Arun B. Khanjire vs The Ichalkaranji Urban Coop. Bank & Ors

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

maintainable.

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. 9

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

delay.

10

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. 14

________________J.

(ALTAMAS KABIR)

________________J.

(MARKANDEY KATJU) New Delhi Dated: 3.12.2008