Bombay High Court
Amrut Annasaheb Dhumal vs The State Of Maharashtra Through Its ... on 20 September, 2024
Author: Mangesh S. Patil
Bench: Mangesh S. Patil
2024:BHC-AUG:22002-DB
1 WP / 14520 / 2023
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 14520 OF 2023
Amrut Annasaheb Dhumal
Age : 59 years, Occu. Agri.,
R/o : At Post Musalwadi, Tq. Rahuri,
Dist. Ahmednagar .. Petitioner
Versus
1] The State of Maharshtra,
Through its Minister
Co-operation and Marketing
Maharashtra State,
Mantralaya, Mumbai - 32.
2] Additional Chief Secretary,
Co-operation & Marketing,
Maharashtra State,
Mantralaya, Mumbai - 32.
3] The Commissioner for Co-operation,
Maharashtra State, Pune
Central Building - 411 001
4] The Commissioner for Sugar,
Maharashtra State,
Sahkar Sankul, Pune
5] The Collector,
Collector Office, Ahmednagar,
Tq. & Dist. Ahmednagar
6] The Regional Jt. Director (Sugar),
2nd Floor, Trilok Chambers,
Lal Taki Road, Ahmednagar
7] The Deputy District Registrar,
Co-operative Society, Ahmednagar,
Tq. & Dist. Ahmednagar
8] The Tehsildar,
Tehsildar Office, Rahuri,
Tq. Rahuri, Dist. Ahmednagar
2 WP / 14520 / 2023
9] The Ahmednagar District Central
Co-operative Bank Ltd., Ahmednagar,
Head Office, Station Road,
Near S.T. Stand, Ahmednagar,
Through its Chairman
10] Dr. Baburao Bapuji Tanpure
Co-operative Sugar Factory Ltd.,
Shrishivajinagar, Tq. Rahuri,
Dist. Ahmednagar
Through its Managing Director .. Respondents
WITH
CIVIL APPLICATION NO. 6789 OF 2024
(Amrut Annasaheb Dhumal V. The State of Maharashtra
Through its Minister & Ors.);
CIVIL APPLICATION NO. 2383 OF 2024
(Namdeo Pandurang Dhokne Patil V. Amrut Annasaheb Dhumal & Ors.)
AND
CIVIL APPLICATION NO. 3271 OF 2024
(Shamrao Shankarrao Nimse Patil Vs. The State of Maharashtra
Through its Minister and others)
...
Advocate for petitioner and applicant in CA/6789/2024 : Mr. Ajeet B. Kale
AGP for the respondent - State : Mrs. P.J. Bharad
Advocate for respondent no. 9 : Mr. R.N. Dhorde, Sr. Advocate
i/b. Mr. V.R. Dhorde
Advocate for respondent no. 10 : Mr. S.S. Thombre
Advocate for the applicant : Mr. A.V. Hon (CA/2383/2024)
None present for the applicant in CA/3271/2024
...
CORAM : MANGESH S. PATIL &
SHAILESH P. BRAHME, JJ.
RESERVED ON : 02 SEPTEMBER 2024
PRONOUNCED ON : 20 SEPTEMBER 2024
JUDGMENT (MANGESH S. PATIL, J.) :
Heard. Rule. It is made returnable forthwith. The AGP
waives service for respondents no. 1 to 8. Mr. Dhorde waives service
3 WP / 14520 / 2023
for respondent no. 9 and Mr. Thombre waives service for respondent
no. 10.
2. The petitioner is coming with following prayers :
"(C) To hold and declare that the action of taking over the possession
of the assets of the respondent no. 10 sugar factory by the
respondent no. 9 is contrary to the provisions of law, illegal and
violative of the provisions of the SARFAESI Act, 2002 and for
that purpose issue necessary writs and orders.
(D) To direct the respondents to hold an inquiry with respect to the
reconstruction of loans obtained by trhe Board of Directors on
their Hamipatra in the year 2016-2021 and illegal handing over
of the assets of the respondent no. 10 sugar factory by the 4
member administrative board by unanimously withdrawing the
suit filed at DRT, Aurangabad, and for that purpose issue writs
or direction.
(E) To hold and declare that the possession obtained by the
respondent no. 9 bank of the assets of the respondent no. 10
sugar factory is illegal direct the respondent no. 9 bank to hand
over the secured assets back to the respondent no. 10 co-
operative sugar factory and for that purpose issue necessary
writs and orders.
(F) To direct the respondent no. 9 to recover the amount of the
reconstructed loans of the respondent no. 10 sugar factory in
view of the Hamipatra submitted by the Board of Directors
against the said loan, from the personal assets of the then
Board of Directors and for that purpose issue necessary writs
and orders.
(G) To direct the respondent no. 6 to conduct an inquiry regarding the
frauds and financial irregularities committed by the last Board of
Directors by appointing one person committee and to recover
the amount from the Board of Directors as a contribution to the
assets of the respondent no. 10 Co-operative sugar factory U/s
156(1)(d) of the Maharashtra Co-operative Socities Act, 1960."
3. Mr. Kale, learned advocate for the petitioner would submit
that respondent no. 10 is a co-operative sugar factory duly registered
as such under the Maharashtra Co-operative Societies Act, 1960 (Act)
and is governed by the provisions of the Act as well as the rules of
4 WP / 14520 / 2023
1961 framed thereunder. He started strenuously arguing as to the
manner in which the board of directors mismanaged the affairs of the
sugar factory, leading it to indebtedness and even its factory and other
assets were required to be attached under section 13(2) and
subsequently taken possession of under section 14 of the The
Securitisation and Reconstruction of Financial Assets and Enforcement
of Securities Interest Act, 2002 (SARFEASI Act) by the respondent
no. 9 - bank. On being pointed out that already the petitioner was
before this Court with exactly the same prayers in writ petition
no. 11354 of 2023 and by the order dated 14-09-2023, he was allowed
to withdraw that writ petition and was allowed to merely pursue the
other remedies available under the Act and to approach the
authorities / state functionaries for redressal of the grievance and
expected these authorities to consider the grievance and to take
appropriate decision on its merits in accordance with law, and raising a
specific query as to how the petitioner would continue with prayer
clauses (C) to (F) (supra), Mr. Kale, on instructions, submitted that the
petitioner would not press for these prayers and would only proceed
with prayer clause (G), whereby he is soliciting appointment of a
committee for enquiring into the fraud and financial irregularities under
section 78 of the Act and soliciting a writ of mandamus against the
respondent no. 6 - the Regional Joint Director (Sugar).
5 WP / 14520 / 2023
4. Mr. Kale would submit that pursuant to the liberty granted
by this Court on 14-09-2023, the petitioner approached the respondent
no. 6 and submitted representation on 20-09-2023 (Exhibit - V), giving
details regarding the rampant misdeeds committed by the then board
of directors right from the year 2015. He would submit that it was also
pointed out as to how the then board of directors, without any right or
authority much less for sufficient reason, withdrew the proceedings
before the Debts Recovery Tribunal (DRT) wherein a challenge was
put up to the auction of the respondent no. 9 - bank and inspite of the
DRT having granted stay to the further auction in a proceeding under
section 13(4) of the SARFAESI Act. It was also pointed out as to how
the then board of directors in a clandestine manner indulged in some
settlement with the respondent no. 9 and managed to hand over the
sugar factor by entering into a settlement contrary to the interest of the
co-operative sugar factory.
5. Mr. Kale would further submit that it was also pointed out
that crushing of sugarcane was undertaken even without obtaining
crushing licence for the year 2021-22, from the respondent no. 4 -
Commissioner of Sugar, and he had imposed penalty of
Rs.16,30,85,000/- because of such illegal action of the board of
directors. Even the respondent no. 8 - Tehsildar, Rahuri, on 08-12-
2021, had expressly reported about the illegal excavation of mines and
6 WP / 14520 / 2023
minerals and had imposed huge fine of Rs.54,81,59,400/-. In spite of
such serious allegations, substantiated by such strong evidence, the
respondent no. 5 failed to exercise the powers under section 78 of the
Act.
6. Mr. Kale would, lastly, submit that in spite of
persuasion, the respondent no. 5 simply refused to exercise the
powers and instead of undertaking an enquiry, has rejected his
application by communications dated 16-10-2023 and 01-11-2023 that
he had no power to question the proceedings being undertaken under
the SARFAESI Act, without even a whisper about the request to
undertake an enquiry under the relevant provisions of the Act.
7. The learned AGP for respondents no. 1 to 8 and
Mr. Thombre for the respondent no. 10 would submit that the
respondent n. 6 is the Regional Joint Director (Sugar) and Sub-
Registrar of the Co-operative Societies. He has been appointed after
the tenure of the board of directors was over and by resorting to
provisions of section 77-A(1) and has been continued as such even for
the subsequent period, by resorting to section 73AAA read with section
157 of the Act. They would submit that since it is a proceeding under
the SARFAESI Act whereby the respondent no. 9 - bank has recovered
possession of the secured assets of the sugar factory, under the
provisions of the SARFAESI Act, the respondent no. 6 has righly
7 WP / 14520 / 2023
refused to undertake any enquiry into the manner in which the then
board of directors allegedly withdrew the suit in the DRT and
surrendered possession to the respondent no. 9 - bank. They would
submit that the petitioner is driven by ulterior motive, having suffered
recovery order under the Act. Without disclosing it, he is seeking to
refer to the provisions of the Act making rampant allegations against
everyone. The fact was conveniently concealed and this Court may not
in exercise of writ jurisdiction issue mandamus at his instance.
8. We have considered the rival submissions and perused
the papers.
9. True it is that the scope of the petition stands considerably
reduced in the light of the petitioner not pressing rest of the prayers
and consequently, one need not, in this proceeding, embark upon any
scrutiny of the allegations being levelled to the extent of the alleged
action of the respondent no. 9 - bank, to take over the secured assets
of the respondent no. 10 - sugar factor under the provisions of the
SARFAESI Act. To this extent, the stand of the respondent no. 6
cannot be taken exception of. He, indeed, cannot be directed to act in
defiance of the provisions of the SARFAESI Act. Even the respondent
no. 9 bank cannot be questioned in respect of the process undertaken
under the provisions of the SARFAESI Act.
8 WP / 14520 / 2023
10. However, simultaneously, one cannot ignore the fact that
the respondent no. 6, being the Regional Joint Director (Sugar) has
power and jurisdiction to undertake enquiry under the relevant
provisions of the Act, if something is reported to him touching the
mismanagement of the respondent no. 10 - sugar factory.
11. Irrespective of the alleged ulterior motive on the part of the
petitioner to put up allegations about mismanagement, the fact remains
that there are indeed certain circumstances raked up by him regarding
illegal excavation of mines and minerals resulting in Tehsildar imposing
fine of Rs.54,81,59,400/- and the respondent no. 3 - Commissioner of
Sugar imposing penalty of Rs.16,30,85,000/- for illegal crushing of
sugar, if the respondent no. 10 - co-operative sugar factor is penalized
to such extent indicating and reflecting on the mismanagement of its
affairs, the respondent no. 6 should have acted. He could not have
simply refused to exercise the powers with a convenient stand of
having no power and jurisdiction to cause interference in a proceeding
happening under the SARFAESI Act. He could have certainly
undertaken enquiry and fixed the responsibility as to how sugarcane
was crushed during the season 2021-2022 without obtaining a licence
and as to how could there be such illegal excavation to the extent
found by the Tehsildar.
9 WP / 14520 / 2023
12. True it is that the respondent no. 10 - sugar factory seems
to have preferred appeal to the State against the order of respondent
no. 3 - Commissioner of Sugar, imposing penalty and there is stay to
the recovery, still, the fact whether the licence was obtained or
otherwise can certainly be looked into by the respondent no. 6, in
exercise of the powers under Chapter VII and VIII of the Act.
13. Obviously, under Article 226 of the Constitution of India this
Court cannot undertake threadbare scrutiny of the allegations but when
prima facie some substance can be made out from the allegations
reported by the petitioner to the respondent no. 6 vide his
communication dated 20-09-2023, pursuant to the directions of this
Court dated 14-09-2023 in writ petition no. 11354 of 2023, the
respondent no. 6 was duty bound to consider the allegations and even
if he was of the opinion that the allegations were not sufficient enough
to exercise that power, he could have expressly stated so. It appears
that, by the communications dated 16-10-2023 and 01-11-2023, he
merely responded to the part of the complaint made by the petitioner,
without expressly dealing with the allegations pertaining to the alleged
illegal crushing of the sugar for the crushing season 2021-22 and illegal
excavation found by the Tehsildar, Rahuri. This is clearly
demonstrative of abdication of duty by a public officer and would be
sufficient to issue a writ of mandamus.
10 WP / 14520 / 2023
14. The writ petition to that extent, therefore, deserves to be
allowed.
15. The writ petition is allowed partly.
16. The respondent no. 6 shall initiate inquiry and shall take
suitable action by examining the petitioner's allegations to the extent of
the alleged mismanagement in respect of illegal crushing undertaken in
the crushing season 2021-22 and the illegal excavation of the mines
and minerals as found by Tehsildar, as expeditiously as possible and in
any case within 16 weeks.
17. Rule is made absolute accordingly.
18. Pending civil applications are disposed of.
[ SHAILESH P. BRAHME ] [ MANGESH S. PATIL ]
JUDGE JUDGE
arp/
