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Patel Jeby
Housing Societies' Activist

Section 91-A of the MCS Act 1960 was inserted in 1974 and Co-operative Courts
were established in certain territories to deal with the number of cases, then pending in this
area. 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 . In
that era there was one Office of the Registrar which was formerly known as *India Gate *and
different wards were not formed. 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.

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 Cooperative 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 fullfledged 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. 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.
Here is the outlined differences in the procedures under the provisions of these two sections Section 101 and Section 91.
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. 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. 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. 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. 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. 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: 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. 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. However, the execution proceedings, started on the basis of a certificate
issued u/s 101 , cannot be interfered within a proceeding u/s 91. The claims by the Cooperative 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: 23-82000 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.