1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.9065 OF 2007 Parshwajeet Agency & Anr. .. Petitioners Versus Rajarambapu Sahakari Bank Ltd. Peth and Ors. .. Respondents Mr.S.S.Patwardhan for petitioners Mr.T.S.Ingale for respondents. CORAM : S.C.DHARMADHIKARI, J. DATE : 4th March 2008 P.C. . This petition was argued yesterday and Mr.Patwardhan appearing for petitioners and Mr.Ingale appearing for first respondent sought time to take instructions. The matter was placed for orders today at their request. Representatives of both are present in court. 2. In the presence of representatives of 2 both petitioners and respondent No.1 the following order is passed. 3. The case of the petitioners is that they are members of respondent No.1 Cooperative Society. Respondent No.2 also is a member. Business of respondent No.1 is banking. Petitioner Nos. 1 and 2 have obtained a term loan on 8th December 2004 and the sanction letter is annexed as Annexure A to the petition. The disbursement of loan had taken place, according to the petitioners, on 29th January 2005. Petitioners’ case is that petitioner No.2 is the owner of a shop/gala in an immovable property known as Trade Centre at Kolhapur. Galas are given on lease on leave and licence basis to respondent No.1 bank. 4. Understanding is pleaded between the bank and the petitioner that the loan amount would be adjusted from the rent/compensation that the bank 3 is liable to pay in respect of the occupation of the said shop/gala. 5. It is contended that initially this arrangement continued but the bank had advanced certain monies to M/s.Karan Associates. The case of petitioners is that they are not concerned with M/s.Karan Associates, whereas the bank contend that father in law of petitioner No.2 is the borrower in respect of loan that has been sanctioned to M/s.Karan Associates. First respondent bank, therefore, desired to credit the amount of rent payable in respect of rented premises into loan account of M/s.Karan Associates which led to filing of a dispute by the petitioners against the bank in the Coop.Court. That dispute is C.C.303 of 2007. During the pendency of that dispute, an application was filed before the Judge, Coop.Court No.1 Kolhapur and that interim injunction application has been allowed by the 4 Coop.Court on 9th July 2007 in the following terms:- ". Application Exh.5 is partly allowed. 2. The opponent bank is hereby temporarily restrained from transferring and depositing the amount of rent and licence fee payable to disputant No.2 in the loan account of M/s.Karan Associates until final decision of the dispute. 3. The costs shall be the costs in the main cause." 5. Thus, the loan of M/s.Karan Associates cannot be written off by the first respondent bank after appropriating and adjusting the rent payable in respect of said premises is the effect of injunction order. 5 6. The matter before me arises out of a revision application under section 154 of M.C.S. Act which was filed by the present petitioners against an order dated 10th September 2007. That order was passed by the Assistant Registrar, C.S. Zilla Nagari Sahakari Banks Association, Kolhapur under section 101 of the M.C.S. Act. The claim of the bank against the petitioners before the Assistant Registrar is of Rs.16,61,948/-. It is their case that a loan was sanctioned which is evidenced by Exh.A. Initially, the petitioners and the first respondent agreed that the repayment of loan would be made from the rent which the bank is liable to pay for occupation and use of the shops. For a certain period, loan was sought to be repaid by these adjustments. The agreement of leave and licence is still in force. It is rather surprising that the bank despite this continues to occupy the premises whereas petitioners are also not keen to put an 6 end to the rights of the bank. Grievance of the petitioners is that in the light of this arrangement, there was no occasion for the bank to go ahead and file any recovery proceedings. It is the case of the bank that the recovery proceedings under section 101 can continue without in any manner being influenced or controlled by the pending dispute preferred by the petitioners viz., C.C.303 of 2007. Thus, recovery proceedings against the petitioners are sought to be continued. A preliminary objection was raised by the petitioners to the said proceedings being continued on the ground that the matter is pending before a competent court, disputed questions are involved and the same cannot be settled and decided in the summary proceedings. That application and preliminary objections were rejected on 10th September 2007 and that order was challenged before Divisional Joint Registrar by petitioners. The Divisional Joint Registrar rejected revision application. 7 Therefore, this petition under Article 227 of Constitution of India. 7. After this matter was argued for some time, the petitioners and the first respondent agreed to the following arrangements. (a) that the proceedings against M/s.Karan Associates under section 101 of the M.C.S. Act can continue. The present order and arrangement with regard to the loan of the petitioner shall not prejudice the rights and contentions of both sides in those recovery proceedings. Thus, all contentions of both sides in the recovery proceedings are kept open. (b) C.C.No.304 of 2007 can also continue unaffected by the present orders and arrangement. All contentions and pleas of both sides in the said dispute 8 are kept open and the arrangement presently arrived at is without prejudice to the rights and contentions therein. (c) C.C.No.303 of 2007 and the proceedings under section 101 of M.C.S.Act insofar as the loan sanctioned by the first respondent and evidenced by the sanction letter dated 8th December (Exh.A page 20) shall be disposed off in the following manner:- (i) The first respondent bank can proceed and adjust so also appropriate the rent payable by it for occupation of shop/galas for writing off the loan of M/s.Parshwajeet Agencies. The shops/galas are in occupation and I am informed that the lease expires on 31st May 2009. The 9 rent payable in respect of shops/galas shall be adjusted and appropriated as above only towards the loan of M/s.Parshwajeet Agencies. Both sides do not have any objection to the same. (ii) Petitioners have no objection to the entire loan or balance thereof along with interest insofar as M/s.Parshwajeet Agencies are concerned being written off and adjusted in this manner during remaining period of lease. (iii) They shall not press for any relief in C.C.No.303 of 2007 and the said Dispute stands disposed of. 10 (iv) Needless to state that the interim order passed thereon on 9th July 2007 also does not survive in the light of disposal of the Dispute itself. (v) Some amount, as far as the rent payable by the respondent No.1 has been already appropriated towards the loan of M/s.Karan Associates. In other words, that amount has not been utilised for adjusting the loan/ liability of M/s.Parshwajeet Agencies. However, that shall not in any manner preclude the present petitioners from initiating appropriate proceedings and raising all pleas therein with regard to their 11 rights as a landlord/owner of the premises and to recover the rent/compensation from the first respondent. All such proceedings which are based upon the relationship of landlord and tenant and/or licensor or licensee shall remain unaffected by the outcome of this petition and disposal of the Coop.Dispute No.303 of 2007. (vi) First respondent Bank need not pay any rent/compensation in respect of suit premises until petitioners repay the loan of M/s.Parshwajeet and Associates along with outstanding interest. In such circumstances, the application under section 101 of MCS Act 12 filed by the respondent bank against the petitioners - M/s.Parshwajeet Agencies does not survive and stands disposed of. However, disposal of that application does not in any manner affect the outcome of the pending application and proceedings by the first respondent bank against M/s.Karan and Associates. Needless to state that in such proceedings bank can always agitate and urge that the petitioners before me are co-obligers/guarantors and, therefore, liable to be repay the sums which have been found to be due and payable by M/s.Karan and Associates. All contentions in that behalf of both sides are expressly kept open. This order 13 is without prejudice to the rights and contentions of both sides. 8. In the light of the above, order passed by the Divisional Joint Registrar is quashed and set aside. Petition disposed of in the above terms with no orders as to costs. (S.C.Dharmadhikari, J)