Navi Peth, Jalgaon,Dist. JalgaonMr v. D. Hon, Senior
Case Details
2025:BHC-AUG:7420 (1)wp13219.19IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.13219 OF 2019WITHCA/13905/2023 & CA/14914/2023 & CA/1020/20241.Manish Ishwarlal Jain...PETITIONERSAge-Major, Occu-Business,R/o. Rajmal Lakhichand Jewelers,Sarafa Bazar, JalgaonTq. & Dist. Jalgaon2.Surendra Nathmalji Lunkad,Age-72 years, Occu-Business,R/o. Lunkad Towers, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon3.Subhash Sagarmalji SankhalaAge-Major, Occu-Business,R/o. 33/5, Sankhala Building,Zilla Peth, JalgaonTq. & Dist. Jalgaon4.Ajeet Bansilalji Kacheriya,Age-Major, Occu-Business,R/o. 56, Aadarsh Nagar, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon5.Suresh Bansilalji Jain,Age-Major, Occu-Business,R/o. 16, Polan Peth, Jalgaon,Tq. & Dist. Jalgaon6.Tulshiram Khandu Bari,Age-Major, Occu-Business,R/o.71, Dixit Wadi, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon1 of 24
Legal Reasoning
(19)wp13219.19persons cannot be prosecuted for the offence under IPC. The actis held to be completely self contents statutes with its ownprovisions. The Statutes have different object. For the offenceunder the Cooperative Societies Act only persons is to beconsidered a public servant referred to definition under section21 of the IPC. There is no dispute about the same. Therefore,this court holds that the petitioners were rightly added as partyand secondly the limitation applicable would be as under section92 of the Cooperative Societies Act and not as provided underthe Limitation Act.17.In the case of Thakur Sukhpal Singh Vs ThakurKalyan Singh (supra) the Hon’ble Apex Court considered theorder 41 Rule 31 and other Rules. It is held that the provision ofRule 31 should be reasonably construed and should be held tobe required various particular to be mentioned in the judgments.It is only when specific questions are raised in the appeal,ultimately, it is held what is material is that all the questions areconsidered by the appellate court. In the case of Khandesh19 of 24 (20)wp13219.19(Supra) it is held that not the entire CPC is applicable to theproceedings of the Cooperative Court. However, it is onlygeneral principles contents in CPC are broadly applicable to thecooperative court. The Cooperative Courts are expected tofollow broadly principles laiddown in the CPC. It is held that theCooperative Court may not be bound by every technical rule ofprocedure. Thus, it is clear that where the principle of naturaljustice and broad principles contents in the CPC are consideredby the Cooperative Court i.e. sufficient. As it is the CooperativeAppellate Court has considered all the points, even otherwise. 18.In the case of Mah. State Warehousing Corporationand others Vs Pusad Urban Cooperative Bank Ltd and others thepetitioner is held to be surety of the members creating liabilityin favour of the respondent bank in that case. In this case fact ofexecuting surety bonds is not guarantee bonds is not at alldisputed. On the contrary the parties have no dispute about thefactual aspect. The petitions are argued only on the point oflimitation and as to whether the limitation as regards the20 of 24 (21)wp13219.19present petitioners. 19.In the case of Malegaon Taluka Big BagayatdarCooperative Credit Association (supra) the facts were that asociety filed a suit against another society for recovery of theamount. The opponent society was not member of the disputantsociety. In that view it was held that the sub-section (1)(a) ofSection 92 would not apply and case would be covered bysubsection (2) of section 92 where the limitation is three yearsas provided in the Limitation Act. In that view it was held thatdispute was barred by the limitation as it was filed beyond threeyears from the expiry of accounting year 1968-1969 and thedispute was filed in 1975. In that view of the matter it was heldto be bared by limitation. Present is the case this court holdsthat it was governed by section 92 (1) as the petitioners happensto be nominal members of the society, in any case they aregoverned by section 91 against whom dispute was maintainable.20.Clauses (a) & (b) of Section 91 would show that21 of 24 (22)wp13219.19even the members of the society or surety are amenable to thejurisdiction of the Cooperative court in a dispute. The petitionersclearly fall in Section 91(1)(a) being nominal members of thesociety. In view of section 91(1)(d) the petitioners are suretiesand thus they are amenable to the jurisdiction under Section 91.For the purpose of limitation both the parties have referredsection 92. Section 92 (1) gives special limitation. Provision oflimitation Act are applicable only in the cases falling in clause(2) of section 92. Provides limitation of 6 years from the date onwhich act or omission with reference to the dispute arose samelimitation is also applicable in respect of the matters fallingunder clause (c) of section 1 of Section 92. Though it is arguedby the learned senior counsel that there is no sufficientdiscussion by both the courts below, this court on going through,the judgment as shown by the learned Advocate Mr. Salunkefinds that specific issue was framed by the learned CooperativeCourt. Issue No. 3 is specifically framed in respect of thelimitation. It was held that the petitioners failed to show thatdispute is barred by limitation. Issue as to whether they are22 of 24 (23)wp13219.19liable to pay the amount is also answered in affirmative.20.So far as the submission that this court hadspecifically directed the court to decide the issue of limitation inthe WP/7304/2014. There is no dispute, however, it is clearlyseen that court had directed to decide the issue of limitation. Sofar as other aspects as to whether the petitioners are necessaryparty or not this court has not kept it open. 22.This court thus finds that the petitioners were rightlyadded as party in view of section 91(1)(d). The limitation thatwould be applicable under section 92(1) as rightly held by thecourts below. There is no manner of issue that both the courtshave rightly appreciated this legal position.23.On going through the judgment it is found that thecourts have considered section 91 (b) of the Act. It is rightlypointed out that the appellate court has also considered and it isspecifically observed that the contest is only on the legal point.23 of 24
Arguments
(2)wp13219.197.Sau. Sapna Ashwin Shah,Age-Major, Occu-Business,R/o. Sharma Complex, Ganpati Nagar,Jalgaon, Tq. & Dist. Jalgaon8.Sau. Aapna Ajay Raka,Age-Major, Occu-Business,R/o. Anusmruti Jainagar, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon9.Mahendra Durlabhji Shaha,Age-Major, Occu-Business,R/o. 115, Zilla Peth, JalgaonVERSUS1.Jalgaon Zilla Madhyavarti Sahakari...RESPONDENTSBank Limiated, Jalgaon, 27Ring Road, JalgaonDist. Jalgaon through its Manager2.Mahaveer Urban CooperativeCredit Society Ltd JalgaonNavi Peth, Vardhaman ChambersJalgaon, Dist. Jalgaon, Through its Administrator3.Suresh Anandraj TatiyaAge-Major, Occu-Business,R/o. 94, Navi Peth, Jalgaon,Dist. JalgaonMr. V. D. Hon, Senior Advocate i/b Mr. A. D. Shinde, Advocatefor the petitioners Mr. V. D. Salunke, Advocate for the respondent No.1Mr. C. V. Borse, Advocate h/f Mr. V. B. Patil, Advocate forrespondent No.32 of 24 (3)wp13219.19ANDWRIT PETITION NO.5117 OF 2020Suresh Anandraj Tatiya,...PETITIONERS Age-Major, Occu-BusinessR/o. 94, Navi Peth, JalgaonDist. JalgaonVERSUS1.Jalgaon Jilha Madhyavarti...RESPONDENTSSahakari Bank Ltd. JalgaonDist. Jalgaon2.Mahavir Urban Cooperative CreditSociety Ltd. Jalgaon, Navi Peth,Vardhaman Chamber, Dist. Jalgaon3.Manish Ishwarlal Jain,Age-Major, Occu-Business,R/o. Rajmal Lakhichand Jewellers,Saraf Bazar, Jalgaon, Tq. & Dist. Jalgaon4.Surendra Nathmalji Lunkad,Age-72 years, Occu-Business,R/o. Lunkad Towers, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon5.Subhash Sagarmalji SankhalaAge-Major, Occu-Business,R/o. 33/5, Sankhala Building,Zilla Peth, JalgaonTq. & Dist. Jalgaon6.Mahendra Durlabhji Shaha,Age-Major, Occu-Business,R/o. 115, Zilla Peth, Jalgaon3 of 24 (4)wp13219.197.Ajeet Bansilalji Kacheriya,Age-Major, Occu-Business,R/o. 56, Aadarsh Nagar, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon8.Suresh Bansilalji Jain,Age-Major, Occu-Business,R/o. 16, Polan Peth, Jalgaon,Tq. & Dist. Jalgaon9.Tulshiram Khandu Bari,Age-Major, Occu-Business,R/o.71, Dixit Wadi, Zilla Peth,Jalgaon, Tq. & Dist. Jalgaon10.Sau. Sapna Ashwin Shah,Age-Major, Occu-Business,R/o. Sharma Complex, Ganpati Nagar,Jalgaon, Tq. & Dist. Jalgaon11.Sau. Aapna Ajay Raka,Age-Major, Occu-Business,R/o. Anusmruti Jainagar, Zilla Peth,Jalgaon, Tq. & Dist. JalgaonMr. A. P. Bhandari, Advocate for the petitioners Mr. V. D. Salunke, Advocate for the respondent No.1CORAM:KISHORE C. SANT, J.RESERVED ON:27th FEBRUARY, 2025PRONOUNCED ON:12th MARCH, 20254 of 24 (5)wp13219.19JUDGMENT :1.Rule. Rule made returnable forthwith by consent ofthe parties.2. The petitioners before this court are the personswho executed security bonds for the loan advanced torespondent No.2 Society by respondent No.1 bank. RespondentNo.1 is the District Central Cooperative Bank. Respondent No.2is the Society under the Cooperative Societies Act. RespondentNo.3 is also one of the guarantors who has filed writ petitionNo.5117/2020. The present petitioners are respondent No.3 to11 in the writ petition No.5117/2020 filed by the respondentNo.3. Since both the petitions are filed challenging the samejudgment and order passed by the learned Cooperative appellatecourt. [Respondent No.1 hereinafter referred to as ‘Bank’ andRespondent No.2 hereinafter referred to as the ‘Society’ for thepurpose of convenience.] 3.The petitioners are aggrieved by the judgment and5 of 24 (6)wp13219.19order dated 24-09-2021 passed in Appeal No. 42/2019 andAppeal No. 53/2019. The appeal No. 42/2019 was filed by thepetitioners in WP/13219/2019 whereas the appeal No. 53/2019was filed by petitioner in WP/5117/2020.4.The facts giving rise to the present petitions are asbelow:5.That the petitioners executed the Guarantee bonds(Hamipatra) for loan sanctioned to respondent No.2-Cooperative Credit Society. The loan was obtained as term loan.Respondent No.1 sanctioned the loan and took Guarantee bondsfrom the petitioners. Said bonds were executed on differentdates. As the society did not repay the loan, the bank filedoriginal application before the Debt Recovery Tribunal onlyagainst the society on 20-12-2004. After prosecuting for sometime, the bank withdrew the proceedings of original applicationon 26-02-2008 finding that original application is notmaintainable in respect of the Cooperative Bank before the DRT.6 of 24 (7)wp13219.196.After withdrawing the original application the bankfiled dispute before the Cooperative Court, Jalgaon bearingdispute No. 249/2010 for recovery of loan amount ofRs.17,58,03,383/-. This dispute was filed only against thesociety. It is thereafter, the bank filed an amendment applicationExh.9 and sought permission to add petitioners as partyopponents. The relief also came to be claimed against thepetitioners on the strength of Guarantee bonds. Though theapplication was opposed on various grounds, mainly, that theamendment is time barred, the learned Cooperative Court,Jalgaon allowed the amendment application by order dated 31-10-2013.7.The petitioners challenged the order of amendmentby filing revision. The Cooperative Appellate Court dismissedthe revision observing that the court at that stage need not gointo the merits of the matter. The petitioners thereafter filed writpetition No.7304/2014 before this court. This court confirmed7 of 24 (8)wp13219.19the orders by keeping the point of limitation open by its orderdated 01-09-2014. The petitioners filed an application Exh.15 inthe Cooperative Court praying for framing point of limitation aspreliminary issue and to decide the same before proceeding onmerits. This application was on the ground that even if theGuarantee bonds are taken as it is, the period of limitationclaiming recovery on the basis of said Guarantee bonds wouldbe only three years whereas petitioners are added as party forthe first time in 2012. The said point was framed as preliminarypoint. The bank challenged this order by filing revisionNo.19/2017. On dismissal by the appellate court, a writ petitionwas filed bearing No. 11081/2017. This court disposed off thewrit petition directing the lower court to decide all the issuestogether. The trial court, therefore, proceeded to decide all theissues together. 8.After holding trial, the learned Cooperative Courtallowed the dispute holding the petitioners and respondent No.2jointly and severally liable to pay the amount. The petitioners,8 of 24 (9)wp13219.19therefore filed the appeals in the appellate court. The appellatecourt dismissed the appeals and thus the petitioners are beforethis court.9.Mr. Hon, learned senior advocate i/b Mr. A. B.Shinde vehemently argued that both the courts below haveclearly erred in holding the claim against the petitioners withinlimitation. The learned courts failed to appreciate the provisionsof section 92 (2) of the Maharashtra Cooperative Societies Act,1960 [Hereinafter referred to as the ‘Societies Act’]. The disputewas not maintainable against the petitioners under section 91 asthe petitioners are not the members of the bank. Though theGuarantee bonds were executed for term loan, said loan wasconverted into cash credit facility without consent of thepetitioners. This change amounts to variance in the terms ofcontract and thus the petitioners were not liable to any actionfor recovery. When all the issues were raised it was necessary forthe Cooperative Appellate Court to remand the matter back tothe Cooperative Court for decision afresh on all the issues. The9 of 24 (10)wp13219.19learned appellate court failed to do so. It was necessary to frameall the material points in view of provision of order 41 Rule 31of the CPC. When the bank itself had approached the DRT it hadchosen not to add the petitioners as party. Even after withdrawalwhen the dispute was filed, these petitioners were not shown asopponents in the dispute which clearly shows that even the bankwas aware that dispute was not maintainable against the presentpetitioners. He took this court through the provisions of section91 (b) and (d), Section 92(2), Article 36 and 37 of theLimitation Act. This court while disposing of the petitions hadspecifically directed the trial court to consider all the issues.However, in spite of specific directions both the courts havefailed to even discuss these points. He submits that findings onall the issues was necessary. He relied upon the followingjudgments :i]Manjula and others Vs Shyamsundar andOthers1;ii]Malluru Mallappa (D) Thr. Lrs. VsKuruvathappa and others2 ;12022(3)SCC 9022020(4) SCC 31310 of 24 (11)wp13219.19iii]Barnes School and others Vs Arzoo Allan Bakerreported 3;iv]Malegaon Taluka Big Bagayatdar CooperativeCredit Association Vs The Bharat Cooperative JointFarming Society Ltd and others4 ;10.Mr. Bhandari, learned advocate for the petitioner inWP/5117/2020 adopted the arguments of Mr. Hon, learnedsenior counsel. He drew attention of this court to the provisionof the Limitation Act. There is nothing in the order passed in theearlier writ petition to show that amendment relates back to thedates of institution of the dispute. He submits that thus thedispute should be taken to have been instituted against thepetitioner, on the date, on which he was added as opponent.Since the proceedings before the DRT was not before the courtof competent jurisdiction, the time spent before the DRT neednot be excluded in view of section 14 of the Limitation Act. Hesubmits that the court is not defined in the Cooperative SocietiesAct and therefore it will have to be taken as court as defined inGeneral Clauses Act. He submits that in any case certified copy32012(3) All MR41999(4) Bom CR 43811 of 24 (12)wp13219.19of the judgment and order passed by the DRT received on 17-01-2008 and still dispute was filed in 2010 that period also needs tobe excluded. It is only the period for which the proceeding wasactually pending before the court that can be excluded. He alsoargued on section 91 and 92 of the Act and submits that it is thelimitation under the Limitation Act that would be applicable inthe present case as liability of the petitioner is on the basis ofguarantee bonds. 11.In response, the learned advocate Mr. Salunkesubmits, on the point of limitation, that the proceeding anddispute was under the special Act and before the special court. Itis, therefore, provisions of the Special Act that would prevailupon the General Act. The petitioners were office bearers of thesociety and in that capacity they were added as opponents.Reading section 91 as it is, he submits the dispute was verymuch maintainable against the petitioners. The Guaranteebonds (Hamipatra) are duly proved and there is no dispute andno arguments are advanced on that. Even the limitation act is12 of 24 (13)wp13219.19not applicable when there is specific limitation provided undersection 92 of the Act. The liability of this petitioners is equal tothat of the society. In view of section 73 of the Act thepetitioners happen to be nominal members of the society. Thepetitioners cannot avoid the liability as they had executed thebonds while sanctioning the loan these petitioners wereaccepted as nominal members of the bank. . He specificallycontends that all the points were framed by the appellate court.The proceeding is thus clearly maintainable in view of section91. He submits that it was never a case before the trial court,only point of limitation was kept open. The petitioners,therefore, cannot argue other points. Guarantee bonds areexhibited and proved.12.Mr. Salunke, learned advocate relies upon thefollowing judgments:i]State of Maharashtra Vs Laljit Rajshi Shah5ii]Thakur Sukhpal Singh Vs Thakur Kalyan Singh652000 AIR (SC) 93761963 AIR (SC) 14613 of 24 (14)wp13219.19iii]Khandesh Urban Coop. Credit S Vs Ashok RameshwarAgrawal7vi]Mah. State Warehousing Corporation and others Vs PusadUrban Cooperative Bank Ltd. and others813.After hearing the parties this court has to considerthe material as to whether dispute was maintainable against thepetitioners and secondly whether relief against them is hit by thelimitation. The dispute was filed under Section 91 of theCooperative Societies Act which reads as under:-91.Notwithstanding [anything contained] [Thesewords were substituted for the words 'anythingcontaining' by Maharashtra 33 of 1963, Section20(a).] in any other law for the time being in force,any dispute touching the constitution, [elections ofthe committee or its officers [* * *] [These wordswere substituted for the words 'elections of the officebearers' by Maharashtra 20 of 1986. Section 48(a).]conduct of general meetings, management orbusiness of a society shall be referred by any of theparties to the dispute, or by a federal society towhich the society is affiliated or by a creditor of thesociety, [to the co-operative Court] [These wordswere substituted for the words 'to the Registrar' byMaharashtra 18 of 1982, Section 3(a).] if both theparties thereto are one or other of the following:-72002 (4) ALL MR 9182022 (07) BOM CK 002014 of 24 (15)wp13219.19(a)a society, its committee, any past committee,any past or present officer, any past or present agent,any past or present servant or nominee, heir or legalrepresentative of any deceased officer, deceasedagent or deceased servant of the society, or theLiquidator of the society [or the official Assignee of aderegistered society] [These words were inserted byMaharashtra 10 of 1988, Section 17(a)(i).].(b)a member, past member of a person claimingthrough a member, past member of a deceasedmember of society, or a society which is a member ofthe society [or a person who claims to be a memberof the society;] [These words were added byMaharashtra 27 of 1969, Section 16(a)(i).](c) a person other than a member of the society,with whom the society, has any transactions inrespect of which any restrictions or regulations havebeen imposed, made or prescribed under sections43, 44 or 45, and any person claiming through suchperson; [Clauses (c) and (d) were, substituted forthe original by Maharashtra 27 of 1969, Section16(a)(j).](d) a surety of a member, past member or deceasedmember, or surety of a person other than a memberwith whom the society has any transactions inrespect of which restrictions have been prescribedunder section 45, whether such surety or person isor is not a member of the society;(e)any other society, or the Liquidator of such asociety [or-de-registered society or the officialAssignee of such a de-registered society] [Thesewords were inserted by Maharashtra 10 of 1988,Section 17(a)(ii).].15 of 24 (16)wp13219.19[Provided that, an industrial dispute as defined inclause (k) of section 2 of the Industrial Disputes Act,1947, or rejection of nomination paper at theelection to a committee of any society [* * *] [Theproviso was added by Maharashtra 20 of 1986,Section 48(b).], or refusal of admission tomembership by a society to any person qualifiedtherefor [or any proceeding for the recovery of theamount as arrear of land revenue on a certificategranted by the Registrar under sub-section (1) or (2)of section 101 or sub-section (1) of section 137 orthe recovery proceeding of the Registrar or anyofficer subordinate to him or an officer of societynotified by the State Government, who isempowered by the Registrar under sub-section (1) ofsection 156,] [This portion was inserted byMaharashtra 10 of 1988, Section 17(a)(iii).] [or anyorders, decisions, awards and actions of theRegistrar against which an appeal under section 152or 152A and revision under section 154 of the Acthave been provided.] [These words figures andletter were inserted by Maharashtra 34 of 2001,(w.e.f. 7-9-2001) Section 8.] shall not be deemed tobe a dispute for the purposes of this section.]14.In the case of Manjula and Malluru (supra) theHon’ble Apex court considered the provision of order 41 Rule 31of CPC which requires the appellate court to frame specificpoints on which the court has to decide the appeal. It is heldthat first appeal is a valuable right of the party. The appeal iscontinuation of original proceedings. The appellate court16 of 24 (17)wp13219.19decides all the question of fact and law and therefore, it isnecessary to reflect conscious application of mind and thereforeappellate court must record the findings, supported by thereasons on all the issues. It is thus held that the appellate courthas to comply with the requirements of the Order 41 Rule 31 ofCPC. Non-observance thereto lead to infirmity in judgment. Inthat case, the High Court did not comply with the saidrequirements and therefore the matter was remanded back tothe High Court. In the present case this court finds that point oflimitation was framed by the appellate court. There is sufficientdiscussion on all the points. No prejudice is shown to have beencaused to the petitioners. Said judgment is therefore, would notbe applicable in the present fact. In the case of Barnes Schooland others Vs Arzoo Allan Baker this court held that there isobligation on the appellate court to frame all the points in viewof order 41 Rule 31. 15.So far as the judgment in the case of KhandeshUrban Coop. Credit S (supra) same is relied by both the parties.17 of 24 (18)wp13219.19Mr. Salunke, learned advocate relies on para No. 11 to submitthat dispute before the court was in summary in nature. ParaNo. 25 to 28 of the judgment in the case of Maharashtra StateWarehousing Corporation and others VS Pusad UrbanCooperative Bank Ltd 9 relies by Mr. Salunke, while consideringthe provision of section 91 has clearly held that the guarantorfrom the members also falls under section 91 of the CooperativeSocieties Act. In view of section 91(1)(d) thus both the courtshave rightly held that the petitioners are necessary party.16.In the case of State of Maharashtra Vs Laljit RajshiShah the Hon’ble Apex court has considered the question as towhether the Chairman of the Cooperative Society can be said tobe a public servant under Section 21 of the Indian Penal Code.Considering that effect of section 61 of the Societies Act, it isheld that merely because of section 21 of the IPC is referred inSection 161 of the Act would not make him a public servantunder Section 21 of the IPC. Public servant is only for thepurpose of Cooperative Societies Act. It is held that by that92002 (4) ALL MR 9118 of 24
Decision
(24)wp13219.19There is no challenge so far as factual aspects are concerned.Appellate court has considered the point of limitation byconsidering the provision of Section 92 of the Act. The courtspecifically dealt with the submission of the petitioners thatthere cannot be two starting point of limitation against theborrowers and one against the sureties. This court, thus, findsthat there is no illegality or perversity in the orders passed bythe learned appellate court. This court does not find any reasoncalling for interference at the hands of this court and in theimpugned judgment and order.24.The writ petitions stand dismissed and disposed off.25.In view of the disposal of the writ petitions, pendingcivil applications stand disposed off. [KISHORE C. SANT, J.]VishalK/wp13219.1924 of 24