IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NO. 18563 of 2005

Shri Arun B. Khanjire …Petitioner

Vs.

The Ichalkaranji Urban Co-op. Bank Ltd. & Ors. … Respondents

J U D G M E N T  ALTAMAS KABIR,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.

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

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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

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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

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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

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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

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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:

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“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

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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.

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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.

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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

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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

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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

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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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________________J. (ALTAMAS KABIR)

   ________________J. (MARKANDEY KATJU)

New Delhi Dated: 3.12.2008

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