Case Note & Summary
The petitioner, Kolhapur District Central Cooperative Bank Ltd., challenged the judgment and order dated 13th July 2018 passed by the State of Maharashtra (Respondent No.3) in Appeal No. 654 of 2016, which confirmed the order dated 20th May 2016 passed by the Divisional Joint Registrar (Respondent No.2) under Section 79AA(1) of the Maharashtra Co-operative Societies Act, 1960. The dispute arose from a loan of financial assistance given by the petitioner bank to the respondent No.1, Indira Gandhi Mahila Sahakari Soot Girani Ltd., a cooperative spinning mill, in 1997. The loan became irregular, and on 17th March 2007, the State Government floated a scheme for interest subvention on loans raised by spinning mills in the cooperative sector. The petitioner agreed to extend the scheme, and a Memorandum of Understanding (MOU) was executed on 30th March 2007. The respondent mill acknowledged the amount due as on the date of the MOU. Subsequently, disputes arose regarding the extension of the subvention facility. The petitioner claimed that the respondent mill failed to adhere to the revised repayment schedule, while the respondent mill contended that the benefit of the subvention scheme was being wrongly denied. The Divisional Joint Registrar, by order dated 20th May 2016, directed the petitioner to extend the benefit of the scheme, which was upheld by the State in appeal. The petitioner then filed the present writ petition under Articles 226 and 227 of the Constitution of India. The court, after hearing the parties, found no merit in the petition and dismissed it, upholding the concurrent orders of the authorities.
Headnote
A) Cooperative Law - Interest Subvention Scheme - Section 79AA Maharashtra Co-operative Societies Act, 1960 - The court considered whether the bank could withdraw the benefit of the interest subvention scheme due to alleged default by the mill. The court held that the authorities had correctly found that the mill had complied with the conditions and that the bank's action was not justified. (Paras 1-12)
Issue of Consideration
Whether the order passed by the Divisional Joint Registrar under Section 79AA(1) of the Maharashtra Co-operative Societies Act, 1960, directing the petitioner bank to extend the benefit of the interest subvention scheme to the respondent mill, and the appellate order confirming it, are legal and valid.
Final Decision
The court dismissed the writ petition, upholding the orders of the Divisional Joint Registrar and the appellate authority.
Law Points
- Section 79AA of Maharashtra Co-operative Societies Act
- 1960
- Interest subvention scheme
- Cooperative bank
- Memorandum of Understanding
- Default
- Withdrawal of benefit
Case Details
2020 LawText (BOM) (02) 31
WRIT PETITION NO. 631 OF 2019
Mr. S. S. Patwardhan a/w Mr. B. R. Mandlik for the Petitioner, Mr. A. M. Kulkarani a/w Mr. S. S. Diwan for Respondent No.1, Mr. V. A. Thorat, Special Counsel a/w Ms. V. S. Nimbalkar, AGP for Respondent Nos. 2 and 3 - State
Kolhapur District Central Cooperative Bank Ltd.
Indira Gandhi Mahila Sahakari Soot Girani Ltd., Divisional Joint Registrar, Cooperative Societies, Kolhapur Division, Kolhapur, State of Maharashtra
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging the judgment and order dated 13th July 2018 passed by the State of Maharashtra in Appeal No. 654 of 2016, which confirmed the order dated 20th May 2016 passed by the Divisional Joint Registrar under Section 79AA(1) of the Maharashtra Co-operative Societies Act, 1960.
Remedy Sought
The petitioner bank sought to quash and set aside the order of the Divisional Joint Registrar and the appellate order, thereby denying the benefit of the interest subvention scheme to the respondent mill.
Filing Reason
The petitioner bank alleged that the respondent mill failed to adhere to the revised repayment schedule under the MOU, and thus the benefit of the interest subvention scheme should be withdrawn.
Previous Decisions
The Divisional Joint Registrar, by order dated 20th May 2016, directed the petitioner to extend the benefit of the interest subvention scheme to the respondent mill. This order was confirmed by the State of Maharashtra in Appeal No. 654 of 2016 on 13th July 2018.
Issues
Whether the order passed by the Divisional Joint Registrar under Section 79AA(1) of the Maharashtra Co-operative Societies Act, 1960, directing the petitioner bank to extend the benefit of the interest subvention scheme to the respondent mill, and the appellate order confirming it, are legal and valid.
Submissions/Arguments
The petitioner argued that the respondent mill defaulted on the repayment schedule and thus the benefit of the subvention scheme should be withdrawn.
The respondent mill contended that it had complied with the conditions and the bank was wrongly denying the benefit.
Ratio Decidendi
The court found no error in the concurrent findings of the authorities below that the respondent mill was entitled to the benefit of the interest subvention scheme, and the petitioner bank's action in withdrawing the benefit was not justified.
Judgment Excerpts
The challenge in this petition under Article 226 and 227 of the Constitution of India, is to the judgment and order dated 13th July 2018 passed by the Respondent No.3 in Appeal No. 654 of 2016 thereby confirming the order dated 20th May 2016, passed by No.2 under section 79AA (1) of the Maharashtra Co-operative Societies Act, 1960 (for short “Act”).
The brief facts necessary for the disposal of the petition, may be stated thus: That in the year 1997 the Respondent No.1 which is a co-operative spinning mill, had obtained financial assistance from the Petitioner.
Procedural History
The petitioner bank filed a writ petition under Articles 226 and 227 of the Constitution of India challenging the order dated 20th May 2016 passed by the Divisional Joint Registrar under Section 79AA(1) of the Maharashtra Co-operative Societies Act, 1960, and the appellate order dated 13th July 2018 passed by the State of Maharashtra in Appeal No. 654 of 2016, which confirmed the said order.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: 79AA
- Constitution of India: Article 226, Article 227
