TMI Blog2019 (11) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ne year at a time and four years in the aggregate, and maximum for 10 years. In case time is not extended, the winding up comes to an end on the expiry of 6 years or at the end of the extended period. The total period can be 10 years. The second proviso to section 109 makes it clear that if the Registrar comes to a conclusion that the work of liquidation could not be completed by the liquidator due to the reasons beyond his control, he shall call upon the liquidator to submit his report. After getting the report, if the Registrar is satisfied that the realisation of assets, properties, sale of properties still remains to be realised, he shall direct the liquidator to complete the entire work and carry out the activities only for the purposes of winding up and submit his report within such period not exceeding one year reckoned from the date of receipt of the report from the liquidator. It is apparent that on the termination of the liquidation proceedings, liability of the members for the debts taken by them does not come to an end. There is no such provision in the Act providing once winding up period is over, the liability of the members for loans obtained by them which is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank who is going to be benefitted by recovery of public money in the hands of members. In such cases it would be appropriate for the Registrar to send notice of the proceedings to a person who is to be benefitted from the recovery. In the instant case, the bank itself is a prime lender cum liquidator. The proceedings cannot come to the end. Though the Liquidator cannot continue once the proceedings are over. Notice in such cases should be issued by the Registrar to the creditors and to persons for whose benefit recovery is to be made, to continue the pending proceedings in the instrumentality of court/tribunals/recovery officers etc. We hold that appellant Bank can continue the pending proceedings - Appeal allowed. - CIVIL APPEAL NO.10596 OF 2010 - - - Dated:- 20-8-2019 - Mr. Arun Mishra, Mr. S. Abdul Nazeer and Mr. M.R. Shah, JJ. Arvind Kr. Sharma , Aniteja Sharma and Saurabh Mishra , for the appellant. Ms. Shobha Gupta , Joyshree Barman , Abhinav Bansal and Ms. A. Subhashini , for the respondents. JUDGMENT 1. The question involved in the present matter is whether under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cooperative Tribunal, which were pending adjudication. The recovery could not be completed in view of the pendency of the appeals, interim stay granted by courts etc. 6. In the year 2001, one of the defaulting members of the Society filed Writ Petition No.358 of 2001 in the High Court of Bombay at Goa, prayer was made to declare that the winding up proceedings with respect to the Society be deemed to have been terminated with retrospective effect from 24.1.1993 and for an order restraining respondents continuing with the winding up/liquidation proceedings in respect of the Society. 7. The High Court allowed the writ petition vide judgment and order dated 29.11.2006, which has resulted in heavy financial losses to the Bank as the cases pending before the Adjudicating Authority will come to standstill. The High Court vide impugned judgment and order dated 29.11.2006 held that as per Section 109 of the Act, the winding up proceedings have to be closed as soon as practicable within six years from the date the Liquidator takes control of all the property, unless the period is extended by the Registrar under Section 109. Under Section 109(1) of the Act, the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 103(3). As per the provisions of Section 103(4), the Liquidator, subject to the general control of the Registrar, exercise all or any of the powers mentioned in Section 105 of the Act and the Registrar is empowered to remove the Liquidator and appoint another without assigning any reason. It is provided under Section 103(5) that the assets of the society shall vest in the Liquidator. Section 103(6) makes a provision that in case interim order is vacated, the person appointed as Liquidator shall hand over the property to the officers who had delivered the same to him and the officers of the society shall be bound by the action taken by the Liquidator. 10. Under Section 105, the Liquidator appointed under Section 103 shall have power subject to supervision and control of the Registrar to institute and defend legal proceedings, civil or criminal on behalf of the society; carry on business of the society; to sell the immovable and movable property and actionable claims of the society by public auction or private contract, with any person or body corporate, or sell the same in parcels. Section 106 deals with the effect of order of winding up. The order shall be effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Registrar is satisfied that the realisation of assets, properties, sale of properties still remained to be realised, he shall direct the liquidator to complete the entire work and carry out the activities only for the purposes of winding up and submit his report within such period not exceeding one year reckoned from the date of receipt of report from the liquidator. Explanation. - In the case of a society which is under liquidation at the commencement of the Maharashtra Co-operative Societies (Second Amendment) Act, 1985 the period of six years shall be deemed to have commenced from the date on which the Liquidator took over the custody or control as aforesaid. (2) Notwithstanding anything contained in the foregoing sub-section, the Registrar shall terminate the liquidation proceedings on receipt of the final report from the Liquidator. The final report of' the Liquidator shall state that the liquidation proceedings of the society have been closed, and how the winding up has been conducted and the property of and the claims of the society have been disposed of, and shall include a statement showing a summary of the account of the winding up in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the surplus assets as shown in the final report of the Liquidator, which may be divided by the Registrar with the previous sanction of the State Government, amongst its members in such manner as may be prescribed for the purposes. Where the surplus is not so divided, surplus shall vest in the Registrar. 14. It is apparent from the facts of the case that the wound-up Society has availed of loans from Goa State Cooperative Bank Ltd. As well as from the Agricultural Refinance Development Corporation. From 1974-75 to 1979-80, the Society has advanced total loans of ₹ 323.81 lakhs to 155 members. The Society failed to perform its functions. There was non-recovery of loans from the members resulting in overdues, failure to collect the margin money from the loanees prior to release of the loans. There were irregularities in sanction of the loans resulting in benami transactions. Loans were advanced to nontraditional fishermen. There was mismanagement in the running of the ice factory and diesel outlet. There was failure to strengthen the affiliated primary fisheries Cooperative Society. Thus, the winding up of the cooperative society was ordered by the Registrar of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 109 of the Act, proceedings have to be terminated by the Registrar on receipt of final report from the liquidator as ordered under section 109(2). However, at the same time, the Registrar has power to extend the period of 6 years fixed under section 109(1), not exceeding one year at a time and four years in the aggregate, and maximum for 10 years. In case time is not extended, the winding up comes to an end on the expiry of 6 years or at the end of the extended period. The total period can be 10 years. The second proviso to section 109 makes it clear that if the Registrar comes to a conclusion that the work of liquidation could not be completed by the liquidator due to the reasons beyond his control, he shall call upon the liquidator to submit his report. After getting the report, if the Registrar is satisfied that the realisation of assets, properties, sale of properties still remains to be realised, he shall direct the liquidator to complete the entire work and carry out the activities only for the purposes of winding up and submit his report within such period not exceeding one year reckoned from the date of receipt of the report from the liquidator. 18. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that no person can suffer from the act of court and unfair advantage gained by a party of interim order must be neutralised. The Court should never permit a litigant to perpetuate illegality by abusing the legal process. It is the bounden duty of the court to ensure that dishonesty and any attempt to abuse the legal process must be effectively curbed and the court must ensure that there is no wrongful, unauthorised or unjust gain for anyone by the abuse of process of the court. No one should be allowed to use the judicial process for earning undeserved gains or unjust profits. The object and true meaning of the concept of restitution cannot be achieved unless the courts adopt a pragmatic approach in dealing with the cases. The Court observed: 18. In Ram Krishna Verma v. State of U.P. (1992) 2 SCC 620, this Court examined the similar issue while placing reliance upon its earlier judgment in Grindlays Bank Ltd. v. ITO, (1980) 2 SCC 191 and held that no person can suffer from the act of the court and in case an interim order has been passed and the petitioner takes advantage thereof and ultimately the petition is found to be without any merit and is dismissed, th ..... 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