Case Note & Summary
The petitioners, Pravin Laxmanrao Chakole and Dipali Pravin Chakole, were borrowers and members of the New Subhedar Nagari Sahakari Pat Sanstha Ltd., a credit cooperative society registered under the Maharashtra Cooperative Societies Act, 1960. They had obtained a loan of Rs.80,00,000/- on August 16, 2018, which they failed to repay. Consequently, a recovery certificate under Section 101 of the Act was issued against them for an amount of Rs.1,02,19,685/-. After the certificate was issued, the petitioners assured the society in a communication dated June 28, 2022, that they would repay the amount within one month, but they did not honour this commitment. The society then sought to auction the petitioners' house property, issuing an advertisement on December 23, 2023. In response, the petitioners submitted a proposal for One Time Settlement on January 12, 2024, but they did not deposit any amount to demonstrate their bona fides. The petitioners then filed a writ petition under Article 226 of the Constitution, challenging the auction proceedings and seeking relief under Section 154 of the Act. The court considered the petitioners' conduct, noting that they had defaulted on the loan for over five years, failed to honour the recovery certificate, and did not deposit any amount despite proposing a settlement. The court found that the petitioners lacked bona fides and had not made out any case for interference. The writ petition was dismissed, and the rule was discharged. No order as to costs.
Headnote
A) Cooperative Law - Recovery of Dues - Section 101, Maharashtra Cooperative Societies Act, 1960 - Recovery Certificate - The petitioners, borrowers and members of a credit cooperative society, defaulted on a loan of Rs.80,00,000/- obtained on August 16, 2018, leading to a recovery certificate under Section 101 of the Act for Rs.1,02,19,685/-. Despite assurances to pay within one month (communication dated June 28, 2022), they failed to do so, resulting in auction of their house property vide advertisement dated December 23, 2023. The court held that the petitioners lacked bona fides as they did not deposit any amount despite proposing a One Time Settlement on January 12, 2024. (Paras 2-4) B) Cooperative Law - One Time Settlement - Bona Fides - The petitioners invoked the State Government's One Time Settlement policy but failed to demonstrate bona fides by depositing any amount. The court noted that the petitioners had not repaid the principal amount for over five years and had not honoured the recovery certificate. Consequently, the court dismissed the writ petition, finding no merit in the challenge to the auction. (Paras 4-5)
Issue of Consideration
Whether the petitioners are entitled to relief against the auction of their property in recovery proceedings under the Maharashtra Cooperative Societies Act, 1960, given their failure to repay the loan and lack of bona fides in proposing a One Time Settlement.
Final Decision
The writ petition is dismissed. Rule is discharged. No order as to costs.
Law Points
- Recovery certificate under Section 101 of Maharashtra Cooperative Societies Act
- 1960
- One Time Settlement policy
- Bona fides of borrower
- Section 154 of Maharashtra Cooperative Societies Act
