1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.9207 OF 2007 Janakalyan Sahakari Bank Ltd. .. Petitioner Versus Shivaji Pahinkar, Divisional Joint Registrar, Coop.Societies Mumbai Division, Mumbai & Ors. .. Respondents Mr.N.V.Walawalkar, Senior Advocate i/b. M/s.V.Deshpande & Co. for petitioner Mr.Y.S.Jahagirdar, Senior Advocate i/b.Y.P.Gandhi for respondent Nos. 4 and 5 Mr.C.J.Sawant, Senior Advocate, i/b.K.J.Kakani for respondent No.3 Mr.R.M.Patne, A.G.P. for respondent Nos.1, 2 and 6. CORAM : S.C.DHARMADHIKARI, J. DATE : 6th February 2008 ORAL ORDER:- . Rule. Learned A.G.P. waives notice for respondent Nos. 1, 2 and 6, Mr.Hakani waives notice for respondent No.3, Mr.Gandhi waives notice for respondent Nos. 4 and 5. 2 2. By consent of parties, rule made returnable forthwith. By this petition under Articles 226 and 227 of Constitution of India, petitioner is challenging an order passed by the Divisional Joint Registrar, Coop.Societies, confirming that of the Assistant Registrar of Coop.Societies, Mumbai Division. 3. The Divisional Joint Registrar by the order under challenge has, upon an application for condonation of delay filed by the petitioner, not only refused to condone the delay in filing of revision application before him but also upheld the order of Assistant Registrar on merits. 4. In other words, the order of Assistant Registrar dismissing the application for issuance of recovery certificate stood confirmed by the impugned order dated 24th July 2007. 3 5. It is not in dispute that the petitioner is a scheduled bank registered under the Maharashtra Coop.Societies Act, 1960 (for short "Act"). Petitioner is the applicant in Revision Application No.715 of 2006 which was filed before the Divisional Joint Registrar. Petitioner is aggrieved and dis-satisfied with the order of the Assistant Registrar passed on 16th March 2006. 6. It is the grievance of the petitioner that third respondent is a proprietor of M/s.Shri Shankar Plastics and carries on business as Stockists and Traders of Plastics and allied products. Respondent No.3 is member and shareholder of petitioner bank. Respondent No.3 was also member of Board of Directors of petitioner from July 1998 to May 2003. He was also member of Business Loan Sub-committee of Directors of petitioner. This Committee was empowered under the Rules governing the working 4 of the petitioners, to sanction loans to members. It is their case that respondent No.3, during his tenure as Director so also as member of the said Committee was able to avail of and obtain huge loans. According to them, the dues payable by respondent Nos. 3 and 4 as per the statements of Account is Rs.8,41,60,942/- approximately. 7. After narrating the various facilities that were availed of and the renewals thereof, it is contended that respondent Nos. 4 and 5 attended office of the petitioner and delivered so also deposited title deeds of their flat premises. Thus, dues of the petitioner was secured by Equitable Mortgage. 8. The cash credit facility and additional cash credit facility were renewed and placing reliance thereupon, it is contended that the dues at the end of year 2001 stood at Rs.6.5 Crores. There were other facilities which were also 5 availed of. The details of the same are set out in the petition as also in the Revision Application. 9. Petitioner placed reliance upon the Balance sheet for the financial year 2002-03, wherein the respondent No.3 acknowledged his liability to the tune of Rs.7,08,44,407.90. 10. It is contended that respondent No.3 refused to pay off and clear the dues and liability after he ceased to be a Director. 11. It is in such circumstances, that an application was filed before the Assistant Registrar seeking a direction that recovery certificate under section 101 of the Act be issued in favour of the petitioner. 12. Said application together with annexures thereto came to be forwarded to the 6 opponents/respondent Nos. 3 to 5 and, thereafter, it is the specific case of the petitioner that the Assistant Registrar has taken the same on file. Reliance is placed upon the roznama which was maintained by the Assistant Registrar. The proceedings really commenced after October 2005. After October 2005, the matter was adjourned to 16th November 2005 and, thereafter to 8th December 2005. It was pointed out that the Vakalatnama was taken on record on 8th December 2005, the statement was recorded that notice has not been issued to Opponent No.1 before the Assistant Registrar. There are several applications which are filed and taken on record including rejoinder of the bank and the matter was adjourned to 15th December 2005. On 15th December 2005, a copy of rejoinder was handed over to the opponents and the matter was adjourned to 22nd December 2005. Placing reliance upon the roznama of 22nd December 2005, it is contended that the roznama records that 7 oral arguments were made by the Opponent Nos. 2 and 3. It is a direction to file rejoinder which came to be issued to the Bank and also that both sides should file their written arguments. It is contended that thereafter, the written arguments were forwarded and there is an acknowledgement of the same being taken on record. There is also a reference made in the petition to the filing of compilation. 13. It is the specific case of the petitioners in the revision application that they heard nothing after filing of the written arguments and compilation and hence in September 2006, they made enquiries as to whether any orders have been passed on the recovery application. On 28th September 2006, the Chief Executive Officer of Brihanmumbai Nagari Sahakari Banks Association Ltd. informed the petitioners that the Assistant Registrar has already disposed of the application. He has issued 12 Recovery 8 certificates prior to the date of his transfer. However, with regard to the subject recovery application, the bank for the first time became aware of an order being passed by the Assistant Registrar rejecting their recovery application. The order is dated 16th March 2006. It is in such circumstances, that they approached the revisional authority and the Revisional Authority was requested that the revision application which is received on its file on 27th November 2006, should be decided on merits after condoning the delay. Petitioners contended before the Revisional Authority, in support of their plea for condonation of delay, that a back dated order has been passed and their apprehension is that only after receipt of their communication the said order has been passed but it is shown as if it is delivered on 16th March 2006. Their second contention was that the order itself records that the copies of the same would be forwarded to the petitioner so also the opponents but no 9 communication was received from the Assistant Registrar. In such circumstances from the date of their knowledge, revision application has been preferred but if it is to be construed as belated and delayed application, then, there is sufficient cause for the same being entertained and decided on merits. There are several grounds insofar as the merits of the order passed by the Assistant Registrar are concerned. The same are not referred by me inasmuch as, I have heard the argument with regard to the approach of the Divisional Joint Registrar in refusing to condone the delay. I had made it clear to parties that insofar as the merits of the matter are concerned, this Court would give an opportunity to parties only in case the revision application cannot be restored to the file. In other words, if the bank satisfies this Court that sufficient cause was made out for approaching Divisional Joint Registrar belatedly, then, the Revision application will have to be restored and be heard 10 on merits in accordance with law. If this Court is not satisfied with the cause shown by the bank, then, there is no question of interfering with the impugned order as this is not a Court of Appeal. 14. Mr.Walawalkar, learned Senior Counsel for petitioners urges that the bank had made out sufficient case for condoning the delay. He invites my attention to the Application for condonation of delay which has been affirmed by Senior Chief Manager of the Bank and has urged that the Bank has made out sufficient cause for condoning the delay. Thus, there is sufficient cause for condoning delay. He has urged that there is a procedure which is prescribed by the State which guides the Assistant Registrar while deciding subject application or applications for issuance of recovery certificate. That procedure is admittedly not followed. One of the stipulation for guidance of the Assistant 11 Registrar is that the order passed by him must be duly communicated. There is no communication inasmuch as nothing has been produced before the Divisional Joint Registrar to show that the opponents to the recovery proceedings had knowledge of the order or that the order was duly served on them. He submits that apart from the allegations that have been made with regard to back-dating of the order of the Assistant Registrar, additionally, in paras 7 to 10 of the application, it has been specifically pointed out that after the written submissions were filed, there was no communication from respondent No.6 or 7 who are parties to the Revisional Proceedings. In such circumstances, knowledge of the bank with regard to the recovery certificate and a copy thereof being a matter of September 2006, there is a delay of 197 days technically which deserves to be condoned in the interest of justice. 12 15. Mr.Walawalkar has then taken me through the order of the Divisional Joint Registrar and more particularly para 5 thereof. It is urged by him that the impugned order devotes a large part with regard to the application made for condonation of delay and bonafides of the bank. It is only thereafter and while dealing with rival contentions that the Divisional Joint Registrar in para 11 has observed that "there is no case made out for condonation of delay". However, Mr.Walawalkar has severely criticised the approach of the Divisional Joint Registrar in commenting upon the merits of the application. He submits that if there was no sufficient cause and revision application deserves to be dismissed only on the ground that it is time barred, then, there was no occasion to make any observations from paras 12 to 14 of the impugned order. He submits that there was no reference made to the written statement and to the documents produced by the Bank on record. Although, omnibus 13 observation is made in para 15 of the impugned order, the Divisional Joint Registrar has not adverted to the Balance sheet, statement of Account before recording that the bank has failed to substantiate its contentions before the Assistant Registrar. The bank has been faulted erroneously for not producing some statement but they are all of a prior period. He submits that the observations in para 13 that respondent Nos. 1 to 4 before the Divisional Joint Registrar are not members of the bank and that certified copies of the complete statement of account was not produced before the Assistant Registrar and, he, therefore, is justified in dismissing recovery application, are wholly erroneous and vitiated by non application of mind. 16. For all these reasons, Mr.Walawalkar submits that the delay be condoned and the impugned order be quashed and set aside. 14 17. Mr.C.J.Sawant, learned Senior Counsel appearing for respondent No.3 and Mr.Jahagirdar, learned Senior Counsel appearing for respondent Nos. 4 and 5 have supported the impugned order. Additionally, both of them contend that the Bank has falsely implicated and involved the statutory authorities. They have made false and reckless allegations of the order being backdated. These allegations have not been substantiated. On the other hand, in the affidavit in reply which is filed, it is pointed out that the bank had knowledge of the proceedings and the impugned order as early as May 2006. Both of them submit that once the bank comes with a false case of the order being backdated and is unable to substantiate the same, either before the Divisional Joint Registrar or before this Court, then, the discretionary order of the Divisional Joint Registrar should not be interfered with and the petition be dismissed. Even on merits, according to them, the finding of the Assistant 15 Registrar and that of the Joint Registrar requires no interference. Mr.Sawant has relied upon a decision in the case of Binod Bihari Singh Vs.Union of India, reported in (1993) 1 S.C.C. 572 to contend that once a false stand is taken with regard to the receipt of the order of the Assistant Registrar only to get rid of the bar of limitation then, no court should encourage such plea and put a premium on the falsehood by condoning the delay. While not disputing that liberal principles must apply, both distinguish the present case by pointing out that the bank did not approach the Divisional Joint Registrar with a plea that it did not receive the order despite the order stating that the copies have been forwarded to all. It approached the Divisional Joint Registrar with a specific case that the order has been backdated and that is why no interference is necessary with the impugned order. 16 18. When this matter was argued and both sides invited my attention to number of documents and the Roznama, I though it fit to direct the learned A.G.P. to produce the original record in this Court so that both sides have adequate opportunity to inspect the same and make further submissions. Original record was directed to be produced also because of the fact that an affidavit in reply has been filed by Rajendra Bagga in this Court (Respondent No.3). He in para 7 of the affidavit in reply, has specifically contended that petitioners made false statements in support of their application for condonation of delay. He has invited my attention to para 22 page 10 of the petition and has contended that the statement is false because, the petitioners were not aware about who was the concerned Assistant Registrar deciding the Recovery application. He submitted that there are two Assistant Registrars on deputation. Further, the false statement in para 23 of the 17 petition that the bank for the first time learnt of the order passed by the Assistant Registrar is also false and my attention was invited by Mr.Sawant to para 7 of this affidavit where it is contended that written arguments were received by the bank on 8th March 2006. All parties had by that time filed their written arguments. Further, the Assistant Registrar on deputation uses the premises of Association and the employee of the petitioner has been constantly visiting the office of the association. There are number of matters which are filed by the petitioner bank and, therefore, merely because a unfavourable order has been passed in the present case that a false plea has been raised by the bank. In fact, the bank has been accused of fabricating evidence and it is alleged that letter was addressed on 7th May 2006 and forwarded to the association on 11th May 2006, seeking one week’s time. This letter was addressed despite having knowledge of passing of the order. It is in these 18 circumstances and that the parties are not taken by surprise by contents of each of the documents before the authorities, that inspection was offered. Further arguments were heard thereafter and the matter was reserved for orders. 19. With the able assistance of learned Senior Counsel for parties, I have perused the petitions and annexures thereto, including the impugned orders and the affidavits in reply and rejoinder. With their able assistance, I have referred to the contents of such of the documents as are relevant for the purpose of deciding the plea of the bank that the delay deserves to be condoned as sufficient cause was made out. 20. The application which was preferred for condoning the delay is affirmed by the Senior Manager and the specific case of the petitioner bank is that it had filed the recovery application. In para 3 of the application, which 19 has been affirmed by the Senior Chief Manager, Mr.Natrajan, the case of the bank is that there was hearing of recovery application on 22nd December 2005. Hearing was adjourned for filing rejoinder by the Bank. Roznama indicates that there is direction to file written arguments. A copy of the same is annexed to the revision application. As per the order passed on 22nd December 2005, the bank filed rejoinder on 26th December 2005 which is on record in the proceedings before respondent No.5. After filing the rejoinder, respondent Nos.1 and 2 filed written statement in March 2006. The written statement filed by respondent Nos. 1 and 2 is voluminous and they filed the same about 2 and half months from the receipt of rejoinder filed by the Bank. In the mean time on 31st March 2006, the Assistant Registrar before whom recovery application was filed and who presided over the hearing was transferred. 20 21. In para 6 of the application for condonation of delay and affidavit in support thereof, it is contended that on 11th May 2006 the bank filed an application before respondent No.6 who had taken charge from respondent No.5, requesting him to give some more time to file reply to the written argument/statement filed by the respondents. 22. It is stated that, the application was taken cognisance of by not the Assistant Registrar before whom the proceedings were filed and who got transferred but by Mr.Rajendra Veer who has been impleaded as respondent No.6 to the revision application. He orally informed the bank to file reply as early as possible and most preferably within a week. It is, thereafter, that the bank filed its reply to the written statement /arguments on 15th May 2006 and my attention is invited to both, the communication dated 11th May 2006 and the acknowledgement dated 21 15th may 2006 by the Association in whose premises the Assistant Registrar was functioning. It is thereafter alleged in paras 8 and 9 that the bank being concerned about the fate of the recovery application, on 21st September 2006, it wrote a letter enquiring about the pendency of the recovery application before respondent No.5 and requesting transfer of all pending recovery applications to the newly appointed Assistant Registrar. It is thereafter that the Association informed the bank by communication dated 28th September 2006 in reply to the letter dated 21st September 2006 that a recovery certificate is already issued. 23. In para 10 of the application this is what is stated:- "10. I say that the respondent No.5 is transferred with effect from 31/3/2006 and the Applicant Bank gave an application on 11/5/2006 and further filed a reply on 15/5/2006 however, in spite of receipt of said reply there was 22 no communication either from respondent No.6 or from respondent No.7. However, the respondent No.7 who had joined hands with respondent No.5 created false record ........ ..... on 16/3/2006 which is backdated. I say that the respondent No.5 has not at all passed any order on 16/3/2006. However, the respondent No.5 and 6 by creating false record made attempt to show that he passed the order on 16/3/2006 which is before transfer order is issued. I say that after knowledge of the so called order passed by respondent No.5, through respondent No.7, the applicant bank immediately approached the office of respondent No.6 and they got the copy of impugned recovery certificate on 29/9/2006. I say that the applicant bank has filed the Revision Application within two months from the date of receipt of the impugned Recovery certificate. However, technically, there is a delay of 197 days and the same be condoned in the interest of justice for the reasons disclosed hereinabove." 24. In my view, this application must be read as a whole and not in the manner suggested by the learned Senior Counsel appearing for respondents. It may be true that after the bank has put in issue the order of the Assistant Registrar being backdated but that is not the only plea in this application. All circumstances have been set out 23 and copies of roznama so also of the correspondence are annexed. It is not as if the genuineness or authenticity so also existence of these documents is an issue. The emphasis is that because the bank raised a plea that the order was backdated and there was collusion between the authorities that its case must not be accepted. In my view, there is substance in the criticism that the bank has unnecessarily raised this plea and when it was unable to substantiate it, it should not have pursued it. However, by that alone, the other pleas should not be defeated. I have perused the order of 16th March 2006 as well. That is an order on the Application No.5602 of 2005. The order itself refers to the recovery application, annexures thereto, oral arguments, written arguments, written arguments filed by the bank and the other side so also the banks response thereto (explanation of the applicant bank). Now if the case of the bank is that the response to the 24 written arguments filed by the respondent was given in May 2006, then, there was no occasion to make a reference to this in the order which has been passed on 16th March 2006. It is not necessary to pursue this aspect any further but it is not as if that the plea raised could not have been substantiated. The bank ought to have placed this aspect and high lighted it further, if at all it wanted to pursue its case of the order being backdated. 25. However, the order itself shows that the same has been forwarded after it has been pronounced for information to the Manager of the petitioner bank. It has been forwarded for information and necessary action. However, both sides could not point out to me as to what is the date on which the same has been forwarded and received by the respondents so also petitioners before me. While it may be true that the some of the respondents have received a copy that itself 25 is no ground to disbelieve the version of the bank. This is not a case where the bank could be said to be callous or negligent. This is a case where part of the explanation was not substantiated but the version as appearing in the condonation application cannot be thrown out as lacking in bonafides. This is a case where delay of 197 days should have been condoned by imposing costs. 26. Instead, the Divisional Joint Registrar has faulted bank for not being able to substantiate its pleas and has proceeded to discard its version in totality not only with regard to delay but on merits as well. The suggestion may have been made by the Bank that the delay condonation application and the revision application should be decided together. That is because the bank has placed its version in its entirety. However, the approach of the Divisional Joint Registrar is faulty. The 26 Divisional Joint Registrar has in para 11 observed that the delay cannot be condoned lightly. He has referred to a Judgement of this Court wherein the learned Single Judge has made the observations referred to by the Divisional Joint Registrar. The Divisional Joint Registrar in para 11 has observed thus:- "11. ...... But the Applicant though attending office of the Registrar regularly for other cases, it very miserably failed to file its reply/written arguments within reasonable time and the respondent No.5 has already passed the order on 16/3/2006. The applicant has not argued on the point of limitation and also kept silence in its written arguments in that regard. The allegations made by the respondent Nos. 1, 2, 3 and 4 in their respective say to the application for condonation of delay has not been controverted by the applicant by filing the rejoinder or explaining the same