It is mandatory for the Authorities to
follow the Rules provided in Chapter VIIIA of the
Maharashtra CoOperative Societies Rules 1961
while issuing Recovery Certificates. It is amply
clear that in this case the Recovery Certificate
has been issued without following due procedure
and also without proper service of notice on the
appellants and the Rules of natural justice are
violated. Hence the Recovery Certificate issued
must be held to be invalid and bad in law and
needs to be struck down.
LETTERS PATENT APPEAL NO.98 OF 2009
IN
WRIT PETITION NO. 2490 OF 2008
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
Sundeep Polymers Pvt. Ltd.
VERSUS
1. The State of Maharashtra,
CORAM: NARESH H. PATIL AND
K.K. TATED, JJ.
DATE : 3RD SEPTEMBER, 2010.
1.
2. With the consent of respective counsel of
the parties, this matter is taken up for final
hearing at the admission stage.
3. By this Letters Patent Appeal, the
appellantsOriginal petitioners are assailing
order dated 13th February, 2009, passed by the
learned Single Judge, dismissing the Writ Petition
No. 2490 of 2008.
It is the contention of the appellants that
in the proceedings initiated under section 101 of
the Maharashtra CoOperative Societies Act, 1960
(Hereinafter referred to as “Said Act”), Recovery
Certificate has been issued against them for
recovery of Rs.1,14,00,000/(Rupees One Crore
Fourteen Lakhs) along with interest.
5. It is the case of the appellants that
respondent No.4 issued exparte Recovery
Certificate dated 19th December, 2007 under section
101 of the said Act, in Application No. 1497 of
2007. They preferred an application on 26th
December, 2007 for setting aside exparte
Recovery Certificate issued under Section 101 of
the said Act, under Order 9 Rule 13 of the Code of
Civil Procedure. He submits that without giving
any opportunity of hearing, respondent No.4
Recovery Officer confirmed an order dated 19th
December, 2007 under section 101 of the said Act,
on 22.02.2008. He submits that it is mandatory on
the part of respondent No.4 to follow the
procedure as prescribed under Chapter VIIIA of
the Maharashtra CoOperative Societies Rules,
1961. He submits that respondent No.4 without
giving any reasoned order issued Recovery
Certificate. He submits that as per Rule 86F, it
is duty of respondent No.4 to pass Judgment and
order and thereafter to issue Certificate in Form
6.
Recovery Certificate.
V. In the present case, he has directly issued
Mr. Nagargoje, learned Counsel appearing
for the appellantspetitioners submits that the
learned Single Judge failed to consider the fact
that Recovery Officer without following Chapter
VIIIA of the said Rules issued Recovery
Certificate. He further submits that learned
Single Judge dismissed the Writ Petition, mainly
on the ground that alternate remedy provided under
Section 154 of the Maharashtra CoOperative
Societies Act, for preferring the revision to the
Registrar of the coOperative Societies. He
submits that the learned Single Judge ought to
have considered that if without passing any
Judgment and Order, Recovery Certificate issued by
the Competent Authority, then Courts have power
under Article 226 and 227 of the Constitution of
India to set aside such orders.
7. Mr. Kulkarni, learned Counsel appearing on
behalf of respondents submits that the learned
ig
Single Judge rightly held that the Writ Petition
is not maintainable, when alternate remedy is
available under section 154 of the Maharashtra Co
Operative Societies Act. He further submits that
as on today, the appellants failed to pay more
than one Crore Rupees in the present case. He
further submits that there are other proceedings
initiated by them against the appellants for
recovery of other loans. Therefore, this Court
should not entertain the present Letters Patent
Appeal, under Clause 15 of the Letters Patent Act.
8. We have heard both the sides at length.
Admittedly, in the present case respondent No.4
Recovery Officer without passing any Judgment and
Order issued recovery Certificate. Respondent No.
4 failed to follow the procedure prescribed under
Chapter VIIIA of the said Rules to grant
Certificate of Recovery under Section 101 of the
said Act. Under Rule 86A the procedure is
prescribed for filing the application for granting
Recovery Certificate. Rule 86B provides scrutiny
of application and notice to the parties. Rule 86C
provides procedure for appearance of parties and
consequences of nonappearance, whereas Rule 86D
provides production and inspection of documents.
If other side asked inspection of documents, in
that case, Recovery Officer should allow the same.
Rule 86E prescribed procedure of hearing of the
application. It provides that Registrar should
decide the application within three months from
the first date of hearing. He should allow the
parties to argue orally and thereafter fix the
matter for orders. Rule 86F provides that the
authority should pass reasoned Judgment and order,
and thereafter issue Recovery Certificate in
FormV.
9. We perused the order passed by the learned
Single Judge. The learned Single Judge rejected
the Writ Petition mainly on the ground that
alternate remedy is available under section 154 of
the said Act. We are of the opinion that the
learned Single Judge has not considered the
ig
procedure prescribed under Rule 86A to 86F of the
said Rules. It is crystal clear from the Rules 86A
to 86F that the Authorities pertains quasi
judicial work. The Authorities have to follow the
rules of natural justice. In the present case,
the Authority without passing any Judgment issued
Recovery Certificate under section 101 of the Said
Act. These facts are not considered by the learned
Single Judge.
10.
It is mandatory for the Authorities to
follow the Rules provided in Chapter VIIIA of the
Maharashtra CoOperative Societies Rules 1961
while issuing Recovery Certificates. It is amply
clear that in this case the Recovery Certificate
has been issued without following due procedure
and also without proper service of notice on the
appellants and the Rules of natural justice are
violated. Hence the Recovery Certificate issued
must be held to be invalid and bad in law and
needs to be struck down. This has resulted into
unnecessary waste of time and money by the
11.
appellants as well as the bank.
The learned Single Judge of this Court
(in Group of Writ Petition Nos 1717 of 2009,
Ravindra S/o Waman Ingle and another Vs. Sahakar
Mitra Shri Chandrakant Hari Badhe Sir Urban Co
Operative Credit Soceity Ltd. Varangaon and
others) held that “the Certificate issued without
following amended Rules 86A to 86F of the said
Rules is unsustainable. It is further held that
enquiry is required to be conducted in accordance
with the Rules”.
12. Similar view is taken in the matter of
Khushal Narayanrao Mundhe Vs. State of Maharashtra
and others, reported in 2007(4) Bom. C.R.350, and
unreported Judgment in the matter of Vithal
Laxman Fatangade Vs. The State of Maharashtra and
others in Writ Petition No. 2070 of 2010 dated 27 th
July, 2010 (Coram : V.R.KINGAONKAR, J.).
13. Considering foregoing reasons and basic
infirmities found in the Certificate issued
against the appellants, the appeal is allowed.
The impugned Judgment passed by the learned Single
Judge, dated 13th February, 2009 and the Recovery
Certificate issued by respondent No. 3 dated 19th
December, 2007, are set aside.
14. The Deputy Registrar CoOperative Societies
Aurangabad, Ta. Aurangabad shall conduct denovo
enquiry as per Rules and after following due
procedure pass the appropriate order. The parties
to Appeal shall appear before the Deputy Registrar
on 28th September, 2010 at 11.00 a.m. The parties
waive notice for appearance before Deputy
Registrar.
15. The appellants may file their Written
Statement/Reply on the date of appearance or at
the most within one week thereafter. Thereafter,
the proceedingenquiry shall be completed
expeditiously as contemplated under relevant
ig
provisions and Rules, as far as possible within a
order.
period of three months from the receipt of this
.
The Letters Patent Appeal is allowed in
the above terms.
Sd/ Sd/
[K.K. TATED, J.] [NARESH H. PATIL, J.]
MTK
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