Partly allowed

The Liquidator, Maratha Market People Co. Operative Bank Ltd., (in Liquidation) v. Sushila Raghunat Khilari Ad Ors.

Bombay HC18 Oct 2011WP/5147/2011

Case brief

AI extract

What is this about?

The High Court quashed an appellate order that set aside a liquidator's recovery demand under the Maharashtra Co-operative Societies Act. The Court held Section 33 applied only to debts of the society, not member debts, and remanded the appeals for a fresh hearing while keeping other contentions open.

What did the court decide?

Impugned judgments and orders were quashed and set aside; appeals restored to the Appellate Authority for a fresh hearing; petitioner to supply documents.

The Liquidator, Maratha Market People Co. Operative Bank Ltd., (in Liquidation) Vs Sushila Raghunat Khilari Ad Ors. — Bombay HC (2011) — LawSathi Research

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rpa IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURSIDICTION

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WRIT PETITION NO.5147 OF 2011 WITH WRIT PETITION NO.5312 OF 2011

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The Liquidator,

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Maratha Market People Co-op. .. Petitioner in Bank Ltd. Both the petitions V/s. Smt. Sushila Raghunath Khilari .. Respondents in & Others Both the petitions

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Mr. V. P. Sawant & Mr. Amit Jamsandekar i/b. Mr. P. M. Jadhav for the petitioner.

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Mr. R. M. Nakhawa i/b. Mr. Vasant Dhawan for respondent Nos.1 to 4.

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Mr. S. D. Rayrikar, AGP for respondent Nos. 5 and 6.

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CORAM : A.S.OKA, J.

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DATE : OCTOBER 18, 2011.

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P.C.:

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Notice of final disposal was already issued by this Court.

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These petitions can be disposed of by a common judgment and order. The facts leading to the filing of the present petitions are identical.

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For the sake of convenience, a reference is made to the facts of the case in Writ Petition No.5147 of 2011. The petition is filed by the Liquidator of a Co-operative Bank. Certain amount was advanced by the Bank to one Raghunath

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Rakhmaji Khilari (since deceased) the proprietor of M/s. K. Raghunath. The case of the petitioner is that the amount was not repaid. The petitioner (Liquidator) exercised power under Section 105 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as “the said Act”). By an order dated 3^rd February, 2007, he directed the first to fourth respondents to pay a sum of Rs.13,73,935/- together with interest at the rate of 15% per annum. Being aggrieved by the said order, the first to fourth respondents preferred an Appeal under Section 152 of the said Act. By the impugned Judgment and order, the Appeal has been allowed. The demand notice as well as notice before attachment and the said order dated 3^rd February, 2007 have been set aside.

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The learned counsel appearing for the petitioner pointed out that the impugned order is based only on Section 33 of the said Act. He submitted that Section 33 is applicable only to the liability of past members and estate of the deceased members for the debts of the Society and the said Section 33 will have no application in the present case. In the present case, the Petitioner is seeking recovery of the amount due and payable to the society. He submitted that the impugned order is perverse. The learned counsel appearing for the first to fourth respondents submitted that apart from

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the submissions based on Section 33, various other contentions on merits were raised in Appeal. He submitted that the amount which was sought to be recovered by the passing order dated 3^rd February, 1997 was already barred by limitation and the power under Section 105 of the said Act could not have been exercised to recover a time barred debt. He submitted that no interference is called for.

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I have given careful consideration to the submissions. Perusal of the impugned order shows that in the earlier part of the impugned Judgment and order, the factual aspects and submissions have been noted. The reasons have been recorded in only one paragraph which reads thus:

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“ I have perused the the Appeal Memo filed by the Appellants. After perusing the documents, I observed that original borrower Mr. Raghunath Rakhamaji Khilari died on 20-08-1987 and proceedings of liquidation started in 14-08-2000. Impugned order was issued on 3-2-2007. According to section 33 of the MCS Act 1960 estate of a deceased member is liable if deceased member died within two years immediately preceding the date of the order of winding up. Here in instant case deceased member died 13 years prior to order of winding up. Secondly impugned order is passed without giving loan documents to the appellants and is devoid of any reasoning. I am satisfied that the impugned order is bad in law and improper.”

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The main reason on which the impugned order is passed is on the ground of the bar created by Section 33 of the

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said Act. The second reason assigned is cryptic. It is merely observed that loan documents are not supplied to first to fourth respondents and the impugned order is devoid of any reasoning. There is no finding recorded as regards the legal requirement of supplying any particular document to first to fourth respondents. If according to the Appellate Authority, the order was cryptic, an order of remand could have been passed. The effect of the impugned order is that the concerned respondents are held as not liable to pay any amount to the petitioner.

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Section 33 of the said Act reads thus:

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“ Liability of past member and estate of deceased member.- (1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member, of a society for the debts of the society as they stood;

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(a) in the case of a past member, on the date on which he ceased to be a member;

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(b) in the case of a deceased member, on the date of his death, shall, continue for a period of two years from such date.

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(2) Where a society is ordered to be wound up under any provisions of this Act, the liability of a past member or of the estate of a deceased member, who ceased to be a member or died, within two years immediately preceding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed, but such liability shall extend only to the debt of the society as they stood on the date of his ceasing to be a member or death, as the case may be.”

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The Section 33 applies to the liability of a past member or the estate of a deceased member of a society for the debts of the society. Even Sub Section 2 applies only to the debts of the society. In the present case, action was taken for recovery of the debt payable by the deceased member to the society. Therefore, on plain reading of Section 33 of the said Act, the same will have no application.

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Perusal of the memorandum of Appeal filed by the first to fourth respondents as well as the submissions recorded in the impugned order shows that there were other points agitated by the first to fourth respondents. Therefore, by setting aside the impugned order, the Appeal will have to be remanded for a fresh hearing.

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Hence, I pass the following order:

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:: O R D E R ::

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i. The impugned Judgments and orders dated 17^th January, 2011 passed by the Divisional Joint Registrar, Co-operative Societies, Mumbai are quashed and set aside and Appeal No.80 and 81 of 2007 are restored to the file of the Appellate Authority.

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ii. The Appellate Authority shall decide the

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Appeals a fresh in accordance with law in the light of observations made in this Judgment.

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iii. All contentions of the appellants except the contention based on Section 33 of the said Act are expressly kept open.

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iv. Appeals shall be decided as expeditiously as possible.

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v. The learned counsel appearing for the petitioner on instructions of the petitioner states that the petitioner shall supply true copies of the relevant documents to the first to fourth respondents including the extracts of the relevant accounts. The statement is accepted.

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vi. Petitions are partly allowed on the above terms

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with no order as to costs.

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(A.S.OKA, J.)

The Liquidator, Maratha Market People Co. Operative Bank Ltd., (in Liquidation) v. Sushila Raghunat Khilari Ad Ors.

Case brief

What is this about?

What did the court decide?

The Liquidator, Maratha Market People Co. Operative Bank Ltd., (in Liquidation) v. Sushila Raghunat Khilari Ad Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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