Liquidation period expiry does not end member liability or stop pending recovery proceedings against cooperative society borrowers.

Expiry of the liquidation period under Section 109 of the Maharashtra Cooperative Societies Act, 1960 does not automatically extinguish members' liability for loans already obtained or bar pending recovery proceedings. The statutory scheme for winding up, liquidation, final report and disposal of surplus does not create an automatic prohibition on continuation of such actions after the liquidation period ends. The Court also applied the principle that a party should not gain an advantage from an interim stay or litigation delay, and that restitution requires neutralising any unfair benefit. The creditor bank was therefore entitled to continue the pending recovery proceedings, and the High Court's contrary view was set aside.

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Issues: Whether the expiry of the liquidation period under Section 109 of the Maharashtra Cooperative Societies Act, 1960 automatically terminates pending recovery proceedings against members and prevents the creditor bank from continuing those proceedings.

Analysis: Section 109 regulates termination of liquidation proceedings and requires the winding up process to be closed within the prescribed period, subject to extension and submission of the liquidator's final report. The statutory scheme does not provide that liabilities of members for loans already obtained stand extinguished merely because the liquidation period has expired. The provisions dealing with winding up, liquidation, final report, and disposal of surplus do not create an automatic bar against continuation of pending recovery actions. The Court also applied the principle that a party cannot derive advantage from an interim stay or from delay caused by litigation, and that restitution requires neutralising any unfair benefit obtained by such orders.

Conclusion: The expiry of the liquidation period does not wipe out the members' liability or terminate pending recovery proceedings. The appellant bank is entitled to continue the pending recovery proceedings, and the contrary view of the High Court was set aside.

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