Greater Bombay Co-Op. Bank vs Satguru Construction And Ors.
2007 Latest Caselaw 82 Bom

JUDGMENT

Dalvi Roshan, J.

1. The Recovery Certificate of the Assistant Registrar, Cooperative Societies, Government of Maharashtra, Mumbai has been issued on 23rd August, 2000 under Section 101 of Maharashtra Cooperative Societies Act, 1960 against the Respondents shown therein. Those are the same Respondents in this Notice. The amount to be recovered under the certificate was Rs. 80,00,700/in the year 2000. It has since gone beyond Rs. 124 Lakhs.

2. The Recovery Certificate recites that the Assistant Registrar was satisfied that the Respondents have taken loan from the applicants which has become overdue because it was not fully repaid and passes an order against each of the three above named Respondents to pay the Applicants jointly and severally the aforesaid sum. It is further ordered that the said amount would be deemed to be arrears of land revenue under the provisions of Maharashtra Land Revenue Code, 1966. It sets out that the amount would be first recovered from the borrower and if that was not possible (since the liability of the guarantor was coextensive with that of the principal debtor) from the guarantor. It specifies that these amounts are recoverable under Section 156 of the Maharashtra Cooperative Societies Act, 1960 and Rules 107 of Maharashtra Cooperative Societies Rules, 1961.

3. After the issue of the Recovery Certificate the Applicants/Plaintiffs/Recovery Certificate Holders issued a Proclamation of Sale Notice upon the Respondents on 2nd November, 2001 in execution of the Recovery Certificate for proclamation of sale of their mortgaged/attached immovable property/land admeasuring 259 acres at Kalhar and Kasheli Village on Thane Bhiwandi Road, Taluka: Bhiwandi, District: Thane.

4. Thereafter they issued a public notice of the sale of the immovable property of the Respondents in two Newspapers which was published on 20th December, 2001 for holding an auction sale on 24th December, 2001.

5. The sale could not materialise as the Applicants/Plaintiffs received a letter from 191 Villagers of the said Villages in response to the public notice, lodging their claim in respect of the said land.

6. After obtaining the Recovery Certificate and after being unable to sell the properties of the Respondents the parties, even tried a onetime settlement on 26th November, 2005, more than a year prior to the issuance of this Notice. Even the amount of the onetime settlement was not paid.

7. More than a year thereafter this Notice came to be issued on 3rd December, 2005 upon the Respondents under the provisions of Order 21 Rule 37 of the CPC to show cause why they should not be committed to jail for execution of the Recovery Certificate dated 23rd August, 2000.

8. The Respondents have therefore to show cause why Warrant for Arrest should not be issued upon them committing them to jail/civil prison. The Respondents have filed their affidavit in reply to the above Notice on 18th December, 2006 in which they claim that the lands for which the Applicant/ Plaintiffs desire to hold the auction sale could and should have been sold in execution of the decree/Recovery Certificate against them. They rely upon Consent Terms signed by the parties admitting the amount of Rs. 80 Lakhs as due and payable to the Applicant Bank by the Respondents and showing that the Respondents are "holding" land admeasuring 231 acres in a process of selling the land to clear the amount of Rs. 80 Lakhs payable to the applicants and confirming that the applicants would have a charge for the advance amount on said plot of land and that there were no encumberances or third party rights thereupon. These Consent Terms were however, executed even prior to the Recovery Certificate being issued on 16th June, 2000. Hence, it is seen that the parties had tried to put an end to the dispute under which Rs. 80 Lakhs were payable to the Respondents/ Applicants. It could not be settled and the Recovery Certificate was issued. This Court as an Executing Court cannot go beyond the Recovery Certificate. The Recovery Certificate has remained unchallenged. The debt has not been repaid. The Applicants have sought to sell the same lands in execution. They have been unable to sell the lands.

9. In fact the affidavit of the Respondents to show cause against the Notice issued shows other proceedings also unsuccessfully taken by the Applicants in execution of the decree.

10. Paragraph 19 of the affidavit in reply shows that the Respondents "may" take steps to satisfy the claims the Applicants by some other securities and submit their proposal by onetime settlement. The affidavit, therefore, shows that the Respondents do have certain other securities and assets to satisfy the applicant's claim. The respondents offer of settlement is not genuine and as much as they have not shown or specified which are the securities. The onetime offer is made for the second time. The statement of the respondents that they "may" take steps leads the applicants nowhere. The cause shown by the respondents, only reflects an attempt to delay the execution of the Recovery Certificate. Consequently the cause shown is not satisfactory and cannot be accepted. There is no reason as to why the notice should not be made absolute.

11. The respondents have relied upon the Judgment in the case of Jolly George Varghese v. The Bank of Cochin in which it has been held that if the judgment Debtor is bona fide unable to pay his debt the execution cannot proceed under Order 21 Rule 37 of CPC. It is observed in that judgment that" there must be some element of bad faith beyond mere indifference to pay, some deliberate and recusant disposition...."It would not be a mere omission to pay, but a refusal or dishonest disowning of the obligation. Consequently the Court must inquire into the financial position of the Applicant to satisfy the debt. In this case the Respondents are not merely unable to pay off the debt. They are in good position to pay the debt if the land which they are "holding" is sold by them. Despite their offer to sell the land since year 2000 they have not taken any steps to sell it. The steps taken by the applicant have resulted in failure due to the claim of 191 villagers. The respondents have stated that they can offer other securities, but have shown nothing. Consequently the Respondents have not shown mere indifference to pay, but a refusal to pay the debt under the Recovery Certificate.

12. Mr. Kamdar drew my attention to the provision under Section 51 of CPC which requires the satisfaction of the Court inter alia that the respondents have the means to pay but have refused or neglected to pay the decretal amount. Proviso (b) to the said section is satisfied in this case. Despite the notice issued upon the Respondents no cause is shown why they should not be committed to jail in execution of the Recovery Certificate dated 23rd August, 2000.

13. The Notice is therefore made absolute. The warrant of arrest against respondents 2 and 3 shall be issued. The Deputy Sheriff of Mumbai shall take the respondents in custody. This order is stayed for 3 weeks.

14. The respondents shall remain present in Court in support of any application made by them.