HARIBHAU DAGDU TANDALE versus INDUSTRIAL CO-OPERATIVE ASSOCIATION LTD. AND ORS.

Citation: [1996] SUPP. 7 S.C.R. 288 · Decided: 08-10-1996 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Dismissed

Judgment (excerpt)

A 
HARIBHAU DAGDU TANDALE 
v. 
INDUSTRIAL CO-OPERATIVE ASSOCIATION LTD. AND ORS. 
OCTOBER 8, 1996 
B 
(M.M. PUNCHHI AND K. VENKATASWAMI, JJ.] 
Maharashtra Co-operative Societies Act, 1960-Sections 102 to 
106-Liquidation-lntelim order of winding up-Appointment of a Liquida-
tor-Power to sell property of the Society-Power u/s 105 must be read in 
C conjunction with power to sell u/s 106--Sale of property dwing pendency cf 
appeal-Legality of 
The third respondent in exercise of his powers u/s 102(i) (a) of the 
Maharashtra Co-operative Societies Act, 1960 issued an interim winding 
D up order, called upon the first respondent society to show cause why a final 
order of winding up the society should not be passed and also simul-
taneously appointed the second respondent as Special Liquidator u/S 103 
of the Act. The interim order was confirmed u/S 102(2) of the Act without 
affording the personal hearing requested by the first respondent. The first 
respondent filed an appeal to the State Government !J/S 104 of the Act. 
E While the appeal was pending, the Special Liquidator sold the land belong-
ing to the society to the appellant. The Government issued notices to the 
second and third respondents invoking the suo moto power u/S 154 of the 
Act, to question the sale in favour of the appellant. The order of winding 
up and the sale was set aside and the Liquidator was directed to hand over 
p 
the charge of the society to the committee, holding that when the appeal 
was pending with the appellate authority the subordinate authority had no 
right to dispose of any property which may adversely affect if the liquida-
tion order were to be set aside by the appellate authority. The appellant 
challenged the order of the State Government. The High Court. confirmed 
the order of the State Government and dismissed the Writ Petition, 
G holding that the power of sale conferred on the Liquidator under clause 
(a) of sub-section (i) of Section 105 shall have to be read along with the 
powers of sale contemplated u/S 106 of the Act; that Section 105 covers 
cases where sale of the property cannot await the disposal of the appeal, 
while Section 106 deals with the power of sale when winding up order has 
H become final and, therefore, effective; that pending appeal can result both 
288 
H.D. TANDALEv. INDL. CO-OP.ASSN. LTD. 
289 
in the confirmation of the interim winding up order as well as in the A 
vacating thereof; that the sale powers u/s 105 could have been intended 
only to meet such cases where sale of perishable articles or some other 
-
property of such nature cannot wait till the disposal of the appeal. Hence 
this a pp ea I. 
The appellant submitted that no appeal lay to the State Government B 
against an interim order of winding up and appointment of Liquidator; 
that the State Government was not justified in invoking suo moto 
revisional powers for setting aside the confirmation order of winding up 
passed u/S 102(2) of the Act; that the sale by the liquidator ought not to 
have been set aside merely on the ground that interim winding up order c 
was not sustainable as all acts done and proceedings taken by the liquida-
tor shall be binding on the society even if the interim order had sub-
sequently been cancelled; that the interim order of winding up having been 
matle final subsequently by the third respondent by an independent order 
and the society having not challenged the final order, the appeal before the D 
State Government against the interim order must be deemed to have 
become infructuous as the interim order merged with the final order. 
Dismissing the appeal, this Court 
HELD : 1.1. Under the provisions of the Maharashtra Co- operative E 
Societies Act, 1960, as soon as an interim order of winding up was passed 
and a Liquidator was appointed, he gets only the custody and control of all 
the property, effects and actionable claims to which the society appears to 
be entitled, and of all books, records and other documents pertaining to the 
business of the society. It is only under Section 103(5) of the Act, the assets F 
of the society vest in the Liquidator. Under Section 105(1)(c), the Liquida-
tor is empowered to sell immovable and movable property of the society by 
public auction or private contract but this power must be read in conjunc-
tion with the powers to sell, given under Section 106 which says that after a 
• 
winding up becomes effective, the Liquidator shall proceed to realise the 
• 
G 
a

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