Jurisdiction of civil courts is barred in challenging cooperative society actions under the Maharashtra Co-operative Societies Act without prior notice as required by law.

JUDGMENT (Per Court) :-

AJIT B. KADETHANKAR, J.

1. Feeling aggrieved by an order dated 29.06.2024 passed by the ld.Civil Judge Senior Division, Ahmednagar in Regular Civil Suit No.157 of 2024 below Exhibit-15 whereby petitioner’s application under Order VII, Rule 11-d of CIVIL PROCEDURE CODE has been turned down, the defendant No.2 has preferred present Civil Revision Application. The petitioner, inter alia prays for rejection of the plaint.

Parties are referred to their factual status for the sake of convenience.

Core issues involved:

(i) While Section 163 of the Maharashtra Co operative Societies Act bars any challenge in Civil Court against any Orders, Decisions, Awards passed in accordance with the Maharashtra Co Operative Societies Act 1960, Challenge to an Attachment Order and Auction Proceeding conducted in recovery proceedings under ‘MCS’ Act in a Civil Suit is absolutely barred.

(ii) Where in a suit containing multiplier prayers, ‘due to some prayer seeking predominant relief’ suit is expressly barred by any Law; Order VII Rule 11 of CPC for rejection of plaint can be invoked if balance prayer also expressly arises out of the same cause of action i.e. not on any different/separate cause of action.

Facts in brief:

2. Petitioner is a co-operative society (hereinafter referred as ‘Petitioner Society’ for the sake of convenience) registered under the Maharashtra Co-operative Societies Act, 1960 (for the sake of convenience, hereinafter referred to as ‘the MCS Act’). The main object of the petitioner society is to accept deposits from its members, to disburse credits to the members and as such to do the banking business within the parameters of the State Act as well as the guidelines framed by the Reserve Bank of India, if any.

3. In 2007 the petitioner Society disbursed loan of Rs.60,000/- to one of its member namely ‘Priyanka Amit Deshmukh’. The respondent no.2/defendant no.1 stood ‘Guarantor’ to the said loan (hereinafter referred as ‘Guarantor’).

4. As the Borrower turned bad-master to repay the loan, the petitioner society initiated recovery proceeding under Section 101 of the MCS Act. A recovery certificate for Rs.3,38,961/- was also issued under of the MCS Act against the Borrower and the Guarantor. In furtherance of it, charge was created on the subject matter-property i.e. plot No.52B, Survey No.33/3, Savedi, Ahmednagar owned by the Guarantor I.e. R.No.2/Deft. No.1.

5. Failure on the part of the Borrower and Guarantor to repay the loan amount constrained the petitioner society to place in service execution of the recovery certificate under Section 156 r/w Rule 107 under the MCS Act. During the execution proceedings, the Special Recovery Officer of the society attached the suit property on 11.12.2019. Pursuant to the proposal filed by the society, the Deputy Registrar Co- operative Societies, Ahmednagar fixed the upset price for the suit property. The plaintiff lodged his objection before the Deputy Registrar and the upset price was fixed after hearing him.

6. Resultantly, the Special Recovery Officer published an Auction Notice in a newspaper on 03.01.2024.

7. Contending the “cause of action” to file the suit is the Auction Notice dtd.03-01-2024, the civil suit i.e. Regular Civil Suit No.157 of 2024 came to be instituted by present respondent no.1 against his brother i.e. Guarantor@defendant No.1 and the Petitioner for declaration and injunction. The pl