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IN THE HIGH COURT OF BOMBAY
Sandeep V.Marne, J.
Monica Sagar Kate - Appellant
Versus
Joint Registrar Cooperative Societies - Respondent
Writ Petition No. 8440 of 2022
Decided On : 25-10-2023
RECOVERY - CO-OPERATIVE SOCIETIES - Maharashtra Co-operative Societies Act 1960, Sec. 101, Sec. 91 - The court analyzed the provisions of Sec. 101 and Sec. 91 of the Maharashtra Co-operative Societies Act 1960, highlighting that Sec. 101 allows for a summary inquiry for the issuance of recovery certificates for arrears due to certain societies, while Sec. 91 provides a broader jurisdiction for resolving disputes between societies and their members. The court emphasized that the Registrar's role under Sec. 101 is limited to verifying the correctness of the amounts claimed without delving into disputed facts, which must be addressed in a cooperative court under Sec. 91. This distinction influenced the court's decision to set aside the remand order and direct the society to pursue its claims through the appropriate dispute resolution mechanism.
Fact of the Case:
Petitioners, who are borrowers from a credit society, challenged the orders of the Divisional Joint Registrar that allowed the society's revision applications and remanded the case for a fresh decision. The petitioners claimed they had repaid their loans and received 'No Dues Certificates' and Release Deeds, while the society contended these documents were unauthorized and fraudulent.
Finding of the Court:
The court found that the Divisional Joint Registrar erred in remanding the case, as the Assistant Registrar lacked the jurisdiction to resolve the disputed facts regarding the authenticity of the 'No Dues Certificates' and Release Deeds. The court emphasized that such disputes should be resolved in a cooperative court under Sec. 91, not through the summary proceedings of Sec. 101.
Issues: Whether the proceedings under Sec. 101 of the Maharashtra Co-operative Societies Act 1960 were the correct remedy for the recovery of alleged dues from the petitioners, given the existence of disputed facts regarding the repayment of loans and the validity of the 'No Dues Certificates' and Release Deeds.
Ratio Decidendi: The court held that the Registrar's authority under Sec. 101 is limited to a summary inquiry into the amounts claimed, and cannot extend to resolving disputes involving the genuineness of documents or authority to execute them. Such disputes must be adjudicated in a cooperative court under Sec. 91, which has broader powers to examine evidence and resolve factual disputes.
Final Decision: The court allowed the writ petitions, set aside the orders of the Divisional Joint Registrar, and directed the respondent society to file disputes under Sec. 91 of the Act for recovery of the alleged amounts due from the petitioners, emphasizing the need for expedited proceedings.
JUDGMENT/ORDER
1. These Petitions are filed challenging orders dtd. 31/12/2021 passed by the Divisional Joint Registrar allowing Revision Applications filed by Respondent Credit Society and remanding the proceedings before the Assistant Registrar for a fresh decision. The Assistant Registrar had rejected proceedings filed by Respondent-Credit Society for issuance of recovery certificate under Sec. 101 of the Maharashtra Co-operative Societies Act 1960 (Act of 1960).
2. Petitioners are borrowers who have availed credit facilities from Respondent No.3-Credit Society. They claim that the entire amount due under said Credit facilities have been repaid by them with interest, on account of which the Credit Society issued various 'No Dues Certificates' to Petitioners. It is further contended that after issuance of 'No Dues Certificates', the Respondent-Credit Society executed Release Deeds in their favour. Facts in all the Petitions are similar. For brevity, facts in Writ Petition No.8440/2022 are narrated as follows.
3. Chatrapati Sambhaji Maharaj Sahakari Patsanstha, Baramati (Respondent No.3) is a Credit Society registered under the provisions of the Act of 1960. Petitioners are members of the Respondent-Society which granted and disbursed loan of Rs.14, 000, 00.00 to them for business purposes. In pursuance of the loan transaction, Petitioners executed promissory note, acceptance letters, consent letter of sureties, loan agreement, etc. in favour of the RespondentSociety. Petitioners also offered agricultural property admeasuring 10 Acre out of Survey No.45/5/B at Baramati as well as residential Unit No.3 in the building 'Kate Pride' at Baramati, District Pune towards security for the loan. Petitioners also executed Mortgage Deed in favour of the Respondent-Society on 28/8/2015, which came to be registered in the office of Sub-Registrar of Assurances, Baramati.
4. Petitioners claim that they have repaid the entire amount availed by them towards loan along with interest to the Respondent-Society. They contend that the RespondentSociety accordingly issued 'No Dues Certificate' on 24/10/2016 certifying that no amount was due or payable by the Petitioners in the loan account. Petitioners also claim that on account of repayment of the entire loan amount, Respondent-Society executed Release Deed dtd. 11/7/2016 in favour of the Petitioners releasing their charge over the two mortgaged properties.
5. The Respondent-Society later claimed that the Petitioners had neither repaid the loan amount, nor any 'No Dues Certificate' was issued by the Society. The RespondentSociety also denied having executed any Release Deed in favour of Petitioners. The Respondent-Society claims that its Branch Manager unauthorizedly issued 'No Dues Certificate' and executed Release Deed without any decision to that effect being taken in the managing committee meeting of the Society.
6. The Respondent-Society has accordingly filed Special Civil Suit No.51/2019 seeking a declaration that various Release Deeds unauthorizedly executed by the Branch Manager are ab initio void and not binding on the RespondentSociety. It has also sought a declaration that it continues to have the charge over mortgaged properties in pursuance of various Mortgage Deeds executed in his favour. Some of the subsequent Sale Deeds executed by the borrowers/guarantors/mortgagor are also sought to be cancelled in the said suit. The Respondent-Society sought temporary injunction against the Defendants in Special Civil Suit No.51/2019 to restrain them from creating third party rights in the suit properties. By order dtd. 30/4/2019, the Trial Court proceeded to reject the Application at Exhibit-5 for grant of temporary injunction. The Respondent-Society instituted Appeal From Order No. 656 of 2019 challenging the order dtd. 30/4/2019. In that Appeal from Order, this Court passed Interim Order of status-quo. By order passed on 19/10/2023, this Court has disposed of Appeal from Order No.653 of 2019 c
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