PARVATIBAI SHIVAJIRAO SHENDGE Vs. SANGLI SAHAKARI BANK LTD

JUDGEMENT

(1.) Shivajirao Krishnaji Shendge was a partner of a firm by the name of Vilas Transport Company which was constituted on 16th September 1992, under a Deed of Partnership. One of the partners was his son, Prakash Shivajirao Shendge and two others were Vilas Shendge and Jaysingrao Shendge. The partnership firm submitted an application on 23rd March, 1998 to the first respondent for the grant of a loan in the amount of Rs. 1.30 crores. The application was signed by all the partners including Shivajirao. The loan was sanctioned by the Chairman of the Bank on 30th March, 1998, who incidentally also happened to be one of the partners of the firm. The bank had also extended an over draft facility in the amount of Rs. 30 lacs to the partnership firm. All the four partners confirmed an outstanding of Rs. 212.26 lacs as on 31st March, 2001 and furnished undertakings that the account would be regularised before 30th June, 2001. Shivajirao Shendge died on 23rd December, 2001. Upon his death a letter was addressed by one of his sons, Prakash Shendge, who also happened to be a member of the Legislative Assembly in the State of Maharashtra, on 27th July, 2005 to the Chairman of the Bank recording that he had been unable to fulfill the understanding that had been arrived at between the parties for the repayment of the amount of Rs. 5 crores, due to his pre-occupation as a member of the Legislative Assembly. By a letter, an assurance was held out to the bank that an amount of Rs. 5 crores would be paid within a period of 15 days. That assurance was not complied with. The Bank, it may be noted is a co-operative Bank registered under the Maharashtra Co-operative Societies Act, 1960.

(2.) The Bank instituted two applications for the recovery of its dues under section 101 of the Maharashtra Co-operative Societies Act, 1960. On 13th September, 2002, the Assistant Registrar of Co-operative Societies allowed both the applications by decreeing the claim of the bank. In one recovery certificate the total amount decreed was Rs. 2.68 crores approximately, while in the second, the amount was Rs. 2.25 crores. The claim for interest was allowed. Both the recovery certificates attained finality, since no revision application was filed under section 154 of the Maharashtra Co-operative Societies Act, 1960. Execution proceedings were initiated by the Bank. An attachment has been levied by the bank on a residential flat, being flat 101, situated at Sukhada Co-operative Housing Society Ltd. at Worli. The attachment was questioned by taking out an application under Rule 107(19) of the Maharashtra Co-operative Societies Rules, 1961. The application was rejected by the Special Recovery and Sales Officer by an order dated 29th April, 2009. The order rejecting the applications was questioned in Revision before the Divisional Joint Registrar under section 154. By an order dated 3rd August, 2009, the Divisional Joint Registrar, dismissed the revision application. Proceedings have been instituted before this Court under Article 226 of the Constitution by the widow of Shivajirao Shendge.

(3.) On behalf of the petitioner, it has been submitted that in the recovery proceedings that were instituted in 2002, the husband of the petitioner was not impleaded as a party. The petitioner was not a party as an heir oi her deceased husband who had died on 23rd December, 2001. The flat in question, which has been attached was not offered as security to the Bank and the share certificate, at present stands in the name of the petitioner. The bank has attached the flat on the ground that the husband was a partner of the firm, It is urged that, the assets of the petitioner's deceased spouse can be proceeded against only to the extent to which they were assets to the partnership. The residential flat was not an asset of the partnership and coulc not have been attached, in execution of the recovery certificate. Reliance was placed or a judgment of a Division Bench of this Court in Mathuradas Canji Matani Vs. Ebrahim Fazalbhoy, 1927 AIR(Bom) 581, and on a judgment of the Supreme Court in Her Highness Maharani Mandalsa Devi Vs. M. Ramnarain Private Ltd., 1965 AIR(SC) 1718, in support of the proposition that, if the plaintiff takes the risk of not joining the legal representatives of a partner of a pal tnership firm who is dead on the date of the institution of the proceedings, the right of recourse is restricted only as against the assets of the partnership and not the personal assets of the deceased partner. In the present case, it was urged that, on the date on which the recovery proceedings were instituted under section 101 the spouse of the petitioner had died. His heirs were not brought on the record and as a consequence the recovery certificate can be executed only against the assets of the partnership and against the separate properties of the partners who were impleaded as parties to the proceedings. The recovery certificate, it was urged, cannot be executed as against the personal assets of the deceased partner.