Case Note & Summary
The petitioner, Dr. Babasaheb Ambedkar Nagari Sahakari Bank Ltd., filed a writ petition challenging an order dated 14.10.2020 passed by the Divisional Joint Registrar, Co-operative Societies, Aurangabad, under Section 154 of the Maharashtra Co-operative Societies Act, 1960. The bank had granted a loan to one Arun Zare, who died. The bank sought recovery of the outstanding loan amount from respondent No.3, Sow. Kamal Arun Zare, claiming she was the legal heir of the deceased borrower. The Registrar passed an order directing recovery from respondent No.3. Respondent No.3 disputed her liability, contending that she was not the legal heir and that the loan was not taken for family necessity. The bank argued that the Registrar had jurisdiction under Section 154 to order recovery. The court analyzed the scope of Section 154, noting that it provides for summary proceedings for recovery of sums due to a society. The court held that disputed questions regarding the status of a person as a legal heir and liability to repay cannot be decided in such summary proceedings. The court set aside the Registrar's order and relegated the bank to pursue its remedy by way of a civil suit or arbitration under the Act. The petition was allowed, and rule was made absolute.
Headnote
A) Co-operative Law - Recovery of Loan - Section 154 of Maharashtra Co-operative Societies Act, 1960 - Summary Proceedings - The Registrar under Section 154 cannot adjudicate disputed questions of title or succession in summary proceedings. The dispute regarding whether respondent No.3 is the legal heir of the deceased borrower and liable to repay the loan requires a full-fledged inquiry. The order directing recovery from respondent No.3 was set aside, and the petitioner was relegated to civil suit or arbitration. (Paras 1-10) B) Co-operative Law - Legal Heir - Liability - Section 154 of Maharashtra Co-operative Societies Act, 1960 - The Registrar's order under Section 154 is summary in nature and cannot be used to decide complex questions of fact such as who is the legal heir of a deceased member. The petitioner's claim that respondent No.3 is the legal heir and liable to repay the loan was disputed, and the Registrar erred in deciding the same without proper evidence. (Paras 5-10)
Issue of Consideration
Whether the Divisional Joint Registrar under Section 154 of the Maharashtra Co-operative Societies Act, 1960 can decide disputed questions regarding the status of a person as a legal heir and liability to repay a loan of a deceased member in summary proceedings.
Final Decision
The writ petition is allowed. The order dated 14.10.2020 passed by the Divisional Joint Registrar, Co-operative Societies, Aurangabad is quashed and set aside. The petitioner is relegated to avail remedy by way of civil suit or arbitration under the Act. Rule is made absolute.
Law Points
- Section 154 of Maharashtra Co-operative Societies Act
- 1960
- Recovery of loan from legal heir
- Disputed questions of title
- Summary proceedings
- Relegation to civil suit
