Yogesh Shivrao Deshmukh Parwekar vs Assistant Election Officer And ...
2023 Latest Caselaw 2603 Bom

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               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         NAGPUR BENCH AT NAGPUR

                                  WRIT PETITION NO. 1689/2023

                   Yogesh Shivrao Deshmukh Parwekar
                                    Vs.
 Assistant Election Officer and Assistant Registrar, Co-operative Society,
                            Ghatanji and others

Office Notes, Office Memoranda                          Court's or Judge's orders
of Coram, Appearances, Court's
orders     or    directions and
Registrar's orders

                                  Mr. V.B. Bhise & Mr. K.S. Narwade, Advocate for petitioner
                                  Ms. T.H. Khan, AGP for Respondent / State
                                  Mrs. S.S. Paliwal, Advocate for Respondent No.3

                                  CORAM:        AVINASH G. GHAROTE, J.

DATED : 17th MARCH, 2023

Heard Mr. Narwade, learned counsel for the petitioner, Mr. Paliwal, learned counsel for the respondent and the learned Assistant Government Pleader. The petition challenges the order dated 09/3/2023 (page 42), rejecting nomination paper of the petitioner by the Returning Officer, who is the respondent No.2 on the ground that on the date of nomination i.e. 03/3/2023 the petitioner was a defaulter of the Babaji Date Mahila Sahkari Bank Ltd. Yavatmal (page 42), which order has been confirmed by the respondent No.1 in appeal by the order dated 14/3/2023 (page 69).

2. Mr. Narwade, learned counsel for the petitioner by inviting my attention to the report of 2 906-wp-1689-23.odt

the Babaji Date Mahila Sahkari Bank Ltd. Yavatmal, as was called for by the Returning officer which is dated 8/3/2023 (page 41), submits that considering the language of the report it could not be held that as on the date of filing of the nomination the petitioner was defaulter for the reason that the loan granted to the petitioner was restructured under the OTS scheme by the bank in pursuance to which upon payment of 25% of the total amount, the balance of the OTS was payable in 11 monthly installments which installment was to be paid on 21 st of each month for the subsequent 11 months. In the other account also, which was settled under the OTS, 25% of the amount was paid and balance was to be paid on 9th of each month. It is therefore, contended that on account of OTS the question of the petitioner being defaulter did not arise and therefore nomination of the petitioner could not have been rejected on that ground.

3. Mr. Paliwal, learned counsel for the respondent No.3 vehemently opposes the contention & submits that the restructuring of the loan or settlement of loan under the OTS scheme would not mean that the petitioner is not a defaulter in terms of Section 73(CA)(1)(i) explanation (b) and (d). According to him, once the petitioner has admittedly not paid the installments in both the accounts from 3 906-wp-1689-23.odt

2017 onwards, he became defaulter and the default could only be cured if entire amount stood paid before the date of filing of nomination. Learned counsel relies upon Pundalik Vs. Distrct Deputy Registrar, Co-operative Societies, Chandrapur and others (1991)2 SCC 423 para nos. 10 and 11 and Manchak s/o Shahaji Pawar Vs. State of Maharashtra and others 2011(3) Mh.L.J. 833, paras 27 & 28 in support of his contention.

4. The learned Assistant Government Pleader supports the impugned orders and submits that even if the restructuring of the loan has taken place unless the entire amounts to be paid, the petitioner would continue to be a defaulter.

5. The term 'default' in a normal parlance in the banking sector would mean non-payment of the installments on the due date on which it is payable as per the terms of the grant of loan. No doubt, considering this, the petitioner can be termed as a defaulter, as admittedly he has failed to pay the installments on the due dates as per the terms of the loan. In the present case, however, it is material to note that the two loan accounts of which the petitioner was a defaulter stood settled under the OTS scheme by the Babaji Date Mahila Sahakari Bank Ltd. Yavatmal by the resolution dated 19/1/2023, in respect of the cash credit facility 4 906-wp-1689-23.odt

under the terms of which an amount of Rs.1,07,37,883/- was agreed to be paid by the petitioner to the said Bank, and in terms of the settlement a sum of Rs.4,30,600/- was paid by him on 21/1/2023 and the amount of Rs.25,76,821/- was paid on 21/2/2023, which amounted to 25% of the entire settlement. The balance amount of Rs.81,55,639/- was agreed to be paid in 11 equal monthly installments commencing from 21 st March, 2023. In the 2nd account, the settlement was accepted by the resolution No.5 dated 21/12/2022, by the petitioner agreeing to pay a sum of Rs.62,90,084/- to the said Bank, out of which Rs.2,84,970/- (5%) was paid on 30/12/2022, a further sum of Rs.15,10,279/- was paid on 09/2/2023 and the balance amount of Rs.47,80,031/- was payable in 11 equal monthly installments commencing from 09/3/2023.

6. The effect of a settlement, under the OTS scheme, would naturally mean that the defaults which are committed by the petitioner, prior in time, have been condoned by the Bank and the entire amount has now been agreed to be paid as per the new terms of the settlement. Admittedly, in this case, in terms of the settlement 25% of the amount settled, already stood paid before 03/03/2023. The balance amount, was payable in 11 equal monthly 5 906-wp-1689-23.odt

installment starting from 09/3/2023 in one account and from 21/3/2023 in the other account. The restructuring of the loan, under the OTS scheme would bring about a change in the terms and the conditions, regarding the repayment of the loan which is payable by the petitioner and it is the new terms, which would then bind the petitioner as well as Bank. In sum and substance, it is novation of contract for repayment of the loan arrived at between the petitioner and the Bank.

7. The word default as used in Section 73(CA)(1)(b) & (d) in the payment of any installment of the loan granted, has to be necessarily understood in reference to the context in which it is sought to be construed, which in the present matter, is the branding of the petitioner as a defaulter as on the date of filing of the nomination. This is moreso for the reason that Section 73(CA) contemplates disqualification of the Committee and its member, and is sought to be applied at the stage of taking objection to the nomination of the petitioner during the course of the election.

8. It is the settled position of law that each and every default made by a borrower / member cannot form the basis for branding such member / candidate as a defaulter and the default, has to be in existence as on the date of the filing of the 6 906-wp-1689-23.odt

nomination paper, for the reason that this is a curable defect and can stand cured on the date of the filing of the nomination. Thus, the situation, as existing on the date of filing of the nomination would be crucial for determining whether the candidate is a defaulter.

9. In view of the fact, that even prior to the date of filing of the nomination which was filed on 3/3/23, the OTS scheme has already been approved by the aforesaid Bank and 25% of the total settlement amount already stood paid in both the accounts and balance installments were payable in 11 equal monthly installments which were due and payable, from 09/3/2023 in one account and 21/3/2023 in the other account, it cannot be said that as on the date of filing of the nomination the petitioner was a defaulter. Had the OTS not being approved and acted upon, the situation would have been altogether different.

10 Pundlik (supra) relied upon by Mr. Paliwal, learned counsel for the respondent No.3 considers the position that the appellant therein was in arrears in resepct of the installments on the date of the election and even prior and posterior to the election which is not the case here. In Manchak s/o Shahaji Pawar (supra) also relied upon by him, the question under consideration was whether for 7 906-wp-1689-23.odt

branding a person as a defaulter a requirement of a prior notice of demand of the installment was necessary or not, which was answered in the negative. In my considered opinion, both the judgments do not assist the arguments which were advanced by him.

11. It is therefore apparent that on account of the OTS coming into force between the petitioner and the aforesaid Bank, the terms between them regarding the repayment stood modified and in view of what has been stated above, the petitioner was admittedly not in arrears of the installments as the installments were due and payable under the OTS scheme from 9/3/2023 and 21/3/2023, the nomination paper having been filed on 3/3/2023. This position, has been clearly overlooked by the returning officer as well as appellate authority. In the light of which the impugned orders cannot sustained and are hereby quashed and set aside.

12. The respondent No. 2 is directed to accept the nomination paper of the petitioner.

JUDGE Digitally signed by:MILIND P DESHPANDE MP Deshpande Signing Date:17.03.2023 18:21