1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 6315 OF 2008 Prakash S/o Premchand Khachne } Age : 63 Years, Occ. : Retired, } R/o : Plot No. 6, Omshanti Nagar, } Pimprala Shivar, Jalgaon, } Dist. : Jalgaon. } .... PETITIONER V E R S U S 1. The Divisional Joint Registrar } Co-operative Societies, } Nashik Division, } Gurhnirman Bhavan, } Gadkari Chowk, Nashik, } Dist. : Nashik. } 2. The Deputy Registrar } Co-operative Societies, } Jalgaon, Dist. Jalgaon. } 3. Navipeth Urban Co-operative } Credit Society Ltd. } Jalgaon Dist., Jalgaon. } 4. Special Recovery Officer } Navipeth Urban Co-operative } Credit Society Ltd. } Jalgaon Dist., Jalgaon. } 5. Namdeo S/o Raghunath Koli } Age : 45 Yrs., Occ. Service, } R/o : 55, Dadawadi, Jalgaon, } 2 Dist. Jalgaon. } 5. Sow. Babytai W/o Namdeo Koli } Age : 40 Yrs., Occ. Household, } R/o : 55, Dadawadi, Jalgaon, } Dist. Jalgaon. } .... RESPONDENTS Mr. P.R.Patil, Advocate for Petitioner. Mr. T.S.Lodhe, A.G.P. for State – Respondent Nos. 1 & 2. Mr. A.I.Deshmukh, Advocate for respondent no. 3. CORAM : V.R.KINGAONKAR, J. JUDGMENT RESERVED ON : 23/02/2010 JUDGMENT PRONOUNCED ON : 12/03/2010 JUDGMENT : 1. By this petition, the petitioner impugns Recovery Certificate dated 10/21/2007 issued by the respondent no. 2 – Dy. Registrar, Co-operative Societies under section 101 of the Maharashtra Co-operative Societies Act, 1960 ( For short, ‘ the M.C.S. Act ’ ) and order of the revisional authority, whereby the revision application was not entertained without payment of 50 % of the amount due as on the date of application. 2. Indisputably, the respondent no. 5 Namdeo borrowed loan of Rs. 2,34,080/- from respondent no. 3 -Credit Society. He 3 failed to repay the loan amount to the credit society. The respondent no. 3 – Credit Society initiated proceedings for recovery of the loan amount by filing an application under section 101 of the M.C.S. Act before the respondent no. 2 – Dy. Registrar, Co-operative Societies. The respondent no. 3 – Credit Society alleged that the respondent no. 5 Namdeo was the principal borrower whereas the petitioner and the respondent no. 6 were the guarantors/sureties. It was alleged that all of them, together, were liable to pay the loan amount along with due interest. The respondent no. 3 – Dy. Registrar, Co-operative Societies issued notices to the respondent no. 5 Namdeo, the petitioner and the respondent no. 6. The respondent no. 2 – Dy. Registrar, Co-operative Societies issued the Recovery Certificate on 10/12/2007. 3. The petitioner’s case is that he was not the surety/guarantor and had nothing to do with the transaction between the Credit Society and the respondent no. 5 Namdeo. He contended that Recovery Certificate could not be issued against him. He would submit that his property was not liable to be attached during course of the recovery. He approached the respondent no. 1 – Divisional Joint Registrar by filing Revision Application under section 154 of the M.C.S. Act. According to him, the respondent no. 1 – Divisional Joint Registrar declined to register Revision Application unless 50 % of the amount due was deposited as a condition precedent. He alleges that such provision is contrary to the law laid down by the Apex Court in “ Mardia 4 Chemicals Ltd. And others V/s Union of India and others ” ( 2004 (4) SCC – 311 ). Consequently, he urged to quash the Recovery Certificate dated 10/12/2007 or to direct the respondent no. 1 to entertain the Revision Application without payment of 50 % of the amount shown in the said Certificate. 4. Heard learned counsel for the parties and the learned A.G.P. for State. 5. Chief bone of contention raised by Mr. P.R. Patil is that section 101 of the M.C.S. Act does not contemplate issuance of any Recovery Certificate against the guarantor/surety. He would submit that the proceedings under section 101 of the M.C.S. Act are of summary nature and, therefore, the same can be proceeded with against only the borrower. He argued that the wording of the section 101 of the M.C.S. Act does not specifically include words “ guarantor ” or “ surety ” . He seeks to rely on certain observations in “ Sangli Urban Co-op. Bank Ltd. Khanbhag, Sangli and one other V/s Nandkumar Parshuram Prabhudesai Budhgaonkar, Mala Miraj Sangli and three others ” ( 1994 C.T.J. 653 ). The Judgment is rendered by the Maharashtra State Co-operative Appellate Court. The Co-operative Appellate Court held that section 101 of the M.C.S. Act does not cover the issue pertaining to the liability of the guarantor. The said Judgment is subject matter of challenge before main seat of this 5 Court in Writ Petition Stamp No. 27606 of 1994 ( Writ Petition No. 2539 of 1995 ). 6. The Judgment of the Maharashtra State Co-operative Appellate Court can not be regarded as binding precedent. At this juncture, section 101 of the M.C.S. Act may be reproduced for ready reference as below : “ 101. (1) Notwithstanding anything contained in sections 91, 93 and 98, on an application made by a resource society undertaking the financing of crop and seasonal finance as defined under the Bombay Agricultural Debtors Relief Act, 1947 ( or advancing loans for other agricultural purposes repayable during a period of not less than eighteen months and not more than five years ] for the recovery of arrears of any sum advanced by it to any of its members on account of the financing of crop or seasonal finance [ or for other agricultural purposes as aforesaid ] or by a crop protection society for the recovery of the arrears of the initial cost or of any contribution for obtaining services required for crop protection which may be 6 due from its members or other owners of lands included in the proposal ( who may have refused to become members ) or by a lift irrigation society for the recovery of arrears of any subscription due from its members for obtaining services required for providing water supply to them [ or by a Taluka or Block level village artisans multi purpose society advancing loans and arranging for cash credit facilities for artisans for the recovery of arrears of its due ] [ or by a co-operative housing society for the recovery of arrears of its dues, or by a co-operative dairy society advancing loans for the recovery of arrears of any sum advanced by it to any of its members or by an urban co-operative bank for the recovery of arrears of its dues, or by salary earners co-operative society for the recovery of arrears of its dues ] [ or by any such society, class of societies, as the State Government may, from time to time, notify in the official Gazatte , for the recovery of any sum advanced to, or any subscription or any other amount due from, the members of the society or class of societies so notified ] and on the society concerned furnishing 7 a statement of accounts in respect of the arrears the Registrar may, after, making such inquiries as he deems fit, grant a certificate for the recovery of the amount stated therein to be due as arrears ] ”. [ Explanation – For the purposes of this sub- section, the expression other agricultural purposes includes dairy, pisciculture and poultry ] . (2) When the Registrar is satisfied that [ the concerned society has failed to take action under the foregoing sub-section in respect of any amount due as arrears ] the Registrar may, of his own motion, after making such inquiries, as he deems fit, grant a certificate for the recovery of the amount stated therein to be due as arrears and such a certificate shall be deemed to have been issued as if on an application made by the society concerned. (3) A certificate granted by the Registrar under sub-section (1) or (2) shall be final and a conclusive proof of the arrears stated to be due therein, and the same shall be recoverable according to the law for the time being in force for the recovery of land revenue. 8 (4) It shall be lawful for the Collector and the Registrar to take precautionary measures authorized by sections 140 to 144 of the Bombay Land Revenue Code, 1879 or any law or provision corresponding thereto for the time being in force, until the arrears due to [ the concerned society ], together with interest and any incidental charges incurred in the recovery of such arrears, are paid , or security for payment of such arrears is furnished to the satisfaction of the Registrar. 7. Literal construction of section 101 of the M.C.S. Act would make it manifestly clear that the Recovery Certificate can be issued against any member for recovery of loan advanced by the co-operative society or the credit society. The section does not refer to terms like “ borrower ”, “ surety ”, etc. . It appears that on furnishing of a statement of accounts in respect of the arrears, by the society concerned, the Recovery Certificate can be granted by the competent authority. The section commences with non obstante clause. The question is whether the amount borrowed by the respondent no. 6 could be said to be “ the amount of sum advanced and fallen due from the petitioner ”. The liability of the surety is co-extensive with the liability of the principal borrower. Obviously, the principal borrower and the 9 sureties/guarantors are jointly and severally liable to pay the loan amount which is found due to the credit society. The constructive liability of all of them arises out of the contract with the credit society or bank, as the case may be. It is further clear from close reading of section 101 of the M.C.S. Act that the Recovery Certificate can be issued against the members of the co-operative society for effecting recovery of the amount due. It has come on record that the petitioner was required to become member of the credit society. His membership form was accepted. He had paid membership fees. A copy of the membership application ( Exh. R – 1 ) is placed on record. Needless to say, the petitioner was jointly and severally liable, prima facie, to pay the amount which was borrowed as loan by the respondent no. 5 Namdeo. There is no substance in the argument of the counsel for the petitioner that the recovery proceedings could be drawn only against respondent no. 5 Namdeo ( borrower ). 8. Mr. Patil invited my attention to certain observations in “ Shivshakti Co-Op. Housing Society, Nagpur V/s Swaraj Developers and others ” [ (2003) 6 Supreme Court Cases 659 ]. The Apex Court held that, “ object of interpreting statute is to ascertain intention of the legislature ”. He also invited my attention to observations in “ Committee of Management and another V/s Vice Chancellor and others ” [ ( 2009 ) 2 Supreme Court Cases 630 ]. The Apex Court held that, “ existence of alternative and efficacious 10 remedy does not bar exercise of writ jurisdiction under Article 226 of the Constitution of India when the order is passed by the authority without jurisdiction or in violation of the principles of natural justice ”. The Apex Court in “ Whirlpool Corporation V/s Registrar of Trade Marks, Mumbai and others ” ( AIR 1999 Supreme Court 22 ), held that, “ existence of alternative remedy does not affect jurisdiction of High Court, specially in case where authority against whom writ is filed is shown to have had no jurisdiction ”. It is argued by Mr. Patil that in spite of alternate remedy available, the Writ Petition may be allowed because the petitioner is not liable to pay the amount in the eye of law. 9. In “ Sita Ram Gupta V/s Punjab National Bank and others ” [ ( 2008 ) 5 Supreme Court Cases 711 ], the Apex Court held that, “ the guarantee is continuing one and could not be revoked during the validity period ”. Mr. Deshmukh invited my attention to certain observations in “ State Bank of India V/s Amravatizilla Krishi Auudyogik Sahakari Sangh Maryadtt and others ” ( 2004 (2) Mh. L.J. 8., A Division Bench of this Court held that, “ Plaint as a whole even against guarantors could not have been rejected ”. In “ Greater Bombay Co-operative Bank Ltd., Mumbai and another V/s Dhillon P. Shah and others ” (2004 (1) Mh.L.J. 996 ), a Single Bench of this Court held that, “ mandatory requirement of 50 % payment of the total amount of recoverable dues needs to be complied with 11 while invoking revisional jurisdiction under section 154 ( 2 – A ) and 101 of the M.C.S. Act. In fact, Section 154 (2-A) makes it explicit that payment of 50 % of the amount shown under the Recovery Certificate is mandatory before considering question regarding registration of the revision petition filed under section 154 ”. The provision is pre-emptory in nature. The petitioner has not challenged virus of Section 101 or 154 (2-A) of the M.C.S. Act. It is not necessary, therefore, to consider validity of the relevant provisions. 10. In “ Dr. Vinayak Chintamani Agashe V/s State of Maharashtra and Others ” ( 2009 ( 5 ) All MR 402 ), it is held that, “ the arrears payable to a co-operative bank can be recovered not only from principal borrower but also from the guarantor by resorting to section 101 of the M.C.S. Act ”. The petitioner can not claim immunity from the mandatory compliance of section 154 (2-A) of the M.C.S. Act. Hence, I do not find any substance in the petition. In the result, the petition is dismissed. No costs. [ V.R.KINGAONKAR ] JUDGE knp/WP 6315.08