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The Co- Operative Societies Act, 1912

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Bombay High Court
M/S. Puran Automobiles, ... vs Aurangabad on 18 July, 2012
Bench: S. S. Shinde

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

WRIT PETITION NO. 9393 OF 2011

WITH

CIVIL APPLICATION NO. 15263 OF 2011

AND

CIVIL APPLICATION NO. 381 OF 2011

M/s. Puran Automobiles, Shahagunj

Aurangabad, Through its Partner

Shri Murlidhar s/o Khimandas Rizwani,

Age 62 years, Occ. Business,

R/o. A-5, Shantganga Housing Society,

Dashmesh Nagar,

Aurangabad, District Aurangabad ...Petitioner Versus

1. The State of Maharashtra,

Through its Secretary,

Co-operation and Textile

Department, Mantralaya,

Mumbai.

(Copy to be served on Govt.

Pleader, High court of Bombay,

Bench at Aurangabad)

2. The Divisional Joint registrar,

Co-operation Societies,

Aurangabad Divisional, Aurangabad

3. District Deputy Registrar,

Co-operative Societies, Pune

4. Janta Sahakari Bank Ltd.

Pune, Branch at Aurangabad

Through its Manager,

5. The Special Recovery Officer,

Janta Sahakari Bank Ltd. Pune

Janta Bank Building,

New Gulmandi Road, Dalalwadi,

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Aurangabad

6. M/s. Vardhaman Infrastructure,

(Partnership Firm)

Office at 2-11-18, Ground Floor,

Chintamani, Jubilee Park,

Aurangabad, Through its Partner

Shri Rajkumar s/o Nandilal Kasliwal, ...Respondents .....

Mr. R.T. Nagargoje, advocate for the petitioner Mr. D.R. Korde, AGP for respondent Nos. 1 to 3. Mr. S.V. Natu, advocate for respondent No.4 Mr. S.V. Adwant, advocate for respondent No.6. .....

CORAM : S. S. SHINDE, J.

DATED : 18TH JULY, 2012

JUDGMENT:-

1. Heard.

2. Rule. Rule made returnable forthwith. By consent, heard finally.

3. This writ petition takes exception to the order dated 29.11.2011 passed by the District Deputy Registrar, Co-operative Societies, Pune.

4. The brief facts, as disclosed in the petition, are as under:-

5. The petitioner is a partnership firm. The petition is filed through one of the partners. The petitioner had applied for loan to the respondent Bank. The respondent Bank granted the loan. wp9393.11

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It is the case of the petitioner that on 5.7.2010, the respondent Bank obtained certificate under Section 101 of the Maharashtra Co- operative Societies Act 1960 (hereinafter for the sake of brevity referred to as the "Societies Act") for recovery of the amount. On 9.2.2011, on the basis of the sale certificate, the respondent Bank started recovery proceedings by publishing auction notices. Earlier to that also, on two occasions, notices were published. It it the case of the petitioner that as the said notices have been published arbitrarily and illegally, the revisional authority has quashed and set aside the auction notices with direction to the respondent to follow the provisions of Rule 107 of the Maharashtra Co-operative Societies Rules 1961 (hereinafter for the sake of brevity referred to as the "said Rules"). The matter was remanded back by order dated 9.2.2011 for fresh auction. It is the further case of the petitioner that on 12.2.2011 and on 14.3.2011, the respondent Bank again published auction notices. Alongwith the said auction notices, the terms and conditions of the auction were published. It it the case of the petitioner that such conditions were not followed, as such the petitioner submitted written objections on the ground of non depositing the amount and other grounds as well. The said objections were considered by the Recovery Officer and were rejected. Against that Revision is preferred by the petitioner.

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It is further case of the petitioner that the respondent Bank submitted proposal for confirmation of sale on 28.9.2011 and without hearing the petitioner, on 29.11.2011, the District Deputy Registrar, Co-operative Societies, Pune, who has no power to pass impugned order, confirmed the sale. Hence, this writ petition.

6. Learned counsel appearing for the petitioner invited my attention to the provisions of Rule 107 of the said rules and submitted that under sub Rule 14 of Rule 107, the confirmation of sale is contemplated and permissible only by the Recovery Officer. However, in the present case, the District Deputy Registrar, who has no power to confirm the sale, has passed the order, which assailed in this petition.

7. The learned counsel for the petitioner invited my attention to the judgment of this court in writ petition No. 3511 of 2011, decided on 13.10.2011. Relying on the said judgment, counsel appearing for the petitioner submitted that this court had occasion to interpret the provisions of sub Rule 14 of Rule 107 of the said Rules. Upon interpretation of said Rules, this Court has taken a view that the District Deputy Registrar, Co-operative Societies, has no power to confirm the sale. Therefore, according to the learned counsel, this petition deserves to be allowed.

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8. On the other hand, the learned counsel appearing for respondent No.4 invited my attention to the affidavit in reply filed on behalf of respondent No.4. It is submitted that the District Deputy Registrar has referred to the circular issued by the Government of Maharashtra, in the year 2007 and accordingly in the light of that circular, has confirmed the sale. It is submitted that the definition of Registrar also includes the Deputy Registrar. Therefore, the Deputy Registrar, Co-operative Societies, was empowered to confirm the sale. It is further submitted that on the basis of order passed by the District Deputy Registrar, Recovery Officer has also passed an order on 29.11.2011 thereby confirming the sale. Learned counsel invited my attention to Exh. R-3 at page 111 and submitted that the Recovery Officer has also passed order. It is further submitted that there is no provision to afford hearing to the petitioner at the time of confirming the sale. The scheme of Rule provides that if the aggrieved person has any grievance he can file his objection with the Recovery Officer and the Recovery Officer, within 30 days can either accept those objections or reject the same. It is submitted that the petitioner did file his objection with the Recovery Officer, the Recovery Officer rejected the same, the said issue can be agitated before the Divisional Joint Registrar.

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9. The learned counsel appearing for the respondent No.6, auction purchaser, submitted that entire amount has been deposited with the respondent No.4 bank. In fact, respondent No.6, auction purchaser, has suffered in this entire controversy. Therefore, it is submitted that the Recovery Officer, has confirmed the sale in view of Rule 107 of the said Rules. Learned counsel also invited my attention to the affidavit in reply filed by respondent No.6. Therefore, relying upon the averments made in the affidavit in reply, counsel for respondent No.6 would submit that this petition may be dismissed.

10. Upon hearing counsel for the parties and upon perusal of provisions of sub Rule 14 (3) of Rule 107, it is abundantly clear that the powers are vested in the Recovery Officer to pass the order confirming the sale. Upon careful perusal of sub Rule 14 of Rule 107 of the said Rules, the powers are only with the Recovery Officer. There is no mention of District Deputy Registrar, who can exercise the powers and confirm the sale. At this juncture, the counsel appearing for respondent No.4 invited my attention to the provisions of sub-Rule (h) of Rule 2 and submitted that "Recovery Officer" means any person empowered to exercise in any district, the powers of the Registrar under Section 156. Relying upon that provision, learned counsel for respondent No.4 submitted that even District Deputy Registrar has power to act as Recovery Officer.

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11. It is true that, in appropriate case, the Recovery Officer may be District Deputy Registrar or any other Officer, as contemplated under th said Rule, however, in the facts of this case, respondent No.4 alongwith its affidavit in reply, has annexed a copy of order passed by the Special Recovery Officer. Therefore, in the facts of this case, there Special Recovery Officer is already appointed. There cannot be two Recovery Officers in the same case.

12. At this juncture, it is apposite to reproduce herein below the provisions of sub Rule 14 of Rule 107 of the said Rules, which reads thus:-

"(14) (i) At any time within thirty days from the date of the sale of immovable property, the applicant or any person entitled to share in a rateable distribution of the assets or whose interests are affected by the sale, may apply to the Recovery Officer to set aside the sale on the ground of a material irregularity or mistake or fraud in publishing or conducing it:

Provided that no sale shall be set aside on the ground of irregularity or fraud unless the Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of such irregularity, mistake or fraud. (ii) If the application be allowed, the Recovery shall set aside the sale and may direct a fresh one.

(iii) On the expiration of thirty days from the date of sale, if no application to have the sale set aside is made or if such application has been made and wp9393.11

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rejected, the Recovery Officer shall make an order confirming the sale: Provided that if he shall have reason to believe that the sale ought to be set aside notwithstanding that no such application has been made or on grounds other than those alleged in any application which has been made and rejected, he may, after recording his reasons to writing, set aside the sale.

(iv) Whenever the sale of any immovable property is not so confirmed or is set aside, the deposit or the purchase money, as the case may be, shall be returned to the purchaser.

(v) After the confirmation of any such sale, the Recovery Officer shall grant a certificate of sale bearing his seal and signature to the purchaser, and such certificate shall state the property sold and the name of the purchaser. (Emphasis supplied)

13. Thus, it is clear that the provisions of clause (iii) of sub Rule 14 of Rule 107 of the said Rules, empowers the Recovery Officer to confirm the sale. Clause (v) of sub Rule 14 of Rule 107 of the said Rules provides that after the confirmation of any such sale, the Recovery Officer shall grant a certificate of sale bearing his seal and signature to the purchaser, and such certificate shall state the property sold and the name of the purchaser

14. Apart from the above, this court in writ petition No. 3511 of 2011, decided on 13.10.2011, while interpreting the provisions of sub-Rule 14 of Rule 107, in para 9, held thus:-

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"9. ........... I am afraid, this submission is completely devoid of merit. The Circular, referred to above, issued by the Registrar Cooperative Societies on 19th January, 2005 has no basis in law, it has no legal sanctity in law. As said above, the Recovery Officer was appointed as per the provisions of Rule 2 (h) of the Rules. Once a person is appointed as Recovery Officer, he becomes the representative of the Registrar having all the powers to do whatever is required to be done under the Rules. He wields all the powers given to him by the Rules. So, if clause (v) of sub-rule 14 empowers him to confirm the sale, such power cannot be diluted or diverted by issuing a Circular. Even the Registrar cannot do so. Sub-rule 14 does not require the Recovery Officer to send the proposal for confirmation to either District Deputy Registrar or the Registrar himself. So, by sending Circular, the Registrar could not have limited the powers of the Recovery Officer, lawfully appointed under the provisions of the Act and Rules. So, the procedure adopted by the Recovery Officer in this case for sending the proposal for confirmation to the District Deputy Registrar was unnecessary and had no basis in law. If such step taken by the Recovery Officer was unnecessary, then the order passed pursuant to such unnecessary step has no legal sanctity. The order passed by the District Deputy Registrar confirming the sale is not an order in the eye of law and has no sanctity of law. If such an order was no order in the eye of law, there was no possibility of challenging it before the revisional authority under Section 154 of the Act. In view of this discussion, I hold that the revision filed by respondent No. 4 before respondent No. 2 was not maintainable and the order passed by respondent No. 2 on such revision has no legal sanctity and cannot be upheld. So, wp9393.11

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apparently since there was no order which was capable of being examined before the revisional court, the revisional authority could not have entertained the revision."

15. Therefore, for the reasons aforesaid, in my opinion, the District Deputy Registrar, was not competent to confirm the sale. The writ petition, therefore, deserves to be allowed.

16. In the result, The writ petition is allowed. The impugned order dated 29.11.2011, passed by the District Deputy Registrar, Co- operative Societies, Pune is set aside.

17. Rule is made absolute in the above terms.

18. In view of disposal of writ petition, civil applications Nos. 15263 of 2011 and 381 of 2012 do not survive and the same stand disposed of accordingly.

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