1. Heard. RULE.

2. The petitioner-Bank has challenged the order dated 14.05.2025 passed by the Cooperative Court on an application at Exhibit 42 in dispute no.86 of 2023 and the order dated 18.09.2025 passed by the Maharashtra State Cooperative Appellate Court, Bench at Nagpur in revision application no.05 of 2025, by which the application for permission to effect substituted service is allowed.

3. The primary issue which falls for consideration in the instant petition is justiciability of the orders passed by the Courts, granting permission to effect substituted service upon the members of the society in the wake of provisions of Order V Rule 20 of Code of Civil Procedure, 1908 (for short, ‘the Code’).

4. The controversy involved in the instant matter arises in the backdrop of following facts which are stated in nutshell:-

                    i. The petitioner is a Cooperative Bank registered under the provisions of Maharashtra Cooperative Societies Act, 1960 (for short, ‘the Act’). In response to an application for membership submitted by about 1105 interested persons, the petitioner passed a resolution (Resolution no.11) in its Executive Committee Meeting held on 18.09.2023 and admitted those persons as members of the society.

                    ii. The respondent nos.1 to 13 who are members of the society, filed a dispute under Section 91 of the Act vide Dispute no.86 of 2023, seeking a declaration that the resolution no.11 passed by the Executive Committee on 18.09.2023 is illegal, unlawful and without any right or authority. Initially, total nine opponents were added to the dispute which included the petitioner herein, as opponent no.1 and 8 executive members.

                    iii. On 10.11.2023, the disputants filed an application at Exhibit 10 for addition of parties to implead the names of 1105 members as party opponents to the dispute.

                    iv. By order dated 15.01.2024, the Cooperative Court issued notices to the proposed 1105 opponents. Accordingly, notices were sent by Registered Post Acknowledgment Due for effecting service upon all the proposed opponents.

                    v. Although notices were served upon some of the members, however, the notices on several members returned unserved with postal endorsement as ‘refused’, ‘unclaimed’, ‘not claimed’ and ‘reported to be dead’.

                    vi. On 14.05.2025, the disputants therefore filed an application, at Exhibit 42, for grant of permission to serve the notices upon the unserved opponents by publishing the notice in local newspaper.

                    vii. On the same day, i.e. on 14.05.2025 itself, the Cooperative Court allowed the application and permitted the disputants to serve the notice upon the unserved opponents by publishing notice in local newspaper.

                    viii. The petitioner-Bank, which was arrayed as opponent no.1 to the dispute, challenged the said order before the Cooperative Appellate Court by filing revision application bearing no.5 of 2025.

                    ix. By order dated 18.09.2025, the Cooperative Appellate Court rejected the revision application and upheld the order passed by the Cooperative Court.

                    x. Feeling aggrieved by the aforesaid orders passed by the Cooperative Court as well as the Cooperative Appellate Court, the petitioner-Bank has filed instant instant petition.

5. In support of its submissions, Senior Advocate Shri C.S. Kaptan for the petitioner, canvassed various submissions, which are briefly stated below:-

                    a. The impugned order passed by the Cooperative Court, is unsustainable as the Court has failed to record its satisfaction about the reasons to believe that the proposed opponents had avoided service and as such the application for substituted service, by ignoring purport of the provisions of Order V Rule 20 of the Code, deserved to be rejected.

                    b. The order passed by the Cooperative Court is cryptic and unreasoned and is passed without considering the fact that the disputants failed to make out any case for substituted service under Order V Rule 20 of the Code.

                    c. The disputants failed to take all the necessary steps for effecting service by regular mode and had adopted a shortcut method to effect service only on the ground that the service upon 1100 opponents will be a tedious job. The reasons put forth in the application for substituted service are not at all sufficient for allowing the disputants to serve by way of paper publication.

                    d. As the controversy involved in the dispute is about challenge to the membership of the proposed opponents who are more than 1100 in number, it is necessary to effect proper service upon all the proposed opponents for granting them an opportunity to contest the dispute on merits.

6. To buttress his submissions, the learned Senior Advocate placed reliance on the judgment of the Hon’ble Supreme Court in Neerja Realtors Private Limited Versus Janglu (Dead) Through legal representative [(2018) 2 SCC 649], in which it is held that recording of satisfaction of the Court about service being avoided is necessary before resorting to provisions of Order V Rule 20 of the Code. Thus, in absence of any reasons being reflected from the order, a cryptic order allowing service by way of substituted service is unsustainable. In this regard, he also placed reliance on the judgment of coordinate bench of this court in the matter of Ramesh Jagannath Ingole Versus Shakunbai Ganesh Ingole [2015(6) ALL MR 286], which lays down similar proposition.

He also placed reliance on the single bench judgment of the Madhya Pradesh High Court in the matter of Indore holding Pvt.Ltd & Others Versus Chimanlal & Others [(2019) 2 MP LJ 215] and submitted that recourse to the substituted service has to be by way of last resort. He submitted that the Cooperative Court was under statutory obligation to record reasons about justification of compliance of Order V Rule 20 of the Code.

7. Per contra, Shri Harish Dangre, learned counsel for respondents vehemently opposed the petition and submitted that the petition is not maintainable at the instance of the petitioner-Bank, which is the opponent no.1 in the said dispute. He submitted that the petitioner-Bank cannot claim to be an aggrieved party and hence the revision application filed before the Cooperative Appellate Court was also not maintainable. He also raised objection about the authority of the person who has sworn the affidavit on behalf of the petitioner-Bank in this petition by alleging that he is not the Chief Executive Officer of the Bank or the person authorized on behalf of the Bank by any resolution. Apart from these objections, he submitted that the orders passed by the Cooperative Court as well as the Cooperative Appellate Court do not warrant interference on any count, as the Cooperative Court has exercised its discretionary power in allowing the application to facilitate service of notice upon the proposed opponents. He argued that considering the reasons mentioned in the application for substituted service, the Cooperative Court has rightly considered the contention that the proposed opponents being 1100 in number, the process of effecting service would be a tedious job.

8. By relying upon provisions of Rule 78 of the Maharashtra Cooperative Societies Rules, learned counsel for the respondents submitted that the primary mode of service through Registered Post Acknowledgment Due was resorted to and having failed in that process, the recourse to substituted service was the only option. By relying on the provisions of sub-Rule 2 of Rule 78, he submitted that the service could have been effected through the institution and the petitioner-Bank ought to have supplied the details of the opponents on whom the service was required to be effected. He also placed reliance on Rule 78(4) and submitted that this rule allows service ‘in such manner it thinks fit’ which means by any other mode and as such the order passed by the Cooperative Court is within the four corners of law, warranting no interference on any count.

9. To controvert the contentions of the respondents, learned Senior Advocate for the petitioner-Bank placed reliance on the additional affidavit dated 10.02.2026 filed on behalf of the petitioner-Bank and invited my attention to the resolution of the Board of Directors taken on 17.11.2021 by which the Board has resolved to authorize the Chief Executive Officer of the Bank to contest cases on its behalf, which included the authority for filing of vakalatnama and signing all the documents on behalf of the Bank in Court cases. He submitted that the affidavit of the instant petition being sworn by Shri Sanjay Ingley, the Chief Executive Officer of the Bank cannot be faulted with. Further, as regards the contentions of the respondents about service through the institution in accordance with Rule 78(2) of the Rules, he submitted that the disputants have never filed any application seeking details from the bank about the addresses of the members who are the proposed opponents to the dispute. He submitted that the disputants have never demanded the details of the proposed opponents and as such the reliance placed on Rule 78(2) is misplaced.

10. In the backdrop of above mentioned submissions, the rival contentions fall for my consideration.

11. As regards the objections raised by the respondents, it has to be noted that in view of the fact that the petitioner-Bank is the opponent no.1 in the dispute and in view of the fact that the dispute is filed by the disputants for seeking cancellation of membership of thousands of members of the petitioner-Bank, it is entitled to raise challenge based on the legal issues, since in the event of a defective service upon the proposed opponents by disregarding the procedural law, serious prejudice will be caused to the members as well as to the Bank. Hence, the challenge at the instance of the Bank needs to be entertained and cannot be considered to be without any locus. Further, in view of the resolution of the Board of Directors of the Bank dated 17.11.2021, the authority of the person who has sworn the affidavit on behalf of the petitioner-Bank cannot be faulted with, so as to dismiss the petition on that count. As such, the objections raised by the respondents on both the counts do not sustain. The petition is accordingly taken up for further consideration.

12. I have perused the documents on record and given thoughtful consideration to the contentions canvassed on behalf of both the parties. It has to be noted that the disputants have challenged the resolution dated 18.09.2023 and in effect sought for cancellation of membership of the opponents and therefore effecting service upon all the proposed opponents is crucial. The disputants have filed the application dated 14.05.2025 at Exhibit 42, stating therein that although some of the persons have been served, however as regards several other persons, the postal envelopes are returned with endorsements ‘unclaimed’, ‘not claimed’ and ‘refused’ and it is stated that since there are more than 1100 persons who are required to be added as opponents to the dispute, the job of service upon them is very tedious and therefore permission is sought to serve the members by publication of notice in the local newspapers. Thus, the main reasons which are put forth are the number of persons being more than 1100 and the job of effecting service being tedious in nature.

13. Pertinent to note, on the application at Exhibit 42 which was filed on 14.05.2025, the Cooperative Court has passed the order on the same day i.e. on 14.05.2025, which is reproduced below:-

                    “Issue notice to the remaining unserved opponents in local newspaper as prayed and as per law”

Thus, it can be seen that, the Cooperative Court has allowed the application on the same day without recording any reasons about its satisfaction that the proposed opponents have avoided service upon them. The order passed by the Cooperative Court does not at all mention any other reason for allowing the dispute to resort to the provision of substituted service by way of paper publication. It is clear that the order passed by the Cooperative Court is cryptic and unreasoned, apart from it being passed on mere asking.

14. At this juncture, it is relevant to have a look at the provisions of Order V Rule 20 of the Code, which is reproduced below:-

                    “20. Substituted service.-(1) Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy thereof in some conspicuous place in the Court-house, and also upon some conspicuous part of the house (if any) in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the Court thinks fit.

                    (1-A) Where the Court acting under sub-rule (1) orders service by an advertisement in a newspaper, the newspaper shall be a daily newspaper circulating in the locality in which the defendant is last known to have actually and voluntarily resided, carried on business or personally worked for gain.]

                    (2) Effect of substituted service-Service substituted by order of the Court shall be as effectual as if it had been made on the defendant personally.

                    (3) Where service substituted, time for appearance to be fixed- Where service is substituted by order of the Court, the Court shall fix such time for the appearance of the defendant as the case may require.”

On a bare reading of the aforesaid provision, it is clear that on the Court being satisfied and having reason to believe that the respondent before it has avoided the service of notice or could not be served through usual mode, then, after recording its satisfaction, the Court can grant permission for effecting service through substituted service. It has to be noted that the other provisions of Order V of the Code dealing with the necessary steps about effecting service on the parties, make it clear that recourse to Rule 20 has to be preceded by taking all the steps to serve the parties by regular mode and the service through substituted service has to be by way of last resort.

15. It is beneficial to refer to the position of law as laid down by the Hon’ble Supreme Court while dealing with the aspect of substituted service under Order V Rule 20 of the Code. In Neerja Realtors Private Limited (supra), it is held that on failure to comply with Order V Rule 17 of the Code, the directions to effect service through substituted service was not justified. The position of law is clarified while deciding the said case as reflected in paragraphs 9 and 15, which are reproduced below:-

                    “9. The High Court by its judgment dated 7-7-2015 held that neither the report of the bailiff nor the order of the trial court indicate that a copy of the summons was affixed in a conspicuous place on the court house and at the house where the defendant was known to have last resided. The High Court held that there was a breach of the provisions of Order 5 Rule 20(1) CPC. The High Court observed that the order of the trial court permitting substituted service was cryptic and that the Court had not recorded its satisfaction that the defendant was keeping out of the way to avoid service or that the summons could not be served in the ordinary manner for any other reason. Moreover, the serving officer had not followed the procedure stipulated in Order 5 Rule 17 where the defendant was not found to reside at the place where he was last residing. The Court noted that besides the service to be effected through the bailiff, the summons were not sent to the defendant at the address furnished by the plaintiff by registered post, with acknowledgment due. The High Court also found that the trial Judge had ignored the provisions of Chapter III of the Civil Manual issued by the High Court on the appellate side for guidance of the civil courts and officers subordinate to it.

                    15. The submission that under Order 5 Rule 20, it was not necessary to affix a copy of the summons at the court house and at the house where the defendant is known to have last resided, once the court had directed service by publication in the newspaper really begs the question. There was a clear breach of the procedure prescribed in Order 5 Rule 17 even antecedent thereto. Besides, the order of the Court does not indicate due application of mind to the requirement of the satisfaction prescribed in the provision. The High Court was, in these circumstances, justified in coming to the conclusion that the ex parte judgment and order in the suit for specific performance was liable to be set aside.”

16. The position of law is also clarified by the Coordinate Bench of this Court in Ramesh Jagannath Ingole (supra) laying down similar observations about requirement of recording reasons and satisfaction by the Court before taking recourse to the provisions for substituted service.

17. It is also relevant to take note of the observations of the Madhya Pradesh High Court in Indore Holding Pvt. Ltd. & Others (supra), in which it is observed that the trial Court is under a statutory obligation to record reasons germane for justification of compliance with Order V Rule 20 of the Code and substituted service has to be resorted to as a last resort where the defendant cannot be served in the ordinary way, and when the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service. Relevant paragraph from the said judgment, being paragraph 14 is reproduced below:-

                    “14. The report of the process server explicitly suggests mutually conflicting reports, viz., (i) at the given address, the defendant-company was not found; (ii) there was a chowkidar who said that the owners of the company were out of station and said that unless, the Owners permit him to take notice, he cannot accept the notice. There was no compliance of Order 5, Rule 17, Civil Procedure Code as neither did he affix the notice nor submitted the report in the context of the said provision to complete the service of summons. Under the circumstances, the defendants admittedly were not available at the given address, therefore, it could not have been construed to be a case of refusal or deliberate avoidance of notice. In fact, it ought to have been held that there was no compliance of Order 5, Rule 17, Civil Procedure Code. The trial Court, therefore, in all fairness, ought to have ordered for payment of fresh process to serve upon the defendants or if for any reason it was found that the defendants cannot be found at the residence should have ordered for service of notice through affixture under Order 5, Rule 17, Civil Procedure Code. That was not done. Before ordering for substituted service through publication under Order 5, Rule 20, Civil Procedure Code, the trial Court was under statutory obligation to record reasons germane for justification of compliance of Rule 20, Civil Procedure Code. The order dated 25-8-2004 does not suggest application of mind in the aforesaid context. The trial Court has straightaway ordered for substituted service without taking steps for service of summons by ordinary way as contemplated under Order 5, Rules 12, 15 and 17, Civil Procedure Code. As held by the Hon'ble Supreme Court in the case of Yallawwa (Smt.) (supra), substituted service has to be resorted as a last resort where the defendant cannot be served in the ordinary way and the Court is justified that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way.

                    In view of the above, the impugned order dated 25-8- 2004 is found to have been passed in hot haste and slip shod manner contrary to the low laid by the Hon'ble Apex Court and High Courts in catena of decisions as relied upon by the learned senior counsel for the appellants.”

18. Thus, in view of the above mentioned exposition of law about the provisions of Order V Rule 20 of the Code, it has to be seen as to whether in the instant case, the disputant has made out a case for invoking provisions of Order V Rule 20 for effecting substituted service and whether the trial Court has recorded its satisfaction as required by the said provision.

19. Perusal of the application filed on behalf of the disputants, at Exhibit 42, mentioning reason about the procedure being tedious, cannot be considered to be a justification or sufficient cause for resorting to provisions of Order 5 Rule 20 of the Code for effecting substituted service. The application does not mention any steps taken by the disputants for effecting service by all other permissible modes either by fixing the notice at a conspicuous place of the house where the proposed opponents were known to have last resided or any efforts to obtain their correct addresses. Even disputants have not taken any steps to obtain the addresses of the proposed opponents by making any communications with the Bank or by filing any application before the Court, by resorting to Rule 78(2) of the Rules. It is thus clear that the Cooperative Court has allowed the application for substituted service, only on mere asking by the disputant without any application of mind, and as such, the impugned order passed by the Cooperative Court does not stand to the scrutiny of law.

20. It has to be noted that in the application for substituted service, at Exhibit 42, the disputants have categorized the proposed opponents by mentioning the status of service on the basis of endorsements of the postal department. Although the list under Category A to E is with respect to the persons who are served or the postal endorsement have shown the remark as ‘not claimed’ or ‘refused’, it has to be noted that the service is not effected on substantial number of proposed opponents as mentioned in Category-F. As regards category F, which contain a list of opponents who remained unserved, it is clear that there are more than 500 persons who are not at all served and there is no endorsement about ‘unclaimed’ or ‘not claimed’ and therefore, allowing substituted service by paper publication on these proposed opponents would clearly amount to allowing the disputants to bypass regular mode of service and adopt a shortcut method to serve through paper publication. It is pertinent to note that the disputants have challenged the resolution no.11 and in effect claimed the relief of cancellation of their membership, which would amount to their disqualification and as such it is necessary to serve the notices upon all those members. The disputants have themselves decided to add the members as proposed opponents and therefore the disputants have to follow the due procedure for affecting service upon those persons whose rights of membership are questioned in the dispute. In this background, the one line order passed by the Cooperative Court, in a mechanical manner without recording any satisfaction about avoidance of notice by the proposed opponents, is not sustainable in law.

21. As regards the reasons recorded by the Cooperative Appellate Court, it has to be noted that without any basis, it is inferred that the Cooperative Court was satisfied that there are reasons to demonstrate that the summons cannot be served in ordinary way and it is therefore recorded that the discretionary order passed by the Cooperative Court required no interference. It has also to be noted that, although the judgment in Ramesh Jagannath Ingole (supra) was cited before the Cooperative Appellate Court, which is even mentioned in paragraph 8 of the impugned order, however, there is no discussion about consideration of the law down by this Court in the said judgment.

22. Even as regards, the contentions of the disputants by placing reliance upon provisions of Rule 78 of the Rules, it has to be noted that the disputants have failed to take steps to secure the details of the proposed opponents from the Bank for effecting service in regular manner. There is noting on record to show that the disputants have sought for the details of the proposed opponents from the Bank, either by issuing any communications or by filing any application, and as such the reliance on Rule 78 of the Rules to suggest that service by any other mode is permissible, is misplaced in the facts of the instant case. The contentions in this regard are therefore not acceptable. It has to be noted that the disputants have filed the application at Exhibit 42 for effecting service by paper publication and therefore, it was imperative for them to exhaust all other permissible modes before resorting to service by paper publication by invoking provisions of Order V Rule 20 of the Code.

23. It is relevant to note that in every matter, effecting service upon the parties is crucial and conclusion of service only on the basis of substituted service can be prejudicial, since after the service by way of paper publication the matter proceeds in regular course. Therefore, it is imperative for the parties to take recourse to all permissible modes of service before resorting to provisions of Order V Rule 20 of the Code for effecting substituted service. An application for effecting service by paper publication is required to be decided by the Court only on the basis of its satisfaction, based on material before it, about avoidance of service by the concerned party and as such the recourse to substituted service has to be adopted as a last resort. Allowing an application for substituted service only for the reason that the service by regular mode would be a tedious job or would be a time consuming process, clearly depicts mechanical approach in deciding the important applications. In the litigation involving rights of the parties, it is always desirable that all the concerned parties are served by all the permissible modes and only on the basis of satisfaction of the Court that the service is complete in all respects, the matter should be proceeded further.

24. On giving anxious consideration to the entire controversy involved in the instant matter, I am of the firm opinion that the disputants have failed to take all the necessary steps before taking recourse to the mode of substituted service. The impugned order passed by the Cooperative Court, allowing the application for service through paper application is therefore unsustainable in law and deserves to be quashed and set aside. So also, the order passed by the Cooperative Appellate Court in dismissing the revision application is also unsustainable and needs to be interfered. However, it has to be noted that the disputants can invoke provisions of Order V Rule 20 of the Code for effecting service through substituted service after taking all the necessary steps and in case the Court is satisfied about avoidance of service by the proposed opponents, an application submitted by the disputants can be independently considered by the Court, if situation arises.

25. In view of the above mentioned factual and legal aspects, I am of the considered opinion that the impugned orders passed by the Cooperative Court as well as the Cooperative Appellate Court warrants indulgence. Hence, I pass the following order:-

                    I. The writ petition is allowed.

                    II. The order dated 14.05.2025 passed by the Cooperative Court on the application at Exhibit 42 in Dispute no.86 of 2023 is quashed and set aside. So also, the order dated 18.09.2025 passed by the Cooperative Appellate Court in the Revision Application no.5 of 2025 is quashed and set aside.

                    III. The application filed by the disputants at Exhibit 42 in Dispute no.86 of 2023 is rejected.

                    IV. It is clarified that the disputants are entitled to take steps to effect service upon the unserved proposed opponents by taking recourse to all the permissible modes of service as mentioned in Order V of the Code.

26. Rule is made absolute in the aforesaid terms. No order as to costs.