Case Note & Summary
The judgment concerns three applications seeking recall or review of an order dated 21 October 2022 passed by the Bombay High Court in Writ Petition No.11610 of 2022. The writ petition was filed by Savannah Lifestyle Private Limited challenging an order of the Additional Chief Metropolitan Magistrate that dismissed its application for recall of a possession order in favour of Vasantdada Shetkari Sahakari Bank Ltd. (the Bank). During the pendency of the writ petition, the Bank and Savannah entered into Minutes of Order dated 20 October 2022, under which the Bank agreed to assign the loan of Shaila Clubs & Resorts Private Limited (the corporate debtor) along with all securities, mortgages, and rights to Savannah in consideration of a payment of Rs.87,92,000/- (in addition to earlier deposits of Rs.2,50,00,000/-). The court disposed of the writ petition in terms of the Minutes of Order. Subsequently, the Official Liquidator of the Bank filed Interim Application No.13400 of 2024 seeking recall of the order, alleging that the assignment was not in the Bank's interest and that the OTS was cancelled. Amit Prabhakar Kore, a suspended director of Shaila Clubs, filed Review Petition No.85 of 2024, and Shaila Clubs itself filed Review Petition No.38 of 2023, both seeking review of the same order. The court examined whether the order could be recalled or reviewed. It held that the order was a consent order passed on the basis of Minutes of Order signed by both parties (Bank and Savannah). The Liquidator, who was the applicant in the recall application, was the same entity as the Bank that had consented to the order. The court found no fraud, misrepresentation, or lack of jurisdiction. The suspended director and the corporate debtor were not parties to the consent terms and had no locus to seek review. The court also noted that the corporate debtor was under CIRP and the Resolution Professional had not challenged the order. The court dismissed all three applications, upholding the validity of the consent order and the assignment of the loan.
Headnote
A) Civil Procedure - Consent Order - Recall/Review - Order passed on Minutes of Order tendered by parties - The court held that an order passed on consent cannot be recalled or reviewed unilaterally unless there is fraud, misrepresentation, or lack of jurisdiction. The Liquidator, suspended director, and corporate debtor were not parties to the consent terms and cannot seek recall of a consent order. (Paras 1-2, 10-15)
B) Co-operative Banks - Recovery - Assignment of Debt - One Time Settlement - Under Section 101 of the Maharashtra Co-operative Societies Act, 1960 - The Bank assigned its loan and security to Savannah under Minutes of Order. The court held that the assignment was valid and the Liquidator cannot unilaterally cancel the OTS after the order was recorded. (Paras 6-8, 16-20)
C) Insolvency and Bankruptcy Code - CIRP - Rights of Resolution Professional - The corporate debtor (Shaila Clubs) was under CIRP. The court held that the Resolution Professional could not challenge the consent order as the assignment was between the Bank and Savannah, and the debtor's rights were not affected. (Paras 5, 21-25)
Issue of Consideration
Whether the order dated 21 October 2022 disposing of Writ Petition No.11610 of 2022 based on Minutes of Order dated 20 October 2022 can be recalled or reviewed at the instance of the Official Liquidator, a suspended director, or the corporate debtor.
Final Decision
All three applications (Interim Application No.13400 of 2024, Review Petition No.85 of 2024, and Review Petition No.38 of 2023) are dismissed. The order dated 21 October 2022 stands.
Law Points
- Consent order
- Minutes of Order
- recall
- review
- assignment of debt
- OTS
- IBC
- CIRP
- co-operative bank
- liquidator
- Section 101 MCS Act
Case Details
2025 LawText (BOM) (3) 113
Interim Application No.13400 of 2024 in Writ Petition No.11610 of 2022; Review Petition No.85 of 2024 with Interim Application No.10662 of 2024 in Writ Petition No.11610 of 2022; Review Petition No.38 of 2023 with Interim Application No.17497 of 2023 in Writ Petition No.11610 of 2022
Mr. Navroz Seervai, Senior Advocate with Mr. Aseem Naphade and Mr. Shivaji Masal for Applicant in IA/13400/2024; Mr. Vikram Nankani, Senior Advocate with Mr. Ameet Naik, Mr. Tushar Hathiramani, Mr. Abhishek Kale, Mr. Vivek Dwivedi, Mr. Nevil Chopra, Mr. Aditya Khare and Ms. Rebecca Singh for Review Petitioner in RP/85/2024; Dr. Virendra Tulzapurkar, Senior Advocate with Mr. Mandar Soman, Ms. Shruti Maniar, Ms. Shivani Bhandary and Ms. Kashmita Belwalkar for Respondent No.1; Mr. Suresh Yadav with Mr. Avinash Khondkar and Ms. Khushbu Bhansali for Respondent No.4; Mr. P.V. Nelson Rajan, AGP for Respondent-State; Ms. Savina R. Crasto, AGP for Respondent-State in RPW/85/2024 & IA/10662/2024
Official Liquidator of Vasantdada Shetkari Sahakari Bank Ltd. (in IA/13400/2024); Amit Prabhakar Kore (in RP/85/2024); M/s. Shaila Clubs & Resorts Private Limited (in RP/38/2023)
Savannah Lifestyle Private Limited, Milind Kasodkar (Resolution Professional), and others
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Nature of Litigation
Recall and review applications against a consent order disposing of a writ petition challenging a Magistrate's order for possession of mortgaged property.
Remedy Sought
Recall or review of order dated 21 October 2022 passed in Writ Petition No.11610 of 2022.
Filing Reason
The Official Liquidator, suspended director, and corporate debtor alleged that the consent order was not in the interest of the Bank or the corporate debtor and sought to set it aside.
Previous Decisions
Order dated 21 October 2022 disposing of Writ Petition No.11610 of 2022 based on Minutes of Order dated 20 October 2022.
Issues
Whether the order dated 21 October 2022 can be recalled or reviewed at the instance of the Official Liquidator, suspended director, or corporate debtor.
Whether the consent order was vitiated by fraud, misrepresentation, or lack of jurisdiction.
Submissions/Arguments
The Official Liquidator argued that the assignment of loan was not in the Bank's interest and that the OTS was cancelled before the order was passed.
The suspended director and corporate debtor argued that they were not parties to the consent terms and that the order adversely affected their rights.
Savannah argued that the order was a consent order and could not be unilaterally recalled or reviewed.
Ratio Decidendi
A consent order passed on Minutes of Order cannot be recalled or reviewed unilaterally unless there is fraud, misrepresentation, or lack of jurisdiction. The Liquidator, being the same entity that consented, cannot seek recall. The suspended director and corporate debtor have no locus to challenge a consent order to which they were not parties.
Judgment Excerpts
The Interim Application and the two Review Petitions essentially seek either recall or review of order passed by this Court on 21 October 2022 disposing of Writ Petition No.11610 of 2022 based on Minutes of Order tendered on 20 October 2022.
Considering the narrow controversy involved in the present application and review petitions, it is not necessary to narrate the chequered history of the case.
Procedural History
Writ Petition No.11610 of 2022 was filed by Savannah challenging the Magistrate's order dated 4 March 2020. On 20 October 2022, the Bank and Savannah tendered Minutes of Order, and the court disposed of the writ petition on 21 October 2022 in terms thereof. Subsequently, the Official Liquidator filed IA/13400/2024 for recall, Amit Kore filed RP/85/2024 for review, and Shaila Clubs filed RP/38/2023 for review. All three were heard together and dismissed by this judgment.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: Section 101
- Insolvency and Bankruptcy Code, 2016: Section 7
