1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.2337 OF 2010. The Jalgaon Merchant Co-operative Bank Ltd., Jalgaon, Address-82, Merchant Sahakar Bhavan, Navi Peth, Bank Street, Jalgaon,Tq. and Dist.Jalgaon, Through its Manager - Sunil s/o Laxminiwas Baheti. - PETITIONER VERSUS 1) Smt. Laxmibai w/o Laxminarayan Zawar, Age: Major, occu. Household, Sita Sadan, opp.Gangopi Apartment, Ring Road, Jalgaon. 2) Sou.Kiran Ashok Zawar, Age:Major, occu. Business. 3) Shri Ashok Laxminarayan Zawar, Age:Major, occu. Business. Resp.Nos.2 and 3 above R/o 113, Polan Peth, Jalgaon. 4) Shri Sunil Laxminarayan Baheti Assistant Manager, Age:Major, occu. Service, Having same address as that of appellant as per the res.No.1. 5) Shri Narendra Narayandas Rathi, Age:Major, occu. Business, R/o H-13, MIDC, Ajantha Road, Jalgaon. 2 6) Shri Sudhirchandra Laxminarayan Baheti, Age: major, occu. Business & Agril. R/o Girad, Tq. Pachora, District Jalgaon. - RESPONDENTS ***** Mr.VD Sapkal,Advocate h/for Mr.DD Pokharkar,Adv. for Petitioner; Mr.DB Thoke,Advocate for Respondent no.1. ----- CORAM : K.U.CHANDIWAL,J. DATE : 18th October,2010. ORAL JUDGMENT : 1) Heard. Rule. Rule made returnable forthwith. Heard finally by consent of the parties. No fresh set of documents desired by the parties to be tendered. 2) The petitioner/bank impugns the order of learned Judge, Cooperative Court, below Exhibit-30 in Dispute No.1057/2007, dated 11.08.2008 and confirmed by the learned Member, Cooperative Appellate Court, Aurangabad by order dated 15.11.2008 in Appeal No.169 of 2008. 3) The Respondent No.1 – Smt. Laxmibai is 3 the alleged guarantor to the loan arrangement in favour of her close relatives named in the writ petition, parties thereto. 4) A chequered history of events is portrayed by both the learned Counsel. However, the controversy can be put in a condensed form to traverse the questions raised by learned Counsel for petitioner. The questions posed would be –(i) Whether the learned Judge of the Cooperative Court was competent to decide Exhibit-30 in Dispute No.1057 of 2007, by ignoring bar of jurisdiction in terms of Section 34 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred to as the Securitization Act, 2002)?; and (ii) Whether the respondent No.1 herein, (petitioner in the Writ Petition No.4168/2007), having informed to this Court on 27.7.2007 to withdraw said writ petition with liberty to resort to appropriate remedy available under the Securitization Act, 2002, could still invoke two remedies, one under the jurisdiction of the Cooperative Court and the other under the Securitization Act, 2002, necessarily with Debt Recovery Tribunal(DRT) or Debt Recovery Appellate Tribunal(DRAT), to be permissible? 4 5) The learned counsel for the petitioner, in order to stress his points, dealt with `doctrine of election’, which has been highlighted by the Apex Court in the matter of National Insurance Company Ltd. Vs. Mastan, reported in 2005 AIR (SCW) 6305, paragraph 24 thereof illustrate as under : “24. The `doctrine of election’ is a branch of `rule of estoppel’, in terms whereof a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. The doctrine of election postulates that when two remedies are available for the same relief, the aggrieved party has the option to elect either of them but not both. Although there are certain exceptions to the same rule but the same has no application in the instance case.” 6) The learned Counsel for the petitioner submits, when the appeal preferred by the respondent no.1 has been rejected by the competent forum on 29.2.2008 of DRT and the respondent no.1, having challenged the same before the DRAT, no legal right prevails for the respondent no.1 to approach the Cooperative Court and get an injunction prohibiting the bank from initiating its action. I find substance in the grievance of petitioner bank. 5 7) The learned Counsel for the respondent, while supporting the orders of the learned Judge, Cooperative Court, or for that purpose, the Cooperative Appellate court, submits that the jurisdiction vests to the DRT in terms of Section 17 for dealing with the provisions Section 13(4) of the Securitization Act, are quite limited. The scope cannot be widened to decide the case of a fraud or the case of non-renewal of the contract, renovation of contract or recession of contract or discharge of liability of the surety hence, only proper forum is the Cooperative court. 8) The learned counsel also submits that in terms of Section 91 and Section 163 of the Maharashtra Cooperative Societies Act, 1960, (for short, MCS Act) the approach of the respondent no.1 before the learned Judge, Cooperative court, raising a dispute was in tune with the statutory arrangement, no interference is warranted in the order questioned in the writ petition. 9) Though, both the sides advert to the merits of the case as to availing loan, slumber by the bank; inaction on the part of the bank, admission in cross-examination (page 115), to this effect. However, this court is not required to dwell upon to encounter these avenues, as the 6 scope of writ has to be confined to the legality of the order questioned. 10) Reverting to the process of doctrine of election, it was incumbent upon the respondent, having so informed to the writ court to elect a specific court. The contention, that such remedies to challenge the alleged fraud are not open to be addressed before DRT in terms of section 17, is difficult to conceive as the learned Member of DRT is competent to deal with all the objections, as are available to a party litigating, raising objections to the recourse of Section 13(4) of the Securitization Act, 2002. 11) Now, taking recourse to Section 34 of the Securitization Act, 2002, which ordains as under : “34. Civil Court not to have jurisdiction, - No Civil court shall h ave jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ( 51 of 1993).”, 7 It is apparent, the legislature has confined the acts and actions in relation to the loans, which are securitized or which are under the special statutes. When the law prohibits certain actions with indication, no injunction could be granted by any court or any other authority. It naturally binds the learned Judge of the Cooperative court not to entertain an application for injunction in a dispute raised by the respondents. 12) The findings of the Cooperative Appellate Court unfortunately are travelling to the merits in favour of the respondents and to the inaction of the bank. In fact, it was not arena left to the learned Judge of the Cooperative Appellate Tribunal. He was also expected to inquire into the legality of the order of the learned Judge, vis-a-vis action initiated by the respondent no.1 before the competent forum - DRT. Such decision call for interference under Article 227 of Constitution of India. 13) There is an appeal pending before Debts Recovery Appellate Tribunal (DRAT), the Respondent no.1 has no scope to address and re- agitate same issue before the Cooperative court. On both the counts, the action of the learned 8 Judge, Cooperative Court and that of the Cooperative Appellate Court is not matching to the legal tune and even squeezing liberty granted while withdrawing WP No. 4168/2007 and, therefore, calls for interference. Both the orders are set aside. 14) Rule made absolute in the aforesaid terms with no order as to costs. sd/- (K.U.CHANDIWAL) JUDGE bdv/ Authenticated copy (BD VADNERE,PS)