Bombay High Court
Ganesh Narayan Kavade And Anr vs The Wai Urban Co-Operative Bank Ltd. Wai ... on 25 September, 2025
Author: Amit Borkar
Bench: Amit Borkar
2025:BHC-AS:40595-DB
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.14725 OF 2024
Ganesh Narayan Kavade & Anr. ... Petitioners
V/s.
The Wai Urban Cooperative Bank
Limited, Wai & Ors. ... Respondents
Mr. Sangramsinh Bhosale with Mr. Mayuresh Ingale
i/by Mr. Abhishek Salian (through V.C.) for the
petitioner.
Mr. Chinmay R. Deshpande (through V.C.) for
Digitally
signed by
respondent Nos.1 to 3.
ATUL
ATUL GANESH
GANESH KULKARNI
KULKARNI Date: Mr. N.C. Walimbe, Additional G.P. with Mr. A.A.
2025.09.25
18:32:57
+0530 Alaspurkar, AGP for the State.
CORAM : AMIT BORKAR, J.
DATED : SEPTEMBER 25, 2025
P.C.:
1. The present writ petition is filed under Article 227 of the
Constitution of India. The petitioners are challenging the order of
the Revisional Authority. The Revisional Authority has refused to
exercise powers under Section 154 of the Maharashtra Cooperative
Societies Act, 1960 (for short "MCS Act") on the ground that the
petitioners have not complied with Section 154(2A) of the MCS
Act.
2. Learned Advocate for the petitioners has advanced two
submissions. First, he contends that the recovery certificate under
Section 101 was obtained by practicing fraud. Therefore, the
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petition deserves to be entertained without insisting upon
compliance with Section 154(2A) of the MCS Act. For this
proposition, he relies upon the judgment of the Hon'ble Supreme
Court in State of Tripura vs. Manoranjan Chakraborty & Others ,
(2001) 10 SCC 740. His second submission is that in exercise of
powers under Rule 107(11) of the Maharashtra Cooperative
Societies Rules, 1961 (for short "MCS Rules"), property worth
Rs.2.43 crore has already been attached against the recovery
certificate of Rs.1.95 crore. Hence, according to him, the
requirement under Section 154(2A) does not arise.
3. In my view, the controversy raised by the petitioners is
already settled by the judgment of the Hon'ble Supreme Court in
Arun B. Khanjire vs. Ichalkaranji Urban Co-operative Bank , 2009
(2) SCC 187. In that case, the Apex Court examined the true scope
of Section 154 of the MCS Act, particularly the mandatory
requirement of deposit under Section 154(2A). The Court held in
clear words that unless the amount required under Section
154(2A) is deposited, the Revisional Authority has no jurisdiction
to entertain any application under Section 154.
4. The Supreme Court also considered the submission of
learned counsel that the proceedings in that case were initiated
suo motu. However, the Court rejected the said contention by
holding that since the petitioner had in fact submitted an
application before the concerned officer, setting out all the facts of
his case, the proceedings could not be treated as suo motu. The
Court observed that although the application was not in the formal
shape of a memorandum of appeal, in substance it amounted to an
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appeal. Thus, the attempt of the petitioner to bypass the statutory
requirement of depositing 50% of the recoverable dues under
Section 154(2A) could not be countenanced.
5. The Court further noticed that the petitioner had resorted to
an innovative method only to avoid the mandatory precondition of
deposit. This interpretation by the Supreme Court leaves no room
for doubt that compliance with Section 154(2A) is a condition
precedent for invoking revisional jurisdiction. It is not a procedural
formality but a substantive safeguard built into the statute.
Therefore, any plea seeking exemption from such compliance must
fail unless there is an express statutory provision to the contrary.
6. As regards the contention of the petitioners that the recovery
certificate was obtained by practicing fraud, it needs to be
examined carefully. Allegations of fraud are always serious in
nature, but they require proof on the basis of evidence. Such issues
cannot be decided merely on bare assertions. They involve a mixed
question of law and facts, which requires proper adjudication
before the competent authority.
7. The statutory scheme under the MCS Act is clear. Section
154(2A) lays down that before invoking revisional jurisdiction, the
party must deposit fifty per cent of the recoverable dues. The law
does not provide any exception even on the ground of alleged
fraud. If the contention of the petitioner is accepted, it would
amount to creating an exception not contemplated by the statute
itself. Courts cannot dilute or bypass the express mandate of the
legislature.
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8. Therefore, unless the petitioners comply with the condition
under Section 154(2A), their plea of fraud cannot be gone into.
The allegations of fraud, being a mixed question of law and fact,
can only be examined once the statutory precondition is fulfilled.
In absence of such compliance, the revisional jurisdiction cannot
be validly invoked.
9. The reliance placed by the petitioners on the judgment of the
Supreme Court in State of Tripura vs. Manoranjan Chakraborty
arose from the provisions of the Tripura Sales Tax Act, 1976. In
that case, the Supreme Court observed that when gross injustice is
shown and no valid reason exists for the Court to refuse
interference, the writ court can exercise jurisdiction to do
substantive justice, notwithstanding the existence of an alternate
statutory remedy. The principle emphasized was that constitutional
powers cannot be curtailed where grave injustice is demonstrated.
10. However, in my opinion, the ratio of the said case cannot be
read in isolation. It has to be viewed in the light of the subsequent
pronouncement of the Supreme Court in Commissioner of Income
Tax & Ors. vs. Chhabil Das Agarwal, 2014 (1) SCC 603. In that
case, the Supreme Court directly addressed the scope of writ
jurisdiction in the face of an available alternate remedy. The Court
laid down parameters broadly in line with the principles earlier
stated in Whirlpool Corporation vs. Registrar of Trade Marks,
(1998) 1 SCC 1. The observations in Chhabil Das Agarwal make it
clear that when a statute provides a complete machinery for
redressal of grievance, ordinarily the parties must exhaust such
remedy before approaching the High Court. The High Court is
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expected to decline jurisdiction unless exceptional circumstances
such as breach of fundamental rights, violation of natural justice,
or absence of jurisdiction are established.
11. Thus, the law as it stands today requires strict adherence to
statutory remedies unless a clear case falling within the exceptions
carved out by the Supreme Court is made out. In the present case,
no such exceptional ground has been substantiated by the
petitioners.
12. In the scheme of the MCS Act, this Court has repeatedly
observed that the revisional powers under Section 154 were often
invoked by defaulting borrowers only to stall or delay the process
of recovery. Such misuse directly defeated the very object of
Section 101, which was enacted to ensure speedy and effective
recovery through a summary procedure. It is for this reason that
the legislature introduced the safeguard of Section 154(2A),
making deposit of fifty per cent of the recoverable dues a condition
precedent for invoking the revisional jurisdiction.
13. This Court, in a series of judgments, has consistently held
that compliance with Section 154(2A) is not an empty formality
but a mandatory requirement. The condition was specifically
designed to balance the rights of both the creditor society and the
defaulting borrower. If such deposit is not insisted upon, the
legislative purpose of Section 101 would stand frustrated, as
borrowers would continue to take shelter under revision
proceedings to indefinitely delay recovery.
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14. In the present case, the plea of fraud raised by the
petitioners undoubtedly involves questions of fact as well as law.
Such issues cannot be adjudicated within the limited scope of writ
jurisdiction under Article 227. They require proper examination of
evidence and facts, which can only be undertaken in the
appropriate statutory forum. The petitioners cannot bypass the
mandatory condition of deposit by merely alleging fraud.
15. In my considered opinion, therefore, the plea of fraud raised
in this petition cannot be entertained. The petitioners are at liberty
to pursue their remedy of revision under Section 154 of the MCS
Act, provided they first comply with the statutory mandate of
Section 154(2A). Only then can the Revisional Authority be called
upon to adjudicate their grievance in accordance with law.
16. As regards the contention of the petitioners that attachment
of property under sub-Rule 11 of Rule 107 of the MCS Rules
should be treated as equivalent to deposit of fifty per cent amount
under Section 154(2A) of the MCS Act, I am unable to accept such
argument. The legal position is clear that attachment of property is
only a protective measure. It merely secures the property and
prevents the borrower from alienating or encumbering it.
Attachment by itself does not result in satisfaction of the debt nor
does it amount to deposit of money by the borrower.
17. The statutory scheme under Rule 107 shows that the process
is complete only when the property is brought to auction and the
auction purchaser deposits the bid amount. Till that stage is
reached, the creditor does not receive any money, and the
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borrower cannot claim that the statutory requirement of deposit
under Section 154(2A) stands complied with.
18. The only other mode available to a creditor society or a co-
operative bank is under Section 100 of the MCS Act read with Rule
85 of the MCS Rules, where the property can be taken in the name
of the society or bank, and the equivalent market value is adjusted
by way of credit. However, even in such a case, the law is settled
that ownership is not transferred to the bank merely because the
property stands in its name for adjustment purposes. It is only a
mode of recovery permitted by the statute and not a substitute for
deposit contemplated under Section 154(2A).
19. Therefore, attachment under Rule 107 cannot, in law, be
equated with deposit of fifty per cent of the recoverable dues. To
hold otherwise would defeat the very object of Section 154(2A)
and render the mandatory condition meaningless.
20. In light of the above discussion, I am of the clear opinion
that the petitioners cannot bypass the statutory mandate of Section
154(2A) of the MCS Act. The legislature has made it obligatory
that before invoking revisional jurisdiction, fifty per cent of the
recoverable dues must be deposited. This requirement is neither
directory nor a matter of discretion; it is a mandatory condition
that ensures balance between speedy recovery under Section 101
and the right of the borrower to challenge such recovery in
revision. Unless the petitioners first comply with this requirement,
their grievance cannot be entertained. The only lawful course open
to them is to deposit the amount as required under Section
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154(2A) and then avail the revisional remedy before the
competent authority.
21. For these reasons, this Court is not inclined to entertain the
present writ petition under Article 227 of the Constitution of India.
The writ petition, being devoid of merit, stands rejected. There
shall be no order as to costs.
(AMIT BORKAR, J.)
