Shantaben Natvarlal Mehta vs Madhavpura Mercantile ...
2022 Latest Caselaw 1239 Guj

     C/SCA/10679/2013                                  ORDER DATED: 04/02/2022



            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 10679 of 2013

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             SHANTABEN NATVARLAL MEHTA & 4 other(s)
                           Versus
         MADHAVPURA MERCANTILE CO-OPERATIVE BANK LTD.
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Appearance:
MR VIJAY PATEL FOR HL PATEL ADVOCATES(2034) for the Petitioner(s)
No. 1,2,3,4,5
for the Respondent(s) No. 2
MR NANDISH CHUDGAR FOR MS NIDHI N PRAJAPATI(10572) for the
Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                              Date : 04/02/2022

                               ORAL ORDER

Heard learned advocate Mr.Vijay Patel for H.L.Patel Advocates for the petitioners and learned advocate Mr.Nandish Chudgar for learned advocate Ms.Nidhi N. Prajapati for the respondent No.1 through video conference.

1. By this petition under Article 227 of the Constitution of India, the petitioners have prayed for the following reliefs :

"(A) Be pleased to issue an appropriate writ, order or direction quashing and setting aside the order regarding depositing 25% of total loan amount in bank by order dated 17/04/2013 (Annexure A) while remanding the case passed by Gujarat State Cooperative Tribunal in Appeal No. 1480/03

(B)Pending admission, hearing & final disposal of this petition, This Hon'ble court may be pleased to stay the implementation, execution & operation of the

C/SCA/10679/2013 ORDER DATED: 04/02/2022

impugned order (Annexure A) dated 17/04/13 passed by the Gujarat State Co-operative Tribunal in Appeal No. 1480/03 and the order (Annexure B) dated 01/10/2003 passed by the Hon'ble Board of Nominee in Arbitration (Lavad) Case No.334/2002.

(C) The Hon'ble court may be pleased to pass any other & further relief as may be deemed fit, just and proper in favour of the petitioners."

2.1. The respondent-Madhavpura Mercantile Co.Op. Bank Ltd. which is now under liquidation, represented by the Liquidator, filed a Lavad Suit No.334 of 2002 for recovery of Rs.75,43,389/- from the petitioners towards the outstanding dues of the Bank.

2.2. The Board of Nominees passed the decree without giving any opportunity of cross- examination to the petitioners with regard to the contentions raised in the written statements by the petitioners. The Board of Nominees also passed the award dated 1st October, 2003 without assigning any reason with regard to the issues framed and passed decree, relying upon the deposition of the plaintiff and the documents produced by the plaintiff, by filling in the blanks of the printed form of the award.

2.3. The petitioners therefore, challenged such award by preferring Appeal No.1480 of 2003 before the Gujarat State Co-operative Tribunal, Ahmedabad (for short 'the Tribunal').

2.4. The Tribunal, by order dated 17th April, 2013

C/SCA/10679/2013 ORDER DATED: 04/02/2022

partly allowed the Appeal of the petitioners and quashed and set aside the judgment and award dated 1st October, 2003 passed by the Board of Nominees in Lavad Suit No.334 of 2002 on condition that the petitioners would deposit 25% of the Suit amount within one month with the respondent-Bank and thereafter, giving an opportunity of hearing to the petitioners, the Board of Nominees was directed to dispose of the Lavad Suit within a period of three months as the Suit was of the year 2002.

2.5. The petitioners being aggrieved by the condition to deposit the 25% of the Suit amount have preferred this petition with the aforesaid prayers. This Court by order dated 08.07.2013 by way of interim-relief stayed order imposing condition of deposit of 25% of the suit amount passed by the Tribunal.

2.6. This Court (Coram: Hon'ble Mr.Justice K.M.Thaker as his Lordship was then) passed the following order on 22nd June, 2018 :

"1. The Registry is directed to call for photocopy of entire Record & Proceedings of Appeal No.1480 of 2003 from the Cooperative Tribunal at Ahmedabad and the photocopy of entire Record & Proceedings of Lavad Case No.334 of 2002 (along with Rojkam) from the Board of Nominees at Ahmedabad which should reach this Court on 26.6.2018.

2. It is clarified that the Tribunal and the Board of Nominees shall forward only photocopy of the entire Record & Proceedings including Rojkam, and not the original record so that the proceedings /

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hearing of the case may not be affected or stalled for want of record.

3. The office shall also call for reason as to why the said Lavad Case No.334 of 2002 has not progressed / heard for almost 5 years and the said Lavad Case is not decided on merits after the learned Cooperative Tribunal remanded the case for fresh hearing and fresh decision vide order dated 16.4.2013. The reason for not conducting the proceedings of the said case (despite the fact that this Court has not stayed the proceedings and any interim relief is not granted) for almost 5 years, shall also be called for. The photocopy of the Record & Proceedings and the said explanation should reach this Court on or before 26.6.2018.

S.O. to 27.6.2018."

2.7. It appears that thereafter, this matter was heard on 04.01.2022 and the petitioners were directed to join Liquidator of the respondent- Bank in this proceedings. Accordingly, Civil Application No.1 of 2022 was filed by the petitioners to join the Liquidator of the Madhavpura Mercantile Co.Op. Bank Ltd. as respondent No.2, which was allowed by order dated 17th January, 2022.

2.8. It appears that meanwhile, the petitioners approached the Liquidator with regard to the amount lying in the Fixed Deposit in the name of one M/s.Omkar Finstock Private Limited, where the petitioners are the Directors, with a request to give set-off of the amount lying in the Fixed Deposit of the said Company against the recovery to be made from the petitioners as per the

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outstanding dues of the respondent-Bank.

2.9. The learned advocate for Liquidator of the respondent-Bank has placed on record the letter dated 5th January, 2022 wherein, it is stated that the applicant-Shantaben Mehta does not have any deposit with the Bank in her name. However, deposit of Rs.50,69,929/- lying in the name of M/s.Omkar Finstock Private Limited, where the applicant is one of the Directors in the said Company, is reflected in the books of the account of the respondent-Bank and one of the Directors, Shri Kamlesh Mehta, approached the Liquidator with the Resolution of M/s. Omkar Finstock Ltd. to the effect that the said deposit amount be set-off against the outstanding dues of the petitioner. According to the Liquidator, said application is under examination for final decision by the Competent Authority.

2.10. According to the Liquidator therefore, even after giving the set-off of the amount in the Fixed Deposit of Rs.50,69,929/-, dues payable up to 31.12.2021 including the interest at the simple rate of 19.5% with effect from 31.12.2001 to 31.12.2021, total amount payable by the petitioners would be Rs.3,19,18,827/-.

3.1. Learned advocate Mr.Vijay Patel for the petitioners submitted that if the amount of Fixed Deposit of Rs.50,69,929/- is considered as

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payment towards the condition imposed by the Tribunal being 25% of the suit amount, the Board of Nominees may proceed with the Lavad Suit No.334 of 2002.

3.2. Learned advocate Mr.Patel would submit that the petitioners are having the financial crunch and they are unable to pay the 25% of the suit amount as directed by the Tribunal. It is further submitted that the order of the Tribunal to deposit 25% of the suit amount is stayed by this Court vide order dated 08.07.2013, however, in order to see that accounts are settled by the petitioners, as it is done in the other similar cases availing the benefit of one time settlement, the petitioners are agreeable to set- off Rs.50,69,929/-, amount of Fixed Deposit lying with the respondent-Bank, to be considered as the compliance of the condition imposed by the Tribunal as the amount of the Fixed Deposit is much more than the 25% of the suit amount.

4. As against the above submission, learned advocate Mr.Chudgar appearing for the respondent No.2-Liquidator submitted that the Liquidator has no authority or power to grant set-off or consider the amount of Fixed Deposit of Rs.50,69,929/- towards payment in lieu of the condition imposed by the Tribunal.

5. Considering the fact that this petition is

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pending since 2013 in which this Court has granted the stay against the condition imposed by the Tribunal, it would be in the interest of justice to consider the amount of Rs.50,69,929/- which is admittedly shown as a credit in the accounts of the Bank in name of M/s.Omkar Finstock Private Limited who has given consent by passing a Resolution to consider such amount towards payment by the petitioners for the outstanding dues of the respondent-Bank.

6. Therefore, in such circumstances, the amount of Rs.50,69,929/- is ordered to be considered as fulfillment of the condition imposed by the Tribunal towards payment of 25% of the Suit amount as per the order of the Tribunal dated 17.04.2013 and the Board of Nominees is therefore directed to proceed with the Lavad Suit No.334 of 2002 which is pending for more than 20 years expeditiously on day to day basis and to dispose of the Suit as per the order passed by the Tribunal on or before 31st May, 2022.

7. With the aforesaid directions, the petition is disposed of. Rule is discharged.

(BHARGAV D. KARIA, J) PALAK