DEEPAK NIKHALJE Vs. STATE OF MAHARASHTRA AND OTHERS

JUDGEMENT

(1.) These four petitions concern a plot of land bearing No.21, admeasuring 810 sq. meters out of Suvery No.14 part of Village Chembur, Taluka Kurla, District B.S.D. ("subject plot"). With a view to understand the controversy in these petitions, a few facts may be noted as below :-

(2.) In or about 1981, the subject plot was proposed to be purchased by a partnership firm known as M/s Borse Brothers. One Panditrao S. Borse and his father and three brothers were partners of this firm. On 1 August 1981, the subject plot was purchased in an auction sale held by Collector of Bombay. There is some controversy between the parties as to whether the purchase was on behalf of the firm. It is, however, not disputed that the plot was infact purchased in the name of Panditrao Borse, who also paid the purchase price for the same. The sale was subsequently confirmed. In October 1986, M/s Borse Brothers sought cash credit loan of Rs.10,00,000/- from one of the Respondents herein, namely, Mahanagar Co-operative Bank Limited ("Bank"). M/s Borse Brothers failed to repay this loan to the Bank and as a result, recovery proceedings were filed by the Bank under Maharashtra Co-operative Societies Act, 1960 ("Act"). On 4 April 1994, the Court passed an ex parte award under Section 91 of that Act against M/s Borse Brothers, through its partners including Panditrao Borse. The award was for a sum of Rs. 24,19,904.92 with interest on the principal amount at the rate of 17.5 % per annum. On 4 July 1996, in pursuance of this award, the Co-operative Court issued an execution certificate under Section 98 of the Act. A demand notice was served upon M/s Borse Brothers in pursuance of the execution certificate and finally, on 16 April 2004, Special Recovery and Sale Officer ("SRO") took possession of the subject plot. By an application made on 24 May 2004, three of the present Respondents, as heirs and legal representatives of Panditrao Borse (since deceased), through their Constituted Attorney, made an application before the Co-operative Court for setting aside the ex parte award and stay of execution. By its order dated 6 September 2004, the Co-operative Court rejected that application. On 30 October 2004, a panchnama was made of taking over of the possession of the subject plot and a notice thereafter was published in the local newspapers inviting tenders for purchase of the plot in execution of the award. On 29 January 2005, SRO opened tenders received in response to the auction notice. The offer of the Petitioner herein as a Proprietor of M/s Adhishakti Developers ("M/s Adhishakti") of Rs.1,51,00,000/- was accepted by SRO. On 25 January 2005, a sum of about Rs.50,96,000/- from out of its offer price was paid by M/s Adhishakti to SRO. The balance purchase price was paid in four separate installments, the last of such installments having been paid on 17 March 2005. After payment of the last installment, vacant and peaceful possession of the subject plot was handed over by SRO to M/s Adhishakti, under a possession receipt dated 18 March 2005. On 13 May 2005, a communication was addressed by SRO to M/s Borse Brothers informing the latter about the auction sale and requesting them to collect surplus amount (that is to say, the surplus sales proceeds after adjustment of the bank's outstanding) from the bank. A conveyance deed appears to have been executed thereafter in favour of M/s Adhishakti after confirmation of sale in its favour. M/s Adhishakti thereafter applied for effecting changes in the revenue records in pursuance of the auction sale in their favour. By an order dated 9 March 2006, the Collector of Mumbai Suburban District rejected that application. That order was challenged in appeal by M/s Adhishakti. By his order dated 16 January 2009, the Hon'ble Minister of Revenue rejected the appeal. This order is the subject matter of challenge in Writ Petition No.1543 of 2009 filed on the original side by M/s Adhishakti and Appellate Side Writ Petition No.6544 of 2009 filed by the Bank. In the meantime, legal heirs of Panditrao Borse had filed a revision application before the Divisional Joint Registrar, Co-operative Societies, Mumbai Divn., Mumbai, challenging the auction sale of the subject plot along with an application for condonation of delay. By his order dated 20 March 2009, the delay was condoned and the application was directed to be heard on merits. By his order dated 29 December 2009, the Divisional Joint Registrar set aside the auction sale held on 29 January 2005 as well as the confirmation of that sale of 18 March 2005. That order along with the order granting condonation of delay is the subject matter of challenge in the other two companion petitions, namely, Writ Petition Nos.393 of 2010 and 1779 of 2010.

(3.) In the backdrop of these facts, Writ Petition Nos.393 of 2010 and 1779 of 2010 are taken up for consideration first, since they challenge the order cancelling the auction sale. The orders of the Collector and the Hon'ble Minister of Revenue, which are the subject matters of challenge in Writ Petition Nos.1553 of 2009 and 6544 of 2009, which are consequential upon the auction sale, could be taken up thereafter, if necessary.