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Judgment
S.B. Deshmukh, J.—We have heard learned Counsel for the respective parties. This petition was earlier before the learned Single Bench of this Court. We have perused all earlier orders passed in this writ petition. This Court had issued notices informing the parties that the petition would be disposed of finally. Said notices were made returnable on April 24, 2008. Parties, thus, were aware that the petition would be considered by this Court for final disposal at the admission stage. On behalf of respondent No. 9, an affidavit in reply is filed. Other respondents have not presented pleadings and/or affidavit in reply, despite service. The facts relevant for the disposal of the writ petition, we may reproduce in brief,
(a) Respondent No. 1 ("Co-operative Bank"), was initially registered as co-operative society.
(b) Respondents No. 2 and 3 had applied for loan to respondent No. 1. They were enrolled as Members/Shareholders. Respondents No. 4 and 5 were guarantors to respondents No. 2 and 3 for the loan sought by them. This loan transaction seems to be dated 20.6.2002. Repayment span of the loan was 15 years.
(c) The Principal Borrowers i.e. respondents No. 2 and 3 defaulted in repayment of monthly installments somewhere in the months of June, 2003, September, 2003 and January, 2004.
(d) On default of the principal borrowers, respondent No. 1 Bank issued notice to the principal borrowers, calling upon them to make the repayment of amount of Rs. 4,85,417/-. Respondent No. 1 Bank claims that it is a joint and several liability of the principal borrowers and the guarantors.
(e) Respondent No. 1 Bank lodged the arbitration case under the Multi-State Co-operative Societies Act, 2002. It was registered as case No. 269/NKGSB/04. The arbitrator passed an award in favour of respondent No. 1 Bank. A sum of Rs. 4,80,352/-, together with interest at the rate of 12 % from 1.1.2004 till repayment, with costs of Rs. 5,000/- was directed to be paid.
Somewhere in the year 2004, noticing default on the part of the principal borrowers in repayment, respondent No. 1 Bank requested respondents No. 6, 7, 8 and 9 for deduction of sum of Rs. 1743/-per month from the salary of the petitioner. The petitioner claims that about 35 months such deduction is being made by his employer i.e. respondents No. 6 to 9.
While raising the loan, according to the petitioner, the principal borrowers had mortgaged the flat with respondent No. 1 Bank. The petitioner also filed a civil suit bearing No. 62/06/A, for recovery of money against respondents No. 2 and 3, i.e. the principal borrowers. Somewhere, in the month of September, 2007, the petitioner, allegedly pointed out Section 60 of the CPC (CPC) to respondent No. 1 to contend that deductions from the salary beyond a period of 24 months is not legal.
Respondent No. 1 Bank did not pay any heed. Therefore, the petitioner filed this petition in this Court on 12.12.07.
The petitioner, in this petition, seeks a writ of mandamus against respondents No. 1, 6, 7, 8 and 9, directing them to stop deduction of salary of the petitioner and refund the entire amount of deduction made beyond the period of 24 months. He seeks refund of Rs. 36,729/-with 12 % interest.
We have considered the provisions of the Multi-State Co-operative Societies Act, 2002 ("Act 2002" for short). "Co-operative bank" is defined u/s 3(f) and "multi-State co-operative society" is defined u/s 3(p) of the Act 2002.
Learned Counsel appearing on behalf of the petitioner submits that respondents No. 6 to 9 have no legal right of deducting loan installments from the salary of the petitioner contrary to the provisions laid down u/s 60 of CPC. She further contends that the principal borrowers are owners of an immovable property which is a flat. No action is taken against the principal borrowers by respondent No. 1 Bank for recovery of the loan amount. Recovery of the loan needs to be effected by respondent No. 1 from the principal borrowers i.e. respondents No. 2 and 3 and if there is no satisfaction of recovery of the entire amount, proceedings can be initiated against the present petitioners. In support of her submission, learned Counsel for the petitioner relied on a Division Bench Judgment of this Court in the matter of The Goa Urban Co-operative Bank Ltd. vs. The Merces English High School and others, reported in 1999 (2) Goa L.T. 263.
Per contra, learned ASG appearing on behalf of respondent No. 9, drew our attention to the affidavit-in-reply (page 31). According to him, agreement has been executed by the petitioner in favour of respondent No. 1 Bank, in view of Section 49 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter, referred to as the "Act 1960" for short). He submits that the liability of the principal borrowers and the guarantors, is joint and several. According to him, the petition is devoid of any substance and he requests for dismissal of the same. He also invites our attention to Section 60 of the Act 2002.
Along with the affidavit in reply filed on behalf of respondents No. 6 to 9 (page 31), there are some copies of documents placed on record. Amongst these documents, page 34, a letter addressed by respondent No. 1 Bank to the employer of the petitioner is important. This communication makes reference to the Agreement executed by the present petitioner u/s 49(i) of the Act 1960, and Section 58(2) of the Multi-State Co-operative Societies Act, 1984. This letter is dated 16.12.2003. Agreement for loan (page 35) seems to have been executed by the petitioner and the guarantors on 2.7.2002. Page 38 is the agreement for deducting installments from the salary/wages (surety). This has been executed by the employer of the petitioner, i.e. on behalf of respondents No. 6 to 9. Thus letter (page 34) dated 16.12.2003, agreement of loan (page 35) and the agreement (page 38) are important documents/agreements. These three documents are significant from the view point of Section 49 of the Act, 1960. We have considered the scheme of Section 49 of the Act 1960. Apart from these 3 documents, page 37 is a promissory note in favour of respondent No. 1 Bank. From the facts and the material produced on record, we are of the view that the petitioner has executed an agreement within the parameters of Section 49 of the Act 1960 in favour of respondent No. 1 Bank. There is also an agreement executed by the petitioner, authorising his employer i.e. respondents No. 6 to 9 to deduct the amount of installments from his salary, as per the requisition from respondent No. 1 Bank. We are of the opinion that the action of respondents No. 6 to 9 is well within the parameters of Section 49 of the Act, 1960.
We have given our anxious consideration to the submissions of the Advocate for the petitioner relating to the Division Bench Judgment of this Court in the matter of the Goa Urban Co-operative Bank Ltd.(supra). The facts therein are altogether different. In our view, the said Judgment does not help the present petitioner. It is also not possible for us to countenance the submission of the learned Advocate for the petitioner that respondent No. 1 should have proceeded against the principal borrowers before acting against the present petitioner. Learned ASG, appearing on behalf of respondent No. 9, is justified in relying on a Judgment of the Supreme Court in the matter of State Bank of India Vs. Messrs. Indexport Registered and others, . On this issue, we are of the opinion, that the liability of repayment of loan pertaining to the principal borrowers and the guarantors cannot be said to be alternative. In other words, responsibility of the guarantors for repaying the loan raised and obtained by the principal borrowers, is coextensive. In fact, this is a ratio of the Judgment of the Hon''ble Supreme Court in State Bank of India (supra). We have also gone through the Judgment of the learned Division Bench of this Court, pointed out to us, by the learned ASG, in the case of The New Phaltan Sugar Works Ltd. & Ors. vs. State of Maharashtra reported in 2004(4) ALL MR 426. The facts are distinguishable.
Learned Advocate for the petitioner took us through Rule 37(6) of the Multi-State Co-operative Rules, 2002. In our view, this rule has no application to the facts brought before us in this writ petition.
We have also considered the submission of learned ASG, pertaining to Section 60 of the Act 2002. We feel it necessary to reproduce the said section herein below :
Deduction from salary to meet-State co-operative society''s claim in certain cases. -(1) Notwithstanding anything contained in any law for the time being in force, a member of a multi-State co-operative may execute an agreement in favour of that society providing that his employer disbursing his salary or wages shall be competent to deduct every month from the salary or wages payable to him, such amount as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debit or other demand the member owes to the society.
(2) On the execution of such agreement, the employer disbursing the salary or wages of the members shall, if so required by the multi-State co-operative society, by a requisition in writing and so long as the society does not intimate that the whole of such debit or other demand has been paid, make the deduction in accordance with the agreement and pay the amount so deducted to the society within a period of fourteen days of the date on which deduction has been made, as if it were a part of the salary or wages payable on the day as required under the Payment of Wages Act. 1936 (4 of 1936), and such payment shall be valid discharge of the employer for his liability to pay the amount deducted.
(3) If after the receipt of a requisition made under sub-section (2), the employer disbursing the salary or wages of the member at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned or makes default in remitting the amount deducted to the multi-State co-operative society, the society shall be entitled to recover any such amount from such employer as arrears of land revenue and the amount so due from such employer shall rank in priority in respect of the liability of such employer equal to that of the salary or wages in arrears.
This section starts with non-obstante clause. The scheme of this section is closer to Section 49 of the Act 1960. We are in agreement with the learned ASG that the facts of the case on hand are governed by Section 49 of the Act 1960 and that of Section 60 of the Act 2002. Status of respondent No. 1 as multi-State co-operative society is not in dispute.
Learned Advocate on behalf of the petitioner tried to emphasize the word "inquiry". This word "inquiry" needs to be construed in view of various provisions of the Act 1960. Under the Act 1960, Chapter VIII is relevant. Sections 81 to 88 are also significant. Factually, in the case on hand, it is nobody''s case that any inquiry or audit was directed by the Registrar in relation to the affairs of respondent No. 1 Bank or the Society. In our view, it cannot be said that the facts in the case on hand are being governed only by Section 60 C.P.C. or Rule 37(6) and applies to the case in hand. In our opinion, Section 60 of the CPC is a general provision. We are dealing with the petition wherein the provisions of the Maharashtra Co-operative Societies Act, 1960 and the Multi-State Co-operative Societies Act, 2002 and the Multi-State Co-operative Societies Rules, 2002 are applicable. We do not feel that the petitioner can lay his hands only on Section 60 CPC. Another reason for such conclusion is that there is no execution sought by respondent No. 1 or respondents No. 6 to 9, of any decree or an award, passed by the competent Court or an Authority. The case purely is governed by the provisions of Section 49 of the Act 1960 and Section 60 of the Act 2002. We have also noticed the definition of the word "execution" as defined by Black''s Law Dictionary, with pronunciations, Sixth Edition, by Henry Campbell Black.
The petitioner has fairly conceded that the suit for recovery against the principal borrowers is already filed by the petitioner and pending before the concerned Court.
With the assistance of the learned Counsel for the petitioner, we have considered Section 94(c) of the Act 2202. We have also taken into account Sections 39, 40, 83, 99 and 101. These sections have no application to the facts on record. Respondents No. 6 to 9 are only obliging and/or acting in obeisance of the communication page 34 and the agreement page 38. For the foregoing reasons, we do not see any merit in the petition and the writ petition stands dismissed. Add interim relief, if any, granted earlier, stands vacated. No costs.