High Court · 2022
Legal Reasoning
129 W. P. No. 3688-2021-.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO. 3688 OF 20211.Ambadas s/o Vinayak Pisolkar,Age : 48 Years, Occ. Business,R/o. House No.5-6-47/1,Khadkeshwar Aurangabad.2.Prashant s/o Raghunath Nalawade,Age : 47 Years, Occ. Business,R/o. Plot No.5, Flat No. 31,Vaishnavi Vastu, Meharnagar,Aurangabad. ... Petitioners VERSUS1.The State of Maharashtra,Through its Secretary,Co-opertive Department, Mantralaya,Mumbai- 32.2.The Divisional Joint Registrar,Co-operative Societies, Aurangabad.3.The District Deputy Registrar,Co-operative Societies, Aurangabad.4.The Assistant Registrar,Co-operative Societies, Aurangabad.5.Ltur Urban Co.Op. Bank LtdLatur Urban Co.Op. Bank LtdBranch Khedkeshwar,Aurangabad.6.The Recovery Officer,Latur Urban Co. Op., Bank LtdBranch Khedkeshwar,Aurangabad.
Legal Reasoning
229 W. P. No. 3688-2021-.odt7.Vinay s/o Hanmantrao Yadkikar,Age : Major, Occ. Business,R/o. Flat No.4, Vrindavan Complex,Khadkeshwar, Aurangabad... Respondents ....Advocate for the petitioners : Mr. S. S. GangakhedkarAGP for Respondent Nos. 1 to 4 : Mr. A. S. ShindeAdvocate for Respondent No.5 : Mr. G. N. Kulkarni .... CORAM : S. G. MEHARE, J.DATE : 02.01.2024PER COURT :1.Heard the learned counsel for the petitioners and the contesting respondent Nos.5 and 6.2.The petitioners before this Court are the sureties of the principalborrower. Since the principal borrower failed to repay the loan,respondents Nos. 5 and 6 had applied for the recovery certificatebefore the District Deputy Registrar, Aurangabad, who is respondentNo.3. Respondent No.3 had passed an order on 20.05.2015 grantingrecovery certificate under Section 101 of the Maharashtra Co-operativeSocieties Act.3.The present petitioners had impugned the said order beforerespondent No.2, the Divisional Joint Registrar Aurangabad. However,the revision was dismissed on 01.01.2021 on the sole ground that the 329 W. P. No. 3688-2021-.odtpetitioners did not deposit 50% of the amount due as provided underSection 154 (2A) of the Co-operative Societies Act, 1960.4. The learned counsel for the petitioners would submit that in themeantime, the borrower’s vehicle was auctioned for Rs. 4,42,000/- andthe principal borrower had deposited Rs. 5,00,000/- with the Bank.Some amount has also been recovered from the account of the presentpetitioners. After issuance of the recovery certificate, Rs. 6,64,332/-were deposited. Therefore, on 31st March 2022, the due amount wasRs. 6,47,482/-. He also submits that the guarantor preferred an appeal,mainly on the grounds that the procedure as laid down under Rules86A to 86F of the Maharashtra Co-operative Societies Rules was notconsidered, and no opportunity of being heard was granted. He wasnot required to comply with Section 154(2A) of the Maharashtra Co-operative Societies Act. He read over the above Rules and submittedthat prima facie, the order issuing the recovery certificate was incontravention of those Rules. He prayed to allow this petition.5.Per contra, the learned counsel for the respondents Nos. 5 and 6submits that the petitioners have made a statement before this Courton 25th February 2021 that they are ready to deposit 60% of theamount due since they were bound to deposit the money. Since they 429 W. P. No. 3688-2021-.odtdid not comply with the provisions of 154(2A) of the Co-operativeSocieties Act, they do not deserve any relief from this Court.6.Per contra, the learned counsel for the petitioners would submitthat the vehicle was not auctioned at that time, and the borrower didnot deposit the amount. The subsequent facts may be considered. Asper his calculations, the amount due is Rs. 6,27,482/-. He is ready todeposit the amount of Rupees three lakh to protect their interest.7.The learned counsel for the respondent Nos. 5 and 6 submittedthat assuming for the sake of argument after deducing the amountdeposited by the principal borrower and auction of the vehicle, anamount of Rs. 6,27,482/- is due. The petitioners shall deposit theentire amount with the Bank.8.Perused Rules 86A to 86E and the impugned order of the DistrictDeputy Registrar Co-operative Societies Aurangabad. Respondents Nos.5 and 6 had applied for the certificate on 3rd February 2015. The paperpublication notice is also placed on record. It was issued on 25thFebruary 2015, whereby all the parties concerned were given notice ofthe proceeding and called upon their appearance on 4th March 2015.On 20th May 2015, the District Deputy Registrar issued the certificaterelying on the document placed before it. He relied upon the 529 W. P. No. 3688-2021-.odtpromissory note, loan agreement and the loan account. He has alsoobjected that the impugned order is not reasoned as required underRule 86F of the above Rules. Reliance has also been placed on thejudgment of this Court delivered in the case of Sundeep Polymers Pvt.Ltd and Others Versus State of Maharashtra and Others 2010 (7) Mh.L. J. 538. In this case, this Court examined Rules 86A to 86F. Rule 86A provides for the procedure for applying for a recoverycertificate. Rule 86 B is for scrutiny of the application and notice to theparties. Rule 86C pertains to the procedure for the appearances ofparties and the consequences of non-appearance, whereas Rule 86Dprovides for the production and inspection of documents. Rule 86Edeals with the procedure for hearing the application. Rule 86Fspecifically states that the authority should pass a reasoned judgementand order and issue a recovery certificate in form “V”.9.The learned counsel for respondents No. 5 and 6 submitted thatthe notices by Registered Post A.D. were sent to the petitioners and theprincipal borrower. However, the service report was awaiting. Hence,a paper publication was issued.10.Considering the paper publication notice, which was publishedon 25th February 2015, there appears to be substance in the submission 629 W. P. No. 3688-2021-.odtof the learned counsel for the petitioners that the due procedure forservice of the notice, as provided under Section 86B of the Rules, wasnot strictly followed. There was no material before the District DeputyRegister that the opponent could not be easily found. Hence, they wererequired to serve through the notice published in the local newspaper.In fact, the report of the notices sent by the Registered Post A.D. wereawaiting. It shows that the authority was hasty in proceeding with thematter by giving go-by to the procedure laid down in the Rules. Sincenobody appeared in pursuance of the paper publication notice, the ex-parte certificate was issued.11.The ratio laid down in the Sundeep Polymer (supra) case issquarely applicable to the case at hand. Apparently, the recoverycertificate was issued without following the due procedure andproperly serving the notice to the petitioners. The rules of naturaljustice have been violated. Therefore, this is a fit case to exercise writjurisdiction by granting the petitioners a fair opportunity of hearing.The petitioners have shown bona fide to deposit Rs. 3,00,000/- withrespondent No.5. They being sureties their bona fide may beconsidered. In the facts and circumstances of the case, the same reliefis to be sought before the revisional authority. Therefore, the followingorder is passed instead of remitting the matter back.
Decision
729 W. P. No. 3688-2021-.odt ORDER(I)The Writ Petition is allowed.(II)The impugned orders issuing the recovery certificate dated 20.05.2015 by the District Deputy. Registrar Co-operative Societies, Aurangabad and the Divisional Joint Registrar Co- operative Society Aurangabad, dated 01.01.2021, are quashed and set aside.(III)The matter is remitted to the District Deputy Registrar Co-operative Societies, Aurangabad, for fresh consideration after granting an opportunity to the petitioners, on the condition that petitioners Nos.1 and 2 shall deposit Rs. 1,50,000/- each with respondent No.5 Bank within two weeks from today and the Rules 86A to 86F of the Maharashtra Co-operative Societies Act, 1960 be followed strictly.(IV)Both parties are to appear before the District Deputy Registrar Co-operative Societies, Aurangabad, on 30th January 2024, at 3.00 p.m.(V)The District Deputy Registrar Co-operative Societies, Aurangabad, shall endeavour to decide the application within three months from the date of their appearance.(VI)Needless to say, this order is restricted only to the petitioners.(VII)Civil Application, if any, stands disposed of. ( S. G. MEHARE ) JUDGE ysk