Full Judgment Text
2023:BHC-AS:32238
R Dilwale 10-wp-8440-22 & Ors.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.8440 of 2022
Monica Sagar Kate & Anr }
Age-32 years Occ. House Wife }
Sagar Mahadeo Kate }
Age-36 years Occ. Business }
Both R/o. Row House No.19, Green Park }
Baramati, Dist. Pune }..Petitioners
Versus
1. The Joint Registrar }
Co-operative Societies, }
Pune Division, Pune }
2. The Assistant Registrar }
Co-operative Societies, }
Pune Division, Pune }
3. Chatrapati Sambhaji Maharaj }
Sahkari Patsanstha Maryadit, }
Sasaba, Baramati, Tal. Baramati }
Dist. Pune. }
4. Kantilal Pandurang Bhosale }
Age-58 years Occ. N.A. }
R/o Dorlewai, Tal. Baramati }
Dist. Pune }
5. Hemant Suresh Dudhal }
Age-32 years Occ: N.A. }
R/o. Kale pride, 2nd Floor, }
Shriram Chowk, Kasaba, }
Tal. Baramati Dist. Pune }
6. State of Maharashtra }
Served through Government Pleader }..Respondents
Page 1 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
WITH
WRIT PETITION NO.2755 OF 2022
Sangita Abhijit Mahadik & Ors ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8431 OF 2022
Swati Sarjerao Phule Alias
Swati Yogesh Dubhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8432 of 2022
Sagar Mahadeo Kate ..Petitioner
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8430 of 2022
Anju Shamsundar Dhanwant & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO. 8433 of 2022
Dhiraj Dilip Takale & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8434 of 2022
Hemant Suresh Dudhal & Anr ..Petitioners
Page 2 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8435 of 2022
Shamsundar J Dhanwani & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.2758 of 2022
Sagar Mahadeo Kate ..Petitioner
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8436 of 2022
Abhijit Dayaram Mahadik & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8437 of 2022
Priya Sawata Mohalikar @
Priya Hemant Dudhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8438 of 2022
Kiran Shivdas Ghule & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8439 of 2022
Ranjit Dayaram Mahadik & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
Page 3 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
WITH
WRIT PETITION NO.2757 of 2022
Yogesh Suresh Dudhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
...
Mr. Tushal Sonawane a/w Ms. Pooja Satpute Advocates
for the Petitioners.
Mr. S.D. Rayrikar, AGP for Respondent Nos.1 & 2.
Ms. G.S. Godbole , Senior Advocate i/by Ms.Manjiri
Parasnis, Advocate for the Respondent No.3.
...
CORAM : SANDEEP V. MARNE, J.
RESERVED ON : 19 OCTOBER 2023
PRONOUNCED ON : 25 OCTOBER 2023
JUDGMENT
1. These Petitions are filed challenging orders dated
st
31 December 2021 passed by the Divisional Joint Registrar
allowing Revision Applications filed by Respondent Credit
Society and remanding the proceedings before the Assistant
Registrar for a fresh decision. The Assistant Registrar had
rejected proceedings filed by Respondent-Credit Society for
issuance of recovery certificate under Section 101 of the
Maharashtra Co-operative Societies Act 1960 ( Act of 1960 ).
Page 4 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
2. Petitioners are borrowers who have availed credit
facilities from Respondent No.3-Credit Society. They claim
that the entire amount due under said Credit facilities have
been repaid by them with interest, on account of which the
Credit Society issued various ‘No Dues Certificates’ to
Petitioners. It is further contended that after issuance of ‘No
Dues Certificates’, the Respondent-Credit Society executed
Release Deeds in their favour. Facts in all the Petitions are
similar. For brevity, facts in Writ Petition No.8440/2022 are
narrated as follows.
3. Chatrapati Sambhaji Maharaj Sahakari Patsanstha,
Baramati (Respondent No.3) is a Credit Society registered
under the provisions of the Act of 1960. Petitioners are
members of the Respondent-Society which granted and
disbursed loan of Rs. 14,000,00/- to them for business
purposes. In pursuance of the loan transaction, Petitioners
executed promissory note, acceptance letters, consent letter
of sureties, loan agreement, etc. in favour of the Respondent-
Society. Petitioners also offered agricultural property
admeasuring 10 Acre out of Survey No.45/5/B at Baramati as
well as residential Unit No.3 in the building ‘Kate Pride’ at
Baramati, District Pune towards security for the loan.
Page 5 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Petitioners also executed Mortgage Deed in favour of the
Respondent-Society on 28th August 2015, which came to be
registered in the office of Sub-Registrar of Assurances,
Baramati.
4. Petitioners claim that they have repaid the entire
amount availed by them towards loan along with interest to
the Respondent-Society. They contend that the Respondent-
Society accordingly issued ‘No Dues Certificate’ on 24th
October 2016 certifying that no amount was due or payable by
the Petitioners in the loan account. Petitioners also claim that
on account of repayment of the entire loan amount,
Respondent-Society executed Release Deed dated 11th July
2016 in favour of the Petitioners releasing their charge over
the two mortgaged properties.
5. The Respondent-Society later claimed that the
Petitioners had neither repaid the loan amount, nor any ‘No
Dues Certificate’ was issued by the Society. The Respondent-
Society also denied having executed any Release Deed in
favour of Petitioners. The Respondent-Society claims that its
Branch Manager unauthorizedly issued ‘No Dues Certificate’
and executed Release Deed without any decision to that effect
Page 6 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
being taken in the managing committee meeting of the
Society.
6. The Respondent-Society has accordingly filed
Special Civil Suit No.51/2019 seeking a declaration that
various Release Deeds unauthorizedly executed by the Branch
Manager are ab initio void and not binding on the Respondent-
Society. It has also sought a declaration that it continues to
have the charge over mortgaged properties in pursuance of
various Mortgage Deeds executed in his favour. Some of the
subsequent Sale Deeds executed by the
borrowers/guarantors/mortgagor are also sought to be
cancelled in the said suit. The Respondent-Society sought
temporary injunction against the Defendants in Special Civil
Suit No.51/2019 to restrain them from creating third party
rights in the suit properties. By order dated 30th April 2019,
the Trial Court proceeded to reject the Application at Exhibit-5
for grant of temporary injunction. The Respondent-Society
instituted Appeal From Order No. 656 of 2019 challenging the
order dated 30th April 2019. In that Appeal from Order, this
Court passed Interim Order of status-quo . By order passed on
19th October 2023, this Court has disposed of Appeal from
Page 7 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Order No.653 of 2019 continuing the order of status-quo till
decision of the suit.
7. Parallelly, Respondent-Society initiated proceedings
for issuance of recovery certificate under Section 101 of the
Act of 1960 against borrowers and guarantors. So far as
present petitions are concerned, Application
No.101/95/537/2019 was filed before the Assistant Registrar,
Co-operative Societies (Parseva), Baramati. The Application
was resisted by Petitioners inter alia contending that the
entire amount of loan has been repaid by them. They
produced a receipt dated 7th July 2016 to demonstrate
repayment of loan. They also relied upon Release Deed dated
11th July 2016 and contended that the bank never issued any
notice for recovery of any outstanding amount towards loan
since the year 2016.
8. The Assistant Registrar proceeded to pass order
nd
dated 22 November 2019 holding that since the Respondent-
th
bank had issued ‘No Dues Certificate’ on 11 July 2016 and
executed Release Deed, no amount was due or payable from
Petitioners. It was further held that the Assistant Registrar did
not have jurisdiction to rule on genuineness of ‘No Dues
Page 8 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Certificate’, Release Deed, etc. It was held that evidence in
the form of examination-in-chief and cross-examination cannot
be recorded before the Assistant Registrar. By recording these
reasons, the Assistant Registrar proceeded to reject the
recovery application filed by the Respondent-Society.
9. Respondent-Society filed Revision Applications
before the Divisional Joint Registrar, Co-operative Societies,
Pune challenging the decisions of Assistant Registrar. The
Revision Applications were opposed by Petitioners by filing
their reply.
10. The Divisional Joint Registrar proceeded to partly
allow the Revision Applications by order dated 31st December
2021 remanding the proceedings before Assistant Registrar
for fresh decision. Petitioner are aggrieved by the orders
passed by the Divisional Joint Registrar and have accordingly
filed the present Petitioners.
11. Mr. Sonawane, the learned counsel appearing for
the Petitioners would submit that the Divisional Joint Registrar
has erred in setting aside the orders passed by the Assistant
Registrar. That, disputed questions relating to genuineness of
Page 9 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
‘No Dues Certificate’ and authority to execute Release Deed
on behalf of the Respondent-bank, cannot be decided in
recovery proceedings under Section 101 of the Act of 1960.
That, Petitioners have valid defence to oppose the proceedings
on account of which recovery certificate cannot be issued in a
summary manner. That, execution of Release Deed would
prima facie indicate repayment of the entire loan amount and
once prima facie case is made out by the Petitioners, Registrar
cannot exercise powers under Section 101 of the Act of 1960.
That, Respondent-bank has alternate and equally efficacious
remedy of filing a Dispute under Section 91 of the Act of 1960
wherein detailed enquiry can be conducted by adducing
evidence by both the parties. In support of his contentions, he
would rely upon Judgment of Division Bench of this Court in
Top Ten Vs. State of Maharashtra 2012 (1) Mh.L.J. 347. He
would submit that the bank has already filed Special Civil Suit
No. 51/2019 with regard to the validity of Release Deed
executed on behalf of the bank. That, Application for
temporary injunction sought by Respondent-bank is already
rejected in that suit, thereby demonstrating non-existence of
any prima facie case in favour of Respondent-bank. That, the
finding recorded by the Divisional Joint Registrar as are such
that the Assistant Registrar would feel bound to issue to
Page 10 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
recovery certificates, ignoring the lawful defences of
Petitioners.
12. Per Contra, Mr. Godbole, the learned senior
advocate appearing for the Respondent Credit-Society would
oppose the petitions and support the orders passed by the
Divisional Joint Registrar. He would submit that the orders
under challenge are merely orders of remand and not orders
granting recovery certificate. That, no prejudice is caused to
the Petitioners since the proceedings are merely remanded
with a view to examine whether the Respondent-Society has
made out any case of issuance of recovery certificate. That, all
defences can be raised by the Petitioners before the Assistant
Registrar.
13. Mr. Godbole would further submit that the ‘No dues
Certificates’ are fake and issued without any authority. That,
there is no evidence of repayment of loan. The Release Deeds
are also silent on the issue of the repayment. That, though
‘No Dues Certificate’ in the present case is issued on 24th
October 2016, Petitioners have paid installments after
issuance of such certificates, thereby demonstrating complete
falsity in the same. That, the Bank did not authorise the
Branch Manager to execute Release Deeds. That there is no
Page 11 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
resolution adopted by the society for closure of loan accounts
or for execution of Release Deeds. That, the bank has
produced certified extracts of loan accounts demonstrating
outstanding amounts from Petitioners. That, Respondent-
Society has been defrauded by its Branch Manager in
connivance with one Shri. Sagar Kate, who is the main culprit
in the entire episode. That the Societyhas lodged criminal
proceedings against the Branch Manager. He would pray for
dismissal of the petitions.
14. Rival contentions of parties now fall for my
consideration.
15. The issue that arises for consideration in the
present petitions is whether proceedings under Section 101 of
the Act of 1960 is the correct remedy for recovery of alleged
dues of Respondent-Society from Petitioners. Section 101
envisages summary enquiry for issuance of recovery
certificate. Petitioners contend that complicated questions and
disputed facts are involved in the present case which cannot
be determined by the Assistant Registrar while exercising
jurisdiction under Section 101 of the Act of 1960. It would
Page 12 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
therefore be apposite to reproduce provisions of Section 101,
which reads thus:-
“ 101. Recovery of certain sums and arrears due to certain
societies as arrears of land revenue]
(1) Notwithstanding anything contained in sections 91,
93 and 98, on an application made by a resource society
undertaking the financing of crop and seasonal finance as
defined under the Bombay Agricultural Debtors Relief Act, 1947,
[or advancing loans for other agricultural purposes repayable
during a period of not less than eighteen months and not more
than five years] for the recovery of arrears of any sum advanced
by it to any of its members on account of the financing of crop or
seasonal finance [or for other agricultural purposes as aforesaid]
or by a crop-protection society for the recovery of the arrears of
the initial cost or of any contribution for obtaining services
required for crop-protection society or for the recovery of the
arrears of the initial cost or of any contribution for obtaining
services required for crop protection which may be due from its
members or other owners of lands included in the proposal (who
may have refused to become members) or by a lift irrigation
society for the recovery of arrears of any subscription due from
its members for obtaining services required for providing water
supply to them, [or by a Tulaka or Block level village artisans
multipurpose society advancing loans and arranging for cash
credit facilities for artisans for the recovery of arrears of its
dues,] [or by a co-operative dairy society advancing loans for the
recovery of arrears of any, sum advanced by it to any of its
members or by an urban co-operative bank for the recovery of
arrears of its dues, [or any sum advanced by the District Central
Co-operative Bank to its (individual) members or by non-
agricultural co-operative credit society for the recovery of the
arrears of its dues) or by salary-earners co-operative society for
the recovery of arrears of its dues, or by a fisheries co-operative
society for the recovery of arrears of its dues,) [or by any such
society or class of societies, as the state Government may from
time to time, notify in the Official Gazette, for the recovery of any
sum advanced to, or any subscription or any other amount due
from, the members of the society or class of societies so not
notified;] and [on the society concerned furnishing a statement of
accounts and any other documents as may be prescribed) in
respect of the arrears, the Registrar may, after making the
inquiry in such manner as may be prescribed, grant a certificate
for the recovery of the amount stated therein to be due as
arrears. The application for grant of such certificate shall be
made in such form and by following such procedure,
accompanied by such fees and documents as may be prescribed.
[Explanation I.— For the purposes of this sub-section, the
expression "other agricultural purposes" includes dairy,
pisciculture and poultry.]
[Explanation. II— ]*
Page 13 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
(2) Where the Registrar is satisfied that [the concerned
society has failed to take action under the foregoing sub-section
in respect of any amount due as arrears,] the Registrar may, of
his motion, after making such inquiries as may be prescribed],
grant a certificate for the recovery of the amount stated therein
to be due as arrears and such a certificate shall be deemed to
have been issued as if on an application made by the society
concerned.
(3) A certificate granted by the Registrar under sub-
section (1) or (2) shall be final and a conclusive proof of the
arrears stated to be due therein, and the same shall be
recoverable according to the law for the time being in force [as
arrears of land revenue. A revision shall lie against such order or
grant of certificate, in the manner laid down under section 154
and such certificate shall not be liable to be questioned in any
court].
(4) It shall be lawful for the Collector and the Registrar
to take precautionary measures authorised by sections 140 to
144 of the Bombay Land Revenue Code, 1879 or any law or
provision corresponding thereto for the time being in force, until
the arrears due to [the concerned society), together with interest
and any incidental charges incurred in the recovery of such
arrears, are paid, or security for payment of such arrears is
furnished to the satisfaction of the Registrar. ”
16. Thus, under Section 101, the Registrar is
empowered to make an enquiry and issue recovery certificate
on furnishing a statement of accounts and other documents as
may be prescribed. The remit of enquiry before the Registrar
under Section 101 is thus limited, who is not supposed to
determine disputed questions by directing parties to adduce
evidence. He has to merely record a satisfaction that the
amount demanded is due from a member. Such satisfaction is
required to be recorded by the Registrar after taking into
consideration the statement of accounts submitted by the
Society. Though the words ‘any other documents’ are also
used in sub-Section (1) of Section 101, it does not mean that
Page 14 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
the Registrar can act like a Court by appreciating evidence
produced by parties in support of their respective claims.
17. Sub-Section (1) of Section 101 begins with a non-
obstante clause providing that ‘ notwithstanding anything
contain in Section 91, 93 and 98…. ’, it would therefore be
necessary to reproduce the provisions of Section 91 of the Act
of 1960 which reads thus:-
“91. Disputes
(1) Notwithstanding [anything contained] in any other law for
the time being in force, any dispute touching the constitution,
[elections of the committee or its officers [ ]], conduct of general*
meetings, management or business of a society shall be referred by
any of the parties to the dispute, or by a federal society to which the
society is affiliated or by a creditor of the society, [to the co-
operative Court] if both the parties thereto are one or other of the
following:—
(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 legal representative of any deceased
officer, deceased agent or deceased servant of the society, or the
Liquidator of the society [or the official Assignee of a de-registered
society).
(b) a member, past member of a person claiming through a
member, past member of a deceased member of society, or a society
which is a member of the society [or a person who claims to be a
member of the society;]
(c) a person other than a member of the society, with whom the
society, has any transactions in respect of which any restrictions or
regulations have been imposed, made or prescribed under sections
43, 44 or 45, and any person claiming through such person;
(d) a surety of a member, past member or deceased member, or
surety of a person other than a member with whom the society has
any transactions in respect of which restrictions have been
prescribed under section 45, whether such surety or person is or is
not a member of the society;]
(e) any other society, or the Liquidator of such a society [or-de-
registered society or the official Assignee of such a de-registered
society].
Provided that, an industrial dispute as defined in clause (k) of
section 2 of the Industrial Disputes Act, 1947, or rejection of
nomination paper at the election to a committee of any society, or
refusal of admission to membership by a society to any person
Page 15 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
qualified therefor [or any proceeding for the recovery of the amount
as arrear of land revenue on a certificate granted by the Registrar
under sub-section (1) or (2) of section 101 or sub-section (1) of
section 137 or the recovery proceeding of the Registrar or any
officer subordinate to him or an officer of society notified by the
State Government, who is empowered by the Registrar under sub-
section (1) of section 156,] [or any orders, decisions, awards and
actions of the Registrar against which an appeal under section 152
or 152A and revision under section 154 of the Act have been
provided.] shall not be deemed to be a dispute for the purposes of
this section.]
(3) Save as otherwise provided under [sub-section (2) to section
93], no Court shall have jurisdiction to entertain any suit or other
proceedings in respect of any dispute referred to in sub-section (1).
Explanation 1 .—A dispute between the Liquidator of a society [or
an official Assignee of a de-registered society] and [the members
(including past members, or nominees, heirs or legal representative
or deceased members)] of the same society shall not be referred [to
the co-operative Court) under the provisions of sub-section (1).
Explanation 2 .-For the purposes of this sub-section, a dispute shall
include-
(i) a claim by or against a society for any debt or demand due to
it from a member or due from it to a member, past member or the
nominee, heir or legal representative of a deceased member, or
servant for employee whether such a debt or demand be admitted
or not;
(ii) a claim by a surety for any sum or demand due to him from
the principal borrower in respect of a loan by a society and
recovered from the surety owing to the default of the principal
borrower, whether such a sum or demand be admitted or not;
(iii) a claim by a society for any loss caused to it by a member,
past member or deceased member, by any officer, past officer or
deceased officer, by any agent, past agent or deceased agent, or by
any servant, past servant, past servant or deceased servant, or by
its committee, past or present, whether such loss be admitted or
not;
(iv) a refusal or failure by a member, past member or a nominee,
heir or legal representative of a deceased member, to deliver
possession to a society of land or any other asset resumed by it for
breach of condition as the assignment.
18 . As opposed to the proceedings under Section 101, a
Cooperative Court under Section 91 is empowered to decide
‘any dispute’ between a society and member so long as in
touches the constitution, elections of the committee or its
officers conduct of general meeting and management or
Page 16 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
business of the society. The jurisdiction conferred on the
Cooperative Court is thus wide enough to virtually decide
every dispute between a member and the society. Since sub-
Section 1 of Section 101 begins with a non-obstante clause ,
the said provision under Section 101 is in addition to the
remedy provided to the society under Section 91.
19. The issue with regard to the difference in
jurisdictions vested in Registrar under Section 101 and
Cooperative Court under Section 91 has been discussed by
Division Bench Judgment of this Court in Top Ten ( supra ).
This Court held in para 13, 14, 15, 16, 17,18, 19 as under :-
13. Perusal of section 101 reveals that it is the last section
in Chapter IX of 1960 Act. It's heading is "Recovery of arrears
due to certain societies as arrears of land revenue". Important
words to be noted are "arrears due to certain societies". Sub-
section (1) then contains a long list of various types of societies
and it is not in dispute that the respondent credit co-operative
society before this Court are covered thereunder. After this list
of societies, again the important words appear and those words
are "and on the society concerned furnishing a statement of
accounts in respect of the arrears." Thus the society which
invokes this remedy has to file statement of accounts showing
how it is entitle to recover those arrears. Thereafter the
Registrar has been given authority to make enquiry in such
manner as may be prescribed. Depending upon outcome of that
enquiry, he can issue a certificate for recovery of amount stated
in the certificate as due towards arrears. The procedure
prescribed for undertaking such enquiry is envisaged in
Chapter VIIIA of 1961 Rules. The petitioners as also
respondents accept that this is a speedy remedy of summary
nature envisaged by the legislature. We find sub-section (2) of
section 101 important. It enables the Registrar to issue such
certificate on his own motion, after undertaking enquiry, if he is
satisfied that concerned society has failed to take action under
the foregoing sub-section in respect of any amount due as
arrears. This power given to the Registrar to recover amount of
arrears due to a society itself shows the desire with which this
Page 17 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
provision has been inserted in the statute book. The language
itself shows that the recovery contemplated is of arrears due to
society. The recovery is again by a speedy remedy by treating it
as arrears of land revenue.
14. Section 91 noted above enables the Co-operative Court
to decide disputes about the amounts claimed by the society as
arrears. Recovery of loan is also possible under section 91.
Section 94 deals with procedure for settlement of disputes and
power of Co-operative Court. Section 94(4) states that save as
otherwise directed by the State Government in any case or
class of cases, every dispute shall be decided in such summary
manner as may be prescribed and as expeditiously as possible.
Sub-section (1A) obliges the Co-operative Court to decide
dispute within 6 months. Sub-section (1) confers upon Co-
operative Court a power to summon and enforce attendance of
witness, to compel them to give evidence on oath, affirmation
or affidavit and to compel production of documents.
15. Division Bench of this Court in 1998 (2) LJ 628, Madhav
Karmarkar vs. State of Maharashtra and others, has held that
the Co-operative Courts are established to decide civil disputes
and are part and parcel of Civil Courts function. The procedure
to be followed by the Co-operative Court is envisaged in
Chapter VIII of 1961 Rules. Rule 77-E, prescribes procedure for
hearing and decision of disputes. Rule 77F prescribes summary
procedure for deciding disputes. Any dispute for recovery of a
debt upon promissory note, Hundi, Bill of exchange or bond
with interest accrued in such instrument, or under byelaw and
certain other types of recovery disputes, can be tried as
summary disputes. It is not necessary for this Court to go into
details of the procedure prescribed, but then briefly stating, the
procedure is not different than one prescribed under Order
XXXVII of the Code of Civil Procedure. Section 98 of 1960 Act
provides the mode and manner in which money can be
recovered. Section 93(1) of 1960 Act enables the President of
the Co-operative Appellate Court to withdraw and transfer
anydispute from one Co-operative Court to any Co-operative
Court.
Sub-section (2) enables a party to a dispute to apply to the Co-
operative Court, pointing out that a complicated question of law
and fact is required to be adjudicated. The Co-operative Court
in that situation
can suspend the proceedings before it to enable such party to
move the Civil Court for getting it adjudicated. However, if such
civil suit is not filed within 2 months, the Co-operative Court
has to continue with adjudication before it.
16. Section 101 which opens with non obstante clause reads
“101(1). Notwithstanding anything contained in sections 91, 93
and 98. on an application made by" Thus this section gives an
additional remedy to particular types of societies as
enumerated therein. Normal remedy envisaged is under section
filed by such society can be tried as a regular dispute as per
Rule 77-E or then as a summary dispute under Rule 77F. Rule
77F contemplates and identities a particular type of disputes
for summary disposal. Thus from otherwise, large types of
Page 18 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
disputes which may be filed before the Co-operative Court and
disposed of under Rule 77-E, a category is carved out for
expeditious disposal where the debtor like the present
petitioner has to seek a leave to defend, as per Rule 77F(3).
Section 101 carves out a still narrower type of dispute or
controversy. It speaks of arrears due to certain societies and its
recovery as land revenue. Therefore, it proceeds on "arrears
due" and only for that purpose the concerned society has to
furnish a statement of account in respect of the arrears. The
Registrar has to make an enquiry only in relation to those
arrears. It is, therefore, obvious that the legislature which
thought it proper to extend to a debtor/borrower an opportunity
of claiming leave to defend under section 94(4) of the 1960 Act,
read with Rule 77F, has itself provided this remedy where very
narrow enquiry is required. The legislature obviously has given
importance to cooperative movement and public interest which
is evident from sub-section (2) of section 101. The enquiry
contemplated by the registrar is, therefore, extremely narrow.
The learned Additional Government Pleader appearing on
behalf of the respondent State has pointed out that wherever
necessary legislature has expressly conferred power upon the
authority to record evidence. Section 94(1) and section 144D
are pointed out to be instances of such use of power by the
legislature. It is an admitted position here that Chapter VIIIA of
1961 Rules or then section 101 of 1960 Act, do not confer such
power upon the Registrar while conducting enquiry as
necessary under section 101.
17. Chapter VIIIA of 1961 Rules vide its Rule 86A shows
procedure for filing application for grant of certificate for
recovery. The form in which it is to be filed is also prescribed
and documents which must accompany are also stipulated.
Form "U" in which application under section 101 is required to
be filed shows the requirement of disclosure of relevant facts
by the concerned society: all necessary facts which make the
respondents before that authority either borrower or guarantor
the procedure followed for sanctioning loan, securities
furnished,: documents executed. The applicant then has to
point out failure to repay principal amount and interest upon it
and demand/demands made by the concerned society. A
resolution of the Board of Directors to file an application under
section 101 transaction is also required to be pleaded. Details
of loan transaction are also required to be pointed out as part
and parcel of this application. The application is required to be
supported by affidavit of responsible officer of a co-operative
society. Rule 86B contemplates scrutiny of such application by
the Registrar. Registrar cannot issue notice to other side, if
such application is incomplete in material respect. The other
side is expected to file written statement. Rule 86C
contemplates appearance of party, either personally or through
an Advocate and consequence of failure to appear. Rule 86D
enables both the parties to file documents. It also enables the
Registrar to call for such other documents from opposite party
by order in writing, if production of such document is found
Page 19 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
essential. Request for such production from opponent cannot
be entertained before he files his written statement.
Adverse inference can be drawn if the document is not
produced, after such direction. The applicant Society has to
prove contents of its application and also show how the
contentions raised in defence by other side are not correct.
After this exercise is undertaken by the applicant Society, the
opponent has been given opportunity to file reply in support of
his defence, and after such reply, Registrar has to hear oral
arguments. Then he has to deliver a reasoned judgment under
Rule 86F. If he issues certificate, it has to be in Form "V". Rule
86-E specifically stipulates that no cross-examination of any of
the parties is permitted.
18. Use of both words i.e., "arrears and due" together in
section 101 is itself manifestation of very limited inquiry felt
necessary under section 101 before issuing the certificate. In
plain English, both words may be synonymous. New Oxford
Advanced Learner's Dictionary gives following meaning of
these words. "Arrears" means a money which has not been paid
at right time. "Due" is stated to mean it must be paid
immediately, owed to somebody as it is their right or they have
done something to deserve it. In Chambers 20th Century
Dictionary; word "Arrear" means that which remains unpaid or
undone. Word "Due" means - owed, that ought to be paid to
another. Blacks Law Dictionary (9th Ed.) states "Arrears"
means the state of being behind in payment of a debt or the
discharge of an obligation, an unpaid or overdue debt, Word
"Due" means immediately enforceable, owing or payable,
constituting a debt. Advanced Law Lexicon by P. Ramanatha
Aiyyar 3rd. Ed. also shows same meaning of word "Due". It also
points out that said word has different meanings and that
meaning has to be put on it which fits in with the context.
Meaning of Arrears shows that which remains unpaid though
due. T.P. Mukherjee's Law Lexicon states "Arrears" means
payment remaining unpaid at the due time. It also explains
"due" to mean amount which has matured and is in arrears.
1975 Mh.L.J. (SC) 22 = AIR 1974 SC 1613, Dhan Singh
Ramkrishna Chaudhuri vs. Laxminarayan Ramkrishan shows
that arrears means money unpaid at due time. Here, it is
beyond doubt that both these words do not signify same state
of affairs I.e., non-payment. Word "Due" therefore is not
duplication of what is conveyed by word "arrears". It indicates
that amount which is found or determined to be outstanding
and hence, recoverable. Thus statement of accounts and other
facts essential under Rules to be disclosed by the concerned
Society and to be looked into by the Registrar reveal that said
amount of arrears has to be "due" i.e., payable. This quasi-
judicial exercise is made final by legislature and not kept open
under section 91 only because of possibility of determination of
the limited aspect about arrears due without adjudication on
any disputed questions of facts. Such factual disputes cannot
and have not been subjected to and fall outside the procedure
under section 101. Thus, either the Arrears are already
declared due by some authority or then can be ascertained on
Page 20 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
the basis of statement of accounts and other material on record
by Registrar. Moment it is demonstrated to Registrar that a
bona fide and genuine defense about said arrears is raised
which calls for a finding on disputed facts, need for cross-
examination surfaces and section 101 ceases to apply.
Procedure laid down for enquiry under section 101 itself
manifests said legislative intention. It cannot be even urged
that legislature made that certificate final while denying the
right to dispute the facts cardinal for its determination and
intended to fasten the recovery as liability upon a person
having bona fide and valid defence. Section 101(2) again
indicates this as it expects the Registrar to be satisfied about
the failure of concerned society to take steps under its sub-
section (1) in respect of any amount "due as arrears".
19. Thus very small types of disputes in which only
limited question is of quantification of arrears due, is to
be looked into by such Registrar while undertaking
enquiry under section 101 . Importance therefore, is to
statement of accounts. The enquiry undertaken is only aimed at
ascertaining whether amount disclosed in statement of
accounts as arrears, is correct and due. The limited
opportunity of defence is, therefore, extended to the
borrower like petitioners. The correctness of amount
shown as arrears can be verified from the accounts and
from accounts of the society and from receipts produced
by other side. Denial of cross-examination in this
situation only shows legislative intent that if a genuine
and disputed question of facts is found arising by the
Registrar, he cannot proceed to resolve that question.
The concerned society, in such circumstances, has to take
recourse to filing of a dispute under section 91, where
such disputed questions can be gone into. Hence, a bona
fide defence being raised by a borrower or other person
against whom such certificate is sought, cannot be
resolved by the Registrar under this jurisdiction . If he
finds such dispute arising, he has to deny the recovery
certificate by passing appropriate judgment under Rule 86F.
In Ramchandra and another vs. Collector, Nagpur and
others (supra), the Division Bench of this Court has looked into
the provisions of section 137. Section 137 (1) was earlier a
provision pari materia with provisions of section 101. Section
137(1) enables the Registrar to make such enquiry 'as he
deems fit.' Section 101 was also containing same phrase till 10-
5-2006. On that date, the said words have been replaced and
Registrar, is obliged to conduct enquiry in such manner as may
be prescribed. Thereafter, Chapter VIIIA has been added to
1961 Rules, prescribing the mode of enquiry. Thus, said
Division Bench judgment is no longer relevant for interpreting
the scheme of section 101. Paragraph 26 of this Division Bench
judgment on which the petitioners have placed reliance,
however, does not show any express finding about need of
extending an opportunity of cross-examination. Moreover, there
is no provision either in 1960 Act or in 1961 Rules, prohibiting
Page 21 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
such cross-examination in section 137 enquiry. This judgment,
therefore, is of no assistance in present situation.
(emphasis & underlining supplied)
20. Thus, as held by Division Bench of this Court in
Top Ten (supra), the Registrar can decide only small types of
disputes relating to quantification of arrears, etc., where only
limited opportunity of defence can be extended to the
opponents. The Registrar can undertake enquiry into
correctness of amounts demanded from a member. However, if
a genuine defence is raised and disputed question of facts
arise before the Registrar, he cannot decide such questions
and the society is required to file dispute under Section 91.
The Division Bench has held the Registrar does not have
jurisdiction to permit parties to lead evidence or to conduct
cross-examination. Thus, in every case where adducing of
evidence and grant of opportunity of cross-examination
becomes necessary, the Registrar will have to stay away from
such proceedings and relegate the parties to jurisdiction
under Section 91.
21. Having discussed the remit of enquiry which a
Registrar can undertake under Section 101 as opposed to the
wider jurisdiction of Cooperative Court under Section 91, it
Page 22 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
would be necessary to examine as to whether the Registrar
can decide the proceedings instituted by Respondent-Society
for issuance of recovery certificates in the present cases.
Though, the Respondent-Society has sought issuance of
recovery certificates by producing certified extracts of
accounts showing various amounts due from Petitioners, the
Petitioners have raised a defence that the entire amount has
been repaid by them and that no amount is due or payable in
the loan accounts. The defence is backed, essentially by two
documents viz. ‘No Dues Certificates’ and Release Deeds. It
appears that the Petitioners in Writ Petition No.8440 of 2023
have also relied upon receipt dated 7th July 2016 issued in the
name of Monika Sagar Kate to demonstrate repayment of the
loan. In the light of this defence taken and the documents in
the form of ‘No Dues Certificate’, Release Deeds and receipts
of repayment being produced, the Registrar will have to
record his findings qua those defences and documents. The
Respondent-Society has taken a plea that the ‘No Dues
Certificate’ are either fake or have been issued without
authority by its Bank Manager. The Society will have to prove
this assertion by leading evidence. In respect of Release Deed,
stand is taken by the Society that the Branch Manager did not
have any authority to execute Release Deeds on behalf of the
Page 23 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Society. These contentions raised by the Respondent-Society
will have to be proved by adducing evidence. The Registrar,
whose ambit of enquiry is restricted to perusal of statement of
account for deciding proceedings under Section 101, will not
be in a position to decide the complicated question as to
whether the Release Deeds are validly executed or whether
the ‘No Dues Certificates’ are genuine. Neither Respondent-
Society will be in a position to adduce evidence by examining
any witnesses nor Petitioners can cross examine them. Similar
is the position if Petitioners desire to lead evidence to prove
authority in favour of the Branch Manager who executed the
Release Deeds. In my view therefore, nature of the dispute is
such that the same cannot be adjudicated in proceedings
under Section 101.
22. It must also be borne in mind that the question of
enforceability of Release Deeds is raised in Special Civil Suit
No. 51 of 2019 filed by the Society. It is Civil Court who would
decide whether the Release Deeds were executed with proper
authority and whether they would bind the parties. Before
such Suit could be decided, the Society desires that the
Registar should proceed on a presumption that the Release
Deeds are invalid. Mr. Godbole has canvassed that the issue of
Page 24 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
dues recoverable from Petitioners is distinct from the validity
of release deeds and that during pendency of Society’s Suit for
declaration of invalidity of release deeds, the Society can
attempt recovery on an assumption that there is no mortgage
on its favour. While Mr. Godbole may not be entirely wrong in
contending so, the question whether the issue of correctness
of ‘No Dues Certificates’ could be decided in recovery
proceedings still begs an answer. Therefore, even if the
Society decides to wait for decision of Civil Suit for
enforceability of mortgages, it will have to ultimately prove
that the ‘No Dues Certificates’ are either fraudulent or issued
without any authority. Opportunity also needs to be given to
Petitioners to prove their defence about deposit of amounts
and non-reflection of those deposits in the accounts
statements.
23. Perusal of the Order passed by the Divisional Joint
Registrar would indicate that he has proceeded to virtually
discard the ‘No Dues Certificates’ and Release Deeds by
recording a finding that the Petitioners have deposited some
amount in the loan account after issuance of ‘No Dues
Certificates’ and after execution of Release Deeds. The nature
of findings recorded by the Divisional Joint Registrar are such
Page 25 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
that the Assistant Registrar will not be left with much choice
but to ignore the ‘No Dues Certificates’ and Release Deeds
while deciding proceedings under Section 101. Thus, without
adducing evidence by any parties and without an opportunity
of cross-examination to the Petitioners, the Divisional Joint
Registrar has proceeded to hold that the ‘No Dues
Certificates’ and Release Deeds will have no impact on the
loan accounts, which show outstanding amounts in the names
against Petitioners. In my view the Divisional Joint Registrar
has committed a serious error in recording such findings,
without being equipped with any material on record to
support its findings.
24. In my view therefore, the impugned orders passed
by the Divisional Joint Registrar are clearly unsustainable.
Respondent-Society has contended that no prejudice would be
caused to Petitioners on account of remand of the proceedings
to the Assistant Registrar. In my view in fact no prejudice
would be caused to the Respondent-Society on account of
rejection of its recovery proceedings filed under Section 101
by the Assistant Registrar. Petitioners have alternate and
equally efficacious remedy filing disputes under Section 91 of
the Act. Therefore passing of order by the Assistant Registrar
Page 26 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
would not render Respondent-society remediless. The society
has already filed a Civil Suit seeking declaration that the
Release Deed is void and not binding on it. It can file Disputes
before Cooperative Court seeking recovery of alleged
outstanding loan amounts from Petitioners. On the contrary, if
the Assistant Registrar is allowed to decide proceedings under
Section 101, he will not be in a position to decide the issue as
to whether the No Dues Certificates and Release Deeds would
bind the Respondent-Society. However, while relegating the
Society to remedy under Section 91, this Court is conscious of
the nature of allegations levelled by the Society against the
person at whose behest the moneys were borrowed as well
against the Branch Manager. Therefore, mere relegation to
alternate remedy under Section 91 would not be treated as a
reflection on the Society’s right to recover its dues, if indeed
the same are found to be due from Petitioners. At the same
time, filing of Disputes by the Society against Petitioners shall
not be used as an opportunity by the Petitioners to delay the
recovery proceedings. Therefore, the proceedings filed before
the Cooperative Court, if and when filed by the Society, need
to be expedited. The Cooperative Court where such Disputes
are filed shall proceed to decide the same in an expeditious
Page 27 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
manner without letting the Petitioners seek unnecessary
adjournments.
25. Writ Petitions accordingly succeed. Orders passed
by the Divisional Joint Registrar remanding the proceedings to
Assistant Registrar are set aside. The Respondent-Society
shall however be at liberty to file Disputes under Section 91 of
the Act of 1960 for recovery of alleged amounts due from
Petitioners. If such disputes are filed, the Co-operative Court
shall proceed to decide the same, in an expeditious manner,
without being influenced by any of the observations made in
this judgment. The Writ Petitions are accordingly allowed.
Rule is made absolute in above terms.
SANDEEP V. MARNE, J
Page 28 of 28
Signed by: Rameshwar L. Dilwale
Designation: PA To Honourable Judge
Date: 26/10/2023 15:36:39
R Dilwale 10-wp-8440-22 & Ors.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.8440 of 2022
Monica Sagar Kate & Anr }
Age-32 years Occ. House Wife }
Sagar Mahadeo Kate }
Age-36 years Occ. Business }
Both R/o. Row House No.19, Green Park }
Baramati, Dist. Pune }..Petitioners
Versus
1. The Joint Registrar }
Co-operative Societies, }
Pune Division, Pune }
2. The Assistant Registrar }
Co-operative Societies, }
Pune Division, Pune }
3. Chatrapati Sambhaji Maharaj }
Sahkari Patsanstha Maryadit, }
Sasaba, Baramati, Tal. Baramati }
Dist. Pune. }
4. Kantilal Pandurang Bhosale }
Age-58 years Occ. N.A. }
R/o Dorlewai, Tal. Baramati }
Dist. Pune }
5. Hemant Suresh Dudhal }
Age-32 years Occ: N.A. }
R/o. Kale pride, 2nd Floor, }
Shriram Chowk, Kasaba, }
Tal. Baramati Dist. Pune }
6. State of Maharashtra }
Served through Government Pleader }..Respondents
Page 1 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
WITH
WRIT PETITION NO.2755 OF 2022
Sangita Abhijit Mahadik & Ors ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8431 OF 2022
Swati Sarjerao Phule Alias
Swati Yogesh Dubhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8432 of 2022
Sagar Mahadeo Kate ..Petitioner
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8430 of 2022
Anju Shamsundar Dhanwant & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO. 8433 of 2022
Dhiraj Dilip Takale & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8434 of 2022
Hemant Suresh Dudhal & Anr ..Petitioners
Page 2 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8435 of 2022
Shamsundar J Dhanwani & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.2758 of 2022
Sagar Mahadeo Kate ..Petitioner
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8436 of 2022
Abhijit Dayaram Mahadik & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8437 of 2022
Priya Sawata Mohalikar @
Priya Hemant Dudhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8438 of 2022
Kiran Shivdas Ghule & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
WITH
WRIT PETITION NO.8439 of 2022
Ranjit Dayaram Mahadik & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
Page 3 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
WITH
WRIT PETITION NO.2757 of 2022
Yogesh Suresh Dudhal & Anr ..Petitioners
Versus
The Joint Registrar & Others ..Respondents
...
Mr. Tushal Sonawane a/w Ms. Pooja Satpute Advocates
for the Petitioners.
Mr. S.D. Rayrikar, AGP for Respondent Nos.1 & 2.
Ms. G.S. Godbole , Senior Advocate i/by Ms.Manjiri
Parasnis, Advocate for the Respondent No.3.
...
CORAM : SANDEEP V. MARNE, J.
RESERVED ON : 19 OCTOBER 2023
PRONOUNCED ON : 25 OCTOBER 2023
JUDGMENT
1. These Petitions are filed challenging orders dated
st
31 December 2021 passed by the Divisional Joint Registrar
allowing Revision Applications filed by Respondent Credit
Society and remanding the proceedings before the Assistant
Registrar for a fresh decision. The Assistant Registrar had
rejected proceedings filed by Respondent-Credit Society for
issuance of recovery certificate under Section 101 of the
Maharashtra Co-operative Societies Act 1960 ( Act of 1960 ).
Page 4 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
2. Petitioners are borrowers who have availed credit
facilities from Respondent No.3-Credit Society. They claim
that the entire amount due under said Credit facilities have
been repaid by them with interest, on account of which the
Credit Society issued various ‘No Dues Certificates’ to
Petitioners. It is further contended that after issuance of ‘No
Dues Certificates’, the Respondent-Credit Society executed
Release Deeds in their favour. Facts in all the Petitions are
similar. For brevity, facts in Writ Petition No.8440/2022 are
narrated as follows.
3. Chatrapati Sambhaji Maharaj Sahakari Patsanstha,
Baramati (Respondent No.3) is a Credit Society registered
under the provisions of the Act of 1960. Petitioners are
members of the Respondent-Society which granted and
disbursed loan of Rs. 14,000,00/- to them for business
purposes. In pursuance of the loan transaction, Petitioners
executed promissory note, acceptance letters, consent letter
of sureties, loan agreement, etc. in favour of the Respondent-
Society. Petitioners also offered agricultural property
admeasuring 10 Acre out of Survey No.45/5/B at Baramati as
well as residential Unit No.3 in the building ‘Kate Pride’ at
Baramati, District Pune towards security for the loan.
Page 5 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Petitioners also executed Mortgage Deed in favour of the
Respondent-Society on 28th August 2015, which came to be
registered in the office of Sub-Registrar of Assurances,
Baramati.
4. Petitioners claim that they have repaid the entire
amount availed by them towards loan along with interest to
the Respondent-Society. They contend that the Respondent-
Society accordingly issued ‘No Dues Certificate’ on 24th
October 2016 certifying that no amount was due or payable by
the Petitioners in the loan account. Petitioners also claim that
on account of repayment of the entire loan amount,
Respondent-Society executed Release Deed dated 11th July
2016 in favour of the Petitioners releasing their charge over
the two mortgaged properties.
5. The Respondent-Society later claimed that the
Petitioners had neither repaid the loan amount, nor any ‘No
Dues Certificate’ was issued by the Society. The Respondent-
Society also denied having executed any Release Deed in
favour of Petitioners. The Respondent-Society claims that its
Branch Manager unauthorizedly issued ‘No Dues Certificate’
and executed Release Deed without any decision to that effect
Page 6 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
being taken in the managing committee meeting of the
Society.
6. The Respondent-Society has accordingly filed
Special Civil Suit No.51/2019 seeking a declaration that
various Release Deeds unauthorizedly executed by the Branch
Manager are ab initio void and not binding on the Respondent-
Society. It has also sought a declaration that it continues to
have the charge over mortgaged properties in pursuance of
various Mortgage Deeds executed in his favour. Some of the
subsequent Sale Deeds executed by the
borrowers/guarantors/mortgagor are also sought to be
cancelled in the said suit. The Respondent-Society sought
temporary injunction against the Defendants in Special Civil
Suit No.51/2019 to restrain them from creating third party
rights in the suit properties. By order dated 30th April 2019,
the Trial Court proceeded to reject the Application at Exhibit-5
for grant of temporary injunction. The Respondent-Society
instituted Appeal From Order No. 656 of 2019 challenging the
order dated 30th April 2019. In that Appeal from Order, this
Court passed Interim Order of status-quo . By order passed on
19th October 2023, this Court has disposed of Appeal from
Page 7 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Order No.653 of 2019 continuing the order of status-quo till
decision of the suit.
7. Parallelly, Respondent-Society initiated proceedings
for issuance of recovery certificate under Section 101 of the
Act of 1960 against borrowers and guarantors. So far as
present petitions are concerned, Application
No.101/95/537/2019 was filed before the Assistant Registrar,
Co-operative Societies (Parseva), Baramati. The Application
was resisted by Petitioners inter alia contending that the
entire amount of loan has been repaid by them. They
produced a receipt dated 7th July 2016 to demonstrate
repayment of loan. They also relied upon Release Deed dated
11th July 2016 and contended that the bank never issued any
notice for recovery of any outstanding amount towards loan
since the year 2016.
8. The Assistant Registrar proceeded to pass order
nd
dated 22 November 2019 holding that since the Respondent-
th
bank had issued ‘No Dues Certificate’ on 11 July 2016 and
executed Release Deed, no amount was due or payable from
Petitioners. It was further held that the Assistant Registrar did
not have jurisdiction to rule on genuineness of ‘No Dues
Page 8 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Certificate’, Release Deed, etc. It was held that evidence in
the form of examination-in-chief and cross-examination cannot
be recorded before the Assistant Registrar. By recording these
reasons, the Assistant Registrar proceeded to reject the
recovery application filed by the Respondent-Society.
9. Respondent-Society filed Revision Applications
before the Divisional Joint Registrar, Co-operative Societies,
Pune challenging the decisions of Assistant Registrar. The
Revision Applications were opposed by Petitioners by filing
their reply.
10. The Divisional Joint Registrar proceeded to partly
allow the Revision Applications by order dated 31st December
2021 remanding the proceedings before Assistant Registrar
for fresh decision. Petitioner are aggrieved by the orders
passed by the Divisional Joint Registrar and have accordingly
filed the present Petitioners.
11. Mr. Sonawane, the learned counsel appearing for
the Petitioners would submit that the Divisional Joint Registrar
has erred in setting aside the orders passed by the Assistant
Registrar. That, disputed questions relating to genuineness of
Page 9 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
‘No Dues Certificate’ and authority to execute Release Deed
on behalf of the Respondent-bank, cannot be decided in
recovery proceedings under Section 101 of the Act of 1960.
That, Petitioners have valid defence to oppose the proceedings
on account of which recovery certificate cannot be issued in a
summary manner. That, execution of Release Deed would
prima facie indicate repayment of the entire loan amount and
once prima facie case is made out by the Petitioners, Registrar
cannot exercise powers under Section 101 of the Act of 1960.
That, Respondent-bank has alternate and equally efficacious
remedy of filing a Dispute under Section 91 of the Act of 1960
wherein detailed enquiry can be conducted by adducing
evidence by both the parties. In support of his contentions, he
would rely upon Judgment of Division Bench of this Court in
Top Ten Vs. State of Maharashtra 2012 (1) Mh.L.J. 347. He
would submit that the bank has already filed Special Civil Suit
No. 51/2019 with regard to the validity of Release Deed
executed on behalf of the bank. That, Application for
temporary injunction sought by Respondent-bank is already
rejected in that suit, thereby demonstrating non-existence of
any prima facie case in favour of Respondent-bank. That, the
finding recorded by the Divisional Joint Registrar as are such
that the Assistant Registrar would feel bound to issue to
Page 10 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
recovery certificates, ignoring the lawful defences of
Petitioners.
12. Per Contra, Mr. Godbole, the learned senior
advocate appearing for the Respondent Credit-Society would
oppose the petitions and support the orders passed by the
Divisional Joint Registrar. He would submit that the orders
under challenge are merely orders of remand and not orders
granting recovery certificate. That, no prejudice is caused to
the Petitioners since the proceedings are merely remanded
with a view to examine whether the Respondent-Society has
made out any case of issuance of recovery certificate. That, all
defences can be raised by the Petitioners before the Assistant
Registrar.
13. Mr. Godbole would further submit that the ‘No dues
Certificates’ are fake and issued without any authority. That,
there is no evidence of repayment of loan. The Release Deeds
are also silent on the issue of the repayment. That, though
‘No Dues Certificate’ in the present case is issued on 24th
October 2016, Petitioners have paid installments after
issuance of such certificates, thereby demonstrating complete
falsity in the same. That, the Bank did not authorise the
Branch Manager to execute Release Deeds. That there is no
Page 11 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
resolution adopted by the society for closure of loan accounts
or for execution of Release Deeds. That, the bank has
produced certified extracts of loan accounts demonstrating
outstanding amounts from Petitioners. That, Respondent-
Society has been defrauded by its Branch Manager in
connivance with one Shri. Sagar Kate, who is the main culprit
in the entire episode. That the Societyhas lodged criminal
proceedings against the Branch Manager. He would pray for
dismissal of the petitions.
14. Rival contentions of parties now fall for my
consideration.
15. The issue that arises for consideration in the
present petitions is whether proceedings under Section 101 of
the Act of 1960 is the correct remedy for recovery of alleged
dues of Respondent-Society from Petitioners. Section 101
envisages summary enquiry for issuance of recovery
certificate. Petitioners contend that complicated questions and
disputed facts are involved in the present case which cannot
be determined by the Assistant Registrar while exercising
jurisdiction under Section 101 of the Act of 1960. It would
Page 12 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
therefore be apposite to reproduce provisions of Section 101,
which reads thus:-
“ 101. Recovery of certain sums and arrears due to certain
societies as arrears of land revenue]
(1) Notwithstanding anything contained in sections 91,
93 and 98, on an application made by a resource society
undertaking the financing of crop and seasonal finance as
defined under the Bombay Agricultural Debtors Relief Act, 1947,
[or advancing loans for other agricultural purposes repayable
during a period of not less than eighteen months and not more
than five years] for the recovery of arrears of any sum advanced
by it to any of its members on account of the financing of crop or
seasonal finance [or for other agricultural purposes as aforesaid]
or by a crop-protection society for the recovery of the arrears of
the initial cost or of any contribution for obtaining services
required for crop-protection society or for the recovery of the
arrears of the initial cost or of any contribution for obtaining
services required for crop protection which may be due from its
members or other owners of lands included in the proposal (who
may have refused to become members) or by a lift irrigation
society for the recovery of arrears of any subscription due from
its members for obtaining services required for providing water
supply to them, [or by a Tulaka or Block level village artisans
multipurpose society advancing loans and arranging for cash
credit facilities for artisans for the recovery of arrears of its
dues,] [or by a co-operative dairy society advancing loans for the
recovery of arrears of any, sum advanced by it to any of its
members or by an urban co-operative bank for the recovery of
arrears of its dues, [or any sum advanced by the District Central
Co-operative Bank to its (individual) members or by non-
agricultural co-operative credit society for the recovery of the
arrears of its dues) or by salary-earners co-operative society for
the recovery of arrears of its dues, or by a fisheries co-operative
society for the recovery of arrears of its dues,) [or by any such
society or class of societies, as the state Government may from
time to time, notify in the Official Gazette, for the recovery of any
sum advanced to, or any subscription or any other amount due
from, the members of the society or class of societies so not
notified;] and [on the society concerned furnishing a statement of
accounts and any other documents as may be prescribed) in
respect of the arrears, the Registrar may, after making the
inquiry in such manner as may be prescribed, grant a certificate
for the recovery of the amount stated therein to be due as
arrears. The application for grant of such certificate shall be
made in such form and by following such procedure,
accompanied by such fees and documents as may be prescribed.
[Explanation I.— For the purposes of this sub-section, the
expression "other agricultural purposes" includes dairy,
pisciculture and poultry.]
[Explanation. II— ]*
Page 13 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
(2) Where the Registrar is satisfied that [the concerned
society has failed to take action under the foregoing sub-section
in respect of any amount due as arrears,] the Registrar may, of
his motion, after making such inquiries as may be prescribed],
grant a certificate for the recovery of the amount stated therein
to be due as arrears and such a certificate shall be deemed to
have been issued as if on an application made by the society
concerned.
(3) A certificate granted by the Registrar under sub-
section (1) or (2) shall be final and a conclusive proof of the
arrears stated to be due therein, and the same shall be
recoverable according to the law for the time being in force [as
arrears of land revenue. A revision shall lie against such order or
grant of certificate, in the manner laid down under section 154
and such certificate shall not be liable to be questioned in any
court].
(4) It shall be lawful for the Collector and the Registrar
to take precautionary measures authorised by sections 140 to
144 of the Bombay Land Revenue Code, 1879 or any law or
provision corresponding thereto for the time being in force, until
the arrears due to [the concerned society), together with interest
and any incidental charges incurred in the recovery of such
arrears, are paid, or security for payment of such arrears is
furnished to the satisfaction of the Registrar. ”
16. Thus, under Section 101, the Registrar is
empowered to make an enquiry and issue recovery certificate
on furnishing a statement of accounts and other documents as
may be prescribed. The remit of enquiry before the Registrar
under Section 101 is thus limited, who is not supposed to
determine disputed questions by directing parties to adduce
evidence. He has to merely record a satisfaction that the
amount demanded is due from a member. Such satisfaction is
required to be recorded by the Registrar after taking into
consideration the statement of accounts submitted by the
Society. Though the words ‘any other documents’ are also
used in sub-Section (1) of Section 101, it does not mean that
Page 14 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
the Registrar can act like a Court by appreciating evidence
produced by parties in support of their respective claims.
17. Sub-Section (1) of Section 101 begins with a non-
obstante clause providing that ‘ notwithstanding anything
contain in Section 91, 93 and 98…. ’, it would therefore be
necessary to reproduce the provisions of Section 91 of the Act
of 1960 which reads thus:-
“91. Disputes
(1) Notwithstanding [anything contained] in any other law for
the time being in force, any dispute touching the constitution,
[elections of the committee or its officers [ ]], conduct of general*
meetings, management or business of a society shall be referred by
any of the parties to the dispute, or by a federal society to which the
society is affiliated or by a creditor of the society, [to the co-
operative Court] if both the parties thereto are one or other of the
following:—
(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 legal representative of any deceased
officer, deceased agent or deceased servant of the society, or the
Liquidator of the society [or the official Assignee of a de-registered
society).
(b) a member, past member of a person claiming through a
member, past member of a deceased member of society, or a society
which is a member of the society [or a person who claims to be a
member of the society;]
(c) a person other than a member of the society, with whom the
society, has any transactions in respect of which any restrictions or
regulations have been imposed, made or prescribed under sections
43, 44 or 45, and any person claiming through such person;
(d) a surety of a member, past member or deceased member, or
surety of a person other than a member with whom the society has
any transactions in respect of which restrictions have been
prescribed under section 45, whether such surety or person is or is
not a member of the society;]
(e) any other society, or the Liquidator of such a society [or-de-
registered society or the official Assignee of such a de-registered
society].
Provided that, an industrial dispute as defined in clause (k) of
section 2 of the Industrial Disputes Act, 1947, or rejection of
nomination paper at the election to a committee of any society, or
refusal of admission to membership by a society to any person
Page 15 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
qualified therefor [or any proceeding for the recovery of the amount
as arrear of land revenue on a certificate granted by the Registrar
under sub-section (1) or (2) of section 101 or sub-section (1) of
section 137 or the recovery proceeding of the Registrar or any
officer subordinate to him or an officer of society notified by the
State Government, who is empowered by the Registrar under sub-
section (1) of section 156,] [or any orders, decisions, awards and
actions of the Registrar against which an appeal under section 152
or 152A and revision under section 154 of the Act have been
provided.] shall not be deemed to be a dispute for the purposes of
this section.]
(3) Save as otherwise provided under [sub-section (2) to section
93], no Court shall have jurisdiction to entertain any suit or other
proceedings in respect of any dispute referred to in sub-section (1).
Explanation 1 .—A dispute between the Liquidator of a society [or
an official Assignee of a de-registered society] and [the members
(including past members, or nominees, heirs or legal representative
or deceased members)] of the same society shall not be referred [to
the co-operative Court) under the provisions of sub-section (1).
Explanation 2 .-For the purposes of this sub-section, a dispute shall
include-
(i) a claim by or against a society for any debt or demand due to
it from a member or due from it to a member, past member or the
nominee, heir or legal representative of a deceased member, or
servant for employee whether such a debt or demand be admitted
or not;
(ii) a claim by a surety for any sum or demand due to him from
the principal borrower in respect of a loan by a society and
recovered from the surety owing to the default of the principal
borrower, whether such a sum or demand be admitted or not;
(iii) a claim by a society for any loss caused to it by a member,
past member or deceased member, by any officer, past officer or
deceased officer, by any agent, past agent or deceased agent, or by
any servant, past servant, past servant or deceased servant, or by
its committee, past or present, whether such loss be admitted or
not;
(iv) a refusal or failure by a member, past member or a nominee,
heir or legal representative of a deceased member, to deliver
possession to a society of land or any other asset resumed by it for
breach of condition as the assignment.
18 . As opposed to the proceedings under Section 101, a
Cooperative Court under Section 91 is empowered to decide
‘any dispute’ between a society and member so long as in
touches the constitution, elections of the committee or its
officers conduct of general meeting and management or
Page 16 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
business of the society. The jurisdiction conferred on the
Cooperative Court is thus wide enough to virtually decide
every dispute between a member and the society. Since sub-
Section 1 of Section 101 begins with a non-obstante clause ,
the said provision under Section 101 is in addition to the
remedy provided to the society under Section 91.
19. The issue with regard to the difference in
jurisdictions vested in Registrar under Section 101 and
Cooperative Court under Section 91 has been discussed by
Division Bench Judgment of this Court in Top Ten ( supra ).
This Court held in para 13, 14, 15, 16, 17,18, 19 as under :-
13. Perusal of section 101 reveals that it is the last section
in Chapter IX of 1960 Act. It's heading is "Recovery of arrears
due to certain societies as arrears of land revenue". Important
words to be noted are "arrears due to certain societies". Sub-
section (1) then contains a long list of various types of societies
and it is not in dispute that the respondent credit co-operative
society before this Court are covered thereunder. After this list
of societies, again the important words appear and those words
are "and on the society concerned furnishing a statement of
accounts in respect of the arrears." Thus the society which
invokes this remedy has to file statement of accounts showing
how it is entitle to recover those arrears. Thereafter the
Registrar has been given authority to make enquiry in such
manner as may be prescribed. Depending upon outcome of that
enquiry, he can issue a certificate for recovery of amount stated
in the certificate as due towards arrears. The procedure
prescribed for undertaking such enquiry is envisaged in
Chapter VIIIA of 1961 Rules. The petitioners as also
respondents accept that this is a speedy remedy of summary
nature envisaged by the legislature. We find sub-section (2) of
section 101 important. It enables the Registrar to issue such
certificate on his own motion, after undertaking enquiry, if he is
satisfied that concerned society has failed to take action under
the foregoing sub-section in respect of any amount due as
arrears. This power given to the Registrar to recover amount of
arrears due to a society itself shows the desire with which this
Page 17 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
provision has been inserted in the statute book. The language
itself shows that the recovery contemplated is of arrears due to
society. The recovery is again by a speedy remedy by treating it
as arrears of land revenue.
14. Section 91 noted above enables the Co-operative Court
to decide disputes about the amounts claimed by the society as
arrears. Recovery of loan is also possible under section 91.
Section 94 deals with procedure for settlement of disputes and
power of Co-operative Court. Section 94(4) states that save as
otherwise directed by the State Government in any case or
class of cases, every dispute shall be decided in such summary
manner as may be prescribed and as expeditiously as possible.
Sub-section (1A) obliges the Co-operative Court to decide
dispute within 6 months. Sub-section (1) confers upon Co-
operative Court a power to summon and enforce attendance of
witness, to compel them to give evidence on oath, affirmation
or affidavit and to compel production of documents.
15. Division Bench of this Court in 1998 (2) LJ 628, Madhav
Karmarkar vs. State of Maharashtra and others, has held that
the Co-operative Courts are established to decide civil disputes
and are part and parcel of Civil Courts function. The procedure
to be followed by the Co-operative Court is envisaged in
Chapter VIII of 1961 Rules. Rule 77-E, prescribes procedure for
hearing and decision of disputes. Rule 77F prescribes summary
procedure for deciding disputes. Any dispute for recovery of a
debt upon promissory note, Hundi, Bill of exchange or bond
with interest accrued in such instrument, or under byelaw and
certain other types of recovery disputes, can be tried as
summary disputes. It is not necessary for this Court to go into
details of the procedure prescribed, but then briefly stating, the
procedure is not different than one prescribed under Order
XXXVII of the Code of Civil Procedure. Section 98 of 1960 Act
provides the mode and manner in which money can be
recovered. Section 93(1) of 1960 Act enables the President of
the Co-operative Appellate Court to withdraw and transfer
anydispute from one Co-operative Court to any Co-operative
Court.
Sub-section (2) enables a party to a dispute to apply to the Co-
operative Court, pointing out that a complicated question of law
and fact is required to be adjudicated. The Co-operative Court
in that situation
can suspend the proceedings before it to enable such party to
move the Civil Court for getting it adjudicated. However, if such
civil suit is not filed within 2 months, the Co-operative Court
has to continue with adjudication before it.
16. Section 101 which opens with non obstante clause reads
“101(1). Notwithstanding anything contained in sections 91, 93
and 98. on an application made by" Thus this section gives an
additional remedy to particular types of societies as
enumerated therein. Normal remedy envisaged is under section
filed by such society can be tried as a regular dispute as per
Rule 77-E or then as a summary dispute under Rule 77F. Rule
77F contemplates and identities a particular type of disputes
for summary disposal. Thus from otherwise, large types of
Page 18 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
disputes which may be filed before the Co-operative Court and
disposed of under Rule 77-E, a category is carved out for
expeditious disposal where the debtor like the present
petitioner has to seek a leave to defend, as per Rule 77F(3).
Section 101 carves out a still narrower type of dispute or
controversy. It speaks of arrears due to certain societies and its
recovery as land revenue. Therefore, it proceeds on "arrears
due" and only for that purpose the concerned society has to
furnish a statement of account in respect of the arrears. The
Registrar has to make an enquiry only in relation to those
arrears. It is, therefore, obvious that the legislature which
thought it proper to extend to a debtor/borrower an opportunity
of claiming leave to defend under section 94(4) of the 1960 Act,
read with Rule 77F, has itself provided this remedy where very
narrow enquiry is required. The legislature obviously has given
importance to cooperative movement and public interest which
is evident from sub-section (2) of section 101. The enquiry
contemplated by the registrar is, therefore, extremely narrow.
The learned Additional Government Pleader appearing on
behalf of the respondent State has pointed out that wherever
necessary legislature has expressly conferred power upon the
authority to record evidence. Section 94(1) and section 144D
are pointed out to be instances of such use of power by the
legislature. It is an admitted position here that Chapter VIIIA of
1961 Rules or then section 101 of 1960 Act, do not confer such
power upon the Registrar while conducting enquiry as
necessary under section 101.
17. Chapter VIIIA of 1961 Rules vide its Rule 86A shows
procedure for filing application for grant of certificate for
recovery. The form in which it is to be filed is also prescribed
and documents which must accompany are also stipulated.
Form "U" in which application under section 101 is required to
be filed shows the requirement of disclosure of relevant facts
by the concerned society: all necessary facts which make the
respondents before that authority either borrower or guarantor
the procedure followed for sanctioning loan, securities
furnished,: documents executed. The applicant then has to
point out failure to repay principal amount and interest upon it
and demand/demands made by the concerned society. A
resolution of the Board of Directors to file an application under
section 101 transaction is also required to be pleaded. Details
of loan transaction are also required to be pointed out as part
and parcel of this application. The application is required to be
supported by affidavit of responsible officer of a co-operative
society. Rule 86B contemplates scrutiny of such application by
the Registrar. Registrar cannot issue notice to other side, if
such application is incomplete in material respect. The other
side is expected to file written statement. Rule 86C
contemplates appearance of party, either personally or through
an Advocate and consequence of failure to appear. Rule 86D
enables both the parties to file documents. It also enables the
Registrar to call for such other documents from opposite party
by order in writing, if production of such document is found
Page 19 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
essential. Request for such production from opponent cannot
be entertained before he files his written statement.
Adverse inference can be drawn if the document is not
produced, after such direction. The applicant Society has to
prove contents of its application and also show how the
contentions raised in defence by other side are not correct.
After this exercise is undertaken by the applicant Society, the
opponent has been given opportunity to file reply in support of
his defence, and after such reply, Registrar has to hear oral
arguments. Then he has to deliver a reasoned judgment under
Rule 86F. If he issues certificate, it has to be in Form "V". Rule
86-E specifically stipulates that no cross-examination of any of
the parties is permitted.
18. Use of both words i.e., "arrears and due" together in
section 101 is itself manifestation of very limited inquiry felt
necessary under section 101 before issuing the certificate. In
plain English, both words may be synonymous. New Oxford
Advanced Learner's Dictionary gives following meaning of
these words. "Arrears" means a money which has not been paid
at right time. "Due" is stated to mean it must be paid
immediately, owed to somebody as it is their right or they have
done something to deserve it. In Chambers 20th Century
Dictionary; word "Arrear" means that which remains unpaid or
undone. Word "Due" means - owed, that ought to be paid to
another. Blacks Law Dictionary (9th Ed.) states "Arrears"
means the state of being behind in payment of a debt or the
discharge of an obligation, an unpaid or overdue debt, Word
"Due" means immediately enforceable, owing or payable,
constituting a debt. Advanced Law Lexicon by P. Ramanatha
Aiyyar 3rd. Ed. also shows same meaning of word "Due". It also
points out that said word has different meanings and that
meaning has to be put on it which fits in with the context.
Meaning of Arrears shows that which remains unpaid though
due. T.P. Mukherjee's Law Lexicon states "Arrears" means
payment remaining unpaid at the due time. It also explains
"due" to mean amount which has matured and is in arrears.
1975 Mh.L.J. (SC) 22 = AIR 1974 SC 1613, Dhan Singh
Ramkrishna Chaudhuri vs. Laxminarayan Ramkrishan shows
that arrears means money unpaid at due time. Here, it is
beyond doubt that both these words do not signify same state
of affairs I.e., non-payment. Word "Due" therefore is not
duplication of what is conveyed by word "arrears". It indicates
that amount which is found or determined to be outstanding
and hence, recoverable. Thus statement of accounts and other
facts essential under Rules to be disclosed by the concerned
Society and to be looked into by the Registrar reveal that said
amount of arrears has to be "due" i.e., payable. This quasi-
judicial exercise is made final by legislature and not kept open
under section 91 only because of possibility of determination of
the limited aspect about arrears due without adjudication on
any disputed questions of facts. Such factual disputes cannot
and have not been subjected to and fall outside the procedure
under section 101. Thus, either the Arrears are already
declared due by some authority or then can be ascertained on
Page 20 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
the basis of statement of accounts and other material on record
by Registrar. Moment it is demonstrated to Registrar that a
bona fide and genuine defense about said arrears is raised
which calls for a finding on disputed facts, need for cross-
examination surfaces and section 101 ceases to apply.
Procedure laid down for enquiry under section 101 itself
manifests said legislative intention. It cannot be even urged
that legislature made that certificate final while denying the
right to dispute the facts cardinal for its determination and
intended to fasten the recovery as liability upon a person
having bona fide and valid defence. Section 101(2) again
indicates this as it expects the Registrar to be satisfied about
the failure of concerned society to take steps under its sub-
section (1) in respect of any amount "due as arrears".
19. Thus very small types of disputes in which only
limited question is of quantification of arrears due, is to
be looked into by such Registrar while undertaking
enquiry under section 101 . Importance therefore, is to
statement of accounts. The enquiry undertaken is only aimed at
ascertaining whether amount disclosed in statement of
accounts as arrears, is correct and due. The limited
opportunity of defence is, therefore, extended to the
borrower like petitioners. The correctness of amount
shown as arrears can be verified from the accounts and
from accounts of the society and from receipts produced
by other side. Denial of cross-examination in this
situation only shows legislative intent that if a genuine
and disputed question of facts is found arising by the
Registrar, he cannot proceed to resolve that question.
The concerned society, in such circumstances, has to take
recourse to filing of a dispute under section 91, where
such disputed questions can be gone into. Hence, a bona
fide defence being raised by a borrower or other person
against whom such certificate is sought, cannot be
resolved by the Registrar under this jurisdiction . If he
finds such dispute arising, he has to deny the recovery
certificate by passing appropriate judgment under Rule 86F.
In Ramchandra and another vs. Collector, Nagpur and
others (supra), the Division Bench of this Court has looked into
the provisions of section 137. Section 137 (1) was earlier a
provision pari materia with provisions of section 101. Section
137(1) enables the Registrar to make such enquiry 'as he
deems fit.' Section 101 was also containing same phrase till 10-
5-2006. On that date, the said words have been replaced and
Registrar, is obliged to conduct enquiry in such manner as may
be prescribed. Thereafter, Chapter VIIIA has been added to
1961 Rules, prescribing the mode of enquiry. Thus, said
Division Bench judgment is no longer relevant for interpreting
the scheme of section 101. Paragraph 26 of this Division Bench
judgment on which the petitioners have placed reliance,
however, does not show any express finding about need of
extending an opportunity of cross-examination. Moreover, there
is no provision either in 1960 Act or in 1961 Rules, prohibiting
Page 21 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
such cross-examination in section 137 enquiry. This judgment,
therefore, is of no assistance in present situation.
(emphasis & underlining supplied)
20. Thus, as held by Division Bench of this Court in
Top Ten (supra), the Registrar can decide only small types of
disputes relating to quantification of arrears, etc., where only
limited opportunity of defence can be extended to the
opponents. The Registrar can undertake enquiry into
correctness of amounts demanded from a member. However, if
a genuine defence is raised and disputed question of facts
arise before the Registrar, he cannot decide such questions
and the society is required to file dispute under Section 91.
The Division Bench has held the Registrar does not have
jurisdiction to permit parties to lead evidence or to conduct
cross-examination. Thus, in every case where adducing of
evidence and grant of opportunity of cross-examination
becomes necessary, the Registrar will have to stay away from
such proceedings and relegate the parties to jurisdiction
under Section 91.
21. Having discussed the remit of enquiry which a
Registrar can undertake under Section 101 as opposed to the
wider jurisdiction of Cooperative Court under Section 91, it
Page 22 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
would be necessary to examine as to whether the Registrar
can decide the proceedings instituted by Respondent-Society
for issuance of recovery certificates in the present cases.
Though, the Respondent-Society has sought issuance of
recovery certificates by producing certified extracts of
accounts showing various amounts due from Petitioners, the
Petitioners have raised a defence that the entire amount has
been repaid by them and that no amount is due or payable in
the loan accounts. The defence is backed, essentially by two
documents viz. ‘No Dues Certificates’ and Release Deeds. It
appears that the Petitioners in Writ Petition No.8440 of 2023
have also relied upon receipt dated 7th July 2016 issued in the
name of Monika Sagar Kate to demonstrate repayment of the
loan. In the light of this defence taken and the documents in
the form of ‘No Dues Certificate’, Release Deeds and receipts
of repayment being produced, the Registrar will have to
record his findings qua those defences and documents. The
Respondent-Society has taken a plea that the ‘No Dues
Certificate’ are either fake or have been issued without
authority by its Bank Manager. The Society will have to prove
this assertion by leading evidence. In respect of Release Deed,
stand is taken by the Society that the Branch Manager did not
have any authority to execute Release Deeds on behalf of the
Page 23 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
Society. These contentions raised by the Respondent-Society
will have to be proved by adducing evidence. The Registrar,
whose ambit of enquiry is restricted to perusal of statement of
account for deciding proceedings under Section 101, will not
be in a position to decide the complicated question as to
whether the Release Deeds are validly executed or whether
the ‘No Dues Certificates’ are genuine. Neither Respondent-
Society will be in a position to adduce evidence by examining
any witnesses nor Petitioners can cross examine them. Similar
is the position if Petitioners desire to lead evidence to prove
authority in favour of the Branch Manager who executed the
Release Deeds. In my view therefore, nature of the dispute is
such that the same cannot be adjudicated in proceedings
under Section 101.
22. It must also be borne in mind that the question of
enforceability of Release Deeds is raised in Special Civil Suit
No. 51 of 2019 filed by the Society. It is Civil Court who would
decide whether the Release Deeds were executed with proper
authority and whether they would bind the parties. Before
such Suit could be decided, the Society desires that the
Registar should proceed on a presumption that the Release
Deeds are invalid. Mr. Godbole has canvassed that the issue of
Page 24 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
dues recoverable from Petitioners is distinct from the validity
of release deeds and that during pendency of Society’s Suit for
declaration of invalidity of release deeds, the Society can
attempt recovery on an assumption that there is no mortgage
on its favour. While Mr. Godbole may not be entirely wrong in
contending so, the question whether the issue of correctness
of ‘No Dues Certificates’ could be decided in recovery
proceedings still begs an answer. Therefore, even if the
Society decides to wait for decision of Civil Suit for
enforceability of mortgages, it will have to ultimately prove
that the ‘No Dues Certificates’ are either fraudulent or issued
without any authority. Opportunity also needs to be given to
Petitioners to prove their defence about deposit of amounts
and non-reflection of those deposits in the accounts
statements.
23. Perusal of the Order passed by the Divisional Joint
Registrar would indicate that he has proceeded to virtually
discard the ‘No Dues Certificates’ and Release Deeds by
recording a finding that the Petitioners have deposited some
amount in the loan account after issuance of ‘No Dues
Certificates’ and after execution of Release Deeds. The nature
of findings recorded by the Divisional Joint Registrar are such
Page 25 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
that the Assistant Registrar will not be left with much choice
but to ignore the ‘No Dues Certificates’ and Release Deeds
while deciding proceedings under Section 101. Thus, without
adducing evidence by any parties and without an opportunity
of cross-examination to the Petitioners, the Divisional Joint
Registrar has proceeded to hold that the ‘No Dues
Certificates’ and Release Deeds will have no impact on the
loan accounts, which show outstanding amounts in the names
against Petitioners. In my view the Divisional Joint Registrar
has committed a serious error in recording such findings,
without being equipped with any material on record to
support its findings.
24. In my view therefore, the impugned orders passed
by the Divisional Joint Registrar are clearly unsustainable.
Respondent-Society has contended that no prejudice would be
caused to Petitioners on account of remand of the proceedings
to the Assistant Registrar. In my view in fact no prejudice
would be caused to the Respondent-Society on account of
rejection of its recovery proceedings filed under Section 101
by the Assistant Registrar. Petitioners have alternate and
equally efficacious remedy filing disputes under Section 91 of
the Act. Therefore passing of order by the Assistant Registrar
Page 26 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
would not render Respondent-society remediless. The society
has already filed a Civil Suit seeking declaration that the
Release Deed is void and not binding on it. It can file Disputes
before Cooperative Court seeking recovery of alleged
outstanding loan amounts from Petitioners. On the contrary, if
the Assistant Registrar is allowed to decide proceedings under
Section 101, he will not be in a position to decide the issue as
to whether the No Dues Certificates and Release Deeds would
bind the Respondent-Society. However, while relegating the
Society to remedy under Section 91, this Court is conscious of
the nature of allegations levelled by the Society against the
person at whose behest the moneys were borrowed as well
against the Branch Manager. Therefore, mere relegation to
alternate remedy under Section 91 would not be treated as a
reflection on the Society’s right to recover its dues, if indeed
the same are found to be due from Petitioners. At the same
time, filing of Disputes by the Society against Petitioners shall
not be used as an opportunity by the Petitioners to delay the
recovery proceedings. Therefore, the proceedings filed before
the Cooperative Court, if and when filed by the Society, need
to be expedited. The Cooperative Court where such Disputes
are filed shall proceed to decide the same in an expeditious
Page 27 of 28
R Dilwale 10-wp-8440-22 & Ors.odt
manner without letting the Petitioners seek unnecessary
adjournments.
25. Writ Petitions accordingly succeed. Orders passed
by the Divisional Joint Registrar remanding the proceedings to
Assistant Registrar are set aside. The Respondent-Society
shall however be at liberty to file Disputes under Section 91 of
the Act of 1960 for recovery of alleged amounts due from
Petitioners. If such disputes are filed, the Co-operative Court
shall proceed to decide the same, in an expeditious manner,
without being influenced by any of the observations made in
this judgment. The Writ Petitions are accordingly allowed.
Rule is made absolute in above terms.
SANDEEP V. MARNE, J
Page 28 of 28
Signed by: Rameshwar L. Dilwale
Designation: PA To Honourable Judge
Date: 26/10/2023 15:36:39