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2007 DIGILAW 645 (CAL)

Sadananda Das v. STATE OF WEST BENGAL

2007-08-22

S.P.TALUKDAR

body2007
Judgment :- (1) AN award was passed by the learned Arbitrator in dispute Case no. 4-BK of 2004 05. Such dispute was raised by the Bankura District Central co-operative Bank Limited, when it approached with a prayer for recovery of loan. The present petitioners were defendants in the said dispute case. (2) BEING aggrieved by such award dated 25. 8. 2004, the petitioners, as appellants, approached the learned Tribunal. This gave rise to Appeal no. 32 pf 2006. It was claimed before the learned Tribunal that prayer for adjournment was made in connection with the dispute case. It was not allowed though copy of the plaint was not even served upon the present petitioners. (3) GRIEVANCE was ventilated for the reason that the learned Arbitrator, despite having knowledge about pendency of a writ application being no. 12425 (W) of 2004, chose to proceed further without even giving an opportunity to file written statement. The said case was disposed of within a period of one month and a half from the date of reference. The present petitioners took a loan of Rs. 72,71,926/- from the Bankura District Central co-operative Bank Limited (hereinafter referred to as "the Bank") when they started a business of Mineral Water under the name and style of Susunia spring Water Private Limited. Since such loan amount could not be paid back in due time, the Bank was compelled to initiate that dispute case. The said case having been disposed of exparte, the petitioners, as appellants, approached the learned Tribunal. They alleged that the petitioners company took lease of the infrastructure of another company under the name and style of Benfed. Though there were other persons as members of the Board of Directors, the dispute case was filed without bringing them into the picture and this was precisely done in order to save them. (4) IT appears from the materials available on record which, of course, include the impugned order dated 16th May, 2006 that being dissatisfied with the award dated 25. 8. 2004, the present petitioners filed a writ application. It was disposed of with the observation that since the learned Tribunal was functioning, there was need for filing an appeal. (5) DURING pendency of the writ application, the Assistant Registrar of co-operative Societies, Bankura, by an orderdated 24. 12. 8. 2004, the present petitioners filed a writ application. It was disposed of with the observation that since the learned Tribunal was functioning, there was need for filing an appeal. (5) DURING pendency of the writ application, the Assistant Registrar of co-operative Societies, Bankura, by an orderdated 24. 12. 2004 appointed the Co-operative Development Officer, Bankura to conduct sale of the property under the provisions of the Act. This was challenged by filing an application being C. A. N. No. 312 of 2005 in connection with W. P. No. 18159 (W) of 2004 and an interim order was obtained. Such interim order was extended from time to time. Finally, the said writ application together with W. P No. 12425 (W) of 2004 was disposed of with direction upon the appellants to prefer appeal against the impugned order and the interim order passed earlier was directed to continue for a period of six weeks from the said date. Thus, the appellants were given the liberty to pray for interim relief before the Appellate authority. (6) IT was also observed that the delay in filing the appeal may also be condoned. In such changed circumstances, the petitioners preferred an appeal on 16. 3. 2006 before the learned Tribunal thereby giving rise to Appeal no. 32 of 2006 together with an application for stay of operation of the order under challenge. The said application was taken up for hearing on 4. 4. 2006. Learned Tribunal, by its order dated 4. 4. 2006, granted an order of stay subject to deposit of Rs. 30 lakhs. A writ application was moved being W. P. No. 9086 (W) of 2006 praying for stay of operation of the order relating to the said direction to deposit the amount of Rs. 30 lakhs. Such writ application was dismissed. (7) FINALLY, the appeal was heard and the learned Tribunal, by the order dated 16. 5. 2006, dismissed the appeal thereby affirming the order of the learned Arbitrator on 25. 8. 2004. The petitioners, thereafter, approached this court with such an application under Article 227 of the Constitution being aggrieved by the said order of the learned Tribunal. (8) ACCORDING to learned Counsel for the petitioners, the Tribunal misdirected itself while dealing with the grievances as raised in the appeal and failed to consider the materials in their right perspective. 8. 2004. The petitioners, thereafter, approached this court with such an application under Article 227 of the Constitution being aggrieved by the said order of the learned Tribunal. (8) ACCORDING to learned Counsel for the petitioners, the Tribunal misdirected itself while dealing with the grievances as raised in the appeal and failed to consider the materials in their right perspective. He contended that certain aspects raised before the learned Tribunal continue to remain unanswered. It was submitted that no schedule was furnished to indicate the personal properties of the persons in question. Admittedly, loan was taken by M/s. Susunia Spring Water Private Limited from the respondent bank. Machineries as well as the land of the Company were mortgaged and hypothecated to the respondent Bank. Originally, there were three Directors. Subsequently, two of them resigned and a few others joined as Directors. It was further submitted that the dispute case does not clarify as to whether it was initiated against Sadananda Das and two others in personal capacity or against the Company itself. If the loan was taken by the Company, question of chasing Sadananda Das and two others in their personal capacity cannot arise. lt was also mentioned that respondent Nos. 6,7 and 8, who became directors of the Company along with the original Directors, were not impleaded in the original dispute. Thus, the case could not be said to be maintainable owing to non-joinder and mis-joinder of parties. It was then emphatically submitted by learned Counsel for the petitioners that the impugned order, thus, suffers from inherent illegality and jurisdictional error. (9) BY filing a Supplementary Affidavit, the petitioners sought to explain the reasons for failure to make payment to the Bank. According to learned counsel for the petitioners, non-consideration of all such materials by the learned. Tribunal amounted to failure on its part to exercise jurisdiction vested in it. It appears that voluminous documents and various correspondences have been annexed to the present application. (10) IN response to an application dated 16. 6. 2003 made by Sri sadananda Das, as one of the Directors of the concerned Company, there had been extension of period of moratorium in respect of repayment of the principal instalment of Term/mx Loan. Such extension till 31st January, 2004 was communicated by letter dated 18. 8. 2003. (10) IN response to an application dated 16. 6. 2003 made by Sri sadananda Das, as one of the Directors of the concerned Company, there had been extension of period of moratorium in respect of repayment of the principal instalment of Term/mx Loan. Such extension till 31st January, 2004 was communicated by letter dated 18. 8. 2003. (11) ATTENTION of the Court was drawn to the various extracts of the minutes of the Board meetings of the concerned Company. Such documents, however, do not seem to have much role to play in the present controversy. The fact remains that due to failure to repay the loan, the concerned Bank approached the appropriate authority, thereby giving rise to the disputed case under Section 95-96 for settlement of the claim. The Assistant Registrar of co-operative Societies, by order dated 16. 7. 2004, restrained the present petitioners from transferring or changing the property as described in the schedule Bankura District Central Co-operative Bank Limited was appointed receiver of the property referred to in the schedule. An order of attachment was accordingly passed. In compliance of the said order, the authorities in the Bank, by order dated 19. 7. 2004, appointed Sri Basudeb Banerjee, assistant Manager (Loans), as Receiver and the Receiver was directed to discharge his obligations in the manner as indicated in the said order. (12) BY order dated 10. 8. 2004, the learned Arbitrator in respect of the disputed case was requested to adjourn the hearing on the ground of pendency of the writ application being W P. No. 12425 (W) of 2004. In connection with the dispute Case No. 4-BK of 2004-05, summons were issued and the matter was fixed on 20. 8. 2004. There was further prayer for adjournment. (13) ATTENTION of the Court was invited to a letter dated 23rd August, 2004 addressed to the various authorities including the Bankura District central Co-operative Bank Limited which quite rightly was described as a letter of threat. The dispute case, however, was disposed of by the learned arbitrator by order dated 25. 8. 2004. In response to the an application being a. S T. No. 1919 of 2004, the learned Single Bench of this Court by order dated 29. 9 2004 gave certain directions. It was made clear that the Receiver already appointed was not to create any obstacle in the matter of running of the factory. 8. 2004. In response to the an application being a. S T. No. 1919 of 2004, the learned Single Bench of this Court by order dated 29. 9 2004 gave certain directions. It was made clear that the Receiver already appointed was not to create any obstacle in the matter of running of the factory. The writ petitioners were, however, restrained from disposing of any of the fixed assets including the securities of the bank. Thereafter, the learned Division Bench of this Court by an order dated 16. 11. 2004 passed in m. A. T. No. 3721 of 2004 disposed of the appeal after setting aside the judgment and order under challenge. (14) SUBSEQUENTLY, the learned Single Bench of this Court in connection with W. P. No. 12425 (W) of 2004 with W. P. No 18159 (W) of 2004 (C A. N. No. 2588 of 2005), by an order dated 17. 2. 2006 took into consideration the fact that though an award passed by the learned Arbitrator under the West bengal Co-operative Societies Act was under challenge, since an Appellate forum was functioning, the grievances were required to be ventilated before the said Forum. (15) THE award dated 25. 8. 2004 was then challenged by the present petitioners, as appellants, by filing the said Appeal No. 32 of 2006. lt appears that the learned Tribunal on the basis of the materials available before it took into consideration the fact that the loan of Rs. 72,71,926/-, taken by M/s. Susunia Spring Water Private Limited from the Bankura, District Central cooperative Bank Ltd. , was not repaid in due time. It was urged before the learned Tribunal that the organisation BENFED also got associated with the running of the said Company, as the Company took lease of the infrastructure of the said BENFED. It was also placed before the learned Appellate Authority that certain respondents were left out and this was done in collusion with them. Grievance was raised on the ground that the present petitioners/ appellants were not given any proper opportunity to contest the dispute case. Learned Tribunal, in the impugned order, while referring to the backdrop of the dispute, indicated that stay application was filed before the Tribunal. The operation of the order dated 24 12. 2004 was stayed till disposal of the hearing of the appeal subject to deposit of an amount of Rs. Learned Tribunal, in the impugned order, while referring to the backdrop of the dispute, indicated that stay application was filed before the Tribunal. The operation of the order dated 24 12. 2004 was stayed till disposal of the hearing of the appeal subject to deposit of an amount of Rs. 30 lakhs within 10 days from the date of the order i. e. 4. 4. 2006. This order was challenged before the High Court but without any success. Time for payment of the aforesaid amount was, however, extended till 28 4. 2006. Admittedly, the said amount could not be paid or deposited even at the time of hearing of the appeal. The learned Tribunal further took into consideration the fact that the legality or propriety of the award was not effectively challenged. (16) AFTER due consideration of all such relevant aspects, the learned tribunal dismissed the appeal thereby affirming the impugned order dated 25. 82004. (17) WHAT essentially emerges from the submission made by learned counsel, Mr. Ghosh, appearing for the petitioners, is that the entire proceedings were conducted in violation of the basic principle of nature justice. (18) MR. Bhattacharjee, appearing as learned Counsel for the contesting opposite parties invited attention of the Court to the various orders passed in connection with the dispute case in support of his contention that there can be no merit in the grievance of the present petitioners. (19) IT was emphatically submitted by Mr. Bhattacharjee that an application under Article 227 of the Constitution cannot be converted into an appeal. Relying upon the decision of the learned Division Bench of this Court in the case of Mackintosh Bura Ltd. v. State of West Bengal and Ors. , reported in 2007 (2) CHN page 115, it was submitted by Mr. Bhattacharjee that the power conferred by Articles 226/227 is designed to effectuate the law, to enforce the rule of law and to ensure that the several authorities and organs of the State act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law, nor can there be any question of the High Court clothing the authorities with its power under Article 226 or the power of a Civil Court. It cannot be invoked for directing the authorities to act contrary to law, nor can there be any question of the High Court clothing the authorities with its power under Article 226 or the power of a Civil Court. (20) THE learned Division Bench in connection with the said case derived inspiration from the decision in the case Union of India v. Kirloskar Pneumatic company Ltd. , as reported in 1996 (4) SCC 453 . Mr. Bhattacharjee categorically submitted that liberty to approach the Appellate Tribunal cannot be interpreted in a manner so as to suggest that there had been implied condonation of the delay. (21) IN this context, Mr. Bhattacharjee further referred to an unreported judgment of this Court passed in C. O. No 3039 of 2002 with C. O. No 3040 of 2002. Reference was made in the said judgment of the words of Lord Pearce in Anisminic Case, 1969 (2) AC 147 (195) which is as follows:- "while engaged on proper enquiry, the Tribunal may depart from the rules of natural justice, or it may ask itself the wrong question, or it may take into account matters which it was not directed to take into account. Thereby it would outside its jurisdiction. " (22) BUT in the factual backdrop of the present case, it cannot be said that the order of the learned Tribunal under challenge in this application suffers from any such infirmity or jurisdictional error. This Court does not find any rational justification for any manner of interference with the impugned order. The present application being C. O. No. 2018 of 2006 be accordingly dismissed. This also disposes of C. A. N. No. 8210 of 2006. No order as to costs.