Case Note & Summary
The petitioners, who were tenants/licensees of shop premises in a building owned by the respondent co-operative bank, challenged the auction sale of the building conducted by the bank for recovery of dues. The bank had taken possession of the building and sold it through auction. The petitioners contended that the sale was void for want of registration under the Registration Act, 1908 and that the sale was not a valid sale under the Transfer of Property Act, 1882. They also argued that the sale was barred by limitation under Article 12 of the Limitation Act, 1963. The court examined the provisions of the Maharashtra Co-operative Societies Act, 1960, particularly Section 101 which empowers a co-operative bank to sell property for recovery of its dues. The court held that such a sale is a statutory sale and not a sale under the Transfer of Property Act, and therefore does not require registration. The certificate of sale issued by the bank is sufficient to transfer title. The court also held that Article 12 of the Limitation Act does not apply to such sales. Additionally, the court observed that a co-operative bank is not a 'State' under Article 12 of the Constitution and thus a writ petition is not maintainable. The petitioners have an alternative remedy of arbitration under Section 91 of the MCS Act. The court dismissed the writ petition, upholding the validity of the auction sale.
Headnote
A) Co-operative Law - Auction Sale by Bank - Nature of Sale - Sale of property by a co-operative bank under Section 101 of the Maharashtra Co-operative Societies Act, 1960 is not a 'sale' under the Transfer of Property Act, 1882 and does not require registration under Section 17 of the Registration Act, 1908 - The court held that the sale is a statutory sale and the certificate of sale issued by the bank is sufficient to transfer title (Paras 10-15).
B) Limitation Act - Article 12 - Applicability - Article 12 of the Limitation Act, 1963 which provides limitation for setting aside a sale does not apply to auction sales by co-operative banks under the MCS Act, 1960 - The court held that such sales are not 'sales' under the Transfer of Property Act and hence Article 12 is not attracted (Para 16).
C) Constitutional Law - Maintainability of Writ - Co-operative Bank not 'State' - A co-operative bank is not a 'State' under Article 12 of the Constitution of India and hence a writ petition under Article 226 is not maintainable against it - The court held that the petitioners have an alternative remedy of arbitration under Section 91 of the MCS Act, 1960 (Paras 17-20).
Issue of Consideration
Whether the auction sale of property by a co-operative bank under the Maharashtra Co-operative Societies Act, 1960 requires registration under the Registration Act, 1908 and whether the sale is a 'sale' under the Transfer of Property Act, 1882.
Final Decision
The court dismissed the writ petition, upholding the validity of the auction sale conducted by the co-operative bank.
Law Points
- Co-operative bank's sale of property under Section 101 of Maharashtra Co-operative Societies Act
- 1960 is not a sale under Transfer of Property Act
- 1882
- No registration required under Section 17 of Registration Act
- 1908
- Auction sale by bank is not a 'sale' under Article 12 of Limitation Act
- 1963
- Writ petition not maintainable against co-operative bank as it is not a 'State' under Article 12 of Constitution
- Alternative remedy of arbitration under Section 91 of MCS Act available
Case Details
2023 LawText (BOM) (06) 51
Writ Petition No.9660 of 2022
Mr. Jayvant S. Shah and others
Bombay Mercantile Co-operative Bank Limited and others
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Nature of Litigation
Writ petition challenging auction sale of property by a co-operative bank for recovery of dues.
Remedy Sought
Petitioners sought to set aside the auction sale and declare it void for want of registration and being barred by limitation.
Filing Reason
Petitioners, who were tenants/licensees of shop premises in a building owned by the respondent co-operative bank, challenged the auction sale of the building conducted by the bank for recovery of dues.
Issues
Whether the auction sale of property by a co-operative bank under the Maharashtra Co-operative Societies Act, 1960 requires registration under the Registration Act, 1908?
Whether the sale is a 'sale' under the Transfer of Property Act, 1882?
Whether Article 12 of the Limitation Act, 1963 applies to such sales?
Whether a writ petition under Article 226 is maintainable against a co-operative bank?
Submissions/Arguments
Petitioners argued that the sale was void for want of registration under the Registration Act, 1908 and that the sale was not a valid sale under the Transfer of Property Act, 1882.
Petitioners also argued that the sale was barred by limitation under Article 12 of the Limitation Act, 1963.
Respondent bank argued that the sale was a statutory sale under Section 101 of the Maharashtra Co-operative Societies Act, 1960 and did not require registration.
Respondent bank also argued that the writ petition was not maintainable as the bank is not a 'State' under Article 12 of the Constitution and that the petitioners have an alternative remedy of arbitration under Section 91 of the MCS Act.
Ratio Decidendi
A sale of property by a co-operative bank under Section 101 of the Maharashtra Co-operative Societies Act, 1960 is a statutory sale and not a sale under the Transfer of Property Act, 1882. Therefore, it does not require registration under the Registration Act, 1908. The certificate of sale issued by the bank is sufficient to transfer title. Article 12 of the Limitation Act, 1963 does not apply to such sales. A co-operative bank is not a 'State' under Article 12 of the Constitution, and a writ petition under Article 226 is not maintainable against it; the petitioners have an alternative remedy of arbitration under Section 91 of the MCS Act.
Judgment Excerpts
The sale of property by a co-operative bank under Section 101 of the Maharashtra Co-operative Societies Act, 1960 is a statutory sale and not a sale under the Transfer of Property Act, 1882.
The certificate of sale issued by the bank is sufficient to transfer title and no registration is required under the Registration Act, 1908.
Article 12 of the Limitation Act, 1963 does not apply to auction sales by co-operative banks under the MCS Act.
A co-operative bank is not a 'State' under Article 12 of the Constitution and hence a writ petition under Article 226 is not maintainable.
Procedural History
The petitioners filed a writ petition under Article 226 of the Constitution of India before the High Court of Judicature at Bombay challenging the auction sale of property by the respondent co-operative bank. The court heard the matter and dismissed the petition.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: Section 101, Section 91
- Transfer of Property Act, 1882:
- Registration Act, 1908: Section 17
- Limitation Act, 1963: Article 12
- Constitution of India: Article 12, Article 226
