Maha to set up task forces to seize assets of troubled credit societies

The move comes after authorities reported difficulties in taking possession of properties and putting them up for auction, even after liability was fixed against around 1,949 directors, officials and employees under section 88 of the Maharashtra Cooperative Societies Act, 1960

MUMBAI: In a major push to recover money locked up in 469 financially distressed cooperative credit societies, the Maharashtra government has ordered the setting up task forces, or taluka-level committees, to fast track the attachment and auction of properties belonging to directors, officials and members held responsible for financial losses and loan defaults.

Maha to set up task forces to seize assets of troubled credit societies

The move comes after authorities reported difficulties in taking possession of properties and putting them up for auction, even after liability was fixed against around 1,949 directors, officials and employees under section 88 of the Maharashtra Cooperative Societies Act, 1960.

The government has now brought the revenue, cooperation and home departments into a coordinated recovery mechanism, with committees headed by sub-divisional officers. The committees will track properties, facilitate their attachment, oversee auctions and address administrative and law-and-order hurdles that have slowed recovery proceedings.

A government resolution to this effect was issued by Pravin Darade, principal secretary, state cooperation department, on Friday.

The issue is particularly significant for depositors whose money could not be returned within the stipulated period after the societies ran into financial difficulties. In cases where inquiries under section 88 have established financial liability against office-bearers and officials, recovery of the money is expected to be made through their assets.

The committees will review the recovery of amounts for which office-bearers and officials of the 469 distressed urban, rural non-agricultural cooperative credit societies have been held liable as well as recovery of outstanding loans under section 98 and recovery certificates issued by the concerned registrar under section 101, states the GR.

A key task will be to identify and secure the assets of those liable for repayment. The committees have been directed to obtain 7/12 and 8A land records and other property documents from the revenue department and trace movable and immovable properties belonging to liable directors, office-bearers and guarantor members.

The government has also moved to prevent properties attached or mortgaged to the societies from being transferred during recovery proceedings. Sub-registrars have been asked to block such transactions and initiate action to have unauthorised transfers declared illegal.

The committees will also assist in determining the upset price for auctions, while sub-registrars will provide the government valuation or Ready Reckoner value of the properties concerned.

The recovery drive will not be restricted to civil proceedings. The committees have been asked to review criminal cases registered against directors and officials held responsible and monitor the progress of cases, including the filing of charge sheets before courts.

The committees will function until action relating to properties of directors, officials, employees, defaulters and guarantors connected with the 469 societies is completed.

“The government has found that recovery officers are facing difficulties in attaching these properties and selling them through auction. Several writ petitions concerning the matter are also pending before the Aurangabad bench of the Bombay High Court, where hearings are underway,” said a senior official of the state cooperation department.

“The idea behind setting up taluka-level committees is to facilitate and expedite the attachment and auction of properties belonging to guilty directors, officials, employees and defaulting members of the credit societies,” the official added.