The court held that the District Magistrate's role in executing recovery orders is strictly executionary, not requiring a hearing or assessment of merits, thus upholding the procedural framework of the Maharashtra Cooperative Societies Act.

JUDGMENT :

(AMIT BORKAR, J.)

1. By this writ petition under Article 226 of the Constitution of India, the petitioners are challenging an order dated 16th August 2024 passed by the District Magistrate, Pune, in exercise of powers under Rule 107(11)(d-1) appointing the Tehsildar as the officer empowered to take possession from the petitioners.

2. Facts and circumstances giving rise to the filing of the present writ petition are as under:

The petitioners are the borrowers who were granted a loan of Rs.30 lakh by the respondent No.2 on 5th October 2016. On an application filed by the respondent No.2 under Section 101 of the Maharashtra Cooperative Societies Act, 1960, the Assistant Registrar, Cooperative Societies issued a certificate under Section 101 of the said Act for recovery of an amount of Rs.28,15,685/-. It is further submitted that the manner in which the certificate was issued, and the subsequent recovery proceedings, have been tainted by procedural irregularities that vitiate the legal validity of the enforcement process, thereby raising serious questions regarding adherence to statutory requirements and principles of natural justice.

3. The respondent No.4, being the Special Recovery Officer appointed under Section 156 of the Act, issued a notice of demand to the petitioners. Subsequently, on 16th August 2024, the respondent No.5 passed the impugned order appointing the Tehsildar as the officer to take possession of the mortgaged property.

4. Mr. Chandrachud, learned Advocate for the petitioners, submitted that the Special Recovery Officer who filed the application before the District Magistrate under sub-Rule (vi) of clause (d-1) was not duly notified by the State Government as required under Rule 156. Consequently, the application made on his behalf before the District Magistrate is not maintainable. Furthermore, he contended that, in passing the order under clause (d-1), the District Magistrate was under an obligation to provide cogent reasons and to afford the borrower an opportunity of being heard, failing which the order would stand in violation of the principles of natural justice. In support of his submission, he relied upon the judgments in Automotive Tyre Manufacturers Association v. Designated Authority & Ors. (2011) 2 SCC 258, and A.K. Kraipak & Ors. v. Union of India & Ors. (1969) 2 SCC 262. The petitioners further submit that the absence of an adequate hearing mechanism amounts to a fundamental procedural lacuna which, in turn, renders the impugned order legally untenable.

5. Mr. Gole, learned Advocate for respondents Nos.2 and 4, produced a gazette notification published on 21st July 2022, which designated the Special Recovery Officer at Serial No.8 as the Special Recovery Officer for the Districts of Pune and Satara. He submitted that the power conferred upon the District Magistrate under clause (d-1)(vi) is strictly confined to securing the compliance of the request made by the duly appointed Special Recovery Officer, and therefore, the statutory framework does not contemplate the requirement of affording an opportunity of hearing to the borrower or the guarantor. Accordingly, he prayed for the dismissal of the writ petition. Notwithstanding, it is submitted by the petitioners that such a narrow construction of procedural safeguards has resulted in the denial of a fundamental right to be heard, thereby compromising the integrity of the decision-making process and precipitating a potential miscarriage of justice.

6. The submissions advanced by the respective parties have been duly recorded and are now considered by this Court in light of the statutory provisions and the applicable legal principles.

7. The relevant provision of Section 156 and Rule 107(11)(d-1) (vi) of the Maharashtra Cooperative Societies Rules, 1961 are reproduced here for clarity and proper contextual understanding:

“156. Registrar’s powers to recover certain sums by attachment and sale of property (1) The Registrar or any officer subordinate t