Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Jayant Aloni (Legal Consultant & Lawyer)     15 December 2010

Suit for Mandatory Injunction

In an auction under SARFAESI ACT 2002, A sale notice was published, My client had participated in the said proceedings and was a highest bidder. He has paid the entire amount as per the terms and conditions.  The Bank has acknowledged the receipt of entire bid amount.  Thereafter the Bank has given him the possession of the property alongwith fittings and fixtures.  But before the bank can issue sale certificate, a liquidator was appointed and bank avoided to issue sale certificate.  

After a detailed discussion, I filed a suit for Declaration and Mandatory Injunction against the bank, seeking declaration that the auction proceedings carried out by the bank is binding upon the bank, and mandatory injunction seeking direction to the bank to issue sale certificate.  

The bank did not appear in the matter, but the court is objecting to the maintainability of the suit on the ground that, the Civil court has no jurisdiction to try the matter as it is touching the business of the society and dispute will lie u/s 91 of Maharashtra Co-op Societies Act.

Now what remedy is available to me.  Can anybody help me out? Can anybody suggest any Case Law.



Learning

 7 Replies

adv. rajeev ( rajoo ) (practicing advocate)     15 December 2010

Co-operative act will be applicable if it touches the business of the society, otherwise it is not applicable.  The member of the society cannot file a suit against the society.  But in your case your client is neither a member nor has got share in the society.  So suit is maintainable. 

You will get this point in the Maharastra-Co-Op., Society act.

N.K.Assumi (Advocate)     15 December 2010

In almost all the co-Operative society Acts in India civil Court jurisdiction is barred but in your case it is an exception as your client is not a member as pointed out by rajeev, as such the suit is maintainable.

Uma parameswaran (lawyer)     15 December 2010

If arbitration clause is there then you can move that side and I am thinking you can file Writ petition also.

Jayant Aloni (Legal Consultant & Lawyer)     15 December 2010

 

Originally posted by :Jayant Aloni
"
In an auction under SARFAESI ACT 2002, A sale notice was published, My client had participated in the said proceedings and was a highest bidder. He has paid the entire amount as per the terms and conditions.  The Bank has acknowledged the receipt of entire bid amount.  Thereafter the Bank has given him the possession of the property alongwith fittings and fixtures.  But before the bank can issue sale certificate, a liquidator was appointed and bank avoided to issue sale certificate.  

After a detailed discussion, I filed a suit for Declaration and Mandatory Injunction against the bank, seeking declaration that the auction proceedings carried out by the bank is binding upon the bank, and mandatory injunction seeking direction to the bank to issue sale certificate.  

The bank did not appear in the matter, but the court is objecting to the maintainability of the suit on the ground that, the Civil court has no jurisdiction to try the matter as it is touching the business of the society and dispute will lie u/s 91 of Maharashtra Co-op Societies Act.

Now what remedy is available to me.  Can anybody help me out? Can anybody suggest any Case Law.
"

Rajeev Sir

I agree with you.  But the problem in my case is that, The bank has not initiated recovery proceedings under M.C.S. Act like section 101 by issuing recovery certificate followed by sale etc., but the bank has chosen the remedies available under SARFAESI ACT, 2002.  That after issuing notice u/s 13 (2) r/w 13(4) and 14 of the act, procedure prescribed in rule 9 of Enforcement Rules were followed.  

Now being auction purchase I have complied with all conditions, now, I am not covered within the ambit of section 91 of MCS Act nor I can file any appeal u/s 19 of SARFAESI.  Thus, Co-operative court has no jurisdiction to decide the matter as SARFAESI Act came into play, nor I can file any proceedings under SARFAESI ACT, as I am not the borrower or any person, claiming through the borrower.  Therefore I filed a Civil Suit, now the matter is stuck up at the point of jurisdiction.  

Certainly the proceedings initiated by the bank will not amount to touching the business of society.  Still I am not in a position to get the proper precedent.

Jayant Aloni (Legal Consultant & Lawyer)     15 December 2010

Mr. Assumi,

I have gone through the entire co-operative societies act, and found that being non-member I have no scope to file dispute before Co-operative Court, but I am in search of proper provision or case law to maintain the civil suit.  Can you please suggest whether I have to amend any of the relief in civil suit.

Uma

There is no arbitration clause.  But as regards invoking writ jurisdiction, appointment of liquidator is the main obstacle.

s k s k sarma (advocate)     17 December 2010

i think that the suit of declaration is not at all necessary. when the bank conducted the auction and your client is highest bidder adn deposited entire sale consideration and whcih was accepted by the bank adn delivered the property to your client and your client is enjoying the property. when no one challenging the auction why you have file suit for declaration and it is duty of the bank to issue sale certificate if the bank failed to do it you simple fie writ before High court and take necessary direction against the bank for slae certifcate. please verfiy this way 


(Guest)

yes experts replied 


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register