1 WRIT PETITION NO.: 4617 OF 2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD APPELLATE SIDE, CIVIL JURISDICTION WRIT PETITION NO.: 4617 OF 2011 *** M/s Renuka Agro Pvt. Ltd. Company, House No.25705-706. Shri Chhatrapati Shivaji Raje Complex, Mhada Colony, In front of Eknath Nagar, Link Road, Kandiwali, West, Mumbai through its Director Ganesh S/o pundalik Chavan, Age: 45 years, Occu.: Business, R/o Golegaon, Tq. Khultabad, District Aurangabad. ... PETITIONER. VERSUS 1. The State of Maharashtra. Through Secretary, Cooperation And Textile Department, Maharashtra State, Mumbai. Copies to be served on Govt. Pleader, High Court of Bombay, Bench at Aurangabad. 2. The Deputy Registrar, Cooperative Societies, Taluka: Aurangabad. 3. Vaidyanath Urban Cooperative Bank Ltd., Branch at Aurangabad. 4. Sandeep S/o Uttamrao Lagame, Age 34 years, Occu.: Business, R/o N-7, Cidco, Aurangabad. 5. Anil S/o Champalal Agrawal, ` Age: 48 years, Occu.: Business, R/o House No.25705-706, 2 WRIT PETITION NO.: 4617 OF 2011 Shri Chhatrapati Shivaji Raje Complex, Mhada Colony, In front of Eknath Nagar, Link Road, Kandiwali, West, Mumbai. 6., Govind S/o Maheshchandraji Agrawal, Age 37 years, Occu.: Business, R/o House NO.25705-706. Shri Chhatrapati Shivaji Raje Complex, Mhada Colony, In front of Eknath Nagar, Link Road, Kandiwali, West, Mumbai. 7. Vithal S/o Laxman Fatangale, Age Major, Occu.: Agril., R/o Shiv Dhanora, Tq. Gangapur, District Aurangabad. 8. Bhausaheb S/o Jayram Pawar, Age: Major, Occu.: Agril., R/o Pakohra, Post Bhendala, Tq. Gangapur, Dist. Aurangabad. 9. Raju S/o Deorao Thombre, Age: Major, Occu.: Business, R/o Rajiv Gandhi Nagar, Plot No.15, Aurangabad. 10. Ashok S/o Janardhan Chavan, Aged: Major, Occu.: Business, R/o N-7, Cidco, B-1, House No.198, Aurangabad. 11. Sominath S/o Pandharinath Chavan, Age 45 years, Occu.: Agri., R/o Golegaon, Taluka Khultabad, District Aurangabad. ... RESPONDENTS *** Mr. R. T. Nagargoje, Advocate h/f Mr. G. D. Kale, Advocate for the Petitioner. Mr. D. V. Tele, A.G.P. for Respondent/ State Authorities. Mr. R. S. Deshmukh, Advocate for Respondent No.3. *** 3 WRIT PETITION NO.: 4617 OF 2011 CORAM: S. S. SHINDE, J. DATED:- RESERVED ON: 3rd OCTOBER, 2011. PRONOUNDED ON: 12th OCTOBER, 2011. JUDGMENT: 1. Heard learned counsel for the parties. 2. Rule. Rule is made returnable forthwith, heard finally by the consent of the parties. 3. This writ petition takes exception to the issuance of recovery certificate dated 31st December, 2009 issued by Deputy Registrar, Cooperative Societies, Taluka Aurangabad in case No.667 of 2009. 4. The petitioner company applied for loan facility before the Respondent bank. The respondent bank has sanctioned loan amount in favour of the petitioner company on 5th September, 2005. It appears that there is some dispute about repayment of the loan amount. Therefore, Respondent No.3 bank applied before the aforesaid authority for issuance of recovery certificate under section 101 of the Maharashtra Cooperative Societies Act, 1960 bearing Application NO.667 of 2009 for recovery of amount. 4 WRIT PETITION NO.: 4617 OF 2011 5. It is the contention of the petitioner that, before issuing such recovery certificate under section 101 of the Act, the procedure as laid down under Rule 86-A to 86-F of the Maharashtra Cooperative Societies Rules, 1961 is required to be followed. The another contention of the petitioner is that, such certificate is granted in favour of the respondent bank without following the principles of natural justice. The counsel appearing for the Petitioner, relying upon the pleadings in the petition, grounds taken therein and the annexures thereto, would submit that the petition deserves to be allowed. 6. On the other hand, learned A.G.P. appearing for the State has invited my attention to the certificate issued by the authority and submitted that such certificate is issued after following proper procedure as contemplated under the Rules. Learned counsel appearing for the Respondent bank would submit that the Respondent bank has not filed any affidavit in reply. However, learned counsel appearing for the respondent bank has not disputed that before issuing recovery certificate under section 101 of the Act the Deputy Registrar, 5 WRIT PETITION NO.: 4617 OF 2011 Cooperative Societies has not followed the procedure contemplated under Rules 86-A to 86-F of the Rules. However, he submits that if at all this Court is inclined to set aside the recovery certificate, in that case parties may be relegated back before the Deputy Registrar, Cooperative Societies, Aurangabad for denovo hearing. 7. I have given due consideration to the rival submissions. Perused the grounds taken in the petition and annexures thereto and I am of the considered opinion that the procedure which is prescribed under Rules 86-A to 86-F of the Rules has not been followed by the concerned authority while issuing recovery certificate in favour of the respondent bank. 8. On 18th May, 2007 Government of Maharashtra issued notification for amendment of Rule 86 of the Maharashtra Cooperative Societies Rules, 1961. After Rule 86-A by the said notification Chapter VIIIA has been inserted for grant of certificate for recovery. Said amended Rules are called "The Maharashtra Cooperative Societies (First Amendment) Rules, 2007. 9. Rule 86A of said Rules provides for 6 WRIT PETITION NO.: 4617 OF 2011 application for grant of certificate of recovery. Rule 86B provides for scrutiny of applications and notice to parties. Rule 86C provides for production and inspection of documents. Rule 86E provides for hearing of application. Rule 86F provides for judgment, order and certificate. In the said notification, which is placed on record at Exhibit- B at page 22 of the compilation of the writ petition, 'form-U' and 'Form-V' are provided for issuance of recovery certificate under section 101 of the Act in said format. 10. The point raised in this petition is no more res-integra and covered by the judgment of this Court in the case of "Khushal S/o Narayanrao MUndhe V/s Stte of Mharashtra and others" reported in 2007 (4) Mh.L.J. 333. This Court in paragraph Nos.6 and 7 of the said judgment, held that the Registrar has to issue notice before granting any certificate under subsection (1) of section 101 of the Act and should give hearing to the member/ defaulter concerned. In absence of any notice grant of such certificate under subsection (1) of section 101 of the Act appears to be illegal. In Writ Petition No.2070 of 2010 and other connected writ petitions, 7 WRIT PETITION NO.: 4617 OF 2011 also this Court has considered the provisions of section 101 of the Maharashtra Cooperative Societies Act, 1960 and Rule 86A to 86F of the Rules, 2007. The recovery certificate is required to be issued after giving notice to the affected party and after following the mandate of Rule 86A to 86F of the Rules. 11. Therefore, in the afore stated background, when the Respondent authority has not followed the procedure prescribed under Rule 86A to 86F of the Rules, the issuance of certificate is without following the procedure and therefore, same deserves to be set aside. The impugned certificate, to the extent it is issued against the petitioner, is set aside, so also the notice of recovery is set aside. The Deputy Registrar, Cooperative Societies, Aurangabad shall conduct denovo inquiry as per the Rules and after following the due procedure. Parties to the petition shall appear before the Deputy Registrar, Cooperative Societies, Aurangabad on 17th October, 2011 at 11.00 a.m. The parties waive notice for appearance before the Deputy Registrar, Cooperative Societies, Aurangabad. The petitioner may file his written 8 WRIT PETITION NO.: 4617 OF 2011 statement/ reply on the date of appearance or at the most within two weeks thereafter and the proceeding of inquiry shall be completed expeditiously as contemplated under the relevant provisions of the Rules and as far as possible within a period of four months. The petition is allowed to the above extent. Same stand disposed of. Rule made absolute in above terms. No costs. 12. It is relevant to mention that, during pendency of this writ petition, fifty per cent amount of the amount mentioned in the certificate has been deposited by the petitioner with the Respondent bank. Same should remain with the Respondent Bank. [S. S. SHINDE, J.] Dated:12/10/2011. ans/4617 9 WRIT PETITION NO.: 4617 OF 2011 WRIT PETITION NO.: 4617 OF 2011 Date of decision: 12th OCTOBER, 2011. For approval and signature THE HONOURABLE SHRI JUSTICE S. S. SHINDE. Whether Reporters of local papers ... Yes may be allowed to see the judgment? To be referred to the Reporter or not? ... Yes Whether Their Lordships wish to see ... No fair copy of the judgment? Whether this case involves a substantial... No question of law as to the interpretation of the Constitution of India, 1950, or any order made thereunder? Whether it is to be circulated to the ... No Civil Judges? Whether the case involves an important ... No question of law and whether a copy of the judgment should be sent to Nagpur, Goa and Bombay offices? [G. F. ANSARI] PRIVATE SECRETARY TO THE HONOURABLE JUDGE