1 mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.10257 OF 2009 The Hindustan Co-op. Bank Limited Petitioner versus The State of Maharashtra and others Respondents Mr.Vishal Ghosalkar for petitioner. Mr.Vijay Pandey a/w Mr.Pawan Mishra for respondents 4 to 6. Ms.P.S.Cardozo, AGP for respondents 1 to 3. CORAM : R.V.MORE, J. DATE : 12th July 2010 PC : 1. Heard learned counsel for the parties. Rule. Since short question is involved, by consent of the parties, Rule is made returnable forthwith. 2. The petitioner is a co-operative bank duly registered under the provisions of Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the said Act") and engaged in carrying on the banking business. The respondent no.4 some time in the year 1999 applied for the loan for his business expansion through Bhandup Branch of the petitioner. In pursuance of his application, the petitioner sanctioned a term loan facility of Rs.10.00 lakhs repayable in 60 monthly installments with interest thereon @ 19% p.a.. The fourth respondent offered the security and mortgaged his ownership flat and the shop premises. In 2 addition to these securities, the respondent nos.5 and 6 have given their personal guarantee to the loan sanctioned to respondent no.4. The petitioner disbursed the loan amount to the respondent no.4 as per the contract. The respondent no.4 initially made payment of the loan installments regularly, however, thereafter committed defaults in repayment of the loan. The petitioner-bank thereafter issued notices to the respondent no.4 in view of defaults in repayment of loan and later initiated proceedings under section 101 of the said Act against respondent no.4 for recovery of balance amount of Rs.5,23,993/- with interest thereon @ 19% p.a.. 3. The learned Assistant Registrar, Co-operative Societies, by his order dated 26th May 2003 granted certificate under section 101 of the said Act in petitioner's favour for recovery of an amount of Rs.5,27,411/- along with interest on the principal amount of Rs.4,70,585/-. 4. The respondent nos.4 to 6 feeling aggrieved preferred a revision application under section 154 of the said Act and by the impugned order, the Divisional Joint Registrar, Co-operative Societies set aside the certificate granted under section 101 of the said Act and remanded the matter back to the Assistant Registrar, Co-operative Societies. This order is impugned in the present petition. 5. I have perused the impugned order. The only ground on which the certificate under section 101 of the said Act is set aside is that prior to 3 filing of the proceedings by the petitioner under section 101 of the said Act, the respondent nos.4 to 6 had deposited Rs.9,50,418/-, and after issuance of recovery certificate, till 13th December 2005, the respondent nos.4 to 6 have deposited a sum of Rs.16,23,693/- with the petitioner. According to the petitioner, the said finding of the learned Divisional Joint Registrar, Co-operative Societies that the respondent nos.4 to 6 had repaid a sum of Rs.16,23,693/- between the period from the date of recovery certificate till 13th December 2005, is factually incorrect and, therefore, the impugned order deserves to be quashed and set aside. The learned counsel for the respondent nos.4 to 6 submitted that after issuance of the recovery certificate, they have deposited a sum of Rs.2.30 lakhs. However, they could not support the finding of the learned Divisional Joint Registrar, Co-operative Societies that after grant of recovery certificate, till 13th December 2005, the respondent nos.4 to 6 have paid a sum of Rs.16,23,693/-. 6. There is no dispute among the parties that a sum of Rs.9,50,480/- was deposited by the respondent nos.4 to 6 with the petitioner bank prior to initiation of the proceedings under section 101 of the said Act. The petitioner bank after taking into consideration this amount, applied for issuance of recovery certificate under section 101 of the said Act for the balance amount namely Rs.5,23,693/-. The respondent nos.4 to 6 in a proceeding under section 101 of the said Act before the Assistant Registrar of Co-operative Societies admitted the claim of the petitioner. However, it is the contention of respondent nos.4 to 6 that after issuance 4 of the recovery certificate, there was an oral compromise between the petitioner bank and respondent nos.4 to 6 and pursuant to the said alleged oral compromise, the petitioner agreed to settle the dispute by accepting Rs.3.00 lakhs towards full and final settlement of the dues and out of this amount, Rs.2.30 lakhs was paid and balance amount of Rs. 70,000/- is remained to be paid. This contention of oral settlement and payment pursuant thereto by the respondent nos.4 to 6 is, however, disputed by the petitioner bank. 7. The learned Divisional Joint Registrar, Co-operative Societies while passing the impugned order recorded a finding that the respondent nos.4 to 6 have deposited with the petitioner a sum of Rs.16,23,693/- after the date of issuance of recovery certificate. This finding even respondent nos.4 to 6 could not support. Therefore, I am of the opinion that the impugned order which is passed solely on the basis of above finding, deserves to be quashed and set aside. The matter is required to be remanded back to the Divisional Joint Registrar, Co-operative Societies to decide afresh. 8. In the circumstances, I dispose of the petition by passing following order :- A) The impugned order is quashed and set aside and the matter is remanded back to the Divisional Joint Registrar, Co-operative Societies, Mumbai for hearing afresh; 5 B) The learned Divisional Joint Registrar, Co-operative Societies, Mumbai shall dispose off the revision application of the respondent nos.4 to 6 expeditiously and preferably within a period of twelve weeks from the date of receipt of an ordinary copy of this order, in accordance with law and in the light of the observations made above; C) During pendency of the revision application before the Divisional Joint Registrar, Co-operative Societies, Mumbai, the ad-interim order granted by this Court on 14th December 2009 will continue to operate; D) Rule is made absolute in above terms. (R.V.MORE, J.)