J.B.

Patel Jeby
Housing Societies' Activist
9820538570
eby!atel"#e$i%%&ail.co&
Section 91-A of the MCS Act 1960 was inserted in 1974 and Co-operative Courts
were established in certain territories to deal with the number of cases, then pending in this
area. Even though the Co-operative Courts were established in 1974, the disputes were first
required to be referred to the egistrar in order to decide whether the said dispute e!isted
within the meaning of the "ection # then it were sub$ected before the Co-operative Court . %n
that era there was one &ffice of the egistrar which was formerl' (nown as )%ndia *ate )and
different wards were not formed. "ection 91 of the +C" ,ct 19-. confers e!clusive
$urisdiction on Co-operative Courts to decide the disputes between parties referred to in
section. %t prescribes the $urisdiction of ordinar' civil courts to decide such disputes between
the parties referred to in the said section.
Section 101 of the MCS Act 1960 contemplates a recover' of the amount due to
the societ' in a summar' manner with regards to certain societies. /he different procedures
that are followed under these two sections often conflict with one another. )"ocieties and Co-
operative ban(s are interested in recovering amounts, due from the members, b' adding
sureties as parties u0s 1.1 of the +C" ,ct 19-.. /he reason for this is that a certificate can
be obtained from the egistrar as per the provisions of the +C" ,ct 19-. without a full-
fledged trial. /hus, the procedure for the recover' of mone' due to a societ' or ban( is
comparativel' eas' # speedil' disposed off. 1nfortunatel', often Co-operative "ocieties and
ban(s, in order to defraud their creditors and to e!pedite their claims from borrowers, file
proceedings under "ection 1.1 before the egistrar . /he reason is that this section gives
relief quic(l' and without an' full-fledged inquir'. 2owever, this practice is pre$udicious to the
members of the societ'.
3efore e!amining the anomalies of different provisions of this ,ct, let us understand what a
dispute, under the +C" ,ct 19-., essentiall' is. "ection 91 of the +C" ,ct 19-. refers to a
dispute between the societ' or its past or present servant, nominee, or heir or legal
representative of an' deceased officer or a member, past member, claiming through a
member of past member of a deceased member of societ'. , dispute touching the constitution
or conduct of a general meeting or business of the societ' can be decided u0s 91 of the +C"
,ct 19-. . /he provisions of section 914154d5 provide for a suret' of a member, as one of the
parties to the dispute, and therefore, even though the suret' is not a member, dispute could
be filed against the suret' for recover' of dues . 6or an' such dispute, the matter can be
ta(en to the Co-operative Court.
2ere is the outlined differences in the procedures under the provisions of these two sections -
"ection 1.1 and "ection 91.
"ection 1.1 of the +C" ,ct contemplates a recover' of the amount due in a summar'
manner and the power is given to the egistrar to issue a certificate for the amount due b'
ma(ing a summar' inquir' on the basis of the affidavits, filed b' the respective parties. 4i.e. an
application is filed b' the disputant and the respondent simpl' files a written repl' to it5.
&n the other hand, section 91 prescribes a full- fledged trial in the Co-operative court , with all
the ingredients of a trial e.g. cross-e!amination of witnesses, appreciation of evidence,
interpretation of documents etc. 1nder section 91, an appeal lies to the Co-operative
,ppellate Court whereas under sec. 1.1 there is no provision for appeal. 2owever, a revision
can be made to the 7ivisional 8oint egistrar. %n an appeal u0s 91, there is an appreciation of
evidence whereas in a revision, there is no possibilit'. /he $oint egistrar simpl' reads the
order and if he finds an' anomal' he revises it. /hus, the procedure is ver' arbitrar' and
depends upon the sub$ective satisfaction of the authorit'. &ften, the claims of huge amounts
are decided on the basis of the affidavits and certificates. /hese claims are decided without
testing the validit' of documents li(e loan bonds, promissor' notes etc. 6urther, it involves the
interpretation of provisions of complicated propert' laws. 1nder section 91 , the court has full
discretion to sta' the entire decree, whereas under "ection 1.1, fift' percent of the award
amount that is recoverable has to be deposited in the court. &nl' then will a revision can be
entertained. /hus, even if the aggrieved person has a good case on merit, if he is not in a
position to deposit 9.: of the amount due, he will be deprived of the right to file revision. /he
proceedings under "ection 91 are $udicial proceedings and form a substantive remed',
provided b' law. &n the other hand, proceedings under "ection 1.1 are quasi $udicial and
provide a summar' remed', under law. v %n view of the above conflict between "ection 91 and
1.1 of the +C" ,ct 19-. , the 6ull 3ench of the Co-operative ,ppellate Court 3omba', in
)"angli 1rban Co-operative 3an( ;imited v0s. <and(umar =rashuram =rabhudesai 4 1994
C./.8. -9>5) made certain observations, which are ver' relevant while entertaining
applications u0s 1.1.
/he salient points are mentioned below? 1nder the provisions of section 1.1, no certificate
can be issued against the suret'. 2owever, in case such a certificate is issued, it would not
debar a suret' from challenging the statement of accounts in a proceeding u0s 91 of the +C"
,ct 19-.. , member or a suret' can file a dispute against the societ' for settlement of
accounts and such proceeding is not barred because of the provisions of section 1.1 of the
+C" ,ct 19-.. 2owever, the e!ecution proceedings, started on the basis of a certificate
issued u0s 1.1 , cannot be interfered within a proceeding u0s 91. /he claims b' the Co-
operative "ociet' for recover' of its dues against the members and suret' of a member,
based upon the e!ecution of documents as well as on the basis of statement of accounts, are
maintainable u0s 91 of +C" 19-.. %n spite of the above observations made b' the 6ull 3ench,
often Co-operative ban(s and societies ta(e recover' of the amount due on the basis of
documents before the egistrar u0s 1.1. 6urther, the amendment to sec. 194 , dated? @>-A-
@... puts the restriction that no revision shall be entertained unless fift' percent of the
amount due is deposited. 6urther, it ta(es awa' the valuable right of the suret' to file a
revision even if the order of the egistrar is bad. 2owever, as this $udgment is given b' the
Co-operative ,ppellate Court, it has onl' a persuasive value. %t cannot be considered to be a
law. %t is merel' a guideline for the subordinate Co-operative ,ppellate Courts .
)Contradictions between these sections can be solved onl' b' a $udgment b' the 2onBble
3omba' 2igh Court or the "upreme Court ). %n the absence of such a ruling b' the higher
authorities, serious cogniCance of the full-bench $udgment of the Co-operative ,ppellate Court
should be ta(en.