Dr. Annasaheb Choughle Urban vs Prakash Rajaram Patil
2012 Latest Caselaw 305 Bom

                                                           WP.3388.2012.judgment.doc


        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              CIVIL APPELLATE JURISDICTION




                                                                      
                     WRIT PETITION NO. 3388 OF 2012




                                              
    1.    Dr. Annasaheb Choughle Urban
    Cooperative Bank Ltd.,




                                             
    Peth Vadgaon, Taluka Hatkanangle,
    District Kolhapur Branch Sangli
    District Sangli




                                 
    2.    Special Recovery Officer,
    Dr. Annasaheb Choughle Urban
                       
    Cooperative Bank Ltd.,
    Peth Vadgaon, Taluka Hatkanangle,
    District Kolhapur                                 :-       Petitioners
                      
           versus

    1.    Prakash Rajaram Patil,
      

    Age adult, Occ. Agriculturist,
    Residing at Post Kande, Taluka Shirala,
   



    District Sangli

    2.    Shashikant Prakash Patil,
    Age adult, Occ. Agriculturist,





    Residing at Post Kande, Taluka Shirala,
    District Sangli

    3.    Sharad Prakash Patil,
    Age adult, Occ. Agriculturist,





    Residing at Post Kande, Taluka Shirala,
    District Sangli

    4.    Akaram Dnyanu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli


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    5.    Laxman Dnyanu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                                                      
    District Sangli




                                              
    6.    Shamrao Pandurang Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




                                             
    7.    Balasaheb Namdeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                 
    District Sangli

    8.
                     
          Bhimrao Siddhu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
                    
    District Sangli

    9.    Ananda Pandurang Sawant,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
      


    District Sangli
   



    10. Pandurang Namdeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,





    District Sangli

    11. Parvati Pandurang Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,





    District Sangli

    12. Sulbha Sarjerao Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




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    13. Sunanda Balasaheb Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                                                         
    District Sangli




                                                 
    14. Jagganath Siddhu Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,
    District Sangli




                                                
    15. Kiran Mahadeo Patil,
    Age adult, Occ. Agriculturist,
    Residing at Post Kapri, Taluka Shirala,




                                   
    District Sangli
                        
    16. Pradeep Ganpati Kadam,
    Age adult, Occ. Agriculturist,
                       
    17. Mohan Joshi,
    Member vidhan Parishad,
    Vidhan Bhavan, Mumbai

    18. Secretary,
      


    Maharashtra Vidhan Bhavan,
   



    Mumbai

    19.    State of Maharashtra                          :-       Respondents





                                     ***
    Mr. S. S. Patwardhan, for the Petitioners.
    Mr. Sanjeev Sawant i/b. Mr. Shridhar A. Patil, for Respondent Nos. 
    1 to 16.
    Mr. D. J. Khambatta, Advocate General on notice. 





    Mr. Nitin Deshpande, A.G.P., for respondent Nos. 17 to 19.


                                         CORAM:-         A.M.KHANWILKAR &
                                                         R.Y.GANOO,JJ.

Judgment Reserved on :- OCTOBER 18, 2012 Judgment Pronounced on:- OCTOBER 31, 2012

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JUDGMENT :- (Per A.M.Khanwilkar, J.)

This Writ Petition under Article 226 of the Constitution

of India has been filed to issue direction to the Committee on

Petitions, constituted under the Maharashtra Legislative Council

Rules, to refrain from entertaining the application dated 24 th July,

2010, submitted by Respondent No. 17, along with undated

representation of Respondent Nos. 1 to 16 Exhibit 'B' collectively.

The alternative relief claimed is to issue direction or Writ of

Mandamus to direct Respondent No. 18 to place the representation

of the Petitioner Bank, dated 24th October, 2011 Exhibit 'I', before

the abovesaid Committee with further direction that the same be

heard and disposed of in a time bound manner.

2) Briefly stated, the Petitioner Bank had advanced an

aggregate amount of Rs. 90 lacs to 20 borrowers on 29 th March,

2004. The Bank advanced another some of Rs. 9 lacs to three

other borrowers on 30th March, 2007. That advance was given

against the security of mortgage created by each of the 23 persons

in the Bank's favour. In due course, however, the loan amount

became hopelessly irregular and non performing assets. As a

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result, the Bank processed the proposal of the said 23 borrowers

and found that 16 borrowers were small/marginal farmers as

defined in the loan waiver scheme floated by the Government. As

on 31st December, 2007, these 16 persons were collectively eligible

for loan waiver of Rs.30,33,489. The Bank, accordingly, gave credit

of the corresponding amount in the respective accounts of the said

16 persons. After the said adjustment, as on 31 st March, 2010, the

sum of Rs. 28,52,927/- still remained due and payable by them to

the Petitioner Bank collectively. So far as the seven remaining

persons, who were not small farmers, they were eligible for a

partial waiver of 25% of the outstanding amount in their accounts

as on 31st December, 2007. However, the said seven persons failed

to deposit the necessary amount in order to become entitled for

loan waiver. The amount due and payable by the said seven

borrowers, as on 31st March, 2010, is stated to be 1,17,35,606/-.

3) Since the abovesaid payment became over due, the

Petitioner Bank had no option but to initiate proceedings under

Section 101 of the Maharashtra Co-operative Societies Act, 1960

(hereinafter referred to as "the Act"). The Registrar of the Co-

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operative Societies, Maharashtra State, Pune, who is the Statutory

Authority to issue Recovery Certificates, after hearing the

Petitioner Bank and the 23 defaulters, vide order dated 3 rd June,

2008, issued separate Recovery Certificates under Section 101 of

the Act. On the basis of the said Recovery Certificates, the

Petitioner Bank resorted to execution of Recovery Certificates,

under Rule 107 of the Maharashtra Co-operative Societies Rules,

1961 (hereinafter referred to as "the Rules").

4) Indisputably, according to the Petitioners, these

proceedings are judicial proceedings and steps taken by the

Petitioner Bank, for recovery of the outstanding dues, against all

its borrowers, are as per the procedure established by law. The

borrowers could have resorted to remedy of revision application

under Section 154 of the Act, against the said proceedings.

Instead of resorting to that remedy, the Respondent Nos. 1 to 16

herein, however, approached the Respondent No. 17 on 24 th July,

2010. The Respondent No.17 is incidentally a member of the

Vidhan Parishad. The Respondent No.17, in turn, requested the

Chairman of the Committee on Petitions of the Maharashtra

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Legislative Assembly to place the application made by Respondent

Nos. 1 to 16 before the Committee on Petitions constituted under

Part XVI of the Maharashtra Legislative Council Rules. On receipt

of the said request, the matter proceeded before the said

Committee. The Committee considered the said application and

ordered stay of recovery of defaulted amount from Respondent

Nos. 1 to 16 until further orders to be passed by it. This is noticed

from the communication dated 21st August, 2010, sent by the

office of Respondent No. 18 to the office of Respondent No. 19.

The same reads thus:

"egkjk"Vª fo/kku eaMG &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&

izs"kd%

iz/kku lfpo] egkjk"Vª fo/kkueaMG lfpoky;]

izfr]

iz/kku lfpo egkjk"Vª 'kklu] lgdkj o lL=ks|ksx foHkkx ¼lgdkj½ ea=ky;] eqacbZ 400032

fo"k; %& MkW- vk..kklkgsc pkSxqys vcZu dks- vkWijsfVOg cWad] isBoMxko] rk- gkrd.kaxys ft- dksYgkiwj ;k cWadsdMwu f'kjkGk ¼ft- lkaxyh½ rkywD;krhy 'ksrd&;kauh ?ksrysY;k dtkZP;k ijrQsMhr 'ksrd&;kaoj gksr vlysyk vU;k; ;k fo"k;kojhy Jh- eksgu tks'kh fo- i-l- ;kauh nk[ky dsysyk fouarh vtZ-

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WP.3388.2012.judgment.doc

lanHkZ %& 1- ;k lfpoky;kps i= dzekad [email protected]&15] fn- 23 tqyS] 10 2- ;k lfpoky;kps i= dzekad

[email protected]&15 fn- 21 vkWxLV] 10

egksn;]

funs'kkuqlkj vki.kkal dGfo.;kr ;srs dh] mijksDr fo"k;kojhy fouarh vtZ Jh eksgu tks'kh fo- i- l- ;kaph fnukad 26 tqyS] 2010 jksth fo/kkuifj"kn lHkkx`gkr lknj dsyk vlwu rks R;kp fno'kh ek- lHkkirhauh fo/kku ifj"kn fouarh vtZ lferhdMs fopkjkFkZ lqiwrZ dsyk

vkgs- fouarh vtZ lferhus lnjgw vtkZoj cq/kokj] fnukad 18 vkWxLV] 2010 jksthP;k lferhP;k cSBdhr fopkjkr ?ksowu R;k ckcrhr vlk fu.kZ; ?ksryk dh] 'ksrd&;kaP;k ukos mHkkj.;kr vkysY;k O;fDrxr d`"khZph f'kYyd o R;koj cWadsus vkdkjysys naM O;kt o brj vkdkj.kh o

dkj[kkU;kus fnysyh geh ;k loZ xks"Vhapk rkGesG gksmu ns; ckdh fuf'pr gksbZi;Zar o lnjgw fouarh vtkZoj vafre fu.kZ; gksbZi;Zr cWadsP;k olqyh izfdz;sl LFkfxrh ns.;kr ;koh-

¼dk;Zo`Rr lkscr tksMys vkgs-½

lferhP;k ojhy fu.kZ;kP;k vuq"kaxkus ;ksX; rh dk;Zokgh d:u

dsysY;k dk;Zokghph ekfgrh lferhyk rkrMhus ikBfo.;kr ;koh- ;k fo"k;kP;k lanHkkZr fo/kkuifj"kn fouarh vtZ lferh] lIVsacjP;k ifgY;k lIrkgkr foHkkxkP;k lfpokaph lk{k ?ks.kkj vkgs- rjh ojhy ekfgrh fnukad 3- vkWx"V] 2010 jksth ;k rRiwohz ;k lfpoky;kdMs ikBfo.ksckcr

vki.kkal fouarh vkgs- lferhP;k cSBdhph rkjh[k vki.kkal ;'kkodk'k dGfo.;kr ;sbZy-

vkiyk] [email protected]& ¼Jh/kj jktksik/;s½

mi lfpo egkjk"Vª fo/kkueaMG lfpoky;"

5) The Principal Secretary, Department of Co-operation,

Government of Maharashtra, was summoned by the said

Committee, which then met on 8th September, 2010. The said

Committee, upon considering the submissions made before it,

including by the Bank, ordered that recovery of the defaulted loan

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amount by Respondent Nos. 1 to 16 deserves to be stayed. The

Petitioners then approached this Court by way of Writ Petition No.

10162/2010. The said Writ Petition was, however, dismissed by

the Division Bench of this Court on 4th February, 2011. The said

order of the Division Bench reads thus:

"P.C:

Heard learned counsel for the petitioners.

2] The question sought to be raised in this petition cannot be gone into in the writ jurisdiction of this Court under Article 226 of the Constitution of India. Petition is,

therefore, dismissed.

3] This order will not come in the way of the petitioners if

they want to appear before the same Authority for canvassing their contentions."

6) Pursuant to the abovesaid order of the High Court, the

Petitioners moved the Respondent No. 18, vide letter dated 24 th

October, 2011. The Petitioners submitted representation to be

placed before the said Committee for vacation of the stay order

granted by it. Since no response was received, the Petitioners once

again approached the Respondent No. 18 for placing the

Petitioners' representation before the Committee, for vacating the

stay, vide reminder letters dated 24 th November, 2011 and 17th

December, 2011. However, no response has been received by the

Petitioners thereto.

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7) In the representation filed by the Petitioners, it is

asserted that the Committee has no jurisdiction to interdict the

execution of the Recovery Certificates. The scope of Petitions to be

entertained by the Committee on Petitions has been delineated in

Rule 233 of the Maharashtra Legislative Council Rules, which

reads thus:

"233. Petitions may be presented or submitted to the House

with the consent of the Chairman on-

(i) a Bill which has been published under rule 111 or which has been introduced in the House;

(ii) any matter connected with the business pending before the House; and

(iii) any matter of general public interest provided that it is not one-

(a) which falls within the cognisance of a court of law

having jurisdiction in any part of India or a court of enquiry or a statutory tribunal or authority or a quasi-judicial body,

or a commission;

(b) which relates to a matter which is not within the cognisance of the State Government;

(c) which can be raised on a substantive motion or

resolution; or

(d) for which remedy is available under the law, including rules, regulations, bye-laws made by the Central Government or by State Government or an authority to whom power to make such rules, regulations, bye-laws, etc. is delegated."

From the bare language of Rule 233, it is obvious that clauses (i)

and (ii) have no application at all to the fact situation of this case.

Assuming that the grievance of Respondent Nos.1 to 16 was in the

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nature of matter of general public interest - which obviously it was

not - even in that case, it was covered by the excepted category

specified in sub-clauses (a) and (d) of the cause (iii). A priori, the

Committee on Petitions had no jurisdiction to entertain the

grievance of Respondent Nos.1 to 16. Sub-clause (a) applies to

cases which fall within the cognizance of a Court of Law having

jurisdiction in any part of India or a Court of enquiry or a statutory

Tribunal or Authority or a quasi-judicial body or a Commission.

The matter pertaining to the justness of the Recovery Certificates

issued by the Appropriate Authority in exercise of its statutory

powers conferred by the Act of 1960 r/w Rules of 1961 or

regarding taking the same to its logical end and execution thereof,

indisputably, falls within the cognisance of a Court of law or

Authority, etc., as is, provided for by law. Further, it is open to the

borrower or any person affected by such proceedings to take

recourse to remedy of revision u/s 154 of the Act of 1960. Matters

in respect of which remedy is available under law, including Rules,

Regulations, Bye-laws made by the Central Government or by

State Government or an Authority to whom power to make such

Rules, Regulations, Bye-laws, etc. is delegated, also cannot be

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entertained by the Committee on Petitions under Rule 233, by

virtue of sub-clause (d) of Rule 233 (iii).

8) The grievance made by Respondent Nos. 1 to 16, which

was placed before the Committee on Petitions, according to the

Petitioners, was beyond the purport of Rule 233. As a result, the

Committee has had no jurisdiction to entertain the same much less

grant stay to the recovery proceedings. It is further urged that in

view of the basic structure of the Constitution of India providing

for separation of powers of Executive, Legislature and Judiciary;

and in view of express legal provisions in the Act of 1960 and

Rules framed under that Act, being Rules of 1961, providing for

remedy against the Recovery Certificates and the execution

proceedings initiated by the Petitioner Bank, it is axiomatic that

the Committee on Petitions can exercise its jurisdiction on these

matters much less to interdict the recovery against respondent

Nos.1 to 16. Indeed, the State Legislature or the Parliament, as the

case may be, inspite of the doctrine of separation of power, in a

given case, may be competent to undo the effect of a judgment of

the Court but, the Committee on Petitions, by no stretch of

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imagination, can exercise its power to do so and including in terms

of Rule 233.

9) Further, it was contended before us that the impugned

direction issued by the said Committee, is, essentially in the nature

of a political decision, which cannot undo the Recovery Certificates

issued by the Competent Authority in exercise of its statutory duty,

or interdict the execution thereof. Notably, the direction issued by

the Committee on Petitions was not in respect of general public

interest but only to favour the select few borrowers (Respondent

Nos.1 to 16) of the Petitioner Bank. The relief given to the select

few borrowers of the Petitioner Bank was bound to unwittingly

prejudice the interest of large number of stakeholders, investors

and shareholders of the Petitioner Bank. If so, the impugned

decision of the Committee is against the general public interest

and not to further the same, and is opposed to the purport of Rule

233 itself. Similarly, it is opposed to the extant Regulations and

contractual obligations, which were and/or are binding on the

Petitioner Bank as also its members and more particularly the

borrowers. It would stifle the co-operative movement and push

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the Petitioner Bank to face liquidity crunch, sooner or later, and

moreso, it would entail in favouring undeserving and ineligible

persons who have failed to fulfill their contractual and legal

obligations. The interference by the Committee on Petitions

was not only extra judicial but also extra Constitutional power

exercised by a Constitutional functionary. With this grievance, the

Petitioners have once again approached this Court by way of Writ

Petition under Article 226 of the Constitution of India, for the

reliefs already adverted to in the first paragraph, as the Committee

has failed and neglected to consider the representation made by

the Petitioner Bank for immediate vacation of the stay of recovery

of outstanding loan amount from Respondent Nos. 1 to 16, on the

basis of Recovery Certificates, by way of execution proceedings, as

provided by Rules of 1961.

10) The Respondent No. 19 has filed short affidavit. After

having adverted to the relevant facts, at the end of Paragraph 4, it

is stated that the letter dated 21 st August, 2010, from the

Maharashtra Legislative Secretary and the minutes of the meeting

dated 8th September, 2010 of the Petition Committee were never

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treated as stay order on the recovery process. As regards the

Petitioners' claim that the execution proceedings initiated by the

Petitioner Bank has been interdicted, it is stated that in a meeting

held on 23rd July, 2012, under the chairmanship of the Minister

(Co-operation), which was attended by the Chairman, Vice

Chairman and Chief Executive Officer of the Petitioner Bank and

after discussion of the proposal given by the Petitioner Bank

regarding one time settlement of the loan amount, the Bank has

decided to charge 8% interest on reducing balance under the one

time settlement scheme and it would submit the proposal through

the Commissioner of Co-operation, in that behalf. The minutes

were recorded by consent of parties and on the basis thereof, the

proposal submitted by the Petitioner Bank was examined by the

Commissioner of Co-operation on 20th September, 2012. Further,

the State Government has considered the said proposal and has

approved the same, which fact has been communicated vide letter

of the Commissioner for Co-operation dated 8th October, 2012.

11) In other words, during the pendency of this Petition,

the dues payable by Respondent Nos. 1 to 16 in respect of their

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Loan Accounts has under gone change and the Petitioner Bank has

agreed to act upon that proposal. Further, the proposal has been

duly approved by the Appropriate Authority. This statement is

made on affidavit, which has been taken on record. The fact that

the said affidavit is taken on record does not mean that this Court

is putting its seal of approval on the said arrangement. It is

possible that some investor(s), creditor(s) or member(s) of the

Petitioner Bank may come forward to challenge the authority of

the persons, who have agreed to the said proposal or for that

matter, about the authority of the concerned Authority to grant

approval to such proposal on grounds as may be permissible in

law. The activities of the Petitioner Bank - being a Co-operative

Society - are indisputably in public domain. The action of the

Petitioner Bank not only must be just and proper qua its borrowers

but has to be in conformity with the extant regulations lest it may

offend the rights of the investors and members of the Bank

including under Article 14 and 21 of the Constitution of India.

The Petitioner Bank can sustain the agreement entered with the

Respondents 1 to 16 only if it is backed by law or by policy of the

State or its own policy. We may not be understood to have

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expressed any opinion one way or the other in that behalf.

12) Indeed, on the basis of the reply affidavit filed by

Respondent No. 19 it may appear that the reliefs as claimed in this

Petition are worked out. Inasmuch as, in view of the proposal

submitted by the Petitioner Bank to revise the loan accounts of the

concerned borrowers by charging only 8% interest on reducing

balance, under the one time settlement scheme, the Petitioner

Bank will not be in a position to take the Recovery Certificates,

already issued against the said Respondents, forward in the same

form. Ostensibly, this change has happened not because of any

order passed by the Committee on Petitions but on the basis of

arrangement agreed upon by the Bank, may be because of the

mediation of the Minister of Co-operation, in the meeting held on

23rd July, 2012.

13) Thus, it is unnecessary to dwell upon the argument

that the order of the Committee on Petitions was to stay the

recovery of the amount pertaining to the concerned loan accounts

qua the Respondent Nos. 1 to 16 herein. That stay was in the

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context of the amount in the loan accounts preceding the issuance

of the said Recovery Certificates. The Petitioner Bank cannot

pursue execution proceedings on the basis of the said Recovery

Certificates, after the waiver agreed upon in the meeting held

under the chairmanship of Minister of Co-operation on 23 rd July,

2012.

14) Be that as it may, a new dispensation has been agreed

upon by the Petitioner Bank and Respondent Nos. 1 to 16, which

will have to be now taken forward. Assuming that the Committee

on Petitions had granted stay of recovery proceedings, that will be

no impediment for the Petitioner Bank to proceed in the matter as

per the new arrangement. Even if there was some doubt about,

whether it is open to the Petitioner Bank to proceed with the

recovery process against Respondent Nos. 1 to 16 because of the

letter dated 21st August, 2010 sent by the Maharashtra Legislative

Secretary and the minutes of the meeting dated 8th September,

2010 of the Committee on Petitions, we have no manner of doubt

that the Committee on Petitions had no jurisdiction to deal with

the subject matter presented before it in the form in which the

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application made by the Respondent Nos. 1 to 16 was couched.

The subject matter was indisputably in respect of issues which fell

within the cognizance of a Court of law having jurisdiction in any

part of India or Court of inquiry or a statutory Tribunal or

Authority or quasi judicial body or a Commission, as provided in

the Act of 1960 and the Rules of 1961. These matters are

explicitly excluded from the scope of Petitions under Rule 233. It

falls under excepted category provided in sub-clause (a) of clause

(iii) of Rule 233. As a matter of fact, the grievance was nothing

to do with matter of general public interest at all but concerning

the individual interests of Respondent Nos. 1 to 16. Further, the

said Respondent Nos.1 to 16 could invoke remedy under section

154 of the Act. Even for that reason, the Committee on Petitions

could not have interdicted the judicial or quasi judicial process of

execution of Recovery Certificates against Respondent Nos. 1 to

16.

15) Accordingly, we hold that the Petitioner Bank is free to

pursue the recovery proceedings against Respondent Nos. 1 to 16,

in accordance with law, irrespective of the letter dated 21 st

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August, 2010 issued by the office of Maharashtra Legislative

Secretary or the minutes of the meeting dated 8 th September, 2010

of the Committee on Petitions. We also hold that the Committee

on Petitions has had no jurisdiction to interdict the recovery

process resorted to by the Petitioner Bank against Respondent

Nos.1 to 16. At the same time, we make it clear that we are not

expressing any opinion either way with regard to the correctness

and legality of the agreement arrived at for and on behalf of the

Petitioner Bank by the Chairman, Vice Chairman and Chief

Executive Officer to modify the rate of interest payable by

Respondent Nos. 1 to 16. If that action is challenged in any

proceedings, being illegal or prejudicial to the interests of the

investors, members or creditors of the Bank, that challenge will

have to be considered on its own merits, in accordance with law.

16) The Petition is disposed of on the above terms.

        (R.Y.GANOO,J.)             (A.M.KHANWILKAR,J.)





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