The Ministry of Cooperation’s Appellate Authority and Central Registrar of Cooperative Societies has dismissed an appeal filed by Godavari Multistate Cooperative Credit Society Ltd., Beed, Maharashtra, and upheld the Co-operative Ombudsman’s direction to repay Rs 21.29 crore to Latur Multi State Cooperative Credit Society Ltd., Latur.
The amount relates to a matured deposit that remained unpaid, with the order directing Godavari MSCS to repay the dues along with up-to-date applicable interest.
The dispute relates to a fixed deposit of Rs 21 crore placed by Latur MSCS with Godavari MSCS. According to the order, the deposit matured on July 7, 2024, but the maturity amount of Rs 21.29 crore was not paid.
During proceedings before the Co-operative Ombudsman, Godavari MSCS did not dispute either the deposit or its liability to repay the amount. However, it cited liquidity constraints and stated that its General Body had adopted a policy for phased repayment of large deposits.
The Co-operative Ombudsman, in an order dated April 10, 2026, directed Godavari MSCS to pay the amount due along with applicable interest within 30 days and submit a compliance report.
Challenging the order, Godavari MSCS sought permission to repay the amount over four years, including accrued and future interest. Alternatively, it proposed that the depositor take ownership of property of equivalent value held by the society.
At the appellate stage, the society also raised a new objection, claiming that Latur MSCS was not its member and, therefore, the Co-operative Ombudsman lacked jurisdiction to entertain the complaint under Section 85A of the MSCS Act.
However, the Appellate Authority observed that this objection had never been raised before the Ombudsman. It noted that Godavari MSCS had consistently admitted its liability of Rs 21.29 crore and had contested only the manner and timeframe of repayment.
The Authority held that liquidity constraints and an internal resolution for phased repayment could not, by themselves, defer an admitted matured liability.
It also observed that the question of whether acceptance of the deposit from an entity allegedly not a member violated Section 67 of the Act was a separate issue that 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, directing Godavari MSCS to comply with the Ombudsman’s order and repay the dues with up-to-date applicable interest.
