Case Note & Summary
The petitioners, Amit Prakash Jori and Jyoti Prakash Jori, were borrowers who had taken a loan of Rs.30 lakh from respondent No.2, Dyandeep Co-op. Credit Society Limited, on 5th October 2016. Upon default, the Assistant Registrar, Cooperative Societies issued a certificate under Section 101 of the Maharashtra Cooperative Societies Act, 1960 for recovery of Rs.28,15,685/-. The respondent No.4, Special Recovery Officer appointed under Section 156 of the Act, issued a demand notice and subsequently, on 16th August 2024, the District Magistrate, Pune passed an order under Rule 107(11)(d-1) appointing the Tehsildar as the officer to take possession of the mortgaged property. The petitioners challenged this order by way of a writ petition under Article 226 of the Constitution of India, contending that the Special Recovery Officer was not duly notified by the State Government as required under Section 156, and that the District Magistrate failed to provide cogent reasons and an opportunity of hearing, violating principles of natural justice. The respondents, on the other hand, produced a gazette notification dated 21st July 2022 designating the Special Recovery Officer at Serial No.8 for Pune and Satara districts, and argued that the District Magistrate's power under clause (d-1)(vi) is ministerial and does not require a hearing. The Court examined the relevant provisions, particularly Section 156 of the Act and Rule 107(11)(d-1)(vi) of the Maharashtra Cooperative Societies Rules, 1961. It held that the language of Section 156 is unambiguous in vesting recovery powers in the Registrar or any officer subordinate to him or an officer of a society notified by the State Government. The Court further observed that Rule 107(11)(d-1)(vi) empowers the District Magistrate to take possession upon request by the Recovery Officer, and this power is ministerial in nature, not requiring a hearing to the borrower. The Court also noted that sub-rule 19(a) of Rule 107 provides an opportunity to the affected person to raise a claim or objection to the attachment, and the Recovery Officer is empowered to adjudicate such objections. Accordingly, the Court dismissed the writ petition, holding that the impugned order was valid and did not suffer from any procedural irregularity.
Headnote
A) Cooperative Law - Recovery of Dues - District Magistrate's Power under Rule 107(11)(d-1)(vi) - Maharashtra Cooperative Societies Act, 1960, Section 156 and Maharashtra Cooperative Societies Rules, 1961, Rule 107(11)(d-1)(vi) - The power of the District Magistrate under Rule 107(11)(d-1)(vi) is ministerial and confined to securing compliance of the request made by the duly appointed Special Recovery Officer. The statutory framework does not contemplate affording an opportunity of hearing to the borrower or guarantor before passing such order. (Paras 7-10) B) Cooperative Law - Recovery of Dues - Notification of Special Recovery Officer - Maharashtra Cooperative Societies Act, 1960, Section 156 - The Special Recovery Officer must be duly notified by the State Government under Section 156. In the present case, the respondent No.4 was notified as per gazette notification dated 21st July 2022, and therefore the application before the District Magistrate was maintainable. (Paras 5, 8) C) Cooperative Law - Recovery of Dues - Opportunity of Hearing - Maharashtra Cooperative Societies Act, 1960, Section 156 and Maharashtra Cooperative Societies Rules, 1961, Rule 107(11)(d-1)(vi) - The District Magistrate is not required to provide cogent reasons or afford an opportunity of hearing to the borrower before passing an order under clause (d-1)(vi). The provision is designed to ensure expeditious recovery and does not violate principles of natural justice as the borrower has other remedies available. (Paras 4, 10)
Issue of Consideration
Whether the District Magistrate's order appointing the Tehsildar to take possession of the mortgaged property under Rule 107(11)(d-1)(vi) of the Maharashtra Cooperative Societies Rules, 1961 is valid despite alleged procedural irregularities and lack of hearing to the borrower.
Final Decision
The writ petition is dismissed. The impugned order dated 16th August 2024 passed by the District Magistrate, Pune, is upheld.
Law Points
- District Magistrate's power under Rule 107(11)(d-1)(vi) is ministerial
- no hearing required
- Special Recovery Officer must be duly notified under Section 156 of the Maharashtra Cooperative Societies Act
- 1960
