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L.P.A.98.09

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LETTERSPATENTAPPEALNO.98OF2009
IN
WRITPETITIONNO.2490OF2008

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INTHEHIGHCOURTOFJUDICATUREATBOMBAY
BENCHATAURANGABAD

SundeepPolymersPvt.Ltd.
HavingitsFactoryatD70

MIDCInd.Area,Hingna
Nagpur440028andofficeat
52,MamtaANewPrabhadeviRoad,
Mumbai25

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1.

2.ShriDileepBalkrishnaNevatia,
Age59years,Occup.Business,
R/o5A,Worli,SeaFace,
Mumbai25.

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3.SmtSunitaDileepNevatia,
Age57yearsOccup.Housewife
R/oasabove....APPELLANTS.

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VERSUS
1.TheStateofMaharashtra,
ThroughitsSecretary
CooperationDepartment
Mantralaya,Mumbai400032.
2.DeogiriNagriSahakriBankLtd.
HavingitsofficeatArtha
complex,Kesarsinghpura,
Aurangabad,431001
throughitsManager.
3.TalukaDeputyRegistrar,
CooperativeSocieties,Aurangabad.

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L.P.A.98.09

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4.SpecialRecoveryOfficer,
DeogiriNagriSahkariBankLtd.,
havinghisofficeatHeadOffice
atHeadoffice,ArthaComplex,
KesarsinghPura,
Aurangabad,431001....RESPONDENTS.

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...
Shri.R.T.Nagargoje,AdvocateforAppellants.
Shri.V.D.Rakh,A.G.P.forRespondentNos.1and3.
Shri.S.V.Kulkarni,AdvocateforRespondentNos.2
and4.
...
CORAM:NARESHH.PATILAND
K.K.TATED,JJ.

DATE:3RDSEPTEMBER,2010.

ORALJUDGMENT:[PER:K.K.TATED,J.]
Admit.

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1.

2. With the consent of respective counsel of

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the parties, this matter is taken up for final

hearingattheadmissionstage.

3. By this Letters Patent Appeal, the

appellantsOriginal petitioners are assailing
order dated 13th February, 2009, passed by the
learnedSingleJudge,dismissingtheWritPetition
No.2490of2008.

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4.

L.P.A.98.09

Itisthecontentionoftheappellantsthat

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intheproceedingsinitiatedundersection101of

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the Maharashtra CoOperative Societies Act, 1960

(HereinafterreferredtoasSaidAct),Recovery
Certificate has been issued against them for
recovery of Rs.1,14,00,000/(Rupees One Crore

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FourteenLakhs)alongwithinterest.

5. It is the case of the appellants that

respondent No.4 issued exparte Recovery

Certificatedated19thDecember,2007undersection

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101 of the said Act, in Application No. 1497 of

2007. They preferred an application on 26th
December, 2007 for setting aside exparte

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Recovery Certificate issued under Section 101 of

thesaidAct,underOrder9Rule13oftheCodeof
Civil Procedure. He submits that without giving
any opportunity of hearing, respondent No.4
Recovery Officer confirmed an order dated 19th
December,2007undersection101ofthesaidAct,
on22.02.2008.Hesubmitsthatitismandatoryon
the part of respondent No.4 to follow the

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L.P.A.98.09

procedure as prescribed under Chapter VIIIA of

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the Maharashtra CoOperative Societies Rules,

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1961. He submits that respondent No.4 without

giving any reasoned order issued Recovery

Certificate.HesubmitsthatasperRule86F,it
isdutyofrespondentNo.4topassJudgmentand
orderandthereaftertoissueCertificateinForm

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V. In the present case, he has directly issued

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RecoveryCertificate.

Mr. Nagargoje, learned Counsel appearing

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for the appellantspetitioners submits that the

learned Single Judge failed to consider the fact
that Recovery Officer without following Chapter

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VIIIA of the said Rules issued Recovery

Certificate. He further submits that learned
Single Judge dismissed the Writ Petition, mainly
onthegroundthatalternateremedyprovidedunder
Section 154 of the Maharashtra CoOperative
SocietiesAct,forpreferringtherevisiontothe
Registrar of the coOperative Societies. He
submits that the learned Single Judge ought to

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L.P.A.98.09

have considered that if without passing any

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JudgmentandOrder,RecoveryCertificateissuedby

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the Competent Authority, then Courts have power

under Article 226and 227of theConstitution of
Indiatosetasidesuchorders.

7.Mr.Kulkarni,learnedCounselappearingon

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behalf of respondents submits that the learned

Single Judge rightly held that the Writ Petition

is not maintainable, when alternate remedy is

availableundersection154oftheMaharashtraCo

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Operative Societies Act. He further submits that

as on today, the appellants failed to pay more
than one Crore Rupees in the present case. He

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further submits that there are other proceedings

initiated by them against the appellants for
recovery of other loans. Therefore, this Court
should not entertain the present Letters Patent
Appeal,underClause15oftheLettersPatentAct.

8. We have heard both the sides at length.

Admittedly, in the present case respondent No.4

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RecoveryOfficerwithoutpassinganyJudgmentand

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OrderissuedrecoveryCertificate.RespondentNo.

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4failedtofollowtheprocedureprescribedunder
Chapter VIIIA of the said Rules to grant
Certificate of Recovery under Section 101 of the
said Act. Under Rule 86A the procedure is
prescribedforfilingtheapplicationforgranting

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RecoveryCertificate. Rule86Bprovidesscrutiny
ofapplicationandnoticetotheparties.Rule86C

providesprocedureforappearanceofparties and
consequences of nonappearance, whereas Rule 86D

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provides production and inspection of documents.

If other side asked inspection of documents, in
thatcase,RecoveryOfficershouldallowthesame.

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Rule 86E prescribed procedure of hearing of the

application. It provides that Registrar should
decide the application within three months from
the first date of hearing. He should allow the
parties to argue orally and thereafter fix the
matter for orders. Rule 86F provides that the
authorityshouldpassreasonedJudgmentandorder,
and thereafter issue Recovery Certificate in

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FormV.

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9. Weperusedtheorderpassedbythelearned
Single Judge. The learned Single Judge rejected
the Writ Petition mainly on the ground that
alternateremedyisavailableundersection154of

the said Act. We are of the opinion that the

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learned Single Judge has not considered the

procedureprescribedunderRule86Ato86Fofthe

saidRules.ItiscrystalclearfromtheRules86A
to 86F that the Authorities pertains quasi

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judicialwork.TheAuthoritieshavetofollowthe
rules of natural justice. In the present case,
theAuthoritywithoutpassinganyJudgmentissued

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RecoveryCertificateundersection101oftheSaid
Act.Thesefactsarenotconsideredbythelearned
SingleJudge.

10.

It is mandatory for the Authorities to

followtheRulesprovidedinChapterVIIIAofthe
Maharashtra CoOperative Societies Rules 1961
while issuing Recovery Certificates. It is amply

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clear that in this case the Recovery Certificate

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has been issued without following due procedure

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andalsowithout properserviceofnoticeonthe
appellants and the Rules of natural justice are
violated. Hence the Recovery Certificate issued
must be held to be invalid and bad in law and
needstobestruckdown. Thishasresultedinto

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unnecessary waste of time and money by the

11.

appellantsaswellasthebank.

The learned Single Judge of this Court

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(in Group of Writ Petition Nos 1717 of 2009,

RavindraS/oWamanIngle andanotherVs.Sahakar
Mitra Shri Chandrakant Hari Badhe Sir Urban Co

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Operative Credit Soceity Ltd. Varangaon and

others)heldthattheCertificateissuedwithout
following amended Rules 86A to 86F of the said
Rules is unsustainable. It is further held that
enquiryisrequiredtobeconductedinaccordance
withtheRules.

12. Similar view is taken in the matter of

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L.P.A.98.09

KhushalNarayanraoMundheVs.StateofMaharashtra

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andothers,reportedin 2007(4)Bom.C.R.350,and

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unreported Judgment in the matter of Vithal

LaxmanFatangadeVs.TheStateofMaharashtraand
othersinWritPetitionNo.2070of2010dated27 th

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July,2010(Coram:V.R.KINGAONKAR,J.).

13. Considering foregoing reasons and basic

infirmities found in the Certificate issued

against the appellants, the appeal is allowed.

TheimpugnedJudgmentpassedbythelearnedSingle

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Judge, dated 13th February, 2009 and the Recovery

Certificate issued by respondent No. 3 dated 19th

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December,2007,aresetaside.

14. TheDeputyRegistrarCoOperativeSocieties
Aurangabad, Ta. Aurangabad shall conduct denovo
enquiry as per Rules and after following due
procedurepasstheappropriateorder.Theparties
toAppealshallappearbeforetheDeputyRegistrar
on28thSeptember,2010at11.00a.m.Theparties

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L.P.A.98.09

waive notice for appearance before Deputy

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Registrar.

15. The appellants may file their Written

Statement/Reply on the date of appearance or at
themostwithinoneweekthereafter. Thereafter,
the proceedingenquiry shall be completed

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expeditiously as contemplated under relevant

provisionsandRules,asfaraspossiblewithina

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order.

period of three months from the receipt of this

TheLettersPatentAppeal isallowed in

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theaboveterms.

Sd/Sd/
[K.K.TATED,J.][NARESHH.PATIL,J.]

MTK

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