1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 1392 OF 2002 1. Uttam S/o Pandurang Sabde } Age : 46 Years, Occ. Business, } R/o : Latur, Tq. & Dist. Latur. } 2. Vithal S/o Tukaram Chalwad } Age : 50 Years, Occ. : Agril. } R/o : Latur, Tq. & Dist. Latur. } 3. Namdeo S/o Nivrutti Chalwad } Age : 40 Years, Occ. Business, } R/o : Latur, Tq. & Dist. Latur. } .... PETITIONERS V E R S U S 1. Osmanabad Janta Sahakari } Bank Ltd., Branch at Latur, } Through its Branch Manager, } Office at Ganjgolai, Latur } Tq. & Dist. : Latur. } 2. The Assistant Registrar } Co-Operative Societies, Latur, } Tq. & Dist. : Latur. } .... RESPONDENTS Mr. V.D.Salunke, Advocate for Petitioner. Mr. A. N.Irpatgire, Advocate for Respondent no. 1. Mr. K.J.Ghute Patil, A.G.P. for Respondent no. 2. 2 [ CORAM : S.S.SHINDE, J. ] JUDGMENT RESERVED ON : 22/09/2009 JUDGMENT PRONOUNCED ON : 29/09/2009 JUDGMNENT : 1. This Writ Petition is filed challenging the Judgment and Order dated 16/3/2002 passed by the Member, Co-operative Appellate Court, Aurangabad in Appeal No. 61 of 2001. 2. The back-ground facts of the case as disclosed in the petition are as under. The Respondent no. 1 herein advanced loan of Rs. 8,00,000/- in favour of petitioners on monthly instalment of Rs. 10,500/- with interest @ 11 % per annum. The petitioners herein executed hypothecation deed in favour of Bank. The rate of interest was not mentioned in the said deed. The petitioners herein requested the Respondent no. 1 - Bank to give him balance statement and statement of accounts, but, the Bank initially avoided to give him balance statement. The respondent no. 1 issued notice through respondent no. 2 to start proceeding under Section 101 of Maharashtra Co-operative Societies Act, 1960 ( for short ‘ the Act ’ ). The petitioners in reply to said notice, contended that he paid huge amount in the month of March, 1996 and still the Bank is intending to initiate the 3 proceedings under Section 101 of the Act and the balance of Rs. 6,86, 531.41 Ps. is shown in the notice issued to him. According to the petitioners, who are original disputants, the Bank in spite of payment of huge amount, has intended to initiate proceedings under Section 101 of the Act for recovery of huge amount and, therefore, the petitioners filed dispute for settlement of accounts and issue of perpetual injunction. 3. The Respondent no. 1 herein filed Written Statement at Exh. 6 and denied the allegations. The Co-operative Court framed necessary Issues and by Judgment and Order dated 14/3/2001, directed the Bank to settle the loan account of disputant and further directions were also issued. Being aggrieved by the Judgment and Order of the Co- operative Court, Nanded dated 14/3/2001, the respondent no. 1 herein filed Appeal No. 61 of 2001. The Co-operative Appellate Court, Aurangabad by his Judgment and Order dated 16/3/2002, allowed the Appeal and the Judgment and Award passed by the Co-operative Court came to be set aside. Being aggrieved by the Judgment and Order of the Member, Co-operative Court, Aurangabad in Appeal No. 61 of 2001, this Writ Petition is filed. 4. Learned counsel appearing for the petitioners invited my 4 attention to the Judgment and Order passed by the Appellate Co- operative Court, Aurangabad and submitted that the appellate Co- operative Court allowed the Appeal holding that the Co-operative Court has no jurisdiction to entertain the dispute filed by the petitioners. The learned counsel further submitted that the Appellate Co-operative Court has relied on the Judgment of this Court in case of Bhusawal People’s Co-operative Bank Ltd. V/s Vijay Ramdas Rane and others in Writ Petition No. 2277 of 2001 and held that Co-operative Court has no jurisdiction once the Certificate under Section 101 of the Act has been issued by the Respondent – Registrar. The learned counsel further submitted that in the present case, the dispute was filed on 18/10/1996 being Dispute No. 373 of 1996 by the present petitioners. The recovery certificate under Section 101 of the Act was issued by the Registrar on 28/10/1996. On 14/3/2001, Co-operative Court decreed the dispute. Thereafter, on 16/3/2002, Appeal filed by the respondent no. 1 Bank came to be allowed. The learned counsel appearing for the petitioners submitted that the reliance placed by the appellate co-operative Court on unreported Judgment of this Court referred above, is wholly misplaced as much as in that case a certificate under section 101 of the Act was issued and this Court was dealing with different facts situation in the said case, however, in the instant case, when the dispute was filed by the present petitioners before the Co-operative Court, no recovery certificate under section 101 of the Act was issued by the 5 Registrar. According to the learned counsel, the ratio laid down by this Court in case of Basaveshwar Co-operative Credit Society Ltd. V/s Jayant Shivpal Banchhode reported in 2009 (1) Mah.L.R. 173 is squarely applicable in the instant case. According to the learned counsel, the remedy of filing dispute under section 91 of the Act is statutory remedy and Co-operative Court is a statutory court. The learned counsel invited my attention to the observations of this Court in paragraph 4 of the Judgment cited supra and submitted that, the Co- operative Court is exercising statutory powers conferred on it under section 91, while Registrar is exercising powers under Section 101 of the Act. They fall in distinct and different jurisdiction. Thus, they are in distinct and different jurisdiction operating in different fields. Therefore, learned counsel would submit that when the dispute was filed before issuance of recovery certificate under section 101 of the Act, the dispute was maintainable and, therefore, appellate Co-operative Court was not right and justified in allowing the Appeal only on the ground that the Co-operative Court has no jurisdiction to entertain the dispute. Therefore, he prayed that Writ Petition may be allowed. 5. The learned counsel for respondent opposed the Writ Petition and submitted that the recovery proceedings were initiated on 9/2/1996. Thereafter, recovery proceedings were almost completed. The dispute came to be filed on 18/10/1996. The recovery certificate is issued under section 101 of the Act on 28/10/1996. Therefore, the 6 learned counsel would submit that, in nut shell , what is challenged under dispute is the certificate issued by the Registrar under section 101 of the Act. The learned counsel invited my attention to the prayers in the dispute and submitted that, in nut shell, the challenge in the dispute was for the issuance of recovery certificate under section 101 and appellate co-operative court has rightly held that, the Co-operative Court has no jurisdiction to entertain the dispute and no infirmity can be pointed out in the Judgment and Order of the appellate Co-operative Court. Hence, he prayed for dismissal of the Writ Petition. The learned counsel for the respondent in support of his contention relied on reported Judgment of this Court in case of Vasundhara Ashokrao Patil V/s Rajaram Bapu Sahakari Bank Ltd. Reported in 2003 (4) Mh.L.J. 315 and submitted that the certificate issued under section 101 of the Act can not be challenged under section 91 of the Act. The only remedy open to the party aggrieved is to file Revision application under section 154 of the Act. The learned counsel further invited my attention to the fact that, in afore-cited Judgment of this Court, the Court has taken notice of reported Judgment of this Court in case of Shri. Kedarling Vikas Seva Scy.Ltd. V/s DinkarBhimrao Raut and ors. , 2003 (1) Mh.L.J. 152. Therefore, learned counsel would submit that the appellate Co-operative Court has rightly held that the co-operative Court has no jurisdiction to entertain the dispute and rightly allowed the Appeal filed by the respondent no. 1 herein. 7 6. After hearing the learned counsel for the petitioner as well as respondent, it is necessary to note some undisputed facts. It is not in dispute that the dispute filed by the present petitioners before the Co- operative Court was filed on 18/10/1996. The recovery certificate under section 101 of the Act was issued on 28/10/1996. The appellate Co-operative Court has allowed the Appeal merely on the point that, the Co-operative Court had no jurisdiction to entertain the dispute filed by the petitioners herein. Once it is not in dispute that the dispute was filed on 18/10/1996 i.e. prior to issuance of the recovery certificate, in that case, the ratio laid down in reported Judgment of this Court in case of Vasundhara V/s Rajaram (cited supra) and in case of Shri. Kedarling Vikas Seva Scy. Ltd. V/s Dinkar (cited supra) is not applicable. In those cases, the certificate under section 101 of the Act was issued and dispute was filed subsequent to the issuance of the certificate. In the instant case, the dispute is filed on 18/10/1996 at the stage of pending proceedings under section 101 of the Act. The certificate came to be issued on 28/10/1996. Therefore, so far stage of filing of the dispute is concerned, the facts of the present case are more akin to the facts in case of Basaveshwar Co-operative Credit Society Ltd. V/s Jayant (cited supra). In said matter, the dispute was filed at the stage when the parties failed to settle the exact amount and the appellant society threatened to proceed to recover the amount as arrears of rent and 8 issued notice, upon receipt of which, the respondent therein filed dispute under section 91 of the Act being Dispute No. 857 of 2006 and took up the plea that the recovery proceedings initiated were without authority and were not sustainable. In the instant case also, the dispute was filed before the recovery certificate was issued and at the stage when recovery proceedings were initiated and same were in progress. In case of Basaveshwar Co-operative Credit Society Ltd. V/s Jayant (cited supra), the Hon’ble Division Bench of this Court in paragraph 4 held, ‘ The Co-operative Court is exercising its statutory powers conferred on it under Section 91, while the Registrar is exercising powers under Section 101 of the Act. They fall in distinct and different jurisdictions. Thus they are distinct and different jurisdictions operating in different fields ’. This Court further in paragraph 5 held, ‘ The proceedings before the Co-operative Court are proceedings before a statutory Court ’. Therefore, what follows from the aforesaid observations by this Court is that, the exercise of the power by the Co-operative Court under Section 91 is distinct and different from the exercise of jurisdiction by the Registrar under Section 101 of the Act. In the present case, the appellate Co-operative Court in paragraph 12 of the Judgment has observed that, ‘ Lower Court ought to have framed preliminary issue of jurisdiction and then should have proceeded further with the dispute ’. It is further observed that, ‘ When 9 the Court have jurisdiction then only it can take cognizance of subject matter of dispute and can hear and decide it ’. “ Basically, lower court had no jurisdiction to take cognizance of the subject put before it in dispute for adjudication. The view taken by lower court about jurisdiction is not correct, legal. In light of these findings, other Issues framed and decided by lower Court are without jurisdiction and need not be discussed. ” On perusal of paragraph 12 of the Judgment of appellate Co-operative Court, the findings recorded by said Court are not sustainable. As rightly held by this Court in case of Basaveshwar Co- operative Credit Society Ltd. V/s Jayant (cited supra), the Co- operative Court is exercising its statutory power conferred on it under section 91 of the Act, while the Registrar is exercising powers under section 101 of the Act and they fall in distinct and different jurisdiction. Apart from this, as per Order XIV Rule 2 of Code of Civil Procedure, “ Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues ”. 7. Therefore, the observation of the appellate Court that the point of jurisdiction should have been considered as a preliminary issue and co-operative court should have decided the same before taking 10 other issues for adjudication, is not in consonance with the provisions of Order XIV Rule 2 of the Code of Civil Procedure. Once it is not under dispute that, the dispute was filed before issuance of certificate under section 101 of the Act, it has to be held that the dispute was maintainable. This view is supported by the Judgment of this Court in case of Basaveshwar Co-operative Credit Society Ltd. V/s Jayant (cited supra). Therefore, the impugned Judgment and Order passed by the appellate Co-operative Court is quashed and set aside. The matter is remanded back to the appellate Co-operative Court for fresh hearing. The appellate Co-operative Court, Aurangabad to decide the Appeal on merits. It will be open for the parties to agitate all issues before the appellate Co-operative Court, Aurangabad. The Writ Petition is partly allowed to the extent above. Since this Writ Petition is pending from 2002, the Maharashtra State Appellate Court, Bombay Bench at Aurangabad is directed to hear and decide the Appeal preferably within six months from today. It is made clear that this Court has not adjudicated the matter on merits and it will be open for both the parties to argue the matter on merits. The Rule is made absolute to the above extent. The Writ Petition is partly allowed and disposed of. Civil Application, if any, stands disposed of in view of disposal of main Writ Petition. [ S.S.SHINDE ] JUDGE knp/WP1392.02