At, In the High Court of Bombay at Aurangabad
By, THE HONOURABLE MR. JUSTICE R.M. BORDE
For the Petitioners: G.V. Wani, Advocate. For the Respondents: R1, Mrs. S.D. Shelke, V.P. Patil, AGP.
2. Rule. With the consent of the parties, the matter is taken up for final disposal at admission stage.
3. In all these matters challenge is raised to the enquiry initiated under section 101 of the Maharashtra Co-operative Societies Act in respect of recovery of amount from the petitioners as well as the recovery certificate issued for the purpose of facilitating recovery of amount is also subjected to challenge in these petitions.
4. Petitioners have denied that they have borrowed loan to the extent of amount as contended by the respondent before the Assistant Registrar. In almost all the matters, it is stated that the petitioners or the principle borrowers have borrowed the sum more than Rs.20,00,000/- on 30-3-2007. In some petitions, some of the petitioners are stated to be the guarantors for the borrowing by principle borrowers. It is the contention of the bank that inspite of making demand, the petitioners have not deposited the amount, as such, applications were presented before the Assistant Registrar, Co-operative Societies for issuance of certificate as contemplated by section 101 of the Maharashtra Co-operative Societies Act. It is stated that the Assistant Registrar, after hearing the parties, issued certificate as requested by respondent/ bank as contemplated by section 101 of the Maharashtra Co-operative Societies Act. There are several objections raised by the petitioners in these petitions to the recovery proceedings initiated by the bank. It is pointed out by the petitioners that forged record is created by bank officials as well as the Directors of the bank in respect of the alleged borrowing. It is contended that the surprising feature of the matter is that in almost all the matters loan is stated to have been disbursed on 30-3-2007 itself. In almost all the matters the borrowers are stated to have withdrawn the loan in cash and that too on the same date i.e. on 30-3-2007. It is the defence of the petitioners that they have not at all borrowed the loan amount as contended by the respondent. There were no original documents placed on record before the Assistant Registrar by the bank to demonstrate the alleged withdrawal by the respective petitioner.
It is specifically contended that request was made before the Assistant Registrar for issuance of direction to the respondent / bank to produce original record so as to verify whether infact the documents were executed by the petitioners in respect of the alleged transactions. A serious allegation is made that inspite of specific requests made in that behalf, the documents were not produced before the Assistant Registrar nor were produced during the continuation of proceeding before this court. It is also contended that the Assistant Registrar has not adhered to the procedure as contemplated by Rules 86(a) to 86(f) while holding enquiry in respect of issuance of certificate under section 101 of the Maharashtra Co-operative Societies Act. It is contended that in Writ Petition No.1717/2009 account extracts show that there are entries pertaining to the year 2009-2010 in respect of withdrawal of amount which is shown to have been withdrawn in the year 2008 itself. It is contended that in Writ Petition No.6678/2009 the loan amount is shown to have been disbursed at Aurangabad whereas the guarantor who is the petitioner in the petition is resident of Jalgaon. Doubt is raised as regards existence of borrower on whose account the loan is stated to have been sanctioned.
It is further contended that there are proceedings presented before the Co-operative court by the petitioners in Writ Petition No.1717/2009, 2341/2009, 8261/2009, 6678/2009 and 8072/2009. It is contended that all these questions raised before the Assistant Registrar can be effectively dealt with by the Co-operative court and the Assistant Registrar dealing with the enquiry under section 101 of the Act has to issue order in accordance with the adjudication by the Co-operative court. It is contended that the instructions issued by the Co-operation department in respect of conduct of proceeding by the Assistant Registrar have not been adhered to. Petitioners further contend that the Assistant Registrar has not conducted enquiry in accordance with the provisions of the Act. Although there was insistence on production of original documents, care was not taken to ensure production of documents by the bank. It is contended that order has been passed by the Assistant Registrar directing issuance of certificate without application of mind to the record of the case and as such, the orders need to be set aside.
5. Learned counsel for the respondents supported the order passed by the Assistant Registrar. It is contended that infact those are the cases in respect of renewal of loan. Petitioners in the petitions are the borrowers even prior to the impugned transaction and in order to satisfy the existing liability they borrowed larger sum. It is contended that at the time of securing renewal of the loan, petitioners have executed proper documents and those are in the custody of the bank. Learned counsel for the respondent / bank has shown willingness to produce documents, if directed.
6. Considering the contentions raised by the parties, I am of the opinion that the questions raised in the matter need to be decided by th Assistant Registrar after holding appropriate enquiry as contemplated by provisions of Maharashtra Co-operative Societies Act and the rules framed thereunder. The petitioners have raised many disputed questions of fact which need to be determined only after holding proper enquiry in that behalf. On perusal of the order passed by the Assistant Registrar, it appears that the objection raised by the petitioners for issuance of certificate does not appears to have been properly considered by the adjudicating authority. It was also essential to extend proper opportunity of hearing to both the parties before issuing certificate. The question as to permissibility of continuing the proceedings in the background of pendency of disputes which were instituted before presentation of application under section 101 of the Maharashtra Co-operative Societies Act has also to be taken into account. Clause 10 (v) and (vi) of the circular issued by the Government on 3-3-2001 provides thus :
"v If during the pendency of hearing, the Opponent brings to the notice of the Registrar that he has filed dispute under section 91 for accounts in respect of the loan in question and the co-operative Court has passed interim order restraining recovery of dues, claimed in application, till decision of dispute, then the Registrar, may stay the hearing of the application, till decision of such dispute. If in such dispute accounts are settled, then the Registrar shall issue certificate for the amount adjudicated in such dispute. If dispute is dismissed, then he shall proceed with the application according to law.
vi While deciding the application under section 101 in case of Urban Co-operative Banks and co-operative societies, the Registrar shall give the consideration to the circulars and guidelines issued by the Reserve Bank of India and rate of interest charged in the account. If necessary, the Registrar may call for the relevant circulars and guidelines of the RBI for his satisfaction."
The Assistant Registrar shall take into account the permissibility of continuance of the proceeding on the basis of presentation of dispute prior to presentation of application seeking recovery certificate by the bank. I am sure that the Assistant Registrar will apply mind to the facts of the case and determine the objections. The Assistant Registrar also shall ensure production of documents as requested by the petitioners to verify the objections raised in that behalf. petitioners shall have liberty to raise all the contentions which are raised in these writ petitions, before the Assistant Registrar. The Assistant Registrar shall have due regard to the provisions of Rules 86(a) to 86(f) will conducting proceeding initiated under section 101 of the Maharashtra Co-operative Societies Act. It is also strenuously contended by the petitioners that a note of fabrication of documents at the instance of Directors and officials of the bank has been taken into by the officials of the cooperation department while dealing with enquiry under sections 83 and 88 of the Maharashtra Co-operative Societies Act and certain conclusion are drawn which support the contentions raised by the petitioners herein. It would be open for the petitioners to raise appropriate contentions before the Assistant Registrar and
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the adjudicating authority would be obliged to consider such contentions if raised during the course of enquiry. For the reasons stated above, I am of the opinion that all the petitions presented by the petitioners deserve to be allowed and the same are accordingly allowed. The impugned recovery certificates issued by the Assistant Registrar are quashed and set aside. The Assistant Registrar, Co-operative Societies is directed to reconsider the applications tendered by respondent / bank for issuance of recovery certificate afresh after extending opportunity of hearing to all the parties concerned and after observing the procedure prescribed by Maharashtra Co-operative Societies Act and the rules framed thereunder. Enquiry shall be conducted by the Assistant Registrar as expeditiously as possible preferably within six months from today. Rule is accordingly made absolute. In the facts and circumstances of the case, there shall be no order as to costs.