Case Note & Summary
The petitioner, Mahesh Balwant Arjunwadkar, filed two writ petitions challenging an order of the Divisional Joint Registrar, Cooperative Societies, Kolhapur, which refused him leave to file a dispute under Section 91 of the Maharashtra Cooperative Societies Act, 1960 (MCS Act). The petitioner claimed that he had never borrowed any loan from the Miraj Urban Cooperative Bank Limited, which was under liquidation. He sought a declaration to that effect. The Registrar rejected his application on the ground that the petitioner could raise all his contentions before the Liquidator in the recovery proceedings already initiated. The High Court examined Section 107 of the MCS Act, which bars civil suits in winding up matters but allows proceedings with the leave of the Registrar. The court noted that the petitioner was obliged to seek leave due to the bar. The court observed that the impugned order did not consider that the Liquidator cannot be equated with a competent court under Section 91, where the petitioner could lead evidence and produce documents. The court held that the petitioner is entitled to file a dispute under Section 91 for a declaration of non-liability. The court set aside the impugned order and directed the Registrar to grant leave to the petitioner to file the dispute, subject to such terms as the Registrar may impose. The writ petitions were allowed, and rule was made absolute.
Headnote
A) Cooperative Law - Winding Up - Leave to File Dispute - Section 107, Section 91 Maharashtra Cooperative Societies Act, 1960 - Petitioner sought to file a dispute under Section 91 for a declaration that he never borrowed any loan from the bank, but the Registrar refused leave on the ground that he could raise defences before the Liquidator - High Court held that the Liquidator cannot be equated with a competent court under Section 91, and the impugned order did not consider this aspect - Held that the Petitioner is entitled to file a dispute under Section 91, and the Registrar must grant leave subject to terms (Paras 7-9).
Issue of Consideration
Whether a person who claims never to have borrowed a loan from a cooperative bank under liquidation can be compelled to raise defences only before the Liquidator, or whether he is entitled to file a separate dispute under Section 91 of the MCS Act, 1960.
Final Decision
Writ petitions allowed. Impugned order set aside. Registrar directed to grant leave to the petitioner to file a dispute under Section 91 of the MCS Act, 1960, subject to such terms as the Registrar may impose. Rule made absolute.
Law Points
- Section 107 MCS Act bars civil suits but allows proceedings with Registrar's leave
- Liquidator cannot decide disputes requiring evidence
- Section 91 MCS Act provides for dispute resolution by competent court
