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2004 Supreme(Bom) 1018

IN THE HIGH COURT OF BOMBAY
Shah A.P., C.J. Kamdar S.U., J.
Kausalya Sampat .... Petitioner.
Versus
Vasant Sahakari Bank Ltd. others.... Respondents.
Writ Petition No. 5065 of 2004, decided on 22-7-2004.
Advocates appeared :
A.K. Abhyankar with Suman Jain, for petitioner.
Shivajirao Masal, for respondent No. 1.

Headnote:Maharashtra Co-operative Societies Act, 1960 - Sections 101 and 154(2-A) - Civil Procedure Code, 1908, Order XXX, Rule 1 - Issuance of recovery certificate - Against partner of firm - Partner not impleaded as party to proceedings - Suit can be instituted against firm - Firm an association of partners - Partners liable in respect of liabilities of partnership firm - Recovery certificate executable against partner of firm. - Admittedly at the relevant time when the loan was advanced by the 1st respondent to the 2nd respondent firm, the petitioner was a partner in the said firm. Secondly, under the provisions of Order XXX of the Civil Procedure Code, a suit can be instituted against the firm and the firm being an association of the partners the said partners are liable in respect of the liabilities of the said partnership firm. Order XXX, Rule 1 inter alia prescribes that any two or more persons claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action. It is well-settled that the partners are personally liable in respect of the liability of the firm since the partnership firm is not constituted on the principle of limited liability.

       Maharashtra Co-operative Societies Act, 1960 - Section 154(2-A) - Constitution of India, 1950, Articles 14 and 19 - Constitutional validity of Section 154(2-A) of Act - Provisions of Section 154(2-A) constitutionally valid - Not violative of petitioner’s fundamental rights under Articles 14 and 19 of Constitution of India. - The provisions of sub-section (2-A) of Section 154 are constitutionally valid and are not violative of the petitioner’s fundamental rights under Articles 14 and 19 of the Constitution of India.

JUDGMENT - KAMDAR S.U., J.:-The petitioner is challenging the constitutional validity of the provisions of section 154 (2-A) as amended by the Amending Act Maharashtra 41 of 2000. Under the provisions of the sub-section (2-A) it is provided that no application for revision shall be entertained against the recovery certificate issued by the Registrar under section 101 unless the applicant deposits with the concerned society, fifty percent, of the total amount of recoverable dues.

2. These provisions of sub-section (2-A) of section 154 are challenged by the petitioner in the context of the facts which are briefly enumerated as under:-

3. A firm known as M/s. Gajanankrupa Enterprises availed of the loan facilities from the 1st respondent Bank. The petitioner before the Court was a partner of the said 2nd respondent firm. It is the case of the petitioner that with effect from 20-8-1991 the petitioner retired from the said firm and thus ceased to be a partner any further. However, it is an admitted position that at the relevant time of granting the loan to the said partnership firm, the petitioner was a partner in the said firm. Sometime in or about 1998, the 2nd respondent firm filed a dispute under section 91 of the Maharashtra Co-operative Societies Act for the recovery of the dues and by an order dated 8-2-2000 the respondents in the said dispute including the firm were directed to pay a sum of Rs. 34,91,630/- with further interest on the principal sum of Rs. 15 lacs. Accordingly, a certificate for recovery has been issued under section 101 of the Maharashtra Co-operative Societies Act for recovery of sum of Rs. 34,91,630/-. It is the case of the petitioner that on 11-12-2002 a notice was served on the petitioner under Rule 107 of the Maharashtra Co-operative Societies Rules, 1961 and the recovery certificate is sought to be enforced against the assets of the petitioner. On 17-12-2002, the petitioner sought for a certified copy of the said recovery certificate, however, the same was not furnished and ultimately the petitioner received a xerox copy of the certificate dated 18-2-2000. The petitioner thereafter filed a writ petition in this Court being Writ Petition No. 622 of 2003 challenging the said recovery certificate and for various interim reliefs. On 7-4-2004, this Court directed the petitioner to avail of alternative remedy available under the provisions of sections 154 of the Maharashtra Co-operative Societies Act, 1960 and disposed of the petition accordingly.

4. On 27-4-2004, the petitioner filed a revision application under section 154 of the Maharashtra Co-operative Societies Act, 1960 before the Divisional Joint Registrar, Co-operative Societies, Bombay being Revision Application No. 261 of 2004. The petitioner thereafter made an application for dispensing with the condition of deposit of 50% under section 154(2-A) of the Maharashtra Co-operative Societies Act, 1960. On 5-5-2004, the Divisional Joint registrar passed an order rejecting the revision application and stay application on the ground that the petitioner has failed to deposit the amount as prescribed under sub-section (2-A) of section 154 of the Maharashtra Co-operative Societies Act, 1960.

5. In the aforesaid setting of the facts, the petitioner has filed the present petition and has, inter alia, challenged the constitutional validity of sub-section (2-A) of section 154 of the Maharashtra Co-operative Societies Act, 1960 on the ground that the same is ultra vires Articles 14 and 19 of the Constitution of India as the same is arbitrary and discriminatory.

6. Before we proceed further we feel it relevant to reproduce hereunder the provisions of sub-section (2-A) of section 154 of the Maharashtra Co-operative Societies Act, 1960 which read as under :-

"(2-A) No application for revision shall be entertained against the recovery certificate issued by the Registrar under section 101 unless the applicant deposits with the concerned society, fifty percent amount o



















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