Case Note & Summary
The petitioners, Sonia Bhalchandra Godase and others, filed two writ petitions before the Bombay High Court challenging the recovery proceedings initiated by the Sangola Urban Co-operative Bank Ltd (respondent no.3) for recovery of loan dues. The petitioners contended that the bank had initiated recovery proceedings under the Maharashtra Co-operative Societies Act, 1961 without serving any notice under Section 101 of the Act, which mandates that before attaching property, the borrower must be given an opportunity of hearing. The petitioners claimed that they were not aware of any loan default and that the bank had not provided them with any notice or opportunity to present their case. The respondent bank, represented by Mr. V.S. Talkute, argued that the recovery proceedings were valid and that notices were sent to the petitioners. However, the court noted that the bank failed to produce any evidence of service of notice upon the petitioners. The court observed that the principles of natural justice require that before any coercive action like attachment of property, the person affected must be given a reasonable opportunity of hearing. Since the petitioners were not served with any notice, the recovery proceedings were held to be void. The court allowed the writ petitions and quashed the recovery proceedings, directing the bank to issue fresh notice to the petitioners and provide them an opportunity of hearing before proceeding further. The judgment was delivered by Justice S.G. Chapalgaonkar on November 4, 2025.
Headnote
A) Co-operative Law - Recovery Proceedings - Notice under Section 101 of Maharashtra Co-operative Societies Act, 1961 - Opportunity of Hearing - The petitioners challenged the recovery proceedings initiated by the respondent bank for non-payment of loan dues, contending that no notice under Section 101 of the Act was served upon them before attachment of their property. The court held that the failure to provide an opportunity of hearing vitiates the recovery proceedings. (Paras 1-10) B) Natural Justice - Right to be Heard - Attachment of Property - The court observed that the principles of natural justice require that before any coercive action like attachment of property, the person affected must be given a reasonable opportunity of hearing. Since the petitioners were not served with any notice, the proceedings were declared void. (Paras 5-8) C) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - The court exercised its writ jurisdiction to quash the recovery proceedings as the same were in violation of statutory provisions and principles of natural justice. (Paras 9-10)
Issue of Consideration
Whether the recovery proceedings initiated by the respondent bank against the petitioners are valid when no notice under Section 101 of the Maharashtra Co-operative Societies Act, 1961 was served upon the petitioners before attaching their property.
Final Decision
The court allowed the writ petitions and quashed the recovery proceedings initiated by the respondent bank against the petitioners. The court directed the bank to issue fresh notice to the petitioners and provide them an opportunity of hearing before proceeding further with recovery.
Law Points
- Natural justice
- opportunity of hearing
- notice under Section 101 of Maharashtra Co-operative Societies Act
- 1961
- recovery proceedings
- attachment of property
- void proceedings
