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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.M. MODAK, J.
Mr. Sadanand Belvalkar & Anr. - Petitioners
Versus
The State of Maharashtra and Ors. - Respondents
Writ Petition (ST) No. 4057 of 2020
Decided On : 13-01-2022
Constitution of India, 1950 - Article 227 - Maharashtra Co-operative Societies Act, 1960 - Section 101, 91, 151 and 163 - Code of Civil Procedure, 1908 - Order 7 Rule 11 (d) - Bank - Loan - Government Resolution - Supervisory Jurisdiction - Scope of jurisdiction of Cooperative Court under Section 91 of the said Act of 1960 - Whether order passed by Maharashtra State Co-operative Appellate Court, Mumbai bench at Pune in Revision Application is open for interference in a supervisory jurisdiction under Article 227 of Constitution - Petitioner being guarantor to loan has filed a dispute before Co-operative Court Pune by taking recourse to provisions of Section 91 of Act, 1960 - There is Government Resolution issued by Government of Maharashtra Department of Corporation. By that resolution guidelines are given to the Urban Co-operative banks in respect of one time settlement towards dues - The guarantor/Petitioner made grievance before Co-operative Court that bank has not accepted his proposal for one time settlement vide letter (whereas in fact bank itself vide notice has advised to participate in OTS) and hence he sought direction from Co-operative Court to bank.
Finding of the Court:
In order to give jurisdiction to Cooperative Court party has to satisfy both these parameters. If a dispute pertains to management or business of the society, it is one of disputes prescribed under Section 91 of said Act, which falls within jurisdiction of the co-operative court. The bank is dealing with business of lending amounts and accepting deposits - As per Section 154 of said Act, authorities can examine record for purpose of ascertaining legality and correctness of the decisions. Whereas, decisions to refuse benefit of one time settlement has to be tested on the lines of guidelines given as per GR. Hence, the dispute is clearly maintainable under Section 91 of said Act - Court may find that appellate court has not considered the provisions of said Act as discussed above and came to erroneous conclusion - Provisions of said Act, and particularly, Section 91, Section 101, Section 154 and Section 163 ought to have been interpreted by considering the mandate given in the government resolution in question. This resolution is the outcome of deliberations and situations created much after passing of said Act - Request before cooperative court is made as per provisions of Order 7 Rule 11 (d) and not under the provisions of Order 7 Rule 11 (a) of the Code of Civil Procedure 1908 - Court inclined to hold that dispute so far as prayer clause (a) of application can certainly entertained and inquired by cooperative court. The prayer clause (b) “to issue no due certificate”, certainly, encroaches on power of the Registrar to issue recovery certificate under Section 101 of the said Act - Petitioner is directed to delete the name of Special Recovery Officer from array of opponent from the file of the proceedings before the cooperative court on the first date of appearance before it after this order.
Result: Writ petition is allowed.
JUDGMENT :
Rule. The only issue arise in this petition is whether order passed by the Maharashtra State Co-operative Appellate Court, Mumbai bench at Pune in Revision Application No. 27 of 2019 dated 17/12/2019 is open for interference in a supervisory jurisdiction under Article 227 of the Constitution.
2. The order under challenge was passed on the Revision application filed by Vidya Sahakari Bank limited (hereinafter referred to as said bank). Present Petitioner is Respondent therein. He is one of the guarantor to the loan sanctioned by the bank to the borrower M/s Mbells Labs present Respondent No. 3.
3. The bank has obtained recovery certificate on 14 July 2017 under Section 101 of Maharashtra Co-operative Societies Act, 1960. The present Petitioner being guarantor to the loan has filed a dispute on 10 June 2018 before Co-operative Court Pune by taking recourse to the provisions of Section 91 of Maharashtra Co-operative Societies Act, 1960. There is Government Resolution dated 25/11/2017 issued by the Government of Maharashtra Department of Corporation. By that resolution guidelines are given to the Urban Co-operative banks in respect of one time settlement towards the dues. The guarantor/Petitioner made grievance before the Co-operative Court that bank has not accepted his proposal for one time settlement vide letter dated 23 February 2018 (whereas in fact bank itself vide notice dated 23 November 2017 has advised to participate in OTS) and hence he sought direction from the Co-operative Court to bank. He made following request –
(b) bank to issue no due certificate.
4. Apart from bank, special recovery officer was also made as a party opponent. After appearance the bank took objection as to the maintainability of the said dispute by taking recourse to the provisions of Order 7 Rule 11 (d) of Code of Civil Procedure. It was turned down by the Co-operative Court as per the order dated 10th December, 2018. The bank got aggrieved and approached the Appellate Court. There they succeeded and the dispute/plaint was returned as held not maintainable as per the order dated 17 December 2019. This order is challenged before this Court.
5. I have heard Mr. Sachin Mandlik, learned counsel for the Petitioners, Mr. A.P. Vanarse, learned AGP for the Respondent/State, and Mr. Shrivallabh Panchpor, learned counsel for the Respondent No. 2.
6. This Court is aware of the limitation on exercising the supervisory jurisdiction. It can be exercised to remedy grave cases of injustice or failure of justice. It is to be exercised with restraint to ensure that the court or tribunal act within the bounds of their authority. Considering the effect of the two orders passed as referred above, this Court feels that the petition cannot be dismissed simply by refusing to exercise supervisory jurisdiction. Two aspects are important.
(b) In given set of facts whether the plaint can be rejected by invoking the provisions of order 7 Rule 11 (d) of Code of Civil Procedure.
7. First glaring mistake is noticed in the impugned operative order. The Appellate Court has directed to return the plaint whereas if a grievance falls under Order 7 Rule 11 (d) of Code of Civil Procedure, the plaint has to be rejected and not to be returned. If the suit is barred by any law, plaint has to be rejected. For that purpose it will be relevant to consider the averments in the protest application made by the bank.
Avernment in the Application
8. There is specific averment in the application about bar of jurisdiction under Section 91 of Maharashtra Co-operative Societies Act (said Act). Firstly for the reason that dispute does not fall within the parameters of the Section and secondly as per proviso the present dispute is carved out of the purview of Section 91 of the said Act. Further
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