THE HON'BLE THE CHIEF JUSTICE HIMA KOHLI
AND
THE HON'BLE SRI JUSTICE B. VIJAYSEN REDDY
WRIT APPEAL No.392 OF 2020
JUDGMENT: (Per the Hon'ble the Chief Justice Hima Kohli)
1. The appellant/writ petitioner is aggrieved by the order dated
17.07.2020, passed by the learned Single Judge in W.P.No.13332
of 2018, wherein the prayer made was for declaring as illegal, the
order dated 24.03.2018 passed by the respondent No.1/Registrar of
Cooperative Societies (RCS) (for short, 'Cooperative Tribunal') in Revision Petition No.1 of 2016, confirming the order dated 18.06.2016, passed by the respondent No.2/Divisional Cooperative Officer (Arbitrator) in I.A.No.1 of 2016 in A.R.C.No.8 of 2015. While allowing the writ petition and setting aside the proceedings initiated by the respondent No.2 in A.R.C.No.8 of 2015, liberty was granted to the said respondent to conclude the proceedings in A.R.C.No.1669 of 2008 in terms of the order dated 30.06.2015, passed by the Cooperative Tribunal in C.T.A.No.37 of 2012.
2. A brief glance at the facts matrix of the case is necessary. On 26.03.2005, respondent No.4 a proprietory firm approached the respondent No.3/Bank to avail of a cash credit loan of Rs.6,00,000/- (Rupees six lakhs only) towards working capital and term loan of Rs.1,00,000/- (Rupees one lakh only), on offering as W.A.No.392 of 2020 Page 1 of 15 security, the title deeds of residential premises bearing house No.21-4-350/D situated at Dongersingh Tabela, Moosa Bowli, Chowmahalla, Hyderabad. The appellant and his father, Sri Vishnu Das Mundada, who has since expired, were the owners of the said property and they executed an equitable mortgage deed in respect of the said property by depositing the title deeds with the respondent No.3/bank. When the respondent No.4 failed to repay the loan amount, on 01.11.2008 the respondent No.3/bank moved an application before the respondent No.2/Divisional Cooperative Officer for issuance of a Certificate under Section 71 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short, 'Cooperative Societies Act') for recovery of a sum of Rs.8,37,280/- (Rupees eight lakh thirty seven thousand and two hundred and eighty only) with future interest. The said case was numbered as A.R.C. No.1669 of 2008.
3. On 16.03.2009, the respondent No.2/Divisional Cooperative Officer issued a Certificate under Section 71(1) of the Cooperative Societies Act for a sum of Rs.6,00,000/- (Rupees six lakhs only) as on 11.04.2009, towards the amount of arrears payable to the respondent No.3/bank along with future interest. Aggrieved by the aforesaid order, the respondent No.4 filed an appeal before the Cooperative Tribunal registered as C.T.A.No.45 of 2009. Vide order dated 09.03.2010, the Cooperative Tribunal allowed the aforesaid appeal and remanded the matter back to the respondent W.A.No.392 of 2020 Page 2 of 15 No.2/Divisional Cooperative Officer for fresh disposal. On the matter being received by the respondent No.2/Divisional Cooperative Officer, a Certificate dated 11.06.2010 for a sum of Rs.7,42,499/- (Rupees seven lakh forty two thousand and four hundred and ninety nine only) was issued as arrears payable by the respondent No.4 and the appellant jointly and severally, to the respondent No.3/bank along with future interest.
4. On receiving the Certificate dated 11.06.2010, the respondent No.3/bank filed an execution petition before the respondent No.2/Divisional Cooperative Officer, registered as E.P.No.18 of 2010 and a Sale Officer was appointed under Section 70 of the Cooperative Societies Act for execution of the decretal amount along with future interest. The Sale Officer issued Form No.6 to the respondent No.4/judgment debtor and the appellant/guarantor demanding the amount due along with interest. He also issued Form No.7 i.e., notice for attachment of immovable property and subsequently put the immovable property mortgaged by the appellant and his father to sale by auction on 07.03.2011. The auction could not be conducted on the said date. Finally, the mortgaged property was put to auction on 14.06.2012 and a bidder who has offered a bid amount of Rs.14,12,000/- (Rupees fourteen lakh and twelve thousand only), was declared as successful. However, the respondent No.3/bank could not evict and secure W.A.No.392 of 2020 Page 3 of 15 vacant possession of the mortgaged property. Resultantly, the purchase amount had to be returned to the successful bidder.
5. Thereafter, Sri Ramesh Kumar Mundada, son of the co- guarantor, Sri Vishnu Das Mundada and brother of the appellant herein, preferred an appeal along with a stay application (I.A.No.90 of 2011 moved in C.T.A.No.342 of 2011). Vide order dated 01.03.2011, the Cooperative Tribunal initially granted an interim order in his favour. Sri Ramesh Kumar Mundada also filed an appeal under Section 76 of the Cooperative Societies Act for setting aside the Certificate dated 11.06.2010 issued by the respondent No.2/Divisional Cooperative Officer. The said appeal registered as C.T.A.No.37 of 2012 was disposed of by the Cooperative Tribunal on 03.06.2015. The operative part of the said order is as follows:-
"3. The Deputy Registrar of Co-operative Societies i.e., respondent No.2 was directed by this Tribunal to submit the original ARC file so as to examine the proceedings and decide the appeal wherein the arbitration award is questioned. In spite of giving many opportunities the Deputy Registrar failed to submit the original arbitration file and filed a Memo on 15.10.2014 informing that several efforts have been made to trace out the arbitration file Rc.No.385/2010 but, the same was not traced out and prayed to decide the case basing on the available records.
4. It is pertinent to note that the CTA No.37 of 2012 is filed questioning the very Arbitration Award W.A.No.392 of 2020 Page 4 of 15 and to decide the legality of the same the original file of the lower authority is required to be examined. In the absence of the same, the Tribunal cannot proceed further in the matter. In view of the above, the Tribunal feels it appropriate to quash the Arbitration Award dated 11.06.2010 and remand back the matter to the lower authority to cause a fresh enquiry and pass appropriate orders in the matter.
5. In the result, the appeal is allowed and the impugned Arbitration Award dated 11.06.2010 passed by the respondent No.2 is set aside and the matter is remanded back to the lower authority. The lower authority shall cause a fresh enquiry and pass appropriate orders within 6 months from the date of the judgment. He is directed to initiate departmental action against the persons who are responsible for misplacing the original file. There is no order as to costs."
6. In view of the aforesaid order, the matter was remanded back to the respondent No.2/Divisional Cooperative Officer to conduct a fresh enquiry and pass appropriate orders within six months. The plea of the appellant/petitioner before the learned Single Judge was that when the matter was remanded by the Cooperative Tribunal to the respondent No.2/Divisional Cooperative Officer, the latter ought to have adjudicated the same as a remanded case. Instead, the respondent No.2 issued a notice dated 31.10.2015 in a petition registered as A.R.C.No.8 of 2015, by treating it as a fresh case thereby abandoning the proceedings of the remanded case, subject W.A.No.392 of 2020 Page 5 of 15 matter of A.R.C.No.1669 of 2008. This time, the proceedings were initiated under Section 61 of the Cooperative Societies Act. Describing the said action of the respondent No.2/Divional Cooperative Officer of initiating fresh proceedings for a sum of Rs.18,77,923.68/- (Rupees eighteen lakh seventy seven thousand and nine hundred and twenty three and paise sixty eight only) claimed by the respondent No.3/Bank as arbitrary and illegal, the appellant/writ petitioner prayed for quashing and setting aside of the notice dated 31.10.2015 issued by the respondent No.2/Divisional Cooperative Officer in A.R.C.No.8 of 2015.
7. The records reveal that when the appellant/writ petitioner received summons in A.R.C.No.8 of 2015 on 16.01.2016, he filed I.A.No.1 of 2016 under Order VII Rule 11 CPC stating inter alia that the said petition is barred by limitation. However, the respondent No.2/Divisional Cooperative Officer did not decide the said application and instead, proceeded to record the evidence. The appellant/writ petitioner then filed a Memo on 30.05.2016, seeking disposal of the captioned application, on which the respondent No.2/Divisional Cooperative Officer passed an order on 18.06.2016, directing that I.A.No.1 of 2016 would be decided along with the ARC.
8. Aggrieved by the aforesaid order dated 18.06.2016, the appellant/writ petitioner preferred a revision petition before the W.A.No.392 of 2020 Page 6 of 15 Cooperative Tribunal under Section 77 of the Cooperative Societies Act registered as R.P.No.1 of 2016. Initially, vide order dated 30.07.2016, the Cooperative Tribunal stayed the proceedings before the respondent No.2/Divisional Cooperative Officer. Subsequently, the said revision petition was dismissed vide order dated 24.03.2018 with an observation that the appellant/writ petitioner had been prolonging the litigation by filing one plea or the other to avoid the recovery proceedings launched by the respondent No.3/bank. Further, the respondent No.2/Divisional Cooperative Officer was directed to dispose of the pending arbitration proceedings as per the procedure prescribed under the Act. Aggrieved by the aforesaid decision, the appellant/writ petitioner filed a writ petition contending inter alia that initiation of fresh proceedings in the A.R.C. was impermissible and barred by limitation and that no new proceedings could be launched by the respondent No.2/Divisional Cooperative Officer.
9. A counter affidavit, in opposition to the writ petition, was filed by the respondents 1 and 2. After narrating the factual background, it was stated that since the Original Application had gone missing from the record and the time granted by the Cooperative Tribunal to decide the ARC was running, the respondent No.3/bank was directed to file a copy of the Original Application before the respondent No.2/Divisional Cooperative Officer for issuance of a Certificate on 20.08.2015 under Section 71 W.A.No.392 of 2020 Page 7 of 15 of the Cooperative Societies Act by adding the up-to-date agreed interest, calculated till 31.10.2015. In compliance, the respondent No.3/Bank filed a copy of the original plaint which was taken on record and the respondent No.2/Divisional Cooperative Officer issued summons to the parties for appearance. On receiving the summons, the appellant/writ petitioner and the respondent No.4 entered appearance and contested the matter. In terms of the directions issued by the respondent No.2/Divisional Cooperative Officer, the respondent No.3/bank filed chief examination affidavit along with the documents and the learned counsel for the appellant/writ petitioner conducted the cross-examination of P.W.1 for three running days. Thereafter, instead of concluding the cross- examination, the appellant/writ petitioner insisted that the learned Arbitrator must pass orders on I.A.No.1 of 2016 and reject the plaint.
10. The stand taken by the respondents No.1 and 2 was that the copy of the original claim petition is a part and parcel of the original plaint filed on 05.11.2008 and not a separate one and therefore, the respondent No.2/Divisional Cooperative Officer could not be faulted in deferring orders on I.A.No.1 of 2016 filed by the appellant/writ petitioner seeking rejection of the plaint and that the said order has been rightly upheld by the Cooperative Tribunal as there was no plausible reason to interfere therein. It was also stated by the respondents before the learned Single Judge that W.A.No.392 of 2020 Page 8 of 15 notice in the fresh A.R.C. No.8 of 2015 was issued on 31.10.2015 and in the meantime, the records relating to A.R.C.No.1669 of 2008 could be traced out. Thus, the respondent No.2/Divisional Cooperative Officer was now in a position to adjudicate upon A.R.C.No.1669 of 2008 and conclude the proceedings within a reasonable time after affording an opportunity to the appellant/writ petitioner.
11. After considering the submissions made by learned counsel for the parties, the learned Single Judge observed that initiation of proceedings in A.R.C.No.8 of 2015 by the respondent No.2/Divisional Cooperative Officer was contrary to law and accordingly, the said proceedings were quashed and set aside. Further, noting that the records of A.R.C.No.1669 of 2008 had been traced, the writ petition was allowed and liberty was granted to the respondent No.2/Divisional Cooperative Officer to conclude the said proceedings in terms of the orders dated 30.06.2015, passed by the Cooperative Tribunal in C.T.A.No.37 of 2012, within a reasonable time, preferably within a period of six months from the date of receipt of a copy of the said order. Aggrieved by the said order, the appellant/writ petitioner has preferred the present appeal.
12. Mr. Bankatlal Mandani, learned counsel for the appellant/writ petitioner has argued that the learned Single Judge failed to appreciate that the proceedings in A.R.C.No.1669 of 2008 W.A.No.392 of 2020 Page 9 of 15 were no longer in existence as the respondent No.2/Divisional Cooperative Officer had failed to decide the said proceedings within the time granted by the Cooperative Tribunal vide order dated 30.06.2015; that the learned Single Judge ought not to have dealt with the aspects that were not urged before it by taking into consideration the order dated 30.06.2015, passed by the Cooperative Tribunal; that the scope of the writ petition was limited to the challenge laid to initiation of fresh arbitration proceedings by the respondent No.2/Divisional Cooperative Officer in respect of A.R.C.No.8 of 2015 and therefore, any time granted by the learned Single Judge to the respondent No.2/Divisional Cooperative Officer to conclude the proceedings in A.R.C.No.1669 of 2008, or any directions passed in this regard, are impermissible and cannot be sustained.
13. A counter affidavit in opposition to the writ appeal has been filed by the respondent No.3/bank. Mr. M.Shiva Kunar, learned counsel for the respondent No.3/bank submitted that the appellant/writ petitioner has been abusing the process of law since the year 2008 and has successfully managed to gain time on one pretext or the other by making his brother prefer an appeal (C.T.A.No.37 of 2012) and colluding with the officers of the Department due to which the records of A.R.C.No.1669 of 2008 could not be produced before the Cooperative Tribunal and the matter had to be remanded for fresh consideration. It was stated that W.A.No.392 of 2020 Page 10 of 15 after the matter was remanded, the respondent No.3/bank approached the respondent No.2/Divisional Cooperative Officer making an enquiry about the original file of A.R.C.No.1669 of 2008 and since the said file could not be traced and the time granted by the Cooperative Tribunal was running, as per the directions issued by the respondent No.2/Divisional Cooperative Officer, the respondent No.3/bank had got the original plaint re-typed and filed, which was re-numbered by the Office of the respondent No.2/Divisional Cooperative Officer as A.R.C.No.8 of 2015. On notice being issued on the said petition, the appellant/writ petitioner and the respondent No.4 had entered appearance and the appellant/writ petitioner had filed the written statement. Thereafter, evidence was to be recorded and P.W.1 was produced by the respondent No.3/bank who was cross-examined by the appellant/writ petitioner. Instead of concluding the cross- examination of the said witness, the appellant/writ petitioner proceeded to file a misconceived application under Order VII Rule 11 CPC, seeking rejection of the plaint. When the appellant/writ petitioner did not succeed in thwarting the proceedings before the respondent No.2/Divisional Cooperative Officer, he filed a revision petition before the Cooperative Tribunal which was also dismissed on 24.03.2018. The order passed in the revision petition was the subject matter of challenge in the writ petition that has been disposed of by the impugned order. Learned counsel for the W.A.No.392 of 2020 Page 11 of 15 respondent No.3/bank thus contended that to meet the ends of justice and to avoid any ambiguity, the learned Single Judge has set aside the proceedings in A.R.C.No.8 of 2015 and permitted the respondent No.2/Divisional Cooperative Officer to conclude the proceedings in the earlier petition registered as A.R.C.No.1669 of 2008, which cannot be faulted.
14. We have heard the arguments advanced by learned counsel for parties and perused the impugned order as also the records.
15. It is an admitted position that once the order dated 30.06.2015 was passed by the Cooperative Tribunal quashing the arbitration award dated 11.06.2010 passed by the respondent No.2/Divisional Cooperative Officer and remanding the matter back for causing a fresh enquiry, it cannot be urged that the proceedings in A.R.C.No.1669 of 2008 stood concluded. The only reason for remanding the matter back to the respondent No.2/Divisional Cooperative Officer was that in the absence of the original A.R.C. file, the Cooperative Tribunal was not in a position to examine the records and arrive at any concrete conclusion in the light of the pleas taken by Mr. Ramesh Kumar Mundada (brother of the appellant herein) who was impleaded as respondent No.4 in C.T.A.No.37 of 2012. Strictly speaking, once the matter had been remanded by the Cooperative Tribunal, the respondent No.2/Divisional Cooperative Tribunal could only take up the file of W.A.No.392 of 2020 Page 12 of 15 A.R.C.No.1669 of 2008 for further proceedings. If the said file was not traceable, then steps ought to have been taken to approach the Cooperative Tribunal for permission to re-construct the file while maintaining with the original ARC number. However, an improper procedure was adopted by the respondent No.2/Divisional Cooperative Officer by calling upon the respondent No.3/bank to file a copy of the original plaint in A.R.C.No.1669 of 2008, assigning the said petition a fresh number i.e., A.R.C.No.8 of 2015 and treating it as a fresh proceeding.
16. We are in agreement with the view expressed by the learned Single Judge that in terms of the order dated 30.06.2015 passed by the Co-operative Tribunal, the respondent No.2/Divisional Cooperative Officer was required to initiate proceedings in A.R.C.No.8 of 2015 alone and not register fresh proceedings or assign it a fresh number i.e., A.R.C.No.1669 of 2008. Eventually, when the court was informed that the records of A.R.C.No.1669 of 2008 had been traced, to put an end to the controversy raised, directions have been issued to the respondent No.2/Divisional Cooperative Officer to conclude the proceedings in the original A.R.C.No.1669 of 2008, strictly in terms of the orders passed by the Cooperative Tribunal dated 30.06.2015 within a reasonable time.
W.A.No.392 of 2020 Page 13 of 15
17. This Court neither finds any illegality, arbitrariness or perversity in the findings returned in impugned order that warrant any interference. The plea of the appellant/writ petitioner that the learned Single Judge could not have taken into consideration the order dated 03.06.2015 passed by the Cooperative Tribunal, is found to be meritless. The entire background of a case has to be considered by the court while passing an order. In the instant case, the order dated 30.06.2015 gains significance as the Cooperative Tribunal had set aside the Arbitration Award vide order dated 11.06.2010 and had remanded the matter back to the respondent No.2/Divisional Cooperative Officer for fresh adjudication. By the impugned order, the learned Single Judge has rendered complete and substantial justice on examining the factual background of the case and balancing the equities. The plea of limitation sought to be raised by the appellant is no longer available once the records of the originally filed ARC have been traced and the proceedings in the subsequently number A.R.C.No.8 of 2015 stand closed. Quite apparently, the appellant/writ petitioner is trying to hide behind technicalities to somehow or the other, wriggle out of a tight spot and delay adjudication of the claims of the respondent No.3/bank on account of non-payment of the credit facility extended to the respondent No.4 for repayment for which, the appellant/writ petitioner and his father had stood as co-guarantors. W.A.No.392 of 2020 Page 14 of 15
18. For the aforesaid reasons, we do not find any merit in the present appeal which is dismissed. We may note that more time has been lost on account of the pendency of the present appeal. Had the proceedings in A.R.C.No.8 of 2015 been recommenced in terms of the order dated 30.06.2015 passed by the Co-operative Tribunal, the same would have been concluded by January, 2021. It is therefore deemed appropriate to direct the parties to appear before the respondent No.2/Divisional Cooperative Officer (Arbitrator) on 06.05.2021 for taking the said proceedings further. It is directed that neither party shall be accommodated for any unnecessary adjournment. The respondent No.2/Divisional Cooperative Officer shall make an endeavour to conclude the proceedings in A.R.C.No.1669 of 2008 at the earliest, preferably within a period of six months reckoned from 06.05.2021.
19. The appeal is accordingly dismissed along with the pending applications, if any, with litigation costs quantified as Rs.10,000/- (Rupees ten thousand only) to be paid by the appellant to the respondent No.3/Bank on the date fixed before the respondent No.2.
____________________ HIMA KOHLI, CJ ______________________ B. VIJAYSEN REDDY, J 28.04.2021 pln W.A.No.392 of 2020 Page 15 of 15