Case Note & Summary
The judgment concerns two writ petitions and two civil applications seeking termination of liquidation proceedings of The Karmaveer Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd, a cooperative sugar factory at Niphad, District Nasik. The factory incurred financial losses leading to appointment of a liquidator under Section 102(1)(a) of the Maharashtra Cooperative Societies Act, 1960 (MCS Act). Since then, the factory was managed by the liquidator. The State Government permitted leasing the factory to respondent nos.6 and 7. The petitioners, who are members of the society, sought termination of liquidation under Section 105 of the MCS Act and approval of a revival plan. The court examined the financial position, the proposed lease agreement, payment of dues to creditors, and the feasibility of revival. The court held that the revival plan is viable and in the interest of all stakeholders, including members and creditors. It directed termination of liquidation subject to conditions such as payment of all outstanding dues to the government and other creditors within a specified period. The court also allowed the civil applications for intervention. The judgment was pronounced on 26th July 2019 by a division bench of Justice Ranjit More and Justice Bharati H. Dangre.
Headnote
A) Cooperative Law - Termination of Liquidation - Section 105 Maharashtra Cooperative Societies Act, 1960 - Revival of Sick Society - Petitioners sought termination of liquidation of respondent no.1 sugar factory, which was under liquidation since 2002, and approval of a revival plan involving lease to respondent nos.6 and 7 - Court examined the financial viability, payment of dues to creditors, and compliance with statutory requirements - Held that the revival plan is feasible and in the interest of all stakeholders, and directed termination of liquidation subject to conditions (Paras 1-20).
Issue of Consideration
Whether the liquidation proceedings of a cooperative sugar factory can be terminated under Section 105 of the Maharashtra Cooperative Societies Act, 1960, and whether the proposed revival plan is feasible and in the interest of members and creditors.
Final Decision
The court allowed the writ petitions and civil applications, directing termination of liquidation proceedings subject to payment of all outstanding dues to the government and other creditors within a specified period. The revival plan was approved.
Law Points
- Termination of liquidation
- Cooperative societies
- Revival of sick society
- Section 105 MCS Act
- 1960
- Lease of assets
- Payment of dues
Case Details
2019 LawText (BOM) (07) 68
Writ Petition No. 14127 of 2018 with Writ Petition No. 7685 of 2019 and Civil Application Nos. 1470 of 2019 and 1471 of 2019
Shri Ranjit More, Smt. Bharati H. Dangre
Mr. Pramod Narayan Joshi, Mr. V.R. Raje, Mr. Surel S. Shah, Mr. Amey C. Sawant, Ms. Bhavana Khichi, Mr. Ashish Shivajirao Gaikwad, Ms. Prerana A. Agavekar, Mr. D.R. Kale, Mr. Yogesh Jaybhaye, Mr. A.A. Alaspurkar
Balasaheb Devram Wagh and ors; Dhondiram Murlidhar Shinde and ors
The Karmaveer Kakasaheb Wagh Sahakari Karkhana Ltd and ors
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Nature of Litigation
Writ petitions seeking termination of liquidation proceedings of a cooperative sugar factory and approval of a revival plan.
Remedy Sought
Termination of liquidation under Section 105 of MCS Act and approval of revival plan.
Filing Reason
The sugar factory was under liquidation since 2002; members sought revival to protect their interests.
Previous Decisions
Liquidator appointed under Section 102(1)(a) of MCS Act; State Government permitted lease of factory to respondent nos.6 and 7.
Issues
Whether the liquidation proceedings can be terminated under Section 105 of MCS Act.
Whether the revival plan is feasible and in the interest of members and creditors.
Submissions/Arguments
Petitioners argued that the revival plan would pay off all dues and restart operations, benefiting members.
Respondents (liquidator and lessees) supported the plan, stating it is financially viable.
Ratio Decidendi
Termination of liquidation under Section 105 of MCS Act is permissible if a revival plan is feasible and in the interest of all stakeholders, including creditors and members.
Judgment Excerpts
Since both the writ petitions before us seek an identical relief of terminating the liquidation proceedings in respect of the respondent no.1 Sakhar Karkhana, we have heard both the writ petitions finally by consent of the parties.
Respondent no.1 – The Karmaveer Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd, at Niphad, District Nasik, as a processing Society has incurred financial losses which resulted into appointment of a liquidator by order under Section 102(1)(a) of Maharashtra Cooperative Societies Act, 1960.
Procedural History
The sugar factory was placed under liquidation by order under Section 102(1)(a) of MCS Act. The State Government permitted leasing the factory to respondent nos.6 and 7. Petitioners filed writ petitions seeking termination of liquidation and approval of revival plan. Civil applications for intervention were filed and allowed. The court heard all matters together and pronounced judgment on 26th July 2019.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: 102(1)(a), 105
