Case Note & Summary
The petitioner, Sunil Sitaram Mahajan, filed a writ petition challenging an order dated 20.01.2015 passed by the Divisional Joint Registrar, Cooperative Societies, Kolhapur Division. The impugned order allowed a revision application filed by respondent No.1, Suryakant Pandurang Badave, and set aside a notice of hearing dated 23.01.2014 issued in recovery proceedings under Section 101 of the Maharashtra Cooperative Societies Act, 1960. The factual background involves respondent No.4 (Pooja Annaso Jadhav) as the borrower from respondent No.3, Shahu Corner Nagari Sahakari Path Sanstha Maryadit, with respondent No.1 acting as guarantor. Upon default, the society initiated certificate proceedings under Section 101, resulting in a certificate dated 01.06.2010 for Rs.11,09,258 with interest at 16% per annum from 01.10.2005. The society then filed an application for recovery, and a notice of hearing was issued on 23.01.2014. Respondent No.1 filed a revision before the Joint Registrar, who set aside the notice on the ground that the borrower was not impleaded as a party in the certificate proceedings. The High Court framed the legal issue: whether the revisional authority could set aside the notice on that ground. The petitioner argued that the society is entitled to proceed against the guarantor alone and that the borrower is not a necessary party. The respondent contended that the certificate proceedings were vitiated due to non-joinder. The court analyzed Section 101 and held that the Cooperative Court is not required to implead the borrower if the society chooses to recover only from the guarantor. The court found that the revisional authority exceeded its jurisdiction under Section 154 by setting aside the notice without proper consideration. The High Court quashed the revision order and restored the notice of hearing, directing the Cooperative Court to proceed with the recovery application. The petition was allowed with no order as to costs.
Headnote
A) Cooperative Law - Recovery Proceedings - Section 101 of Maharashtra Cooperative Societies Act, 1960 - Certificate Proceedings - The court considered whether the absence of the borrower as a party in certificate proceedings under Section 101 vitiates the recovery certificate against the guarantor. Held that the society is entitled to proceed against the guarantor alone and the Cooperative Court is not required to implead the borrower if the society chooses to recover only from the guarantor. The revision order setting aside the notice of hearing was quashed. (Paras 4-8) B) Cooperative Law - Revision - Section 154 of Maharashtra Cooperative Societies Act, 1960 - Scope of Revision - The court examined the scope of revisional powers under Section 154. Held that the revisional authority cannot set aside a notice of hearing without considering that the borrower was not a necessary party in the certificate proceedings against the guarantor. The revision was allowed erroneously. (Paras 6-8)
Issue of Consideration
Whether the Divisional Joint Registrar, Cooperative Societies, could in revision set aside a notice of hearing issued in recovery proceedings under Section 101 of the Maharashtra Cooperative Societies Act, 1960, on the ground that the borrower was not impleaded as a party in the certificate proceedings?
Final Decision
The High Court allowed the writ petition, quashed the order dated 20.01.2015 passed by the Divisional Joint Registrar, Cooperative Societies, Kolhapur Division, and restored the notice of hearing dated 23.01.2014. The Cooperative Court was directed to proceed with the recovery application in accordance with law. No order as to costs.
Law Points
- Revision jurisdiction under Section 154 of Maharashtra Cooperative Societies Act
- 1960 is limited and cannot be exercised to set aside a recovery certificate without notice to the society
- Cooperative Court cannot be faulted for not impleading borrower when society chooses to proceed only against guarantor
- Section 101 certificate is enforceable against guarantor even if borrower is not a party to recovery proceedings
