1 MNM IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO. 7733 OF 2009 AND WRIT PETITION NO.7734 OF 2009 Sukhadev Shankar Patil ...Petitioner Vs. The Commercial Co­operative Bank Ltd. & Ors. ...Respondent Petitioner in person Mr. S.S.Patwardhan, Advocate for Respondents 1 to 4 CORAM : SMT. ROSHAN DALVI, J. DATED : 4TH MARCH, 2010 P.C. : 1. The Petitioner has challenged the order of the Co­operative Court in C.C.S.No.6/2009 rejecting his application for stay of the Lavad Notice issued by the Bank giving intimation to the Petitioner that the bank would be instituting recovery proceedings under Section 101 of the Maharashtra Co­operative Societies Act 1960 (the Act). The Court observed that there would be no injury as the disputant would be able to defend those proceedings. The Co­operative Appellate Court rejected the stay application in the Appeal filed by him to the Appellate Court in A.O. No.74/2009. The 2 rejection is on the ground that the Petitioner has not denied his signature on his own application for taking the loan of Rs.13 lakhs on 31 st March 2008 and for which the Lavad Notice was issued on 18 th December 2008. 2. There is no error in the impugned orders. They need not be interfered with. 3. The Recovery Proceedings continued. The Recovery Certificate was issued. 4. The Petitioner challenged the Recovery Certificate issued under Section 101 of the Maharashtra Co­operative Societies Act, 1960 under his application bearing C.C.S.No.6/2009. The Co­operative Court rejected his application. The Co­operative Appellate Court rejected the Petitioner’s application for stay. 5. Since both the Appeals have been dismissed the Petitioner has filed the aforesaid 2 Petitions. 6. The material question which has to be considered is whether the Recovery Proceedings have been correctly instituted or could be stayed. The Petitioner has alleged fraud on the part of the Bank. Since fraud vitiates any transaction it became necessary for this Court to go beyond the transaction though not otherwise required. 3 7. The Recovery Certificate has been issued pursuant to a loan of Rs.13 lakhs granted to the Petitioner on 31 st March 2008. The Petitioner claims to have taken cash credit facility since 2004. The Petitioner maintained Account No.301/482 with the first Respondent Bank in that behalf since 2004. 8. The amount of Rs.13 lakhs came to be due and payable by the Petitioner in around February/March 2008. It may be mentioned that in February 2008 the Petitioner’s account was credited for Rs.2.5 lakhs showing a balance of Rs.1301740.85 in the negative. To help the Petitioner tide over his liability the Respondent No.1 Bank gave the Petitioner a credit of Rs.13 lakhs after the Petitioner deposited Rs.15,000/­ in cash by way of interest receivable by the Bank so as to bring down the negative balance to Rs.684.85 only. This entry has been made consequent upon a fresh loan granted to the Petitioner, as the sole proprietor of one Kedar Constructions. The Petitioner has executed all the necessary documents of the Bank pursuant to his application made for grant of fresh loan of Rs.13 lakhs on 25 th February 2008. The Petitioner has inter alia executed a Promissory Note for Rs.13 lakhs repayable with interest @ 13.5 % p.a on 31 st March 2008, a continuing security letter also for Rs.13 lakhs and affidavit in that behalf. 9. A fresh account in another branch of the first Respondent Bank being Market­yard Branch came to be opened in the name of the Petitioner. That has been Account No.301/194. Since the Petitioner is the sole proprietor of Kedar Construction, the account has been opened in his personal name. The Petitioner was issued a fresh cheque book on 31 st March 2008 for the 4 new account. The Petitioner signed the first leaf of the cheque book on 31 st March 2008. This cheque bears the number 02093541 and is dated 31 st March 2008. It is admittedly signed by the Petitioner. The next cheque leaf is from the same cheque book of the same account issued on 5 th May 2008 for Rs.15110/­ representing the interest on the amount of Rs.13 lakhs which was the fresh loan taken and which represented the amount admittedly payable by the Petitioner in March 2008. This cheque bears the No.02093542 and is dated 5 th May 2008. 10.The Petitioner contends that the Bank has played a fraud by mentioning the name of his Proprietary Concern Kedar Constructions below his signature on these cheques. This is an irrelevant deviation from the main issue. The Petitioner is admittedly the sole proprietor of Kedar Construction. A fresh loan has been taken by the Petitioner in that capacity. The Petitioner has been shown as a Proprietor of Kedar Construction in each of the documents cited above. The Petitioner has also purchased stamp papers in his name as Proprietor of Kedar Constructions for execution of the documents required by the Bank for the grant of a fresh loan of Rs.13 lakhs from the other branch of the Bank. 11.The Petitioner sought to contend before this Court when confronted with the aforesaid two cheques that a cheque of Rs.13 lakhs does not represent his liability as on 31 st March 2008 and the cheque of Rs.15110/­ was towards the interest amount to be paid by the Petitioner on the loan of Rs. 2.5 lakhs taken by him at around that time. The Petitioners initial account 5 showing the credit entry of Rs.13 lakhs as well as Rs.2.5 lakhs show Rs. 15000/­ paid by way of interest in March 2008. Rs.15000/­, therefore, represents interest payable on the outstanding amount of Rs.13 lakhs and not Rs.2.5 lakhs. Further sum of Rs.15110/­ paid by the Petitioner, therefore, represents interest on the loan or the credit amount of Rs.13 lakhs and not Rs.2.5 lakhs. The issue of the first two cheques from the new account under the new cheque book issued to the Petitioner at the time the second loan was granted to the Petitioner, therefore, conclusively shows the receipt of the loan as well as the admission of the receipt by the payment of interest of the first quarter thereunder. 12.The Recovery Certificate which has been issued by the Bank and which has not been stayed is, therefore, required to be proceeded with unless the Petitioner files a Revision Application under Section 154 of the Act before the Additional Joint Registrar, Co­operative Societies, Kolhapur. The impugned orders cannot be interfered with. 13.The Writ Petitions are accordingly dismissed. (SMT.ROSHAN DALVI, J.)