Ambadas Vinayak Pisolkar And Another vs The State Of Maharashtra And Others
2024 Latest Caselaw 24 Bom

Bombay High Court

Ambadas Vinayak Pisolkar And Another vs The State Of Maharashtra And Others on 2 January, 2024

2024:BHC-AUG:309-DB

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                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                     BENCH AT AURANGABAD

                                 WRIT PETITION NO. 3688 OF 2021

               1.     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

                        VERSUS

               1.     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 Ltd
                      Latur Urban Co.Op. Bank Ltd
                      Branch Khedkeshwar,
                      Aurangabad.

               6.     The Recovery Officer,
                      Latur Urban Co. Op., Bank Ltd
                      Branch Khedkeshwar,
                      Aurangabad.
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7.      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. Gangakhedkar
        AGP for Respondent Nos. 1 to 4 : Mr. A. S. Shinde
        Advocate for Respondent No.5 : Mr. G. N. Kulkarni
                           ....

                                 CORAM : S. G. MEHARE, J.
                                 DATE : 02.01.2024

PER 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 principal

borrower. Since the principal borrower failed to repay the loan,

respondents Nos. 5 and 6 had applied for the recovery certificate

before the District Deputy Registrar, Aurangabad, who is respondent

No.3.    Respondent No.3 had passed an order on 20.05.2015 granting

recovery certificate under Section 101 of the Maharashtra Co-operative

Societies Act.


3.      The present petitioners had impugned the said order before

respondent No.2, the Divisional Joint Registrar Aurangabad. However,

the revision was dismissed on 01.01.2021 on the sole ground that the
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petitioners did not deposit 50% of the amount due as provided under

Section 154 (2A) of the Co-operative Societies Act, 1960.


4.     The learned counsel for the petitioners would submit that in the

meantime, the borrower's vehicle was auctioned for Rs. 4,42,000/- and

the principal borrower had deposited Rs. 5,00,000/- with the Bank.

Some amount has also been recovered from the account of the present

petitioners. After issuance of the recovery certificate, Rs. 6,64,332/-

were deposited. Therefore, on 31 st March 2022, the due amount was

Rs. 6,47,482/-. He also submits that the guarantor preferred an appeal,

mainly on the grounds that the procedure as laid down under Rules

86A to 86F of the Maharashtra Co-operative Societies Rules was not

considered, and no opportunity of being heard was granted. He was

not required to comply with Section 154(2A) of the Maharashtra Co-

operative Societies Act. He read over the above Rules and submitted

that prima facie, the order issuing the recovery certificate was in

contravention of those Rules. He prayed to allow this petition.


5.    Per contra, the learned counsel for the respondents Nos. 5 and 6

submits that the petitioners have made a statement before this Court

on 25th February 2021 that they are ready to deposit 60% of the

amount due since they were bound to deposit the money. Since they
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did not comply with the provisions of 154(2A) of the Co-operative

Societies Act, they do not deserve any relief from this Court.


6.    Per contra, the learned counsel for the petitioners would submit

that the vehicle was not auctioned at that time, and the borrower did

not deposit the amount. The subsequent facts may be considered. As

per his calculations, the amount due is Rs. 6,27,482/-. He is ready to

deposit the amount of Rupees three lakh to protect their interest.


7.    The learned counsel for the respondent Nos. 5 and 6 submitted

that assuming for the sake of argument after deducing the amount

deposited by the principal borrower and auction of the vehicle, an

amount of Rs. 6,27,482/- is due. The petitioners shall deposit the

entire amount with the Bank.


8.    Perused Rules 86A to 86E and the impugned order of the District

Deputy Registrar Co-operative Societies Aurangabad. Respondents Nos.

5 and 6 had applied for the certificate on 3rd February 2015. The paper

publication notice is also placed on record. It was issued on 25 th

February 2015, whereby all the parties concerned were given notice of

the proceeding and called upon their appearance on 4 th March 2015.

On 20th May 2015, the District Deputy Registrar issued the certificate

relying on the document placed before it. He relied upon the
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promissory note, loan agreement and the loan account. He has also

objected that the impugned order is not reasoned as required under

Rule 86F of the above Rules. Reliance has also been placed on the

judgment 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 recovery

certificate. Rule 86 B is for scrutiny of the application and notice to the

parties. Rule 86C pertains to the procedure for the appearances of

parties and the consequences of non-appearance, whereas Rule 86D

provides for the production and inspection of documents. Rule 86E

deals with the procedure for hearing the application. Rule 86F

specifically states that the authority should pass a reasoned judgement

and order and issue a recovery certificate in form "V".


9.     The learned counsel for respondents No. 5 and 6 submitted that

the notices by Registered Post A.D. were sent to the petitioners and the

principal borrower. However, the service report was awaiting. Hence,

a paper publication was issued.


10.    Considering the paper publication notice, which was published

on 25th February 2015, there appears to be substance in the submission
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of the learned counsel for the petitioners that the due procedure for

service of the notice, as provided under Section 86B of the Rules, was

not strictly followed. There was no material before the District Deputy

Register that the opponent could not be easily found. Hence, they were

required to serve through the notice published in the local newspaper.

In fact, the report of the notices sent by the Registered Post A.D. were

awaiting. It shows that the authority was hasty in proceeding with the

matter by giving go-by to the procedure laid down in the Rules. Since

nobody 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 is

squarely applicable to the case at hand. Apparently, the recovery

certificate was issued without following the due procedure and

properly serving the notice to the petitioners. The rules of natural

justice have been violated. Therefore, this is a fit case to exercise writ

jurisdiction by granting the petitioners a fair opportunity of hearing.

The petitioners have shown bona fide to deposit Rs. 3,00,000/- with

respondent No.5. They being sureties their bona fide may be

considered. In the facts and circumstances of the case, the same relief

is to be sought before the revisional authority. Therefore, the following

order is passed instead of remitting the matter back.
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                            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 30 th 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

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