[Cites 3, Cited by 0]
Bombay High Court
Tirupati Nagari Sahakari Patsanstha ... vs Smt. Prathibha Sanjay Navale And Ors on 17 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:13096
11-wp-6873-2023.doc
Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.6873 OF 2023
SHABNOOR
Tirupati Nagari Sahakari Patsanstha
AYUB Maryadit & Anr. ... Petitioners
PATHAN
Digitally signed by
V/s.
SHABNOOR AYUB
PATHAN
Date: 2026.03.17
Prathibha Sanjay Navale & Ors. ... Respondents
17:40:34 +0530
Ms. Anita Agarwal with Ashwini B. Jadhav, for the
Petitioners.
Ms. Aloka A Nadkarni, AGP, for the State - Respondent
No.6.
CORAM : AMIT BORKAR, J.
DATED : MARCH 17, 2026
P.C.:
1. The dispute in the present petition arises from an order
passed by the Revisional Authority. By the said order, the revision
application filed by Respondent Nos. 1 and 2 was allowed. As a
result, the Revisional Authority set aside the notice of possession
dated 27 November 2019 as well as the decision passed by the
Special Recovery Officer in the course of recovery proceedings. In
simple terms, the action taken by the recovery authorities for
enforcing the dues of the cooperative society was nullified by the
Revisional Authority. The petitioner has approached this Court
challenging the legality of that decision.
2. Respondent No. 1 had filed the revision application along
with an application seeking condonation of delay. The delay was
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not minor. It was approximately seven years. In support of the
request for condoning such long delay, Respondent No. 1
contended that the liability arising from the loan transaction had
already been discharged much earlier. According to Respondent
No. 1, an amount of Rs. 11,41,574/- had been deposited in the
year 2001 towards repayment of the loan. It was further submitted
that after recovery proceedings were initiated, an additional
amount of Rs. 1,50,000/- came to be deposited on 2 June 2018.
On the strength of these deposits, Respondent No. 1 attempted to
show that the recovery action was unnecessary and that the delay
in approaching the Revisional Authority deserved to be condoned.
3. A specific contention was also raised on behalf of
Respondent No. 1. It was submitted that the recovery certificate
issued under Section 101 of the Maharashtra Cooperative Societies
Act, 1960 had never been directly challenged by the respondents.
According to them, the revision was directed only against the
subsequent recovery steps taken under Rule 107 of the
Maharashtra Cooperative Societies Rules, 1961. On this basis it
was argued that the statutory requirement of pre deposit contained
in Section 154(2A) of the Act would not apply. In other words,
Respondent No. 1 sought to draw a distinction between the
recovery certificate itself and the later execution steps taken on the
basis of that certificate. The contention was that when the
certificate is not under challenge, the condition of depositing a
portion of the recovery amount should not be insisted upon.
4. The petitioner strongly opposed both the revision application
and the request for condonation of delay. A detailed reply was filed
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before the Revisional Authority. The petitioner pointed out that
once a recovery certificate is issued under Section 101 of the Act,
the subsequent proceedings under Rule 107 are merely a
continuation of the same recovery process. They are derivative in
nature. Therefore, any challenge to those steps is indirectly a
challenge to the certificate itself. On this reasoning, the petitioner
contended that the statutory requirement contained in Section
154(2A) becomes mandatory. That provision requires a person
filing revision against a recovery certificate or related action to
deposit a prescribed portion of the recoverable amount before the
revision can be entertained. According to the petitioner, the
respondents had not complied with this condition. Therefore, the
revision itself was not maintainable in law.
5. Despite these objections, the Revisional Authority accepted
the submissions made on behalf of Respondent Nos. 1 and 2. The
Authority took the view that since the recovery certificate issued
under Section 101 was not directly challenged, the requirement of
pre deposit under Section 154(2A) would not apply. On that
reasoning, the Revisional Authority proceeded to entertain the
revision application and ultimately granted relief in favour of the
respondents. This interpretation of the statutory provision forms
the main basis of the impugned order.
6. The Revisional Authority also made certain observations
regarding the factual background of the loan transaction. It
recorded that the borrower and guarantors had deposited an
amount of Rs. 11,41,574/- in the year 2011. According to the
Authority, despite this payment a recovery certificate under Section
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101 of the Act came to be issued on 25 January 2015. The
Authority further observed that when the borrower had expired,
the legal representatives were not given notice before initiating
proceedings under Rule 107 of the Rules. On this reasoning it
concluded that the recovery action suffered from procedural
defects and therefore deserved to be interfered with.
7. When the present petition came up before this Court on 27
June 2023, notice was issued to Respondent Nos. 1 and 2. The
office report indicates that service of notice was duly effected upon
them. Learned Advocate Ms. Shinde had appeared on behalf of the
said respondents earlier. However, when the matter was called out
during the morning session, she remained absent. In order to
afford a fair opportunity, the matter was kept in the second session
of the day. Even in the second session there was no appearance on
behalf of the respondents. In these circumstances the Court has
proceeded to consider the matter on merits on the basis of the
material available on record.
8. The reasoning adopted by the Revisional Authority primarily
turns upon the interpretation of Section 154(2A) of the
Maharashtra Cooperative Societies Act. This question had earlier
been the subject of debate before different benches of this Court.
Certain judgments had taken the view that the requirement of pre
deposit applies only when the recovery certificate itself is
challenged. Other decisions suggested that the condition would
apply even when derivative or consequential actions taken for
executing the certificate are challenged. Because of these differing
views, the issue had been referred to a Division Bench of this Court
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for authoritative determination.
9. The Division Bench has now settled the position of law in the
decision rendered in Govindrao Shankarrao Gaikwad vs. The
Ganesh Co-operative Bank, Writ Petition No. 4118 of 2014 decided
on 4 March 2026. The Division Bench has clearly held that when a
person challenges a recovery certificate or any action which flows
from that certificate, the requirement of pre deposit under Section
154(2A) becomes mandatory. The Court observed that execution
steps taken under Rule 107 are inseparably connected with the
certificate issued under Section 101. Therefore a revision directed
against such steps cannot be treated as independent of the
certificate. In such cases, the statutory condition of depositing fifty
percent of the recoverable dues must be complied with before the
revision can be entertained.
10. In view of this authoritative pronouncement, the legal
position now stands clarified. The Revisional Authority could not
have entertained the revision application without insisting upon
compliance with Section 154(2A) of the Act. The requirement of
pre deposit is not a mere formality. When such a condition is
clearly prescribed, the authority exercising revisional jurisdiction
cannot ignore it. The impugned order therefore suffers from a
fundamental legal error.
11. Even otherwise, the findings recorded by the Revisional
Authority do not appear to justify interference with the recovery
proceedings. The Authority itself has noted that the recovery
certificate issued under Section 101 was not challenged by the
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respondents. Once such a certificate attains finality, the scope of
examination in subsequent proceedings becomes limited. The only
relevant inquiry would be whether the amount specified in the
certificate has been fully satisfied after its issuance. The material
on record does not show such satisfaction. The record indicates
that an amount of only Rs. 1,50,000/- was deposited on 2 June
2018. This amount is clearly far below the dues reflected in the
recovery certificate issued against the borrower and the
guarantors. In the absence of full payment of the certified amount,
the recovery authorities were justified in continuing the
proceedings under Rule 107 of the Rules.
12. For these reasons, the impugned order passed by the
Revisional Authority cannot be sustained. The order proceeds on
an incorrect interpretation of the statutory provisions and
overlooks the mandatory requirement of pre deposit prescribed by
the Act. Consequently, the impugned order deserves to be set
aside. The petition therefore succeeds. Rule is made absolute in
terms of prayer clause (b).
13. The writ petition is accordingly disposed of in the above
terms.
14. There shall be no order as to costs.
(AMIT BORKAR, J.)
