1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CIVIL JURISDICTION CIVIL APPLICATION NO. 623 OF 2010 WITH WRIT PETITION NO. 2848 OF 2009 The Sangli District Central Co-operative Bank Ltd. ... Applicant. V/s. The Union of India, through the Ministry of Consumer Affairs Food & Public Distribution Director of Sugar Krishi Bhavan, New Delhi and Ors. .... Respondents. Mr. Umesh R. Mankapure for the Applicant. Mr. Suresh Kumar for the Respondents. CORAM : ANIL R. DAVE, C.J. & S.C. DHARMADHIKARI,J. RESERVED ON : 10th MARCH 2010. PRONOUNCED ON : 07th APRIL 2010. P.C. :- Mr. Mankapure, learned Advocate appearing on behalf of the Applicants in this Civil Applications contended that the Applicant is a Co-operative Bank registered under the Maharashtra Co-operative Societies Act, 1960. The Applicants in the course of their business provided financial accommodation to Co-operative Sugar Factories and 2 particularly, Respondent No.6. He refers to the facilities granted to Respondent No.6 and submits that the sugar bags of this Respondent No.6 sugar factory are pledged with the Applicants. However, notwithstanding such pledge, Respondent No.4 who is the Assistant Provident Fund Commissioner and Recovery Officer has attached the sugar bags lying in Godown No.1 of Respondent No.6, although the godown is in custody, control and possession of the Applicant. Mr. Mankapure has invited our attention to the relevant paragraphs of the Civil Application and contended that the attachment of the sugar bags is illegal and otherwise null and void. 2. Mr. Mankapure has referred to the facilities granted to Respondent No.6 and submits that the cash credit facilities against pledge of sugar bags of four sugar factories, whose names are set out in paragraph 3 of the Civil Application have been extended to them on the terms and conditions including that the pledge security will be in the custody, control and possession of the Applicant. The godown is to be hired in the name of the Applicant – Bank and terms and conditions give absolute right to the Applicant to sell the pledged goods and 3 appropriate the sale proceeds towards their claim. Thus, the pledged goods are the absolute property of the Applicants. Therefore, the attachment levied and recovery certificate issued are contrary to the terms on which the pledge has been made and the right of the Applicant to deal with the said goods. In such circumstances, the decision to auction the goods which are pledged with the Applicant was illegal. The request is to quash and set aside the notice of such auction. 3. However, Mr. Mankapure fairly points out that the aforementioned Writ Petition in which this Civil Application is moved for challenging the order of attachment and all steps in furtherance thereof. This Writ Petition was admitted on 12th March 2009. This Court granted stay to the steps proposed by Respondent Nos.1 to 5. This court permitted by way of interim measures a joint sale of the sugar and deposit of the amount in this Court. 4. Mr. Mankapure submits that the claim of the Applicant is as set out in paragraph 10 of the Civil Application. Mr. Mankapure submits that the Provident Fund Authorities can recover only the amount specified in their orders and recovery 4 certificates and the deficit amount cannot be touched by them. That is a amount which must be permitted to be withdrawn by the Applicant. The Applicant in fact prays for withdrawal of the entire amount. However, if the dues of the employer towards provident fund is Rs.6,21,21,177/- as on 19th February 2009, then, assuming without admitting that more amount is due and payable even then, if the amount deposited in this Court is more than the sum to which the Provident Fund Authorities are entitled, then, the deficit amount should be permitted to be withdrawn by the Applicant – Bank. 5. We have heard this Civil Application together with the main Writ Petition which was placed before us. The outstanding dues of the Provident Fund Authorities had been certified as Rs.5,99,33,469/- in the certificate and the warrant of attachment. 6. In the Civil Application preferred by the Applicant – Bank it is stated that the amount which is deposited in this Court is Rs.9,21,23,000/-. In these circumstances, in our opinion, interest of justice would be served if we dispose of the main 5 Writ Petition in the terms of the Supreme Court decision. Some of the pleas raised before us by Mr. Mankapure while arguing the Civil Application and the main matter are identical to those raised by Mr. Thorat and Mr. Sakhare, learned Senior Counsel appearing in the other matters. For the reasons set out in the main matter, the Rule has to be discharged in the Writ Petition and the Civil Application. 7. However, as far as the amount deposited in this Court is concerned, it is directed that the Provident Fund Authorities can withdraw the sums as are due and payable to them under the warrant of attachment and the recovery certificates in question with accrued interest, in accordance with the Supreme Court decision. As far as the balance sum or the excess amount is concerned, Respondent No.6 does not appear to have been duly served as is clear from the affidavit of service filed in this Court on 3rd April 2009. Even on 10th December 2009 and when the matter was admitted by this Court, none has appeared for Respondent No.6. Therefore, it would not be proper to pass final orders in their absence. The sum which has been deposited in this Court is from the sale of 6 the assets of Respondent No.6. 8. In these circumstances, the withdrawal of the amount is permitted on production of the relevant documents including recovery certificate/orders by the Provident Fund Authorities. Such documents and proof be placed before the Registrar (Judicial-I) of this Court. Further, the Applicant – Bank shall also place the proof of its debt and dues and the Registrar (Judicial-I) to permit the Applicant – Sangli District Central Co- Op. Bank to withdraw the balance sum if any, after the Provident Fund Authorities take away or withdraw the monies as per their entitlement. The Registrar (Judicial-I) to scrutinize the documents produced by the Applicant – Bank and permit withdrawal of the sums duly certified thereunder. Before the sums are permitted to be taken away by the Applicant, the Applicant to give undertaking to the satisfaction of the Registrar (Judicial) of this Court stating therein that in the event, the Applicant – Bank is directed by any Competent Court or Authority to refund or pay back the sums to the borrowers/guarantors, the Applicant – Bank shall do so subject to its legal rights and contentions. 7 9. On compliance with the above directions, the sums shall be permitted to be withdrawn. 10. Rule discharged subject to above without any costs. CHIEF JUSTICE (S.C. DHARMADHIKARI,J.)