Bombay High Court

The Washim Urban Co-Operative Bank ... vs Jaiprakash S/O. Rambilas Kothari And ... on 3 November, 2025

2025:BHC-NAG:11346


                                                                    WP No. 3783.21 Jud..odt
                                             1

                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          NAGPUR BENCH, NAGPUR.

                        WRIT PETITION NO.3783 OF 2021


                PETITIONER        :-     The Washim Urban Co-Operative Bank
                                         Ltd. Through its Branch Manager,
                                         Having branch at Kediya Plot, Akola,
                                         Tq. & Dist. Akola

                                                       ..VERSUS..
              RESPONDENTS :- 1) Girishchandra S/o. Rambilas Kothari
                                Aged about 58 years, Occ. Business,

                                       2) Umeshchandra S/o. Rambilas Kothari
                                         Aged about 65 years, Occ. Business,
                                       3) Jayprakash Rambilas Kothari
                                         Aged about 63 years, Occ. Business,

                                         All No. 1 to 3 R/o. Near Bhagwat
                                         Hospital, Gorakshan Road, Akola, Dist.
                                         Akola.
                                       4) Kishore S/o. Mohanlal Kothari Aged
                                         about 71 years, Occ. Business
                                         R/o. Vidya Nagar, Akola.
                                       5) Dipak S/o. Hiralal Agrawal
                                         Adult, Occ. Business,
                                         R/o. Rajputpura, Akola Dist. Akola.
               Amendment as per        5) Shri DeepakS/o Hiralal Agarwal
                 Courts order
                                         C/o Chemist Shopping Complex
                dasted 8.7.2022
                                         Dawa Bazar, Near Hotel Skylark
                                         Akola
                                                  WP No. 3783.21 Jud..odt
                         2

                             WITH

        WRIT PETITION NO.3788 OF 2021


 PETITIONER   :-     The Washim Urban Co-Operative Bank
                     Ltd. Through its Branch Manager,
                     Having branch at Old Cloth Market,
                     Akola, Tq. & Dist. Akola

                                    ..VERSUS..
RESPONDENTS :- 1) Umeshchandra S/o. Rambilas Kothari
                  Aged about 65 years, Occ. Business,

                   2) Jayprakash S/o Rambilas Kothari
                     Aged about 62 years, Occ. Business,
                     Both No. 1 to 2 R/o. Dawa Bazar, Near
                     Skylark, Akola, Tq. & Dist. Akola.
                   3) Girish S/o. Rambilas Kothari
                     Aged about 57 years, Occ. Business,
                     R/o.   Near     Bhagwat      Hospital,
                     Gorakshan Road, Akola, Dist. Akola.
                   4) Shashimohan      S/o.     Suganchand
                     Tapadiya, Aged about 72 years, Occ.
                     Business, R/o. Tapadiya Press, Akola

                        WITH
            WRIT PETITION NO.3785 OF 2021


 PETITIONER   :-     The Washim Urban Co-Operative Bank
                     Ltd. Through its Branch Manager,
                     Having branch at Kediya Plot, Akola,
                     Dist. Akola through its Manager

                                    ..VERSUS..
                                                                                                         WP No. 3783.21 Jud..odt
                                                         3

RESPONDENTS :- 1) Jaiprakash Rambilas Kothari
                  Aged about 63 years, Occ. Business,

                                           2) Umeshchandra S/o. Rambilas Kothari
                                                  Aged about 65 years, Occ. Business,
                                           3) Girish S/o. Rambilas Kothari
                                                  Aged about 58 years, Occ. Business,
                                                  All No. 1 to 3 R/o. Near Vatsal
                                                  Hospital, Gorakshan Road, Akola, Dist.
                                                  Akola.
                                           4) Kishore S/o. Mohanlal Kothari, Aged
                                                  about 71 years, Occ. Business,
                                                  R/o. Vidya Nagar, Akola.
                                           5) Sau. Padmaa Jaiprakash Kothari,
                                                  Aged about adult, Occ. Housewife,
                                           6) Sau. Madhuri Sadip Kothari,
                                                  Aged about adult, Occ. Housewife,
                                                  5 & 6 R/o Goraksha Road, Akola.
                                                  Tq. Dist. Akola

------------------------------------------------------------------------------------------------------------------------------------
       Mr. P. K. Mohta, Advocate for Petitioner.
       Mr. M. G. Sarda, Advocate for the Respondents.
------------------------------------------------------------------------------------------------------------


        CORAM                                                            : ROHIT W. JOSHI, J.
        DATE OF RESERVE                                                  : 06.10.2025
        DATE OF PRONOUNCEMENT : 03.11.2025

      JUDGMENT :

1) The present petitions involve identical question of

law relating to the jurisdiction of the Co-operative Court WP No. 3783.21 Jud..odt

under Section 91 of the Maharashtra Cooperative Societies

Act, 1960 (hereinafter referred to as 'the MCS Act, 1960', for

brevity) to entertain proceedings for recovery of loan

advanced by a Cooperative Bank.

2) The petitioner in all three petitions is The Washim

Urban Co-Operative Bank Ltd., which is a registered

cooperative society under the MCS Act, 1960. The petitioner

had filed three separate proceedings under Section 91 of the

MCS Act, 1960 against the respondents in the respective

petitions for recovery of loan advanced. In all these cases, the

respondents raised an issue with respect to jurisdiction of the

learned Co-operative Court to entertain the proceedings in

view of Section 18 of the Recovery of Debts and Bankruptcy

Act, 1993 (hereinafter referred to as 'the RDB Act, 1993').

The learned Co-operative Court rejected the objection

pertaining to jurisdiction and decided the claim on merits.

The learned Co-operative Court allowed the disputes filed by

the petitioner bank by passing three different judgments. The

respondents filed appeals before the Co-operative Appellate

Court under Section 97 of the MCS Act, 1960.

WP No. 3783.21 Jud..odt

3) The learned Co-operative Appellate Court has held that

since the claims in all three matters were more than

Rs.10,00,000/- and Debts Recovery Tribunal was already

constituted for all eleven districts of Vidarbha in the year

2000, the jurisdiction of the Co-operative Court to entertain

the disputes under Section 91 of the MCS Act, 1960 was

barred in view of Section 18 of the RDB Act, 1993. The

petitioner has filed the present petitions challenging the said

appellate judgments and orders dismissing the disputes filed

by it on the issue of jurisdiction.

4) It is not in dispute that the petitioner is a

cooperative society registered under the MCS Act, 1960. It is

also not in dispute that the amount for which the disputes

under Section 91 were filed by the petitioner were more than

Rs. 10,00,000/-. These disputes are filed in the years 2005

and 2006. It is not in dispute that the Debts Recovery

Tribunal, Nagpur, was constituted with territorial jurisdiction

extending over all the eleven districts of Vidarbha region in

the year 2000 and that, the date on which the respective

disputes were filed, the Debts Recovery Tribunal was in WP No. 3783.21 Jud..odt

existence.

5) The only point that arises for consideration in the

present petitions is in relation to jurisdiction of Co-operative

Court under Section 91 of the MCS, Act in view of Section 18

of the RDB Act. The learned Co-operative Court decided the

issue of jurisdiction in the light of judgment of the Hon'ble

Supreme Court in the matter of Greater Bombay Co-op. Bank

Ltd. v. United Yarn Tex. Pvt. Ltd. and others, reported in

(2007) 6 SCC 236, wherein it was held that a Co-operative

Bank which is also a co-operative society registered under the

MCS Act, 1960 does not fall within the meaning of the term,

'banking company' as defined under Section 5(c) of the

Banking Regulation Act, 1949, and therefore, it is not a bank

within the meaning of Section 2(d) of the RDB Act, 1993. It

was accordingly held that the provisions of RDB Act, 1993

were not applicable, and consequently, the jurisdiction of the

Co-operative Court under Section 91 was not ousted by

Section 18 of the RDB Act.

6) The learned Co-operative Court had decided the

disputes while the judgment of the Hon'ble Supreme Court in WP No. 3783.21 Jud..odt

the matter of Greater Bombay Co-operative Bank (supra) was

holding the field. The said judgment is since then overruled

by the Hon'ble Supreme Court in the matter of Pandurang

Ganpati Chaugule..Vs...Vishwasrao Patil Murgud Sahakari

Bank Ltd, reported in (2020) 9 SCC 215. The Hon'ble

Supreme Court has held that Co-operative Banks are included

within the definition of the term 'bank' and 'banking

company' as defined under Sections 2(1)(c) and 2(1)(d) of

the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest (SARFAESI) Act, 2002.

Definitions of the terms 'bank' and 'banking company' are

identically worded in both the Acts.

7) The learned Co-operative Appellate Court has

allowed the appeals filed by the respondents/borrowers in all

three petitions, holding that the petitioner bank is a 'bank'

and a 'banking company' within the meaning of Sections 2(d)

and 2(e) of the RDB Act, 1993. The said conclusion is drawn

by placing reliance on the judgment of the Hon'ble Supreme

Court in the matter of Pandurang Ganpati Chaugule (supra).

WP No. 3783.21 Jud..odt

8) In the light of the aforesaid, the learned Co-

operative Appellate Court has held that the learned Co-

operative Court did not have jurisdiction to entertain the

dispute under Section 91 of the MCS Act, in view of the

express bar under Section 18 of the RDB Act.

9) Mr. Palash Mohta, the learned Advocate for the

petitioner, contends that the provisions of RDB Act,

particularly Sections 17, 18 and 19 thereof will not have the

effect of ousting jurisdiction of the learned Co-operative

Court under Section 91 of the MCS Act. He contends that

jurisdiction under Section 91 will continue to exist despite

the bar under Section 18 of the RDB Act. The learned

Advocate has placed reliance on the judgments of the Hon'ble

Supreme Court in the matter of Nationals Spot Exchange

Ltd., Vs Union of India, reported in (2025) 8 SCC 393,

judgment dated 09.02.2024 by this Court at its Nagpur Bench

in Writ Petition Nos.2188 of 2022 and other connected

matters (Supreme Agro Trade and others...Vs...State of

Maharashtra) and judgment dated 11.04.2022 by this Court

at its Nagpur Bench in Writ Petition No.691 of 2022 (Viren WP No. 3783.21 Jud..odt

Foods and Beverages Pvt. Ltd. and ors. Vs. State of

Maharashtra).

10) Per contra, Mr. M.G. Sarda, learned Advocate for

the respondents/borrowers, contends that jurisdiction of

Cooperative Court is expressly barred by Section 18 of the

RDB Act. He contends that, undisputedly, the claim of the

petitioner is more than Rs.10,00,000/- and on the date of

filing of the disputes, the Debts Recovery Tribunal was

already established. He contends that, in view of the

judgment of the Hon'ble Supreme Court in the matter of

Pandurang Ganpati Chaugule (supra), it cannot be disputed

that the Debts Recovery Tribunal will have jurisdiction to

entertain proceedings for recovery of money filed by the

petitioner and, therefore, the jurisdiction of all Courts and

authorities, including the Co-operative Court, will be barred

in view of Section 18 of the RDB, Act.

11) Mr. Mohta, counters the contention and argues

that the remedy under Section 18 of the RDB Act can only be

considered to be an additional remedy, in addition to the

remedies provided under the MCS Act, and that the said WP No. 3783.21 Jud..odt

provision cannot be interpreted to mean that the jurisdiction

of authorities constituted under the MCS Act is ousted.

12) At the outset, it must be stated that, in view of

the categorical pronouncement of the Hon'ble Supreme Court

in the matter of Pandurang Ganpati Chaugule (supra), there

cannot be any doubt that a co-operative bank falls within the

definition of the terms 'banking company' and 'bank' as

defined under Sections 2(e) and 2(d) respectively of the RDB

Act,1993. In this backdrop, when Section 17 of the RDB Act,

1993 is perused, it will be apparent that the DRT shall have

the jurisdiction, power and authority to decide applications

filed by co-operative banks for recovery of debt due to it. In

this context, it is necessary to refer to Section 18 of the RDB

Act, which provides an express bar to jurisdiction of every

Court and other authority to exercise any jurisdiction, power

or authority in relation to any matters provided under

Section 17 of the RDB Act, 1993. The bar is not only to

jurisdiction of Civil Court but also to jurisdiction of, 'any

authority'. Even if, the Co-operative Court constituted under

MCS Act, 1960 is not considered to be a Court, it will WP No. 3783.21 Jud..odt

certainly be, an authority, referred under Section 18 of the

RDB Act, 1993. It is therefore, obvious that Section 18 of the

RDB Act, 1993 will have the effect of ousting the jurisdiction

of the learned Co-operative Court to deal with proceeding for

recovery of debt initiated by the petitioner under Section 91

of the MCS Act, 1960.

13) Mr. Mohta, learned Advocate for the petitioner

contends that having regard to the doctrine of pith and

substance, the Co-operative Court will also have the

jurisdiction to entertain the dispute and bar under Section 18

of the RDB, Act will not apply. The doctrine of pith and

substance means that if an enactment substantially falls

within the powers expressly conferred by the Constitution on

the legislature, and the legislature enacts a law in exercise of

such power, then the law so enacted cannot be held to be

invalid for want of legislative competence merely because it

incidentally encroaches on matters assigned to another

legislature. The said doctrine is invoked in cases where a

virus of an Act is challenged for want of legislative

competence. In the case at hand, the validity of the MCS Act WP No. 3783.21 Jud..odt

is not in question. The question is of interpretation of two

statutes. The question will have to be answered having

regard to the provisions of Section 91 of the MCS Act and

Sections 17 and 18 of the RDB Act. Section 91 of the MCS,

Act confers jurisdiction upon Co-operative Court to decide

disputes touching, amongst other aspects, business of a

co-operative society relating to dispute between category of

persons enumerated therein which includes a society and its

members. The dispute in the matter is pertaining to recovery

of amount advanced by the petitioner to the

respondents/borrowers who were/are members of the

petitioner-society. The Co-operative Court, therefore, will

have the jurisdiction to entertain claim for recovery of money

under Section 91 of the MCS, Act. However, Section 91 of the

MCS, Act has to be read in conjunction with Sections 17 and

18 of the RBD, Act. Section 17 of the RDB Act confers

jurisdiction on the Debts Recovery Tribunal to decide

applications by banks for recovery of debts due to it. The

term debt is defined under Section 2(g) of the RDB, Act as an

amount, which is claimed as due by any bank from any WP No. 3783.21 Jud..odt

person, which is advanced by a bank during the course of its

business activity. It will be pertinent to mention here that in

view of Section 1(4) of the RDB, Act, provisions of the said

Act are not applicable in case where the debt due is less than

Rs.10,00,000/-. It is not in dispute that the debt due, as

claimed by the bank in all the three cases is more than

Rs.10,00,000/-. As is held in the matter of Pandurang

Ganpati Chaugule petitioner is a bank under the RDB Act and

consequently the Debts Recovery Tribunal will have

jurisdiction to entertain application for recovery of debt by

the petitioner under Section 17 of the RDB Act. The

jurisdiction of Courts and other authorities to deal with any

matter specified under Section 17 of the RDB Act is expressly

barred by Section 18 of the said Act. Section 91 and Sections

17 and 18 when read in conjunction with each other will lead

to conclusion that the jurisdiction of co-operative Court

under Section 91 of the MCS, Act will be ousted in cases

where the debt due claimed by a Co-operative Bank is more

than Rs.10,00,000/-.

WP No. 3783.21 Jud..odt

14) In the present case, the debt due is admittedly

more than Rs.10,00,000/- and consequently, the jurisdiction

of the learned Co-operative Court is clearly ousted by Section

18 of the RDB Act.

15) The argument pertaining to doctrine of pith and

substance only implies that the State Legislature has the

legislative competence to frame laws with respect to

co-operative society, including a co-operative bank, and to

provide mechanism for recovery of debt due to the co-

operative bank. However, it cannot be disputed that such

provisions framed by the State Legislature will have to be

read in conjunction with central legislation, i.e. the RDB Act,

1993, which is also a validly enacted law framed by the

Parliament. It will be pertinent to mention here that Section

34(1) of the RDB, Act provides overriding effect to the said

Act over any other law in force. Sections 17 and 18 of the

RDB, Act when read harmoniously with Section 91 of the

MCS Act, 1960, will lead to the conclusion that in cases

where the amount of debt due as claimed by a co-operative

bank is less than Rs.10,00,000/- or such limit as may be fixed WP No. 3783.21 Jud..odt

by the Central Government in exercise of power under

Section 1(4) of the RDB, Act, the Co-operative Court will

have jurisdiction to entertain dispute for recovery of debt

under Section 91 of the MCS, Act, however, if the debt due is

claimed by the co-operative bank is more than

Rs.10,00,000/- or the limit fixed by the Central Government,

the jurisdiction of Co-operative Court under Section 91 of the

MCS, Act shall stand ousted and the Debts Recovery Tribunal

alone will have the jurisdiction to entertain application for

recovery of debt in view of Section 17 read with Section 18 of

the RDB, Act.

16) The learned Advocate for the petitioner has

placed reliance on the judgment of this Court in the matter of

Viren Foods and Beverages Pvt. Ltd. and ors., the said

decision deals with the Section 101 of the MCS, Act and

Section 13 of the SARFAESI Act. In the said case, the

petitioner had raised a contention that parallel proceedings

under Section 13 of the SARFAESI Act and Section 101 of the

MCS Act cannot be initiated. The said contention was

rejected by this Court placing reliance on the following WP No. 3783.21 Jud..odt

observation in the matter of Pandurang Ganpati Chaugule

(supra):-

"Thus, the Parliament considered it appropriate to provide additional remedy for speedy recovery which is an alternative even if there is an incidental encroachment on the field reserved for the State under List II Entry 32, as in pith and substance, the 'banking' is part of List I Entry 45 and recovery procedure is covered within the ken of List I Entry 45."

17) It will be pertinent to mention that, although

Section 35 of the SARFAESI Act, provides overriding effect to

the provisions of said Act over other laws, Section 37 of the

said Act does not bar operation of other laws. It will be

pertinent to mention here that there is no provision under

SARFAESI Act, which prohibits invocation of other remedies

for recovery of debt. However, section 18 of the RDB Act

specifically bars jurisdiction of other Courts and authorities to

deal with any matter, which the DRT is competent to decide

under Section 17. The judgment of this Court in the matter of

Viren Foods(supra), which deals with provisions of SARFAESI

Act will, therefore, not be applicable in the present case, since

it does not deal with the provisions of RDB Act which WP No. 3783.21 Jud..odt

specifically bar jurisdiction of other Courts and authorities.

18) The judgment in the matter of Supreme Agro

Trade (supra) deals with Section 101 of the MCS Act and

Sections 17 and 18 of the RBD Act. The said judgment holds

that the proceedings under Section 101 will be maintainable

at the behest of a cooperative society registered under the

MCS Act on the ground that the Parliament had made a

conscious exclusion and deliberate omission of cooperative

banks from the purview of the RBD Act. The relevant

observations in paragraphs 29 and 30 of the judgment are

reproduced herein below:

"29. The above referred observations made it clear that, banking in pith and substance is covered under Entry 45 of List I, even incidental trenching upon the field reserved for State under Entry 32 List II is permissible. It is further evident that, the meaning of "banking company" necessarily be strictly confined to the words used in Section 5(c) of the BR Act.

30. The above referred observation also makes it clear that, it would have been the easiest thing for Parliament to say that "banking company" shall mean "banking company" as defined in Section 5(c) and shall include "cooperative bank"

as defined in Section 5 (cci) and "primary cooperative bank"

as defined in Section 5(ccv). However, Parliament did not do so. There was thus a conscious exclusion and deliberate omission of cooperative banks from the purview of the RDB Act. The reason for excluding cooperative banks seems to be that cooperative banks have comprehensive, self contained and less expensive remedies available to them under the State Cooperative Societies Acts of the States concerned, while other banks and financial institutions did not have such speedy remedies and they had to file suits in civil WP No. 3783.21 Jud..odt

courts. "

19) With respect, the observations run counter to the

law laid down by the Hon'ble Supreme Court in the case of

Pandurang Chaugule (supra). The relevant observations of

the Hon'ble Supreme Court in Pandurang Chaugule's case are

reproduced herein below for ready reference:

"142. Resultantly, we answer the reference as under:

142.1.(1)(a) The cooperative banks registered under the State legislation and multiState level cooperative societies registered under the MSCS Act, 2002 with respect to 'banking' are governed by the legislation relatable to Schedule VII List I Entry 45 of the Constitution of India. 142.1.(b) The cooperative banks run by the cooperative societies registered under the State legislation with respect to the aspects of 'incorporation, regulation and winding up', in particular, with respect to the matters which are outside the purview of Schedule VII List I Entry 45 of the Constitution of India, are governed by the said legislation relatable to Schedule VII List I Entry 45 of the Constitution of India.

142.2. (2) The cooperative banks involved in the activities related to banking are covered within the meaning of 'Banking Company' defined under Section 5(c) read with Section 56(a) of the Banking Regulation Act, 1949, which is a legislation relatable to List I Entry 45. It governs the aspect of 'banking' of cooperative banks run by the cooperative societies. The cooperative banks cannot carry on any activity without compliance of the provisions of the Banking Regulation Act, 1949 and any other legislation applicable to such banks relatable to 'Banking' in List I Entry 45 and the RBI Act relatable to Schedule VII List I Entry 38 of the Constitution of India.

142.3. (3)(a) The cooperative banks under the State legislation and multiState cooperative banks are 'banks' under section 2(1)(c) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The recovery is an essential part of banking; as such, the recovery procedure prescribed under section 13 of the SARFAESI Act, a legislation relatable to Schedule VII List I Entry 45 to the Constitution of India, is applicable.

WP No. 3783.21 Jud..odt

142.4. (3)(b) The Parliament has legislative competence under Schedule VII List I Entry 45 of the Constitution of India to provide additional procedures for recovery under section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 with respect to co operative banks. The provisions of Section 2(1)(c)(iv-a), of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, adding "ex abundanti cautela", 'a multi-State cooperative bank' is not ultra vires as well as the notification dated 28.1.2003 issued with respect to the co operative banks registered under the State legislation. The civil appeals, writ petitions and the pending applications, if any, are disposed of accordingly. No costs."

20) Thus, the Hon'ble Supreme Court has categorically

held that the business of banking includes recovery

procedure, which is an essential part of banking business. It

is further held that business of banking of a cooperative bank

is governed by Schedule VII List I Entry 45 of the Constitution

of India. Although, the judgment in the matter of Pandurang

Chaugule (supra) relates to SARFAESI Act, the definition of

the terms "bank" and "banking company" under the

SARFAESI Act and the RBD Act are identical and as such, the

law laid down in the said judgment will apply with equal

force to the cases under the RBD Act as well. In view of the

law laid down by the Hon'ble Supreme Court, a cooperative