Case Note & Summary
The petitioner, Yashomandir Sahakari Patpedhi Maryadit, a co-operative society, filed a dispute under Section 91 of the Maharashtra Co-operative Societies Act against respondent no.1 (Ashok Raj Enterprises) and respondents 2 and 3 (guarantors) for recovery of Rs. 1,30,212.85 due as on 31st December 1990. The Co-operative Court, on 11th November 1993, passed a decree on admission as respondent no.1 accepted liability and sought installments. The decree allowed recovery with 18% interest from 1st January 1991 and granted installments of Rs. 4000 per month. After almost four years, respondent no.1 filed Appeal No. 466/1997 under Section 97 before the Co-operative Appellate Court, which granted ex-parte stay. During the pendency of a transfer application, respondent no.1 agreed to repay the entire amount if the society provided a true statement of accounts. The President appointed a Court Commissioner who determined liability at Rs. 2,58,011/- as on 20th November 1997. However, before the Appellate Court, respondent no.1 produced a CA statement showing certain payments not accounted for by the Commissioner. The Appellate Court found it difficult to reconcile and remanded the matter to the Co-operative Court for fresh decision within three months, setting aside the 1993 decree. The petitioner challenged this remand order under Articles 226 and 227 of the Constitution. The High Court held that the Appellate Court erred in remanding the matter as the borrower had admitted liability and the decree was passed on admission. The High Court quashed the remand order and restored the Co-operative Court's decree, noting that the borrower's default in payment cannot be a ground to reopen the accounts.
Headnote
A) Co-operative Law - Recovery of Loan - Consent Decree - Admission of Liability - The borrower admitted liability and sought installments; the Co-operative Court passed a decree on admission. The Appellate Court remanded the matter for recalculation of liability, which was held to be improper as the borrower's admission precluded reopening of accounts. (Paras 2-6) B) Co-operative Law - Appellate Jurisdiction - Remand Order - Section 97 Maharashtra Co-operative Societies Act - The Appellate Court set aside the decree and remanded the matter, but the High Court found that the Appellate Court exceeded its jurisdiction by reopening a consent decree based on the borrower's own default in payment. (Paras 4-6) C) Constitutional Law - Writ Jurisdiction - Article 226 and 227 Constitution of India - The High Court exercised its supervisory jurisdiction to quash the remand order as it was perverse and caused injustice to the petitioner-society. (Para 6)
Issue of Consideration
Whether the Co-operative Appellate Court was justified in remanding the matter to the Co-operative Court for working out the exact liability when the borrower had admitted liability and the decree was passed on admission.
Final Decision
The High Court allowed the writ petition, quashed the judgment and order dated 20th February 1998 passed by the Co-operative Appellate Court, and restored the judgment and order dated 11th November 1993 passed by the Co-operative Court.
Law Points
- Consent decree
- admission of liability
- remand order
- jurisdiction of appellate court
- finality of judgment
- Section 91 Maharashtra Co-operative Societies Act
- Section 97 Maharashtra Co-operative Societies Act
- Article 226 Constitution of India
- Article 227 Constitution of India
