1 lpa297-11.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD LETTERS PATENT APPEAL NO.297/2011 Rajabhau Raghunathrao Mundhe .. Appellant Versus The State of Maharashtra and others ... Respondents .... Mr.R.N.Dhorde and Mr.R.L.Kute,Advs.for appellants. Mr.D.R.Korde,AGP for respondents 1,2 & 6. Mr.S.B.Talekar,Adv.for respondent no.3 Mr.D.J.Choudhari,Adv.for Respondent 5. ... CORAM : NARESH H.PATIL AND T.V.NALAWADE, JJ. DATE : 14TH NOVEMBER ,2011 ORAL ORDER 1] Heard. 2] The appellant has challenged the judgment and order passed by learned Single Judge in Writ Petition No.7219/2010 on 29/9/2011. The 2 lpa297-11.odt appellant was issued show cause notice under the provisions of Section 73 FF (1) (i) [c] [ii] and Section 78 [1] of the Maharashtra Cooperative Societies Act 1960 [hereinafter referred to as the said Act for short]. At the relevant time, the appellant was a Director of Beed District Central Cooperative Bank Ltd. Beed. The appellant had issued 5 cheques and had utilized I.B.P. [Internal Bill Purchasing] facility. The bank was requested for loan/advance by discounting the cheques. The appellant personally received an amount of Rs.1,09,00,000/- as advance for running business of Gajanan Ginning Karkhana, Wadwani and the son and nephew of the appellant also received similar amounts. The branch manager was directed to recover the amount of advance alongwith interest at 21% p.a. A notice was sent to the appellant by the branch manager dated 19/12/2008 demanding the advance alongwith interest @ 21% p.a. The appellant requested the bank that the demand of interest @ 21% was very high and it be reduced to 14% p.a. Thereafter, the bank took decision to accept the amount from the appellant and his relatives alongwith interest at the rate of 14% p.a. Fresh demand was made on 9/7/2009 within 30 days from the said date. The appellant admittedly deposited the amount. The notice u/s 78 of the Act was issued by the Registrar, Cooperative Societies for initiation of disqualification proceedings. One of the charges was in respect of availing of I.B.P. facility from the bank misusing power as Director of the bank and another was in respect of default in payment of the said amount. The appellant failed to deposit said amount within the stipulated time inspite of receiving the notice from the bank. The 3 lpa297-11.odt Registrar, Cooperative Societies rejected the explanation of the appellant and found the appellant guilty of misusing his power as Director of the bank and for committing default as contemplated u/s 73 [FF] [1] [i] [c] [ii] of the said Act. 3] The appellant challenged the said order before the Hon'ble Minister. The appeal came to be dismissed. Writ Petition was filed against the impugned judgment and order accordingly. 4] Shri Dhorde, learned counsel for appellant submitted that after receipt of demand on 9/7/09, the appellant deposited the said amount within 30 days alongwith 14% interest p.a. It was submitted that the impugned action taken against the appellant is malafide and due to political interest of the opponents of the appellant. The counsel submitted that the Hon'ble Minister had shown keen interest in the outcome of the proceedings initiated against the appellant. It was submitted that there is sufficient evidence on record to show that the bank had received interest at 14% p.a. for the said transaction. The punishment under impugned orders is harsh as the appellant was disqualified for a further period of one term under Section 78 [1] [b] of the Act. The appellant had also deposited the difference of amount of interest with the bank. 5] Shri S.B.Talekar, learned counsel appearing for respondent no.3 submits that this is a gross case where the Director of the bank by misusing 4 lpa297-11.odt his power and authority has committed violation of the provisions of law. The counsel submits that due to position held by appellant, the bank authorities favoured him due to which the bank suffered financial loss. The conduct of the appellant was prejudicial to the interest of the bank. Inspite of issuance of notice by the bank, the appellant did not deposit the amount alongwith interest at the rate of 21% p.a. 6] The learned counsel for the bank submitted that in the year 2009, the board took decision to charge interest at 14% p.a. Accordingly, appellant had deposited amount alongwith 14% interest. Learned AGP submitted that State authority had passed order following principles of natural justice. The orders were reasoned orders. There was no reason for Hon’ble Minister to interfere into the outcome of the proceedings. The allegations in that respect are baseless according to learned A.G.P. 7] We have perused the record and the order passed by learned Single Judge and the authorities under the Cooperative Societies Act. We are of the view that being a Director of the bank, the appellant ought to have maintained caution in availing the facilities from the same bank in respect of loan advances or facilities like IBP. Even if the appellant as an ordinary customer, wanted to utilize these facilities, then the same treatment like others ought to have been meted out to the appellant in respect of awarding interest by the bank. A little insistence of the appellant claiming reduction of interest from @ 5 lpa297-11.odt 21% to 14% goes adverse to the conduct of the appellant because of the position appellant was holding. Inspite of communication received in December 2008, from the bank, to deposit the amount alongwith interest of 21%, the appellant did not show any diligency in depositing the amount. Instead, the appellant insisted that the amount should be reduced to 14%. This has also gone adverse in respect of conduct of the appellant as a Director of the bank. In the light of the facts before the authorities and the report, we find that the issue in respect of allegation made against the Hon’ble Minister is required to be ignored by this Court. The authorities concerned have followed principles of natural justice and passed reasoned order. The learned Single Judge addressed the issues raised by the contesting parties and had concurred with the view in disqualifying the appellant. We do not find any apparent glaring error to disturb these orders in exercise of our jurisdiction in the Letters Patent. 8] The learned counsel Shri Talekar submitted that there are subsequent developments. Vide order dated 11/11/11, Board of Directors has been superseded and Administrator has been appointed. The learned A.G.P. has placed on record copy of order passed u/s 110-A [(1)] (iii) of the Maharashtra Cooperative Societies Act, 1960 in this regard. 9] Perusal of the said order indicates that NABARD vide its letter dated 27/9/11 furnished the statutory inspection report of the bank and observed 6 lpa297-11.odt serious irregularities which resulted in appointing an Administrator over the Bank. 10] We do not find any merit in this Appeal. Appeal is dismissed. Consequently, Civil Application No.12920/11 is also rejected. (T.V.NALAWADE, J.) (NARESH H. PATIL,J.) umg/lpa297-11