Home » Co-operative Societies | Arun B.Khanjire v. Ichalkaranji Urban Co-operative Bank Limited and Others, S.L.P.(C) No. 18563 of 2005 SC

Co-operative Societies | Arun B.Khanjire v. Ichalkaranji Urban Co-operative Bank Limited and Others, S.L.P.(C) No. 18563 of 2005 SC

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Co-operative Societies | (2009) 2 SCC 187


Justice Altamas kabir and Justice Markandey Katju


S.L.P.(C) No. 18563 of 2005



1. In view of the limited point of law involved, the Special Leave Petition
is taken up for final disposal at the admission stage itself.

2. The petitioner is alleged to have taken loans from the respondent-Bank
under 17 loan transactions either in his capacity as the principal borrower or
as the Director of the firm M/s Prakash Offset Printers. According to the
respondent-Bank a sum of Rs.413.16 lakhs together with interest was due to it
from the 2 petitioner as on 31.12.03. The petitioner, along with the firm and
its other Directors, disputed their liability to make the said payment and filed
an application under Section 91 of the Maharashtra Co-operative Societies Act,
1960. Initially, the Co-operative Court granted an order of status-quo but
vacated the same after hearing the Bank. The Co-operative Appellate Court
affirmed the order of the Co- operative Court and refused to stay the recovery
proceedings. Meanwhile, the respondent-Bank also initiated action for recovery
under Section 101 of the aforesaid Act against the petitioner and his business
concerns. Accepting the claim of the Bank, the Assistant Registrar of
Co-operative Societies issued 12 Recovery Certificates on 12.3.2004.

The petitioner and his other concerns filed three writ petitions before the
High Court questioning the issuance of the Recovery Certificates. The High Court
also declined to grant any relief and on 30.6.2004 the Bank 3 issued demand
notices to the appellant and his other concerns. A warrant of attachment was
also issued.

3. On 15.7.2004, the petitioner herein filed a Misc. Complaint Application
before the Divisional Joint Registrar seeking reliefs which were similar to the
reliefs sought for in the writ petitions. After service of notice, the
respondent-Bank entered appearance and an order or status quo was passed while
fixing the matter for hearing on 22.12.2004. Although, an objection was taken on
behalf of the respondent-Bank that the proceedings were not maintainable and had
been commenced in violation of the provisions of Section 154 of the Maharashtra
Co-operative Societies Act, 1960, the Divisional Joint Registrar set aside the
Recovery Certificates against which decision the respondent-Bank filed a Writ
Petition in the High Court and prayed for 4 setting aside the order of the
Divisional Joint Registrar, which prayer was allowed.

4. This Special Leave Petition is directed against the said decision of the
High Court granting the order of the Divisional Joint Registrar.

5. Appearing for the petitioner, Mr. Jaideep Gupta, learned Senior Advocate,
submitted that the revisional powers under the aforesaid Act vested in the State
Government or the Registrar, which could be exercised suo motu or on an
application. He urged that since the revisional powers under Section 154 of the
aforesaid Act had been invoked by the Divisional Joint Registrar of the
Co-operative Societies suo motu, the order passed by him could not be said to
have been passed contrary to the provisions of Sub-section (2A) of Section 154
of the aforesaid Act. Mr.Gupta urged that the High Court had erroneously come to
the conclusion that the revision proceedings 5 against the decision of the
Registrar was hit by the provisions of Sub-section (2A) of Section 154 of the
above Act, since the inquiry was commenced by the said authority on receipt of
information and not on a formal application made to him.

6. Mr.Gupta then contended that the views expressed by the High Court in
regard to the interpretation of Sub-section (2A) of Section 154 was erroneous
and had been wrongly applied to the facts of the case by the High Court.

7. Opposing the petition, Mr. U. Lalit, learned Senior Counsel, urged at the
very outset that since the application of the petitioner was unaccompanied by 50
per cent of the total sum of the recoverable dues, the revision was not
maintainable in view of the provisions of Sub- section (2A) of Section 154 of
the above- mentioned Act and the matter had been wrongly taken up for
consideration by the Divisional 6 Joint Registrar holding the same to be

8. In this regard, Mr. Lalit referred to Section 154 of the above-mentioned
Act which empowers the State Government and the Registrar, either suo-motu or on
application, to call for and examine the records of an inquiry or proceedings of
any matter other than those referred to in Sub-section (9) of Section 149, where
any decision or order has been passed by any subordinate officer, and no appeal
lies against such decision or order, for the purpose of satisfying themselves as
to the regularity of such proceedings, and to annul or reverse such decision, if
it becomes necessary to do so, after giving the person affected an opportunity
of being heard.

9. Mr. Lalit laid special emphasis on Sub-section (2A) of Section 154, which
reads as follows:

7 "154(2A) No application for revision shall be entertained against the
recovery certificate issued by the Registrar under Section 101 unless the
applicant deposits with the concerned Society, fifty percent amount of the total
amount of recoverable dues."

10. Sub-section (3) provides that no application for revision may be
entertained, if made after two months of the date of communication of the
decision or order. The revisional authority, however, has been given the power
to entertain any such application made even after such period upon sufficient
cause being shown for the delay.

11. Mr. Lalit submitted that while an application may be filed within the
period prescribed, the revision could not be entertained (emphasis added) or
taken up for consideration unless the condition of pre-deposit as indicated in
sub- section (2) was fulfilled. Mr. Lalit submitted that since the condition
precedent had not been satisfied, the Divisional Joint Registrar could 8 not
have entertained and decided the revision application, as had been correctly
held by the High Court. It was also urged that the proceedings under Section 101
had been completed and Recovery Certificates were issued without any
obstruction, and, in any event, the same question had been decided in other
matters which have been rejected upto this Court. Mr.

Lalit submitted that the entertainment of an application, if filed within the
period prescribed, depended on the applicant fulfilling the pre-condition
stipulated, but he could not be held responsible if such delay was caused not by
him but by the concerned officer.

Mr. Lalit urged that since the revisional application had not been taken up
suo-motu, and, on the other hand, the pre-deposit of 50% had not been made, the
High Court rightly dismissed the writ application and the same did not warrant
any interference in this petition.


12. In support of his submission Mr. Lalit firstly referred to the decision
of this Court in The Commissioner of Income -Tax, Bombay vs. M/s Filmistan
Limited [(1961) 3 SCR 893], which was a case where an appeal had been presented
under the Income Tax Act, 1922, within the period of limitation. The tax was
paid after the period of limitation prescribed for presenting the appeal had
expired. In the said case it was held that the expression "no appeal shall lie"
in the proviso to Section 30(2) of the said Act meant that the appeal could not
be held to be properly filed until the tax was paid and not that the memorandum
of appeal could not be presented. In other words, the appeal would be deemed to
have been filed on the date on which the tax was paid and the question would
then have to be decided whether there was sufficient case for condonation of


13. Mr. Lalit submitted that in the case of Lakshmi Rattan Engineering Works
Ltd. vs.

Assistant Commissioner Sales Tax, Kanpur, [(1968) 1 SCR 565] this Court was
called upon to consider the expression `entertain' in the proviso to Section 9
of the U.P. Sales Tax Act, 1948, dealing with appeals and it was held by a
three-Judge Bench that the expression `entertain' meant the first occasion on
which the Court took up the matter for consideration.

But where an appeal was automatically admitted under the Rules the first
occasion for the Court to take up the appeal would be when the appeal came up
for hearing. It was also held that before the appeal could be taken up for
hearing, it would have to be proved to the satisfaction of the officer concerned
that the tax had been paid and in time.

14. Mr. Lalit submitted that a similar view had been expressed by this Court
in State of Haryana vs. Maruti Udyog Limited [(2000) 7 11 SCC 348] where Section
39 of the Haryana General Sales Tax Act, 1973, was in question and where similar
provisions were included and it was held that the word `entertain' would mean
when the case is taken up by the Court for the first time, or, in other words,
when satisfactory proof had been made available that the tax in question had
been deposited.

15. Various other decisions were also cited on the same lines which need not
detain us.

16. Having carefully considered the submission made on behalf of the
respective parties and having carefully considered the provisions of Section 154
of the Maharashtra Co-operative Societies Act, 1960, and in particular
Sub-section (2A) of Section 154, we are convinced that no interference is called
for with the order of the High Court impugned in these proceedings.

Admittedly, Section 154(1) of the above Act confers revisionary powers on the
State 12 Government and also the Registrar of Co- operative Societies under the
Act. It also empowers the State Government or the Registrar to satisfy
themselves as to the legality or the proprietary of any such decision or order
and to modify, annul or reverse the same after giving the person affected
thereby an opportunity of being heard either suo motu or on an application. In
the instant case, although learned counsel Mr. Jaydeep Gupta tried to impress
upon us that the proceedings had been commenced suo-motu, we are unable to
accept such submission since an application had been made by the petitioner to
the officer concerned in which all the facts relating to the appeal had been set
out. Although, the same was not in the form of a formal Memorandum of Appeal it
served the purpose of the appeal without compliance with the provisions of Sub-
section (2A) which required deposit of 50% of the recoverable dues. In fact, the
petitioner resorted to an innovative procedure in order to 13 avoid the
pre-condition of payment of 50% of recoverable dues as stipulated under Sub-
section (2A) of Section 154 of the above Act.

17. We agree with Mr. Lalit's submission that the matter was not taken up
suo-motu by the Divisional Joint Registrar, but on the basis of the application
which had been filed by the petitioner here, though not in the form of a
Memorandum of Appeal, and that while an appeal may be filed within the period of
limitation prescribed, it could not be entertained or taken up for hearing
before the pre-condition indicated in Sub-section (2A) had been complied with,
which view is supported by the decisions referred to hereinabove.

18. We, therefore, see no reason to entertain the Special Leave Petition
which is accordingly dismissed.

19. There will be no order as to costs.

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