Maharashtra State Co Operative Bank vs BANK OF BARODA on 6 August 2026

JUDGMENT

(Pronounced on : 06.08.2026)

1. This appeal has been filed by the appellant under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDB Act”, for short), challenging the order dated 01.09.2015 passed by the Recovery Officer-I (RO-I), Debts Recovery Tribunal (DRT), Aurangabad below application (Exh-

13) in Recovery Proceeding (R.P.) No.73/2010.

2. The facts leading to filing of this appeal, in brief, are that the appellant is an Apex Co-operative Bank in the State of Maharashtra doing the business of banking under the provisions of the Banking

Regulation Act, 1949. The appellant had advanced various loans to respondent No.2 borrower under various heads and n lieu of the same, respondent No.2 had executed security documents creating first charge in favour of the appellant bank. The entire assets (movable and immovable) are given as security to the appellant bank against the financial assistance availed by it.

3. It is further submitted that respondent No.1 is the Certificate Holder bank, who had filed Original Application No.13 of 2009 before the Tribunal for recovery of its amount. In the said proceeding, the appellant was not party nor it was made party though the parties were aware of the fact that the appellant is a secured creditor having security interest created in its favour. The Recovery Certificate was issued by DRT, Aurangabad in favour of respondent No.1 for recovery, which was put to execution before RO-I, DRT, Aurangabad in R.P. No.73/2010. This fact of filing of execution was brought to the knowledge of the appellant by respondent No.2. The Certificate Holder bank had filed an application for seeking possession of the secured assets. The appellant bank, after getting knowledge about the fact that the secured assets are being attached and sold in the execution proceeding, the appellant approached RO by filing Objection Petition (Exh-13) under the Income Tax Certificate Rules, for safeguarding the interest of the appellant bank. Respondent No.1 filed its reply to the Objection Petition on 04.07.2014 and opposed the Objection Petition on the ground that the appellant ought to have appeared in the original proceedings and should have raised the objection regarding its first charge over the mortgaged property. Further ground raised was that the appellant should have filed separate proceeding before appropriate forum.

4. It is further submitted that the appellant on 27.08.2025 filed a purshis (Exh-22) before RO-I and further brought to his notice that the Recovery Officer has no power and jurisdiction to adjudicate the claims and counter claims raised by the appellant and the powers are vested with the Tribunal and the said contention was supported by the law laid down by the Hon’ble Bombay High Court in the case reported in 2014(3) BCR 833 and further requested the RO-I to send the Objection Petition for final adjudication before the Presiding Officer, DRT, Aurangabad, but surprisingly, on 05.10.2015, R.P. No.73/2010 appeared on the board of RO-I for hearing on Exh-13. The enquiry was made with the concerned clerk, who informed that the application/purshis (Exh-22) was dismissed by the RO-I on the ground that the Tribunal is not having jurisdiction beyond the Recovery Certificate to adjudicate upon the claims and counter claims. The order dated 01.09.2015 is passed by the RO without any application of mind. The RO failed to appreciate the contents of the Objection Petition and the RO has misinterpreted the judgment of the Hon’ble High Court. It is submitted that the RO has lost sight of the fact that the RO is not a court and has no powers to adjudicate the claims of any party and the said claims can only be adjudicated by the Tribunal. The RO has exceeded its powers. The RO is not discharging his functions judiciously. The RO ought to have decided the purshis and not the Objection Petition. The Recovery Officer has not given any finding or reasons for rejecting the Objection Petition. The appellant is a third party and the decree or certificate obtained by respondent No.1 cannot be executed as against a person who is not party to the original proceedings. The RO-I has also lost sight of the fact that the provisions of RDB Act cannot be invoked by the appellant as the appellant is a Co-operative Society. Therefore, the finding arrived at by the RO-I that the Objection Petition is not maintainable and the appellant should take other recourse to get its claim adjudicated. The findings are perverse, illegal and contrary to record and the same are liable to be set aside. In the circumstances, it is prayed by the appellant that the impugned order dated 01.09.2015 passed by RO-I below application (Exh-13) in R.P. No.73/2010 be set aside, by allowing the present appeal.

5. The respondent No.1 bank filed its reply-affidavit dated 12.10.2023 (Exh-14) and contested the appeal on the grounds that the respondent No.2 being borrower and mortgagor has executed the necessary loan documents and mortgage documents. The loan was classified as NPA and the respondent bank filed Original Application No.13 of 2009 against present respondent No.2, which was allowed and accordingly, the Recovery Ccertificate was issued. The respondent No.2 has created mortgage on 30.03.2003 by depositing original title deeds. The respondent No.1 bank issued letter dated 02.05.2003 to the concerned Talathi for noting their charge and a copy of letter dated 02.05.2003 was duly acknowledged by the Talathi. The present appellant has filed copy of registered mortgage deed bearing document No. AMP-1706 dated 19.04.2004 at page 32 of the appeal memo. Present respondent No.1 has the first charge over the mortgaged property and hence, present appellant does not have right to create hurdle in recovery proceedings and the present appeal is not maintainable.

6. The appellant has filed following documents on record along with the list of documents (Exh-4).

Sr. No. Particulars of documents Exhibit

Copy of Objection Petition below Exhibit-13 and the reply of respondent No.1 R-1 (Colly)

Copy of purshis at Exhibit-22 and the judgment of the Hon’ble High Court R-2 (Colly)

Copy of order dated 01.09.2015 passed by RO-I in R.P. No.73/2010 R-3

7. On the other side, respondent No.1 bank has produced on record a copy of mortgage-deed dated 30.03.2003 as Annexure-R- 1, thereby creating charge by deposit of original title-deeds by respondent No.2 and Annexure-R-2 copy of letter dated 02.05.2003, written by the Branch Manager of the applicant bank to the Talathi of village Aasta, Tq. Chakur, District Latur for noting their charge in the record.

8. I have heard the learned counsel for the parties and gone through entire material on record, which includes the documents (Exh.R-1 to Exh-R8) filed by the appellant bank along with Recovery Proceeding No.73/2010 as well as impugned order passed by the RO-I, DRT, Aurangabad, thoroughly and carefully.

9. It is an admitted fact in this case that the present respondent No.1 bank had filed Original Application No.13/2009 against respondent No.2 for recovery of the amount and respondent No.2 mortgaged his immovable property on 30.03.2003 by depositing the original title deeds (Annexure-R-1). The said O.A. No.13/2009 filed by respondent No.1 bank was allowed by DRT, Aurangabad and the Recovery Certificate was issued in favour of respondent No.1 bank and execution proceedings were started by the RO-I, DRT vide R.P. No.73/2010. Admittedly, the present appellant was not party in O.A.No.13/2009.

10. It has been claimed by the appellant that respondent No.2 raised loan or financial assistance from the appellant and created security interest pertaining to his immovable property by way of registered mortgage-deed dated 19.04.2004 submitted at page 32 of the paper-book of the present appeal. The appellant has produced document (Exh-R-2 colly), which is a copy of mortgage-deed dated 19.04.2004 ). From these facts, it is amply clear that the first

charge over the suit property was created by respondent No.2 in favour of respondent No.1 on 30.03.2003 by depositing original title-deeds. Hence, present respondent No.1 bank has prior charge over the mortgaged property as the charge of the present appellant was created in its favour vide registered mortgage-deed No.AMP- 1706 dated 19.04.2004. The documents produced by the appellant are pertaining to the loan raised by respondent No.2 from the appellant bank. It may be noted here that the appellant has not even produced original mortgage-deed on record, claiming that it is not traceable. Therefore, respondent No.1 bank has prior charge over the mortgaged property and the respondent No.1 has rightly proceeded against the secured assets by filing O.A. No.13/2009 and the RO-I, DRT has rightly initiated the execution proceeding on the basis of Recovery Certificate issued by the DRT, Aurangabad.

11. The learned counsel for the appellant has also impressed upon that the RO-I should have decided only pushis (Exh-22) and he was not having power to decide the Objection Petition and that it was for the R.O. simply to forward the said Objection Petition to the Presiding Officer, DRT, Aurangabad for adjudication as the DRT, Aurangabad is competent to adjudicate the claim or counter claim in such circumstances. This argument of learned counsel for the appellant has no weight, reason being that when it was well within the knowledge of the appellant that the RO-I has no power to adjudicate the Objection Petition, then the appellant should have filed its claim before the appropriate forum. Further, the appellant has an independent remedy to file O.A. for recovery or move before the Competent Authority under the relevant provisions of the Maharashtra Cooperative Societies Act. The Objection Petition moved by the appellant before the RO-I was not maintainable and hence, in such circumstances, the purshis (Exh-22) as well as the Objection Petition (Exh-13) have rightly been dismissed by RO-I, DRT, Aurangabad.

12. In the backdrop of the aforesaid facts, legal position, discussed hereinabove and the findings arrived at as above by me and the reasons recorded therefor, the present appeal is not maintainable and the same is liable to be dismissed.

13. In the result, I pass the following order:

ORDER

(A) The Appeal No.18 of 2015 is hereby dismissed with no order as to costs. (B) The Interlocutory Application, pending if any, stands disposed of in terms of present judgment. (C) The Registrar is directed to send a copy of this Judgment to the appellant and the respondents. (D) Copy of this judgment be also sent to Recovery Officer-I, Debts Recovery Tribunal, Aurangabad. (E) The file be consigned to the record room.

(Dr. J.R. Chauhan),

PRESIDING OFFICER,

DEBTS RECOVERY TRIBUNAL,

AURANGABAD Aurangabad

Date : 06.08.2026