Pimpri Chinchwad Sahakari Bank Maryadit v. Arun Namdeo Pote

14. The rules framed under Chapter VIII-A lay down the basic documents that must accompany every application under Section

101. These documents are not matters of form. They are the foundation on which the Registrar undertakes a summary inquiry. The requirement is, therefore, mandatory. The Registrar must see whether the society has, in substance, placed before him the material necessary to examine the claim.

15. The filing of Form U, the authority letter, the updated account extract, the notice issued to the member, the relevant documents and proof of fees serve a clear purpose. They show that the claim is legal and genuine. They show that the society has called upon the member to pay. They show the basis of the arrears. Without these, the Registrar cannot verify the correctness of the claim. The law, therefore, insists that the application must be complete.

16. If a document is missing or an extract is incomplete, the defect. This shows that the rules do not aim at rejecting applications for minor lapses. They aim at ensuring that the the rules say that the Registrar shall dismiss the application if defects are not cured, the language is mandatory. The Registrar does not have the discretion to proceed on an incomplete application. He must insist that the society supplies what is required.

17. At the same time, the Registrar must look to the substance, not the form. For example, if the account extract is filed but contains a minor clerical error that is corrected by supporting records, the Registrar need not reject the application. If the authority letter is signed by the proper office-bearer but is in a slightly different format, the Registrar must see whether the signature and the power are valid. If the notice copy is filed but the acknowledgment is missing, the Registrar may look to postal records or subsequent compliance of Rule 86B. The aim is to see whether, in essence, the society has complied with the requirements that go to the root of the matter.

18. Thus, the rule is mandatory in its object. The Registrar must examine whether the essential requirements are fulfilled. If the defect is minor and does not affect the merits of the claim, the the matter, he must insist on strict compliance.

(ii) Service of notice to the member.

19. The obligation placed upon the Registrar to issue notice within fifteen days is not an empty formality. It is a safeguard to ensure that no person is condemned unheard. The Legislature has prescribed a clear manner of service. Notice must go by registered post with acknowledgment or, where the opponent cannot be easily found on the address provided by opponent, by publication in a local newspaper.

20. The requirement is mandatory for a simple reason. Section 101 is a summary remedy. It dispenses with oral evidence. It dispenses with cross examination. The scrutiny is limited to documents. In such a process, fair opportunity is the only protection available to the opponent. If this safeguard is diluted, the proceeding loses legitimacy. The words of the rule are clear. The Registrar shall issue notice. He shall ensure service by registered post or by publication. The duty is mandatory.

21. Service of notice is the step that gives jurisdiction to the notice was not issued or that service was defective, the order must fall. A person must be informed of the case against him. He must have a chance to place his defence. The rules recognise this principle and give it statutory expression.

22. At the same time, the Registrar must examine whether, in substance, the opponent had knowledge of the proceedings. If notice sent on correct address provided by member by post returned unclaimed and publication was made in accordance with Rule 86B, the requirement stands satisfied. The opponent cannot complain of lack of service if he deliberately avoids notice. But where neither registered post nor publication is carried out, the inquiry is vitiated.

23. The Registrar must, therefore, be careful. He must ensure that every step of service is properly recorded. The acknowledgment, the postal endorsement, the newspaper publication and the report of service must form part of the record. Only then can the Registrar proceed to consider the claim.

(iii) Inquiry is document-based. No cross examination.

24. The prohibition against cross examination is a deliberate and significant feature of the scheme under Section 101. Rule 86E(1) states in clear terms that no cross examination shall be permitted. It reflects the very character of the remedy. Section 101 provides a summary process meant for quick recovery of dues which are reflected in the accounts of the society. The Legislature has kept the inquiry confined to documents. The Registrar is expected to examine the account extract, the notices issued, the receipts produced and the resolutions of the society. On this material, the Cross examination is a feature of a full-fledged adjudication. The bar on cross examination is mandatory.

25. At the same time, the Registrar must exercise care in applying this rule. When the member seeks cross examination, it is a clear sign that the dispute involves contested facts requiring a full trial. The Registrar must then consider whether the defence is genuine and supported by some material. If the defence is bald or unsupported, the Registrar may proceed under Section 101.

(iv) Registrar must pass a reasoned judgment.

26. Rule 86F requires the Registrar to record a reasoned judgment while granting or rejecting an application under Section

101. This requirement is not a mere procedural formality. Reasons serve a clear purpose. They show that the Registrar has applied his mind to the material on record. They demonstrate that the the higher authority to understand the basis of the decision if the matter is challenged. Without reasons, an order becomes opaque. It raises doubt whether the authority acted arbitrarily or overlooked relevant facts.

27. In the summary proceedings under Section 101, the The entire inquiry rests on documents produced by the society and the member. The Registrar must therefore explain why the account extract is accepted, why the defence is rejected, or why the dispute requires adjudication under Section 91. A bare conclusion is insufficient. The order must show the steps of reasoning that led the Registrar to the conclusion.

28. The requirement is mandatory because Rule 86F uses clear and imperative language. The Registrar shall issue a reasoned judgment. It leaves no scope for discretion. An order without reasons is in breach of principles of natural justice. It cannot stand scrutiny. The parties must know why the application succeeds or fails.

29. When a borrower raises a defence, supported by material, that the interest has been wrongly calculated, the Registrar must examine the objection with clarity and restraint. The Registrar is not expected to undertake a mathematical audit or reconstruct accounts. His duty is limited. He must see whether the borrower has brought before him any material that casts doubt on the correctness of the society’s account extract.

30. A mere assertion is never enough. The Registrar must insist on some supporting material. A borrower who challenges the interest component may produce receipts that show a payment not reflected in the extract. He may produce his own bank statements showing debits made towards repayment. He may place earlier correspondence where he objected to the rate applied or sought clarification. He may even submit a calculation sheet to show how, according to him, the figures ought to stand. Each such document provides some basis to test the claim.

31. The Registrar must place such material side by side with the society’s account extract. If the receipts tallied by the borrower appear genuine and show entries not reflected in the extract, the indicate regular deductions which do not appear in the society’s records, the Registrar must note this. If earlier correspondence reveals a continuing dispute regarding the rate of interest, the correctness of the dues claimed.

32. At the same time, the Registrar must remember the limits of his jurisdiction. He cannot embark on a detailed recalculation. He cannot engage in questions that require oral evidence or expert testimony. The Registrar must ask a simple question. Does the material produced by the borrower raise a real doubt about the correctness of the account extract. If the answer is no, the documents are vague, incomplete or do not directly relate to the entries challenged, the defence must fail. A summary proceeding cannot be derailed on the strength of loose or unrelated material.

33. A mere denial without documents does not create doubt about the correctness of the account extract. The Registrar must distinguish between a bare assertion and a defence supported by material. A bald denial cannot defeat a statement of accounts duly certified by the society. But if the borrower produces material which raises a legitimate question, the Registrar must record the point in issue and test whether the matter can still be resolved on documents.

34. The Registrar must then record his finding. He must state clearly whether the entries in the account extract are accurate. If the borrower’s material affects the quantum and cannot be resolved without detailed inquiry or cross examination, the Section 101. In such a case, the society must be directed to seek its remedy under Section 91.

35. Thus, the duty to give reasons forms an integral part of the proceedings under Section 101. It ensures that the Registrar acts within the bounds of law and that justice is not only done but is seen to be done. v) Relegating society to a dispute under section 91 if a genuine dispute requiring trial arises.

36. Section 101 is attracted when the loan, its disbursement and default are proved by documents of the society. Section 91 covers disputes that require a full judicial examination. It applies when the very foundation of the transaction is questioned. When the matter is only about the amount due, and the account statements support the claim, the Registrar can issue a Recovery Certificate. The Registrar is not required to summon witnesses or allow cross examination. The limited opportunity given to the borrower is only to point out errors in the account. If the borrower produces receipts or records to show that the amount shown as arrears is incorrect, the Registrar must consider those documents.

37. A mere denial of signature or a bare allegation of forgery cannot defeat recovery proceedings. Law does not accept a simple verbal denial when documentary evidence exists. The borrower must bring some material to show that the documents are not genuine. The Court expects clarity, not empty statements. When a person signs loan documents, the Bank records his signature, photograph, KYC papers, and supporting documents. These become part of the official record. If the borrower later says that he never signed the papers, he must explain how the Bank came to possess his records. He must produce some basis such as expert opinion, police complaint, or contemporaneous correspondence raising objection. Without such foundation, a simple denial remains a self-serving statement.

38. Forgery is a serious allegation. It amounts to alleging a criminal act. Such a charge cannot rest on mere suspicion. It must be supported by some material such as a handwriting expert's opinion, proof of loss or theft of documents, or a timely complaint. When a party raises the allegation of forgery for the first time only after receiving a recovery notice, and without any supporting material, the authority should treat such allegation with caution.

39. The Registrar while acting under Section 101 proceeds on the basis of the documents available. If the borrower only disputes the execution without proof, the Registrar should not be compelled to abandon summary proceedings. But if the borrower brings credible material that creates a serious doubt about the execution of documents, then the matter may require detailed evidence and cross examination before the Cooperative Court under Section 91. Thus, something more than a bald denial is required. There must be prima facie material. The law does not allow the remedy under Section 101 to be frustrated by raising vague allegations. Only when the defence is real and supported by some material does the matter shift to Section 91.

40. However, if during such enquiry, the borrower raises a defence which goes to the root of the transaction, and that defence is backed by some material, the Registrar cannot decide such a dispute. For example, the borrower may assert that he never executed the loan documents or that the documents are forged. In such a situation, the Registrar must test whether the defence is bona fide and supported by material. A simple denial is not a bona fide defence. A bald allegation without any foundation is not a dispute. It is only a tactic to delay proceedings.

41. An allegation of fraud must rest on some material. A mere statement that fraud has taken place does not take away the jurisdiction vested under Section 101. Fraud is a serious charge. Law requires that such an allegation must be supported by specific facts, relevant documents or some evidence. The authority cannot shift proceedings to Section 91 only because a party uses the word fraud without anything more. Forgery or denial of execution is a serious allegation. It demands specific details. A person who alleges forgery must point out facts, supporting documents or prior objections raised by him. There must be some evidence which creates doubt about the genuineness of the documents. If he merely denies signing or merely alleges forgery without any material, the Registrar may proceed under Section 101. Such unsupported allegations do not take away the jurisdiction.

42. Section 91 comes into play when the dispute raised by the borrower cannot be resolved on documents alone and requires a deeper examination of facts. Complex facts arise when the very foundation of the transaction is questioned, or when the circumstances surrounding the loan or the entries in the account demand a fuller inquiry. The Registrar under Section 101 is not equipped to decide such matters. His inquiry is summary. He relies only on records. Where the facts cannot be settled without oral evidence, cross examination or expert opinion, the proceeding must move to Section 91.

43. To illustrate, consider a case where the borrower alleges that the loan was sanctioned without his consent, or that his signatures were taken on blank papers which were later misused. Suppose the borrower produces earlier complaints to the police or correspondence disputing the transaction. These are not issues that can be verified through the account extract alone. They require a detailed examination of the manner in which the loan was processed, the conduct of the parties and the genuineness of the documents. These are complex facts.

44. Similarly, where two different sets of documents are produced by both sides, and each set contradicts the other, the examining witnesses. For example, the borrower may produce a letter issued by the society granting him a moratorium on interest, while the society denies issuing any such letter. The alleged letter bears a disputed signature. This raises issues requiring handwriting examination and witness testimony. Such a dispute belongs to

45. Another example arises where the borrower claims that the interest charged was changed unilaterally and without notice. The society produces a resolution passed in the general body meeting, while the borrower produces minutes of an earlier meeting or circulars contradicting it. Here, the dispute is not about figures alone. It concerns the authority of the society to levy the charges. This again requires examination of proceedings and the validity of resolutions. This is beyond the scope of Section 101.

46. Complex facts also arise when there are allegations of fraud supported by some material. Suppose the borrower produces a forensic report suggesting manipulation of entries or tampering of documents. The Registrar cannot test such a report in a summary proceeding. Fraud is a serious allegation. When supported by material, it demands a full trial. Section 91 is the forum for such adjudication.

47. The principle behind these examples is simple. Section 101 handles matters where the account speaks for itself. Section 91 handles matters where the account must be proved by evidence. When the defence raises questions that require testing of credibility, examination of witnesses or technical expertise, the dispute involves complex facts requiring adjudication under

48. The distinction is between a genuine dispute based on facts and a mere attempt to delay the recovery. Thus, the test is clear. Denial without foundation is not enough. Something more is needed to show that the dispute is real. Only then can the forum under Section 91. vi) Production of documents referred to in the application.

49. The requirement of producing documents referred to in the pleadings is central to the scheme of Section 101. The entire inquiry rests on records. No oral evidence is taken. No cross examination is permitted. The Registrar must decide the matter on the strength of the documents placed before him. For this reason, the rules require both sides to file all documents they rely upon at the time of filing their pleadings. This requirement is mandatory.

50. The society must place its account extract, notices issued, resolutions and relevant papers. The member must place receipts, correspondence or any document on which he bases his defence. Without these materials, the Registrar cannot verify the correctness of the arrears. The inquiry would then lose its summary character and drift into conjecture. The law does not permit such an approach.

51. Rule 86D reinforces this principle. If either party asserts that a relevant document is in the custody of the opposite party, the receives a full and fair record. If the party fails to comply, the the mandatory nature of the requirement. A party cannot withhold documents and expect to succeed in a summary proceeding.

52. At the same time, the Registrar must apply a practical approach. The requirement is not meant to punish minor defects. It is meant to ensure that the material necessary for decision is before the authority. If a document is bulky or cannot be produced physically, inspection may be allowed. The object is to ensure access to records. The rule must be applied in a manner that furthers this object.

53. The proceeding under Section 101 is unlike a regular trial. The Registrar does not decide disputed questions of fact. He does not test oral testimony. He verifies records. The rules require that the records be complete and available. This ensures that the inquiry remains within its proper limits. It also ensures fairness to both sides.

54. Therefore, the requirement of producing documents referred to in pleadings is mandatory. It is the foundation of the process. Without full disclosure of documents, the Registrar cannot discharge his duty. The inquiry must then be refused and the parties must be left to seek adjudication under Section 91. vii) Decision of the Registrar must be based strictly on accounts and records.

55. Section 101 recognises only those disputes which can be determined by looking into records. The limitation placed upon the disputed facts, is inherent in the structure of Section 101. The Legislature has designed this provision as a summary mechanism. It enables a society to recover dues which are evident from its accounts. The inquiry is narrow. It is confined to verifying the correctness of the arrears from records. The nature of the remedy itself excludes examination of contested factual issues.

56. If the Registrar attempts to resolve factual disputes on the basis of assumptions or personal inferences, he would overstep the limits of his jurisdiction. He would convert a summary inquiry into a substantive adjudication. This would go against the legislative intent. It would expose the summary procedure to delay and misuse. It would also cause injustice, because the party raising a genuine issue would lose the opportunity of a full trial before the proper forum.

DIRECTORY PARAMETERS:

57. Time limit for issuing notice within fifteen days. This is directory. Delay does not vitiate the proceeding if reasonable cause is shown.

58. Adjournment of up to fifteen days for written statement. This is directory. A short extension may be allowed if justified.

59. Decision within three months. This is directory. The Registrar may decide beyond three months by recording reasons. The time limit is intended to expedite, not invalidate.

60. Registrar’s power to draw adverse inference. This is directory. It is a discretionary power. The Registrar is not bound to draw an adverse inference in every case.

61. Opportunity to file additional statement. This is directory. The Registrar may allow an additional statement only in limited situations. It is not an absolute right.

62. Inspection of bulky documents. This is directory. The procedural measure.

63. Applying these parameters to the present case, the Revisional Authority did not examine whether the dispute raised by respondent No.1 had any material support. The Revisional Authority did not record any finding that the debt was not proved or that the documents were insufficient. The direction to proceed only under Section 91 was premature and contrary to the scheme of the Act.

64. Justice demands that the matter be remanded so that the Revisional Authority may examine the record afresh. The Revisional Authority shall decide whether the dispute raised by respondent No.1 requires full trial and cross examination, or whether recovery can proceed under Section 101. The Revisional Authority shall consider compliance with Section 154(2A). It shall also consider whether respondent No.1 was duly served under

65. The Revisional Authority has set aside the Certificate by a brief order. It has not considered the statutory requirement under Section 154(2A) regarding deposit of fifty percent of the recoverable dues. It has not recorded any finding that the debt itself is prima facie disputed on material placed on record. The order is vague. The reasoning is insufficient to justify setting aside a Recovery Certificate already issued.

66. If the Revisional Authority felt that respondent No.1 had no proper opportunity of hearing, the proper course was to remand the matter back to the Authority that issued the Certificate. Instead of doing so, the Revisional Authority directed the Bank to file a dispute under Section 91. Such direction shuts out the statutory right of the Bank to proceed under Section 101.

67. Hence, following order: (a) The Judgment and Order dated 17 January 2022 passed by the Divisional Joint Registrar, Cooperative Societies, Pune Division in Revision Application No.389 of 2021 is set aside; (b) The matter is remanded back to the Revisional Authority for fresh consideration;

(c) The Revisional Authority shall examine the matter afresh in the light of the parameters mentioned in the aforesaid paragraphs of this judgment. The Revisional Authority shall determine whether proceedings are maintainable under Section 101 or whether the dispute is of such nature that it needs adjudication under Section 91;

(d) Both parties shall appear before the Revisional

Authority on 28th November 2025 at 11 am. The Revisional Authority shall decide the revision within a period of three months from the date of appearance; (e) All contentions of both sides are kept open. (f) No order as to costs.

68. The writ petition stands disposed of in above terms. (AMIT BORKAR, J.)