N.A. Britto, J.
1. Heard.
2. Challenge in this Writ Petition is to two orders of the Registrar of Co-operative Societies, Goa. The first is dated 16.8.2007 and the second is dated 30.01.2008. By the second order, the Registrar has refused to review the first order dated 16.8.2007. By the first order, the Registrar has allowed an appeal filed by respondent No. 3 herein and has set aside the order dated 26.8.1995 passed by the Assistant Registrar of Co-operative Societies and has directed him to rehear the matter on condition that the respondent No. 3 deposit a sum of Rs. 1,00,000/-as costs to the Petitioner. The petitioner (Bank, for short) has sought for declaration for declaring the said orders of the respondent No. 1 Registrar as orders passed without jurisdiction or authority or power to entertain, hear and dispose of the purported appeal either under the Act of 1960 or under the Act of 2002 and consequently quashing of the said orders by a Writ of Certiorari or any other Writ, direction or order.
3. At the outset, the submissions made on behalf of the respondent Nos. 1 and 2 as well as the intervenor are required to be noted. (a) Shri Kamat, learned Government Advocate, on behalf of Advocate General Shri Kantak has conveyed the latter's submission that the first order of the Registrar of Co-operative Societies, cannot be sustained under the Multi-State Co-operative Societies Act, 2002 (Act of 2002, for short) whereupon a submission is made by Shri Sanjiv Pundekar, learned Counsel on behalf of Respondent No. 3, that the said order could be considered as having been made under the Maharashtra Co-operative Societies Act, 1960 (Act of 1960, for short) as applicable to the State of Goa.
4. (b) Shri Rafique Dada, the learned Senior Counsel appearing on behalf of the intervenor has submitted that upon the failure of the respondent No. 3 to comply with the order of the Hon'ble Supreme Court dated 24.3.2009, the intervenor has paid full purchase price to the petitioner and has registered the sale deed in respect of the suit property that is to say the property known as 'Soranto' surveyed under No. 179/1 of Anjuna Village, which was earlier mortgaged to the petitioner.
5. The petitioner herein is a Bank (Bank, for short) which was initially registered as a Co-operative Society under the Act of 1960 and is now governed by the Act of 2002 w.e.f. 30.5.1987 that is to say by virtue of Section 95 of the Multi-State Co-operative Societies Act, 1984 (Act of 1984, for short) read with Goa, Daman and Diu Re-organisation Act, 1987.
6. Although the Bank ought to have followed the procedures laid down by the Act of 1984 and thereafter by Act of 2002 w.e.f. 30.5.1987, particularly for recovery of loans from defaulters, it appears that the Bank chose to follow the Act of 1960. The Act of 2002 was not being followed apparently because under the Act of 1960 the office bearers of the committee of the Bank could remain in power for a period of five years and not for three years as stipulated in the Act of 2002. This Court in Writ Petition No. 23/93 confirmed the position that the Bank ought to have followed the provisions of Act of 2002 w.e.f. 30.5.1987. As said before, as far as recoveries of loans given to various borrowers, it appears that the Bank followed the mode of recovery provided under the Act of 1960 and the award of the Registrar's Nominee dated 26.8.1995 appears to be one instance from amongst 1084 cases, taken note of by the learned Division Bench of this Court in Writ Petition No. 23/93 by judgment dated 7.11.1997.
7. Be that as it may, there is no dispute that M/s Walbro Hotels Private Limited, is a company which was incorporated on 25.8.1988 and its two share holders were Shri. Anil P. Walavalkar and Smt. Arundhati Anant Dessai with one equity share each. The said company purchased the said property Soranto, surveyed under No. 179/1 of Anjuna Village from Dattatray Kashinath Nanal and others by sale deed dated 23.12.1988. Thereafter, Shri Anil P. Walavalkar, as proprietor of M/s Walbro Constructions applied for a loan of Rs. 20,00,000/-from the Bank for construction activities and against the said loan mortgaged the suit property belonging to the said M/s Walbro Hotels Private Limited. It appears that the said M/s Walbro Constructions of the said Anil P. Walavalkar had taken up a construction project known as 'Ocean Park' in the suit property and at the relevant time the said property along with buildings under construction was valued at Rs. 1,18,68,700.00 by one of the valuers of the Bank. There is no dispute that on 28.5.1991 both the said Shri Anil P. Walavalkar as well as the said Smt. Arundhati Anant Dessai, the former as a proprietor and latter in her personal capacity as sureties signed a mortgaged deed in favour of the Bank as security towards the said loan of Rs. 20,00,000/- along with other documents.
8. The said loan was repayable on or before 27.5.1992 and as it was not repaid, the bank informed M/s Walbro Constructions by letter dated 25.9.1993 that they had neglected to pay the amount due to the Bank. There is no dispute that on 8.3.1994 the said Shri Anilkumar P. Walavalkar submitted a letter dated 30.6.1994 with a fresh certificate of incorporation consequent to the change of name of M/s Walbro Hotels Private Limited. The certificate shows that M/s Walbro Hotels Private Limited, had become first as M/s Walbro Hotels Limited and latter as M/s Woods Beach Hotels Limited, a public limited company that is to say the respondent No. 3 herein. However, what is relevant to be noted at this very stage is that as per the certificate of incorporation, the said Anilkumar P. Walavalkar and Smt. Arundhati Anant Dessai had continued to be share holders and directors of M/s Woods Beach Hotels Limited. The registered address of M/s Woods Beach Hotels Limited had remained to be same as M/s Walbro Hotels Private Limited. In other words, this was a case of change of label only, the wine and the bottle remaining same, if it may use that expression.
9. The loan amount having not been paid by the principal borrower namely the said Anil P. Walavalkar or the guarantor, the M/s Walbro Hotels Private Limited, a final demand notice came to be issued on 16.9.1994 and thereafter the Bank raised a dispute by application dated 10.10.1994. There is no dispute, that disputes were raised under the Act of 1960 by making a reference under Section 91 of that Act, though the application ought to have been made under Section 74 of the Act of 1984. The dispute was referred to the Registrar's Nominee Advocate Shri Gaonkar in terms of Section 91 of the Act, 1960 and all the parties to the said dispute were duly served. Shri Anil P. Walavalkar as well as Smt. Arundhati Anant Dessai who were directors of said company in its old as well as in its new name appeared before the said Registrar's Nominee Advocate Shri Gaonkar through Advocate Shri Salatry and the latter sought time, but eventually an ex-parte award came to be passed on 26.8.1995 in the sum of Rs. 33,81,148/-as on 26.8.1995 with interest at the rate of 22% per annum with further penal interest of 2% from 27.8.1995.
10. It appears that subsequently the affairs of M/s Woods Beach Hotels Limited, that is to say respondent No. 3, were taken over by Shri Avinash Virkar,no date is mentioned anywhere, who on or about 7.2.2000 approached the Bank and even paid an amount of Rs. 6.63 lakhs into the loan account but took no steps to challenge the ex-parte award dated 26.8.1995. That award, since it was passed in terms of Section 91 of the Act of 1960 could have been challenged before the Co-operative Tribunal, Panaji Goa, in terms of Section 97 of the Act of 1960. The said award dated 26.8.1995 was allowed to attain finality.
11. Thereafter, the Bank started proceedings for execution of the said award by application to the Assistant Registrar of Cooperative Societies, Goa, against the said M/s Walbro Constructions, M/s Walbro Hotels Pvt. Ltd., Smt. Arundhati Anant Dessai and Shri Anilkumar P.P. Walavalkar. This was done in terms of Section 85 of the Act of 1984 read with Rule 22 of the Multi-State Co-operative Societies (Privileges, properties, etc.) Rule, 1985. Notices were served on the said judgment debtors including the said M/s Walbro Hotels Pvt. Ltd., at the registered address. At this stage it may observed that in case the notice was issued to M/s Walbro Hotels Pvt. Ltd., at its registered address, it could not be said that it was not received by M/s Woods Beach Hotels Limited when it was delivered at the same address. M/s Woods Beach Hotels Limited respondent No. 3 must have certainly received the said notice of execution and only after that notice was received, that presumably respondent No. 3 through its director Avinash Virkar approached the Bank and made payment of Rs. 6.63 lakhs which was adjusted by the Bank towards M/s Walbro Constructions and it is stated by the Bank that the said Avinash Virkar thereafter failed and neglected to pay the balance due. The said Virkar must have made the said payment of Rs. 6.63 lakhs on 7.2.2000 only after he was aware of the notice dated 10.12.1999 issued by the recovery and sales officer of the Central Registrar. Thereafter, the execution proceeded. A proclamation was made on 27.10.1999 for auction of property on 7.2.2000 of which the Bank claims due notice was given to the judgment debtors and as on that day there were no bidders, the auction was adjourned to 31.1.2001 and as still there were no bidders the auction was fixed on 3.5.2001 and these auctions were fixed, as stated by the petitioner, every time by issuing a fresh proclamation. Lastly, another proclamation was issued on 23.12.2002 fixing the auction on 28.3.2002 and as still there were no bidders the Bank obtained permission and offered a price of Rs. 97,04,222/-which was accepted and the sale was confirmed in favour of the Bank by certificate issued by the sales and recovery officer on 6.5.2002.
12. Thereafter, there was again silence on the part of the respondent No. 3 and then the Respondent No. 3 on one side approached the Assistant Registrar on 28.9.2004 with an application under Order 9, Rule 13, Civil Procedure Code, for setting aside the ex-parte award dated 26.8.1995 of the Registrar's Nominee, and, on the other side, filed a Writ Petition on 16.8.2004 bearing No. 378/2004 before this Court. It appears that ad-interim stay was granted in favour of respondent No. 3 to deposit Rs. 50,00,000/-which the respondent No. 3 failed to deposit and as a result on 29.10.2004 the said ad-interim order was recalled and eventually the Writ Petition came to be dismissed by the Division Bench of this Court on 29.3.2005, inter alia, observing that the respondent No. 3 was free to pursue the remedy available to him under the law. With the dismissal of the said Writ Petition, the order dated 6.5.2002 confirming the sale in favour of the Bank also attained finality. It may be noted here that the respondent No. 3 on 5.9.2004 had filed a SLP before the Apex Court and the Hon'ble Supreme Court was pleased to entertain the same on condition that respondent No. 3 deposits Rs.50,00,000/-but upon failure of the respondent No. 3 to appear before the Apex Court and/or to deposit the said amount, the said SLP came to be dismissed on 10.2.2006.
13. The application filed before the Assistant Registrar on 28.9.2004 came to be dismissed on 5.10.2005 by the Assistant Registrar. The application filed by respondent No. 3 before the Assistant Registrar came to be dismissed, inter alia with an observation by the Assistant Registrar that he had no power to restore the proceedings by setting aside the judgment and order dated 26.8.1995 of the Registrar's Nominee. Appeal from the said order, as already observed, could have been filed only before the Co-operative Tribunal and none other, in ordinary civil jurisdiction. However, it is interesting to note that although the application was filed under Order 9, Rule 13, CPC no cause was shown as to why M/s Walbro Hotels Private Limited for that matter M/s Woods Beach Hotels Limited could not appear before the Registrar's Nominee prior to passing of award dated 26.8.1995. The respondent No. 3 thereafter filed an appeal before the Registrar Co-operative Societies against the said order dated 5.10.2005.
14. Against the order of this Court dated 17.3.2008 in this Writ Petition, by which status quo prayed for by respondent No. 3, in relation to the sale of the suit property was refused, the respondent No. 3 preferred an appeal to the Apex Court and by judgment dated 24.3.2009 the Apex Court had directed the respondent No. 3 to deposit a sum of Rs. 6.04 lakh in this Writ Petition within three months from that date and in the event, it was deposited, parties were directed to maintain status quo as regards the suit property initially for a period of three months unconditionally and in the event the said amount was deposited, the interim order was continued till the disposal of the Writ Petition or until further orders to be passed by this Court in the Writ application. It is in this context, that Shri Rafique Dada appearing on behalf of the intervenor, has submitted that on the failure of the respondent No. 3 to deposit the said amount of Rs. 6.04 lakh with the Bank that the intervenor has completed the sale in respect of the suit property and the sale deed has also been registered.
15. The Registrar, Respondent No. 1, appears to have been much impressed that the case was filed by the Bank in the name of M/s Walbro Hotels Private Limited inspite of their knowledge that the name of the company was changed to M/s Woods Beach Hotels Limited. Learned Registrar does not appear to have taken into consideration that both the directors of erstwhile Walavalkar Hotels Pvt. Ltd., were also the directors of M/s Woods Beach Hotels Limited and were duly served with the notice of the proceedings before the Registrar's Nominee and not only that the Company under the new name was served at the very same address. The Registrar therefore felt that the respondent in those proceedings ought to be given opportunity to defend inspite of the fact that all concerned had sufficient opportunities to defend themselves but had failed to defend in the said proceedings before the Nominee.
16. Shri Nadkarni, the learned Senior Counsel appearing on behalf of the petitioner, has submitted that the impugned order of the Registrar does not even show that it has been passed by him as a representative of the Central Registrar. Learned Counsel further submits that nowhere in the petition or in the affidavit in reply filed by the respondent No. 3, it has been disclosed as to when the said Virkar acquired interest in M/s Woods Beach Hotels Limited which was earlier held by said Shri Anil P. Walavalkar and Smt. Arundhati Anant Dessai. Learned Counsel further submits that against the award dated 26.8.1995 the respondent No. 3 ought to have approached the Co-operative Tribunal, or High Court in extra ordinary jurisdiction. He further submits that no provision of law was ever mentioned under which, the appeal was filed, before the Registrar. Learned Senior Counsel therefore submits that the order of the Registrar dated 16.8.2007 is absolutely without jurisdiction and authority of law in as much as the Registrar does not have any appellate power against the order of the Assistant Registrar under the Act of 2002. Learned Counsel further submits that what was changed is only the name of the company and whatever action taken against M/s Walbro Hotels Private Limited, the respondent No. 3 M/s Woods Beach Hotels Limited would be bound by it. Learned Counsel concedes that under the Act of 1984 the disputes had to be raised before the Central Registrar and under the Act of 2002 they had to be settled by the arbitration in terms of Section 84 thereof but since the Bank was then following the procedure prescribed under the Act of 1960, the dispute was raised before the Registrar and was referred to and was decided by the Registrar's Nominee and his decision was at no time challenged by the respondent No. 3, and as such the same is binding on respondent No. 3. Shri Nadkarni has placed reliance on the decision of Division Bench of this Court in the case of Laxman Ladu Raut and Anr. v. Union of India and Ors. 2007 (1) G L.R. 518 wherein this Court had referred to Rafique Bibi v. Sayed Waliuddin : (2004) 1 SCC 287, amongst other cases and reiterated the principle that firstly, the Court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. The order may be 'a nullity' and 'void' but these terms have no absolute sense: their meaning is relative, depending upon the Court's willingness to grant relief in any particular situation. If this principle of illegal relativity is borne in mind, the law can be made to operate justly and reasonably in cases where the doctrine of ultra vires, ridigly applied, would produce unacceptable results. Secondly, there is a distinction between mere administrative orders and the decrees of Courts, especially a superior Court. The order of a superior Court such as the High Court, must always be obeyed no matter what flaws it may be thought to contain. Thus a party who disobeys a High Court injunction is punishable for contempt of Court even though it was granted in proceedings deemed to have been irrevocably abandoned owing to the expiry of a time-limit. The Supreme Court also noted that a decree suffering from illegality or irregularity of procedure, cannot be termed inexecutable by the executing Court: the remedy of a person aggrieved by such a decree is to have it set aside in a duly constituted legal proceedings or by a superior Court failing which he must obey the command of the decree. A decree passed by a Court of competent jurisdiction cannot be denuded of its efficacy by any collateral attack or in incidental proceedings. The lack of jurisdiction in the Court passing the decree must be patent on its face in order to enable the executing Court to take cognizance of such a nullity based on want of jurisdiction, else the normal rule that an executing Court cannot go behind the decree must prevail. On behalf of the intervenor learned Senior Counsel Dada has placed reliance on Tayabbhai M. Bagasarwalla and Anr. v. Hind Rubber Industries Pvt. Ltd. : (1997) 3 SCC 443 wherein the Apex Court referred to the case of D.M. Samyulla v. Commissioner, Corporation of the City of Bangalore, wherein reference was made to the decision of the Court of appeal in Hadkinson v. Hadkinson:
The principle laid down in the said decision is, a party who knows an order, whether it is null or valid, regular or irregular, cannot be permitted to disobey it and it would be dangerous to allow the party to decide as to whether an order was null or valid or whether it was regular or irregular.
In Hadkinson v. Hadkinson, the Court of Appeal had held that:
It is the plain and unqualified obligation of every person against, or in respect of whom an order is made by a Court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void. Lord Cottenham, L.C., said in Chuck v. Cremer:
A party, who knows of an order, whether null or void, regular or irregular, cannot be permitted to disobey it.... It would be most dangerous to hold that the suitors, or their solicitors, could themselves judge whether an order was null or void - whether it was regular or irregular. That they should come to the Court and not take upon themselves to determine such a question. That the course of a party knowing of an order, which was null or irregular, and who might be affected by it, was plain. He should apply to the Court that it might be discharged. As long as it existed it must not be disobeyed.
17. Shri Dada, the learned Senior Counsel has also submitted that the principal borrower himself was not aggrieved by the award dated 26.8.1995 and that in fact the application dated 28.9.2004 filed before the Assistant Register was made by Shri Virkar in the name of the principal borrower. Learned Senior Counsel further submits that all notices were served in terms of Section 51 read with 146 of the Company Act, 1956 and therefore respondent No. 3 could not claim that it was unaware of any of the notices. Learned Counsel further submits that the point of jurisdiction was taken before the Registrar and yet it was by passed by him. The only submission now on behalf of Respondent No. 3 is that the impugned order was passed by the Registrar under the Act of 1960.
18. This is a case where the dispute between the Bank, the borrower and the guarantors was not only decided by the award of the Registrar's Nominee dated 26.8.1995 but it is also a case where the pursuant thereto the mortgaged property has been sold and sale confirmed in favour of the Bank and then sold and sale registered in favour of the intervenor in this Writ Petition, pursuant to another agreement. In case the property was mortgaged to the Bank, the legal possession would always remain with the Bank. The respondent No. 3 did not choose at any time assaile the ex-parte award dated 26.8.1995 and that had attained finality so also the execution proceedings initiated in terms thereof and even the said proceedings had attained finality by virtue of the judgment of this Court dated 29.3.2005. The respondent No. 3 did have a remedy against the ex-parte award dated 26.8.1995 but that remedy, if in terms of an application under Order 9, Rule 13, was before the Nominee himself or by way of an appeal to the Co-operative Tribunal. The respondent No. 3 did not take any such proceedings either before the Registrar's Nominee for that matter the Cooperative Tribunal and allowed the said award dated 26.8.1995 to attain finality. The execution proceedings were thereafter completed and sale certificate was issued. A belated attempt before this Court to challenge the said proceedings and then before the Apex Court also failed. Against an order of the Registrar's Nominee, as already stated, the appeal had to be filed before the Co-operative Tribunal and not before the Assistant Registrar. Application before the Assistant Registrar could not have been filed by the Respondent No. 3 on the name of the principal borrower when the principal borrower had not challenged the award and an appeal therefrom could not have been filed by Respondent No. 3. On behalf of the respondent No. 3 no provisions of the Act of 1960 has been brought to my notice by which an order passed by the Registrar's Nominee or for that matter by the Assistant Registrar could be assailed before the Registrar. In any event it may be stated that the only remedy which was available to the respondent No. 3 was to challenge the said award dated 26.8.1995 by filing an application before the Registrar's Nominee itself, in case the remedy under Order 9, Rule 13, was available or an appeal to the Co-operative Tribunal. The Registrar has no authority under the Act of 1960 to hear the appeals either from his own Nominee or for that matter from the Assistant Registrar. Concededly, the Registrar had also no power to entertain any appeal under the Act of 2002.
19. As a result of the above discussions, the petition deserves to succeed. The orders of the Registrar dated 16.8.2007 and 30.1.2008 are hereby set aside. Rule made absolute in terms of prayer Clauses (A) and (B) with costs by Respondent No. 3 in favour of the Bank.