Bombay High Court
Aayan Multi Trade Llp Through Its ... vs Sailabi Ajit Patil And Another on 20 March, 2025
2025:BHC-AUG:8279
(1) wp2746.23
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 2746 OF 2023
Aayan Multi Trade LLP, .. Petitioner
Samsherpur,
Tq. & Dist. Nandurbar,
Through its Authorized Officer,
Shri Padmakar Bhanudas Tapare
VERSUS
1. Sunitabai Madhukar Patil .. Respondents
Age. Major, Occ. Household,
R/o. Nandarkheda, Tal. Shahada,
Dist. Nandurbar.
2. The Pushpadanteshwar Sahakari
Sakhar Karkhana Ltd., Samsherpur,
Tq. & Dist. Nandurbar,
Through its Liquidator.
WITH
CIVIL APPLICATION NO. 12491 OF 2024
WITH WP/12959/2017
AAYAN MULTI TRADE LLP THROUGH ITS AUTHORIZED OFFICER
VERSUS
SAILABI AJIT PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2767 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
VIMALBEN SUDAM PATEL AND ANOTHER
WITH
WRIT PETITION NO. 2784 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
(2) wp2746.23
VERSUS
MADHUKAR LAXMAN PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2749 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
SANGITABAI SANDIP PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2757 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
USHABEN KASHINATH PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2768 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
AARTI PRAMOD PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2751 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
KASHINATH DAGADU PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2750 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
RAMCHANDRA DASHRATH PATIL AND ANOTHER
(3) wp2746.23
WITH
WRIT PETITION NO. 2785 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
SANDIP KASHINATH PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2748 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
SANJITABEN JAYESH PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2753 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
SAMIR KASHINATH PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2754 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
RADHABAI UKHA PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2756 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
VERSUS
SARIKABEN ARVIND PATIL AND ANOTHER
WITH
WRIT PETITION NO. 2783 OF 2023
AAYAN MULTI TRADE LLP SAMSHERPUR THROUGH ITS AUTHORIZED
OFFICER PADMAKAR BHANUDAS TAPARE
(4) wp2746.23
VERSUS
SADHANA SAMIR PATIL AND ANOTHER
Mr.V.D. Sapkal, Sr. Advocate i/b. Mr.Prashant N.Khedkar, Advocate for the
petitioner.
Mr.G.D. Jain, Advocate for respondent No.1.
Mr.K.N. Lokhande, AGP for respondent-State.
CORAM : KISHORE C. SANT, J.
RESERVED ON : 17.02.2025
PRONOUNCED ON : 20.03.2025
JUDGMENT :
-
01. Rule. Rule made returnable forthwith by the consent of the
parties.
02. The petitioner in all these petitions is the same and
respondent No.2 is also same. Facts in all these petitions are similar.
The judgments under challenge are also identical and therefore all these
petitions are taken up together.
03. To understand controversy between the parties, the facts
from Writ Petition No. 2746 of 2023 are discussed, as a representative
petition.
(5) wp2746.23
04. The petitioner is a limited liability partnership firm, who has
purchased a property of respondent No.2 - Sugar Factory. Respondent
No.1 claims to be a depositor who has filed dispute in the Cooperative
Court against respondent No.2 for recovery of deposit amount. In the
dispute, the petitioner and its predecessor were not made party. The
dispute was allowed directing Sugar Factory to pay an amount to the
disputant, with interest thereon @ 20% p.a. The petitioner preferred
appeals to the Cooperative Appellate Court. However, all the appeals
came to be dismissed. The petitioner is, thus, before this Court.
05. It is a case of the petitioner that respondent No.2 - Factory
had raised loan from the Maharashtra State Cooperative Bank [for short
"MCS Bank"] . Since the loan could not be repaid, action was initiated by
the MCS Bank under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 [for short
"Securitisation Act"] for recovery of the dues. Pursuant to said action,
the MCS Bank, took possession of the assets of the factory, including
plant and machinery. The MCS Bank, thereafter, issued sale notice on
30.10.2010, calling for bidders. One Astoria Agro and Allied Industries
Pvt. Ltd. [for short "Astoria"] participated in the bid. The bid of Astoria of
Rs.45.48 crores was finalized. The property of the factory thus became
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property of Astoria. The sale certificate also came to be issued under
Rule 9(6) and 7(2) of the Security Interest (Enforcement) Rules, 2002 for
movable and immovable properties. Said certificate was issued on
30.08.2011. In view of the certificate, the property was handed over
Astoria by following procedure. Even a letter was issued by the Officer of
the factory, showing that the possession is handed over. Later-on, the
present petitioner purchased the property from Astoria on 22.06.2018
and became owner of the factory and its assets.
06. In the meantime, respondent No.1 (depositor) on 16.07.2010
filed a dispute only against the factory in the Cooperative Court, Jalgaon
bearing CC No. 35 of 2010 for recovery of amount along with interest.
The depositor, however, did not make MCS Bank as a party. The fact of
taking over possession and the action under the Securitisation Act also
was suppressed. In written statement by the factory, it is stated that the
property is in possession of MCS Bank since 21.06.2010, pursuant to
action under the Securitisation Act. The Cooperative Court, Jalgaon
allowed claim of the depositors by judgment dated 28.03.2011 and
directed the factory to pay an amount of Rs.1,33,250/- along with
interest @ 21% p.a. to the depositor.
(7) wp2746.23
07. Thereafter, the depositor also filed RD No. 12 of 2013. Same
came to be dismissed by order dated 15.03.2014 with liberty to file fresh
Darkhast by making the liquidator party as by that time the liquidator
was appointed on the bank. Thereafter, the depositor again filed RD No.
23 of 2015 in the Court of CJSD, Nandurbar for recovery of decretal
amount.
08. Learned CJSD, thereafter, issued an attachment order under
Order 21 Rule 54 of the CPC and prohibited the Astoria from transferring
or changing nature of the factory. In the meantime, Astoria received
show cause notice from the Executing Court. It is, thereafter, it came to
the knowledge that the dispute was filed by the depositor and the same
came to be allowed. The Astoria, therefore, filed an appeal in the
Cooperative Appellate Court challenging the judgment and decree passed
in the dispute, mainly on the ground that the MCS Bank was not a party
to the dispute. Since Astoria was not party to the original dispute, it was
required to file application seeking leave to appeal bearing MCA No. 78 of
2016. The learned Judge, Cooperative Court, however by order dated
23.12.2016 dismissed the application. Writ Petition No. 3961 of 2018
was, therefore, filed and the same came to be allowed. The appeal came
to be remanded to the Cooperative Appellate Court by order dated
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15.04.2019.
09. On 22.06.2018, Astoria executed sale-deed in favour of
present petitioner and in that view name of the petitioner was
substituted in the proceeding before the Cooperative Appellate Court. In
the appeal, it is mainly contended that in view of Section 34 of the
Securitisation Act, the Civil Court or any other Court had no jurisdiction.
The decree is, therefore, nullity. The provisions of Securitisation Act
would override other laws. The learned Judge, Cooperative Appellate
Court, however, dismissed the appeal by its judgment and order dated
13.01.2020. So far as execution is concerned, the learned CJSD,
Nandurbar in Darkhast held that execution petition is maintainable by
order dated 29.11.2022. The petitioner is, thus, before this Court,
challenging the judgment and order passed in Appeal No.92 of 2019,
confirming the order of the learned Appellate Court.
10. Learned Sr. Advocate Mr. Sapkal vehemently argued that the
factory failed to repay the amount of loan to the MCS Bank. The MCS
Bank, therefore, initiated recovery proceedings under the Securitisation
Act. After the remedy under the Securitisation Act was resorted to, no
other Court, thereafter, had jurisdiction to entertain a suit. Pursuant to
(9) wp2746.23
the action under the Securitisation Act, even sale certificate came to be
issued. The movable and immovable properties were given in possession
of Astoria. Before initiating action under the the Securitisation Act,
notice was issued on 30.08.2010. Though the dispute is filed on
16.07.2010, the petitioner or the predecessors of the petitioner were not
made party. The factory filed reply on 30.07.2010, wherein it was clearly
stated that the MCS Bank has taken possession of the factory on
21.06.2010 pursuant to action under the Securitisation Act. It was,
therefore, very much necessary for the respondent depositor to add the
MCS Bank and Astoria as parties. It was necessary for the Cooperative
Court to consider this aspect and dismiss the dispute solely on that
ground. However, the dispute came to be allowed by order dated
28.03.2011. Thus, the petitioner was a necessary party. The right of the
petitioner was recognized by this Court in earlier Writ Petition. It was
necessary for the Appellate Court to consider all these aspects and to
allow the appeal. However, it totally failed to apply its mind properly,
though it was pointed out that in view of the provisions of the
Securitisation Act, the Cooperative Court will not get jurisdiction.
11. He submits that the provisions of the Securitisation Act being
Special Act by the Central Government, it would prevail upon the
( 10 ) wp2746.23
Maharashtra Cooperative Societies Act. This basic aspect is not
considered by the learned Cooperative Appellate Court. He, thus prays
for allowing the Writ Petition by quashing and setting aside the
Cooperative Appellate Court's order. On merits, he submits that in view
of Bye-law No.1 of the factory, it could not have raised loan from the
individual parties like depositor. He relied upon provisions of Sections
34, 35 and 37 of the Securitisation Act. He also relies upon judgments in
the case of M/s. Asha Oil Foods Pvt. Ltd. Vs. The Jalgaon Janta
Sahakari Bank Ltd. & Ors., 2004 BCI 516 and Marathwada Gramin
Bank & Ors. Vs. Maharashtra State Co-operative Bank Ltd., 2007
(1) Bom.C.R.819.
12. Learned Advocate Mr. Jain for the original disputant
vehemently opposes the writ petitions. He submits that the respondents
are depositors, who had deposited their money in the factory. However,
they are deprived of the fruits of the judgment by the Cooperative Court,
which is confirmed by the Cooperative Appellate Court. He submits that
the notice of auction was given on 30.10.2010, whereas the dispute was
filed prior to that i.e. on 16.07.2010. The judgment of the Cooperative
Court is dated 28.03.2011, whereas the sale certificate is dated
30.08.2011. The possession is handed over on 30.09.2011. He thus
( 11 ) wp2746.23
submits that the dispute was filed before notice of auction and thus all
the parties are bound by the decree. He prays for rejection of the
petitions.
13. Inspite of service, none appears for the respondent -
liquidator.
14. This Court has to mainly consider the effect of the provisions
of the Securitisation Act and the action that is taken under the said Act.
About the dates and events, there is no dispute. The only dispute is
about - whether dispute was maintainable in absence of making Astoria
as a party?. Secondly, whether the dispute was maintainable in view of
initiation of action under the provisions of the Securitisation Act?
15. Sections 34, 35 and 37 of the Securitisation Act are as
under :-
34. Civil court not to have jurisdiction.--No civil court shall have
jurisdiction to entertain any suit or proceeding in respect of any
matter which a Debts Recovery Tribunal or the Appellate Tribunal
is empowered by or under this Act to determine and no injunction
shall be granted by any court or other authority in respect of any
action taken or to be taken in pursuance of any power conferred
by or under this Act or under the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993 (51 of 1993).
( 12 ) wp2746.23
35. The provisions of this Act to override other laws.--The
provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or any instrument having effect by virtue of any
such law.
37. Application of other laws not barred.--The provisions of this
Act or the rules made thereunder shall be in addition to, and not in
derogation of, the Companies Act, 1956 (1 of 1956), the Securities
Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and
Exchange Board of India Act, 1992 (15 of 1992), the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993 (51 of
1993) or any other law for the time being in force.
16. From reading of the sections, it is clear that once action
under the Securitisation Act is initiated or to be initiated, no Civil Court or
any other Court gets jurisdiction to deal with the properties or other
claims. In the present case, it is clear that notice was issued under the
Securitisation Act by the MCS Bank to the factory. The possession of the
properties was handed over even prior to that on 20.06.2010. The
dispute was filed on 16.07.2010. It was therefore very much necessary
for the depositors to make the MCS Bank, as a party. In the say itself,
the factory had clearly stated that the property is in the possession of the
bank. The bank did not even thereafter contest the dispute. However,
from the say it was clear to the depositors and the Cooperative Court
that the property is not in the possession of the factory and was in
possession of the MCS Bank pursuant to proceedings under the
( 13 ) wp2746.23
Securitisation Act. In view of this it was necessary to add the bank as a
party. During pendency, the bank even sold the property in favour of
Astoria by accepting bid. The property was subsequently purchased by
the petitioner. It was necessary to add at least the MCS Bank and
Astoria as party to the dispute, which was not done.
17. So far as Bye-laws are concerned, this Court need not go into
the aspect as to whether the factory could have raised loan from the
individual depositors. In the judgment in the case of Asha Oil Foods
(supra) the Division Bench of this Court considered the effects of the
provisions of the Securitisation Act. In that case provisions of section
101 of the MCS Act were resorted to for recovery. It was held that in
view of Securitisation proceeding, parties could not have resorted to
section 101 of the MCS Act. In the judgment in the case of
Marathwada Gramin Bank (supra) it was held that being secured
creditor, the MCS bank had issued notice under section 13 (2) of the
Securitisation Act on 16.08.2005. The possession was already taken. It
is, thereafter, the judgment was passed by the Cooperative Court. This
Court held that the provisions of the Securitisation Act being Central Act,
will predominate and will have overriding effect over the provisions of the
MCS Act, 1960. This Court delivered judgment by considering Article
( 14 ) wp2746.23
246(1) of the Constitution. The Court considered various judgments of
the Supreme Court and ultimately held that it was necessary for the
bank, in that case, to resort to the provisions of appeal under section 17
of the Securitisation Act.
18. The main question before this Court is as to whether the MCS
Bank and the Astoria were necessary parties to the disputes. It is seen
that it was clearly brought to the notice of the disputant that the
property was in possession of the bank. At least, thereafter, it was
necessary for the disputant to add the bank as a party. This Court finds
that the judgment of the Cooperative Court was bad for non-joinder of
the parties. The learned Appellate Court also failed to consider the
same.
19. In view of the fact that the action was already initiated and
possession was already handed over pursuant to action under the
Securitisation Act, this Court holds that the dispute was not maintainable
before the Cooperative Court. From the observations of this Court in the
earlier Writ Petition, it is clear that the Court has considered and held
that the petitioner had the right to participate being successor of Astoria,
the Appellate Court, however, has not considered this aspect. It was
( 15 ) wp2746.23
further necessary to see that the MCS Bank had already initiated action
under the Securitisation Act and had taken possession. The material
date is the date on which MCS Bank initiated proceedings under the Act.
20. Thus, considering all the above, this Court has no hesitation
in holding that the learned Member, Cooperative Appellate Court erred in
dismissing the appeals. For the reasons discussed above, the petitions
stand allowed. Hence, following order :-
ORDER
(i) Writ Petition No.12959 of 2017 is allowed in terms of
prayer clause (B-1).
(ii) Rest of the Writ Petitions are allowed in terms of prayer
clause (B).
(iii) Rule made absolute accordingly.
(iv) Pending civil application stands disposed off.
[KISHORE C. SANT, J.]
snk/2025/mar25/wp2746.23
