Arun B. Khanjire Vs.
The Ichalkaranji Urban Coop. Bank & Ors.  INSC 2071 (3 December 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (C) NO. 18563 of
2005 Shri Arun B. Khanjire ...Petitioner The Ichalkaranji Urban Co-op. Bank
Ltd. & Ors. ...
view of the limited point of law involved, the Special Leave Petition is taken
up for final disposal at the admission stage itself.
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.
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.
Special Leave Petition is directed against the said decision of the High Court
granting the order of the Divisional Joint Registrar.
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.
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.
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 maintainable.
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.
Lalit laid special emphasis on Sub-section (2A) of Section 154, which reads as
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
(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
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 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
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 delay.
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.
Lalit submitted that a similar view had been expressed by this Court in State
of Haryana vs. Maruti Udyog Limited [(2000) 7 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
other decisions were also cited on the same lines which need not detain us.
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.
154(1) of the above Act confers revisionary powers on the State 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.
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.
therefore, see no reason to entertain the Special Leave Petition which is
will be no order as to costs.
________________J. (ALTAMAS KABIR)
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