Adarsh Ginning and Pressing Factory, a Partnership Firm Through Its Partner Shri Vijaykumar Mishrilal Kasliwal Vs. the State of Maharashtra and ors. - Court Judgment

Excerpt:
banking - issuance of circular - validity of - petitioner, debtor of respondent no. 4 filed petition for declaration that government circular be quashed and set aside as ultra vires - various banks became multi state cooperative societies under the multi state cooperative societies act, 1984 - challenged provisions of the said act and tried to protect their interests in respect of decided awards and recovery certificates obtained under state act, 1960 - interim relief's given - mean time, multi state act, 2002 came into operation - writ petition filed - division bench gave limited protection and allowed special recovery officers to only attach the properties as part of the recovery proceedings - forbade sealing or selling of the property - held, after multi state act, 2002 came into operation, respondent nos. 2, 3 and 5 which were authorities under the state act, 1960 could not have usurped the powers vested in the central registrar under the multi state act, 2002 - therefore, second notification issued by respondent no. 2 is beyond the jurisdiction or authority of respondent nos. 1 and 2 - circular no. admn./2/a/m/st.a/2002/suits/2003, dated 16th january, 2003 is ultra viresbanking - recovery certificates - sale - validity of - application filed for direction to quash and set aside recovery certificate issued by respondent no. 3 - held, sale effected by respondent no. 5 in favour of respondent no. 6 is beyond the powers and authority permissible under law - no source of such authority or power - interim order passed in writ petition did not authorise sale by respondent no. 5 - therefore, the action taken by respondent no. 5 in selling the property to respondent no. 6 have to be set aside - since provisions of the multi state cooperative societies act, 1984 were not allowed to apply to multi state cooperative societies (till the multi state act, 2002 came into force) by various orders of the court, it cannot be said that the recovery certificate obtained by respondent no. 4 bank is invalid or illegal - in view of section 126 of the multi state act, 2002 steps should have been taken for execution of the recovery certificate under the multi state act, 2002banking - refund of purchase money - application also filed by respondent no. 6, which has purchased secured assets pending this petition, for refund of purchase money - held, since sale effected by respondent no. 5 special recovery officer in favour of respondent no. 6 purchaser pending the writ petition was without legal authority, respondent no. 6 is entitled to refund of the purchase money - code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power under section 44 of the code, then there could be no reason for such a power not to be specified under the provisions of chapter xii of the code. in terms of section 41, a police officer may arrest a person without a warrant or order from the magistrate for any or all of the conditions specified in that provision. language of this provision clearly suggested that the police officer can arrest a person without an order from the magistrate. thus, there appears to be no reason why on the strength of section 156(3) of the code, any restriction should be read into the power specifically granted by the legislature to the police officer. of course, freedom of investigation is the essence of these provisions but in order to suppress the mischief it is sufficiently indicated under different provisions of the code that the arresting officer should exercise his power or discretion judiciously and should be free of motive. some kind of inbuilt safeguard is available to the accused in the cases where the magistrate directs investigation under section 156 (3) of the code by taking recourse to the provisions of section 438 of the code by approaching the court of session or the high court for such relief. thus, during the course of investigation of a criminal case, an accused is not remediless and that would further buttress the above view. [jagannath singh v dr. ajay upadyay & anr 2006 cri lj 4274; 2006 (5) air bom r held per incuriam]. - 36 of 2004 before the divisional joint registrar and thereby prayed for quashing of the sale certificate in form t dated 22.10.2003 as well as refund of rs. 2 issued circular dated 3.10.2002 by which directions were issued to all the departments wherein it was clearly stated that no action under section 101 of the maharashtra cooperative societies act, 1960 be taken. 'i' with the petition clearly indicates that the court only allowed the special recovery officers to take steps of attachment of property, but they were not allowed to seal the property or put them on sale. 6 is clearly beyond the powers and authority permissible under law. in case of failure to pay the amount within time stipulated, the amount shall carry interest at the rate of 12 per cent per annum from date of deposit by respondent no. in case of failure to pay the amount in time, it shall carry interest at 12 per cent per annum from the date of deposit of said amount by respondent no.p.r. borkar, j.1. the petitioner which is a debtor of respondent nos. 4 peoples co-operative bank limited, has filed this petition for declaration that the government circular bearing no. bank/recovery/suits/t-3/2000 dated 8.1.2001 and no. admn/2a/m.s.a./2002/suit/2002 dated 16.1.2003 be quashed and set aside as ultra vires, and also for direction to quash and set aside the recovery certificate issued by respondent no. 3 on 28.10.2002 in application no. 200/2002. civil application no. 7918 of 2003 is filed by respondent no. 6, which has purchased secured assets pending this petition, for refund of purchase money.2. admittedly the petitioner is a partnership firm which had started adarsh ginning and pressing factory at pimpalgaon-divshi, taluka gangapur, district aurangabad. respondent no. 4 peoples cooperative bank limited hingoli is a multi state cooperative bank (hereinafter referred to as 'the bank'). the bank was initially registered under the provisions of the maharashtra cooperative societies act, 1960. however, on 9.12.1999 by registration no. mscs/cr/98/99 it was registered as a multi state cooperative bank.3. the petitioner had applied for loan as it felt that it would get business of ginning and pressing of cotton. respondent no. 4 bank sanctioned loan of rs. 42 lac on 12.5.1999. the loan was to be repaid upto 2004. the petitioner executed a registered mortgage deed and mortgaged the factory property. at that time, kapus ekadhikar yojana (the cotton monopoly scheme) was run by the government. the petitioner was completely dependant upon government for supply of cotton, but the petitioner could not get business as expected. there was change in the government policy in respect of kapus ekadhikar yojana which could not be implemented in effective manner and the petitioner could not repay the loan. 4. respondent no. 4 bank filed proceedings before respondent no. 3 deputy registrar of cooperative societies against the petitioner and its partners and guarantors under section 101 of the maharashtra cooperative societies act, 1960 (hereinafter referred to as, 'the state act, 1960'). after appearance the petitioner filed an application stating that respondent no. 4 bank was governed by the provisions of the multi state cooperative societies act, 2002 (hereinafter referred to as, 'the multi state act, 2002') and, therefore, the proceedings can be filed only before central registrar and respondent no. 3 had no jurisdiction to try and act under section 101 of the state act, 1960. it is further stated that arguments were advanced on 20.10.2002 on the provisions of the multi state act, 2002 and the matter was reserved for orders on the point of applicability of the multi state act, 2002. however, respondent no. 3 relying on circular dated 8.1.2001, granted the recovery certificate without deciding the point of jurisdiction.5. the petitioner thereafter filed revision petition no. 89 of 2002 before the divisional joint registrar, cooperative societies, aurangabad. the divisional joint registrar passed an order on 27.1.2003 directing the petitioner to deposit 50% of the total amount in the bank within 15 days. as against that order of deposit of 50% amount, the petitioner filed writ petition no. 338 of 2003, which came to be dismissed on the ground that the petition was against an interim order. however, all questions were kept open. on 9.9.2003 the petitioner withdrew the revision petition.6. on 14.3.2003 respondent no. 4 bank through its special recovery officer i.e respondent no. 5 issued notice for recovery. respondent no. 5 special recovery officer also sealed the factory of the petitioner. it is stated that neither the state act, 1960 nor the multi state act, 2002 confer power of sealing the property. thereafter the petitioner filed dispute before the cooperative court, aurangabad bearing no. 180 of 2002. the cooperative court was pleased to return the dispute as not maintainable as the proceedings could be entertained by the cooperative court in view of provisions of section 74 of the multi state act, 2002 and the power vested with the central registrar, cooperative societies. 7. before we come to other points, some developments pending this writ petition as disclosed in civil application no. 7918 of 2004 need to be considered. after the recovery certificate under section 101 of the state act, 1960 came to be issued on 28.10.2002 by respondent no. 3 deputy registrar, cooperative societies, the possession of the property was taken over by the bank and the property of the petitioner was put on auction. respondent no. 6 m/s mahaveer cotton industries made proposal to the bank. the proposal of respondent no. 6 was accepted and price of the petitioner's property was fixed at rs. 71 lac. respondent no. 6 deposited entire amount with respondent vo. 4 bank. respondent no. 5 special recovery officer issued sale certificate in form t in favour of respondent no. 6.8. it is case of respondent no. 6 that the boundaries of the property were not properly mentioned in the sale certificate. respondent no. 6 approached respondent no. 5 special recovery officer for getting the possession of the property. the possession was not handed over. in the mean time, the petitioner filed civil application no. 285 of 2004 in this writ petition and this court issued an order directing respondent no. 4 bank not to hand over possession of the property to respondent no. 6 purchaser. respondent no. 6 filed civil application no. 7918 of 2004 in this petition for refund of rs. 71 lac with interest thereon. it is stated that earlier respondent no. 6 purchaser had filed revision application no. 36 of 2004 before the divisional joint registrar and thereby prayed for quashing of the sale certificate in form t dated 22.10.2003 as well as refund of rs. 71 lac from respondent vo. 4. the revision application came to be disposed of on the ground that the matter was sub judice before the high court. as against that order respondent no. 6 purchaser filed writ petition no. 4697 of 2004 which was heard by a single bench. the honourable single judge was pleased to pass an order on 27.7.2004 and thereby observed that in view of the pendency of present writ petition, it would be appropriate for respondent no. 6 purchaser to file civil application so as to get relief of refund of the amount deposited by him and writ petition no. 4697 of 2004 was disposed of on 27.7.2004. respondent no. 6 purchaser supports the case of the petitioner that the regulatory authority under the multi state act, 2002 is the central registrar and the provisions of the state act, 1960 have no application.9. the petitioner has come with a case that though the multi state cooperative societies act, 1984 came into force dealing with cooperative societies whose area of operation extended beyond the state, the said act is now replaced by the multi state cooperative societies act, 2002. earlier many cooperative societies which were converted into the multi state cooperative banks challenged the vires of the multi state cooperative societies act, 1984. all those writ petitions were pending for final hearing and similar orders of admission and interim reliefs were passed.10. it was submitted that due to conversion into the multi state cooperative societies, the cooperative court and the registrar functioning under the state act, 1960 refused to entertain disputes under section 91 of the state act, 1960. the shamrao vithal cooperative bank filed two writ petitions bearing nos. 3089 of 2000 and 3129 of 2000 in the high court at bombay and the court expressed doubt whether orders can be relied upon to clothe the cooperative court with jurisdiction under section 91 of the state act, 1960 to entertain disputes of multi state cooperative societies. 11. similarly, the assistant registrar, cooperative societies started refusing to entertain applications under section 101 of the state act, 1960. the cosmos cooperative bank limited filed writ petition no. 3526 of 2000 which came before the high court on 13.9.2000 and the court was pleased to admit the petition and grant interim relief only to entertain application under section 101 of the state act, 1960. in fact there was no prayer in writ petition no. 3526 of 2000 for relief for execution under section 156 of the state act, 1960. in said writ petition it is averred that multi state cooperative societies act, 1984 was beyond legislative competence of the parliament and as such central act was illegal and otherwise ultra vires. alternatively prayer was made to declare sections 18(5)(c), 74, 75, 76, 85, 87, 88, 90 and 105 and section 4(2) as illegal and ultra vires. in the alternative and without prejudice to above, assuming central act of 1984 as valid, it was urged that the petitioner bank be deemed to be registered under the state act and accordingly central act would apply in areas not covered by state act and state act would apply in areas not covered by the central act of 1984.12. the petitioner claimed that inspite of this circular dated 8.1.2001 was issued permitting execution of the order under section 156 of the state act, 1960 and it is this circular which is challenged in this petition on the grounds that:(a) respondent no. 2 do not have legal sanction or competence to issue circulars in respect of multi state societies. (b) the order of the high court in writ petition no. 3526 of 2000 was misconstrued. (c) the court granted relief only to the cosmos cooperative bank and not to any other bank.(d) the relief under section 156 (for execution) was not prayed for before the high court in writ petition no. 3526 of 2000 and no relief was granted. (e) the impugned circular was contrary to writ petitions no. 3089 of 2000 and no. 3129 of 2000. (f) respondent nos. 1 and 2 did not consider that if writ petitions challenging vires of repealed act, 1984 came to be dismissed, then that would amount to recovery without law and grave injustice would be caused to those litigants.13. the multi state cooperative societies act, 2002 came into force on 19.8.2002. by virtue of section 126 of the multi state act, 2002 the previous multi state cooperative societies act, 1984 stood repealed and, therefore, all writ petitions pending before the court have become infructuous. thereafter respondent no. 2 issued circular dated 3.10.2002 by which directions were issued to all the departments wherein it was clearly stated that no action under section 101 of the maharashtra cooperative societies act, 1960 be taken. 14. in pursuance of the said circular respondent no. 2 refused to continue appointments of assistant registrar or recovery officer under section 101 of the state act, 1960. that was challenged by the cosmos cooperative bank before the high court at mumbai by filing writ petition no. 7388 of 2002. the court by order dated 17.1.2003 was pleased to grant interim relief in terms of prayer clause 'd-(ii)' and 'd-(iii)' only and did not grant interim relief in terms of prayer clause 'd-(i)' which was as follows:d - (i) stay the execution and operation of the circular dated 3.10.2002.one day prior to the order passed by the court, respondent no. 1 issued circular on 16.1.2003 explaining its earlier circular dated 3.10.2002 and giving directions for proceeding with those applications under section 101 of the state act, 1960 filed before 19.8.2002. it is this circular which is also challenged in this petition.15. thus the petitioner challenged the recovery certificate issued by respondent no. 3 and the actions taken by respondent no. 5 recovery officer consequent thereon. the writ petition also challenges both circulars dated 8.1.2001 and 16.1.2003 and wants quashing of circulars and the recovery certificate. 16. the learned counsel for respondent nos. 4 and 5 argued that all actions taken before the multi state act, 2002 came into force were validly taken. he also referred to section 126(2) of the multi state act, 2002 whereby the rule, order, circulars, directions, notifications, decisions made, issued or taken under the multi state act, 1984 are saved. it is also argued that respondent no. 6 is not entitled to relief of refund of amount as already the amount was credited in the account of the petitioner. moreover after issuance of the sale certificate though possession could not be given due to the order of this court, no relief can be granted to the respondent in this petition. respondent no. 6 has not filed the writ petition and no relief can be granted on the civil application no. 7918 of 2004.17. the learned counsel for respondent no. 6 relied upon the case of chiranjilal shrilal goenka v. jasjit singh : [1993]2scr454 and argued that once the multi state act, 2002 came into force on 19.8.2002 the authorities under the state act, 1960 were not entitled to exercise any powers or issue any circular. reliance was placed on paras 17 and 18. it is observed therein that the jurisdiction comes only from law of land and cannot be exercised otherwise. the jurisdiction is thus the authority or the power of the court to deal with a matter or make an order carrying binding force in the facts. the jurisdiction to try a case could only be conferred by law enacted by legislature. at the end of para 17 it is laid down that the jurisdiction could be conferred by statute and even the supreme court cannot confer the jurisdiction or an authority on a tribunal.18. it is argued on behalf of respondent no. 6 that merely because some interim orders are passed by the high court, which were misconstrued, no jurisdiction can be vested in respondent nos. 2, 3 or 5 as they have no authority under the multi state act, 2002 and, therefore, all actions of respondent no. 5 to put on sale the property and issue the sale certificate are void. 19. thus the question is whether for recovery of loan amount by respondent nos. 4 and 5, steps should have been taken under the multi state cooperative societies act, 2002 and whether steps which have already been taken under the maharashtra cooperative societies act, 1960 are valid or not.20. at exh. 'n' with the petition, a copy of the recovery certificate issued under section 101 of the state act, 1960 is produced. it is issued by respondent no. 3. it is stated therein that respondent no. bank filed proceedings for getting the recovery certificate on 14.8.2002. it does not appear that respondent no. 3 considered question whether after coming into force of the multi state act, 2002, it had any jurisdiction. the certificate was issued on 28.10.2002 subsequent to the multi state act, 2002 coming into force on 19.8.2002. this order does not refer to the circular dated 8.1.2001.21. as per the circular dated 8.1.2001 issued by respondent no. 2, the copy of which is produced at exh. 'd-1', the concerned assistant and deputy registrars of the cooperative societies have stopped continuing with old proceedings pending before them and they also stopped receiving of new proceedings and all those matters were pending. the high court had passed interim orders regarding recovery proceedings. therefore, it is directed that the pending recovery proceedings under section 101 of the state act, 1960 should be conducted and new proceedings may also be accepted and decided. the recovery proceedings may also be taken up as per section 156 of the state act, 1960. respondent nos. 1 to 5 relied on the said circular and also on the interim orders passed by the high court. 22. at exh. 'a', a copy of communication of the interim order passed in writ petition no. 4777 of 1986 dated 22.10.1986 is produced. the court passed the order staying operation of certain sections of the multi state cooperative societies act, 1984. the relevant portion of the writ is quoted as follows:and upon hearing shri y.r. naik, advocate for the petitioner and shri r.v. desai with shri k.c. sidhwa, advocates for the respondent nos. 1 and 2 and shri m.b. mehere, a.g.p. for respondent nos. 3 to 5, the court passes the following order:rule, to be heard with writ petition no. 2543 of 1986. respondent nos. 1 to 5 waive service. interim orders in terms of prayer (c).it is accordingly ordered that the operation of the following provisions of the multi-state societies act, 1984, read with rule 33 of the multi-state co-operative societies (registration, membership, direction and management settlement of disputes, appeal and revision) rules, 1985 qua the respondent no. 6 (i.e. saraswat cooperative bank ltd.) be and the same is hereby stayed pending the hearing and final disposal of writ petition or until further orders:(i) section 19 of the multi state act read with rules 11(5), 18, 25, 27 and 33 of the september, 1985 rules and the schedule appended to the september, 1985 rules; (ii) the second proviso to sub-section (2) of section 4 of the multi-state act read with section 74 and 87 thereof; (iii) sub-section (3) of section 29 and section 34(d), (f), (i) of the multi-state act; (iv) sub-rules (3) and (4) of rule 10 and sub-rules (3) and (4) of rule 11 of the october 1985 multi state rules;23. a copy of similar writ issued in writ petition no. 680 of 1987 is also produced on page 25 with the writ petition. petitioner also produced interim orders passed in some other matters.24. at exh. 'b' there is a copy of order passed in writ petitions no. 3089 of 2000 and 3129 of 2000 filed by the shamrao vithal cooperative bank limited. it was observed that so far as the multi state cooperative societies are concerned, prima facie, orders relied upon did not clothe the cooperative courts with the jurisdiction under section 91 of the state act, 1960. it was also pointed out that more than 1000 disputes were pending in the cooperative courts involving similar question and it is urged that if ultimately the order passed by the court below was upheld then lot of valuable time of the cooperative court would be wasted as disputes shall be required to be heard afresh. it was noted that there were seven petitions pending with high court in which validity of the multi state cooperative societies act, 1984 or some provision thereof had been challenged and one of them was filed by same petitioners bearing no. 785 of 1985. 25. in the writ petition filed by the cosmos cooperative bank limited bearing no. 3526 of 2000, interim relief in terms of prayer clause 'b-(ii)' and 'b-(iii)' are allowed, which in effect allowed the authority under the state act, 1960 to entertain applications of petitioner no. 1 bank under section 101 of the state act, 1960 and to receive and decide such applications. the copies of orders are produced at exh. 'c' with the petition.26. it is argued on behalf of the petitioner that the interim orders passed by the court are not applicable to all multi state cooperative banks. those are interim reliefs granted to respective petitioner-banks. it does not appear that any relief under section 156 of the state act, 1960 was prayed before the court and the court granted relief for execution of the orders. 27. it is argued before us that all those writ petitions had challenged the application of the multi state cooperative societies act, 1984. there is no reference to the multi state act, 2002 which came into force on 19.8.2002. under section 84 of the multi state act, 2002, a provision is made for referring the disputes to an arbitrator. the relevant portion of section 84 of the multi state act, 2002 is as follows:84. reference of disputes(1) notwithstanding anything contained in any other law for the time being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-state co-operative society against its paid employee or an industrial dispute as defined in clause (k) of section 2 of the industrial disputes act, 1947 (14 of 1947)] touching the constitution, management or business of a multi-state cooperative society arises -(a) ... (b) between a member, past members and persons claiming through a member, past member or deceased member and the multi-state co-operative society, its board or any officer, agent or employee of the multi-state co-operative society or liquidator, past or present, or (c) ... (d) ... such dispute shall be referred to arbitration.(2) for the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-state co-operative society, namely -(a) a claim by the multi-state co-operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not; (b) ... (c) ... (3) if any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-state co-operative society, the decision thereon of the arbitrator shall be final and shall not be called in question in any court.(4) where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the central registrar. (5) save as otherwise provided under this act, the provisions of the arbitration and conciliation act, 1996 (26 of 1996) shall apply to all arbitration under this act as if the proceedings for arbitration were referred for settlement or provisions of the conciliation act, 1996. decision under arbitration' the and28. the learned counsel for respondent nos. 1 to 5 relied upon section 126 of the multi state cooperative societies act, 2002. it is as follows:126. repeal and saving(1) the multi-state co-operative societies act, 1984 (51 of 1984) is hereby repealed. (2) without prejudice to the provisions contained in the general clauses act, 1897 (10 of 1897) with respect to repeals, any notification, rule, order, requirement, registration, certificate, notice, decision, direction, approval, authorisation, consent, application, request or thing made, issued, given or done under the multi-state co-operative societies act, 1984 (51 of 1984) shall, if in force at the commencement of this act, continue to be in force and have effect as if made, issued, given or done under the corresponding provisions of this act. (3) every multi-state co-operative society, existing immediately before the commencement of this act, which has been registered under the co-operative societies act, 1912 (2 of 1912) or under any other act relating to co-operative societies in force, in any state or in pursuance of the provisions of the multi unit co-operative societies act, 1942 (6 of 1942), or the multi-state co-operative societies act, 1984 (51 of 1984), shall be deemed to be registered under the corresponding provisions of this act, and the bye-laws of such society shall, in so far as they are not inconsistent with the provisions of this act, or the rules, continue to be in force until altered or rescinded.(4) all appointments, rules and orders made, all notifications and notices issued and all suits and other proceedings instituted under any of the acts referred to in sub-section (1) shall , in so far as they are not inconsistent with the provisions of this act, be deemed to have been respectively made, issued and instituted under this act, save that an order made cancelling the registration of a multi-state co-operative society shall be deemed, unless the society has already been finally liquidated, to be an order made under section 86 for its being wound up. (5) the provisions of this act shall apply to -(a) any application for registration of a multi-state co-operative society; (b) any application for registration of amendment of bye-laws of a multi-state co-operative society, pending at the commencement of this act and to the proceedings consequent thereon and to any registration granted in pursuance thereof.(6) save as otherwise provided in this act, any legal proceeding pending in any court or before the central registrar or any other authority at the commencement of this act shall be continued to be in that court or before the central registrar or that authority as if this act had not been passed.29. thus it is argued on behalf of respondent no. 5 that the provision saves any legal proceedings pending before any authority at the commencement of the act.30. it is argued by the petitioner that respondent nos. 2 to 5 have no authority under the multi state act, 2002. unless the statute empowers, they cannot have jurisdiction in respect of multi state cooperative societies. this is clear from the ratio laid down in chiranjilal goenka's case (supra). in that case the supreme court observed in para 17 that even the supreme court cannot confer the jurisdiction or authority on a tribunal and it can only be by statute. it does not appear from section 84 or 126(6) of the multi state act, 2002 that powers of respondent no. 5 as recovery officer under the state act of 1960 are saved. 31. so, it is argued relying upon the case of chiranjilal goenka that the interim orders passed by high court in respect of other banks or the circular dated 8.1.2001 cannot confer the jurisdiction on respondent nos. 3 and 5 to deal with the recovery proceedings for recovery of loan owed by the petitioner to respondent no. 4 bank after 19.8.2002. 32. here reference may be made to the circular dated 3.10.2002 issued by respondent no. 2 as it reflects the position of law as once interpreted by the authorities. as per the circular, since the multi state cooperative societies act, 2002 is made applicable with effect from 19.8.2002, the orders of the high court in respect of provisions of the multi state cooperative societies act, 1984 and in respect of the proceedings under section 101 of the state act, 1960 would not be applicable any more and, therefore, in respect the multi state cooperative societies, the proceedings under section 101 of the state act, 1960 should not be admitted and in case of pending matters no decision should be taken. it is further directed by para 5 of the circular that in view of applicability of the multi state act, 2002 with effect from 19.8.2002, execution of orders passed after 19.8.2002 under section 101 of the state act, 1960 should not be made. it is further stated that the multi state cooperative societies act, 1984 has been repealed by the new act of 2002. no powers are conferred on the state registrar or his subordinates under the new act of 2002 and, therefore, in respect of the multi state cooperative societies, no legal action should be taken until further orders.33. it is argued before us that after the said circular was issued on 3.10.2002, the cosmos cooperative bank limited challenged it before the high court at mumbai by filing writ petition no. 7388 of 2002. a copy of prayer clauses therein is annexed with the petition. on 17.1.2003, high court was pleased to pass an order granting interim relief in terms of prayer clauses (d-ii) and (d-iii) only. the interim relief in terms of prayer clause (d-i) was, however, refused. prayer clause (d-i) is as follows : '(d-i) stay the execution and operation of the circular dated 3.10.2002.' prayer clauses (d-ii) and (d-iii) are to the effect that respondent nos. 2 and 3 should comply with the order dated 13.9.2000 passed in writ petition no. 3526 of 2000 and to issue fresh order continuing the appointments of the officers of petitioner no. 1 bank as special recovery officer under section 156 of the maharashtra cooperative societies act, 1960. these reliefs were granted subject to condition that it would not apply in respect of applications filed after the new act i.e. the multi state act, 2002 came into force with effect from 19.8.2002. it is further made clear in respect of prayer clause (d-iii) that the special recovery officers appointed under section 156 of the state act, 1960 are permitted to take action including passing of the orders of attachment of the property, but such attachments will be a formal attachments without sealing the property. no sale, mortgage or other interest of any kind would be created on the property and such orders would be subject to further orders passed by the court. so, the order passed by this court dated 17.1.2003, copy of which is produced at exh. 'i' with the petition clearly indicates that the court only allowed the special recovery officers to take steps of attachment of property, but they were not allowed to seal the property or put them on sale. it was made clear by para 3 of the order that all contentions of the parties were left open including contention on behalf of the petitioner bank that it would be without prejudice to its rights under the securitisation and reconstruction of finance assets and enforcement of security interest (second) ordinance, 2002. it is made clear by para 4 that so far as those certificates which have been issued after 19.8.2002 but in respect of which applications were made prior to the application of the new act of 2002 are concerned, it was open to the bank to rely on the provisions of that act. it would be open to the debtors to contend in such proceedings that the act would not apply in those cases. so, para 4 of the order makes it very clear that in case of recovery certificates issued after 19.8.2002, but in respect of applications made prior to that date, it was open for the bank to rely on the provisions of the multi state act, 2002. respondent no. 4 bank, therefore, could have proceeded under the provisions of the multi state act, 2002 for recovery on the basis of recovery certificate issued on 28.10.2002 copy of which is produced at exh. 'n'.34. thereafter the circular dated 16.1.2003 came to be issued and it lays down that the pending proceedings as on 19.8.2002 may be decided by the regional officers even in respect of the multi state cooperative societies. they can even entertain review application in respect of the proceedings decided under section 101 of the state act, 1960. it is argued that this circular dated 16.1.2003 authorises the recovery officers to exercise powers under section 156 of the state act, 1960 in respect of the proceedings which were pending as on 19.8.2002 or decided prior to that and this was in excess of what was allowed by this court in the case of cosmos cooperative bank limited in writ petition no. 7388 of 2002. the copy of the civil application no. 946 of 2003 in the said writ petition by the cosmos cooperative bank limited is produced at exh. 'k' with the petition. by order dated 1.7.2003 it was made clear that interim order passed on 17.1.2003 in writ petition no. 7388 of 2002 will not apply to awards validly passed and recovery certificates issued prior to the date on which the multi state cooperative societies act, 1984 was applied to the applicant/bank. by the civil application the cosmos cooperative bank limited has alleged that it became multi state cooperative bank on 28.11.1997 and by para 11 it wanted clarification regarding disputes filed under section 91 of the state act, 1960 and applications filed under section 101 of the state act, 1960 and also regarding awards passed and certificates issued in proceedings pending on 28.11.1997.35. in this case, the peoples cooperative bank became multi state cooperative society on 9.12.1999 and on that date no proceedings were pending between the petitioner and respondent no. 4 bank. so, at the most it can be said that by the interim order passed by the court which was subject to final result, steps were allowed to be taken upto attachment of property, but in no case they were allowed to seal or sell the property. the copy of order dated 17.1.2003 at exh. 'i' is very clear. 36. it is also pointed out that respondent no. 4 bank itself had filed writ petition no. 2224 of 2000 similar to one filed by the cosmos bank and the court did not grant any interim relief. copy of the said writ petition and order thereon is produced at exh. 'l' with the petition. so, it is argued that so far as respondent no. 4 bank is concerned, no similar relief was granted.37. the learned counsel for respondent nos. 4 and 5 argued that after the circular dated 16.1.2003, the petitioner has filed revision petition under section 154 of the state act, 1960 bearing no. 89 of 2002 before the divisional joint registrar, cooperative societies, aurangabad. the divisional joint registrar has passed order on 27.1.2003 directing the petitioner to deposit 50% of the total amount within 15 days. as against that orders the petitioner filed writ petition no. 338 of 2003 which was dismissed by the single judge on the ground that the petition was against interim order. thereafter the revision petition was withdrawn on 9.9.2003. in the revision petition, there was challenge to the recovery certificate and the present proceedings are nothing but an attempt to reopen the same issue without complying with direction to deposit 50% amount. 38. so far as reliefs claimed by respondent no. 6 against respondent no. 4 bank by way of civil application no. 7918 of 2004 is concerned, it is stated that purchaser having purchased the property has now joined hands with the petitioner in raising various contentions. the purchaser has raised dispute regarding identity of the property which he should have verified before purchasing the property. no representation was made to the bank by respondent no. 6 till the dispute was raised in this writ petition. it is alleged that it was respondent no. 6 who did not take possession. the amount of rs. 71 lac is already adjusted and credited to the account of the petitioner and only amount of rs. 34 lac remained due. reliance was placed on sardar govindrao mahadik v. devi sahai : [1982]2scr186 , but facts of that case are different. it is held that the decree holder should be protected till decree is set aside. it is urged that the conduct of the petitioner may also be considered while granting reliefs under articles 226 and 227 of the constitution. the purchaser is not entitled to any relief.39. it is stated that all writ petitions challenging the provisions of the multi state cooperative societies act, 1984 have become infructuous by the enactment of the multi state act, 2002. it is found that out of writ petitions referred to above for interim orders passed therein, only writ petition no. 795 of 1998 the cosmos bank limited v. the union of india and writ petition no. 5509 of 1985 saraswat co-op. bank v. union of india with some ors. writ petitions were disposed of by a common order dated october 3, 2005; and those were disposed of as infructuous due to repeal of the multi state act of 1984 by the multi state act of 2002. other writ petitions are pending.40. in civil application no. 285 of 2004 filed in this writ petition, a copy of common judgment delivered by full bench in group of writ petitions including writ petition no. 6079 of 2002 narendra kantilal shah v. joint registrar, cooperative societies (appeal) bombay dated 12.12.2003 is produced. in para 5 (vi) thereof following fact is stated as admitted position. (vi) that in so far as the provisions of section 74 of multi-state cooperative societies act, 1984 are concerned, they were stayed by this court and they were not in force till that act was repealed by 2002 act. there is no specific denial of said position in this petition. so it is clear that till the multi-state act, 2002 came into force on 19th august, 2002, multi-state cooperative societies had no dispute resolution mechanism and as such they were allowed to have recourse to section 101 of the state act, 1960. we have to consider the circular dated 8.1.2001in the light of this position. therefore the recovery certificate dated 28.10.2002 obtained by the respondent no. 4 bank under section 101 of the state act, 1960 should be held to be legal and valid.41. so far as the case of chiranjilal goenka (supra) is concerned, the authorities and the cooperative courts under the state act, 1960 were bound to obey the interim orders passed by the court. in the case of tayabbhai m. agasarwalla v. hind rubber industries pvt. ltd. : [1997]2scr152 an interim order was passed by a civil court. though ultimately it was found that the court had no jurisdiction to pass the interim order, it was held that disobedience of the same no doubt brings the defendants within compass of order 39 rule 2-a of civil procedure code and they can be punished for violation of the interim orders. we have to appreciate the action of respondent no. 3 in entertaining proceedings under section 101 of the state act, 1960 in view of the interim orders passed by the high court in various writ petitions and in the same background, we will have to consider the circular dated 8.1.2001.42. in any case, so far as issuance of recovery certificate by respondent no. 3 under section 101 of the state act, 1960 is concerned, in the facts and situation of the present case, it is desirable not to exercise discretionary powers under articles 226 and 227 of the constitution to quash it. this is a unique case. as a result of interim orders passed by the high court in various matters and because of the circular issued by respondent no. 2, several proceedings and actions were held and taken by cooperative courts and the authorities under the state act, 1960 and in the larger interest it is preferable that those may be protected. however, same cannot be said about proceedings initiated and actions taken after the multi state act, 2002 came into operation.43. to summarise, it may be stated that after various banks became multi state cooperative societies under the multi state cooperative societies act, 1984, they challenged the provisions of the said act and tried to protect their interests in respect of decided awards and recovery certificates obtained under the state act, 1960 and also sought to protect the pending proceedings under the provisions of the state act, 1960. interim reliefs were given to continue the proceedings under the state act, 1960, but they remained interim orders subject to final orders. in the mean time, the multi state act, 2002 came into operation on 19.8.2002. when cosmos bank filed writ petition, the division bench gave limited protection and allowed the special recovery officers to only attach the properties as part of the recovery proceedings. it specifically forbade sealing or selling of the property. after the multi state act, 2002 came into operation, respondent nos. 2, 3 and 5 which were authorities under the state act, 1960 could not have usurped the powers vested in the central registrar under the multi state act, 2002 and, therefore, the second notification dated 16.1.2003 issued by respondent no. 2 is beyond the jurisdiction or authority of respondent nos. 1 and 2. the case of chiranjilal goenka (supra) is very clear. in view of paras 17 and 18 thereof it will have to be held that the circular no. admn./2/a/m/st.a/2002/suits/2003, dated 16.1.2003 is ultra vires. similarly, the sale effected by respondent no. 5 in favour of respondent no. 6 is clearly beyond the powers and authority permissible under law. we do not find any source of such authority or power. the interim order dated 17.1.2003 passed by this court in writ petition no. 7388 of 2002 did not authorise sale by respondent no. 5 and, therefore, the action taken by respondent no. 5 in selling the property to respondent no. 6 will have to be set aside. it is pending this writ petition and without authority of this court. however, since the provisions of the multi state cooperative societies act, 1984 were not allowed to apply to multi state cooperative societies (till the multi state act, 2002 came into force) by the various orders of the court, it cannot be said that the recovery certificate obtained by respondent no. 4 bank is invalid or illegal. in view of section 126 of the multi state act, 2002 steps should have been taken for execution of the recovery certificate under the multi state act, 2002.44. so far as respondent no. 6 is concerned, it has knocked the doors of this court by filing the writ petition. the single bench of this court in writ petition no. 4697 of 2004 by order dated 27.7.2004, (copy of which is produced at exh.'a') with civil application no. 7918 of 2004, directed it to file civil application in this writ petition. so, respondent no. 6 is entitled to get relief in this writ petition. 45. since we have come to a conclusion that the sale effected by respondent no. 5 special recovery officer in favour of respondent no. 6 purchaser pending the writ petition was without legal authority, respondent no. 6 is entitled to refund of the purchase money which is rs. 71 lac and, therefore, respondent no. 4 bank is directed to refund amount of rs. 71 lac to respondent no. 6 within a period of two months from the date of this order. in case of failure to pay the amount within time stipulated, the amount shall carry interest at the rate of 12 per cent per annum from date of deposit by respondent no. 6 till repayment of the full amount by the bank. interest at 12 per cent per annum is allowed as it is an average rate of lending.46. in view of above, the petition is partly allowed. civil application no. 7918 of 2003 is allowed. rule is made absolute in the following terms:(i) the circular bearing no. admn./2/a/m/st./a/2002/suits/2003, dated 16.1.2003 is quashed and set aside. (ii) the sale of property belonging to the petitioner by respondent no. 4 recovery officer pending this petition is set aside and the sale certificate issued to respondent no. 6 is hereby cancelled. the property, however, shall continue to be in possession of respondent nos. 4 and 5.(iii) respondent no. 4 bank shall refund amount of rs. 71 lac within two months from the date of this order. in case of failure to pay the amount in time, it shall carry interest at 12 per cent per annum from the date of deposit of said amount by respondent no. 6 with the respondent no. 4 bank till actual repayment. (iv) parties are directed to bear their own costs.