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2017 DIGILAW 1161 (GUJ)

Dipsinh Rambhai Zala v. Chief Liquidator Officer

2017-07-03

R.SUBHASH REDDY, VIPUL M.PANCHOLI

body2017
ORDER : R. SUBHASH REDDY, J. This Letters Patent Appeal under clause-15 of the Letters Patent is filed by the original petitioners in Special Civil Application No. 1784 of 2015, aggrieved by the order dated 11.1.2017 passed by the learned single Judge. By the aforesaid order, the learned single Judge dismissed the Special Civil Application filed by the appellants herein. 2. The appellants-original petitioners were members of Shri Una Taluka Khedut Sahakari Khand Udhyog Mandali, which is registered under the provisions of the Gujarat Societies Act, 1961 (“the respondent-Society” for short). In the writ-petition, the appellants have sought direction by way of mandamus to direct the respondent No. 1-Chief Liquidator Officer to give possession of the shops/godown to the petitioners. 3. The said Shri Una Taluka Khedut Sahakari Khand Udhyog Mandali was facing financial crunch and therefore, it decided to construct some shops/godowns and allot them to its members on payment of Rs. 2,55,000/-. Total 60 shops were constructed at Una Gir Dadheda Road during the year 1997-98. The shops were intended to facilitate its members to store their sugarcane crops. Before the shops were allotted to the members, financial condition of the respondent-Society worsened and all the members of the managing committee resigned from the membership, which resulted in appointment of Custodian by order dated 4th April, 2002. Thereafter, the society went into liquidation and liquidator was appointed on 7.5.2012 as contemplated under section 108 of the Gujarat Cooperative Societies Act, 1961. Liquidation order has, therefore, become final, which is not under challenge. 4. It is the case of the appellants herein that as they have already deposited the amount of Rs. 2,75,000/- each with which money shops were constructed, they are entitled for possession of shops for using them for storing the crops of sugarcane. Learned single Judge has declined to grant relief as prayed for, mainly on the ground that order of liquidation is passed and the liquidator has to take further steps as contemplated under section 118 of the Gujarat Cooperative Societies Act, 1961. Learned single Judge also placed reliance on the provision of section 111 of the Act, which reads as under: “111. Learned single Judge also placed reliance on the provision of section 111 of the Act, which reads as under: “111. Effect of order of winding up.:- After the expiry of the period for appeal under section 109 against the order made under sub-section (3) of section 107, or where the appeal has been dismissed, the order for winding up shall be effective and shall operate in favour of all creditors and of all the contributors of the society, as if it has been made on the joint petition of creditors and contributories. When a winding up order becomes effective, the liquidator shall proceed to realise the assets of the society by sale or otherwise, and no dispute shall be commenced, or if pending at the date of the winding up order, be proceeded with, against the society, except by leave of the Registrar and subject to such terms as the Registrar may impose. The Registrar, may of his own motion, however, entertain or dispose of any dispute by or against the society.” 5. From the perusal of the above provision of Section 111 of the Act, it becomes clear that once the order of liquidation is passed, winding up order becomes effective and the liquidator will proceed to realize the assets of the respondent-Society by sale or otherwise and distribute the sale proceeds as per the priorities contemplated under the Act. Thus, when the liquidator is appointed and process is initiated by him under section 118 of the Act, the appellants are not entitled for any direction. However, they are entitled for refund of money paid by them by putting forth their claims before the liquidator and the same are to be considered by the liquidator in accordance with the priorities under the Act. 6. For the aforesaid reasons, we do not find any merit in this appeal so as to interfere with the order passed by the learned single Judge. The appeal is devoid of merits and the same is accordingly dismissed. 7. In view of the dismissal of the Letters Patent Appeal, the connected Civil Application does not survive and the same is disposed of.