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miss.munnowara f. pakajade (lawyer)     20 December 2021

Regarding property

respected sir my query is i stood guarantor no.2 to my friends loan. he failed to repay the same. the bank started recovery proceeding under s.101 of maharashtra co-operative socities act. no notice was send to me. bank got recovery certificate under s.101. by said certificate , bank made attachment of my property in 2009. thereafter no proceedings was initiated by bank to recover due amount.
meantime, bank started s 138 Negotiable Instrument Act against main borrower. he was acquitted by the court on the ground that bank has not given him loan amount. now, bank doing nothing, my property is still under attachment since 2009. i request to all of you please suggest me legal remedies. thank you.


 4 Replies

G.L.N. Prasad (Retired employee.)     21 December 2021

Whether the loan was outstanding or not, and till the loan is cleared all your efforts may be futile.  The main transaction is pending, sec.138 is a different transaction.

Yogeshwari Sirsikar   21 December 2021

As per your query, let me tell you that, it appears that proceedings under Section 101 of maharashtra co-operative socities act has attained finality. If the order under Section 101 is passed without issuing a notice to you, you can challenge it before the superior authority. The finding given in Criminal proceeding is not binding on civil court established under Maharashtra Co-operative socities act. Therefore, the finding of Criminal court is of no avail to you. It is a continuing guarantee that you can not be exhonerated unless the bank dues are paid either by the borrower or by you. 

Hope it helps!


Yogeshwari Sirsikar

1 Like

Kawmini Liyanage   21 December 2021


In order to answer your query, I herewith lay down s.101 of Maharashtra co-operative societies act in a nutshell. 

The Section 101 procedure is a simpler way of realizing arrears of society dues without instituting the cumbersome court proceedings.  a compulsion in business that requires establishing debt due by a debtor to a creditor in the course of business, a profit-making activity necessarily. 

According to section 101 recovery process is as follow;

  • Assistant Registrar/ Deputy Registrar making a hearing and a summary inquiry on the basis of the affidavits filed by the disputant (lender) and the respondent (defaulter).
  • Assistant Registrar/ Deputy Registrar issuing a notice of default to the defaulter.
  • On receipt of the Recovery Certificate, the Recovery Officer shall prepare a demand notice to be sent to the Sale-Officer for attaching the movable property of the member concerned.
  • The Sale Officer, on receipt of recovery paper from the Recovery Officer, shall visit the flat of the member concerned for preparing an inventory of the movable property and handover such list to the member concerned and serve the demand notice on the defaulter member.

  • If the amount is not paid by the member concerned immediately upon service of the demand notice, the Sale Officer will seize the movable property.

  • Thereafter, the Sale Officer shall fix the date, time and place for such auction of the movable property seized, and auction out the same, and pay the sale proceeds thereof to the Society, in satisfaction of the outstanding dues payable by the defaulting member to the society.

  • Making Application for issuing  a recovery certificate

  • Issue notice for payment of dues (including up to 21% interest) to the defaulter, with a warning therein that on failure to make payment of the same, an application would be made to the Competent Authority under section 101 of MCS Act, 1960.

  • Pass the resolution to recover the dues at the Managing Committee Meeting.

  • Issue a final notice to the defaulter

  • Apply to the Assistant. Registrar/ Deputy Registrar for the recovery of dues.

  • Pay the prescribed fee (Rs 15 to 1000 max) through the Reserve Bank of India.

  • As is evident, there is no suit before a court of law is involved.

In fact, for cooperative disputes, cooperative courts have exclusive jurisdiction, and even that is obviated by the special procedure of Recovery Certificate and Administration of the State helping Societies to recover arrears of dues at almost no cost.  The question of time barring is unthinkable. Hence, until settlement, the attachment to your property will be valid. 


Kawmini Liyanage

miss.munnowara f. pakajade (lawyer)     24 December 2021



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