:1: :1: :1: IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION WRIT PETITION NO. 6907 OF 2007 Doodhsakhar Sahakari Bank ltd ...Petitioners Versus Satappa Ganpatti Toundkar and Ors. ....Respondents WRIT PETITION NO. 6908 OF 2007 Doodhsakhar Sahakari Bank ltd ...Petitioners Versus Bhikaji Dattatraya Killedar and Ors. ....Respondents WRIT PETITION NO. 6911 OF 2007 Doodhsakhar Sahakari Bank ltd ...Petitioners Versus Jaywant Vasant Warakhe and Ors. ....Respondents ====== Mr.Amit Borkar, Adv. for the petitioners. None for the respondents. CORAM: S.C.DHARMADHIKARI, J. DATED: 15TH FEBRUARY,2008. P.C. P.C. P.C. : : : . Rule. 1. In this Writ Petitions, Notices were issued on :2: :2: :2: 23.01.2008 with a clear indication that the petitions would be disposed off at this stage itself. 2. The Notices have been issued and the Affidavit proving service has been filed. None appears for the respondents although served. A short point is involved in this petition and therefore it is taken up for hearing and disposal finally at this stage. 3. The Co-operative Appellate Court has passed an order on 6.2.2007 in Appeal No.351 of 2004 and connected Appeal. 4. Appeals were directed against an order in Dispute No.920 of 1996 which was instituted by the petitioner before me, claiming a sum alongwith interest from the respondents. The Original Appellant was the Borrower whereas Respondent no.2 and 3 to the Appeal were the guarantors. The Borrowers had filed an Appeal challenging the judgment of the trial court making an Award in favour of the petitioner bank in the principal sum and interest. :3: :3: :3: 5. The Bank was a party to the Appeal. After hearing the Learned Counsel appearing for the Borrower and the Bank, the lower Appellate Court has found that the claim of the Bank was genuine and maintainable, that there was a transaction, and that the default and liability is proved. However, the Trial Court has granted further interest at the rate of 20% p.a. which sum has been reduced by the lower Appellate Court ignoring the Mandate of Section 96 of the Maharashtra Co-operative Societies Act, 1960. The lower Appellate Court has directed payment of interest from the date of the Award till payment at the rate of 6% p.a. 6. Mr.Borkar, appearing for the Bank has invited my attention to Section 96 of the Maharashtra Co-operative Societies Act, 1960 which reads thus :- "S.96. "S.96. "S.96. Decision of Co-operative Court. Decision of Co-operative Court. Decision of Co-operative Court.- When a dispute is referred to arbitration, the Co-operative Court may, after giving reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection with the proceedings, and fees and expenses payable to the Co-operative Court. In case of money claim preferred by society against a member, the amount of award representing the interest shall not be less than the amount of interest accrued thereon, in accordance with the :4: :4: :4: contractual rate of interest, but where such money claim relation to any loan referred to in Section 44A, the provisions of that section shall apply to such money claim as they apply to loan under Section 44A. 7. A bare perusal of the same would demonstrate that in case of money claim preferred by the Society against a member, the amount of Award representing the interest shall not be less than the amount of interest accrued thereon, in accordance with the contractual rate of interest, save and except, money claim relation to loan referred to in Section 44A admittedly. Therefore, anything lower than the contractual rate, which is agreed, could not have been awarded by the court. It is not in dispute before me that what would apply to a Co-operative Court equally applies to a Co-operative Appellate Court. If the Co-operative Court has abided by the Mandate of Section 96, then, to the extent the Award carries interest therein under the terms therein, the lower Appellate Court in Appeal could not have interfered with the same, is the submission. This submission is supported by a decision of this court reported in 2007(3) Bom.C.R.page 170 Ghanshyamdas Madanlal Chaudhary and Anr. V/s. :5: :5: :5: Chikhali Urban Co.op Bank Ltd and Ors. 8. In the instant case, the Trial Court has referred to the contract between the parties and the contractual rate of interest agreed. It has awarded that sum as interest on the principal sum adjudged. The Award of the Co-operative Court is in the following terms :- "1. The Opponent Nos.1 to 3 are jointly and severally liable for repayment and should pay Rs.49,752.50/- to the Disputant alongwith future interest @ 20% p.a. on Rs.49,752.00 from 1.4.1996 till realisation of the amount. Opponents should also pay costs of dispute as under : Court Fee stamps Rs.25.00 Court costs Rs.500.00 Advocate Fees Rs.1080.00 " 9. The quantum of interest is clearly supportable therein as would be clear from para.7 of the order of the Co-operative Appellate Court. Thus, the Trial Court abided by the Mandate of Section 96 and the contract between the parties. Such an Award has not :6: :6: :6: been interfered with by the Co-operative Appellate Court, insofar as, the principle sum adjudged. Then what prevailed upon the Co-operative Appellate Court to modify the Award with regard to interest is not clear to me at all. The reasoning in para-5 on point No.2 is ex-facie unsustainable. It is patently erroneous and illegal because this was not penal interest. There is no question of any penal interest or wilful default, inasmuch as, what the bank claimed was contractual interest which has to be awarded in terms of Section 96. 10. In this view of the matter, there is much substance in the contention of Mr.Borkar that the Award is vitiated by an error apparent on the face of the record and therefore deserves to be interfered with. It is accordingly interfered with under Article 226 and 227 of the Constitution of India. The Writ petition is therefore allowed. Rule is made absolute in terms of prayer clause (b). The Award by the Co-operative court is set aside and and that of the Trial Court is restored. No order as to costs. sd/- :7: :7: :7: *********