1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.1561 OF 2009 M/s. Rajkamal Agro Industries, Through its Partner, Nirmalkumar Ramnivas Dhoot, Age: 35 years, Occ: Business, R/o.Plot No.B-8/3/B, MIDC, Jalgaon, Tq. & Dist. Jalgaon. .. Petitioner Versus 1. Union of India, Through its Secretary, Ministry of Finance (Banking Div), Jeevan Deep Building, 3rd Floor, Opp. Parlement street, New Delhi. 2. The Chairman, The Jalgaon Janata Sahakari Bank Ltd., Jalgaon. 117/119, Navi Peth, Jalgaon. Tq. & Dist. Jalgaon. 3. The Authorised Officer & The Jalgaon Janata Sahakari Bank Ltd. Jalgaon. 117/119, Navi Peth, Jalgaon, Tq. & Dist. Jalgaon. .. Respondents ... Mr. A.G. Talhar, Advocate for petitioner. Mr. R.P. Phatke, Advocate for respondent No.1. Mr. A.N. Nagargoje, Advocate for respondent Nos. 2 and 3. ... 2 CORAM : A.M. KHANWILKAR & S.S. SHINDE, JJ. DATE : 26TH FEBRUARY, 2010 PER COURT : Heard Counsel for the parties. 2. By this petition under Article 226 of the Constitution of India, declaration is sought that the respondent bank which is a Co-operative Bank, cannot invoke the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Further consequential reliefs are claimed in the context of coercive action resorted to by the bank. 3. The issue raised in this petition, in our opinion, stands answered by the Division Bench of our High Court in the case of Nashik 3 Merchants Co-operative Bank Ltd. vs. Aditya Hotels private Ltd., decided on 20-04-2009 in Writ Petition No. 6041 of 2008 as well as another decision in the case of Khaja Industries vs. State of Maharashtra decided on 03-07-2007 in Writ Petition No. 2672 of 2007. Indeed, both these decisions are subject matter of the challenge before the Apex Court by way of SLP (Civil) No. 11744/2009 and 17573/2007 respectively and are still pending. The fact remains that the judgment of this Court taking the view that it is open to the Co-operative Bank to pursue the remedy under the provisions of Act of 2002, operation thereof has not been stayed. It is only the operative order of the decision impugned in the said appeals has been stayed during the pendency of the appeals before the Apex Court - that too on condition of deposit. 4. Accordingly, we have no difficulty in following the earlier decisions of our own High 4 Court to reject the plea taken by the petitioner in this petition. Counsel for the petitioner, however, submitted that the decisions referred to above can be distinguished and in any case reconsidered because it has not examined the effect of Section 13 and 37 of the Act of 2002. Section 13(1) of the Act postulates "notwithstanding anything contained in section 69 or section 69-A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal, by such creditor in accordance with the provisions of this Act". It was argued that scope of the said provision is to override the provision of Section 69 and 69-A of the Transfer of Property Act alone and not to defeat the right of the borrower as such. Besides, Section 37 of the Act 2002 provides that the provisions of this Act or rules made thereunder shall be in addition to, and not derogation of the Acts referred to therein or any other law for the 5 time being in force. Relying on these provisions, it is argued that there is mechanism provided in the provision of Maharashtra Co- operative Societies Act and rules framed thereunder. As per Section 101, the claim of the bank has to be in the first place adjudicated by the authority before the Co- operative bank and then proceed with the action of attachment and sale of the mortgaged property to recover the outstanding dues. In the present case, the respondent bank did invoke that remedy but the appropriate authority rejected the claim of the bank for reasons recorded in the order dated 05-05-2008. The respondent Co-operative bank has allowed the said decision of the authority to become final and yet has now resorted to the provisions of the Act of 2002 against the petitioner and proceedings in relation to the property of the petitioner. According to the petitioner, such measure would be in derogation of the provisions of the Co- operative Societies Act and rules framed 6 thereunder. 5. In our opinion, there is no merit in any of these submissions in as much as it is well established by now that if the provisions of Act of 2002 are applicable, in that case, the same would override any other Legislation governing the field. The fact that the application moved by the respondent Co-operative bank under the provisions of M.C.S. Act of 1960 has been rejected by the authority, that would not take away the remedy of the respondent bank to pursue action under the provisions of Act of 2002, if the same were to be applicable. This Court, as aforesaid in the case of Khaja Industries, as well as Nashik Merchants Co-operative Bank Ltd., (supra), have already answered the issue that the Co-operative bank by virtue of notification dated 28-01-2003 issued by the Central Government is a bank within the meaning of definition of 2(c) of the Act of 2002. The said view is binding on us until it is to be reversed 7 by the Apex Court. The above argument cannot be the basis to ignore two decisions of this Court holding that the Co-operative bank is a bank within the meaning of Section 2(c) of the Act of 2002. In the case of M/s. Asha Oil Food Pvt. Ltd., vs. The Jalgaon Janta Sahakari Bank Ltd. and others reported in 2006 M.C.R. 25 and in Ghanshamdas s/o Salchandra Ahuja vs. The Jintur Urban Co-op. Bank Ltd. and others reported in 2005 M.C.R. 688, this Court has rejected the grievance of the borrower that the bank cannot resort to remedy under the provisions of Act of 2002 in view of the existing certificate under section 101 of the Co-operative Societies Act. Thus understood, no fault can be found with the proposed action of the respondent Co-operative bank to proceed against the petitioner by resorting to remedy under the provisions of Act of 2002. 6. Accordingly, this petition fails. The 8 same is dismissed. 7. Needless to clarify that after the action under the provisions of the Act of 2002 culminates with the sale of property owned and possessed by the petitioner and the bank appropriates the outstanding dues of the bank, it will be open to the petitioner to make grievance regarding the inappropriateness of the claim of the bank before the appropriate Forum both in relation to the principal amount or the quantum of interest as the case may be if so advised which issue will have to be answered on its own merits in accordance with law. 8. At this stage, Counsel for the petitioner submits that the petitioner may consider of taking matter in appeal before the Apex Court for which reason, some protection be granted. Although this prayer is opposed by the Counsel of the respondent Co-operative bank, we are 9 inclined to accede to the request of the petitioner being reasonable one. We direct the respondent Co-operative Bank not to precipitate the matter for the period of four weeks from today. ( S.S. SHINDE, J. ) ( A.M. KHANWILKAR, J.) sut/FEB10/wp1561.09