(1) IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD. WRIT PETITION NO. 6039 OF 2010 1. Ramchandra s/o. Deorao Pere, Age : 58 years, Occupation : Agriculturist, R/o. At Patoda, Post Valadgaon- -Pandharpur, Taluka & District : Aurangabad. 2. Eknath s/o. Dhondiram Mithe, Age : 60 years, Occupation : Agriculturist, R/o. Naigaon, Post : Waluj, Taluka : Gangapur, District : Aurangabad. 3. Shivnath s/o. Ramchandra Pere, Age : 35 years, Occupation : Agriculturist, R/o. At Patoda, Post Valadgaon- -Pandharpur, Taluka & District : Aurangabad. 4. Kapindra s/o. Kailas Pere, Age : 25 years, Occupation : Agriculturist, R/o. : At Patoda, Post : Valadgaon- -Pancharpur, Taluka & District : Aurangabad. (2) 5. Haribhau s/o. Dhondiram Mithe, Age : 50 years, Occupation : Agriculturist, R/o. at Naigaon, Post : Waluj, Taluka : Gangapur, District : Aurangabad. 6. Ajeet Seeds Ltd., Tapadia Teres, 2nd floor, Adalat Road, Aurangabad, Through its Deputy General Manager. .. Petitioners. versus 1. The State of Maharashtra, Through Principal Secretary, Cooperation Department, Mantralaya, Mumbai - 400 032. 2. The Commissioner of Sugar, Maharashtra State, Sakhar Sankul, Agricultural College Compound, Shivaji Nagar, Pune, District : Pune. 3. The Commissioner for Cooperation, Maharashtra State, Pune, District : Pune. 4. The Director of Sugar, Land Development Bank Building, Kranti Chowk, Aurangabad, Aurangabad Region, Aurangabad, District : Aurangabad. (3) 5. The Maharashtra State Cooperative Bank Limited, 9, Maharashtra Chamber of Commerce Lane, Fort, Mumbai - 400 001. 6. Gangapur Sahakari Sakhar Karkhana Ltd., Raghunath Nagar, Taluka : Gangapur, District : Aurangabad, Through its Managing Director. 7. Rajaram Foods Pvt. Ltd., 304 & 305, 3rd Floor, Raheja Plaza, Andheri (West), Mumbai, Through its Managing Director 8. Aurangabad District Central Cooperative Bank Ltd., Through its Managing Director, Prataprao s/o. Baburao Chavan, Age : 53years, Occupation : Service, R/o. Bank Quarters, Adalat Road, Aurangabad, Taluka & District : Aurangabad. 9. Ashok Sahakari Sakhar Karkhana Ltd., Ashoknagar, Taluka : Shrirampur, District : Ahmednagar, through its Managing Director, Sitaram Dagadu Kakade, Age : 60 years, Occupation : Service, R/o. Ashoknagar, Taluka : Shrirampur, District : Ahmednagar. (4) 10. Authorised Officer & Joint Manager, Regional Office, .. Respondents Maharashtra State Cooperative (Nos.8 & 9 - Bank Ltd., 10, Town Centre, Intervenors) CIDCO, Aurangabad - 431 003. ....................... Mr. P.R. Patil, Advocate, for the petitioners. Mr. N.B. Khandare, Government Pleader, for respondent nos.1 to 4. Mr. R.N. Dhorde, Advocate, for respondent nos.5 and 10. Mr. A.S. Deshpande, Advocate, for respondent no.6. Mr. A.Y. Pandule, Advocate, for respondent no.7. Mr. Rajendra Deshmukh, Advocate, for respondent no.8. Mr. S.P. Deshmukh, Advocate, for respondent no.9. ........................ W I T H WRIT PETITION NO. 6716 OF 2010 Shri Nandkumar s/o. Murlidhar Gandhile, Age : 42 years, Occupation : Agriculture, R/o. Pimparkheda, Taluka : Gangapur, District : Aurangabad. .. Petitioner. (5) versus 1. The State of Maharashtra, Principal Secretary, Cooperation and Textile Department, Mantralaya, Mumbai. 2. The Commissioner of Sugar, Maharashtra State, Sakhar Sankul Agricultural College, Shivajinagar, Pune. 3. The Commissioner of Cooperation, Maharashtra State, Pune. 4. The Deputy Director of Sugar, Kranti Chowk, Aurangabad. 5. Maharashtra State Cooperative Bank Ltd., Maharashtra Chamber of Commerce Lane, Fort, Mumbai. 6. Gangapur Sahakari Sakhar Karkhana Ltd., Raghunath Nagar, Taluka : Gangapur, District : Aurangabad, through its Managing Director. 7. Rajaram Foods Private Ltd., 304-305, third floor, Raheja Building, Andheri West, Mumbai, through its Managing Director. .. Respondents. .......................... (6) Mr. V.D. Sapkal, Advocate, for the petitioner. Mr. N.B. Khandare, Government Pleader, for respondent nos.1 to 4. Mr. R.N. Dhorde, Advocate, for respondent no.5. Mr. A.B. Kale, Advocate, for respondent no.6. Mr. A.Y. Pandule, Advocate, for respondent no.7. ................................... W I T H WRIT PETITION NO. 6769 OF 2010 Vaidyanath Sahakari Sakhar Karkhana Ltd., Pangri, Taluka : Parli Vaijinath, District : Beed, Through its Managing Director, Shri Ashok Vishwanath Palve, Age : 61 years, R/o. Pangri, Taluka : Parli Vaijinath, District : Beed. .. Petitioner. versus 1. Maharashtra State Cooperative Bank Ltd., having its Main Office at Mumbai and having its Regional Office at Town Centre, Aurangabad, through its Authorized Officer, Town Centre, Aurangabad. (7) 2. M/s. Rajaram Foods Pvt. Ltd., Through its Managing Director, R/o. 303, 304, Raheja Plaza, Andheri (E), Mumbai - 53. 3. The State of Maharashtra, Through its Secretary, Ministry of Cooperative and Textiles, Mantralaya, Mumbai. 4. Gangapur Sahakari Sakhar Karkhana Ltd., Raghunath Nagar, Taluka : Gangapur, District : Aurangabad, Through its Authorised Officer. .. Respondents. .............................. Mr. V.J. Dixit, Senior Advocate, with Mr. A.N. Nagargoje, Advocate, for the petitioner. Mr. R.N. Dhorde, Advocate, for respondent no.1. Mr. A.Y. Pandule, Advocate, for respondent no.2. Mr. N.B. Khandare, Government Pleader, for respondent no.3. Mr. A.B. Kale, Advocate, for respondent no.4. ........................... (8) W I T H WRIT PETITION NO. 7403 OF 2010 Ashok Sahakari Sakhar Karkhana Ltd., Ashoknagar, Taluka : Shrirampur, District : Ahmednagar, through its Managing Director, Sitaram Dagadu Kakade, Age : 60 years, Occupation : Service, R/o. Ashoknagar, Taluka : Shrirampur, District : Ahmednagar. .. Petitioner. versus 1. The State of Maharashtra, through its Secretary, Department of Cooperation, Mantralaya, Mumbai - 32. 2. Commissioner of Sugar, Maharashtra State, Sakhar Bhawan, Pune. 3. The Regional Joint Director of Sugar, Aurangabad Region, Aurangabad. 4. The Maharashtra State Cooperative Bank Ltd., through its authorised officer, 10, Town Centre, CIDCO, Aurangabad. (9) 5. The Maharashtra State Cooperative Bank Ltd., Benet House, Shahid Bhagatsingh Marg, Fort, Mumbai, through its Manager. 6. Gangapur Sahakari Sakhar Karkhana Ltd., Gangapur, District : Aurangabad, through its Chairman / Managing Director. 7. Rajaram Food (P) Ltd., Raheja Plaza, Shah Industrial Area, Vira Desai Road, Andheri (West), Mumbai, through its Chairman/Managing Director. .. Respondents. ............................... Mr. S.P. Deshmukh, Advocate, for the petitioner. Mr. N.B. Khandare, Government Pleader, for respondent nos.1 to 3. Mr. R.N. Dhorde, Advocate, for respondent nos.5 and 7. ******************* CORAM : MOHIT S. SHAH, CJ. & S.V. GANGAPURWALA, J. DATE : 26TH AUGUST 2010 COURT'S ORDER (Per Chief Justice) : 1. Heard learned Counsel for the parties. (10) 2. Civil Application No. 11964 of 2010, filed in Writ Petition No. 6039 of 2010, for amendment is allowed. Amendment be carried out within three days. 3. All these petitions, under Article 226 of the Constitution of India, challenge the steps being taken by the respondent no.5 - Maharashtra State Cooperative Bank Ltd., in selling assets of respondent no.6 - Gangapur Sahakari Sakhar Karkhana Ltd., in favour of respondent no.7, Rajaram Foods Pvt. Ltd., under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short, hereinafter referred to as "the Securitisation Act"). 4. The respondent no.6 is a Cooperative Sugar Factory established under the Maharashtra Cooperative Societies Act, 1960. The respondent no.6 has obtained loan for plant and machinery, from respondent no.5 Bank. Since the amounts were not repaid, the respondent no.5 invoked the provisions of the Securitisation Act. In that process, after issuing a public advertisement and inviting offers, the respondent no.5 has accepted the offer of respondent no.7 to purchase the factory of respondent no.6 for a sum of Rs. 29.01 Crores. The respondent no.7 has already deposited 25 % of the purchase price as per terms and conditions mentioned in the public advertisement. (11) However, on account of litigation filed by the petitioners herein and the stay orders granted therein, the respondent no.5 could not get the sale deed executed in favour of respondent no.7. The present petitions are filed by the persons, who are either share holders of respondent no.6 - Cooperative Society, or by the non- secured creditors of respondent no.6. 5. It is contended that the sale of the property of respondent no.6, in favour of respondent no.7, is illegal and arbitrary because higher offers are available and particularly, the petitioner no.6 in Writ Petition No. 6039/2010 - Ajeet Seeds Ltd., has already made an offer of Rs. 32 Crores, as conveyed through letter dated 6th July 2010. 6. The learned Counsel appearing for the petitioners submits that a Cooperative Bank has no jurisdiction to initiate proceedings under the Securitisation Act. For that purpose, he has relied upon the decision of the Apex Court, in the case of Greater Bombay Cooperative Bank Ltd. Vs. United Yarn Tex. Pvt. Ltd. and others (2007(3) Mh.L.J. 434). 7. The learned Counsel appearing for the petitioners have vehemently submitted that the impugned action of the respondent no.5 Bank is illegal and without jurisdiction because the purported action under Section 13 of the Securitisation Act is (12) ab initio null and void. It is submitted that Section 31(i) of the Securitisation Act specifically provides that the provisions of the Securitisation Act shall not apply to any security interest created in agricultural land. It is submitted that as per the details given in the statement at Exhibit "J", in Writ Petition No. 6039/2010, the land admeasuring 68 Hectares 69 Are is agricultural land and that only remaining portion of land, admeasuring 48 Hectares 95 Are, is non-agricultural land belonging to Karkhana. It is, therefore, submitted that the respondent no.5 Bank should not have resorted to the provisions of the Securitisation Act for disposing of the said agricultural land admeasuring 68 Hectares 69 Are. 8. On the other hand, the learned Counsel appearing for respondent no.5 Bank has submitted that since the respondent no. 5 has taken the decision to sell the property of respondent no.6, in favour of respondent no.7, after following the procedure of holding a public auction, the petitioners cannot be permitted to make a grievance. It is submitted that the respondent no.7 has already deposited 25 % of the purchase price and that any delay, in handing over property to respondent no.7, would result in denying the right to commence the crushing activities from the ensuing season which is going to start in October 2010. It is submitted that as soon as crushing activity starts, number of persons will also get employment in the sugar factory. It is submitted that the petitioners have efficacious alternative remedy (13) by filing appeal / application, under Section 17 of the Securitisation Act, by approaching the Debts Recovery Tribunal and all the contentions, including the contention regarding lack of jurisdiction in respect of agricultural land, as referred in Section 31(i) of the Securitisation Act, can be raised before the Debts Recovery Tribunal. A strong reliance is placed on the decision of the Apex Court, in the case of Authorized Officer, Indian Overseas Bank & another Vs. Ashok Saw Mill (2009(8) SCC 366), in support of the contention that the Securitisation Act is a complete code and that any person aggrieved by any action of the secured creditor, under the Securitisation Act, has a right to move the Debts Recovery Tribunal under Section 17 of the Securitisation Act and the Debts Recovery Tribunal is vested with power, even to set aside a transaction including sale and to restore possession to the borrower in appropriate cases and the Debts Recovery Tribunal can even restore possession status ante. 9. We have heard the learned Counsel for the parties and given anxious consideration to the rival submissions. 10. The Apex Court, in the case of Authorized Officer, Indian Overseas Bank & another (supra), in paragraphs 22 and 23 of the judgment, has made the following observations : (14) " In order to prevent misuse of such wide powers and to prevent prejudice being caused to a borrower on account of an error on the part of the Banks or Financial Institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in Sub-Section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in Sub-Section (3) thereof. The intention of the legislature is, therefore, clear that while the Banks and Financial Institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such pwers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. The consequences of the authority vested in DRT under Sub-Section (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The Legislature by including Sub-Section (3) in Section 17 has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. " (15) 11. In view of the above, we have no doubt, that the Debts Recovery Tribunal will have full power to decide the entire controversy amongst the parties, including the question whether the respondent no.5 Bank can be permitted to resort to the provisions of the Securitisation Act, in respect of security interest created in agricultural land and also the contention, that the petitioner no.6 has made offer of Rs. 32 Crores as purchase price. As regards the petitioners' contention, that the Cooperative Bank cannot avail of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the Securitisation Act, the reliance placed by the learned Counsel for the petitioners, on the decision of the Apex Court, in the case of Greater Bombay Coop. Bank Ltd. Vs. United Yarn Tex Pvt. Ltd. (supra), is misconceived. The judgment of the Apex Court, in the said case, has dealt with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and did not deal with the provisions of the Securitisation Act. 12. A Division Bench of this Court, in the case of Rama Steel Industries and others Vs. Union of India and another (2007(6) Mh.L.J. 387), and another Division Bench of this Court, in the case of Khaja Industries Vs. State of Maharashtra and another (2007(6) Mh.L.J. 712), has taken a view that the Cooperative Bank can invoke the provisions of the (16) Securitisation Act for recovery of their dues. 13. In view of the above, we have no manner of doubt that all the contentions sought to be raised by the petitioners herein, including the preliminary contention about the lack of authority of respondent no.5 - Cooperative Bank, in invoking the provisions of the Securitisation Act, in respect of security interest created in agricultural land, and also the contention that the petitioner no.6 in Writ Petition No. 6039/2010 has made offer of Rs. 32 Crores, can certainly be dealt with by the Debts Recovery Tribunal under Section 17 of the Securitisation Act and as and when such contentions are raised before the Debts Recovery Tribunal, the Debts Recovery Tribunal will consider the same in accordance with law, without being influenced by the observations made by us. As already indicated above, as we have relegated the petitioners to avail of the alternative efficacious remedy by approaching the Debts Recovery Tribunal under Section 17 of the Securitisation Act, all contentions are kept open. 14. At this stage, the learned Counsel appearing for the petitioners submit that the respondent no.5 Bank be restrained from executing any sale deed in favour of respondent no.7 till the decision of the Debts Recovery Tribunal. (17) 15. The learned Counsel appearing for respondent no.5 Bank points out that in the proceedings taken out by respondent no.6 - Society before the Debts Recovery Tribunal, some interim orders are already passed. 16. In view of the above, we do not think it necessary to pass interim orders when we are dismissing the petitions on the ground that petitioners have alternative efficacious remedy before which they may make final as well as interim prayers. 17. With these observations, the petitions are dismissed. Consequently, all other Civil Applications filed in these petitions do not survive and they are accordingly disposed of. (S.V. GANGAPURWALA ) (MOHIT S. SHAH) JUDGE CHIEF JUSTICE ......................... Puranik (PS) bgp/wp6039etc