Bombay High Court Dismisses Writ Petition Challenging Rejection of Interim Stay in Cooperative Society Recovery Proceedings. Petitioner Failed to Demonstrate Prima Facie Case or Irreparable Loss in Auction of Mortgaged Property Under Maharashtra Cooperative Societies Act, 1960.

High Court: Bombay High Court Bench: BOMBAY
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Case Note & Summary

The petitioner, Shri Shrirang Gajanan Hole, a member of Respondent No.2 Society (Ujani Mahila Gramin Bigarsheti Sahakari Patsanstha Maryadit), challenged the order dated 27/11/2017 passed by Respondent No.5, the Divisional Joint Registrar, Cooperative Societies, Pune, rejecting his application for interim stay of the auction sale of his property. The petitioner alleged that the society had obtained his signatures on blank loan documents and a mortgage deed dated 06/05/2015, and that the recovery proceedings were initiated without proper notice. The petitioner filed a revision application before the Divisional Joint Registrar, along with an application for interim stay, which was rejected. Aggrieved, the petitioner approached the High Court under Article 227 of the Constitution. The High Court examined the facts and found that the petitioner had not repaid the loan amount and that the auction was conducted after following the procedure under the Maharashtra Cooperative Societies Act, 1960 and Rules. The court held that the petitioner failed to establish a prima facie case or balance of convenience in his favor, and that no irreparable loss would be caused as the auction was a recovery measure. The court also noted that the revision application was pending and the petitioner could raise all grounds therein. Consequently, the High Court dismissed the writ petition, finding no merit in the challenge.

Headnote

A) Cooperative Law - Interim Stay - Prima Facie Case - The petitioner sought interim stay of auction sale of his property initiated by the cooperative society for recovery of loan dues. The Divisional Joint Registrar rejected the stay application. The High Court held that the petitioner failed to make out a prima facie case or demonstrate irreparable loss, as the auction was conducted after following due procedure and the petitioner had not repaid the loan. (Paras 1-10)

B) Cooperative Law - Revision - Scope of Interference - The High Court, in its supervisory jurisdiction under Article 227, declined to interfere with the order of the Divisional Joint Registrar, as the order was neither perverse nor without jurisdiction. The revision application was pending and the petitioner could raise all contentions therein. (Paras 11-13)

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Issue of Consideration

Whether the Divisional Joint Registrar erred in rejecting the petitioner's application for interim stay of the auction sale proceedings pending revision, and whether the High Court should interfere under Article 227 of the Constitution.

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Final Decision

The High Court dismissed the writ petition, holding that the petitioner failed to make out a prima facie case or demonstrate irreparable loss, and that the revision application was pending.

Law Points

  • Interim stay
  • prima facie case
  • balance of convenience
  • irreparable loss
  • cooperative society recovery
  • auction sale
  • revision application
  • Maharashtra Cooperative Societies Act
  • 1960
  • Rule 107
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Case Details

2019:BHC-AS:14974

Writ Petition No.2406 of 2018

2019-06-03

S. S. Shinde, J

2019:BHC-AS:14974

Mr. S A Tarale for the Petitioner, Mr. G S Godbole a/w Mr. Shivraj Patni I/by Mr. Kaustubh Thipsay for Respondent Nos.1 and 2, Mr. S H Kankal, AGP for Respondent Nos.3, 5 and 6, Mr. Prajakt M Arjunwadkar for Respondent No.4

Shri Shrirang Gajanan Hole

The Special Recovery Officer, Ujani Mahila Gramin Bigarsheti Sahakari Patsanstha Maryadit & Ors.

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Nature of Litigation

Writ petition under Article 227 of the Constitution challenging the rejection of interim stay application in cooperative society recovery proceedings.

Remedy Sought

The petitioner sought to quash the order dated 27/11/2017 rejecting interim stay and to direct stay of auction proceedings under Rule 107(14)(3) of the Maharashtra Cooperative Society Rule, 1961.

Filing Reason

The petitioner alleged that the society obtained his signatures on blank loan documents and a mortgage deed, and initiated recovery proceedings without proper notice, leading to auction of his property.

Previous Decisions

The Divisional Joint Registrar, Cooperative Societies, Pune, rejected the petitioner's application for interim stay in Revision Application No.297 of 2017 on 27/11/2017.

Issues

Whether the Divisional Joint Registrar erred in rejecting the interim stay application? Whether the High Court should interfere under Article 227?

Submissions/Arguments

Petitioner argued that the society acted malafide by obtaining signatures on blank papers and that the auction was illegal. Respondents contended that the loan was taken, mortgage deed was executed, and recovery was in accordance with law.

Ratio Decidendi

The court held that for grant of interim stay, the petitioner must establish a prima facie case, balance of convenience in his favor, and irreparable loss. The petitioner failed to do so. The order of the Divisional Joint Registrar was not perverse or without jurisdiction, hence no interference under Article 227.

Judgment Excerpts

By this Writ Petition the Petitioner challenges the order dated 27/11/2017 passed by Respondent No.5 i.e. the Divisional Joint Registrar, Co operative Societies, Pune (Rural) by which order the application filed by the Petitioner in Revision Application No.297 of 2017, pending before Respondent No.5, for interim stay to the execution of public auction sale proceeding dated 24/10/2017 came to be rejected. The Petitioner is a member of Respondent No.2 Society.

Procedural History

The petitioner filed a revision application before the Divisional Joint Registrar against the auction sale. An interim stay application was rejected on 27/11/2017. The petitioner then filed the present writ petition under Article 227 of the Constitution.

Acts & Sections

  • Maharashtra Cooperative Societies Act, 1960:
  • Maharashtra Cooperative Society Rule, 1961: Rule 107 (14)(3)
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