsubmit that the petitioner is driven by ulterior motive, having sufferedrecovery order under the Act. Without disclosing it, he is seeking torefer to the provisions of the Act making rampant allegations againsteveryone. The fact was conveniently concealed and this Court may notin exercise of writ jurisdiction issue mandamus at his instance. 8. We have considered the rival submissions and perusedthe papers. 9. True it is that the scope of the petition stands considerablyreduced in the light of the petitioner not pressing rest of the prayersand consequently, one need not, in this proceeding, embark upon anyscrutiny of the allegations being levelled to the extent of the allegedaction of the respondent no. 9 – bank, to take over the secured assetsof the respondent no. 10 - sugar factor under the provisions of theSARFAESI Act. To this extent, the stand of the respondent no. 6cannot be taken exception of. He, indeed, cannot be directed to act indefiance of the provisions of the SARFAESI Act. Even the respondentno. 9 bank cannot be questioned in respect of the process undertakenunder the provisions of the SARFAESI Act. 8 WP / 14520 / 202310. However, simultaneously, one cannot ignore the fact thatthe respondent no. 6, being the Regional Joint Director (Sugar) haspower and jurisdiction to undertake enquiry under the relevantprovisions of the Act, if something is reported to him touching themismanagement of the respondent no. 10 - sugar factory.11. Irrespective of the alleged ulterior motive on the part of thepetitioner to put up allegations about mismanagement, the fact remainsthat there are indeed certain circumstances raked up by him regardingillegal excavation of mines and minerals resulting in Tehsildar imposingfine of Rs.54,81,59,400/- and the respondent no. 3 - Commissioner ofSugar imposing penalty of Rs.16,30,85,000/- for illegal crushing ofsugar, if the respondent no. 10 - co-operative sugar factor is penalizedto such extent indicating and reflecting on the mismanagement of itsaffairs, the respondent no. 6 should have acted. He could not havesimply refused to exercise the powers with a convenient stand ofhaving no power and jurisdiction to cause interference in a proceedinghappening under the SARFAESI Act. He could have certainlyundertaken enquiry and fixed the responsibility as to how sugarcanewas crushed during the season 2021-2022 without obtaining a licenceand as to how could there be such illegal excavation to the extentfound by the Tehsildar.
Decision
10 WP / 14520 / 202314. The writ petition to that extent, therefore, deserves to beallowed. 15. The writ petition is allowed partly. 16. The respondent no. 6 shall initiate inquiry and shall takesuitable action by examining the petitioner’s allegations to the extent ofthe alleged mismanagement in respect of illegal crushing undertaken inthe crushing season 2021-22 and the illegal excavation of the minesand minerals as found by Tehsildar, as expeditiously as possible and inany case within 16 weeks.17. Rule is made absolute accordingly. 18. Pending civil applications are disposed of. [ SHAILESH P. BRAHME ] [ MANGESH S. PATIL ] JUDGE JUDGEarp/