SHRI ARUN B. KHANJIREversusTHE ICHALKARANJI URBAN CO-OP. BANK LTD. & ORS.

                                            [2008] 16 S.C.R. 1108


A                                    SHRI ARUN 8. KHANJIRE
                               .                     -~             ..

    THE ·ICHALKARANJI URBAN CO-OP. SANK LTD. & ORS.
                   ,           · . · (SLP (C) NO. 18563 of 2005)
    '   ' •.   '       ~   -   •       •+        •   "'   ;.


                                        DECEM~ER 3, 2008

        [ALTAMAS KABIR AND MARKANOEY KATJU, JJ.]

      · Maharashtra ·Co-operative Societies Act, 1960 - ss. 154
   and 101 - Default in repayment ·of loah ..... Recovery
C procee.dings initiated by Respondent-Co-operative Sank
   against ths Petitioner - Recovery certificates issued by Asstt.
  ·Registrar, Co-operative Societies - High Court declined to
   interfere -Application by Petitioner before Divisional Joint
   Registrar for settihg aside recovery certificates allowed -
o Propriety of ..:. Held: Not proper - s. 154(2A) .stipulated pre-
   deposit of 50%. recoverable dues as pre-condition to hear
   appeal- Petitioner made application in which all facts relating
   to appeal were set out and which served the purpose of appeal
  without compliance with s. 154(2A).
E       The Petitioner disputed his liability and that of his firm
  to make payments to Respondent-Co•operative Bank,
  after allegedly taking loans from it, and filed an
  application under s;91 of the Maharashtra ·Co-operative
  Societies Act, 1961. Meanwhile, Respondent-Bank
F initiated action for recovery against the Petitioner and his
  firm under s.101 of the Act. The Assistant Registrar of the
  Co-operative Societies issued recovery certificates after
  accepting the claim of the Bank. The. Petitioner filed writ
  petitions before the High Court. The High Court declined
G to grant relief. The Petitioner filed Misc. complaint .
  appl,ication before the Divisional Joint Registrar seeking
  reliefs similar to the reUefs sought for in the writ petitions.
  The. Divisional Joint Registrar set aside the recovery
  certificates. Writ petition against the order of Divisional
H                               1108
  ARUN B. KHANJIRE v. ICHALKARANJI URBAN CO-OP. 1109
                BANK l tb. & ORS,

 Joint Registrar was-allowed. Hence the present petition.        A

      Dismissh1g the Petition, the Court

   .· HELD: 1. 1·n view of s.154 of the Maharashtra Co-
 op-erative Societies Act, 1960, and in particular Sub-
 section (2A) of s.154, no interference is called for wi.th the · 8
 order of the High Court. [Para 16] [1115-C-D]

      2.1. s.154(1) of the Act confers revisionary powers on
 the State Government and also the Registrar of Co-
 operative Societies under the Act. It also empowers the 'c
 State Government or the Registrar to satisfy themselves
 as to the legality or the propriety 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 o
 instant case, although it was contended that the
 proceedings had been commenced suo-motu, one is
 unable to accept such submission sinc.e an application
 had been made by the petitioner to the officer concerned
 in which all the facts relating to the appeal had been set E
 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 F
 innovative procedure in order to avoid the pre-condition
 of payment of 50% of recoverable dues as stipulated
 under Sub-section (2A) of s.154 ofthe Act [Para 16][1115-
 D-G]

      2.2. The matter was not taken up suo-motu by the           G
  Divisional Joint Registrar, but on the basis of the
. application which had been filed by the petitioner, 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         H
     · 11-10         SUPREME COURT REPORTS               [2008] 16 S.C.R.


A hearin_g .before the· pre-condition indicated in Sub-section
  (2A) had been complied with. [Para 17] (1115-H; 1116-A-B]

      . The Commissioner of Income- Tax, Bombay v. Mis
   Filmistan Limited (1961) 3 SCR 893 and Lakshmi Rattan
   Engineering Works' Ltd. v. ·Assistant Commissioner Sales
 8
   Tax,·K;;mpur (1968) :1 SCR 565 and State of Haryana v.
   Maruti Udyog Limited (2000) 7 SCC 348, referred to.

                             Case Law· Referenc'e:

 c             (19G1) 3 SCR '893        referred to             Para 12
               (1968) 1 SCR 565         referred·   to          Para 13
               (2000) 1 sec. 348        referred to             Para 14

        CIVIL APPEtLATE'JURISDICTION : Special Leave
D Petition (C) No'.'18563 of 2005.   ·

      , ; From the Judgment and Order c;lated SA.2005 of the High
     Court of Judicature at Bombay in Writ Petition No. 569 of 2005 .

.E         Jaideep Gupta, Shivaji M. Jadhav, Rahul Joshi and
     .Brijkls~or Sah for the Petitioner.

            Uday, ti. Lalit, Amel Chifale, A. Kr. Mishra, Gautam Godara
     arid Ravindra Keshavrao Adsure forthe Respondents. ·
       I         -                             .          .     .


F          -~The Judgm~nt of the Court was delivered by

        . ALTAMAS tµBIR, J. 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.

G      2. The petitioner is alleged to have taken loans from the
   respondent-Bank under 17 loan transac~ions either in his
   capacity as the.princi~al borrow£ro_r as the Di!ec.tor of the firm       f.-     •
   Mis Prakash Offset Printers. According to the re~pond,ent.,Bank .
   a sum 9tRs.413.16 lakhs together with interest wasdue to it_ ·
H ·from the petmoner-as ori 31.12.03. The·petitian·er, along With
                    ARUN B. KHANJIRE v. ICHALKARANJI URBAN CO-OP.               1111
                         BANK LTD. & ORS. [Al TAMAS KABIR, J.]
                   the firm and its other Directors, disputed their liability to make A
         1!
                   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 B
                   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 c
                   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 issued demand notices
                   to the appellant and his other concerns. A warrant of ~ttachment
                                                                                      D
                   was also issued.

    1-
                          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   E
                    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   F
                    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 setting aside the order of the Divisional
                  .
                    Joint.,Registrar, which prayer was allowed.                        G
                        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    H
    1112     SUP~EME COURT REPORTS                 [;2008] ·15 S,C.R.


A Senior Advocate, submitt~d that the revisional powers under
    th~ .afor~saig Act vested in the. State Government or the ·
    Registrar, which could .be exercis.ed suo motu or on an
                                                                         '
  . ap.plication. He urged that since the revisional powers under
    Section .154 of the aforesaid Act ·had been invoked by the
B 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
c   proceedings 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.:
D        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 wrorigly
                                                                        • '1-
    applied.tothe facts of the case by·the High Court.

E        7 .. Qpposing the petition, ·Mr. U. Lalit, learned Senior
    Cou_nsel,· urged at the very outset that sine~ the application of
    the petition.er 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
F   the above-mentioned Act and the matter had been wrongly
    taken up for consideration by the Divisional Joint Registrar
    holding the same to be maintainable.                                       ~




        8. In this :regard, Mr. Lalit referred to Section 154 of the
   above-mentioned Act \Nhich empowers the State Government
G and the Registrar, eithersuo-motu or on application, to ca~for
   an.d exar;nine the records of an inquiry or proceedings of any
   matter other tnan 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
H: or order, for the purpose of satisfying themselves as to the

                                                                                       .
                                                                                       ,

                                                                                   n
         ARUN R KHANJIRE v. ICHALKARANJI URBAN CO-OP.                    1113
              BANK LTD. & ORS. [Al TAMAS KABIR, J.]

         regularity of such proceedings, and to annul or reverse such            A
     _., 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:                                     a
             "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."                                               C

            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                   D
       application made even after such period upon sufficient cause
       being shown for the delay.

              11. ·Mr. Lal it 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              E
         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 not have entertained and decided the revision
         application, as had been correctly held by the High Court. It was       F
         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                 G
         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,            H
    1114        SUPREME COURT REPORTS               [2008] 16 S.C.R.


A on the other hand, the pre-deposit of 50% had not been made,
  the High Cot}rt rightly dismissed the wri~ application and the ·       ir-
  safne 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 -
9
  Tax1• Bombay vs. Mis Fi/mis.tart-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
C 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
D on which the tax was paid and the question would then have to
  be decided whether there was sufficient case for condonation
  of delay.

           13. Mr. Lalit submitted that in the case of Lakshmi Rattan
E Engineering Works Ltd. vs. Assistant Cbmmissioner 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 lJP. Sales Tax Act, 1948, dealing with appeals and it
    was held by a three-Judge_ Bench that the expression 'entertain'
F · ni'eant 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 field that before the appeal could be taken up for
G 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
  ex·pressed by thi~ Court in State ofHaryana vs. Maruti Udyog
  Limited ((2000) 7 SCC 348] where Section 39 of the Haryana
H General Sales\ Tax Act, 1973, was in question and where                      ,·
                 ARUN 8. KHANJIRE v. ICHALKARANJI URBAN CO-OP.                1115
                      BANK LTD. & ORS. [AL TAMAS KABIR, J.]

      -+        similar provisions were included and it was held that the word        A
                '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.
                                                                                      8
                     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         c
                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 Government and also           D
                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            E
                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           F
                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
                                                                                      G
                 petitioner resorted to an innovative procedure in order to 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        H

-
•
*'
    1116 .          SUPREME COURT REPORTS                [2008] 16 S.C.R.


A · was not taken up suo-motu by ·the Divisional Joint Registrar, -t-
    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
B 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.
0
               19. There will be no order as to costs.

    B.B.B.                                               SLP ·dismissed.




      ·· ..,