Dismissed

Shri. Narsinha Ganpatrao Nikam v. the State of Maharashtra, through Principal Secretary, Co-Operation and Textile Dept and Ors.

Bombay HC10 Jun 2014WP/7966/2012

Case brief

AI extract

What is this about?

This writ petition challenged the sale of cooperative society property to repay a bank loan following a notice u/s 13(2) of the SEBI Act. The Court dismissed the petition, holding that the sale was bona fide, consideration was received, and sale deed executed, negating need for interference.

What did the court decide?

Petition dismissed; no interference warranted in the sale transaction.

Shri. Narsinha Ganpatrao Nikam Vs the State… — Pension and Retirement Benefits | Bombay HC (2014)

¶1

¶2

WP7966.12

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

¶4

APPELLATE SIDE

¶5

CIVIL WRIT PETITION NO. 7966 OF 2012

¶6

Narsinha Ganpatrao Nikam

¶7

.. Petitioner

¶8

Versus

¶9

The State of Maharashtra & Ors.

¶10

.. Respondents

¶11

Mr. S. S. Patwardhan i/b P. G. Chavan, Advocate for the petitioner Mr. S. N. Patil, AGP for R. Nos. 1 to 3 Ms. Varsha Palav, Advocate for R. No. 5. Mr. T. S. Ingale, Advocate for R. No. 6.

¶12

CORAM:-NARESH H. PATIL & RAVINDRA V. GHUGE, JJ. DATED : -10/06/2014

¶13

P.C.

¶14

Heard.

¶15

2 The petitioner questioned the sale transaction of

¶16

the property bearing Gat No. 14/1-A and Gat No. 5/2, admeasuring 8 hectares and 59 ares situated at Phaltan, Taluka Phaltan, District Satara. It is an admitted position that the respondent No. 4 – The Maharashtra State Co-operative Bank

1/10

WP7966.12

had issued a notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “The Securitisation Act”) against respondent No. 5 on 5^th July, 2012. The respondent No. 5 – Shriram Sahakari Sakhar Karkhana Ltd. had obtained huge amount of loan and the outstanding amount till the date of issuance of notice by respondent No. 4 was about 26.30 Crores. 3 Respondent No. 5 - Karkhana in the meeting of the Board of Directors decided to sell part of the immovable property, but before taking this decision, a meeting of the special general body was called. In the said meeting it was decided that, to repay the loan of respondent No. 4 Apex Bank part of the immovable property of respondent No. 5 - karkhana would be sold.

¶21

4 An application was made to Commissioner of Sugar, Pune, seeking permission to sell the immovable property. By an order dated 25/7/2012, the Commissioner of

2/10

WP7966.12

Sugar, Pune, permitted respondent No. 5 – Karkhana to sell the immovable property admeasuring 8 hectres 59 ares which was owned and possessed by respondent No. 5 – karkhana. Thereafter a notice was issued on 9/8/2012 for auction of the said property. On 21/8/2012 auction took place. Respondent No. 7 was the successful bidder who had submitted bid for Rs.30.40 Crores. The karkhana had accepted the offer/bid of the respondent No. 7. On the day of the acceptance of the bid, an amount of Rs.5 Crores was deposited by respondent No. 7 and the remaining amount was to be deposited by 31/8/2012. It is a matter of record that the remaining amount could not be deposited by respondent No. 7 in time. Time to time respondent No. 7 was granted extension by the Karkhana and the respondent No. 5 deposited the amount in part and in installments.

¶26

5 The learned counsel for the petitioner submitted that the Commissioner of Sugar, Pune, committed error in

3/10

WP7966.12

granting permission for sale of the immovable property by Respondent No. 5 - karkhana. The 2nd objection was that in view of Deed of Partnership executed between respondent No. 5 and respondent No. 6, it was responsibility of respondent No. 6 to repay the loan amount of the Apex bank. Respondent No. 6 failed to discharge its obligation. The learned counsel submitted that respondent No. 5 - karkhana had unnecessarily resorted to sell the immovable property owned by the karkhana and caused huge financial loss to the karkhana. Reliance was placed by the learned counsel on the judgment, in the case of

¶31

Shilpa Shares and Securities and others v. National Cooperative Bank Ltd. and & others, 2007 (4) Mh. L.J. 184 . The counsel made reference to Section 45 of the Maharashtra Co-operative Societies Act and Rule 47 of the Maharashtra Cooperative Societies Rules.

¶32

6 The learned counsel appearing for respondent No.

¶33

5 - karkhana submitted that under the provisions of The

4/10

WP7966.12

Maharashtra Co-operative Societies Act, 1961 and the Rules framed thereunder, there is no obligation on respondent No. 5 - karkhana to seek prior permission from the Commissioner of Sugar, Pune, for selling the immovable property. The Karkhana had received a notice under the Securitisation Act and in the best interest of Karkhana the decision was taken in the Special General Body meeting to sell part of immovable property owned by Karkhana. The learned counsel submitted that though there was delay in repayment of the amount by the successful bidder i.e. respondent No. 7, but on that ground the entire proceedings of the sale cannot be quashed at the behest of a member of Karkhana. The learned counsel submitted that petitioner being member of karkhana did not raise any objection in the Special General Body Meeting. Neither the petitioner resorted to alternative efficacious remedy for redressal of his grievance. The learned counsel submitted that there is no case made out to enter into the factual statements

5/10

WP7966.12

made at the behest of the petitioner. As the transaction of sale and purchase is complete, the consideration amount towards sale of the subject immovable property has been now paid fully, no interference is warranted.

¶42

7 We have considered the submissions advanced by the learned counsel for the parties, perused the record, the judgments cited (supra) and the relevant provisions of Maharashtra Cooperative Societies Act, 1961 and the rules framed thereunder.

¶43

8 The petitioner is a member of respondent No. 5 Karkhana. The record reflects that after receipt of notice issued by the Apex Bank u/s 13(2) of the Securitisation Act, respondent No. 5 – karkhana decided to take necessary steps so as to repay the loan amount obtained by the karkhana from the Apex Bank. The partnership deed entered into between respondent No. 5 and respondent No. 6, discloses that respondent No. 6 was to discharge the liabilities incurred by

6/10

WP7966.12

respondent No. 5 – karkhana. The counsel appearing for respondent No. 6 has seriously disputed the liability tried to be fastened on it, regarding repayment of loan. The counsel submitted that the payment of loan which was obtained by respondent No. 5 – karkhana from the Apex Bank was not the obligation of respondent No. 6, under the agreement.

¶48

9 Respondent No. 5 – karkhana called a special general body meeting and the said body decided to sell the immovable property owned by respondent No. 5 – karkhana for repayment of loan amount to the Apex Bank. Accordingly an application was made to the Commissioner of Sugar, Pune, seeking his permission and such a permission was accorded by the Commissioner of Sugar, Pune. Thereafter auction notice was issued on 21^st August, 2012 and actual auction took place on 21^st August, 2012. Respondent No. 7 was the successful bidder as its bid was found to be highest one, amounting to Rs.30.40 Crores. Its bid was accepted. Respondent No. 7

7/10

WP7966.12

deposited an amount of Rs.5 Crores on the same day.

¶53

10 It is true that according to the earlier communication made by the Karkhana to respondent No. 7, the remaining amount was to be deposited by 31^st August, 2012, but respondent No. 7 deposited rest of the amount on intervals. The counsel appearing for respondent No. 5 - karkhana submitted that the entire amount has been received by the karkhana from the respondent No. 7. The possession of the immovable property has already been handed over in favour of respondent No. 7. Registered Deed of Sale was executed on 1^st December, 2012. These substantial developments have taken place. The petitioner amended the petition and questioned the subsequent transaction.

¶54

11 In the facts of the case, therefore, we find that the karkhana had taken decision consequent to the resolution passed in the Special General Body Meeting to sell the immovable property to repay the loan obtained from the Apex

8/10

WP7966.12

Bank. The karkhana had resorted to sale of the immovable property after receipt of notice issued by the Apex Bank u/s 13(2) of the Securitisation Act.

¶59

12 In the facts of the case, we do not find it necessary to go into details of the nature of deed of partnership executed between respondent No. 5 and 6. In case respondent No. 5 is to recover some amount from respondent No. 6, it would be matter of settlement of contractual rights and obligations between the parties flowing from execution of such deed. In exercise of extraordinary jurisdiction of this court, we are not inclined to probe the matter any further.

¶60

13 We find that after resolution was passed in the Special General Body Meeting, the sale deed regarding the subject property has been executed in favour of successful bidder. The property is not said to be undervalued. It is alleged that some of the purchasers of the property are related to the Member of Board of Directors.

¶61

9/10

¶62

10 WP7966.12

¶63

14 Taking into consideration the record, the subsequent developments, we are of the view that no interference is warranted by this court in exercise of its extraordinary jurisdiction. The petition is dismissed.

¶64

(RAVINDRA V. GHUGE, J.) (NARESH H. PATIL, J.) md.saleem

¶65

10/10

Shri. Narsinha Ganpatrao Nikam v. the State of Maharashtra, through Principal Secretary, Co-Operation and Textile Dept and Ors.

Case brief

What is this about?

What did the court decide?

Shri. Narsinha Ganpatrao Nikam v. the State of Maharashtra, through Principal Secretary, Co-Operation and Textile Dept and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Mr. Dilawar Rahiman Pathan Vs the Chief Officer, Phaltan Nagar Parished and Ors.

Shri. Dhanraj Parappa Munjal Vs the State of Maharashtra and Ors.

Shantabai Tarachand Pardesi (Deceased through Lrs) Laxman Tarachand Pardeshi and Ors. Vs Sayyad Murtuza Sayyad Ali

Shri. Shivaji Bacharam Jadhav Vs Chief Executive Officer, Zilla Parishad, Kolhapur and Ors.

Dagadu Rama Mali and Ors. Vs Ganpati Dadu Mali and Ors.

Shri. Abhimanyu Pandurang Jadhav Vs the State of Maharashtra, through Secretary, Dept of Urban Development and Ors.