JUDGMENT 1. This petition, under Article 227 of the Constitution of India, is directed against the judgment and order dated 7.6.2000 in Revision Application No. 114 of 2000 passed by the Divisional Joint Registrar, Co-operative Societies (Appeals and Revisions), Mumbai Division, Mumbai, (Revisional Authority), whereby the order issuing recovery certificate by Respondent No.3 in Application No. 892 of 1998, dated 1.2.2000 under Section 101 of the Maharashtra Co-operative Societies Act, 1960 ("the M.C.S. Act" for short) came to be set aside. THE FACTUAL MATRIX: 2. The factual matrix reveal that the Petitioner is a Co-operative Bank. Respondent No.1 is a principle borrower. Respondent Nos. 2 and 3 are the guarantors. All of them are the shareholders of the petitioner-bank. 3. On being applied by Respondent No.1-principle borrower, petitioner-bank sanctioned loan in the sum of Rs.25,50,000/-, on furnishing surety and guarantee of Respondent Nos. 2 and 3. Respondent No.1 executed necessary loan documents to avail the said financial facility with interest thereon @ 21% per annum. Respondent Nos. 2 and 3- guarantors have also executed a guarantee deed/bond and guaranteed thereunder repayment of loan borrowed and/or to be borrowed by Respondent No.1-principle borrower. 4. The principle borrower after availing financial facility committed default in repayment of outstanding dues of the petitioner-bank. Consequently, demand notice was issued on 5.6.1998 to Respondent Nos. 1 to 3 demanding an amount of Rs. 31,62,750-61 followed by another notice dated 8.7.1998 since the earlier demand notice was not complied with by any of the noticees. The petitioner-bank was required to file application under Section 101 of the M.C.S.Act, praying for recovery certificate of the outstanding dues recoverable from the Respondent Nos. 1 to 3. 5. The Deputy Registrar, Co-operative Societies after hearing parties held that Respondent Nos. 1 to 3 were liable to pay Rs.31,61,739/- to the petitioner-bank. Accordingly, recovery certificate dated 1.2.2000 was issued. 6. Being aggrieved by the aforesaid order under Section 101 of the M.C.S. Act the Respondent Nos. 2 and 3 (guarantors) preferred revision Application under Section 154 of the M.C.S. Act before the Divisional Joint Registrar, Co-operative Societies (Revisional Authority). The said revision petition was heard and allowed. Consequently, the certificate issued under Section 101 of the Act was set aside. 7. Being aggrieved by the aforesaid order of the Revisional Authority the petitioner-bank invoked Revisional jurisdiction of the State Government under Section 154 of the M.C.S. Act. The said revision petition was heard and allowed. Consequently, the certificate issued under Section 101 of the Act was set aside. 7. Being aggrieved by the aforesaid order of the Revisional Authority the petitioner-bank invoked Revisional jurisdiction of the State Government under Section 154 of the M.C.S. Act. The said Revision Application came to be dismissed by an order dated 3.1.2001, holding it to be not maintainable. 8. Being aggrieved by the aforesaid order of the State Government, the Petitioner has invoked writ jurisdiction of this Court to challenge the above adverse order. SUBMISSIONS: ----------- 9. At the out set, learned counsel appearing for the petitioner submits that the Revision Application filed by the Petitioner-bank was very much maintainable since it was a first revision petition preferred by the petitioner-bank. As such, it could not have been rejected, holding it to be not maintainable. He further submits that the order of the Ist Revisional Authority dated 7.6.2000 is palpably wrong, wherein the finding was recorded that the bank had failed to produce supporting documents to establish that the finance was genuine and that the bank did not furnish statement of account in support of its claim. The learned counsel for the petitioner-bank submits that the Ist Revisional Authority had also wrongly recorded adverse finding that the Bank failed to take timely steps to recover its dues. He, thus, submits that both the impugned orders are liable to be quashed and set aside. 10. Respondent Nos.2 and 3 are represented by Shri K.V.Tembe, Advocate. Respondent No.4 chose to remain absent inspite of service. 11. Mr Tembe, in reply, tried to support the impugned order, contending that, in a proceeding initiated under Section 101 of the M.C.S.Act, no extract of statement of account was filed. He further submits that principle borrower- Respondent No.1"M/s Shakti Paper Company" is a Proprietorship concern. The said Respondent No.1, under the provisions of the M.C.S. Act, could not have been admitted as member of the Society, since it is neither a juridical person nor a living person. In his submission, only the proprietor of the firm, in his individual capacity, could have been admitted to the membership of the Society under Section 22 (a) of the Act but not the proprietorship concern. He, thus, submits that the loan was given to non-existent body, hence, it cannot be recovered from the guarantors. In his submission, only the proprietor of the firm, in his individual capacity, could have been admitted to the membership of the Society under Section 22 (a) of the Act but not the proprietorship concern. He, thus, submits that the loan was given to non-existent body, hence, it cannot be recovered from the guarantors. He further submits that petitioner-bank did not take any step to protect the security; namely, hypothecated goods, as such guarantors have lost their security resulting in their discharge. In his submission, the guarantors were, therefore, correctly discharged from their liability. He, thus, prayed for dismissal of the petition with costs. CONSIDERATION: ------------- 12. At the outset, I must observe that the revision application which was dismissed by the State Government, holding it to be not maintainable being a second revision petition, is palpably erroneous and suffers from non-application of mind. In view of judgment of this Court in the case of Sita Ram Gupta vs. Punjab National Bank and others (2008) 5 S C C 711 Revision Petition, at the instance of the petitioner-bank, which was a first revision at their instance was very much maintainable. 13. In view of the above finding, normally the matter is liable to be remanded back to the revisional authority for consideration afresh. However, considering the pendency of this Petition before this Court since 2002 against the impugned order dated 3.1.2001, I do not think, justice would lie in remanding this matter to the Revisional Authority - the State Government. The litigation would get protracted. In the event of success in favour of either of the party to the proceedings, the matter is bound to be carried to this Court once again. In this view of the matter on considering the consensus between both parties, both of them were directed to argue this matter on merits. Accordingly, submissions were advanced on merits of the matter and the same is being decided on merits. ON MERITS: --------- 14. At this stage, I must deal with one of the contentions raised by Mr Tembe, that the Proprietorship firm could not have been the member of the co-operative bank/Society since it is neither natural nor juridical person. That no finance could have been made by the Society to the respondent no.1-firm. 15. At this juncture, I must observe that this plea was never taken by the guarantors before any of the authorities below. That no finance could have been made by the Society to the respondent no.1-firm. 15. At this juncture, I must observe that this plea was never taken by the guarantors before any of the authorities below. For the first time, this issue is being raised before this Court. As a matter of fact, Respondent Nos. 2 and 3 are not entitled to raise this plea in the present petition since they allowed Respondent No.1 to borrow loan and on the top of it, they stood guarantors for it. In other words, they allowed petitioner-bank to act to their prejudice without objecting at the stage when the finance was made. Even, during long period of indebtedness they did not raise any objection in this behalf. Consequently, they are estopped from raising any objection sought to be raised on this count. 16. The Apex Court in the case of B.L. Sreedhar vs K.M. Munireddy A.I.R. 2003 S C 578 held as under: "The essential factors giving rise to estoppel are, I think - (a) A representation or conduct amounting to representation intended to induce a course of conduct on the part of the person to whom the representation was made. (b) An act or omission resulting from representation whether actual or by conduct, by the person to whom the representation was made. (c) Detriment to such person as a consequence of the act or omission where silence cannot amount to a representation, but where there is a duty to disclose, deliberate silence may become significant and amount to a representation. The existence of a duty on the part of a customer of a bank to disclose to the bank his knowledge of such a forgery as the one in question was rightly admitted." 17. The existence of a duty on the part of a customer of a bank to disclose to the bank his knowledge of such a forgery as the one in question was rightly admitted." 17. The general principle of estoppel is stated thus by the Lord Chancellor in vs Cairncross vs. Lorimer (1860) 3 H.L.C. 829: "The doctrine will apply, which is to be found, I believe, in the laws of all civilized nations that if a man either by words or conduct has intimated that he consents to an act which is to be done and that he will offer no opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to do that from which they otherwise might have abstained, he cannot question the legality of the act he has so sanctioned, to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct...I am of the opinion that generally speaking, if a party having an interest to prevent an act to be done has full notice of its being done, and acquiesces in it, so as to induce a reasonable belief that he consents to it, and the position of others is altered by their giving credit to his sincerity, he has no more right to challenge the act to their prejudice than he would have had if it had been done by his previous licence." 18. In the case of Maddanappa (deceased) after him vs by his legal representatives vs. Chandramma and Anr A.I.R. 1965 S C 1812 the Supreme Court relying upon the judgment of Privy Council in the case of Saratchunder Dey vs. Gopal Chunder Laha 19 Ind App 203 (PC) explained the ingredients of the doctrine of estoppel and went on to hold that a person who sets up an estoppel against the other must show that his position was altered by reason of the representation or conduct of the latter and unless he does that, even the general principle of estoppel cannot be invoked by him. In the case at hand, the petitioner-bank has established that it acted to its prejudice by accepting the representation made by the guarantor expressing their willingness to be the guarantors of the proprietorship firm. 19. In the case at hand, the petitioner-bank has established that it acted to its prejudice by accepting the representation made by the guarantor expressing their willingness to be the guarantors of the proprietorship firm. 19. Having examined legal concept of estoppel and factual matrix, in my considered view, the petitioner is estopped from raising any objection in this behalf. 20. Having said so, since the parties have argued this question at length, let me examine the said issue leading to membership of the proprietorship firm so as to give the quietus to the legal controversy raised. 21. The statutory provision relevant for consideration of the issue is Sec. 22 of the M.C.S. Act. The relevant extract of which reads as under:- SECTION: 22:- ----------- ."Person who may become member :- ------------------------------ (1) Subject to the provisions of section 24, no person shall be admitted as a member of a society except the following, that is to say - (a) an individual, who is competent to contract under the Indian Contract Act, 1872: (b) a firm, company or any other body corporate constituted under any law for the time in force, or a society registered under the Societies Registration Act, 1860; (c) a society registered, or deemed to be registered under this Act; (d) the State Government or the Central Government;] (e) a local authority; (f) a public trust registered under any law for the time being in force for the registration of such trusts: Provided that, the provisions of clause (a) shall not apply to an individual seeking admission to a society exclusively formed for the benefit of students of a school or college: Provided further that, subject to such terms and conditions as may be laid down by the State Government by general or special order, a firm or company may be admitted as a member only of society which is a federal or urban society or which conducts or intends to conduct an industrial undertaking: Provided also that, any firm or company, which is immediately before the commencement of this Act, a member of a society deemed to be registered under this Act, shall have, subject to the other provisions of this Act, the right to continue to be such member on and after such commencement. Explanation:- For the purpose of this section as "urban society" means a society the business of which mainly falls within the limits of a municipal corporation, municipality, cantonment or notified area committee." Section 2 (14): "Firm" means a firm registered under the Indian Partnership Act, 1932 - 22. It is not in dispute that one Shri Shivaji Hari Petel is a proprietor of the Respondent No.1 proprietorship concern. It is, thus, clear that the person, who is the proprietor of the concern is a well identified person. He had borrowed money in the name of his proprietorship concern as an owner thereof. The doctrine of identification is conceptually distinct from vicarious liability. The start of any analysis as to whether or not a person is to be identified with the proprietorship firm is the very concept which has been recognised by the Code of Civil Procedure, (the Code) 1908 under Order 30 Rule 10, which permits filing of the suit against the proprietorship concern doing business or trade in its trade name. Under Order 30 Rule 10 of the Code proprietorship concern, can be sued. Prima facie; "directing mind and will" of the proprietorship concern will be its proprietor being the sole owner thereof enjoying full independence without any restriction on his power from the outside agency. 23. It is, no doubt, true that the phrase "directing mind and will" comes from the celebrated Speech of Viscount Haldane L.C. in Lennard’s Carrying Co. v. Asiatic Petroleum Co.Ltd., (1915) A.C. 705, 713 while considering the case arising from the provisions of the Companies Act, but the very same concept and principle holds good for finding out civil liability of a person carrying on trade in the trade name, if sufficient evidence in that behalf is available on record. 24. The concept of proprietorship concerned is nothing but a concept of running business under the trade name. The trading is done in the trade name. The proprietor of the firm is the owner of the establishment. This concept of running business by a natural or juridical person in the trade name is well recognised in our country holding, ultimate, owner responsible for the assets and liabilities of the establishment. 25. One of the main objects of the banks, much less the Co-operative banks are to make finances to the borrowers including persons engaged in the trade and commerce. 25. One of the main objects of the banks, much less the Co-operative banks are to make finances to the borrowers including persons engaged in the trade and commerce. While making finance the Bank has to see that the person, who is borrowing money, should be its member under the provisions of the M.C.S. Act. It is true that proprietorship concerned is neither a juridical nor a natural person. If that be so, it is normally expected on the part of the co-operative bank to admit proprietor of the firm as its member as the partners of the partnership are admitted to its membership. 26. Be that as it may, even if the petitioner bank has admitted the proprietorship concern as its member, still in the eye of law the owner or proprietor thereof shall be the member of the bank. At the most, assuming it to be an irregularity, so long owner or proprietor is a well identifiable person; he has to be treated as the member of the said society or bank. Consequently, the submission made by Mr Tembe, in this behalf cannot be accepted. 27. The next submission advanced by Mr Tembe leading to discharge of the liability of the guarantors on account of alleged negligence on the part of the petitioner-bank for not taking timely legal action and failure to protect the security obtained by way of hypothecation of goods, is also misplaced. The relevant terms and conditions of the guarantee bond vide Clause (3) thereof read as under: 3. "This Guarantee shall be a continuing Guarantee and shall not be considered as wholly or partially satisfied or exhausted by any payments from time to time made to the Bank or any settlement of any account or by reason of the account being brought to a credit at any time or from time to time or its being drawn upto the full extent or exceeding the full extent of the limit from time to time and its being reduced or extinguished and thereafter re-opened. The Guarantee shall continue in force notwithstanding the discharge of the Principal by operation of law or my death or the death of any one of us and shall cease only on payment of the amount guaranteed hereunder either by me or any of us." 4. The Guarantee shall continue in force notwithstanding the discharge of the Principal by operation of law or my death or the death of any one of us and shall cease only on payment of the amount guaranteed hereunder either by me or any of us." 4. "I/We shall not be entitled to any of the rights conferred on sureties by Section 133, 134, 139, and 141 of the Indian Contract Act. And I/We further expressly agree that the Bank shall also have discretionary Power without my/our further assent or knowledge or without discharging or in any way affecting my/our liability under the Guarantee from time to time..." (Emphasis supplied) 28. Having seen terms and conditions of the guarantee deed, it is clear that the guarantors have waived their rights under Sections 133, 134, 139 and 141 of the Contract Act. 29. So far as the question of discharge from the liability is concerned, the Apex Court in the case of Sita Ram Gupta vs. Punjab National Bank and Ors (2008) 5 SCC 711 has categorically ruled that guarantor having entered into an agreement in the manner enacted therein cannot turn around and say that his guarantee stands discharged. In view of the waiver on the part of guarantor to claim benefit of Sections 133, 134 and 148 of the Contract Act, while entering into contract of guarantee with the bank, it is not open for him to claim discharge on this count. 30. In Lachoo Mal v. Radhey Shyam (1971) 1 SCC 619 the Apex Court while taking this view relied upon Edition Halsbury’s Laws of England, Vol.8, 3rd Edition, wherein it has been stated in para 248 at p. 143, as under: Contracting out: ---------------- "As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it said, can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void". 31. Statutory conditions may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void". 31. In Brijendra Nath Bhargava v. Harsh Wardhan (1988) 1 SCC 454 (page 461 para 10) it has been observed by the Apex Court that if a party had given up the advantage he could take of a position of law, it was not open to him to change and say that he could avail of that ground. The same principle has been followed in Bank of India v. O.P. Swarnakar (2003) 2 SCC 721 . 32. I have already examined clauses (3) and (4) of the guarantee bonds executed by the guarantors. Keeping the agreement of guarantee, as noted above, in mind, I may observe that on facts there is no negligence on the part of the petitioner-bank in protecting security of the hypothecated goods. In the hypothecation, the goods always remain with the borrower. The bank, at the most, can call upon to borrower to pay outstanding dues. In the event of failure to pay the the outstanding dues, the scurity can be enforced through the process of law. The petitioner-bank, being a co-operative bank, has invoked jurisdiction under the provisions of Section 101 of the M.C.S.Act The security could only be encashed through the process of execution only after obtaining the recovery certificate. Before it could be done, the present litigation ensued giving rise to the present petition for which the petitioner-bank cannot be held responsible. 33. Keeping the above scenario and factual matrix, it is not possible to accept the contention raised by Mr Tembe. Thus, his contention in this behalf fails. 34. In view of what is stated hereinabove, the impugned order dated 7.6.2000 is liable to be quashed and set aside. Accordingly, the judgment and order dated 7.6.2000 is set aside and Recovery Certificate dated 1.2.2000 stands restored. Rule is made absolute with no order as to costs.