Andhra HC (Pre-Telangana)
Hyderabad Co-Operative Central ... vs Registrar Of Co-Operative Societies ... on 29 December, 2003
Equivalent citations: 2004(1)ALD768
ORDER V.V.S. Rao, J.
1. The Petitioner is a Co-operative Society registered under the Multi State Co-operative Societies Act, 1984 (hereafter called 'MSCS Act') which was running business in the name and style of Lakshmi Super Bazaar. The petitioner society availed cash credit facility from Hyderabad District Co-operative Central Bank Limited (hereafter called 'HDCCB'); in 1974 towards working capital for running Lakshmi Super Bazaar. The loan was guaranteed by Central Government. However, during the financial year 1994-95, Central Government did not extend bank guarantee and therefore third respondent stopped cash credit facility to the petitioner society. Whatever be the reason, Lakshmi Super Bazaar was closed with effect from 31.7.1998. Therefore HDCCB recalled the loan outstanding as on 31.3.1994. Challenging the same, petitioner filed W.P. No. 33564 of 2001 before this Court and obtained an order of interim suspension and also allegedly paid an amount of Rs. 25,00,000/- to HDCCB. Later the said writ petition was withdrawn.
2. The Registrar of Co-operative Societies (hereafter called 'RCS') passed an award under MSCS Act against the petitioner society. Aggrieved by the same, an appeal under Section 90 of the said Act was filed and the same was allowed by the Appellate Authority-cum-Joint Secretary to Central Government on the ground that RCS is not competent to pass award against the petitioner society under 1984 Act. Be that as it is, when HDCCB approached the second respondent for certificate for recovery of loan amount, an order came to be passed on 10.12.2003 directing the petitioner society to pay an amount of Rs. 1,00,68,914/- with interest at 18.5% + 2% per annum from 1.7.2003 till the date of payment. Assailing the said order, the present writ petition is filed.
3. The learned Counsel for petitioner Sri A.K. Jayaprakash Rao contends that Respondents 1 and 2 are not competent to pass any award or issue certificate for recovery against the petitioner society as the petitioner society is not a member of HDCCB. Secondly he would urge that the petitioner society being one registered under the 1984 Central Act, third respondent has to take action in accordance with the said Act, which is now been repealed by the Multi State Co-operative Societies Act, 2002. Elaborating the submissions, he would submit that earlier when HDCCB referred the matter to the District Cooperative Officer, R.R. District, by order dated 29-8.2000 the first respondent returned the case giving liberty to HDCCB to seek a reference under Central Act of 1984. Thereafter when the first respondent passed orders on 2.11.2001 under Section 74 of the Central Act directing the petitioner society to pay an amount of Rs. 84,41,656.87 ps., the petitioner preferred appeal before the Joint Secretary to Central Government under Section 90 of the Central Act. The appeal was allowed holding that first respondent is not competent to pass orders and ordered for payment under the Central Act. Therefore, the learned Counsel would urge that the certificate for recovery dated 10.12.2003 is illegal and without jurisdiction.
4. The submission that HDCCB should proceed against the petitioner society under Multi State Co-operative Societies Act, 2002 which replaces 1984 Act cannot be accepted. It is not denied that DCCB is registered under A.P. Act of 1964. Therefore when the third respondent seeks to recover the amount advanced by it to the petitioner society, it has necessarily recourse either under Section 61 or 71 or 101 of the State Act and no remedy is available to third respondent under the Central Act. The law which governs the lending bank and the law which governs recovery of loans by lending bank is alone applicable and not the law under which the borrower is registered or came to be established has no application. For instance, if the borrower is a firm or a company registered under the Companies Act and the lending bank is a co-operative society, it is only the Act under which the Co-operative Society is registered that is applicable. Further, a perusal of Section 84 of Central Act, 2002 would show that HDCCB cannot avail any remedy under the said act to recover loan from the borrower which is registered under the said act. Indeed if the appellate authority under Section 90 of the 1984 Act observed that HDCCB could not have filed any dispute under MSCS Act before the Central Registrar and that first respondent could not have exercised powers of Central Registrar.
5. The other submission that petitioner society not being a member of the third respondent society, Section 71 has no application is also without substance. HDCC Bank though is not a scheduled bank as defined under Banking Regulation Act, 1949, is permitted to advance loans to its members. As the petitioner society availed loan, a reasonable inference can be drawn that before advancing loan to the petitioner society, it was admitted as a member of third respondent and therefore it is always open to third respondent to recover loan after obtaining a certificate under Section 71 of the State Act.
6. Furthermore, against every certificate for recovery granted under Section 71, the petitioner has an effective alternative remedy of filing an appeal before the A.P. Co-operative Tribunal. The petitioner can as well raise all the grounds raised hereinbefore the appellate authority. Therefore, this Court is not inclined to interfere in the matter. Liberty is reserved to the petitioner society to avail the remedy of appeal before the A.P. Co-operative Tribunal, Hyderabad and raise all grounds. It is made clear that the said Tribunal shall consider all the issues without in any manner being influenced by the observations made hereinabove.
7. The writ petition, subject to above observations, is accordingly dismissed. There shall be no order as to costs.