-: 1 :- SPB IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CIVIL JURISDICTION APPELLATE SIDE CIVIL JURISDICTION APPELLATE SIDE CIVIL JURISDICTION WRIT PETITION NO. 3802 OF 2008 WRIT PETITION NO. 3802 OF 2008 WRIT PETITION NO. 3802 OF 2008 The Ravi Co-operative Bank Ltd. .. Petitioner. V/s. 1. Mohan Pandurang Jadhav & Ors. .. Respondents. WITH WITH WITH WRIT PETITION NO. 5395 OF 2008 WRIT PETITION NO. 5395 OF 2008 WRIT PETITION NO. 5395 OF 2008 The Ravi Co-operative Bank Ltd. .. Petitioner. V/s. 1. Sanjay Mahipati Ghodake & Ors. .. Respondents. WITH WITH WITH WRIT PETITION NO. 5396 OF 2008 WRIT PETITION NO. 5396 OF 2008 WRIT PETITION NO. 5396 OF 2008 The Ravi Co-operative Bank Ltd. .. Petitioner. V/s. 1. Anil Baburao Jadhav & Ors. .. Respondents. WITH WITH WITH WRIT PETITION NO. 5397 OF 2008 WRIT PETITION NO. 5397 OF 2008 WRIT PETITION NO. 5397 OF 2008 The Ravi Co-operative Bank Ltd. .. Petitioner. V/s. 1. Vrindavan Developers & Ors. .. Respondents. --- --- --- Mr. Amit Borkar for the Petitioners. -: 2 :- Mr. S.S. Patwardhan for the Respondents. --- CORAM : V. C. DAGA, J. CORAM : V. C. DAGA, J. CORAM : V. C. DAGA, J. DATED : 19th SEPTEMBER,2008. DATED : 19th SEPTEMBER,2008. DATED : 19th SEPTEMBER,2008. P.C.: P.C.: P.C.: 1. Rule, returnable forthwith in all cases. Heard finally by consent of the parties. 2. All these petitions filed under Article 227 of the Constitution are directed against the common judgment and order passed by the Co-operative Appellate Court, Mumbai, allowing the appeals filed by the original disputants and directing the refund of the surplus amount alleged to have been paid by the appellants to the respondent, the Ravi Co-operative Bank Ltd., (the Petitioner-Bank, for short). 3. Facts in all these four petitions are more or less common and submissions made were identical. So a common order will dispose of all the petitions. However, to appreciate submissions made, the facts are borrowed from the writ petition no. 3802 of 2008 (The Ravi Co-operative Bank Ltd.. vs. Mohan Pandurang Jadhav & Ors.). The disputants are respondent nos. 1 to 3 in -: 3 :- this petition. THE FACTUAL MATRIX THE FACTUAL MATRIX THE FACTUAL MATRIX 4. The respondent no.1 herein is a borrower, who borrowed cash credit loan of Rs. 4 lakhs on 31.03.1997 from the petitioner bank for the purpose of his business. The respondent nos. 2 to 3 are guarantors. All of them committed defaults in payment of borrowings made. Consequently, the bank applied for recovery certificate under section 101 of the Maharasthra Co-operative Societies Act, 1960. (the Act for short). The recovery certificate was issued by an order dated 24.03.2005 under section 101 of the Act against the respondents, holding them jointly liable to pay the amount mentioned therein along with the interest. 5. The respondents did not challenge the aforesaid Recovery Certificate issued under section 101 of the Act, though the remedy by way of Revision under section 154 of the Act against the order issuing certificate under section 101 was available to the disputants/ respondent nos. 1 to 3. Consequently, the said certificate has attained finality. 6. The original disputants/ respondents without -: 4 :- challenging the certificate referred to hereinabove, filed the dispute under section 91 of the Act, being C.C.S. No. 1535 of 2006, wherein a specific contention was raised by the petitioner- bank leading to non-maintainability of the said dispute under section 91 of the Act. However, the learned Judge of the Co-operative Court without dealing with the said contention, partly allowed the dispute filed and directed the bank by the judgment and award dated 31.07.2007 to settle the disputed loan account by charging simple interest @ 14% p.a., adopting the reducing balance method from the date of the loan. The disputants were directed to pay outstanding amounts in two equal instalments, the first of which was to fall on or before 14.08.2007; while balance amount was to be deposited on or before 14.09.2007, failing which the bank was given liberty to recover the whole dues as claimed by it in lump-sum together with future interest at the rate of 18% p.a. but by following due process of law. 7. Being aggrieved by the aforesaid Judgement and Award, the respondents, original disputants filed the appeal under section 97 of the Act before the Maharashtra State Co-operative Appellate Court Mumbai, Bench Pune, Camp at Kolhapur. -: 5 :- 8. The liquidator came to be appointed on the petitioner -bank during pendency of the appeal. Consequently, administrator was arrayed as party respondent in all the appeals. 9. The parties to the appeal have reiterated their submissions before the Appellate Court, which were canvassed before the Co-operative Court. 10. The learned member of the Maharashtra State Co-operative Appellate Court, Mumbai, Bench at Nagpur (Bench Pune), while holding camp at Sangli, allowed all the appeals and declared that surplus payments to the extent an amount of Rs.17,29,512.78/- were made by the disputant respondent nos.1 to 3 to the petitioner bank, as such directed the petitioner- bank either to refund the amount or adjust the surplus amount in other loan account which was a subject matter in Appeal No. 206 of 2007. Further directions were issued to issue "No dues certificate" to the original disputants, the respondents nos. 1 to 3 herein. 11. Being aggrieved by the aforesaid judgment and order of the Co-operative Appellate Tribunal, the petitioner bank has invoked writ jurisdiction of this court as stated herein above. -: 6 :- RIVAL SUBMISSIONS RIVAL SUBMISSIONS RIVAL SUBMISSIONS 12. Learned counsel for the petitioner-bank submitted that the learned Co-operative Appellate Court had no jurisdiction to entertain appeal of the respondents in view of the fact that there was certificate issued u/s. 101 of the MCS Act against the respondents and in favour of the petitioner bank, which had attained finality. Reliance is placed on the Judgements of this court in Vasundhara Patil vs. RBS Bank, reported in 2003[4] Mh.L.J.315] and [Pukhraj Vyas vs. Sanmitranagri Sah. Pat Sanstha, reported in 2007 [2] Boom. C.R. 327]. 13. It is further submitted that the Assistant Manager of the bank had no authority to file joint pursis leading to compromise and to admit the lower rate of interest in view of fact that there was no resolution of the Society giving such authority to the Assistant Manager. The power to compromise exclusively vests with the liquidator under section 105(g) of the Act. 14. It is further submitted that the authority to grant concession as stated in reply below Exh. 9 lies exclusively with the liquidator. No one else, unless specifically authorized by the liquidator, had authority -: 7 :- to agree to any terms prejudicial to the interest of the bank. As such, the act of the Assistant Manager to agree to a lower rate of interest was beyond scope of authority of the Assistant Manager of the petitioner Bank. 15. It is further submitted that once it is proved that the learned Co-operative Court had no jurisdiction in law to entertain any challenge in respect of certificate issued under section 101 of the Act, then mere consent, (which was without authority) would neither confer any jurisdiction in favour of the Co-operative Court nor create any right in favour of the disputants. 16. Per contra, the learned counsel appearing for the respondents submits that the respondents did not challenge certificate issued under section 101 of the Act. What is challenged is the resolution dated 14.10.2006 passed by the bank and letter dated 16.10.2006, seeking declaration that the resolution as well as the subject letter are illegal and unauthorised and that the disputants are entitled to a declaration that the Bank is not entitled to implement the impugned resolution/ letter against the disputants and that they are entitled for further declaration that the loan amount -: 8 :- has been fully and finally satisfied by them, as such entitle to claim permanent injunction restraining the Bank from taking any steps to recover their outstanding dues. He, thus, submits that the petition is liable to be dismissed with costs. CONSIDERATION : CONSIDERATION : CONSIDERATION : 17. At the outset, the preliminary objections raised by the petitioner about non-maintainability of the dispute and or to proceed with the appeals filed by the respondents needs consideration on the touchstone of section 105(g) read with section 106 of the Act. Said sections are reproduced hereinbelow : Section 105. Powers of Liquidator - Section 105. Powers of Liquidator - Section 105. Powers of Liquidator - (1) The Liquidator appointed under section 103 shall have power, subject to the rules and the general supervision, control and direction of the Registrar, - (g) to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims present or future, certain or contingent, subsisting or -: 9 :- supposed to subsist between the society and a contributory or alleged contributory or other debtor or person apprehending liability to the society, and all questions in any way relating to or affecting the assets or the winding up of the society on such terms as may be agreed, and take any security for the discharge of any such call, liability, debt, or claim and give a complete discharge in respect thereof; Section 106 - Section 106 - Section 106 - Effect of order of winding up -- After expiry of the period for appeal against the order made under sub-section [1] of section 102 or where the appeal has been dismissed, the order for winding up shall be effective and shall operate in favour of all the creditors and of all the contributories of the society, as if it had been made on the joint petition of creditors and contributories. When a winding up order becomes effective, the liquidator shall proceed to realise the assets of the society by sale or otherwise, and no dispute shall be commenced or, if pending at the date of the winding up order, shall be proceeded with , against the society, except by leave of the Registrar and subject to such terms as the Registrar may impose. The -: 10 :- Registrar, may of his own motion however, entertain or dispose of any dispute by or against the society. 18. Perusal of the aforesaid sections would go to show that any dispute pending on the date of the winding up order cannot be proceeded with against the Society except with the leave of the Registrar. Admittedly, no such leave was obtained by the respondents either to file dispute or to proceed with the dispute and /or appeals. Consequently, disputes including the appeals were not maintainable. At any rate, the appeal being the continuation of the dispute, for want of leave, neither dispute nor appeals could not have been proceeded with. 19. The second ground sought to be pressed into service by the learned counsel appearing for the petitioner that the Co-operative Court and or Co-operative Appellate Court had no jurisdiction to entertain disputes and/ or appeals at the instance of the respondents in view of the fact that the recovery certificates issued under section 101 of the Act, were holding the field. It was open for the respondents to canvass all their contentions in the proceeding in which the recovery certificate under section 101 of the Act was -: 11 :- issued. 20. The petitioner has rightly placed reliance on the Division Bench judgement of this Court in the case of Vasundhara Ashokrao Patil vs. Rajaram Bapu Vasundhara Ashokrao Patil vs. Rajaram Bapu Vasundhara Ashokrao Patil vs. Rajaram Bapu Sahakari Bank ahakari Bank ahakari Bank Ltd., 2003 (4) Mh.L.J. 315, Ltd., 2003 (4) Mh.L.J. 315, Ltd., 2003 (4) Mh.L.J. 315, wherein the division bench was pleased to hold that the certificate issued under section 101 of the Maharashtra Co-operative Societies Act, cannot be challenged under section 91 of the Act; only remedy for the aggrieved party is to file revision application under section 154 of the Act. 21. The aforesaid judgment has been followed by the learned single Judge of this court in the case of Pukhraj Pukhraj Pukhraj Mohanlal Vyas & Ors. vs. Sanmitranagri Sahakari Pata Mohanlal Vyas & Ors. vs. Sanmitranagri Sahakari Pata Mohanlal Vyas & Ors. vs. Sanmitranagri Sahakari Pata Sanstha Ltd., & Ors.; 2007 (2) Bom.C.r.327, Sanstha Ltd., & Ors.; 2007 (2) Bom.C.r.327, Sanstha Ltd., & Ors.; 2007 (2) Bom.C.r.327, wherein the learned single Judge was pleased to hold that the dispute filed under section 91 by the disputants, seeking recalculating outstanding of the loan after adjusting fixed deposit, was not maintainable. It was further held that the provisions of the Act provide for remedy of revision. Since no such revision was filed as such order u/s. 101 of the Act has become final and that the disputant could not be allowed to raise dispute under section 91 of the Act to challenge recovery certificate issued under section 101 of the Act, either directly or -: 12 :- indirectly. 22. In the above view of the law laid down by this court, I have no hesitation to record the finding that neither the dispute nor the appeal was maintainable at the instance of the respondent nos. 1 to 3 (Disputants). 23. The submission made by the petitioners that the Assistant Manager had no authority to file joint pursis or admit rate of interest in view of the fact that there was no resolution that the society giving such authority to the Assistant Manager also needs acceptance in view of section 105(g) of the Act, which empowers the liquidator alone to compromise any dispute. 24. The petitioner has also placed reliance on the judgment of the Apex Court in the case of Chief Engineer, Chief Engineer, Chief Engineer, Hydel Hydel Hydel Project & Anr. vs. Ravinder Nath & Ors., (2008) 2 roject & Anr. vs. Ravinder Nath & Ors., (2008) 2 roject & Anr. vs. Ravinder Nath & Ors., (2008) 2 Supreme Court Cases 350, Supreme Court Cases 350, Supreme Court Cases 350, in particular para 25 which reads as under : "25. The Court then proceeded to rely on Bahrein Petroleum Co. Ltd. vs. P.J.Pappu and observed in para 32 that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court, otherwise incompetent to try the -: 13 :- suit. 25. In the case of Kiran Singh vs. Chaman Paswan Kiran Singh vs. Chaman Paswan Kiran Singh vs. Chaman Paswan [AIR 1955 S.C. 340 [AIR 1955 S.C. 340 [AIR 1955 S.C. 340, the Apex Court held as under :- " It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, ..... A defect of jurisdiction, ..... A defect of jurisdiction, ..... strikes at the very authority of the court to strikes at the very authority of the court to strikes at the very authority of the court to pass any decree, and such a defect cannot be pass any decree, and such a defect cannot be pass any decree, and such a defect cannot be cured even by consent of parties.". cured even by consent of parties.". cured even by consent of parties.". (Emphasis supplied) 26. In light of the aforestated settle legal position, the submission made by the learned counsel appearing for the petitioner must result in allowing all these petitions. 27. The submission made by the learned counsel appearing for the respondents that the petitioners were not challenging the certificate issued under section 101 -: 14 :- of the Act is misplaced. The judgment impugned in all these petitions has an effect of setting aside the recovery certificate issued under section 101 of the Act, which the Co-operative Appellate Court could not have done. Needless to mention that what cannot be done directly cannot be allowed to be done indirectly. 28. I may place it on record that the judgment of the Division Bench of this Court in the case of Vasundhara Ashokrao Patil cited supra, was delivered by the Division Bench of this Court as back as in the year 2003; whereas the judgment of the learned single Judge is a recent judgement delivered in the month of December or January, 2007. As such, it was expected on the part of the Judge of the Co-operative Court as well as the Co-operative Appellate Court to know the law laid down by this court. 29. It was also expected on the part of both the courts below to deal with these contentions specifically raised before it. However, both the courts below have conveniently did not consider these submissions and conveniently by passed the law laid down by this court and in order to suit the view taken by them. The judicial propriety required them to deal with the contentions raised and the judgments cited. -: 15 :- 30. As a matter of fact not following law laid down by this court is nothing short of a contempt. The subordinate courts are duty bound to follow law laid down by this court. 31. The Registrar General is directed to forward the copy of this order to both the Judges of the courts below so as to enable them to know correct legal position, which would go a long way to put them on notice not to commit such error in future. 32. In the result, the petitions are allowed. The impugned judgments and orders of the courts below are hereby quashed and set aside and the disputes filed under section 91 by the disputants are held to be not maintainable, consequently, all disputes are dismissed with costs, quantified in the sum of Rs. 25,000/- in each petition to be recovered from the petitioners jointly or severally. 33. At this stage,learned counsel for the disputants prayed for stay of this order. The same is strongly opposed by the learned counsel for the petitioner-bank. No case is made out for grant of stay as prayed. Prayer made is rejected. -: 16 :- ( V. C. DAGA, J.) .....