2011 Supreme(Bom) 1443

2012 (2) ALL MR 127
In the High Court of Bombay at Nagpur
B.P. DHARMADHIKARI & A.P. BHANGALE
M/s. Top Ten, A Partnership Firm & Others
Versus
State of Maharashtra & Others
WRIT PETITION Nos. 92 & 1230 OF 2009
Decided on : 09-12-2011

Headnote:MAHARASHTRA CO-OPERATIVE CREDIT SOCIETIES ACT, 1961 - Section 101 - Scope of inquiry under - Very small types of disputes in which silly limited question is of quantification of ’arrears due’, is to be looked into by Registrar while undertaking enquiry under Section 101 of Act.

       MAHARASHTRA CO-OPERATIVE CREDIT SOCIETIES ACT, 1961 - Section 101 - Rule 86-E - Bar under Rule 86- E. - Rule 86-E of Rules, 1961, not permitting cross- examination in inquiry proceedings under Section 101 of Act, 1961, neither arbitrary nor in breach of principles of natural justice, constitutionally valid.

       Validity of the provisions of Rule 86-E of the Maharashtra Co- operative Societies Rules. 1961 which does not permit cross- examination in inquiry proceedings under Section 101 of the Maharashtra Co-operative Societies Act, 1960 was challenged as being arbitrary and in breach of principles of natural

       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. 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 imputed questions of facts.

       Such factual disputes cannot and have not been subjected to and fall outside the procedure under Section 101. Thus, either arrears are already declared due by some authority or then can be ascertained on the basic 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 application. 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 d and intended to fasten the recovery as liability upon a person having homicide 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".

       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. 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 he 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 86-F. Section 91 is a general remedy and general law covering all disputes; while section 101 governs extremely a small type or nature therefrom, where only possible dispute is about the quantum of arrears demonstrated to be due.

       If any other type of dispute requiring an adjudication arises, it is not possible for the Registrar or his delegate functioning under Chapter VIII-A to entertain such application and the application in that event needs rejection. The concerned society has then to move the Co-operative Court under section 91 for said recovery. The express bar of such cross-examination under Rule 86-E is because of this very narrow scope of enquiry open to the Registrar under section 101 read with Chapter VIII-A of 1961 Rules. Provisions of Rules 86-E are constitutionally valid.