CRA.331.2023.doc Ajay IN IN THE THE HIGH HIGH COURT COURT OF OF JUDICATURE JUDICATURE AT AT BOMBAY BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO. 331 OF 2023 The Saraswat Co-op. Bank Ltd & Anr. .. Applicants (Org. Defendants) Versus Mulani Associates .. Respondent (Org. Plaintiff) ....................  Mr. H.G. Dharmadhikari a/w Ms. Pallavi Baghel, Advocate for Applicants.  None for Respondent. ................... CORAM : MILIND N. JADHAV, J. DATE : JUNE 12, 2026 P.C.: 1. Heard Mr. Dharmadhikari, learned Advocate for Applicants. None appears for Respondent. 2. Briefly stated, the present proceedings arise out of an order dated 15.09.2022 passed by the Civil Judge, Senior Division, Palghar in Summary Suit No.1 of 2021, whereby the Application filed by the Applicant – Original Defendant seeking dismissal of the Suit on the ground of non-compliance of Section 115 of the Multi-State Co- operative Societies Act, 2002 (for short 'the said Act') came to be rejected. 2.1. Applicant is a Multi-State Co-operative Bank registered under the provisions of the said Act. 2.2. Respondent – Original Plaintiff is an approved Valuer who 1 of 13 CRA.331.2023.doc was empanelled by Applicant – Bank and was engaged from time to time for valuation of immovable properties offered as security for loan sanctioned by the Applicant – Bank. 2.3. Respondent claims to have rendered valuation services to various branches of Applicant – Bank pursuant to his empanelment and thereafter raised bills towards professional fees for such services. 2.4. Alleging non-payment of the amounts due under the said bills, Respondent instituted Summary Suit No.1 of 2021 before Civil Judge, Senior Division, Palghar seeking recovery of an amount of Rs.6,96,595/- together with interest. 2.5. Upon appearance in the Suit, Applicant filed Application contending that the Suit was not maintainable for want of compliance with the mandatory provisions of Section 115 of the said Act. It was Applicant’s contention that the valuation work carried out by the Respondent was directly connected with the banking activities of the Applicant and therefore the dispute was such a one touching the business of the Society (Bank). Consequently, prior notice to the Central Registrar as contemplated under Section 115 of the said Act was therefore mandatory before institution of the Suit. 2.6. Respondent opposed the said Application contending that the Suit was merely for recovery of professional fees and did not concern the constitution, management or business of Applicant within 2 of 13 CRA.331.2023.doc the meaning of Section 115 of the said Act. It was further contended that the provisions relied upon by Applicant were not attracted to the facts of the present case. 2.7. After hearing the parties, Trial Court by order dated 15.09.2022, held that the subject matter of the Suit did not touch the constitution, management or business of Applicant and consequently the provisions of Section 115 of the said Act were not attracted. Trial Court accordingly rejected the application. 2.8. Being aggrieved by the said order, Applicant has invoked the supervisory jurisdiction of this Court under Article 227 of the Constitution of India challenging the legality and correctness of the order dated 15.09.2022. 3. Mr. Dharamadhikari, learned Advocate appearing for Applicants while assailing the impugned order dated 15.09.2022 in Summary Suit No.1 of 2021 would submit that Trial Court has failed to appreciate the true scope and applicability of Section 115 of the said Act and has erroneously rejected the Applicant's Application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (for short ‘CPC’). 3.1. He would submit that Respondent – Original Plaintiff has instituted Summary Suit No.1 of 2021 seeking recovery of an amount of Rs.6,96,595/- alongwith interest towards professional fees allegedly payable for valuation services rendered by the Respondent to various 3 of 13 CRA.331.2023.doc branches of the Applicant – Bank. 3.2. He would submit that the Applicant is a Multi-State Co- operative Bank registered under the provisions of the said Act and is therefore governed by the statutory provisions contained therein. 3.3. He would submit that Section 115 of the said Act mandates issuance of prior notice to the Central Registrar before institution of any Suit against a Multi-State Co-operative Society in respect of any act touching its constitution, management or business. 3.4. He would submit that admittedly no notice as contemplated under Section 115 of the said Act was issued by the Respondent prior to institution of the present Suit and therefore the Suit itself is not maintainable in law. 3.5. He would submit that Trial Court has failed to appreciate that the services rendered by the Respondent as a Valuer are directly connected with and form an integral part of the banking business carried on by Applicant. 3.6. He would submit that Respondent was engaged by the Applicant for preparation of Valuation Reports in respect of immovable properties offered as security by borrowers seeking financial assistance from the Applicant – Bank. 3.7. He would submit that such valuation services were availed in 4 of 13 CRA.331.2023.doc compliance with various Master Circulars issued by the Reserve Bank of India governing management of advances by Urban Co-operative Banks. 3.8. He would submit that the Reserve Bank of India, by its Master Circulars dated 04.07.2007, 05.07.2015 and 08.04.2022 has emphasized the necessity of obtaining realistic valuation of immovable properties accepted as collateral security for loans and advances. 3.9. He would submit that valuation of secured assets is a mandatory and essential requirement for assessing the adequacy of security offered by borrowers and for taking an informed decision regarding sanction and disbursement of loans. 3.10. He would submit that in absence of a Valuation Report, Applicant – Bank cannot proceed with the process of sanctioning or disbursing loans and therefore valuation forms an indispensable component of the lending process. 3.11. He would submit that lending and advancing money against security constitutes one of the principal objects and core business activities of the Applicant – Bank as reflected in its bye-laws. 3.12. He would therefore submit that the services rendered by the Respondent are intrinsically connected with and have a direct nexus to the banking business carried on by the Applicant. 5 of 13 CRA.331.2023.doc 3.13. He would submit that any dispute arising out of such valuation services necessarily constitutes a dispute touching the business of the Applicant – Bank within the meaning of Section 115 of the said Act. 3.14. He would submit that Trial Court has adopted an unduly narrow interpretation of the expression "touching the business of the society" and has failed to appreciate the broad ambit attributed to the said expression by judicial precedents. 3.15. In support of his submissions, he would place reliance upon the judgment in Mohan Meakin Limited, Bombay Vs. The Pravara Sahakari Sakhar Karkhana Ltd.1. 3.16. Relying upon the observations contained therein, he would submit that the expression "touching the business of the society" is required to receive a wide and liberal interpretation and would include all acts and transactions having a direct nexus with the principal business activities of the Society. 3.17. He would submit that Court in the aforesaid judgment has held that where the subject matter of the dispute bears a direct connection with the business activities of the Co-operative Society, compliance with the statutory notice provision becomes mandatory. 3.18. He would submit that the principles laid down in the 1 1987 Mh.LJ 503. 6 of 13 CRA.331.2023.doc aforesaid judgment squarely apply to the facts of the present case in as much as valuation of properties offered as security for loans is an essential and inseparable part of the lending activity undertaken by the Applicant – Bank. 3.19. He would therefore submit that the dispute raised by the Respondent clearly pertains to an act touching the business of the Applicant – Bank and consequently compliance with Section 115 of the said Act was mandatory before institution of the Suit. 3.20. He would submit that Trial Court has failed to appreciate the mandatory nature of the statutory requirement and has erroneously concluded that Section 115 of the said Act is not attracted to the present proceedings. 3.21. He would therefore submit that the impugned order dated 15.09.2022 deserves to be quashed and set aside and the plaint in Summary Suit No.1 of 2021 is liable to be rejected under Order VII Rule 11 of the CPC for non-compliance with the mandatory provisions of Section 115 of the said Act. 4. Though no one appears for the Respondent – Original Plaintiff, the case of the Respondent as discernible from averments in the plaint and the findings recorded in the impugned order is that the Respondent is a Government-recognized valuer, architect and R.C.C. consultant carrying on professional activities through Mulani 7 of 13 CRA.331.2023.doc Associates. 4.1. It was the case of the Respondent before Trial Court that he was appointed as an authorized architectural consultant and Valuer of the Applicant - Bank and such appointment was renewed from time to time since the year 1992. 4.2. It was the case of the Respondent that pursuant to the said appointment, he prepared Valuation Reports and rendered other professional services to various branches of the Applicant – Bank for several years. 4.3. According to the Respondent, professional fees in the sum of Rs.6,96,595/- remained outstanding towards the services rendered by him to the Applicant – Bank. 4.4. It was his case that despite repeated demands, correspondence and issuance of legal notice dated 20.02.2020, the outstanding amount was not paid by the Applicant. 4.5. It was the case of Respondent that the Applicant, in response to the legal notice, sought particulars and details of the outstanding bills and the same were duly furnished by him. 4.6. Respondent therefore instituted Summary Suit No.1 of 2021 seeking recovery of the aforesaid amount together with interest. 4.7. It was the case of the Respondent that the Suit is founded 8 of 13 CRA.331.2023.doc purely upon non-payment of professional fees for services rendered and does not concern any dispute relating to the constitution, management or business of the Applicant. 5. I have heard Mr. Dharmadhikari, learned Advocate for Applicants. Though none appears for the Respondent, I have perused the averments in the Suit plaint, the impugned order and the material placed on record. Submissions made by the learned Advocate at the bar has received due consideration of the Court. 6. Trial Court, upon consideration of the averments in the plaint and the rival contentions, held that the dispute pertains to recovery of professional fees allegedly payable for services rendered by the Respondent and does not relate to any act touching the constitution, management or business of the Applicant. 7. Trial Court further concluded that the provisions of Section 115 of the said Act were not attracted to the facts of the present case and consequently the requirement of issuance of notice to the Central Registrar did not arise. 8. Trial Court accordingly rejected the Application seeking rejection of the plaint under Order VII Rule 11 of the CPC. 9. The principal and central question that arises for consideration is whether the present Summary Suit instituted by the Respondent for recovery of professional fees allegedly payable for 9 of 13 CRA.331.2023.doc valuation services rendered to the Applicant – Bank can be said to be a Suit in respect of an act touching the constitution, management or business so as to attract Section 115 of the said Act. 10. At the outset, it is well settled that while considering an Application under Order VII Rule 11 of the CPC, the Court is required to examine the averments contained in the plaint and the documents relied upon by the Plaintiff. The defence sought to be raised by the Defendant cannot ordinarily be looked into for determining whether the plaint is liable to be rejected. 11. A perusal of the plaint reveals that the Respondent claims to have rendered valuation and allied professional services to the Applicant – Bank pursuant to his empanelment as a Valuer and architectural consultant. The grievance of the Respondent is that despite rendering such services and raising bills from time to time, professional fees amounting to Rs.6,96,595/- remained unpaid. Suit is therefore founded upon an alleged liability arising out of non-payment of professional charges. 12. Significantly, the plaint does not disclose any dispute concerning the constitution of the Applicant, its internal management, affairs of administration or any dispute relating to transactions between the Applicant and its borrowers. The cause of action pleaded in the Suit is confined to recovery of professional fees allegedly due and payable to the Respondent. 10 of 13 CRA.331.2023.doc 13. The contention of the Applicant is that valuation of immovable properties offered as security by borrowers constitutes an essential part of the loan sanction process and therefore any dispute arising from valuation services must necessarily be treated as a dispute touching the business of the Bank. 14. I am unable to accept the aforesaid contention. Though Valuation Reports may be obtained by the Applicant in connection with its lending activities, the present dispute does not arise out of any loan transaction, recovery proceeding or enforcement of security toughing upon the constitution and business of the Bank as a Society. The controversy is confined to recovery of professional fees allegedly payable to the Respondent. 15. Merely because the Applicant may have availed the services of the Respondent in connection with its lending activities or in compliance with regulatory requirements would not by itself render every dispute arising out of such professional engagement a dispute touching the business within the meaning of Section 115 of the said Act. The immediate and substantive controversy in the present proceedings concerns alleged non-payment of professional charges and not the conduct of banking business by the Applicant. 16. The test is not whether the services rendered by the Respondent were utilised by the Applicant in the course of its banking activities, but whether the subject matter of the dispute itself directly 11 of 13 CRA.331.2023.doc concerns the business. In the present case, the dispute relates solely to recovery of professional remuneration and therefore lacks the requisite nexus contemplated under Section 115 of the said Act. 17. The expression “touching the business of the society” undoubtedly deserves a broad interpretation. However, such interpretation cannot be stretched to include every transaction having a remote or incidental connection with the functioning of a Co- operative Society. There must exist a direct and proximate nexus between the subject matter of the dispute and the principal business activities of the society. 18. In the facts of the present case, the dispute arises out of a professional and contractual relationship between the parties which has nothing to do with the constitution and business of the Applicant - Bank. Respondent has approached the Court for recovery of the outstanding professional fees allegedly payable for services rendered by him. Such dispute cannot be equated with disputes relating to advancement of loans, recovery of dues, enforcement of securities or other core banking functions of the Applicant. 19. Trial Court has therefore rightly observed that the Suit has been instituted for recovery of professional charges allegedly payable to the Respondent and not in respect of any act touching the constitution, management or business of the Applicant. Once Section 115 of the said Act is held to be inapplicable, the question of issuance 12 of 13 CRA.331.2023.doc of notice to the Central Registrar does not arise and consequently no ground is made out for rejection of the plaint under Order VII Rule 11 of the CPC. 20. The findings recorded by Trial Court are based upon a proper appreciation of the pleadings and the statutory provisions and do not suffer from any perversity, illegality or jurisdictional error warranting interference. 21. The impugned order dated 15.09.2022 in Summary Suit No.1 of 2021 is legal and proper and calls for no interference. Hence order dated 15.09.2022 is confirmed and upheld. 22. In view of the above, Summary Suit No.1 of 2021 shall proceed further in accordance with law and on its own merits. Suit is expedited. 23. Civil Revision Application being devoid of merits is accordingly dismissed. [ MILIND N. JADHAV, J. ] 13 of 13 RAVINDRA MOHAN AMBERKAR Digitally signed by RAVINDRA MOHAN AMBERKAR Date: 2026.06.12 15:29:05 +0530