1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.7126 OF 2008 Madhukar s/o Dagdoji Deshmukh, age: 38 years, Occ: Contractor, R/o “Krushna”, J-33, N-5, Vijayshree Colony, CIDCO, Aurangabad. Petitioner Versus 1 The State of Maharashtra, through the Secretary, Department of Cooperation, Mantralaya, Mumbai-32. 2 The Divisional Joint Registrar, Co-operative Societies, Aurangabad. 3 The Taluka Deputy Registrar, Co-operative Societies, Aurangabad. 4 Devgiri Nagari Sahakari Bank Ltd., Railway Station Branch, through its Manager. 5 The Special Recovery and Sale Officer, Grade-I, Devgiri Nagari Sahakari Bank Ltd., Earth Complex, Kesharsingpura, Aurangabad. 6 Vijay s/o Janardhan Gaikwad, age: major, Occ: Business, R/o 125, Nandanwan Colony, Chawani, Aurangabad. 7 Lalil s/o Dattatraya Adhane, 2 age: major, Occ: Business, R/o Jyoti Nagar, Osmanpura, Aurangabad. 8 Smt.Ranjana d/o Laxman Bhise, @ Smt.Ranjana Vijay Gaikwad, age: major, Occ: Service, R/o 185, Nandanwan Colony, Chawani, Aurangabad. Respondents Mr.V.D.Salunke, advocate with Mr.B.N.Patil, advocate for the petitioner. Mr.N.N.Jadhav, A.G.P. for Respondents No.1 to 3. Mrs.Preeti Diggikar-Deshpande, advocate for Respondent No.4. Respondents No.5 to 8 served. CORAM: R.M.BORDE, J. DATE : 11 th November, 2009. ORAL JUDGMENT: 1 Heard learned Counsel for respective parties. Rule, made returnable forthwith and heard by consent of learned Counsel for respective parties. 2 Petitioner, in the instant petition, is raising challenge to the certificate issued by Taluka Deputy Registrar on 26.11.2001 entitling the Bank to recover an amount of Rs.24,38,720/- along with interest from the petitioner as well as principal borrower and other two guarantors. 3 Petitioner contends that in fact he did not stand as guarantor 3 for the loan secured by Respondent No.6. According to the petitioner, Respondents No.7 and 8 were guarantors in respect of loan secured by Respondent No.6 from Respondent No.4-Bank. According to him, therefore, issuance of certificate under Section 101 of the Maharashtra Cooperative Societies Act, 1960, by Taluka Deputy Registrar of Co-operative Societies, Aurangabad, authorising the Bank to recover the amount from him, is illegal. 4 Petitioner also makes a grievance that no notice of hearing was issued to him before issuance of certificate by the Taluka Deputy Registrar. Petitioner came to know about issuance of certificate only when his property was attached by taking recourse to Section 107 of the Maharashtra Cooperative Societies Act. Petitioner raised challenge to the order of attachment by presenting Revision Application No.20/2008 to the Divisional Joint Registrar, Cooperative Societies, Aurangabad. The Revisional Authority, after extending opportunity of hearing to all the parties concerned, directed quashment of the order of attachment in view of order issued on 20.09.2008. It is observed in the order passed by Divisional Joint Registrar, Cooperative Societies, Aurangabad, that there is no record available so as to infer that petitioner was extended any opportunity of hearing before issuance of certificate under Section 101 of the Act by the Taluka Deputy Registrar. The record also does not disclose that any notice was issued to the petitioner 4 before issuance of certificate in question. Petitioner, therefore, after disposal of the Revision Application, approached the Revisional authority once again seeking quashment of recovery certificate. However, Revisional Authority, in view of the order dated 15.10.2008, directed the petitioner to deposit 50% of the amount recoverable under the certificate and has further ordered that in the event of failure to deposit the amount, the Revision Application shall be returned to the Revision Petitioner. 5 Learned Counsel for the petitioner has placed reliance on the judgment in the matter of Khushal s/o Narayanrao Mundhe Vs. State of Maharashtra & others, reported in 2007 (4) Mh.L.J. 333. This Court, in para 6 of the judgment, has observed thus: “It is true that issuance of notice, to a member or defaulter, in a proceeding under sub-section (1) of section 101 for grant of certificate is not expressly provided under sub-section (1) of section 101 of the Act, 1960. However, powers have been conferred upon the Registrar, after making such enquiries as he deems fit, to grant of certificate for recovery of the amount stated therein, to be due as arrears. Not only notice, under sub- section (1) of section 101 is contemplated but such enquiries as Registrar deems fit, are also contemplated. In a given case, after the death of debtor, the liability of repayment of the loan falls upon the legal representative of the debtor. In such case, it is the duty of Recovery Officer to ascertain such liability and to enquire about undisposed property left by the deceased 5 member/defaulter coming into hands of his legal representatives. Expression of legal representative, is defined under section 2(11) of the Code of Civil Procedure. Even principles of natural justice requires issuance of such notice by the Registrar to member/defaulter before issuance of certificate under sub-section (1) of section 101 of the Act, 1960. One more aspect, is important that sub-section (2) of section 101 empowers the Registrar if he is satisfied that the Society concerned has failed to take action under sub-section (1) of section 101 in respect of any amount due as arrears, he may on his own motion, after making such enquiries as he deems fit, grant certificate for recovery of the amount stated in the said certificate, to be due as arrears. Such certificate, is also aided with deeming provision by sub-section (2) as if, which have been issued on the application made by the Society concern, sub- section (3) of section 101 gives finality to a certificate granted by the Registrar under sub-section (1) or sub- section (2). Sub-section (3) also makes such recovery certificate, a conclusive proof of the arrears stated to be due therein. It further provides that such arrears shall be recoverable according to the law for the time being in force, for recovery of the land revenue. Sub-section (4) of section 101 obligates the Collector and the Registrar to take precautionary measures authorized by section 140 to 144 or any law or provision corresponding thereto for the time being in force, until the arrears due to, together with interest and incidental charges incurred in the recovery of such arrears, are paid. It is also apropos to refer to section 98(a) and (b) of the Act, 1960, which read thus: 98 Money how recovered. - Every order passed [by the Official Assignee of a de-registered society under sub-section (3) of section 21A or every order passed] by the Registrar or a person authorized by him under section 88 or by the Registrar [or the Co-operative Court] under section 95 (or by the C o-operative Court under section 96], every order passed in appeal under the last preceding section, every order passed by a Liquidator under 6 section 105, every order passed by the State Government in appeal against orders passed under section 105 and every order passed in revision under section 154 shall, if not carried out,- (a) on a certificate signed by (the Official Assignee or) the Registrar [or the Co-operative Court] or a Liquidator, be deemed to be decree of a Civil Court, and shall be executed in the same manner as a decree of such Court, or (b) be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue: Provided that, any application for the recovery in such manner of any such sum shall be made by the Collector, and shall be accompanied by a certificate signed by the Registrar. Such application shall be made within twelve years from the date fixed in the order and if no such date is fixed, from the date of the order. Bare perusal of section 98 shows that certificate signed by Registrar shall be executed in the same manner as a decree of Civil Court to be executed according to the law and under the rules for the time being in force for recovery of arrears of land revenue. Proviso to sub-clause (b) of section 98, however, contemplates obligation for recovery and also puts limitation of 12 years from the date fixed in the order and if no such date is fixed, from the date of the order. Thus, issuance of certificate under sub-section (1) of section 101 of the Act, 1960, is important for recovery of the dues of the society from member concerned and such a certificate, in fact, is having force of decree passed by the Civil Court. Such certificate is also made conclusive proof of the arrears contained in the said certificate and further is made final under sub-section (3) of section 101. The Registrar, therefore, for this reason also, has to issue notice before granting any certificate under sub-section 7 (1) of section 101 and should give an opportunity of being heard to the member/defaulter concerned. In absence of any notice, grant of such certificate under sub-section (1) of section 101, appears to be illegal. In this premise, despite the fact that remedy by way of revision is made available under section 154 of the Act, 1960, in the facts and circumstances of this petition, in my view, power under Article 227 of the Constitution of India requires to be exercised.” 6 It is not controverted that before issuance of certificate under Section 101, Taluka Deputy Registrar did not issue notice to the petitioner requiring him to place on record his defence before the authority. The certificate under section 101 of the Act ought not to have been issued by the Taluka Deputy Registrar without observing principles of natural justice. The act of issuance of certificate under Section 101 of the Act, as against petitioner by the issuing authority, is illegal and certificate shall have to be quashed so far as it relates to petitioner. It is needless to mention that the Bank would be entitled to proceed against others i. e. principal borrowers and other two guarantors in respect of recovery of the amount covered by the certificate. So far as petitioner is concerned, the Bank shall not be entitled to seek recovery of the amount on the basis of certificate issued on 26.11.2001. 7 In the result, certificate issued by the Taluka Deputy Registrar, 8 Cooperative Societies, Aurangabad, shall stand quashed and set aside so far as it relates to petitioner only and the matter is remitted back to the Taluka Deputy Registrar, Cooperative Societies, Aurangabad, for reconsideration of the issue in respect of issuance of recovery certificate under Section 101 of the Maharashtra Cooperative Societies Act, 1960. The issuing authority shall extend opportunity of hearing to the petitioner and after observing procedural formalities prescribed by law shall proceed to deal with the issue in respect of issuance of certificate as against the petitioner. 8 Rule is accordingly made absolute. In view of peculiar facts and circumstances of this case, there shall be no order as to costs. (R.M.BORDE) JUDGE ******* adb/wp712608