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2012(2) ALL MR 127

B.P. DHARMADHIKARI AND A.P. BHANGALE, JJ.

M/S. Top Ten & Anr. Vs. State Of Maharashtra & Ors.

Writ Petition No. 92 of 2009,Writ Petition No. 1230 of 2009

9th December, 2011

Petitioner Counsel: Mr. A.S. JAISWAL, Mr. A.S. CHANDURKAR

(A) Maharashtra Co-operative Societies Act (1960), Ss.101, 154 - Maharashtra Co-operative Societies (Amending) Act (1965), S.152[4] -
Revision - Against recovery certi cate issued under S.101 - Though S.101[3] makes certi cate nal, because of S.152[4] it is open to
revision under S.154.

2006 (9) SCC 252 Disting.

2009(1) ALL MR 908, 2010(3) ALL MR 323 Ref. to. (Para 10)

(B) Maharashtra Co-operative Societies Act (1960), Ss.101, 91 - Words and phrases - Words 'Due' and 'Arrears' - Word 'Due' is not
duplication of word 'arrears' - 'Due' indicates amount which is found to be outstanding and hence recoverable.

AIR 1974 SC 1613 Rel. on. (Para 18)

(C) Maharashtra Co-operative Societies Act (1960), Ss.101, 91 - Maharashtra Co-operative Societies Rules (1961), R.86E - Constitution
of India, Arts.226, 227, 14 - Right to cross examination - S.101 governs only dispute about quantum of arrears demonstrated to be due -
Express bar on cross examination under R.86E is because of narrow scope of enquiry open to Registrar under S.101 - Where dispute
requiring adjudication arises Society has to move Cooperative Court under S.91 - No inconsistency inter se between S.91 and S.101 -
R.86E is not unconstitutional - Petitions in this regard are liable to be dismissed.

2008 ALL SCR 224, 2010 ALL SCR (O.C.C.) 180, 1977 (2) SCC 777, 1970 Mh.L.J. 116, 2001 (7) SCC 69, 1998 (2) L.J 628, 2011 (2) LJ Soft
(URC) 166, 2010 (6) ALL MR 550, 2011(4) ALL MR 260 Ref. to. (Para 21)

Cases Cited:
New India Assurance Co. Ltd. Vs. Nusli Nerville Wadia and another, 2008 ALL SCR 224 =AIR 2008 SC 876 [Para 5,11]
K.L. Tripathi Vs. State Bank of India and others, 2010 ALL SCR (O.C.C.) 180 =AIR 1984 SC 273 [Para 5,11]
State of Kerala Vs. K.T. Shaduli Grocery Dealer Etc., (1977) 2 SCC 777 [Para 5,11]
Ramchandra and another .Vs. Collector, Nagpur and others., 1970 Mh.L.J. 116 [Para 5,19]
Shri Basaveshwar Cooperative Credit Society Ltd., Kolhapur Vs. Jayant Shivlal Banchhode, 2009(1) ALL MR 908 =2009 (2) Mh.L.J. 216
[Para 6,9]
State Bank of India Vs. Allied Chemical Laboratories and another, (2006) 9 SCC 252 [Para 6,8]
Vijay Shamrao Bhokre Vs. Shri Mumbadevi Jilla Nagari Sahakari Pat Sanstha Maryadit, Kopargaon and others, 2010(3) ALL MR 323 =2010
(4) Mh.L.J. 381 [Para 7,10]
Rajinder Pershad (dead) by Lrs. Vs. Darshana Devi, 2001 (7) SCC 69 [Para 11]
Madhav Karmarkar Vs. State of Maharashtra and others, 1998 (2) LJ 628 [Para 15]
Dhan Singh Ramkrishna Chaudhuri Vs. Laxminarayan Ramkrishan, AIR 1974 SC 1613 [Para 18]
Ravindra Waman Ingle Vs. Sahakar Mitra, 2011 (2) LJ Soft (URC) 166 [Para 20]
Sundeep Polymers Pvt Ltd.Vs. State of Maharashtra, 2010(6) ALL MR 550 [Para 20]
Vithal Laxman Fatangade and another Vs. State of Maharashtra and others, 2011(4) ALL MR 260 =2011 (2) Mh.L.J. 194 [Para 20]

JUDGMENT

B.P. DHARMADHIKARI, J. :- In both these petitions, led under Articles 226 and 227 of the Constitution of India, challenge is
to the provisions of Rule 86E of the Maharashtra Cooperative Societies Rules, 1961 (hereinafter referred to as "the 1961
Rules" for short), with prayer to declare it as ultra vires to Article 14 of the Constitution of India. Petitioners in both the
matters are creditors, and the Cooperative Society from whom they have borrowed loan, have instituted proceedings under
Section 101 of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as "the 1960 Act" for short). One of
their objection is, about availability of alternative remedy under Section 154 of the 1960 Act. Petitioners have urged that as
constitutional validity of Rule 86E has been assailed, that remedy is not equally e cacious. The creditors assert that
challenge is frivolous and only to avoid deposit of 50% of the amount claimed as mandated under Section 154(2).
Accordingly we have proceeded further to consider the challenge.

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2. In Writ Petition No. 92/2009, a certi cate for recovery under Section 101 of the 1960 Act, has been issued on
11/13.08.2008, and thereafter a notice of seizure of immovable property dated 22.10.2008 and 05.01.2009 has also been
issued. In this background, the petitioners - debtors who claim that there was one time settlement, have assailed the said
order dated 11.08.2008 contending that opportunity of cross-examination needed to be granted to bring truth on record,
and as it has not been so granted, and Rule 86E of 1961 Rules prohibit it, that Rule is bad. In this petition, this Court has
issued notice and granted status quo on 15.01.2009. On 22.09.2010 this Court directed petitioner to deposit sum of Rs.
5,00,000/- within 4 weeks and on 27.04.2011 that amount was directed to be invested in xed deposit with creditor Bank
itself.

3. Petitioners in Writ Petition No.1230/2009 have denied everything in their reply to the application by creditor society under
Section 101 of the 1960 Act. They have stated that they have repaid more than Rs. 1,10,000/from time to time and that
repayment needed to be adjusted against the principal amount. Other defence is though blank cheques were obtained from
them, the same were not forwarded for clearance. Repayment of Rs.10,000/- was in cash, but at that time no receipt was
issued. Last defence is about, respondent no.3 signing on blank document under bona de impression. Appropriation and
calculation of interest is also alleged to be illegal and wrong. In paragraph no.9 of the reply, it is claimed that repayment of
Rs. 1,17,000/- has been done. In this background, an application for framing of issue was moved and by order dated
30.01.2009, because of the nature of proceedings, that application has been rejected. Petition has then been led. In this
petition, this Court has granted status quo on 20.03.2009 and it continues to operate even today.

4. In this background as jointly requested, both the petitions have been taken up for nal disposal at the stage of admission
with consent of the parties. Hence, Rule is made returnable forthwith.

5. Shri A.S. Jaiswal, learned Counsel for petitioners in Writ Petition No.92/2009 and Shri A.S. Chandurkar, learned Counsel
for petitioners in other petition, have pointed out relevant provisions in 1960 Act and 1961 Rules. According to them,
certi cate for recovery issued under Section 101 is nal, and cannot be reopened before any other authority or Court.
Liability mentioned therein, therefore, is irreversible and hence, opportunity of crossexamination must be granted so as to
extend fair and reasonable opportunity to debtors and creditors to substantiate their defence. They have invited attention
to provisions in Section 91, Section 101 and Section 154 to substantiate their contentions. The judgment of Hon'ble Apex
Court reported at AIR 2008 SC 876 : [2008 ALL SCR 224] (New India Assurance Co. Ltd. .vs. Nusli Nerville Wadia and
another), AIR 1984 SC 273 : [2010 ALL SCR (O.C.C.) 180] (K.L. Tripathi .vrs. State Bank of India and others) and (1977) 2 SCC
777 (State of Kerala .vs. K.T. Shaduli Grocery Dealer Etc.) are relied upon to urge that compliance with principles of natural
justice in such circumstances is essential, the opportunity of cross examination must be made available and Rule 86E which
denies it, therefore, must be held to be arbitrary and in breach of principles of natural justice. As it denies fair opportunity
to a debtor, it must be declared as violative of Article 14 of the Constitution of India. Our attention has also been invited to
the Division Bench judgment of this Court reported at 1970 Mh.L.J. 116 (Ramchandra and another .vrs. Collector, Nagpur and
others) to point out as to how the provisions of identical Section i.e. Section 137 of the 1960 Act have been understood by
the said Division Bench. They urge that as said certi cate cannot be questioned even under Section 91 of the 1960 Act,
provisions of Rule 86E which denies e ective opportunity of defence to the petitioners, must be declared to be bad and
unconstitutional.

6. Shri A.M. Ghare, learned Counsel appearing on behalf of respondent nos. 5 and 6 in Writ Petition No.92/2009 has
contended that Section 101 is a provision for expeditious recovery only of arrears and hence, a limited enquiry as envisaged
therein and as is clear from the provisions of Chapter VIIIA of the 1961 Rules, is only open, there is no question of any
opportunity of cross examination in that enquiry. He states that the party aggrieved by recourse to Section 101 has got
remedy to move the Cooperative Court under Section 91 of the 1960 Act, and once such dispute under Section 91 is led, the
Authority proceeding under Section 101 has to nd out whether it is appropriate for it to proceed further with summary
enquiry under that Section. Judgment of Division Bench of this Court reported at 2009 (2) Mh.L.J. 216 : [2009(1) ALL MR 908]
(Shri Basaveshwar Cooperative Credit Society Ltd., Kolhapur vrs. Jayant Shivlal Banchhode) has been relied upon for said
purpose. He further contends that in present matter defence of one time settlement is, nothing but a farce. A frivolous plea
has been raised only to defeat the recovery and hence, this Court should not interfere in such matters. He is relying upon
the judgment of Hon'ble Apex Court reported at (2006) 9 SCC 252 (State Bank of India .vs. Allied Chemical Laboratories and
another) to urge that, when challenge is on the ground of refusal of cross examination, statutory appeal or revision is
equally e cacious and alternative remedy.

7. Mrs. B.H. Dangre, learned Additional Government Pleader appearing on behalf of the respondent State and also on behalf
of the Advocate General, has relied upon the judgment of Division Bench of this Court reported at 2010 (4) Mh.L.J. 381 :
[2010(3) ALL MR 323] (Vijay Shamrao Bhokre .vrs. Shri Mumbadevi Jilla Nagari Sahakari Pat Sanstha Maryadit, Kopargaon
and others), to contend that proceedings under Section 101 cannot be questioned under Section 91. She has urged that it is
a speedy remedy provided by legislature in the interest of Cooperative Societies of particular type and in appropriate
circumstances the Registrar has been authorized even to take suo motu recourse to it. This nature and feature of Section
101, therefore, makes it a unique remedy for cooperative societies and looking to the same, a very limited enquiry has been
contemplated. It is urged that challenge to Rule 86E in this background is unsustainable and the petitions are liable to be
dismissed. It is further contended that as defence of respective petitioners in both the matters do not show any disputed
questions, which need adjudication after a proper trial, issuance of Section 101 certi cate cannot be said to be without

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jurisdiction. The petitioners, therefore, must be asked to take recourse to remedy of revision under Section 154 of 1960 Act.
She has relied upon the provisions of Section 94 (4) and (5), as also provisions of Rule 77E and F, to demonstrate her stand.
She has therefore, prayed for dismissal of both the petitions.

8. We will rst like to deal with the contention about availability of alternate remedy.

Provisions of Section 154 permit petitioners to le revision before the Divisional Joint Registrar against such certi cate.
Subsection (2A) also mandates that such revision cannot be entertained unless the revision applicant deposits with the
concerned society 50% of the amount recoverable under such certi cate. However, it is settled law that when a provision of
any statute or rule is questioned on the ground of it being violative of Article 14 of the Constitution of India, and it's
constitutionality is otherwise assailed, such authority functioning under the Act cannot examine that challenge. Here in both
the petitions, there is prayer to declare Rule 86E of 1961 Rules as unconstitutional. The judgment of Hon'ble Apex Court in
the case of State Bank of India .vs. Allied Chemical Laboratories and another( supra) relied upon by Shri Ghare, learned
Counsel shows a challenge to order of D.R.T., on the ground that it violated principles of natural justice by not permitting
debtor to crossexamine the witness, whose evidence on a davit was accepted. The High Court there had rejected the
objection that appeal could have been preferred against the said order and it held that where principles of natural justice
had been violated, jurisdiction of High Court under Articles 226 and 227 of the Constitution of India could have been
invoked. The Hon'ble Apex Court has reversed the said view of High Court and observed that such a ground could have
been raised in appeal and Appellate Authority could have appreciated it. However, the said judgment shows that there was
no challenge to the constitutionality or validity of any legal provision in the said matter. Hence this judgment is not useful in
present facts.

9. The other judgment relied by Shri Ghare, learned Counsel in the case of Shri Basaveshwar Cooperative Credit Society
Ltd., Kolhapur vrs. Jayant Shivlal Banchhode [2009(1) ALL MR 908] (supra), shows that it is delivered in Letters Patent
Appeal and those proceedings arose out of a notice to recover arrears dated 28.07.2006 issued to respondent - Jayant.
Jayant, had then led a dispute under Section 91 in 2006 itself. During the pendency of this dispute, the appellant Society
approached D.D.R., under Section 101 of the 1960 Act. Jayant then led interim application for injunction before the
Cooperative Court and Cooperative Court passed exparte adinterim order. Cooperative Appellate Court stayed the order of
the Cooperative Court in Appeal against said order. Jayant then approached the learned Single Judge of this Court in Writ
Petition and the same was disposed of on 14.12.2007. The High Court through its learned Single Judge directed Jayant to
deposit amount of Rs. 95,00,000/- and also directed the Cooperative Court to decide the application for temporary
injunction expeditiously. This order of the learned Single Judge was then questioned in Letters Patent Appeal by the
Society. The Division Bench of this Court has in paragraph no.4 noted circular dated 03.03.2001 which contained guidelines
to be followed by the Authorities issuing certi cate under Section 101. Clause 16 of those guidelines has been noted. It's
subclause [v] visualized ling of a dispute under Section 91 for accounts and passing of interim orders therein. Registrar
dealing with Section 101 proceedings was expected to stay the hearing before him till decision of such dispute. It is
therefore, apparent that provisions of Chapter VIIA of 1961 Rules, which came on statute book w.e.f. 18.05.2007 did not
form subject matter of said consideration and the Division Bench has decided the controversy in the light of the guidelines
contained in the above mentioned circular. After 18.05.2007 the position has undergone change. This judgment therefore,
also is of no use here.

10. Mrs. Dangre, learned Additional Government Pleader has pointed out that the Division Bench judgment in the case of
(Vijay Shamrao Bhokre .vrs. Shri Mumbadevi Jilla Nagari Sahakari Pat Sanstha Maryadit, Kopargaon and others : [2010(3)
ALL MR 323] (supra). Said Division Bench has looked into provisions of Sections 91, 101, 154(2A) and 163 of the 1960 Act.
Provisions of Section 93[2] are also noted. The Division Bench has noticed that object behind putting Section 101 in statute
book is to provide a speedy remedy for a particular class of societies for recovery of its dues. After appreciating the
precedents, said Division Bench has found that the legality of proceedings under Section 101 as also legality of certi cate
issued thereunder, cannot be challenged by ling a dispute under Section 91 of the 1960 Act. None of the counsel have
attempted to urge otherwise. The view of this Court as settled, therefore, is that legality of those proceedings and
certi cate issued therein, is not open to challenge under Section 91 before the Cooperative Court. Section 101[3] itself
stipulates that such certi cate is nal and a conclusive proof of arrears stated to be due therein. Section 152 deals with
appeals and it does not envisage any appeal against any order or certi cate under Section 101 proceedings. However, by
Maharashtra Act No. XXXVII of 1965, subsection [4] has been added to this Section 152, which stipulates that every other
order against which appeal is not provided, is nal, but always subject to provisions for revision. The provisions of Section 2
of the "Amending Act" stipulates that this subsection shall be deemed always to have been enacted in this form in Section
152. Therefore, though Section 101[3] makes the certi cate nal, because of Section 152[4], it is open to revision under
Section 154. Section 163 bars the jurisdiction of Civil Court in such matters and its subsection [3] again confers nality on
orders or awards passed under 1960 Act.

11. This brings us to the consideration of challenge as raised in present petitions.

Rule 86E of the 1961 Rules which deals with the procedure for hearing applications reads as under :

"86E. Procedure for Hearing of application.

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(1) On receipt of the statement in defence of the opponent the applicant society shall prove contents of the application
and also deal with the contention of defences. The opponent likewise may file reply in support of the defence on the next
date, if he desires. No cross examination of any of the parties shall be permitted.

(2) On receipt of the replies, the Registrar shall proceed to hear oral arguments of the parties and shall close the
proceeding for the order.

(3) Every endeavor shall be made by the Registrar to decide the application within three months from the first date of
hearing. However, the Registrar may decide the application beyond the period of three months for the reasons to be
recorded in writing.

It is added on 18.05.2007 when Chapter VIIIA dealing with grant of certi cate for recovery under Section 101 came to be
added to 1961 Rules. The judgment of Hon'ble Apex Court in the case of New India Assurance Co. Ltd. .vs. Nusli Nerville
Wadie and another [2008 ALL SCR 224] (supra), in paragraph no.44 and onwards deals with natural justice issue. It states
that if some facts are to be proved by landlord, indisputably the occupant should get opportunity to cross examine. The
Hon'ble Apex Court has added that such opportunity may not be provided by a statute, but it being part of principles of
natural justice, should be held to be indefeasible right. This judgment considers Public Premises (Eviction of Unauthorized
Occupants) Act, 1971. However, the Hon'ble Apex Court was not required to consider a provision like Rule 86E, which
expressly denied cross examination to any of the parties.

In K.L. Tripathi .vrs. State Bank of India and others [2010 ALL SCR (O.C.C.) 180] (supra), the Hon'ble Apex Court has
considered the concept of fair play in action, administrative, judicial or quasijudicial nature. Right of cross examination is
found to be inevitable part of fair play when there is lis regarding facts. However, the Hon'ble Apex Court has also observed
that when there is no dispute on facts and no real prejudice has been caused to a party aggrieved by absence of formal
opportunity of cross examination, perse it is not su cient to invalidate the decision arrived at fairly. Again the observations
are in absence of of any express provision like Rule 86E.

In judgment reported at 2001 (7) SCC 69 (Rajinder Pershad (dead) by Lrs. vs. Darshana Devi), the Hon'ble Apex Court has
found that if correctness of a statement of witness is to be disputed, such witness needs to be given an opportunity in cross
examination to explain his statement. This issue of confronting a witness is not relevant in present matter.

In State of Kerala .vs. K.T. Shaduli Grocery Dealer Etc. (supra), provisions of Section 17[3] of Kerala General Sales Tax Act,
1963 are looked into. The enquiry envisaged is found to be in two stages. In rst stage, Sales Tax o cer has to come to a
conclusion that return submitted by assessee is, incorrect or incomplete, thereby warranting a best judgment assessment.
The Hon'ble Apex Court has noted that the Sales Tax O cer was obliged to extend to the assessee a reasonable
opportunity to prove the correctness or completeness of such return. The usual mode recognized by law "to prove" a fact is
by production of evidence and therefore, right to examine witness and hence, a right to cross examine. These facts
therefore, show that again an express provision negating right of cross examination has not been construed by the Hon'ble
Apex Court.

12. Section 91 appears in Chapter IX of 1960 Act and it deals with settlement of disputes. None of the parties before us have
urged that a creditor cooperative society cannot le a dispute under Section 91 of the 1960 Act in the present matter.
Section 91 dealing with disputes opens with non obstante clause and its opening words which are relevant for present
purposes read "(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching.."
Thus a exclusive jurisdiction has been conferred to take cognizance of such disputes upon Cooperative Court. The words
"any other law" highlighted by us above, clearly show legislative intent to override the provisions of Section 9 of the Code of
Civil Procedure inrelation to such disputes. But as this position is not in dispute before us, it is not necessary for us to go into
more details. Attention can however, be invited to proviso which appears after Section 91[1][e]. It enumerates certain types
of disputes and lays down that same cannot be treated as "dispute" for the purpose of Section 91. Any proceeding for
recovery of amount as arrears of land revenue on a certi cate granted by the Registrar under subsection [1] or [2] of
Section 101 nds place therein and is, therefore, not a "dispute" for the purpose of Section 91. It is therefore, obvious that
adjudication under Section 101 cannot be subjected to scrutiny of Cooperative Court under Section 91.

13. Perusal of Section 101 reveals that it is the last Section in Chapter IX of 1960 Act. It's heading is "Recovery of arrears due
to certain societies as arrears of land revenue". Important words to be noted are "arrears due to certain societies".
Subsection [1] then contains a long list of various types of societies and it is not in dispute that the respondent credit
cooperative society before this Court are covered thereunder. After this list of societies, again the important words appear
and those words are "and on the society concerned furnishing a statement of accounts in respect of the arrears." Thus the
society which invokes this remedy has to le statement of accounts showing how it is entitle to recover those arrears.
Thereafter the Registrar has been given authority to make enquiry in such manner as may be prescribed. Depending upon
outcome of that enquiry, he can issue a certi cate for recovery of amount stated in the certi cate as due towards arrears.
The procedure prescribed for undertaking such enquiry is envisaged in Chapter VIIIA of 1961 Rules. The petitioners as also
respondents accept that this is a speedy remedy of summary nature envisaged by the legislature. We nd subsection [2] of
Section 101 important. It enables the Registrar to issue such certi cate on his own motion, after undertaking enquiry, if he
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is satis ed that concerned society has failed to take action under the foregoing subsection in respect of any amount due as
arrears. This power given to the Registrar to recover amount of arrears due to a society itself shows the desire with which
this provision has been inserted in the statute book. The language itself shows that the recovery contemplated is of arrears
due to society. The recovery is again by a speedy remedy by treating it as arrears of land revenue.

14. Section 91 noted above enables the Cooperative Court to decide disputes about the amounts claimed by the society as
arrears. Recovery of loan is also possible under Section 91. Section 94 deals with procedure for settlement of disputes and
power of Cooperative Court. Section 94[4] states that save as otherwise directed by the State Government in any case or
class of cases, every dispute shall be decided in such summary manner as may be prescribed and as expeditiously as
possible. Subsection [1A] obliges the Cooperative Court to decide dispute within 6 months. Subsection [1] confers upon
Cooperative Court a power to summon and enforce attendance of witness, to compel them to give evidence on oath,
a rmation or a davit and to compel production of documents.

15. Division Bench of this Court in 1998 (2) LJ 628 (Madhav Karmarkar .vs. State of Maharashtra and others), has held that
the Cooperative Courts are established to decide civil disputes and are part and parcel of Civil Courts function. The
procedure to be followed by the Cooperative Court is envisaged in Chapter VIII of 1961 Rules. Rule 77E, prescribes
procedure for hearing and decision of disputes. Rule 77F prescribes summary procedure for deciding disputes. Any dispute
for recovery of a debt upon promissory note, Hundi, Bill of exchange or bond with interest accrued in such instrument, or
under byelaw and certain other types of recovery disputes, can be tried as summary disputes. It is not necessary for this
Court to go into details of the procedure prescribed, but then brie y stating, the procedure is not di erent than one
prescribed under Order XXXVII of the Code of Civil Procedure. Section 98 of 1960 Act provides the mode and manner in
which money can be recovered. Section 93[1] of 1960 Act enables the President of the Cooperative Appellate Court to
withdraw and transfer any dispute from one Cooperative Court to any Cooperative Court. Subsection [2] enables a party to
a dispute to apply to the Cooperative Court, pointing out that a complicated question of law and fact is required to be
adjudicated. The Cooperative Court in that situation can suspend the proceedings before it to enable such party to move
the Civil Court for getting it adjudicated. However, if such civil suit is not led within 2 months, the Cooperative Court has to
continue with adjudication before it.

16. Section 101 which opens with non obstante clause reads "101[1]. Notwithstanding anything contained in Sections 91, 93
and 98, on an application made by". Thus this Section gives an additional remedy to particular types of societies as
enumerated therein. Normal remedy envisaged is under Section 91. Dispute led by such society can be tried as a regular
dispute as per Rule 77E or then as a summary dispute under Rule 77F. Rule 77F contemplates and identi es a particular
type of disputes for summary disposal. Thus from otherwise, large types of disputes which may be led before the
Cooperative Court and disposed of under Rule 77E, a category is carved out for expeditious disposal where the debtor like
the present petitioner has to seek a leave to defend, as per Rule 77F[3]. Section 101 carves out a still narrower type of
dispute or controversy. It speaks of arrears due to certain societies and its recovery as land revenue. Therefore, it proceeds
on "arrears due" and only for that purpose the concerned society has to furnish a statement of account in respect of the
arrears. The Registrar has to make an enquiry only in relation to those arrears. It is, therefore, obvious that the legislature
which thought it proper to extend to a debtor/borrower an opportunity of claiming leave to defend under Section 94[4] of
the 1960 Act, read with Rule 77F, has itself provided this remedy whee very narrow enquiry is required. The legislature
obviously has given importance to cooperative movement and pubic interest which is evident from subsection [2] of Section
101. The enquiry contemplated by the registrar is, therefore, extremely narrow. The learned Additional Government Pleader
appearing on behalf of the respondent State has pointed out that wherever necessary legislature has expressly conferred
power upon the authority to record evidence. Section 94[1] and Section 144D are pointed out to be instances of such use of
power by the legislature. It is an admitted position here that Chapter VIIIA of 1961 Rules or then Section 101 of 1960 Act, do
not confer such power upon the Registrar while conducting enquiry as necessary under Section 101.

17. Chapter VIIIA of 1961 Rules vide its Rule 86A shows procedure for ling application for grant of certi cate for recovery.
The form in which it is to be led is also prescribed and documents which must accompany are also stipulated. Form "U" in
which application under Section 101 is required to be led shows the requirement of disclosure of relevant facts by the
concerned society; all necessary facts which make the respondents before that authority either borrower or guarantor; the
procedure followed for sanctioning loan, securities furnished, documents executed. The applicant then has to point out
failure to repay principal amount and interest upon it and demand/demands made by the concerned society. A resolution
of the Board of Directors to le an application under Section 101 is, also required to be pleaded. Details of loan transaction
are also required to be pointed out as part and parcel of this application. The application is required to be supported by
a davit of responsible o cer of a cooperative society. Rule 86B contemplates scrutiny of such application by the Registrar.
Registrar cannot issue notice to other side, if such application is incomplete in material respect. The other side is expected
to le written statement. Rule 86C contemplates appearance of party, either personally or through an Advocate and
consequence of failure to appear. Rule 86D enables both the parties to le documents. It also enables the Registrar to call
for such other documents from opposite party by order in writing, if production of such document is found essential.
Request for such production from opponent cannot be entertained before he les his written statement. Adverse inference
can be drawn if the document is not produced, after such direction. The applicant Society has to prove contents of its
application and also show how the contentions raised in defence by other side are not correct. After this exercise is
undertaken by the applicant Society, the opponent has been given opportunity to le reply in support of his defence, and
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after such reply, Registrar has to hear oral arguments. Then he has to deliver a reasoned judgment under Rule 86F. If he
issues certi cate, it has to be in Form "V". Rule 86E speci cally stipulates that no cross examination of any of the parties is
permitted.

18. Use of both words i.e., "arrears and due" together in Section 101 is itself manifestation of very limited inquiry felt
necessary under Section 101 before issuing the certi cate. In plain English, both words may be synonymous. New Oxford
Advanced Learner's Dictionary gives following meaning of these words. "Arrears" means a money which has not been paid
at right time. "Due" is stated to mean it must be paid immediately, owed to somebody as it is their right or they have done
something to deserve it. In Chambers 20th Century Dictionary, word "Arrear" means that which remains unpaid or undone.
Word "Due" means - owed, that ought to be paid to another. Blacks Law Dictionary (9th Ed.) states "Arrears" means the
state of being behind in payment of a debt or the discharge of an obligation, an unpaid or overdue debt, Word "Due" means
immediately enforceable, owing or payable, constituting a debt. Advanced Law Lexicon by P. Ramanatha Aiyyar 3rd. Ed.
also shows same meaning of word "Due". It also points out that said word has di erent meanings and that meaning has to
be put on it which ts in with the context. Meaning of arrears shows that which remains unpaid though due. T.P. Mukherjee's
Law Lexicon states "Arrears" means payment remaining unpaid at the due time. It also explains "due" to mean amount
which has matured and is in arrears.

AIR 1974 S.C. 1613 (Dhan Singh Ramkrishna Chaudhuri v. Laxminarayan Ramkrishan) shows that arrears means money
unpaid at due time. Here, it is beyond doubt that both these words do not signify same state of a airs i.e., nonpayment.
Word "Due" therefore is not duplication of what is conveyed by word "arrears". It indicates that amount which is found or
determined to be outstanding and hence, recoverable. Thus statement of accounts and other facts essential under Rules to
be disclosed by the concerned Society and to be looked into by the Registrar reveal that said amount of arrears has to be
"due" i.e., payable. This quasijudicial exercise is made nal by legislature and not kept open under Section 91 only because
of possibility of determination of the limited aspect about arrears due without adjudication on any disputed questions of
facts. Such factual disputes can not and have not been subjected to and fall out side the procedure under Section 101. Thus,
either the arrears are already declared due by some authority or then can be ascertained on the basis of statement of
accounts and other material on record by Registrar. Moment it is demonstrated to Registrar that a bona de and genuine
defense about said arrears is raised which calls for a nding on disputed facts, need for cross examination surfaces and
Section 101 ceases to apply. Procedure laid down for enquiry under Section 101 itself manifests said legislative intention. It
can not be even urged that legislature made that certi cate nal while denying the right to dispute the facts cardinal for its
determination and intended to fasten the recovery as liability upon a person having bona de and valid defence. Section
101(2) again indicates this as it expects the Registrar to be satis ed about the failure of concerned society to take steps
under its Subsection (1) in respect of any amount "due as arrears".

19. Thus very small types of disputes in which only limited question is of quanti cation of arrears due, is to be looked into by
such Registrar while undertaking enquiry under Section 101. Importance therefore, is to statement of accounts. The enquiry
undertaken is only aimed at ascertaining whether amount disclosed in statement of accounts as arrears, is correct and due.
The limited opportunity of defence is, therefore, extended to the borrower like petitioners. The correctness of amount shown
as arrears can be veri ed from the accounts and from accounts of the society and from receipts produced by other side.
Denial of cross examination in this situation only shows legislative intent that if a genuine and disputed question of facts is
found arising by the Registrar, he cannot proceed to resolve that question. The concerned society, in such circumstances,
has to take recourse to ling of a dispute under Section 91, where such disputed questions can be gone into. Hence, a
bona de defence being raised by a borrower or other person against whom such certi cate is sought, cannot be resolved
by the Registrar under this jurisdiction. If he nds such dispute arising, he has to deny the recovery certi cate by passing
appropriate judgment under Rule 86F.

In Ramchandra and another .vrs. Collector, Nagpur and others (supra), the Division Bench of this Court has looked into the
provisions of Section 137. Section 137 [1] was earlier a provision pari materia with provisions of Section 101. Section 137[1]
enables the Registrar to make such enquiry 'as he deems t.' Section 101 was also containing same phrase till 10.05.2006.
On that date, the said words have been replaced and Registrar, is obliged to conduct enquiry in such manner as may be
prescribed. Thereafter, Chapter VIIIA has been added to 1961 Rules, prescribing the mode of enquiry. Thus, said Division
Bench judgment is no longer relevant for interpreting the scheme of Section 101. Paragraph 26 of this Division Bench
judgment on which the petitioners have placed reliance, however, does not show any express nding about need of
extending an opportunity of cross examination. Moreover, there is no provision either in 1960 Act or in 1961 Rules,
prohibiting such cross examination in Section 137 enquiry. This judgment, therefore, is of no assistance in present situation.

20. We may now brie y refer to some other judgments which may have bearing on the present adjudication.

In 2011 (2) LJ Soft (URC) 166 (Ravindra Waman Ingle .vs. Sahakar Mitra), the learned Single Judge of this Court has held
that when dispute under Section 91 is already instituted before application under Section 101 came to be led, the Registrar
has to take into account said factor to nd out the desirability of continuing Section 101 proceedings.

In 2010 (6) All MR 550 (Sundeep Polymers Pvt Ltd. .vrs. State of Maharashtra), the Division Bench has found that when
Registrar issues certi cate exparte, without following the procedure prescribed in Chapter VIIIA of 1961 Rules, the
certi cate is unsustainable.
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In 2011 (2) Mh.L.J. 194 : [2011(4) ALL MR 260] (Vithal Laxman Fatangade and another .vrs. State of Maharashtra and
others), the learned Single Judge of this Court has found recovery certi cate issued without following due procedure and
ensuring proper notice to opponents, as bad.

21. We have not seen any repugnancy or inconsistency interse between Section 91 and Section 101 of 1960 Act. Section 91 is
a general remedy and general law covering all disputes; while Section 101 governs extremely a small type or nature
therefrom, where only possible dispute is about the quantum of arrears demonstrated to be due. If any other type of
dispute requiring an adjudication arises, it is not possible for the Registrar or his delegate functioning under Chapter VIIIA
to entertain such application and the application in that event needs rejection. The concerned society has then to move the
Cooperative Court under Section 91 for said recovery. Language of both the provisions is plain and unambiguous and both
the provisions can be construed harmoniously in this manner. Both the provisions begin with non obstante clause and do not
militate with each other, but proceed to advance the legislative intention of enabling a society to have a speedy remedy for
recovery of arrears due as land revenue. Therefore, only the legislature has envisaged very limited veri cation, which even
does not call for any cross examination of either of the parties. The express bar of such cross examination under Rule 86E is
because of this very narrow scope of enquiry open to the Registrar under Section 101 read with Chapter VIIIA of 1961
Rules. As already held above, if the scope of enquiry is required to be enlarged, the legislative intent will itself get
frustrated. If the Registrar or his delegate nds disputed questions of facts, genuinely arising in such proceedings, and the
same cannot be resolved without cross examination, it is apparent that the application under Section 101 itself cannot be
entertained. In that event it has to be held that claim made by the concerned applicantsociety is not in respect of arrears
due to it as envisaged under Section 101 of the 1960 Act.

22. In matters before us, no arguments have been advanced about the nature of defence raised and about need of cross
examination, if that defence is to be substantiated. It has not been demonstrated as to why said defence cannot be viewed
as genuine and bona de. The respective creditor societies have also not attempted to demonstrate how the defence raised
are not genuine or bona de. They have raised objection to the tenability of petitions, pointing out that alternate remedy
under Section 154 of the 1960 Act is available. As we have found nothing wrong with the legislative design of not permitting
cross examination in Section 101 enquiry, the challenge to the constitutionality of Rule 86E has to fall. Once said challenge
falls, the petitioners have other remedy prescribed by the statute, open to them. Parties can demonstrate before said
Forum the substance in or frivolous nature of defence raised and how it is vital or irrelevant, in so far as jurisdiction under
Section 101 of 1960 Act is concerned. Hence, leaving the petitioners to invoke that remedy for redressal of their respective
grievances, we dismiss both the petitions. The amount of Rs. 5,00,000/deposited by the petitioners in Writ Petition
No.92/2009 with interest accrued upon it, is allowed to be withdrawn by the respondent no.5 Creditor - Cooperative Society.

Both the petitions are accordingly dismissed. Rule discharged. However, in the facts and circumstances of the case, there
shall be no order as to costs.

23. Shri Sirar, learned Counsel holding for Shri Jaiswal, learned Counsel for the petitioners prays for stay of judgment
pronounced today for a period of eight weeks from today so as to enable the petitioners to take further appropriate steps.
Shri Ghare, learned Counsel appearing on behalf of respondent nos. 5 and 6 is opposing the request.

24. We do not nd any merit in the request being made by Shri Sirar, learned Counsel. The same is, therefore, rejected.

Petitions dismissed.

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