Bombay High Court Reviews Territorial Jurisdiction of Assistant Registrar in Co-operative Loan Recovery Proceedings Under Section 101 of MCS Act. Challenge Centres on Whether Loan Sanction at Head Office Confers Jurisdiction Despite Execution and Disbursement at Branch Office.

Writ petitions challenging the order of the Assistant Registrar, Co-operative Societies, Nandura, which held that he had territorial jurisdiction to entertain recovery applications under Section 101 of the Maharashtra Co-operative Societies Act, 1960.

Petitioners sought quashing of the order dated 5 August 2020 and a declaration that the Assistant Registrar, Nandura, lacked territorial jurisdiction to adjudicate the Section 101 proceedings, as the loan transactions occurred at the Shegaon branch.

The petitioners faced recovery proceedings under Section 101 initiated by the respondent bank before the Assistant Registrar at Nandura. They objected to territorial jurisdiction, arguing that all loan-related activities took place at Shegaon, but the Assistant Registrar rejected their objection by the impugned order, leading to the writ petitions.

The Assistant Registrar, Co-operative Societies, Nandura, by order dated 5 August 2020, held that he had territorial jurisdiction because the loan sanction resolution dated 27 December 2016 and the resolution to initiate legal proceedings dated 4 August 2019 were passed at the head office in Nandura. Subsequently, a revenue recovery certificate was issued against two petitioners, and an application for amendment challenging it was allowed in Writ Petition No. 2083 of 2020 while pending in Writ Petition No. 2037 of 2020.

Whether the Assistant Registrar, Co-operative Societies, Nandura had territorial jurisdiction to entertain applications under Section 101 of the MCS Act when the loan transactions, execution of documents, and disbursements occurred at the Shegaon branch. Interpretation of Sections 2(24), 3, and 11 of the MCS Act regarding the appointment and territorial limits of the Registrar and Assistant Registrar. Whether the place of sanction of loan and resolution for recovery at the head office in Nandura, as opposed to the place of execution and disbursement at Shegaon, determines territorial jurisdiction under Rule 86A and Form-U of the MCS Rules.

Petitioners argued that all actions regarding submission of loan application, execution of mortgages, and disbursement of loan were done by the Shegaon branch of respondent no.1, and mere head office sanction or general resolution for action against defaulters did not clothe the Assistant Registrar at Nandura with jurisdiction. Petitioners relied on Sections 2(24), 3, 11, 101(3) and 101(4) of the MCS Act, as well as Rule 86A and Form-U of the MCS Rules, and the notification dated 7 August 1993, to contend that an Assistant Registrar exercises powers only within the area of appointment, which determines territorial jurisdiction. Respondent bank argued that because the Head Office was at Nandura and the resolution sanctioning the loan and the resolution to initiate action against defaulters were passed at Nandura, the Assistant Registrar at Nandura had jurisdiction to entertain and decide the applications under Section 101.

All these writ petitions, raise an interesting issue regarding the question of territorial jurisdiction of the respondent no.5 in exercising the powers as vested in him under the various provisions of the Maharashtra Co-operative Societies Act, 1960 It is an admitted position, that the respondent no.1- Bank, has Branch Office at Shegaon, where all the petitioners, conduct their various businesses. All the documents regarding the loan were executed at Shegaon, as well as the disbursements were made to the petitioners from the Shegaon Branch of the respondent no.1. By the impugned order dated 5/8/2020, the respondent no.5 relying upon the position that the loan application was sanctioned at Nandura as per Resolution dated 27/12/2016 and the Resolution for initiating legal proceedings was passed at Nandura on 4/8/2019, held that the respondent no.5 had territorial jurisdiction. Mrs. Deshpande, learned Counsel for the petitioners submits, that the respondent no.5, did not have any territorial jurisdiction to entertain an application under Section 101 of the MCS Act, as all the actions regarding the submission of the application for grant of a loan, the execution of the mortgages as well as the disbursement of the loan, was done by the Shegaon Branch of the respondent no.1

The respondent no.1 bank initiated proceedings under Section 101 of the MCS Act against the petitioners before the Assistant Registrar, Co-operative Societies, Nandura. Petitioners raised an objection regarding territorial jurisdiction, contending all loan transactions occurred at Shegaon. The respondent bank opposed the objection by reply dated 29 July 2020, arguing head office jurisdiction. Petitioners filed a rejoinder-cum-written notes of argument on 5 August 2020. By impugned order dated 5 August 2020, the Assistant Registrar held he had territorial jurisdiction. Subsequently, a revenue recovery certificate was issued against two petitioners; an application for amendment challenging it was allowed in Writ Petition No. 2083 of 2020 and pending in Writ Petition No. 2037 of 2020; no recovery certificate was issued in the other petitions. The writ petitions were heard on 27 October 2021.

• Maharashtra Co-operative Societies Act, 1960: 2(24), 3, 11, 101, 101(3), 101(4)
• Maharashtra Co-operative Societies Rules, 1961: 86A