The court reaffirmed that the issuance of Recovery Certificates under Section 101 must follow mandatory procedures, including proper notice and adherence to statutory deposit requirements, vital for the legitimacy of summary recovery proceedings.

JUDGMENT :

Amit Borkar, J.

1. The petitioners challenge the Judgment and Order dated 17 January 2022 passed by the Divisional Joint Registrar, Cooperative Societies, Pune Division in Revision Application No.389 of 2021. By that order, the Divisional Joint Registrar set aside the Recovery Certificate dated 8 May 2019 issued under Section 101 of the Maharashtra Cooperative Societies Act, 1960.

2. The relevant facts are placed on record. Respondent No.1 borrowed an amount of Rs.2.5 crore from petitioner No.1 Bank. Respondent Nos.4 and 5 stood as guarantors for the said loan. Respondent No.1 defaulted in repayment. The outstanding dues were Rs.2,64,55,423. Petitioner No.1 Bank filed Application No.851/2018-19 seeking issuance of Recovery Certificate under Section 101 of the Act. The notice issued to respondent No.1 came back as unclaimed. Therefore, a public notice was issued in a local newspaper as required under Rule 86B of the Maharashtra Cooperative Societies Rules, 1961. Respondent No.1 did not appear before respondent No.2 despite publication of notice. The Authority proceeded ex parte and issued a Recovery Certificate on 8 May 2019.

3. Respondent No.1 filed Revision Application No.20 of 2020, later renumbered as Revision Application No.389 of 2021. Respondent No.1 contended that no proper opportunity of hearing was given, as the notice was not delivered. Respondent No.1 alleged that his requirement was only for Rs.90 lakh. He alleged that petitioner No.1 Bank disbursed Rs.2.5 crore by forging documents and siphoned Rs.1.60 crore from his account.

4. The petitioners filed reply before the Divisional Joint Registrar. They pointed out that the notice was served in accordance with Rule 86B. They raised a preliminary objection that respondent No.1 did not deposit 50 percent of the recoverable dues as mandated under Section 154(2A) of the Act. The petitioners submitted that the allegation of siphoning off money is without any proof. They pointed out that respondent No.1 himself applied for a loan of Rs.3 crore.

5. The Divisional Joint Registrar, by order dated 17 January 2022, allowed the Revision Application No.389 of 2021 and set aside the Recovery Certificate. Aggrieved by that decision, the petitioners have filed the present writ petition.

6. Learned Advocate Mr. Deshpande for the petitioners submitted that the Recovery Certificate quantified the recoverable amount as Rs.2,52,06,824. Therefore, respondent No.1 was required to deposit 50 percent of that amount, which comes to Rs.1,26,03,412. Respondent No.1 did not comply with this mandatory requirement. The notices of proceedings were sent on the address provided by respondent No.1. The notices were returned with the remark unclaimed. The address was correct. Hence, the burden was on respondent No.1 to show that notice was not received. He submitted that the Revisional Authority has passed a non-speaking and casual order. He submitted that if the Revisional Authority was of the view that the borrower had no proper opportunity, it should ha