Suresh Kumar Mundada vs The Registrar Of Cooperative ...
2021 Latest Caselaw 1384 Tel

     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

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

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

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

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

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

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

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

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

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

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

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

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.

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.

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