Bombay High Court
Ashok Narayan Kakde vs The State Of Maharashtra And ... on 2 March, 2016
Bench: V.K. Jadhav
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 4950 OF 2014
WITH
CIVIL APPLICATION 9128 OF 2014
Ashok S/o Narayan Kakde
Age - 46 years, Occ. Agriculture,
R/o. Vadkha, Taluka and
District Aurangabad. ...Petitioner
versus
1. The State of Maharashtra,
Through the Secretary,
Co-operation and Textile Department,
Maharashtra State, Mantralaya,
Mumbai.
2. The Divisional Joint Registrar,
Co-operative Societies,
Anjuman Banglow, Adalat Road,
Aurangabad.
3. Shaikh Muktar S/o Sk. Chand
Age : 53 years, Occ : Business,
R/o. Karmad, Taluka and District
Aurangabad.
4. Adarsh Mahila Nagari Sahakari Bank Ltd.
A Bank registered under the M.C.S. Act 1960,
having its branch office at 31, Shivjyoti Colony,
N-6, CIDCO, Aurangabad
Through its Manager
Mr. Sunil S/o Ambadas Patil
5. Special Recovery Officer,
Adarsh Mahila Nagari Sahakari Bank Ltd.
having its branch office at 31, Shivjyoti Colony,
N-6, CIDCO, Aurangabad. ... Respondents
.....
Mr. S.G. Dodya, advocate for the petitioner
Mr. N.B. Patil, A.G.P. for respondent Nos. 1 and 2
Mr. S.P. Brahme, advocate for respondent No.3.
Mr. P.K. Lakhotiya, advocate for respondent Nos. 4 and 5
Mr. M.P. Gude, advocate for applicant in C.A. No. 9128 of 2014.
.....
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CORAM : V. K. JADHAV, J.
Date of Reserving
the Judgment : 16.02.2016
Date of pronouncing
the Judgment : 02.03.2016
JUDGMENT :-
1. Rule. Rule returnable forthwith. By consent of parties, heard
finally at admission stage.
2. Being aggrieved by the order dated 9.5.2014, passed by the
Divisional Joint Registrar, Co-operative Societies, Aurangabad in
Revision Application No. 25 of 2013, the petitioner, auction
purchaser, has filed present writ petition.
3. Brief facts, giving rise to the present writ petition are as under:-
(a) On 26.1.2012, a proclamation of sale was published by
respondent No.4-bank calling upon the public at large to submit
tenders regarding sale of two pieces of land in auction. It was also
mentioned that the said sale is in accordance with a compromise
decree passed in R.C.S. No. 453 of 2006 dated 2.1.2007 in terms of
compromise arrived at between respondent No.3-original revision
petitioner and respondent No.4-bank. Respondent No.3-original
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revision petitioner had challenged the said auction notice by filing writ
petition (st.) No. 3651 of 2012 in this Court. However on 9.2.2012,
this Court has dismissed the said writ petition for non compliance of
the order. In the said tender process, the petitioner was declared as
highest bidder and accordingly as per the resolution of respondent
No.4-bank, sale deed of said property came to be executed in favour
of petitioner by respondent No.4-bank through respondent No.5.
Being aggrieved by the same, respondent No.3 had preferred
revision application No. 25 of 2013 alongwith an application for
condonation of delay. Since respondent No.2-Divisional Joint
Registrar, Co-operative Societies, Aurangabad has condoned the
delay, respondent No.4-bank had filed writ petition No. 5385 of 2013
in this Court. The said writ petition was dismissed on the basis of
statement made on behalf of respondent No.3 to the effect that the
revision petitioner has challenged the sale certificate and not auction
notice. While elaborating the said statement, it was submitted that
the sale certificate is dated 6.6.2012 and the revision is filed in the
month of October, 2012 and as such there is no much delay in filing
revision against the sale certificate. The petitioner, earlier, was not
party to the revision petition when the delay was condoned. The
petitioner was made party by respondent No.2-Divisional Joint
Registrar suo-moto, by order dated 1.1.2014. The petitioner
accordingly appeared in the said revision application and filed his
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reply alongwith relevant documents. By order dated 9.5.2014,
respondent No.2 was pleased to allow said revision No. 25 of 2013
by setting aside the sale proceeding as well as sale certificate dated
6.6.2012 executed by respondent Nos. 4 and 5 in favour of the
petitioner. Being aggrieved by the said order passed by respondent
No.2 in Revision No. 25 of 2013, dated 9.5.2014, as aforesaid, the
petitioner has preferred this writ petition.
4.
Learned counsel for the petitioner submits that respondent
No.2 had no jurisdiction to deal with and decide the validity of sale
deed or tender process followed, for that purpose, by respondent
Nos. 4 and 5. Respondent No.2 failed to consider that the revision
application is not within limitation. Respondent No.3 original revision
petitioner had no locus standi to challenge the sale deed executed by
respondent Nos. 4 and 5 in favour of the petitioner.
5. As per the compromise decree executed between respondent
No.3 - original revision petitioner and respondent Nos. 4 and 5, the
land under sale was exclusively vested with respondent No.4 bank
for recovery of its loan amount. Respondent No.3 herein has
unequivocally agreed that he will not challenge sale of said land and
he has no right in respect of said land or in respect of sale or
recovery by sale of said land. Respondent No.3 herein has also
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agreed that the bank shall sale the said land as per their wish and he
will never object to the sale. The sale deed under challenge is
executed by respondent No.4 bank in favour of petitioner as per
compromise decree executed in R.C.S. No.453 of 2006 and
therefore, the sale ought not to have been considered as sale under
the Maharashtra Co-operative Societies Act and Rules framed
thereunder. Respondent No.2 has thus no jurisdiction to decide the
validity of the sale deed.
6. Learned counsel submits that the land under sale is purchased
by the petitioner in auction sale. The petitioner has purchased the
said land for consideration of Rs.65,00,000.00 (Rupees sixty five lacs
only) and respondent Nos. 4 and 5 as per the Resolution passed by
the Board of the Bank, have executed the sale deed in favour of the
petitioner. Respondent No.3 has not challenged the sale proceeding
within 30 days of the sale and thus, the revision is barred by
limitation. Respondent No.2 has condoned the delay prior to
appearance of petitioner in the proceeding. In view of this, the
impugned order is liable to be set aside on the ground of delay.
Learned counsel submits that respondent No.3 sought to condone
the delay on the ground of knowledge of the said publication dated
26.1.2012 on 17.10.2012. Learned counsel submits that the same is
false and baseless as respondent No.3 had filed writ petition (st.) No.
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3651 of 2012 on 4.2.2012 thereby challenging the paper publication
dated 26.1.2012 and the said writ petition is dismissed by this Court.
The said fact itself indicates that respondent No.3 was having
knowledge at the time of proclamation that the property under sale
deed was put for auction. Learned counsel further submits that
respondent No.3 has challenged the sale certificate only and not
auction notice or confirmation of sale.
7.
Learned counsel for the petitioner submits that issuance of
sale certificate or sale deed is ministerial act and no any order is
required for that purpose or it relates back to the date of sale.
Learned counsel submits that the revision under Section 154 of the
Co-operative Societies Act therefore, is not maintainable and
respondent No.2 has no jurisdiction to set aside the sale deed.
Learned counsel submits that revision petitioner has not challenged
the sale on the ground of irregularity or fraud. This is merely on the
basis of allegations that the valuation of property is not proper, the
sale cannot be set aside. Learned counsel submits that the
impugned order is against the principles of natural justice. The
petitioner was not provided proper hearing as respondent No.3-
original revision petitioner had not argued the case after appearance
of the petitioner. Moreover, no prior notice was issued to the
petitioner before condoning the delay. Learned counsel submits that
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the sale deed came to be executed by respondent Nos. 4 and 5 in
view of compromise decree passed in R.C.S. No. 453 of 2006 and
therefore, it is only the Civil Court which has jurisdiction to deal with
the issue of sale effected as per the compromise decree.
Learned counsel for the petitioner, in order to substantiate his
submissions, places reliance on the decisions in the following cases:-
I)
Radhy Shyam vs. Shyam Behari Singh, reported in
1971 SC 2337,
II) Sri Ram Maurya vs. Kailash Nath and others,
reported in AIR 2000 SC 3402,
III) P. Mohanreddy and ors. vs. Debts Recovery
Appellate Tribunal, Mumbai and others, reported in
AIR 2004 Andhra Pradesh 94,
IV) Rajmuni Devi and Ors. vs. Ram Naresh Singh and
Anr, reported in AIR 2011 Patna 30,
V) Order dated 25.04.2014 passed by this Court in
Revision application No. 24 of 2014 in writ petition
No. 9713 of 2013,
VI) Order dated 7.8.2015 passed by the Division Bench
of this Court in Letters Patent Appeal No. 401 of
2011 in writ petition No. 3511 of 2011,
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8. Learned counsel for respondent No.3-original revision
petitioner submits that the Recovery Officer has no power to publish
the auction notice and he has not followed mandatory provisions of
Rule 107 of the Rules 1961. Learned counsel submits that notice
was published on 26.1.2012 and date of auction was kept within 30
days, the same is not permissible. Learned counsel submits that in
terms of compromise decree passed in R.C.S. No. 453 of 2006, it
was agreed between the parties that the procedure as contemplated
under Rule 107 of the Rules of 1961 for auction of sale will be
followed.
9. Learned counsel for respondent No.3 submits that the sale is
complete within 30 days without calling upset price of the property at
the relevant time nor the petitioner has deposited 15% of the amount
of auction of sale of his land. Learned counsel submits that the
respondents illegally completed the sale proceeding and issued sale
certificate. Learned counsel submits that respondent No.2 has thus
rightly quashed and set aside the auction with liberty to the
respondent bank to take further action in tune with the provisions of
Rule 107 of Rules of 1961. Learned counsel submits that in the
present case, upset price was called in the month of October, 2006
and thereafter no upset price is called in the year 2012 when the
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respondent bank decided to sell the property in auction. In the year
2007 one Zuber Amanulla Motiwala has deposited an amount of
Rs.17,00,000/- with the respondent bank for recovery of amount
against respondent No.3.
10. Learned counsel for respondent No.3 submits that before
making publication of auction notice, a demand notice is necessary
to the borrowers stating therein that the amount due against the
borrowers and to deposit it within particular period. Learned counsel
submits that in this case there was no demand notice by respondent
Bank. Learned counsel submits that as per provisions of Rule 107,
minimum 30 days are provided from the date of publication of notice
and the date of actual auction. In this case, notice was published on
26.1.2012 and auction was kept on 4.2.2012. The entire
proceedings are required to be set aside on this count alone.
Learned counsel submits that after deposit of Rs.17,00,000/- by said
Zuber Amanulla Motiwala, the amount due and recoverable against
respondent No.3 was necessary to be published and stated in the
auction notice.
11. Learned counsel for respondent No.3 submits that as per the
provisions of Rule 107, it was necessary to the purchaser to deposit
15% amount of price at the time of sale. Learned counsel submits
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that after completion of auction process by the Sale Officer, the
Recovery Officer has power to confirm the sale. In the present case,
the Recovery Officer has published the notice and completed the
proceedings. Learned counsel submits that the same is not
permissible and the person cannot be a judge for his own cause.
Learned counsel further submits that revisional authority has rightly
considered the illegality committed by respondent authority and non
compliance of Rule 107 (11) (e) and (g).
ig Learned counsel thus
submits that the writ petition is devoid of any merits and the same is
liable to be dismissed with costs.
Learned counsel for respondent No.3, in order to substantiate
his contentions, places reliance on the decisions in following cases:-
I) Smita Janak Thacker vs. Commissioner of Registrar,
Madeavarti Karyalaya & Ors, reported in 2001 (4)
Bom.C.R. 730,
II) Niranjan D. Woody vs. South Indian Co-operative
bank Limited & Ors, reported in 2006 (5) Bom.C.R.
12. Learned A.G.P. appearing for respondent Nos. 1 and 2
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submits that in the compromise effected between the parties, it was
agreed by respondent Nos. 3 to 5 that the property of respondent
No.3 which was attached in terms of recovery certificate, issued
under Section 101 of the Societies Act 1960 and respondent No.5
Special Recovery Officer will sell the property as per the powers
delegated to him. Learned A.G.P. thus submits that it cannot be
therefore, stated that the property was sold by respondent No.4 bank
as per compromise effected between the parties. Learned A.G.P.
submits that respondent No.4 bank has no role to play in the
proceeding of sale of property attached in pursuance to the recovery
certificate and it is only respondent No.5 to conduct the sale in terms
of provisions of Rule 107 of Rules 1961. It was obligatory on the part
of respondent No.5 to sale the property in pursuance to the recovery
certificate issued under section 101 by following the procedure as
laid down under Section 156 and Rule 107 of the M.C.S. Act and
Rules. Learned A.G.P. submits that respondent No.5 has failed to
follow the provisions of Rule 107 of M.C.S. Rules 1961, which is
elaborately discussed in the impugned order. Learned A.G.P.
submits that the order under challenge in revision application is not
the sale deed but is only sale certificate issued under Rule 107 of the
Societies Rules. Respondent No.2 is empowered to verify legality
and propriety of sale certificate. The learned A.G.P. further submits
that though respondent No.3 in compromise decree agreed that he
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will not challenge the sale proceedings of the said property, however,
it was further agreed that respondent No.3 has no objection to the
sale of property in terms of provisions of Rule 107. The learned
A.G.P. submits that respondent No.5 has sold the property pursuant
to the recovery certificate issued under Section 101 without following
due procedure, as provided under Rule 107 of the Societies Rules.
Learned A.G.P. submits that the petitioner has every opportunity to
participate in fresh auction proceedings. The impugned order thus
calls for no interference. There is no merit and substance in the writ
petition and the same is liable to be dismissed.
13. I have also heard the learned counsel appearing for
respondent Nos. 4 and 5.
14. Respondent No.3 herein had instituted R.C.S. No. 453 of 2006
for declaration that the land owned by him bearing Gat No. 249/2
admeasuring 11 R is not liable for attachment and sale at the
instance of defendant Nos. 1 and 2 (respondent Nos. 4 and 5 herein)
and also prayed for injunction restraining them from auctioning and
interfering into peaceful possession in respect of said land.
Undisputedly, respondent No.4 bank had sanctioned loan on
24.4.2004 to the wife of respondent No.3. She has borrowed the
said loan. It is also not disputed that for security of repayment, the
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respondent bank got executed registered mortgage deed by deposit
of title for the property owned by respondent No.3. It is also not
disputed that wife of respondent No.3 made default in making
repayment of loan borrowed by her from respondent bank and
accordingly respondent bank obtained recovery certificate from
competent authority under section 101 (1) of the Societies Act on
20.3.2006 for recovery of loan amount and on the basis of same,
respondent No.5 attached the property as mentioned in the
mortgaged deed executed by respondent No.3 in favour of
respondent bank. Respondent No.3 had pleaded in the said suit that
even though the land bearing Gat No. 249/2 measuring 11 Are,
which was not part and parcel of mortgage deed and a plot which
was mortgaged in favour of Bank of Baroda-defendant No.3 in the
said suit, the respondent No.5 had illegally attached the same.
Respondent No.3 therefore, constrained to institute the suit for the
aforesaid reliefs.
15. It further appears that the said suit came to be disposed of in
terms of compromise arrived at between the parties. As per the terms
of compromise, respondent No.3 (plaintiff in the said suit) has
accepted that the land Gat No. 249/2 measuring 11 Are and 5 Are
with separate boundaries owned and possessed by him came to be
attached by respondent No.5 in pursuance to the recovery certificate
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and the proceedings of alienation of said land are going on.
Respondent No.3 has further agreed that the amount received on
alienation of said property, shall be credited to the loan account and
no dues certificate be issued to him. It is further agreed that the said
property is to be sold entirely except one plot measuring 10x70 ft out
of land Gat No. 249/2. It was further agreed that not only the loan
account of respondent No.4 bank shall be closed by issuing no dues
certificate but the amount outstanding and due of Bank of Baroda
shall also be adjusted from the amount received after alienation of
the property, owned and possessed by respondent No.3 (plaintiff in
the said suit). It was also agreed that the respondent No.3 is ready
to execute the sale deed as per the directions of the respondent bank
and the same would be binding on him. In para 6 of the compromise
petition, it is agreed between the parties that the respondent No.5
Special Recovery Officer shall alienate the land by auction for
reasonable price so as to recover entire amount due and outstanding
against respondent No.3 as per the recovery certificate issued by the
competent authority. In the same para, it has also agreed that due
and outstanding amount of Bank of Baroda will also be satisfied and
also no dues certificate shall be issued to respondent No.3.
Unequivocally, it was further agreed that respondent No.3 herein
would not interfere in the process of alienation of said property.
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16. In the light of the said compromise petition at Exh.33, R.C.S.
No. 453 of 2006 came to be disposed of and accordingly decree was
drawn to that effect.
17. It appears that as per compromise decree between the parties
the said land was exclusively vested with respondent No.4 bank for
recovery of its loan amount. It also appears from the terms of
compromise that respondent No.4 bank shall sale the said land and
respondent No.3 will not object for the same. It further appears from
the documents submitted on record and pointed out by learned
counsel for the petitioner that on 16.11.2006 by referring compromise
effected in said R.C.S. No. 453 of 2006, the respondent bank issued
no dues certificate to respondent No.3.
18. As per the compromise terms, which are acted upon by the
parties, the said land was exclusively vested with respondent Nos. 4
and 5 for recovery of its loan amount. Respondent No.3 also agreed
that he will not challenge the sale of the said land and he has no right
to sale the land. He will never claim any right in respect of sale of the
said land. Respondent Nos. 4 and 5 further agreed in the
compromise terms that the respondent Nos. 4 and 5 shall sale the
said land as per their own will and wish. The said land is purchased
by the present petitioner in an auction sale and respondent Nos. 4
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and 5 invited tender from public to sale the said land. In the said
tender proceedings, the petitioner has been declared as highest
bidder. Accordingly, the petitioner has purchased the said land on
consideration of Rs.65.00 lacs. In view of this, the compliance of
provisions of Maharashtra Co-operative Societies Act and the Rules
framed thereunder is not at all applicable to the sale deed executed
in favour of the petitioner. The order passed by respondent No.2 thus
appears to be without jurisdiction. Apart from other irregularities,
while hearing the said revision, the delay was condoned behind back
of the petitioner and that all arguments of revision petitioner were
already heard prior to causing of appearance by the petitioner in said
revision application.
19. In view of the above, in my considered opinion, respondent
No.3 has no locus standi to file revision application No. 25 of 2013.
Respondent No.3 by filing said revision had challenged the execution
of sale deed bearing registration No. 4135 of 2012 dated 6.6.2012
and correction of the sale deed bearing registration No. 6641 dated
12.9.2012 executed by respondent No.4 in favour of petitioner under
auction sale conducted by calling the tenders. As it appears from the
impugned order that respondent No.2 has set aside the auction sale
on the ground that there was irregularity in the auction, the Divisional
Joint Registrar, Co-operative Societies, Aurangabad in the given
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circumstances had no jurisdiction to declare auction sale invalid in
the revision filed by respondent No.3.
20. It is also a matter of record that the publication of auction
notice was challenged by respondent No.3 herein by filing writ
petitioner (st.) No. 3651 of 2012 on 4.2.2012. Thus, there is no
substance in the contentions raised in the revision by respondent
No.3 herein that he got knowledge of sale publication on 17.10.2012
for the first time. Furthermore, respondent No.3-original revision
petitioner has not challenged the sale on the ground of any fraud or
material irregularities. The sale in question is mostly challenged on
the ground that the valuation of properties is not proper etc. So far
as grounds raised in the revision application and considered by the
respondent No.2, are concerned, the same loose its significance in
terms of compromise arrived at by the parties and the terms further
acted upon by the respondent Bank by issuing no dues certificate in
favour of respondent No.3/original revision petitioner.
21. In view of the above discussion, the impugned order 9.5.2014
passed by respondent No.2 in Revision application No. 25 of 2013 is
not sustainable. Hence, the following order:-
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ORDER
I. The writ petition is hereby allowed.
II. The order dated 9.5.2014, passed by respondent No.2
Divisional Joint Registrar, Co-operative Societies,
Aurangabad in Revision application No. 25 of 2013, is
hereby quashed and set aside.
III. Revision application No. 25 of 2013 is hereby dismissed.
IV. Rule is made absolute in the above terms. In the
circumstances, there shall be no order as to costs.
( V. K. JADHAV, J.)
rlj/
