Co-operative
Guru Shri P. Y. Rathod
states that the Co-operative movement has been officially functioning in the State of
Maharashtra since last 95 years or so. Essentially, the Co-operative
movement is based on Co-operation between its members. Unfortunately however,
it is human nature to dispute and so disputes are rather commonplace among the
members. Thus, the importance of the Maharashtra Co-operative Societies
Act 1960 cannot be undermined. It is primarily concerned with the
settlement of such disputes.
Shri P. Y. Rathod further
adds that the Disputes, relating to the affairs of Co-operative
societies, were required to be settled by some authority in which
the powers under the Maharashtra
Co-operative Societies Act 1960 (MCS Act) were required to be
vested so that decisions in such cases could be made. The objective of creating
separate judicial machinery for disputes of Co-operative societies was
to provide justice to the aggrieved
parties quickly, independently and more economically. The machinery so set up
was also intended to be easily accessible to the disputing
parties.
Initially,
when there were fewer disputes between the members, arrangements were made to
refer the matters to the Registrar's nominees. They
were either pleaders or advocates or persons, sufficiently qualified in the
field of Co-operative law.
Gradually, several changes were made in this process says Shri P. Y. Rathod.
Shri P. Y. Rathod further
states that finally, in 1974, when he was working in the Co-operative department Section 91-A of
the MCS Act 1960 was inserted and Co-operative Courts
were established in certain territories to deal with the number of cases, then
pending in this area. He further adds that even though the Co-operative
Courts were established in 1974, the disputes were first required to
be referred to the Registrar in order to
decide whether the said dispute existed within the meaning of the Section &
then it were subjected before the Co-operative Court. He
further recollects and states that in that era there was one Office of the
Registrar which was formerly known as “India Gate” and
different wards were not formed.
Shri P. Y. Rathod
states that Section 91 of
the MCS Act 1960 confers exclusive jurisdiction
on Co-operative Courts to decide the disputes between parties referred to in
section. It prescribes the jurisdiction of ordinary civil courts to decide such
disputes between the parties referred to in the said section.
He
further states that Section 101 of
the MCS Act 1960 contemplates a recovery of the amount due
to the society in a summary manner with regards to certain societies. The
different procedures that are followed under these two sections often conflict
with one another. Societies and Co-operative
banks are interested in recovering
amounts, due from the members,
by adding sureties as parties u/s 101 of the MCS Act 1960.
The reason for this is that a certificate can be obtained from the Registrar
as per the provisions of the MCS Act 1960 without a
full-fledged trial. Thus, the procedure for the recovery of money due to a
society or bank is comparatively easy & speedily disposed off.
Unfortunately,
often Co-operative Societies and
banks, in order to defraud their creditors and to expedite their claims
from borrowers, file proceedings under Section
101 before the Registrar. The reason
is that this section gives relief quickly and without any full-fledged inquiry.
However, this practice is prejudicious to the members of the society.
Before
examining the anomalies of different provisions of this Act, let us understand
what a dispute, under the MCS Act 1960, essentially is says Shri P. Y. Rathod.
Section 91 of
the MCS Act 1960 refers to a dispute between the society or its past
or present servant, nominee, or heir or legal representative of
any deceased officer or a member, past member, claiming through a member of
past member of a deceased member of society. A dispute touching the
constitution or conduct of a general meeting or business of the society can be
decided u/s 91 of the MCS Act 1960.
The provisions of section 91(1)(d) provide
for a surety of a member, as one of the parties to the dispute, and therefore,
even though the surety is not a member, dispute could be filed against the
surety for recovery of dues. For any
such dispute, the matter can be taken to the Co-operative Court.
v Section 101 of the MCS Act
contemplates a recovery of the amount due in a summary manner and the power is
given to the Registrar to issue a certificate
for the amount due by making a summary inquiry on the basis of the affidavits,
filed by the respective parties. (i.e. an application is filed by the disputant
and the respondent simply files a written reply to it). On the other hand, section 91
prescribes a full- fledged trial in the Co-operative court, with
all the ingredients of a trial e.g. cross-examination of
witnesses, appreciation of evidence, interpretation of documents etc.
v Under section 91, an appeal lies to the Co-operative
Appellate Court whereas under sec. 101 there is no
provision for appeal. However, a revision can be made to the Divisional Joint
Registrar.
v In an appeal u/s 91, there is an
appreciation of evidence whereas in a revision, there is no possibility. The joint Registrar
simply reads the order and if he finds any anomaly he revises it. Thus, the
procedure is very arbitrary and depends upon
the subjective satisfaction of the authority.
v Often, the claims of huge amounts are
decided on the basis of the affidavits and certificates. These claims are
decided without testing the validity of documents like
loan bonds, promissory notes etc. Further, it involves the interpretation of
provisions of complicated property laws.
v Under section 91, the
court has full discretion to stay the entire decree, whereas under Section
101, fifty percent of the award amount that is recoverable has to be
deposited in the court. Only then will a revision can be entertained. Thus,
even if the aggrieved person has a good case on merit, if he is not in a
position to deposit 50% of the amount due, he will be deprived of the right to
file revision.
v
The proceedings under Section 91
are judicial proceedings and form a substantive remedy, provided by law. On the
other hand, proceedings under Section 101 are
quasi judicial and provide a summary remedy, under law.
v
In view of the above conflict between Section 91 and
101 of the MCS Act 1960, the Full
Bench of the Co-operative Appellate Court
Bombay,
in Sangli Urban Co-operative Bank Limited v/s. Nandkumar Prashuram
Prabhudesai ( 1994 C.T.J. 653) made
certain observations, which are very relevant while entertaining applications
u/s 101. The salient points are mentioned below:
v
Under the provisions of section 101,
no certificate can be issued against the surety. However, in case such a
certificate is issued, it would not debar a surety from challenging the statement of
accounts in a proceeding u/s 91 of the MCS Act 1960.
v
A member or a surety can file a dispute
against the society for settlement of accounts and such proceeding is not
barred because of the provisions of section 101 of the MCS Act 1960.
v
The claims by the Co-operative
Society for recovery of its dues against the members and surety of a
member, based upon the execution of documents as well as on the basis of
statement of accounts, are maintainable u/s 91 of MCS 1960.
In
spite of the above observations made by the Full Bench, often Co-operative
banks and societies take recovery of the amount due on the basis of documents
before the Registrar u/s 101.
Further, the amendment to sec. 154, dated: 23-8-2000
puts the restriction that no revision shall be entertained unless fifty percent
of the amount due is deposited. Further, it takes away the valuable right
of the surety to file a revision even if the order of the Registrar
is bad.
However,
as this judgment is given by the Co-operative Appellate Court, it has only a
persuasive value. It cannot be considered to be a law. It is merely a guideline
for the subordinate Co-operative Appellate Courts.
Contradictions between these sections
can be solved only by a judgment by the Hon'ble Bombay High Court
or the Supreme Court. In the
absence of such a ruling by the higher authorities, serious cognizance of the
full-bench judgment of the Co-operative Appellate Court
should be taken concludes Shri P. Y.
Rathod.
Co-operative Guru
Ex- Co-operative Officer, Grade (I).
Registrar of Co-op Societies,
Administrator & Enquiry Officer,
Election & Authorised Officer
Govt. Certified
Auditor & Tax Advisor
Co-operative Societies, Mumbai
& Thane Division.
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