Bombay High Court
Suresh Narayan Rege vs The Saraswat Co-Op. Bank Ltd And ... on 19 August, 2015
Bench: Naresh H. Patil
WP11424.12.odt 1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11424 OF 2012
Suresh Narayan Rege,
Age 75 years,
having address at Galas
No.105, 106 and 107 in Udyog
Mandir No.1, 7-C, Bhagoji Keer Marg,
Mahim, Mumbai-400 016.
ig .. Petitioner
.. Versus ..
1. The Saraswat Coop. Bank Ltd.
74, Senapati Bapat Marg,
having address at Samadhan,
Dadar, Mumbai-400 028.
2. R.G. Nepali, SRO
The Saraswat Coop. Bank Ltd.
having address at Samadhan,
74, Senapati Bapat Marg,
Dadar, Mumbai-400 028.
3. N.A. Sawant, SRO
The Saraswat Coop. Bank Ltd.
having address at Samadhan,
74, Senapati Bapat Marg,
Dadar, Mumbai-400 028.
4. M.J. Lele, SRO
The Saraswat Coop. Bank Ltd.
having address at Samadhan,
74, Senapati Bapat Marg,
Dadar, Mumbai-400 028.
5. Vivek Mehra,
having address at 402, Bhagoji
Keer Marg, Mahim,
Mumbai-400 016.
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WP11424.12.odt 2
6. Sunil Mehra,
having address at 402, Bhagoji
Keer Marg, Mahim,
Mumbai-400 016.
7. M/s. Mehra Holdings
having address at 402, Bhagoji
Keer Marg, Mahim,
Mumbai-400 016.
8. Reserve Bank of India,
Central Office, Urban Bank Dept.
Garment House, Worli,
Mumbai-400 018,ig
9. State of Maharashtra,
through the Office of the Govt.
Pleader, High Court, Bombay. .. Respondents
..........
Mr. Satish Shete a/w Mr. Amol Jawale i/by A.P. Steenson & Associates
for the Petitioner,
Mr. Bhupesh V. Samant, Advocate for Respondent No.1,
Mr. P.G. Sawant, A.G.P. for Respondent No.9.
..........
CORAM : NARESH H. PATIL
AND
S.B. SHUKRE, JJ
.
DATE OF RESERVING THE JUDGMENT : 14.07.2015.
DATE OF PRONOUNCING THE JUDGMENT : 19.08.2015
J UDGMENT
: (Per : S.B. SHUKRE, J.)
1. By this writ petition, the petitioner has challenged the
judgment and order dated 12.3.2012 passed in Revision Application
No.434/2006 by the Divisional Joint Registrar, Cooperative Societies
Mumbai Division, Mumbai thereby refusing to set aside the sale of the
property mortgaged by the petitioner to respondent no.1-Bank as a
security for repayment of the loan amount borrowed by the petitioner's
concern M/s. Mohan Printery, Mumbai.
2. The petitioner had obtained a loan of approximately
Rs.22,00,000/- from respondent no.1 and as a security for repayment of
the loan amount, the petitioner had mortgaged in favour of respondent
no.1 his immovable property, situated at Unit No.105, 106 and 107 in
Udyog Mandir No.1, Bhagoji Keer Marg, Mahim, Mumbai. The
petitioner defaulted in making repayment of the loan amount and,
therefore, dispute arose between the petitioner and respondent no.1
regarding recovery of loan amount. The dispute went before a
Cooperative Court, Mumbai and an Award under Section 91 of the
Maharashtra Cooperative Societies Act, 1960 was passed by consent of
the parties. As per the Award, the petitioner was to make the payment
to respondent no.1 by instalments. The instalments were not paid and,
therefore, execution proceedings were initiated by respondent no.1 and
the subject property of the petition was attached. A writ petition was
filed by the petitioner challenging the attachment. The said writ
petition was dismissed and one month's time was given to the petitioner
to make payment as per order passed by the Division Bench of this Court
in Writ Petition No.2195/2002 on 9.9.2002. A review application filed
against the said order dated 9.9.2002 also came to be dismissed by this
court on 8.1.2003.
3. The petitioner had also filed a revision application under
Section 154 of the Act being Revision Application No.434/2006 before
the Divisional Joint Registrar, Cooperative Societies, Mumbai
challenging the attachment and sale notices, proclamation dated
10.5.2004, various orders passed in respect of the attachment and sale
of the subject property and also the order of sale issued by the
concerned Special Recovery Officer attached to respondent no.1. During
the pendency of this revision application, it appears that the petitioner
filed a writ petition being Writ Petition No.5562/2009. In this petition,
this court passed an order on 6.9.2011 directing the Divisional Joint
Registrar to decide the revision application as expeditiously as possible
and preferably within a period of six months.
4. It has emerged from the record that the petitioner apart from
filing the said revision application, kept on moving the High Court by
initiating further rounds of litigation. A Writ Petition No.2125/2004
was filed by the petitioner seeking various reliefs and one of the reliefs
sought was stay of the execution of decree granted by the Cooperative
Court. This petition was dismissed in limini by the learned Single Judge
of this Court on 30.8.2004. An appeal being Appeal No.736/2005 was
preferred against the said order before the Division Bench of this Court.
This appeal was also dismissed by the Division Bench by its order passed
on 27.9.2005. At that time, a statement was made on behalf of the
petitioner by his learned counsel on instructions that the machinery
belonging to the petitioner kept separately by the Bank in a godown,
would be removed by the petitioner within a period of six weeks. In
another writ petition being Writ Petition No.5562/2009, a statement
was made by the learned counsel for the petitioner on instructions that
the petitioner shall remove his machinery lying in the godown of the
respondent-Bank within a period of four weeks which was recorded by
this Court. In the same petition, on 8.4.2010, minutes of order came to
be recorded. It was specifically mentioned therein that if goods were
not removed by the petitioner from the godown on or before 26.4.2010,
respondent no.3-Bank (respondent no.1 in the present petition) shall be
at liberty to sell the goods by auction/treaty and deposit the sale
proceeds in the court. Pursuant to these minutes of order dated
8.4.2010, the sale proceeds of scrap machinery and other articles were
deposited through a Pay Order bearing No. 195629 drawn on Saraswat
Co-operative Bank Ltd. Fort Branch, Mumbai dated 8.6.2010.
5. Thereafter, as directed by this court, the Divisional Joint
Registrar decided the revision application bearing No.434/2006 and
rejected the same by his order passed on 12.3.2012. Now, the petitioner
has challenged this very order and in its wake has also once again raised
almost the same challenges which he had raised earlier before this court
by filing various writ petitions.
6. We have heard Mr. Satish Shete a/w Mr. Amol Jawale i/by
A.P. Steenson & Associates for the Petitioner, Mr. Bhupesh V. Samant,
learned counsel for Respondent No.1 and Mr. P.G. Sawant, learned
A.G.P. for Respondent No.9. We have also gone through the record of
the writ petition with the assistance of learned counsel and learned AGP
appearing for the respective parties.
7. Learned counsel for the petitioner submits that in effecting
the sale of the subject property, the Special Recovery Officer has violated
the provisions of Rule 107, sub-rules (11) (g) and (11) (h) of the
Maharashtra Cooperative Societies Rules, 1961 (hereinafter referred to
as "the Rules"). He submits that the sale proclamation did not mention
any reserve price and the balance amount, as required under the said
provisions, was not paid by the auction purchasers, the respondent
nos.5 to 7, within 15 days from the date of the sale. He submits that
these provisions are mandatory in nature and as they have not been
complied with, the entire sale has been vitiated.
8. Learned counsel for respondent no.1 submits that the sale has
taken place in August 2004 and the entire process of sale including the
execution of consent decree granted by the Cooperative Court came to
be challenged by the petitioner through various rounds of litigation and
the petitioner has not succeeded any where. He submits, after the rights
of the parties having been conclusively determined in these proceedings,
now the petitioner cannot be permitted to raise a dispute in respect of
the rights of the parties all over again. He further submits that there is
not a single instance brought to the notice of the court by the petitioner
showing as to how the provisions of Rule 107, sub-rules (11)(g) and
(11)(h) have been violated in the instance case. Therefore, according
to him, the writ petition deserves to be dismissed.
9. Learned AGP appearing for respondent no.9 has submitted
that an appropriate order may be passed in the matter.
10. The first objection of the learned counsel for the petitioner is
in respect of non mentioning of reserve price in the sale notice as
required under Rule 107 (11) (g) of the Rules. However, upon perusal
of Rule 107 which relates to sale of immovable property in execution of
a decree, we could not come across any provision therein mandatorily
requiring fixation of reserve price in the sale notice nor could learned
counsel for the petitioner point out to us presence of any such provision
therein. The objection so taken, therefore, cannot be accepted and is
rejected.
11. The next contention of learned counsel for the petitioner is
about the entire sale being null and void because of failure of the
auction purchasers, respondent nos.5 to 7, to pay remainder of
purchase money within 15 days from the date of sale. According to
him, this provision of law as contained in Rule 107 (10)(h) of the Rules
is mandatory in nature and its non compliance is not a mere irregularity
but an illegality which renders the entire sale as nullity.
12. The proposition of law canvassed before this court by the
learned counsel for the petitioner that Rule 107 (10)(h) of the Rules is
mandatory in nature and non compliance therewith makes the sale a
nullity is well settled. In the case of Shilpa Shares and Securities and
others .vs. National Cooperative Bank Limited and others, (2007) 12
SCC 165, the Hon'ble Apex Court has held that non compliance with this
provision is not a mere irregularity but something which renders the sale
a nullity.
13. The question, whether there has been a non compliance with
the afore-stated rule or not, however, is a question of fact and has to be
determined on the basis of either facts admitted or proved in evidence.
In exercise of writ jurisdiction under Article 226 of the Constitution of
India which has been invoked by the petitioner in the present case, any
determination of such a question could only be on the basis of admitted
facts. In the present case, the contention of non compliance with the
said mandatory requirement of law has been disputed by the respondent
no.1. No such material as bringing on record uncontroverted facts
leading to a conclusive finding about non compliance with the said
requirement of law has been produced on record by the petitioner.
14. That apart, in the earlier rounds of litigation before this Court
as well as the Hon'ble Apex Court, where the dispute about consent
award, the execution of the consent decree and sale proceedings
initiated by the Special Recovery Officer had reached, the legality and
correctness of the consent decree as well as the sale proceedings have
been upheld. Even when Appeal No.736/2005 arising out of Writ
Petition No.2125/2004 came up for hearing on 27.9.2005 before the
Division Bench of this Court, the petitioner had an opportunity to raise
the challenge now being raised by him. On that day, the then learned
counsel appearing for the respondent no.1 by making a statement
brought to the notice of the court that factory premises, the subject
matter of the present petition, were already sold in August-2004 and
that sale proceeds thereof were in excess of the decretal amount. It was
also stated before the court on behalf of the respondent no.1 that after
adjusting the decretal amount, the balance amount of the sale proceeds
was still lying with the respondent no.1 and in spite of repeated requests
made to the petitioner for taking back the balance amount, the
petitioner did not choose to claim it. It was also stated by the then
learned counsel for the respondent no.1 that the petitioner was at liberty
to take away the machinery kept separately by the Bank in a godown.
On that day, the petitioner was personally present and on his
instructions, his learned counsel made a statement before the court that
within a period of six weeks, the machinery belonging to him would be
removed.
15. It is also not in dispute that the petitioner in another Writ
Petition No.5562/2009, gave a categorical undertaking on 8.4.2010 to
the learned Single Judge of this court that he would remove all goods
from the godown or sell them on the spot on or before 26.4.2010. He
also gave an undertaking to the court that he would abide by the order
of Division Bench of this Court passed on 27.9.2005.
16. It could be seen from the above that in all these proceedings
no challenge to the sale which had been completed long back on the
ground that remainder of the balance amount of the purchase price was
not paid within stipulated time by the auction purchasers was not made.
On the contrary, the petitioner's conduct was such as to accept the sale
of the subject property by respondent no.1 which has resulted in settling
finally the rights between the parties.
17. Learned counsel for the petitioner has also submitted that
non compliance with the afore-stated provisions of law has resulted in
substantial injury and, therefore, the sale was null and void. For this
submission, he has placed reliance on the case of Manilal Mohanlal
Shah and others .vs. Sardar Sayed Ahmed Sayed Mahmad and
another, reported in AIR 1954 SC 349.
18. Learned counsel for the respondent no.1, placing reliance on
the case of Jaswantlal Natvarlal Thakkar .vs. Sushilaben Manilal
Dangarwala, reported in 1991 SCC Supp (2)
, submits that the
material irregularities in conduct of sale must also be shown through
evidence to have caused some substantial injury to the petitioner in
order to hold the sale as null and void.
19. There is no dispute about the principle of law that whenever
there is a material irregularity or illegality in conduct of sale and it
causes substantial injury to the borrower, the sale is liable to be set
aside. However, in the instant case, the petitioner has not demonstrated
any substantial injury having been caused to him.
20.
In the result, we find that there is no merit in this petition
and it deserves to be dismissed. The petition stands dismissed.
(S.B. SHUKRE, J.) (NARESH H. PATIL, J.)
A.S. Gulande, PA.
