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Ms. Vilas Transport Co. Vs. the Divisional Joint Registrar. - Court Judgment

LegalCrystal Citation
CourtMumbai Aurangabad High Court
Decided On
Case NumberWRIT PETITION NO.1657 OF 2011
Judge
AppellantMs. Vilas Transport Co.
RespondentThe Divisional Joint Registrar.
Excerpt:
[s.c. dharmadhikari, j.] it is stated that if the sale proceeds that have been received from sale of all these properties had been properly and duly adjusted and appropriated for recovery of the amounts due under the subject recovery certificates, then, both certificates are satisfied. the respondent bank is claiming future interest on rs.2,68,59,734/- which is contrary to the recovery certificates. the sales have not been questioned. the provisions of rule 107 of the said rules clearly incorporate the detailed procedure for execution of such recovery certificate. if the application be allowed, the recovery officer shall set aside the sale and may direct a fresh one. pertinently, petitioners do not question the sale, proclamation or the sale as such. rule 1 of section 73 of cpc reads.....oral order:- 1] by this petition under article 226 of the constitution of india, the petitioners challenge orders dated 25th june 2010 and 7th june 2011 annexures n and s to the petition, which orders have been made on an application bearing no.2 of 2010. 2] the petitioners are a partnership firm carrying on business as transporters and carriers. the first respondent is a cooperative bank registered under the maharashtra cooperative societies act, 1960 whereas the second and third respondents are the special recovery officer and sales officer, so also the divisional joint registrar, cooperative societies who have passed the orders impugned in this petition. 3] it is the case of the petitioners that they have filed an application bearing no.2 of 2010 for marking the recovery certificate.....
Judgment:

ORAL ORDER:-

1] By this petition under Article 226 of the Constitution of India, the petitioners challenge orders dated 25th June 2010 and 7th June 2011 Annexures N and S to the petition, which orders have been made on an application bearing No.2 of 2010. 2] The petitioners are a partnership firm carrying on business as Transporters and Carriers. The first respondent is a cooperative bank registered under the Maharashtra Cooperative Societies Act, 1960 whereas the second and third respondents are the Special Recovery Officer and Sales Officer, so also the Divisional Joint Registrar, Cooperative Societies who have passed the orders impugned in this petition. 3] It is the case of the petitioners that they have filed an application bearing No.2 of 2010 for marking the Recovery Certificate Nos.101/Sangli/1588 of 2002 and No.101/Sangli/1589 of 2002 both dated 13th September 2002 as satisfied and for refund of excess amount to the extent of Rs.2,80,16,156/-. 4] It is the case of the petitioners before this Court that this application was made because the first respondent bank had granted certain credit facilities to the petitioners. The facilities are referred to and then, it is stated that since the amounts thereunder were not repaid, the first respondent bank applied for issuance of recovery certificate under section 101 of the MCS Act. On their application, on 13th September 2002, the Assistant Registrar concerned, granted recovery certificates, details of which are mentioned in the application which are in the sum of Rs.2,68,59,734/- and Rs.2,25,01,782/- with interest. 5] It is the case of the applicants/ petitioners that they made payments to the credit of its recovery certificates about which there is no denial. It is then stated that in execution of this recovery certificate, the first respondent sold commercial premises at Pohi near Jawaharlal Nehru Port Trust, admeasuring about 10.24 Acres. Alleging that the property has been sold for undervalue and referring to the proclamation of sale dated 19th September 2007, it is alleged that the sale proceeds have been misappropriated, diverted/ adjusted towards dues of other certified debtors. On the sale of this property itself, both the recovery certificates stand fully satisfied in the month of October 2007 and the balance sum of Rs.7,43,28,425/- need to be refunded to the applicants.

6] Without prejudice to the same, an allegation is made that there is another property near JNPT admeasuring 10.50 acres situate at Veshvi. Even that was sold for meager consideration. The allegations of the like nature have been made with regard to the property at Village Dighode, Navi Mumbai. There also it is stated that when the property was sold for Rs.52 lakhs, credit was given only for the sum of Rs.26,01,000/- and the balance is diverted for recovery of some other certificate. 7] Similar are the allegations with regard to the property at Pirkon, Koproli, Near Maha-Mumbai SEZ. Even that property is stated to be sold at under value but besides that its proceeds are not accounted towards the recovery certificates in question. In other words, the proceeds ought to have been appropriated and adjusted for payment under the subject recovery certificates. There is a reference to the sale of office premises situate at 114/B, Bharat Chambers, Baroda Street, Mumbai and there as well the allegations are more or less identical. Similar is the position with regard to sale of two flats at Palm Acres Coop. Housing Society, Mulund (East), Mumbai. It is stated that if the sale proceeds that have been received from sale of all these properties had been properly and duly adjusted and appropriated for recovery of the amounts due under the subject recovery certificates, then, both certificates are satisfied. The allegations in para 4 to 6 of this application read thus: "4. The applicants submit that under the said Recovery certificate, the respondent bank cannot claim interest in excess to the rate prescribed by the RBI from time to time. From year 2002 till date, such rate prescribed by the RBI for the Overdraft facility has been between 10.75% per annum to 12.75% per annum. The Bank cannot charge interest in excess to the rate prescribed by the RBI from time to time and contrary to the said Recovery Certificates. Under the said Recovery Certificates the future interest is to be charged on the principal amounts stated therein at the rate prescribed by the Reserve Bank of India from time to time. The respondent Bank is claiming future interest on Rs.2,68,59,734/- which is contrary to the Recovery Certificates. Recovery Certificate No.1588 of 2002 clearly stipulate that the future interest is to be charged on Rs.1,81,88,631.64 at the rate prescribed by the RBI.

"5. The applicants submit that as on 9th December 2009, Rs.4,96,23,359/- (comprising of Rs. 2,68,59,734/- as principal and Rs.2,27,63,625/- as interest at the rate prescribed by the RBI from 1st January 2002 till 9th December, 2009) is due under Recovery Certificate No.1588 of 2002 and Rs. 4,15,72,042/- (comprising of Rs.2,25,01,782/- as principal and Rs.1,90,70,260/- as interest at the rate prescribed by the RBI from 1st January 2002 till 31st December, 2009) is due under Recovery Certificate No.1589 of 2002. As against total dues of Rs. 9,11,95,402/- the respondent No.1 has recovered Rs. 6,67,12,557/- by way of payments and from realisation of the properties leaving balance of Rs. 2,50,82,844/-. As against the said balance the respondent has not given credit of (i) Rs.25,99,000/- for Dighoda property, (ii) Rs.385 lacs for Pirkone Koproli property, (iii) Rs.50 lacs for office premises at Bharat Chambers, and (iv) Rs.70 lacs for flat No.4 at Mulund all aggregating to Rs.5,30,99,000/-. Thus, the applicants are entitled to and the respondent No.1 is liable to refund Rs.2,80,16,156/- as per particulars of claim supported by the certificates issued by the Chartered Accountant Raj Jain & Associates. The respondent Bank has also not given the credit of the balance payment of Rs.7,43,28,425/- for the Pohi property. The applicants are also entitled to the credit of Rs.70 lakhs received by the respondent Bank from the Guarantor Mr.E.D.Master."

"6. The applicants submit that besides above realisation, the respondent bank has attached and seized commercial property worth Rs.14 Crores at Pune. Despite that the respondent bank is illegally and wrongfully proceeding with the execution of the said Recovery certificate and insisting attachment and sale of various personal properties of the family of the partners of the applicants including the residential flat No.101, Sukhada CHS Limited, Worli, Mumbai. The applicants submit that the conducts of the respondents are illegally and wrongfully harassing the applicants despite the said Recovery Certificates are being fully satisfied. The applicants therefore submit that the said Recovery Certificates be remarked fully satisfied and the respondents be ordered and directed to refund Rs.2,80,16,156/- recovered by them as excess amount under the said Recovery Certificates together with interest at the rate prescribed by the RBI from the date hereof till actual refund. In the facts and circumstances, it is also just and proper and necessary that the further execution proceeding of the said Recovery Certificates of any nature whatsoever be stayed. Irreparable harm loss and injury which cannot be compensated in terms of money will be caused to the applicants, if the interim protection as prayed for are not granted; whereas no such harm or any prejudice will be caused to the respondents inasmuch as they have already recovered the entire certificate amounts and their claim is fully and adequately protected by attachment of various other properties including Pune commercial property worth Rs.14 Crores. Despite that the respondents are illegally and wrongfully proceeding to auction the personal residential premises of family members of the deceased partner of the said firm."

8] On these allegations, the prayers are that the recovery proceedings be transferred to an independent and impartial Special Recovery Officer and pertinently that these recovery certificates be marked as fully satisfied in view of the various payments during execution proceedings as set out in para 5 reproduced above and that sums to the extent of Rs. 2,80,16,156/- as per the Annexure "O" to this application be refunded together with other sums as claimed in prayer (d) and prayer (e) states that further execution proceedings including the sale in respect of the flat at Worli be quashed and set aside. 9] On this application, when notices were issued, the respondent No.1 filed its reply and while raising several pleas with regard to its maintainability and it being barred by res judicata pointed out that there have been no adjustments or appropriation which could be said to be impermissible in law or in terms of the agreement reached between parties. There are common partners and Directors of the firms to which several facilities have been extended and against which recovery proceedings have been initiated and recovery certificates obtained. To their knowledge and wherever there has been a discussion and understanding, with the consent of parties, the sale has been effected. The sales have not been questioned. A detailed chart was annexed to the reply and all contentions were, therefore, specifically denied.

10] Thus, what the recovery officer had before him was this application which was made with its annexures and presented to him as stated on 28th January 2010 and the reply thereto of 6th March 2010.

11] He made an order thereon after hearing both sides and rejected the prayer for marking the recovery certificates satisfied. While considering the said application, he held that the application is nothing but an abuse of process of law and attempt to delay the execution proceedings. It is barred by principle of res judicata and the chart of recovery towards execution of the aforesaid certificates and the statement of account shows the credits given and he is satisfied with the details that there is no diversion or adjustments of any sale proceeds in other loan account or towards other recovery certificates. 12] It is this order which was challenged by the petitioners before the Divisional Joint Registrar, Cooperative Societies, Konkan division by filing Revision Application No.249 of 2010 and he upheld the same by going into various details. By his order dated 7th June 2011, he rejected this revision application and that is how this petition is filed.

13] Mr.Jain learned Counsel appearing for petitioners during his lengthy arguments took me through the record pertaining to the recovery certificates, their issuance, execution thereof, the sales conducted to recover the dues thereunder and the objections thereto. He also took me in details through the application parawise and by pointing out the transactions qua each of the properties which are subject matter of the application. He also tried to point out from the record that the adjustments that have been made are impermissible. It is categorically stated by him that the sale is not challenged. This is not an attempt to challenge the sale. It is also not an attempt to reopen the execution proceedings. This is a simplicitor application seeking to point out to the recovery officer that the proceeds that have been recovered from the sale of immovable properties should be accounted for, truthfully and properly towards the recovery certificates in question. The Recovery Officer was requested to go into all this because it was the allegation of the petitioners that the family manages several business. The family had obtained certain facilities from respondent No.1 bank. Certain members of the family were part of the management of the first respondent bank. To favour them and to set off their recoveries and close their accounts that the amounts received as sale proceeds from sale of petitioners' properties have been diverted and by such process monies have been utilised to wipe of other loan. He submits that these are malafide acts of the Recovery Officer and this is a clear case of collusion with the interested parties from the family and to favour them that this application has been rejected. There is no discussion in the order with regard to the correctness of adjustments and appropriation and, therefore, this Court in its writ jurisdiction should set aside these orders. Upon a pointed query from the Court as to under what provision of law, this application was made, all that Mr.Jain would argue is that the recovery is under a recovery certificate issued by the Assistant Registrar, C.S. Under section 101 of the Maharashtra Cooperative Societies Act, 1960. He invites my attention to section 101 thereof and submits that the certificate has to be executed in terms of section 156 of the Act. He submits that section 156 is titled as "Registrar's Powers to recover certain sums by attachment and sale of properties". He invites my attention also to clauses of sub-section (1) of section 156 and particularly clause (e) thereof and submits that by introduction of this clause by Maharashtra Act 34 of 1963, what the enactment enables is to recover any amount due under a certificate granted under sub-section 1 or 2 of section 101 or sub-section 1 of section 137 together with section 156(1) and (2) with interest, if any, due on such amount or sum and the costs of process by the attachment and sale or by sale without attachment of the property of the person against whom such decree, decision, award or order has been obtained or passed. Inviting my attention to sub-section 2 of section 156, it is contended that the Registrar or the officer empowered by him shall be deemed, when exercising the powers under the foregoing sub-section or when passing any orders on any application made to him for such recovery, to be Civil court for the purposes of Article 136 to the Schedule to the Limitation Act, 1963. In the submission of Mr.Jain, therefore, the recovery officer acted as a civil court. He had the same powers as a civil court had while executing a money decree by attachment and sale of immovable and moveable properties.

14] Then coming to Rule 107 of the Maharashtra Cooperative Societies Rules 1961, Mr.Jain submits that the scheme of the Rules is very clear. The said rules fall under Chapter XII entitled "Miscellaneous". It is setting out the procedure of attachment and once again Rule 107(1)(e) states that the Recovery Officer within whose jurisdiction the debtor resides or the property of the debtor is situated, then, upon the application of the society accompanied by a resolution of the committee of the society authorising any of the members to make and sign the application, recovery can be effected in terms of further sub- rules. Inviting my attention to each of these sub-rules, it is urged by Mr.Jain that the scheme is set out in the sub-rules. Therefore, section 156 and this rule together with sub-rules should be read harmoniously and together. If so read, it is apparent that by virtue of Rule 107 (22), the subject application to mark the certificate satisfied, could have been preferred and in any event that application is traceable to section 73 of Code of Civil Procedure, 1908, which is referred to in sub-rule (22) of Rule 107 of MCS Rules, 1961. For all these reasons according to him, there is no substance in the objection with regard to the maintainability of this application and it was squarely maintainable.

15] On the other hand, Mr.Toor appearing for first respondent Bank urged that the application was totally misconceived and not maintainable. It was an abuse of the process of law. After the sale was concluded way back in the year 2007, pursuant to which proclamation and sale certificates have been issued, amounts adjusted and when it was pointed out that the dues under the recovery certificates are still outstanding and recoverable, that the first respondent proceeded against the immovable property viz., a flat in Sukhada Coop. Society, Worli, Mumbai. That to, stall the sale thereof and further proceedings in execution, such an application is made. That application lacks bonafides completely. In these circumstances, it was not tenable and in any event has been rightly rejected. 16] After having heard learned Advocates at some length, in my opinion, it is not necessary to consider the prayers made in the application, the reliefs sought on that basis and whether the special recovery officer or the Divisional Joint Registrar were in error while passing the impugned orders and rejecting the request of the petitioner applicants' on merits. 17] In my view, the application itself was not maintainable and that was not the remedy of the petitioners at all. My reasons for this conclusion may now be set out.

18] While it is true that a recovery certificate can be executed in terms of section 156 of the MCS Act, section 156 itself is very clear and the same reads thus:-

"156. Registrar's power to recover certain sums by attachment and sale of property:- (1) The Registrar or any officer subordinate to him and empowered by him in this behalf or an officer of such society as may be notified by the State Government, who is empowered by the Registrar in this behalf may, subject to such rules as may be made by the State Government, but without prejudice, to any other mode of recovery provided by or under this Act, recover - (a) any amount due under decree or order of a Civil Court, obtained by a society;

(b) any amount due under a decision or award or order of the Registrar, Cooperative Court or Liquidator or Cooperative Appellate Court; (c) any sum awarded by way of costs under this Act;

(d) any sum ordered to be paid under this Act, as a contribution to the assets of the society; (e) any amount due under a certificate granted by the Registrar, under sub-section (1) or (2) of section 101 or under sub-section (1) of section 137; together with interest, if any, due on such amount or sum and the costs of process, according to the scales of fees laid down by the Registrar, from time to time, by the attachment and sale or by sale without attachment of the property of the person against whom such decree, decision, award or order has been obtained or passed.

(2) The Registrar or the officer empowered by him shall be deemed, when exercising the powers under the foregoing sub-section, or when passing any orders on any application made to him for such recovery to be the Civil Court for the purposes of Article 136 in the Schedule to the Limitation Act, 1963."

19] A perusal of the same would indicate that it is not as if the Registrar or the officer empowered by him can be said to be a civil court for the purpose of the recovery contemplated by section 156 in terms of the recovery certificates issued under section 101 of the MCS Act, 1960. It is for a limited purpose that the Act terms the said officer as a civil court. It is also clear from a perusal of sub-section 2 itself that the same is for Article 136 in the Schedule to the Limitation Act 1963 that he is termed as a civil court. It has also been the position in law that the Recovery Officer cannot be said to be possessing all powers which a executing court possess under order XXI of CPC or in terms of the substantive provisions of CPC. It has been always clarified by this Court as also by Hon'ble Supreme Court that such limited powers would not in any manner make a proceeding for recovery of money akin to a suit. It is held in the case 2007(3) Maharashtra Law Journal (Satguru Construction Co Pvt Ltd vs. Greater Bombay Co-operative Bank Ltd) after referring to the decision reported in 2002 (4) Bombay Cases Reporter (Vithal Yadav Mhase vs. Amdar Balasaheb Thorat Nagari Sahakari Path Sanstha Maryadit through its Administrator) as under:- "8. The provisions of law comprised under section 101(3) clearly provide that a certificate granted by the Registrar under sub-section (1)and (2) shall be final and a conclusive proof of the arrears stated to be due thereunder and the same shall be recoverable according to the law for the time being in force, for the recovery of land revenue. Further section 156(1)(e) specifically provides that the Registrar or any officer subordinate to him and empowered by him in this behalf or an officer of such society as may be notified by the State Government, who is empowered by the Registrar in this behalf may, subject to such rules as may be made by the State Government, but without prejudice, to any other mode of recovery provided by or under the said Act, recover any amount due under a certificate granted by the Registrar under sub- section (1) and (2) of section 101 or under section (1) of section 137, together with interest, any, due on such amount or sum and the costs of process according to the scales of fees laid down by the Registrar from time to time, by the attachment and sale or by sale without attachment of the property of the person against whom such decree, decision, award or order has been obtained or passed. Undisputedly, Rule 107 of the Maharashtra Cooperative Societies Rules, 1961 hereinafter called as "the said Rules" makes elaborate provisions of law for attachment and sale as well as all the other modes for executing a recovery certificate issued under section 101(1) or (2) of the said Act. It is true that section 156 specifies that the proceedings for recovery of any amount due under the recovery certificate shall be without prejudice to any other mode of recovery. However, the proviso thereto clarifies that the other mode spoken of refers to the mode provided by or under the said Act and not under any other Act or statute."

"9. The provisions of law comprised under section 156 of the said Act r/w Rule 107 of the said Rules therefore clearly provide that when any recovery certificate is issued under section 101 of the said Act, the execution or the actual recovery of the amount in terms of such certificate has to be in the manner prescribed under the rules framed by the State Government under the said Act and in fact the Government has framed rules in that regard, and not under any other provision, nor by the authority other than the one specified under the said Act and the said Rules. The provisions of Rule 107 of the said Rules clearly incorporate the detailed procedure for execution of such recovery certificate." 20] Besides this a perusal of the powers that are conferred on a executing court by the CPC and on the Recovery officer under the rules need to be taken into account. In terms of Rule 107, at various stages, the recovery officer is empowered to decide certain objections. He cannot go behind the recovery certificate but while executing the same and recovering the amounts thereunder, he has been conferred with certain powers. These powers are specific and ambit and scope thereof cannot be enlarged by reading into them something which is not specifically stated therein. In other words, such of the provisions of the executing court which are referred to in the sub-rules of 107 alone are conferred on the Sale Officer and by that process, it is not permissible to read the whole of the Code and particularly Order XXI thereof in these rules. That would mean that the entire gamut of the powers or the provisions enabling recovery of amounts under a decree conferred on a civil Court are conferred on the recovery and sale officer. When reliance is placed on Rule 107(14), (17), (19) and (22), then, they need to be reproduced:-

"107(14)(i) At any time within thirty days fromthe date of the sale of immoveable property, the applicant or any person entitled to share in a rateable distribution of the assets or whose interest 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 Officer 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 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 in writing, set aside the sale. (iv) Whenever the sale of any immoveable 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 of the purchaser, and such certificate shall state the property sold and the name of the purchaser."

"101(17) Where the cost and charges incurred in connection with attachment, and sale of moveable property or the attachment and sale or sale without attachment of immoveable property under this rule, exceeds the amount of the cost deposited by the applicant such excess shall be deducted from the sale proceeds of the property sold or the moneys paid by the defaulter, as the case may be, and the balance shall be made available to the applicant" "101(19)(a)Where any claim is preferred to or any objection is made to the attachment of, any property attached under this rule on the ground that such property is not liable to such attachment, the Sale Officer shall investigate the claims or objection and dispose it of on merits;

Provided that, no such investigation shall be made when the Sale Officer considers that the claim or objection is frivolous.

(b) Where the property to which the claim or objection relates has been advertised for sale, the Sale Officer may postpone the sale pending the investigation of the claim or objection. (c) Where a claim or an objection is preferred to the party against whom an order is made may institute suit to establish the right, which he claims to the property in dispute, but, subject to the result of such suit if any, the order shall be final" "101(22) Where assets are held by the Sale Officer and before the receipt of such assets, demand notices in pursuance of applications for execution of decree against the same defaulter have been received from more than one applicant and the applicants have not obtained satisfaction, the assets, after deducting the costs of realisation, shall be rateably distributed by the Sale Officer among all such applicants in the manner provided in section 73 of the Code of Civil Procedure, 1908"

21] A bare perusal of Rule 107(14) would make it clear that at any time within 30 days from the date of sale of immovable property, the applicant meaning thereby a 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. The consequences of such an application, if made and allowed, or dis-allowed are then enumerated in the clauses (i) to (v) of Rule 107(14). As far as Rule 107(15) is concerned, it is clarificatory and clarifies that it shall be lawful for the Sale officer to sell the whole or any portion of the immovable property of a defaulter in discharge of money due. As far as Rule 107(17) is concerned, what is provided therein is that if the cost and charges incurred in connection with attachment and sale of movable property or the attachment and sale or sale without attachment of immovable property exceeds the amount of the cost deposited by the applicant, such excess shall be deducted from the sale proceeds of the property sold or the monies paid by the defaulter, as the case may be, and the balance shall be made available to the applicant. To my mind, this power is distinct in nature and would not enable or permit the applicant/ petitioner in this case to file an application on which the impugned order has been made. As far as Rule 107(18) is concerned, that provides for a receipt in favour of a person making payment towards any money due for recovery of which an application is made. Then comes Rule 107(19), which deals with claim or objection to attachment and the manner in which the same has to be dealt with and Rule 107(22), on which heavy reliance is placed, states that where assets are held by Recovery Officer and before receipt of such assets, demand notices in pursuance of application for execution of a decree against the same defaulter has been received from more than one applicant and the applicants have not obtained satisfaction, the assets, after deducting the costs of realisation, shall be rateably distributed amongst such applicants in the manner provided in section 73 of the CPC. In the first place this provision does not give any right to the present petitioners to make any application of the instant nature. This only enables the Sale Officer to rateably distribute, among all such applicants, the receipt of such assets. In other words, where assets are held by the Sale Officer and before the receipt of the same, demand notices in pursuance of applications for execution of the decree against same defaulter have been received from more than one applicant and the applicants have obtained satisfaction, then, rateable distribution of the assets so as to satisfy the claims against same defaulters but of several applicants can be done. By no stretch of imagination can in exercise of powers conferred by this sub-rule, the special recovery officer, can go into the request of the petitioner - applicant to mark the recovery certificate satisfied. Pertinently, petitioners do not question the sale, proclamation or the sale as such. It is not necessary to find out whether the sale was pursuant to any attachment of immovable properties or without any attachment. It is only after the sale stood concluded and not questioning it but only seeking proper and equal distribution of the proceeds so as to mark the subject recovery certificate satisfied, that the application was made. The allegation is that the sale proceeds have been diverted to enable adjustments in the accounts of other defaulters and that is behind the back or without any consent from the present applicants/ petitioners. The sale proceeds should have been utilised, according to the applicants towards their recovery certificates and not diverted for adjusting the dues or recoveries under some other distinct certificate, may be of the same family and pertaining to the business which are common or entities which are common. This is not permissible, according to the petitioners/ applicants. However, it is not possible to hold that such an enquiry was permissible under Rule 107(22) of the Rules.

22] If reliance is placed on section 73 of the CPC, even then, the intent thereof must be noted. Rule 1 of Section 73 of CPC reads thus:-

"73. Proceeds of execution-sale to be rateably distributed among decree holders:- (1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons:

Provided as follows:-

(a) where any property is sold subject to a mortgage or charge, the mortgagee or incumbrancer shall not be entitled to share in any surplus arising from such sale;

(b) where any property liable to be sold in execution of a decree is subject to a mortgage or charge, the Court may, with the consent of the mortgagee or incumbrancer, order that the property be sold free from the mortgage or charge, giving to the mortgagee or incumbrancer the same interest in the proceeds of the sale as he had in the property sold;

(c) where any immovable property is sold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceeds of sale shall be applied-first, in defraying the expenses of the sale; secondly, in discharging the amount due under the decree; thirdly, in discharging the interest and principal moneys due on subsequent incumbrances (if any); and fourthly, rateably among the holders of decrees for the payment of money against the judgment- debtor, who have, prior to the sale of the property, applied to the Court which passed the decree ordering such sale for execution of such decrees, and have not obtained satisfaction thereof.

(2) Where all or any of the assets liable to be rateably distributed under this section are paid to a person not entitled to receive the same, any person so entitled may sue such person to compel him to refund the assets.

(3) Nothing in this section affects any right of the Government."

23] A bare perusal of the same would indicate that it appears under heading "distribution of assets" and its title is "proceeds of execution - sale to be rateably distributed amongst decree holders." In a very early decision in the case of Bithaldas vs. Nand Kishore (1901) 23 Allahabad 106, it has been held that the object of section 73 is to prevent unnecessary multiplicity of execution proceedings, to obviate, in case where there are many decree holders, each competent to execute his decree by attachment and sale of particular property, the necessity of each and every one separately attaching and separately selling the property. The object is to provide a cheap and expeditious remedy for execution of money decree held against the same judgement debtor by judgement creditors without necessity for separate proceedings. The other object is to secure equitable administration of the property by securing all decree holders by rateably applying the proceeds or the assets by distribution in accordance with the provisions.

24] If such is the object and purpose of the provision which has been referred to in Rule 107(22), on a pointed query by me as to how this is of any assistance to the petitioner applicant, Mr.Jain was unable to show me anything either from this provision or from the Misc. Rules, which would permit the petitioners to make the instant application. All that Mr.Jain would urge is that the recovery officer and the Divisional Joint Registrar who are exercising powers under the MCS Act are performing a public duty. Once they are performing public duty, then, irrespective of whether the application made by the petitioners is maintainable or not, they were entitled to approach a writ court and to set right the wrong and errors of such officers. He, therefore, submits that this is a request under Article 226 of the Constitution to set right the wrong done to the petitioners/ applicants. 25] It is not possible to accept this contention. This Court is not in these matters taking into account any general complaint or grievance against the working of the officials or the authorities under the Act. This Court has been requested by the petitioners to quash and set aside the orders under challenge which have been made on their application. The nature of their application has been noted above. If the petitioners themselves do not have any right of approaching the authorities and making the subject request, then, merely because they are statutory authorities or are performing public duties that each and every act of theirs cannot be corrected by questioning it in writ jurisdiction. This is not a cure all jurisdiction and particularly in this case. In the instant case, the petitioners are proceeded against because they are defaulters. The bank has to recover huge amounts from them. The officers are enabling the bank to recover them by executing certificates, which have gained finality. The execution proceedings have also been concluded. If in the concluded execution proceedings the proceeds from the sale have not been accounted for settlement of dues of the petitioners and they have been diverted allegedly by the special recovery officer to satisfy some other dues of the Bank, then, all such acts that have been committed by them, can be made subject matter of substantive proceeding and monies can be recovered by crystalising the claim for loss and damages. It is not as if the petitioners are remediless. If they apply for reliefs in proceedings which are not maintainable and the request thereunder could not have been taken cognisance of, then, they have to blame themselves. Even if the authorities have proceeded to consider the merits of their objections that by itself would not permit the petitioners to canvass all submissions or raise them insofar as the merits are concerned. Merely because elaborate orders take cognisance of the objections and deal with them on merits does not mean that when the proceedings are not maintainable, this Court is also obliged to go into them. Once I have concluded that the proceedings on which the impugned orders are made are not maintainable in law and the remedy that was chosen by the petitioners was not available to them in law, then, it is not necessary to go into the rival contentions as far as merits are concerned or scrutinise the orders on merits. 26] It must be noted that even if this Court were to go into pleas raised in writ jurisdiction, yet, it must be noted that Mr.Jain had argued extensively that when the claims which were made against the other debtors/ defaulters have also been set off or settled by diversion of the amounts to their account or to enable recoveries of amounts under the recovery certificates issued as against them, then, their presence before the court was necessary. To the chart which is annexed at page 276 of the compilation and to which my attention was invited by Mr.Toor and the correctness of which has not been prima facie questioned, then, it is not the case of not only the petitioners but the presence of other entities, their directors and partners would be necessary for any adjudication in my limited jurisdiction and into factual disputes. Besides, this the Court taking direct cognisance of the request made by the petitioners would entail in scrutiny and enquiry into disputed questions of fact and assuming that there is no dispute as far as facts are concerned but the necessary parties not being before this Court, it would not be proper to accept the contentions of Mr.Jain that in writ jurisdiction, this Court must not go into the contents of the application and the prayers made by the petitioners therein. 27] Finding that the application that was made by the petitioner was itself untenable and not maintainable in law and no orders of the nature that have been sought could have been passed therein, the petition fails and is dismissed. 28] The judgements that have been cited before me by Mr.Jain are of no assistance to him. One of them is reported in 2004(4) Mh.L.J. 1093 (Vasant Jobanpurtra Vs. Bank of India Staff Sampada Co-operative Housing Society Ltd & Ors). There all that the learned Single Judge was considering was the distinction between a proceeding under section 91 of the MCS Act and the nature of the jurisdiction and powers that are conferred on the Registrar or his nominee under section 101 of the MCS Act. True it is that the proceedings are quasi judicial in nature but this Court has clarified that they will retain their summary character. It is not as if a elaborate enquiry has to be conducted and, therefore, if the observations relied upon by Mr.Jain are taken into account, far from supporting the petitioners, they would lend support to the conclusion recorded by me hereinabove.

29] As far as the judgement in the case of Niranjan D. Woody vs. South Indian Coop. Bank Ltd reported in 2006 Law Suit (Bom) 379, there the learned Single Judge of this Court (Dr.D.Y.Chandrachud, J) was dealing with a petition and in which a challenge was raised to the manner in which the property was sold. The observations that have been made and relied upon by Mr.Jain are in the context of the grievance of the petitioner. Therein, the legality of the order dated 12th June 2006 was being considered. There was no compliance with the mandatory requirement of section 107(11)(h) and there was no question, therefore, of relaxing its rigor. The amount, therefore, could not have been deposited after the period prescribed therein. It is in that context the analogy of the rules which enable conducting of sale in execution under the CPC have been taken assistance of. The analogy drawn is limited and, therefore, it is not possible as if the observations will be of any relevance in deciding the instant controversy. The reliance, therefore, on this decision is equally misplaced.

30] In the light of the above and finding that the judgement relied upon of the Single Judge in the case of Mrs.Smita Janak Thacker Vs. Commissioner of Registrar Maddeavarti Karyalaya and others reported in A.I.R. 2002 Bom 58 is also of no assistance, that there is no alternative but to dismiss the petition. 31] The observations in Smita Thacker's case must be seen in the context of the auction sale and that the same has to be conducted in a fair and transparent manner. There cannot be any doubt about this because there has to be fixation of reserve price and the endeavour should be to procure best and highest price. The recovery department and, thereafter, the Joint Registrar has a duty in law that such sales have to be conducted fairly, reasonably and transparently. There is no question of applying this principle because here the sale is not questioned before me. It may have been questioned before the Recovery Officer but the arguments that have been canvassed before me do not touch upon the merits of the application insofar as the conduct of the sale or price obtained therein. The application and the reliefs therein to the extent of marking the recovery certificate satisfied have only been argued before me. Similarly, Mr.Jain fairly conceded that if the application itself was not maintainable, then, the revision application under section 154 before Divisional Joint Registrar was also not tenable. If that is the case, then scrutiny of the Joint Registrar's order is not necessary.

32] The petitioners' reliance on the order passed on 7th march 2008 in an earlier writ petition by me is misplaced. That order dealt with a distinct property and there the objection was to the sale itself. Therefore and since disputed questions of fact were involved that the remedy under Rule 107 and/or Revision under section 154 was held to be efficacious. Here, the sale is concluded and the issue is appropriation and adjustment of the sale proceeds in meeting the dues of the respondent No.1 Bank in respect of several Recovery Certificates. There is allegation of diversion of the proceeds for satisfying the dues of other debtors. That issue cannot be raised under any of the sub-rules of Rule 107 nor under section 154 of the MCS Act, 1960. 33] In the result, the petition fails and it is dismissed. No costs. 


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