Sahyadri Coop Credit Society Ltd. Vs. State of Maharashtra & Ors, on 28th March, 2016, Supreme Court of India: Case Brief – Read Judgement

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Auction of sugar on failure to pay dues of cane growers: Creditor- Co-operative societies to have preference for their dues over others
Civil Appeal No. 1840 of 2013
Bench: Justice Ranjan Gogoi; Justice Prafulla C. Pant

Case Brief: In this appeals, the judgement and order passed by the High Court of Bombay is impugned. In the facts of the case, Respondent no. 5 and 6 were in losses, they failed to pay outstanding dues of the cane growers, as such the Respondent no. 2- Commissioner of Sugar/ Special Registrar, Co-operative Societies, State of Maharashtra, Pune, Passed an ordered under the provision of the Sugarcane (Control) Order, 1966, whereby Rs. 36,22,66,591 were directed to release with interest accrued to be paid to the members who had supplied their sugarcane post 15th May, 2010. Moreover, the Collector of Kolhapur- Respondent no. 3 was nominated for the disbursement of amount. Then the Tehsildar- Respondent no. 4 visited site of Respondent no. 5 and attached the stock some of the godowns, which were earlier pledge to the Appellants- Multi State Co- operative Societies which have offered some loans in favour of Respondent no. 5. Even after the objection from the Respondent no. 5 and Appellants, there was published a advertisement in the newspaper informing auction of said godowns along with stocks therein. The appellant when felt aggrieved by this situation, moved to the High Court with writ petition, where they claimed their right of precedence in repayment of loan amount, thus High Court in their petitions ordered (2011) that the auction should be conducted after fixing the set price. Auction conducted and amount from the pledge sugar in part was deposited with the High Court and rest was to be deposit after receiving the same from auction- purchaser. Thus, the High Court held appellants entitle firstly over the said amount of pledge sugar and also Respondent no. 3 was directed to distribute the collected amount, however, said respondent rejected the claim of the appellants. Against Appellants filed writ petitions before the High Court and therein they prayed for the interim stay, which the High Court refused and sought that the amount with the Court should be remained in fixed deposit, later by its impugn order High Court dismissed the writ petitions on the ground that the Appellants were having alternative remedy to file suit under section 218 of the Maharashtra Land Revenue Code. Now the bench observed that the order of the High Court which was made in earlier petitions have attained finality. Moreover, the bench further relied upon the judgements of the Apex Court in Central Bank of India vs Siriguppa Sugars & Chemicals Ltd. where, similar facts were already discussed and held that appellants rights cannot be doubted over pawned sugar had precedence over the claims of the Cane Commissioner and that of the workmen. Thus, the bench held that the High Court’s dismissal of the writ petitions was due to its erred in law. And hence, the said judgement and order was set aside and asked the authorities to disburse the amount in the light of observations as to the right of appellants to get precedence over the dues payable.

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Sahyadri Coop Credit Society Ltd. Vs. State of Maharashtra & Ors, on 28th March 2016, Supreme Court of India – Judgement

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