VINAYAK CHINTAMANI AGASHE Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) By this writ petition the petitioner has challenged the judgment and order passed by the Deputy Registrar, Co-operative Societies, Pune, in Application No. 5 of 1988 dated 14.5.1992. By this order, the Deputy Registrar held that the petitioner who was a guarantor of a loan availed of by respondent No. 4 herein was liable to repay the amount as respondent No. 4 had defaulted in repaying the loan.

(2.) The respondent No. 4 which is a proprietary concern, availed of the cash credit facility from respondent No. 3 Bank. The petitioner and respondent No. 5 agreed to be the guarantors for the loan obtained by the respondent No. 4 from the Bank. The loan sanctioned by the Bank was to the tune of Rs. 5 lacs and the interest rate payable was 18% per annum. Various documents were executed in order to process the loan. These documents included a demand promissory note, cash credit agreement, letter of continuity, letter of hypothecation and the guarantee bond executed by the petitioner and respondent No. 5.

(3.) The borrower i.e. respondent No. 4 herein defaulted in repaying the loan. A notice dated 26.12.1987 was issued by the Bank to the borrower with a copy to the guarantors, demanding payment of the amount of Rs. 5,61,107/-before 2.1.1988 as that was the outstanding amount. The borrower failed to comply with the demand notice and therefore proceedings were instituted by the Bank against it as well as the guarantors under section 101 of the Maharashtra Co-operative Societies Act (in short, "the M.C.S. Act"). The respondent No. 4 filed the written statement admitting its liability. The petitioner opposed the application by raising several contentions. He also sought inspection of documents from the Bank. An inspection report was submitted to the Deputy Registrar, Co-operative Societies on 17.12.1991 by the petitioner.