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Judgment
Heard. Rule. The Rule is made returnable forthwith. With the consent of both the sides the matters are heard finally.
A common question of fact and law which calls for decision in these writ petitions under Section 107 of the Maharashtra CoÂoperative Societies
Act,1960 is as to whether even a criminal proceeding against a society under winding up or under liquidation is barred. The facts which are common in
both the writ petitions are to the effect that the petitioner no.1 is a coÂoperative society duly registered under the provisions of the Maharashtra CoÂ‐
operative Societies Act. It had obtained the licence to carry on banking businesses under the provisions of Banking Regulations Act, 1949. In the year
2008, the Reserve Bank of India had arrived at a conclusion that there was no likelihood of any improvement in the financial condition the petitioner
no. 1Âsociety. It decided to cancel the licence granted to it for conducting banking business in exercise of the powers under Section 22 of the Banking
Regulation Act. This order of the Reserve Bank of India was passed on 29.12.2008. Pursuant to such order, the Commissioner of CoÂoperative and
Registrar of CoÂoperative Societies, Maharashtra by the order dated 03.01.2009 ordered winding up of the activities of the petitioner no. 1. By that
order even the petitioner no. 2 was appointed as a Liquidator.
It appears that the respondent nos. 3 to 7 in Writ Petition No. 934 of 2017 and respondent nos. 2 and 3 in Writ Petition No. 1406 of 2017 had
deposited money with the petitioner Society. They filed complaints in the District Consumer Forum under Section 12 of the Consumer Protection Act,
1986. The District Consumer Forum by the order dated 09.01.2015 allowed the claims and inter alia issued a direction to the petitioner no. 1 Society to
refund the amounts deposited with interest. In due course even these respondents submitted an execution proceeding before the District Consumer
Forum. Since the petitioners failed to pay money as awarded by the District Consumer Forum, these respondents initiated a proceeding under Section
27 of the Consumer Protection Act invoking the penal provision. The forum issued summons / notices and called upon the petitioners to furnish bail.
Being aggrieved and dissatisfied by such orders the petitioners have approached this Court. The petitioners are seeking to quash the summons and
notices issued by the District Consumer Disputes Reddressal Forum, by invoking the powers under Section 482 of the Code of Criminal Procedure
and under Article 226 and 227 of the Constitution of India.
The learned senior advocate for the petitioners vehemently submitted that by virtue of Section 107 of the CoÂoperative Societies Act, once a CoÂ‐
operative Society goes under winding up and liquidation proceeding, no proceeding can be initiated except with the leave of the Registrar and subject
to such terms as he may impose. When admittedly the petitioner no. 1 is a CoÂoperative Society and when admittedly the Registrar has directed it to
be wound up and it is undergoing liquidation process wherein the petitioner no. 2 is appointed as a Liquidator, in the absence of any permission under
Section 107, the District Consumer Redressal Forum could not have taken cognizance of the complaint under Section 27 of the Consumer Protection
Act and ought not to have directed summons / notice is to be issued. The impugned direction is clearly in violation of such statutory bar. It was pointed
out to the forum by the petitioner no. 2 when he had appeared pursuant to the impugned summons / notice and therefore it may be quashed and set
aside by allowing the writ petitions.
The learned senior advocate for the petitioners also
submitted that the very fact that the petitioner no.1 is undergoing a liquidation process on account of its poor financial condition, it is not only the
present respondents but even the other depositors and creditors also have an equal right to have a share in the proceeds which would be generated at
the end of the liquidation process, may be on pro reta basis. The whole purpose and object of imposing a bar to a proceeding to be initiated against a
coÂoperative society under winding up or liquidation by providing for Section 107 of the CoÂoperative Societies Act is to regulate such a process. It
only regulates such a process and does not create a absolute bar. A depositor or a Creditor only has to seek necessary permission from the Registrar
and can thereafter approach the liquidator staking his claim in the proceeds. The respondents ought to have approached the Registrar and solicited
necessary permission but instead have straight away taken recourse to the remedy provided under Consumer Protection Act and are now bent upon
to compel the petitioner no.2Âliquidator to shell of money to the deprivation of the other rightful claimants. It cannot be allowed and the summons /
notices may be quashed and set aside.
The learned advocates for the respective respondents vehemently submitted that the writ petitions are not tenable. They would submit that in fact
already an objection was lodged with the District Consumer forum for the very same reasons i.e. want of permission under Section 107 of the CoÂ‐
operative Societies Act. Since the objections were rejected, the petitioners filed Civil Writ Petition Nos. 7021 of 2015 and 7084 of 2015 which are
pending in this Court. Having failed to secure any interim relief, a circuitous attempt is being made to stall the proceeding initiated by the respondents
under Section 27 of the Consumer Protection Act. When those writ petitions are still pending, no such second attempt can be allowed to be made by
the petitioners by ingeniously making a prayer which would appear to be different than the reliefs being claimed in these two writ petitions. They
would further point out that even the petitioners have not been approaching this Court in these writ petitions by making a true and honest disclosure by
pointing the fact of filing these two writ petitions. It is an important fact by suppressing which the petitioners have attempted to solicit some favorable
orders. Nowhere in the writ petitions have they even referred to the fact of pendency of these two writ petitions and therefore for this reason alone
the writ petitions are liable to be dismissed.
The learned advocates for the respondents would further submit that even otherwise, the bar contained in Section 107 of the Cooperative Societies
Act only bars a Civil Court from taking cognizance of a proceeding and does not bar any criminal action against the cooperative society which is under
winding up or liquidation. They would point out that a proceeding initiated under Section 27 of the Consumer Protection Act for all the purposes is
governed by the provisions of Code of Criminal Procedure and even the District Forum discharges the powers under the provisions as that of a
Judicial Magistrate First Class. If that be so, the remedy invoked by the respondents pursuant to which the summons / notices have been issued which
are impugned in the present writ petitions cannot be said to be without jurisdiction for want of permission of the Registrar under Section 107 of the
Cooperative Societies Act.
The learned advocate for the respondents in Criminal Writ Petition No. 1406 of 2017 would further point out that even on facts, the claim of the
respondents in that proceeding was allowed by the District Consumer Forum on 06.08.2018 and the petitioner no. 2 was appointed as the Liquidator of
the petitioner no. 1ÂSociety by the order dated 03.01.2009. Therefore, it cannot be said that even that proceeding was barred by Section 107 of the
CoÂoperative Societies Act.
I have carefully gone through the record. Since the dispute pertains to the scope and ambit of Section 107 of the Cooperative Societies Act one
need to refer to the provision itself, which reads thus:
“107. Bar of Suit in Winding up and dissolution matters Save as expressly provided in this Act, no Civil Court shall take cognizance of any matter
connected with the winding up or dissolution of a society under this Act; and when a winding up order has been made no suit or other legal
proceedings shall lie or be proceeded with against the society or the Liquidator, except by leave of the Registrar, and subject to such terms as he may
impose:
Provided that, where the winding up order is cancelled the provisions of this section shall cease to operate so far as the liability of the society and of
the members thereof to be sued is concerned but they shall continue to apply to the person who acted as Liquidator.â€
Perusal of the provision carefully clearly shows that though the heading only refers to bar of suit the body of the provision also mentions 'no suit or
other legal proceeding'. The learned advocate for the petitioners laid much emphasis on the use of these words 'other legal proceedings' and submitted
that it covers all legal proceedings and does not distinguish between a civil and a criminal proceeding. However, a provision has to be read in its
entirety in order to understand its true purport and if so read, the words 'other legal proceeding' can be interpreted ejusdem generis, with the word 'suit'
preceding thereto. These subsequent words would certainly take colour from the earlier word. If so interpreted, it cannot be allowed to be interpreted
to mean a criminal proceeding as well. Besides, the provision itself begins with title 'bar of suit' and also further uses the words 'no Civil Court can
take cognizance'. The use of words civil Courts further puts the controversy as to the interpretation at rest. A complete reading of the provision of
Section 107 makes it abundantly clear that the legislature had only provided for regulating civil proceedings to be instituted against Cooperative
Societies which are under winding up or liquidation process. If the legislature had really intended to even bar a criminal proceeding from being initiated,
it would not have used the words 'suit' and 'civil Courts'. This being the position the submission of the learned advocate for the petitioners that this
provision also governs a criminal action is not acceptable and is not legally tenable.
There is no dispute that the proceeding initiated under Section 27 of the Consumer Protection Act is a criminal action. The provision specifically
lays down that while exercising the powers under that provision, the District Consumer Forum shall have a power of the Judicial Magistrate First
Class for the trial of the offences under that Act and would be exercising those powers under the Code of Criminal Procedure. The proceeding would
clearly have all the drapings of a criminal case and the forum would be exercising the powers of a Magistrate. If that be so, a proceeding initiated
under that provisions cannot be said to be barred by Section 107 of the CoÂoperative Societies Act. As a result, the present writ petitions which seek
to quash and set aside the summons / notices issued by the District Forum in a proceeding under Section 27 of the Consumer Protection Act are not
tenable.
With this, one could have easily disposed of these writ petitions. However it is necessary to bring on record even the conduct of the petitioners.
Being aggrieved and dissatisfied by the orders passed by the District Forum approving the claims preferred by the respondents under Section 12 of the
Consumer Protection Act, they have preferred Writ Petition Nos. 7082 of 2015 and 7021 of 2015 which are pending in this Court. The relief claimed
in those petitions are to the effect that the complaints filed by the respondents herein before the District Forum be quashed and set aside.
Conspicuously, even the bar contained under Section 107 of the CoÂoperative Societies Act, has been raised therein to question the jurisdiction of the
District Forum to entertain the complaints and to decide the claims in favour of the respondents. Admittedly, the summons and the notices impugned in
the present proceedings filed under Section 27 of the Consumer Protection Act arise out of the decision of the District Forum which the petitioner
have already challenged independently in those two writ petitions. Therefore, when those petitions are already pending before this Court, it would have
been appropriate for the petitioners to have pursued that remedy. Interestingly without making a whisper about such pending writ petitions, the present
writ petitions have been filed and another attempt has been made to stall a criminal proceeding which has been initiated under Section 27 of the
Consumer protection Act on petitioners failure to obey the directions.
Be that as it may, for the reasons mentioned hereinÂabove, the Writ Petitions do not have merit and are liable to be dismissed.
The Writ Petitions are dismissed.
The Rule is discharged.Â