{"id":229823,"date":"2008-08-30T00:00:00","date_gmt":"2008-08-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-united-matachem-pvt-ltd-vs-unknown-on-30-august-2008"},"modified":"2015-12-23T19:15:13","modified_gmt":"2015-12-23T13:45:13","slug":"ms-united-matachem-pvt-ltd-vs-unknown-on-30-august-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-united-matachem-pvt-ltd-vs-unknown-on-30-august-2008","title":{"rendered":"M\/S.United Matachem Pvt. Ltd. : vs Unknown on 30 August, 2008"},"content":{"rendered":"
Bombay High Court<\/div>\n
M\/S.United Matachem Pvt. Ltd. : vs Unknown on 30 August, 2008<\/div>\n
Bench: S.A. Bobde<\/div>\n
                             -:    1   :-\n\n           IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n              ORDINARY ORIGINAL CIVIL JURISDICTION\n\n                COMPANY PETITION NO.743 OF 1990\n\n                             In the matter of M\/s.Mafatlal Engg.\n\n\n\n\n                                                                              \n                             Industries Limited (in Liqn.)\n\n\n\n\n                                                     \n    M\/s.United Matachem Pvt. Ltd.                            : Petitioner\n\n                            ...\n\n    Ms Rubia Taneja i\/b. Jhangiani,             Narula & Associates for\n\n\n\n\n                                                    \n    society.\n\n    Mrs.Aruna Pai for Official Liquidator.\n\n\n\n\n                                           \n    Mr.C.N.Mehta for Jyoti Vaswani, purchaser.\n\n                            ...\n                            ig              CORAM : S.A. BOBDE, J.\n<\/pre>\n
                                            DATE : AUGUST 30, 2008.\n<\/p>\n
    ORAL ORDER<\/p>\n
    1.     By    this report, the Official Liquidator               has      prayed<\/p>\n
    that    the    Chairman of M\/s.Anita Co-op.            Housing         Society<\/p>\n
    Limited      be directed to issue duplicate share               certificate<\/p>\n
    in   respect of flat no.31-B to the Official Liquidator                         so<\/p>\n
    as   to     enable    him to transfer the same in            the      name      of<\/p>\n
    Mrs.Jyoti A.       Vaswani, the auction purchaser.\n<\/p>\n
    2.   Mafatlal Engineering Industries Limited is the company<\/p>\n
    in   liquidation.        It    holds     shares in    respect         of     flat<\/p>\n
    no.31-B      in   a   building owned by       M\/s.Anita        Co-operative<\/p>\n
    Housing Society Limited.           In the course of winding up, the<\/p>\n
    Official      Liquidator      took possession of the flat and                 the<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span>\n<\/p>\n
                              -:    2    :-\n<\/p>\n
    garage.       Under    orders      of the Court, he sold it               to     one<\/p>\n
    Smt.Jyoti Vaswani in an auction which was confirmed by the<\/p>\n
    Court    on    16.3.2007.       He handed over the            flat       and     the<\/p>\n
    garage    to the auction purchaser on 3.5.2007.                    The auction<\/p>\n
    purchaser      demanded that the Official Liquidator                     transfer<\/p>\n
    the    shares in her name.          The Official Liquidator wrote to<\/p>\n
    the    management of Mafatlal Engineering Industries Limited<\/p>\n
    i.e.    the company in liquidation to hand over the original<\/p>\n
    share    certificate      in    respect of the property                vide      his<\/p>\n
    letters      dated 4.12.2007 and 18.1.2008.              The management of<\/p>\n
    Mafatlal      Engineering      Industries       Limited         informed         the<\/p>\n
    Official      Liquidator that they do not have original                       share<\/p>\n
    certificate      vide<\/p>\n
                             their      letters     dated       26.12.2007           and<\/p>\n
    23.1.2008.       Therefore,        the Official Liquidator wrote                   to<\/p>\n
    Anita    Co-operative      Housing       Society to       issue        duplicate<\/p>\n
    share    certificate      vide his letters dated              13.2.2008          and<\/p>\n
    31.3.2008.       The    co-operative society in response to                      the<\/p>\n
    Official       Liquidator’s        letter,    by     its      letter          dated<\/p>\n
    17.4.2008 addressed to the Official Liquidator declined to<\/p>\n
    issue    duplicate      share      certificate unless           the      Official<\/p>\n
    Liquidator      clears    the      arrears of      dues     of     maintenance<\/p>\n
    charges      payable by the company in liquidation in view                         of<\/p>\n
    bye-law      no.40 and rule 24(c) which, inter alia,                     provides<\/p>\n
    that no transfer of the share shall be effective unless it<\/p>\n
    is    made in accordance with the provisions of the bye-laws<\/p>\n
    and    all    the   liabilities of the transferor                 due     to     the<\/p>\n
    society are discharged.\n<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span><\/p>\n
                              -:    3    :-\n\n\n\n    3.        Mrs.Pai,    the    learned      counsel      for      the      Official\n\n    Liquidator      submitted      that      Anita   Co-operative             Housing\n\n    Society      Limited is bound to hand over duplicate share                         to\n\n\n\n\n                                                                                \n    the    Official      Liquidator to enable him to give effect                       to\n\n\n\n\n                                                        \n    the    transfer      in favour of the auction purchaser                   without\n\n    insisting      on immediate payment of arrears of dues payable\n\n    by    the    company    in    liquidation     to     Anita        Co-operative\n\n\n\n\n                                                       \n    Housing      Society    Ltd.    According to the learned                 counsel,\n\n    though      the Official Liquidator has stepped into the shoes\n\n\n\n\n                                            \n    of    the    company    in    liquidation, he does            not      deny      the\n\n    liability      of the company to clear maintenance charges                         to\n\n    the    society\n                            \n                      and such payment can only be                in     accordance\n\n<\/pre>\n
    with section 529A of the Companies Act which provides that<\/p>\n
    the    workmen’s dues and debts due to the secured creditors<\/p>\n
    shall      be paid in priority to all debts.              According to the<\/p>\n
    learned      counsel,    the dues of maintenance can be paid                       by<\/p>\n
    the    Official Liquidator only after the workers’ dues                          are<\/p>\n
    satisfied.\n<\/p>\n
    4.     On the other hand, Ms Taneja, the learned counsel for<\/p>\n
    Anita Co-operative Housing Society submitted that the dues<\/p>\n
    of    a    co-operative      society have a first           charge        on     the<\/p>\n
    members’      interest in the property of the society and such<\/p>\n
    dues      do not feature in the property of the company in the<\/p>\n
    process      of winding up.        According to the learned               counsel<\/p>\n
    for the society, any outstanding demand or dues payable to<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span>\n<\/p>\n
                              -:    4    :-\n<\/p>\n
    a society by any member or past member is the first charge<\/p>\n
    which    must be satisfied de hors winding up.                     It is       clear<\/p>\n
    that    if    the    outstanding dues of a member payable                      to     a<\/p>\n
    society      feature in and are governed by the Companies                         Act<\/p>\n
    and    section 529A in particular, they must be paid only in<\/p>\n
    accordance      with the priority provided by section 529A                          of<\/p>\n
    the    Act.     It    is, therefore, necessary             to      examine        the<\/p>\n
    scheme of the law.\n<\/p>\n
    5.     The    Maharashtra      Co-operative Societies               Act,       1960,<\/p>\n
    hereinafter      referred      to as the        “Co-operative           Societies<\/p>\n
    Act”,    is enacted by the State Legislature under Entry                            32<\/p>\n
    of<\/p>\n
          List II of Schedule VII of the Constitution of                         India.\n<\/p>\n
    Section      47 of the Co-operative Societies Act, 1960                        reads<\/p>\n
    as follows:-\n<\/p>\n
              \"47.        Prior    claim       of     society.--          (1)\n      \n\n\n              Notwithstanding          anything in any other              law\n   \n\n\n\n<\/pre>\n
              for the time being in force, but subject to<\/p>\n
              any prior claim of Government in respect of<\/p>\n
              land      revenue    or any money recoverable                 as<\/p>\n
              land      revenue    and    to    the    provisions           of<\/p>\n
              sections      60    and 61 of the Code           of      Civil<\/p>\n
              Procedure, 1908.\n<\/p>\n
              (a)    ……………………………….\n<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span><\/p>\n
                      -:    5    :-\n\n           (i)       ...............................\n\n           (ii)      ...............................\n\n<\/pre>\n
           (iii) ………………………….\n<\/p>\n
     (b)   any outstanding demands or dues payable<\/p>\n
           to    a    society        by any member         or     past<\/p>\n
           member      or deceased member, in                respect<\/p>\n
           of    rent,      shares,      loans      or     purchase<\/p>\n
           money      or    any other rights or              amounts<\/p>\n
           payable        to    such society, shall             be     a<\/p>\n
           first      charge upon his interest in                   the<\/p>\n
           immovable property of the society.\n<\/p>\n
     Explanation – The prior claim of Government<\/p>\n
     in respect of dues other than land revenue,<\/p>\n
     shall   be      restricted        for the      purpose         of<\/p>\n
     sub-section       (1) to the assets created by a<\/p>\n
     member out of the funds in respect of which<\/p>\n
     the Government has a claim.\n<\/p>\n
     (2)   No    property or interest in               property,<\/p>\n
     which   is      subject      to a charge         under       the<\/p>\n
     foregoing sub-section, shall be transferred<\/p>\n
     in    any       manner       without    the         previous<\/p>\n
     permission        of      the     society;        and      such<\/p>\n
     transfer        shall       be     subject        to       such<\/p>\n
     conditions,       if      any,    as the     society         may<\/p>\n
                                                 ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span>\n<\/p>\n
                                 -:   6   :-\n<\/p>\n
                 impose.\n<\/p>\n
                 (3)    Any transfer made in contravention                   of<\/p>\n
                 sub-section (2) shall be void.”\n<\/p>\n
    It    would be reasonable to suppose that all properties of<\/p>\n
    the    company,         including money realised from the sale                     of<\/p>\n
    such    property would be held by the Liquidator and                          would<\/p>\n
    be    liable       to    be distributed to its         creditor          only      in<\/p>\n
    accordance         with the Companies Act.        This would, however,<\/p>\n
    excludes       property      to the extent it is           already         charged<\/p>\n
    under    another         law.    Section    47   of      the      Co-operative<\/p>\n
    Societies Act clearly creates such a charge as undisputed<\/p>\n
    in    law:      a jus ad rem i.e.         a right to receive               payment<\/p>\n
    out    of     property      specified.      A charge        gives        rise      to<\/p>\n
    receive       payment, out of a specific fund or property, and<\/p>\n
    a right to prior payment;             but it does not create a right<\/p>\n
    in    rem in the fund or the property, vide Govind                         Chandra<\/p>\n
    Pal    v.       Dwarka     Nath Pal (ILR 35 Cal.           837),       Raja       Sri<\/p>\n
    Shiva Prasad v.           Beni Madhab (ILR 1 Pat.           387).        The only<\/p>\n
    thing       to ascertain is whether the charge is, in any way,<\/p>\n
    affected       by the Companies Act, 1956.             It is clear that a<\/p>\n
    charge       created by a law can only be nullified by another<\/p>\n
    law     which      overrides the former.         No such provision                has<\/p>\n
    been pointed out in the present case.                  The charge created<\/p>\n
    by     the    Co-operative Societies Act must               be,      therefore,<\/p>\n
    taken to be unaffected by the Companies Act.\n<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span><\/p>\n
                                  -:    7    :-\n<\/p>\n
    6.     It is also settled law that when two enactments deal<\/p>\n
    with    the same subject-matter, the one which is specially<\/p>\n
    enacted     for     the purpose shall prevail vide decision                           in<\/p>\n
    Allahabad     Bank v.         Canara Bank & Anr.<\/a>              (2004) 4 SCC 406,<\/p>\n
    paragraphs        38    to    40 on page         426).      The      Co-operative<\/p>\n
    Societies      Act has been held to be a self-contained                            Code<\/p>\n
    vide Greater Bombay Coop.                 Bank Ltd.      v.    United Yarn Tex<\/p>\n
    (P)    Ltd.<\/a>        [(2007)        6 SCC 236].       It   is    undoubtedly,             a<\/p>\n
    special     law     which         deals      with   co-operative          societies<\/p>\n
    whereas the Companies Act is a general law.                          This special<\/p>\n
    law    creates      a    first         charge    of   the     society         of     any<\/p>\n
    outstanding        demand
\n                               ig     or dues payable to a society by                    any<\/p>\n
    member    or past member vide section 47.                     The first charge<\/p>\n
    created     by the Co-operative Societies Act is not                           liable<\/p>\n
    to     be treated as qualified or in any manner marginalised<\/p>\n
    merely    because the company goes into liquidation and the<\/p>\n
    dues    become payable by the Official Liquidator who steps<\/p>\n
    into the shoes of the member of the society.                           The society<\/p>\n
    retains     its     right to prior payment in respect                       of     such<\/p>\n
    property.         Any    doubt         that this may not         be     the      legal<\/p>\n
    position      is    removed by section 167 of the                    Co-operative<\/p>\n
    Societies Act which reads as follows:-\n<\/p>\n
              “167.          Companies        Act not to apply.–             For<\/p>\n
               the removal of doubt, it is hereby declared<\/p>\n
               that        the provisions of the Companies                  Act,<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span>\n<\/p><\/blockquote>\n
                                -:    8   :-\n<\/p><\/blockquote>\n
                1956,       shall     not     apply    to        societies\n\n                registered      or    deemed    to    be      registered;\n\n                under this Act.\"\n\n\n\n\n                                                                                   \n    The    result      is    that    any outstanding          demands         or     dues\n\n\n\n\n                                                           \n    payable      to    a society by any member or past                   member,        in\n\n    respect      of rent, shares, loans or purchase money or                           any\n\n    other    rights      or amounts payable to such society have                          a\n\n\n\n\n                                                          \n    first    charge on any member or his successor in                         interest\n\n<\/pre>\n
    such as the Official Liquidator in the immovable property<\/p>\n
    of    the society.        Such dues stand outside the winding                       up<\/p>\n
    by    virtue      of section 167 of the Co-operative                    Societies<\/p>\n
    Act.\n<\/p><\/blockquote>\n
    7.     In    this view of the matter, the Chairman                      of     Anita<\/p>\n
    Co-operative        Housing Society ltd.          is directed to               issue<\/p>\n
    duplicate share certificate in respect of flat no.31-B to<\/p>\n
    the    Official      Liquidator       upon the     Official           Liquidator<\/p>\n
    paying      all the outstanding dues to the said society,                           in<\/p>\n
    accordance        with law, so as to convey a good title to the<\/p>\n
    auction purchaser Smt.Jyoti Vaswani.\n<\/p>\n
    8.     Official      Liquidator’s report dated 4.7.2008                      stands<\/p>\n
    disposed of accordingly.\n<\/p>\n
                                                       S.A. BOBDE, J.\n<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:48:40 :::<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court M\/S.United Matachem Pvt. Ltd. : vs Unknown on 30 August, 2008 Bench: S.A. Bobde -: 1 :- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.743 OF 1990 In the matter of M\/s.Mafatlal Engg. Industries Limited (in Liqn.) M\/s.United Matachem Pvt. Ltd. : Petitioner … Ms […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-229823","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nM\/S.United Matachem Pvt. Ltd. : vs Unknown on 30 August, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-united-matachem-pvt-ltd-vs-unknown-on-30-august-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S.United Matachem Pvt. 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