Police must help banks take possession of liquidated property: Bombay High Court

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SummaryA significant order for the banking sector sector was given today by HC.

In a significant order for the banking sector, Bombay High Court has ruled that police are duty-bound to extend assistance to banks or financial institutions when latter are acting under the Maharashtra Cooperative Societies Act to take possession of liquidated properties, etc.

The recent ruling by the division bench of Justices A M Khanvilkar and R D Dhanuka came on a petition which alleged that police did not provide protection to the officers of Kolhapur-based Ravi Cooperative Bank for taking possession of a property.

Petitioner Tulsidas Narsinga Vhatkar had bought the property in an auction conducted by the bank. According to him, after the auction, the bank requested the Superintendent of police to provide protection for the purpose of taking possession from the original owner.

But the SP, relying on a Supreme Court decision, said it would not be possible. The petitioner on the other hand cited Maharashtra Government's circular of January 2008 which directs police authorities to give assistance/protection to the officers of the Cooperative Department.

Agreeing with the petitioner, the judges held: "If Respondent No 1 (liquidator of the Bank) seeks assistance/protection to enable him to take steps and perform his statutory duties, we fail to understand as to how the decision of the Apex Court would come in the way of the Superintendent of Police to provide assistance and protection to the Government servant for discharging his statutory duty."

"It is not the case of the bank that forcible possession is being taken over by other than a due process," the bench noted.

If the liquidator intends to proceed to effectuate the auction, which has attained finality, he/she being a government servant, necessary protection must be extended by the local police, the court ruled.

The fact that the present petition was filed by the auction-purchaser does not absolve the police from performing their duty to give protection to a public servant, the judges said.

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