Bombay High Court
Shri. Pandurang R. Kanade And Anr vs The State Of Maharashtra Through ... on 31 October, 2017
Bench: R.M. Savant
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9663 OF 2014
1. Shri Pandurang R. Kanade )
Age078, Occu. Advocate )
R/at: Kanade Wada, Brahmin Galli, )
Vita, Sangli )
2. Shri Dhananjaya A. Garware )
Age-67, Occu: Agriculturist, )
R/at, Dharmadhikari Building, )
Yashwantnagar, Salshinge Road, )
Vita, Sangli - 415311 ) ..Petitioners
Vs.
1 The State of Maharashtra )
through its Secretary, )
the Department of Co-operation, )
Marketing & Textile )
Having office at Mantralaya, Mumbai )
Maharashtra 400 032 )
2 The Commissioner for Co-operation )
And Registrar, Co-operative Societies, )
Maharashtra State, Pune )
having office at )
2nd floor, New Central Building )
Ambedkar Wellesley Rd, )
Pune, Maharashtra 411001 )
3 The Additional Registrar, )
Co-operative Societies, )
Having office at
nd
2 floor, New Central Building )
Ambedkar Wellesley Rd, )
Pune, Maharashtra 411001 )
4 The Divisional Joint Registrar )
Co-operative Societies, Kolhapur, )
Udyog Bhavan, Near office of )
District Collector, Kolhapur )
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5 The District Deputy Registrar )
Sangli, )
Having its office at VirAcharya )
Babasaheb Buchnure )
Road, Kubera Chambers, Sangli )
6 The Assistant Registrar, )
Co-operative Societies, )
Vita, Tahsil-Khanapur, Sangli )
7 The Official Liquidator, )
The Vita Co-operative Electric )
Supply Society Ltd., Vita )
Having its office at )
Vita, Tal- Khanapur, Dist Sangli )
8 The Vita Urban Co-operative )
Credit Society Ltd. Vita through )
It's Chairman Shri Vaibhav S. Patil )
Age 29 yrs Occu Agriculturist )
R/at Punyayi Niwas Vita, )
Yashwantnagar, Tahsil Khanapur, )
District : Sangli - 415311 )
9 Shri Harshvardhan Patil )
Age Adult, Occu Politician )
R/at (1) At post Bavada, Tal Indapur )
Dist Pune )
And also at )
(2) A-6, Madam Cama Road, )
Opp Mantralaya, Mumbai 400 032 )
10 Shri Sadashivrao Patil )
Age Adult Occu Politician )
R/at Punyayi Niwas Vita, )
Yashwantnagar, Tahsil Khanapur, )
District : Sangli - 415311 )
11 The Maharashtra State Electricity )
Distribution Company Ltd. )
Hongkong Bank Building, M. G. Road, )
Fort, Mumbai 400 001 ) ..Respondents
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Mr. D.S.Patil a/w Mr. Parag Tilak for the Petitioners
Mr. P. K. Dhakephalkar Senior Advocate i/b Mr. N. V. Pawar for the
Respondent No.8
Mrs. R. A. Salunkhe AGP a/w Mr. A. I. Patel Addl G. P. for State
Mr. N. V. Walawalkar Senior Advocate i/b Mr. V. R. Gaikwad for the
Respondent No.7
Mr. Arsha Misra i/b M. V. Kini & Co for the Respondent No.11
Mr. A. J. Kenjale for the Respondent No.9
Mr. Sarthak Diwan i/b Mr. A. M. Kulkarni for the Respondent No.10
CORAM :R. M. SAVANT, &
SARANG V KOTWAL, JJ
DATE : 31st OCTOBER, 2017
ORAL JUDGMENT (PER R. M. SAVANT J.)
1 Rule. Considering the challenge raised, made returnable
forthwith and heard.
2 The Writ Jurisdiction of this Court under Article 226 of the
Constitution of India is invoked for quashing and setting aside the order dated
6-2-2013 passed by the Respondent No.6 i.e. the Assistant Registrar of Co-
operative Societies, Vita, quashing and setting aside the order dated 18-2-2013
passed by the Respondent No.7 i.e. the Official Liquidator appointed on the
Vita Co-operative Electric Supply Co-operative Ltd., Vita and for a declaration
that the Sale Deed dated 22-2-2013 with respect to land bearing Survey
No.558 admeasuring 1405.9 sq.mtrs along with Municipal House No.299
situate at Vita, Taluka Khanapur, District Sangli, executed in favour of the
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Respondent No.8, is illegal and void and to quash and set aside the said Sale
Deed dated 22-2-2013.
3 The facts giving rise to the above Petition in brief can be stated
thus:-
The Petitioners were the members of the co-operative society
known as Co-operative Electric Supply Society Ltd. (for short "the CESS Ltd.").
The said society was registered in the year 1953 and its object was to produce
and supply electricity to the town of Vita, Taluka Khanapur, District Sangli.
The bone of contention in the above Petition is the land bearing CTS No.558
admeasuring 1405.9 sq.mtrs. along with Municipal House No.299 situate at
Vita which property belongs to the said CESS Ltd. It is an undisputed position
that the said property belonging to the said CESS Ltd was purchased partly by
funding from its share capital and partly by taking loan. The residents of the
town Vita can be said to have therefore contributed to the formation of the
said CESS Ltd. The said society had at the relevant time around 600 members.
4 The said CESS Ltd carried out its activities of production and
supply of electricity to the Vita town till the year 1984. However, due to
increase in the manufacturing costs of electricity the CESS Ltd decided to
purchase bulk electricity from Maharashtra State Electricity Board (MSEB for
short) and in turn supply the same to its consumers. On the MSEB taking up
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the supply of electricity to the town of Vita the assets of the said CESS Ltd
along with its staff was transferred to MSEB on 31-3-1984 save and except the
said plot of land. It seems that on account of the fact that the objective for
registering the said CESS Ltd ceased to exist, the Assistant Registrar Co-
operative Societies by order dated 20-2-1997 passed a final order appointing
the Official Liquidator to manage and administer the said CESS Ltd. It seems
that the MSEB filed a Suit being Special Civil Suit No.118 of 1987 in the Court
of the Learned Joint Civil Judge Senior Division, Sangli for recovery of the
amount due from the said CESS Ltd. The said Suit came to be decreed by
judgment and order dated 2-8-2010 by which decree the parties i.e. the MSEB
and CESS Ltd. were directed to settle their respective accounts as per the
Government Notification and directed the State Government to make
compliance of the said settlement within 6 months. It is an undisputed
position that the modality as suggested by the Learned Civil Judge Senior
Division by the decree passed in the Suit has not been complied with till date.
5 The Assistant Registrar Co-operative Societies, Vita i.e. the
Respondent No.6 herein appointed one Shri B. S. Bodare as the Liquidator to
liquidate the assets remaining with the said CESS Ltd. It is after the
appointment of the Official Liquidator Shri Bodare that the facts which are in
contention in the above Petition have unfolded. The Respondent No,8 herein
which is a credit society and which also operates in Vita held a meeting on 27-
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7-2012 and passed a resolution on the said day by which resolution it decided
to acquire the land held by the said CESS Ltd. The Respondent No.8
accordingly vide its letter dated 8-9-2012 made an application to the
Liquidator for purchasing the land belonging to the said CESS Ltd. In the said
application the purpose was mentioned as to construct a commercial
warehouse for its members. It appears that the founder member of the
Respondent No.8 was the local Member of the Legislative Assembly (MLA) Mr.
Sadashivrao H. Patil who addressed a letter dated 18-9-2012 to the then
Hon'ble Minister for Co-operation, Government of Maharashtra and requested
the Hon'ble Minister to look into the matter as regards the request of the
Respondent No.8 to purchase the land belonging to the said CESS Ltd. On the
said letter an endorsement was made by the Hon'ble Minister directing the
Commissioner Co-operation to process the application of the Respondent No.8
expeditiously. It seems that on 20-9-2012 the Additional Registrar Co-
operative Societies, addressed a letter to the Respondent No.5 i.e. District
Deputy Registrar, Sangli and ordered him to scrutinize the application of the
Respondent No.8 as per norms and immediately forward it to the Registrar's
office. The Respondent No.5 District Deputy Registrar immediately on the
next day i.e. 21-9-2012 addressed a letter to the Respondent No.6 Assistant
Registrar of Co-operative Societies, Vita, directing him to obtain a report from
the Respondent No.7 Liquidator and submit the same to his office. It seems
that on 26-9-2012 within a span of 4 days the Respondent No.6 gave a
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detailed reply to the Respondent No.5 and apart from mentioning the
antecedent facts relating to the said CESS Ltd also stated that there were two
applications received for the purchase of land in question one being from the
Respondent No.8 and the other being from one Viraj Co-operative Dairy Ltd.,
Vita. In the said letter, the Assistant Registrar also mentioned that in the
process of liquidation the land belonging to the society in liquidation is
required to be transferred to a society having the same purpose as the society
in liquidation. It seems that thereafter on 1-10-2012 a Mutation Entry
No.3794 came to be effected in respect of the land in question in the name of
the Liquidator. The Respondent No.5 on receipt of the letter of the Assistant
Registrar addressed a letter dated 5-10-2012 to the Commissioner Co-
operation, Government of Maharashtra. It seems that thereafter on 6-12-2012
the Respondent No.5 District Deputy Registrar vide his letter of the said date
requested the Respondent No.2 that it is better if the Respondent No.7 gets the
valuation done of the land of the said CESS Ltd. Thereafter a public notice
came to be issued on 12-12-2012 and 14-12-2012 in terms of Rule 89(4) of
the Maharashtra Co-operative Societies Rule in daily newspaper Lokmat. The
said notice was to the public at large to lodge their claims if any against the
society in liquidation i.e. the CESS Ltd. It seems that on 18-1-2013 the
Respondent No.6 Assistant Registrar vide his letter of the said day to the
Respondent No.7 Liquidator again asked him to process the matter as regards
the sale of the land belonging to the said CESS Ltd. Upon this the Respondent
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No.7 Liquidator vide letter dated 4-2-2013 addressed to the Respondent No.6
stated that he had received the application of the Respondent No.8 and as per
the valuation reports obtained by him the market value of the land is
Rs.1,20,50,000/-. The Liquidator specifically asked for a direction as to
whether the sale of the said land in question is to be done as per Section
105(1)(c) of the Maharashtra Co-operative Societies Act (for short MCS Act)
by public auction or as per market valuation price by private treaty. The
Respondent No.7 by the said letter specifically sought guidance of the
Respondent No.6 as to whether the sale was required to be effected in favour
of the Respondent No.8 society. The Respondent No.6 vide his letter dated 6-
2-2013 in reply to the said letter of the Liquidator dated 4-2-2013 only stated
that the sale has to be carried out as per Section 105 of the MCS Act.
6 The Respondent No.7 Liquidator thereafter by his communication
dated 18-2-2013 sanctioned the sale in favour of the Respondent No.8 society
of the land of the said CESS Ltd for total consideration of Rs.1,20,50,000/-.
Thereafter the Sale Deed was registered in the office of the Sub-Registrar,
Khanapur on 22-2-2013. As indicated above it is the said orders passed by the
Respondent No.6, the Respondent No.7 and the Sale Deed dated 22-2-2013
which are taken exception to by way of the above Petition.
7 At this stage it is required to be noted that the Petitioners herein
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had earlier filed PIL No.226 of 2013 in this Court raising the same challenge as
raised in the instant Petition. A Division Bench of this Court had directed the
Petitioners to deposit an amount of Rs.25 lacs to prove their bonafides. The
Petitioners have accordingly deposited the said sum of Rs.25 lacs in this Court.
The said PIL had thereafter come up before another Division Bench of this
Court (N.H. Patil and B. P. Colabawalla JJ). It seems that having regard to the
nature of the challenge raised as also having regard to the capacity in which
the said Petitioners had filed the said PIL, the Division Bench observed that a
PIL would not lie and the Petitioners would have to file a Writ Petition as they
are espousing a private cause. This is how the instant Petition has been filed
by the Petitioners. The Petitioners are therefore before this court immediately
after the decision to sale the land to the Respondent No.8 was taken and the
Sale Deed executed.
8 In so far as the above Petition is concerned, on behalf of the
Liquidator i.e. the Respondent No.7 an Affidavit in Reply has been filed
wherein the Respondent No.7 has sought to justify the order passed by him as
also the Sale Deed executed in favour of the Respondent No.8. In so far as the
Respondent No.8 is concerned, it has also filed its affidavit and has also sought
to defend the sale which has been executed in its favour.
9 We have heard the Learned Counsel for the parties.
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10 The principal contention of the Learned Counsel for the
Petitioners was that the sale has been made in favour of the Respondent No.8
by private treaty and without holding an auction is in breach and violation of
Section 105 of the MCS Act. It was the submission of the Learned Counsel
that the sale has been effected in favour of the Respondent No.8 on account of
extraneous consideration and in view of the influence exerted by the local
MLA pursuant to which there were directions issued/passed by the then
Hon'ble Minister to process the application of the Respondent No.8 on an
expeditious basis. It was the submission of the Learned Counsel that the sale
effected in favour of the Respondent No.8 is for an amount which is much
below the market price. The Learned Counsel sought to rely upon the
documents which have been annexed to the above Petition especially the letter
dated 13-9-2012 addressed by the local MLA who is the founder of the
Respondent No.8 society on which an endorsement has been made by the then
Hon'ble Minister for Co-operation directing the Commissioner of Co-operation
to process the application of the Respondent No.8 expeditiously to buttress the
said contention. The Learned Counsel would contend that in fact there was no
need for such an urgency as the society in liquidation does not owe any
amount to any person or body and the society is required to be liquidated only
because the purpose of its registration has come to an end on the account of
the fact that the distribution of the electricity has been taken over by the
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Distribution Company namely the MSEDCL. It was the submission of the
Learned Counsel that the manner in which the sale has been completed does
not inspire confidence and reeks of malafides and also is an attempt to cause
wrongful gain to the Respondent No.8.
11 Per contra the Learned Senior Counsel Mr. Dhakephalkar
appearing for the Respondent No.8 would contend that a sale by private treaty
is also one of the modalities contemplated by Section 105(1)(c) of the MCS
Act. It was the submission of the Learned Senior Counsel that the Official
Liquidator had made the sale in favour of the Respondent No8 only after
following the procedure by obtaining valuation reports of as many as three
valuers. The Learned Senior Counsel would submit that much importance
need not be attached to the endorsement made by the then Hon'ble Minister
on the letter dated 18-9-2012 of the founder of the Respondent No.8 i.e. the
local MLA. The Learned Senior Counsel would contend that it is not unknown
that such letters are usually addressed by the persons who are concerned for a
society. The Learned Senior Counsel would contend that since the Sale Deed
has been executed and since the Respondent No.8 is in possession, the same
may not be interfered with by this Court in its Writ Jurisdiction under Article
226 of the Constitution of India.
12 The Learned Senior Counsel Mr. Walawalkar appearing for the
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Respondent No.7, would seek to support his order as also the Sale Deed
executed in favour of the Respondent No.8. The Learned Senior Counsel
would contend that the provisions of Section 105(1)(c) have been complied
with as the Respondent No.7 had addressed a letter to the Assistant Registrar
Co-operative Societies i.e. the Respondent No.6 evincing his guidance in
respect of the sale to be conducted in favour of the Respondent No.8 and it is
only after receiving the said guidance vide letter dated 6-2-2013 that the
Respondent No.7 moved forward and pass an order and carried out the sale in
favour of the Respondent No.8. The Learned Senior Counsel would therefore
contend that no interference is called for in the Writ Jurisdiction of this Court
with the action of the Respondent No.7.
13 Having heard the Learned Counsel for the parties we have given
our anxious consideration to the rival contention. The question that is posed
before us is whether the sale effected in favour of the Respondent No.8 can be
said to meet the requirement of Section 105(1)(c) of the MCS Act. The said
issue can be said to be at the fulcrum in so far as the instant Petition is
concerned. To answer the said issue it would be apposite to refer to the
relevant excerpt of Section 105(1)(c), (c-i) and (c-ii) of the MCS Act, the same
is reproduced hereinunder for the sake of convenience :
(c) to sell immovable and movable property and
actionable claims of the society by public auction
or private contract, with power to transfer the
whole or part thereof to any person or body
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corporate, or sell the same in parcels.
(c-i) to transfer by sale assets valued at market
price to a society registered with similar objects
or to Government undertaking which carries on
the same business as of the society under
liquidation.
(c-ii) to lease to other societies or to Government
undertaking with prior approval of the Registrar,
the property of the society to run the same
business as that of the society under liquidation.
Hence sub Section (1) of Section 105 vest the power in the
Liquidator to carry out actions and things which are mentioned in clause (a) to
(o) of the said sub Section (1). However the said power is circumscribed by
the fact that the Liquidator has to carry out the said things or actions under
the general supervision, control and directions of the Registrar.
In so far as clause (c) is concerned, it confers the power on the
Liquidator to sell the immovable and movable property and actionable claims
of public auction or private contract. However having regard to sub Section
(1) the said power would undoubtedly be circumscribed by the Liquidator
having to carry out the same under the general supervision, control and
direction of the Registrar.
In so far as clause (c-i) is concerned, it provides for transfer by
sale assets valued at market price to a society registered with similar objects or
to a Government undertaking. Hence clause (c-i) postulates that the assets of
the society in liquidation can be transferred by sale to a society registered with
similar objects.
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In so far a clause (c-ii) is concerned, it provides for lease to be
granted to other society or to a Government undertaking with the prior
approval of the Registrar. Hence clause (c-ii) provides for lease to be granted
to other assets or to the Government with the prior approval of the Registrar.
It would also be relevant to refer to Rule 89 of the MCS Rules
1961 which provides for the appointment of the Liquidator, the procedure to
be followed and the powers to be exercised by him and especially sub Rule 14
thereof. The said Rule 89(14) is reproduced for the sake of ready reference:
89. Appointment of Liquidator and the procedure
to be followed and powers to be exercised by him.
89(14)(i) The Liquidator shall not exercise the
powers under clauses (c), (d), (e), (f), (g), (h)
and (k) of Section 105 without the prior approval
of the Registrar.
(ii) An appeal against the order of the
Liquidator under clauses (a), (b), (I), (j), (l), (m)
and (n) of Section 105 shall lie to the Registrar.
A reading of the sub Rule therefore discloses that the Liquidator
shall not exercise powers under clause (c) of Section 105 without the prior
approval of the Registrar.
14 It is in the context of the aforesaid statutory regime that the sale
effected in favour of the Respondent No.8 would have to be looked at. The
contention of the Learned Senior Counsel appearing on behalf of the
Respondent No.8 that the sale carried out in favour of the said Respondent is
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within the ambit of Section 105(1)(c) would be dealt with a bit later.
15 As indicated above the cause for winding up of the said CESS Ltd
was the fact that the purpose of registering the CESS Ltd no more survived as
the production and distribution of electricity was taken over and is being
carried out by the MSEDCL which is an of shoot of the MSEB. It is required to
be noted that the statutory regime applicable requires a particular procedure
to be adopted for liquidating the assets of the society in liquidation. The
provisions of Section 105(1)(c) and clauses (c-i) and (c-ii) have already been
adverted to hereinabove. Notwithstanding the statutory mandate as
comprised in the said provisions, the Respondent No.7 Liquidator entertained
the application filed by the Respondent No.8. The background to entertain the
application was the fact that the Respondent No.8 in its General Body Meeting
dated 27-7-2012 had resolved to purchase the land in question belonging to
the CESS Ltd. In furtherance thereof the founder of the Respondent No.8 i.e.
the Local MLA Mr. Sadashivrao Patil had addressed a letter dated 18-9-2012 to
the then Hon'ble Minister for Co-operation in which letter he had mentioned
the factum of the Respondent No.8 being interested in purchasing the land in
question. The said letter seems to have had its effect in as much as the then
Hon'ble Minister for Co-operation made an endorsement on the said letter
whereby the Commissioner of Co-operation was directed to expedite the
process of consideration of the application of the Respondent No.8. The said
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endorsement as it were had the effect of the wheels of the Co-operation
Department moving fast and in a particular direction. We have already
adverted to the correspondence exchanged between the Additional Registrar
and the Deputy Registrar concerned, the Deputy Registrar and the Assistant
Registrar Vita and the Assistant Registrar and the Official Liquidator Shri
Bodare. The said correspondence and the manner in which it was exchanged
between the parties leave no room for doubt that the whole matter was being
processed in a great hurry so to effect the sale in favour of the Respondent
No.8.
16 Now coming to the contention raised on behalf of the Respondent
No.8 by the Learned Senior Counsel Mr. Dhakhephalkar, it is required to be
noted that the sale in the instant case is by a private treaty. The contention of
the Learned Senior Counsel that the sale by a private treaty can be justified on
the touchstone of Section 105(1)(c) cannot be accepted. As we have already
observed hereinabove that the power to sell by private treaty is circumscribed
by the fact that the same has to be under the directions, supervision and
control of the Registrar. In so far as the said aspect is concerned, it is required
to be noted that the Liquidator has by his letter dated 4-2-2013 has in terms
sought guidance from the Assistant Registrar as to whether the sale could be
effected in favour of the Respondent No.8. In reply to the said letter the
Assistant Registrar has only stated that action as deemed fit may be taken
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under Section 105 by the Official Liquidator. Hence there was no sanction of
approval granted by the Assistant Registrar to the sale being effected in favour
of the Respondent No.8. Whether the sanction of the Assistant Registrar who
is at the lowest rung of the Registrars in the Co-operative Department is
enough, when there is a Deputy Registrar, a Divisional Joint Registrar and an
Additional Registrar, above him is another matter. This is not a case where the
land in question was sought to be sold by public auction and on account of no
response or poor response the modality of sale by private treaty was required
to be adopted. This is also not a case where sale is effected to a society
registered with similar objects at least that is not the case of the Respondent
No.8. In our view therefore the contention of the Learned Senior Counsel
appearing on behalf of the Respondent No.8 that the sale can be justified on
the touchstone of Section 105(1)(c) cannot be accepted and would have to be
rejected.
17 What stares us in the face in the instant case, is the fact that there
seems to be an unseemly and unholy haste in effecting the sale in favour of the
Respondent No.8 without holding a public auction. In the said process the
statutory regime has been thrown to the winds. The sale effected in favour of
the Respondent No.8 cannot therefore be said to be in consonance with
Section 105(1)(c) of the MCS Act. We are constrained to observe that it is
only because of the meddling and the influence exercised by the local MLA
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who is the founder of the Respondent No.8 that the sale has been effected in
favour of the Respondent No.8. In our view such a conduct on the part of the
Liquidator who holds the property in trust till the liquidation process is
complete, cannot be countenanced. The Learned Senior Counsel appearing for
the Respondent No.8 laid much store on the fact that the Liquidator
Respondent No.7 had effected the sale in favour of the Respondent No.8 after
obtaining three valuation reports. In view of the said contention, we deem it
appropriate to deal with the said valuation reports.
In so far as the certificate by the sub-Registrar is concerned, the
value mentioned therein is Rs.4050/- per sq.mtr which is the ready reckoner
rate applicable to the area in which the land in question is situated. It is well
settled by a Judgment of the Division Bench of this Court that the rates
mentioned in the ready reckoner are only for the purpose of payment of stamp
duty and cannot be said to reflect the true market value of the land in
question.
Now coming to the second report, the same is of one S. P. Taywade
Patil. Suffice it would be to state that the valuer has valued the land in
question @ Rs.8000/- per sq.mtr. and the total valuation is Rs.1,17,22,200/-.
Hence there is a quantum rise in the valuation in so far a the second report is
concerned which is of the same contemporaneous time as the certificate issued
by the sub-Registrar.
The third valuation report is of one Shekhar L Thite. The said
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valuer has valued the land at Rs.10,000/- per sq.mtr. and after discounting the
value by 10% for the reasons mentioned in his report, he has arrived at the
total value of the land at Rs.1,16,27,100/-.
18 Hence a reading of the said valuation reports show that there is a
variance between the two valuers who have valued the land in question.
Apart from the fact that the ready reckoner rate mentioned is Rs.4050/- per
sq.mtr., a judicial notice can be taken of the fact that if an auction is held
chances are that the offers received would be more than the valuation done by
the valuers. The valuation made by the valuers can only be a barometer on
the basis of which an auction can be held and an upset or reserve price may be
fixed. The said valuation cannot be taken to be so sacrosanct that a property
has to be alienated on the basis of the said valuation report especially having
regard to the fact that in the instant case the land in question has to be
liquidated for the benefit of the shareholders. In our view, therefore, though
the Liquidator has obtained three valuation reports it would not grant any
credibility or legality to the action of the sale carried out by the Liquidator by
private treaty. The land in question as stated by the Petitioners in the above
Petition is situated in Vita which is a jewellery hub as large number of people
are involved in the manufacture and sale of gold jewellery. It is the case of the
Petitioners that in the vicinity of the land in question there are various
educational institutions and therefore the land in question would fetch a much
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higher price than the amount for which the same has been sold to the
Respondent No.8. The Apex Court has from time to time held that tendering
or public auction is the modality which results in the property in question
fetching the best market price.
19 The upshot of the aforesaid discussion would be that the sale
effected in favour of the Respondent No.8 by the Liquidator by private treaty
cannot be sustained in view of the fact that the sale has been carried out in
breach and violation of Section 105(1)(c) of the MCS Act. Since the Sale Deed
dated 22-2-2013 is a result of the orders passed by the Respondent No.6 and
the Respondent No.7, resultantly the Sale Deed dated 22-2-2013 would also
have to be set aside. The Petition is accordingly allowed and the following
directions are issued:
(i) The communication / order dated 6-2-2013 issued by the Respondent
No.6, the communication / order dated 18-2-2013 passed by the Respondent
No.7 Official Liquidator Exhibit O, would stand quashed and and set aside.
(ii) The Sale Deed dated 22-2-2013 for the reasons aforestated is declared
as illegal and void. The same would resultantly also stand set aside.
(iii) The Respondent No.7 is directed to hold a public auction by following
mmj 20 of 21
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the mandate of Section 105(1)(c) of the MCS Act. The same to be done
within 8 weeks from date.
(iv) The Respondent No.8 would be entitled to the refund of the amount of
Rs.1,20,50,000/- from the Official Liquidator with accrued interest if any. If
the Respondent No.8 does not claim the said amount, the same would be at its
own peril and the authorities would not be liable for payment of any interest.
(v) The amount of Rs.25 lacs deposited by the Petitioners in this Court
would be refunded to the Petitioners on an application made in that behalf
with accrued interest if any.
20 Rule is made absolute in the aforesaid terms with parties to bear
their respective costs of the Petition.
21 At this stage, the Learned Counsel appearing for the Respondent
No.8 seeks stay of the instant order. In view of the fact that we have granted 8
weeks time to the Official Liquidator to carry out the direction as contained in
the instant order, the need for granting stay is obviated.
[SARANG V KOTWAL, J] [R.M.SAVANT, J]
mmj 21 of 21
