The Appellate Authority and Central Registrar of Cooperative Societies has dismissed an appeal filed by Godavari Multistate Cooperative Credit Society Ltd., Beed, Maharashtra, upholding the order of the Co-operative Ombudsman directing the society to repay Rs 1.29 crore to Latur Multi State Cooperative Credit Society Ltd., Latur, Maharashtra, along with applicable interest.
The dispute relates to a fixed deposit of Rs 1.29 crore placed by Latur MSCS with Godavari MSCS. According to the order, the deposit matured on July 7, 2024, but the maturity amount remained unpaid.
During proceedings before the Co-operative Ombudsman, Godavari MSCS did not dispute its liability towards Latur MSCS. The society cited liquidity constraints and financial difficulties, stating that its General Body had approved a policy for repayment of large deposits in phased instalments.
The Co-operative Ombudsman, through an order dated April 10, 2026, directed Godavari MSCS to pay the amount due to Latur MSCS along with up-to-date applicable interest within 30 days and submit a compliance report thereafter.
Aggrieved by the order, Godavari MSCS filed an appeal under Section 85A(3) of the Multi-State Co-operative Societies Act, 2002. The society sought permission to repay the outstanding amount over a period of four years, along with accrued and future interest. Alternatively, it proposed that the depositor could take ownership of property of equivalent value held by the society.
At the appellate stage, Godavari MSCS also raised an objection that Latur MSCS was not a member of the society and, therefore, the Co-operative Ombudsman lacked jurisdiction to entertain the complaint under Section 85A of the Act.
The Appellate Authority rejected the contention, observing that the issue of non-membership had not been raised before the Co-operative Ombudsman. The Authority noted that Godavari MSCS had consistently admitted the deposit and its liability to repay the amount and had contested only the manner and timeframe of repayment.
The Authority held that the newly raised objection regarding non-membership could not be relied upon to withhold repayment of an admitted matured deposit. It further observed that liquidity constraints and an internal resolution for phased repayment could not, by themselves, alter or defer the society’s admitted liability.
The Authority also clarified that the separate question of whether acceptance of the deposit from an entity allegedly not a member involved any violation of Section 67 of the MSCS Act could be examined independently in accordance with law.
Accordingly, Shiv Pal Singh, Appellate Authority and Central Registrar of Cooperative Societies, dismissed the appeal on September 3, 2026.
Consequently, the Co-operative Ombudsman’s April 10, 2026 order remains operative, and Godavari MSCS has been directed to repay Rs 1.29 crore to Latur MSCS along with up-to-date applicable interest and furnish compliance.
