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2024 DIGILAW 824 (AP)

Gudimetla Damodar Reddy v. State Of Andhra Pradesh

2024-07-24

TARLADA RAJASEKHARA RAO

body2024
ORDER : This Writ Petition is filed under Article 226 of Constitution of India for the following relief/s: …It is prayed that this Hon’ble Court may be pleased to issue a Writ, Order or Direction more particularly one in the nature of Writ of MANDAMUS, declaring the action of the 3rd Respondent in passing order dated 5.2.2020, passed in I.A. No.1 of 2019 in Claim No.49 of 2018-19, on the file of Sub Registrar/Officer on Special Duty, District Co-operative Central Bank Limited, West Godavari, Eluru as illegal, arbitrary, unjust and without jurisdiction and in violation of the principles of natural justice and pass such other order. 2. The present Writ Petition is filed to set aside the order dated 05.02.2020 in I.A. No.1 of 2019 in Claim No.49 of 2018-19, on the file of the Deputy Registrar/Officer on Special Duty, District Cooperative Central Bank Limited, West Godavari District, Eluru, wherein whereby the 3rd respondent has dismissed the aforesaid I.A. filed to implead the proposed respondents therein as respondent Nos.8 to 12 to the claim suit enquiry. 3. 3. At the outset, it is the case of the petitioners herein that the 4threspondent bank filed claim No.49/2018-2019 on the file of the 3rdrespondent under Section 61 and 62 of A.P. Cooperative Societies Act, for recovery of a sum of Rs.6,71,47,801/- against the respondents No.5 and 6 (who are original borrowers) and others including the petitioners who are the defendants (Nos.4 to 7) in the said claim suit as the writ petitioners herein have not stood as guarantors by mortgaging the title deeds, to the original borrowers infact they have stood as guarantors to respondents No.5 and 6 (who are original borrowers) in the loan obtained from the bank Attili Co-operative Branch and the said loan was cleared in the year 2016, despite repeated requests the documents which are before the Attili Co-operative Bank have not only returned and the same were transferred to Elamanchali Cooperative Bank and on the demand of the writ petitioners a complaint was lodged to the police by Attili Co-operative Bank Manager against the then Elamanchali Co-operative Bank Manager who arrayed as 14th respondent in the Writ Petition as these facts which are in the knowledge of the proposed implead respondents filed an I.A. 1 of 2019 in Claim No.49/2018-19, hence, on the aforesaid grounds prayed to implead the proposed parties viz., 1) CEO of the District Cooperative Central Bank, Eluru, West Godavari District, 2) the Branch Manager, District Co-operative Central Bank, Attili Branch, 3) Sri S.P. Srinivasamutyam, erstwhile Branch Manager, District Cooperative Central Bank, Yelamanchili branch, now residing at Neggipudi, Marter, Penugonda Mandal, West Godavari District and 4) Sri S. Radha Krishna, Assistant General Manager (ST Loans),District Co-operative Central Bank Limited, R.R. Pet, Central Office, Eluru, West Godavari District, to substantiate their contentions that they have not pledged their documents to the Yelamanchili Branch as guarantor/surety in favour of the 5th and 6th respondents who are original borrowers and the said application for implead was filed to implead the proposed implead respondents as party respondents to the Claim Application 49/2018-19 before the Arbitrator/4th respondent. It is the contention of the learned counsel for the petitioner initially the Arbitrator/4th respondent has observed the following: “Heard both sides. Petition allowed to add parties 8 & 10, 11, 12 only to take evidence from the above parties. In case of 9th party the following is the main contention. It is the contention of the learned counsel for the petitioner initially the Arbitrator/4th respondent has observed the following: “Heard both sides. Petition allowed to add parties 8 & 10, 11, 12 only to take evidence from the above parties. In case of 9th party the following is the main contention. The counsel for guarantors main contention is they have not issued guarantee to Sri Gudimetla Sundara RamiReddy &Co in the Yelamanchili DCCB Branch Ltd., Yelamanchili and documents issued to the Attili branch for another guarantee were not received by them. Hence, this aspect was provide there is no case in Yelamanchili DCCB Branch case. Hence, in the course of trial the court feels it is necessary to summon BM, AP, SCSC Ltd, Eluru to prove the case the court will summon the APSC Ltd., Eluru. Hence, petition accepted accordingly and issue notices to proposed parties, 8, 10, 11 and 12 to take evidence as per IA and for their objections. But as an arbitrator it is necessary to give opportunity to the proposed parties to file objections before there are added as parties in the present case. Hence, notice is to be issued to the proposed parties to take final decision in I.A. No.1 of 2019” Later, on appearance made by the 3rd respondent bank, the Arbitrator/4th respondent has dismissed the I.A. and the order in I.A. No 1 of 2019/2018-2019 was assailed in the writ petition on the grounds and the reasons assigned are not valid reasons and the 3rd respondents have acted illegally in arbitrary manner, unjustly and some relevant grounds are hereby extracted: (i) The 3rd respondent failed to understand the scope and significance of Section 61 and 62 of A.P. Cooperatives Societies, Act, 1964. (ii) The 3rd respondent failed to see that the proposed parties are proper and necessary parties in view of specific defence of the petitioner that the then Branch manager/incharge manager is proper and necessary party, who fabricated documents in collusion with respondents 5 and 6 herein and in order to prove our specific contention of the petitioners that fraud was played on the petitioners as well as on the authorities. (iii) The learned judge erred in holding that the petitioners herein have to adduce evidence even to consider application under Order 1 Rule 10 is totally misconceived. (iii) The learned judge erred in holding that the petitioners herein have to adduce evidence even to consider application under Order 1 Rule 10 is totally misconceived. (iv) The 3rd respondent erred in holding that “the subject of impleading the proposed parties in the claim serves no result more over it is in appropriate and injustice to the proposed parties as they are no way connected directly to the proceedings” are perverse and preposterous as the findings are recorded tailor made to suit the convenience of the proposed parties” with an oblique motive to screen them inspite of the specific allegation of fraud. Hence, prayed to set aside the impugned order in the Writ Petition and also prayed to allow the implead petition. 4. At the outset, it is the contention of the learned counsel for the petitioner that they have not mortgaged their documents or given surety in the Yelamanchili branch who is arrayed as 4th respondent (plaintiff in claim petition No 49/2018-19) and they have stood as guarantors for the loan obtained by the 5th and 6th respondents in Co-operative Bank, Attili branch, thereafter, the petitioner approached the Branch Manager, Attili Branch, several times and requested for release of the original documents belongs to the petitioners. However, there is no reply from the Attili Branch Manager, original borrowers in the Attili branch and the loan was cleared in the year 2016 and later they have not returned the documents, despite serious pursuance made by the petitioners herein. The 4th respondent bank has fraudulently obtained documents from the Attili Branch and manipulated the documents and signatures of the petitioners herein. Therefore, on the pressure given by the petitioners herein, the Attili Brnach Manager has lodged a police report as who lodged the report to the police who is having knowledge about the pledging of the title deeds before Attili Branch, and the petitioners who stood as guarantors for respondent nos.5 and 6, (who are original borrowers). Therefore, on the pressure given by the petitioners herein, the Attili Brnach Manager has lodged a police report as who lodged the report to the police who is having knowledge about the pledging of the title deeds before Attili Branch, and the petitioners who stood as guarantors for respondent nos.5 and 6, (who are original borrowers). All the above said facts which are in the knowledge of proposed implead respondents as such they are the proper necessary parties and the petitioners herein have pleaded the fraud in the claim petition and the burden is on the petitioners to prove the fraud in order to prove the fraud the proposed parties are necessary parties and once the fraud is pleaded, shall be proved, therefore, it is prayed to allow I.A. 1 of 2019 in Claim Petition No.49/2018-19. 5. The respondents No.5 and 6 who are original borrowers have filed the counter affidavit in the Writ Petition and have not denied any of the contentions made in the Writ Petition and simply stated that they have filed an insolvency petition before the Civil Court have not mentioned the name of the Court. The Law in this regard 6. It is relevant to note that Section 120 of the A.P. Cooperative Societies Act, under which the case on hand arises specifically states that in exercising the powers conferred under the Act, the Tribunal, the Registrar or any person authorised by him by general or special order shall have the power of a Civil Court while trying the suit under the C.P.C. in respect of summoning and enforcing the attendance of any person and examining him on oath or affirmation. 120. Power to summon witnesses and requisition documents. 120. Power to summon witnesses and requisition documents. (1) In exercising the powers conferred by or under this Act, the Tribunal, the Registrar or any person authorised by him in this behalf by general or special order, the arbitrator or any other person deciding a dispute, the liquidator of a society and such other officers engaged in the relief of rural indebtedness or officers of [Financing Bank/Primary Agricultural Co-operative Society] [Substituted by Andhra Pradesh Act No. 1 of 1987.] as the Government may by notification in the Andhra Pradesh Gazette, empower, in this behalf, shall have the power of a Civil Court while trying a suit, under the Code of Civil Procedure, 1908 in respect of the following matters, namely:-(a)summoning and enforcing the attendance of any person and examining him on oath or affirmation; (b)compelling the production of any book, account, record or other document, cash, security or other property; (c) issuing a commission for the examination of any witness: (d) receiving evidence on an affidavit.(2) The Tribunal, Registrar, the person, the arbitrator, the liquidator or the officer, as the case may be, referred to in sub-section (1) may require any person present before it or him to furnish any information or to produce any document forthwith in his possession or power and shall also have power to take, or to authorise the taking of such copies of the document, or of any entries therein as it or he may consider necessary. Copies so taken shall, when certified in such manner as may be prescribed, be admissible in evidence for any purpose in the same manner and to the same extent as the original document or the entries therein, as the case may be. 7. It is relevant to note that Section 120 of the A.P. Cooperative Societies Act, under which the case on hand arises specifically states that in exercising the powers conferred under the Act, the Tribunal, the Registrar or any person authorised by him by general or special order shall have the power of a Civil Court while trying the suit under the C.P.C. in respect of summoning and enforcing the attendance of any person and examining him on oath or affirmation. 8. There was no explanation given by the Arbitrator that the petitioners have delayed the trial, and no reasons were assigned in the order. 9. 8. There was no explanation given by the Arbitrator that the petitioners have delayed the trial, and no reasons were assigned in the order. 9. Now the purpose of examining witnesses and giving an explanation is to show that the alleged mortgage of title deeds given as security is false, not true and should not be accepted. Having passed order for examining the witness on behalf of the writ petitioner latter had changed the decision and dismissed the application. 10. If the petitioner claims that fraud has happened, it is the petitioner's responsibility to discharge the burden., The burden must be discharged by the petitioner's examination of his own witnesses. The arbitrator will determine if or not to consider them. In S.P. Chengalvaraya Naidu vs. Jagannath, 1994 (1) SCC 1 Apex Court stated that fraud avoids all judicial acts, ecclesiastical or temporal." 11. “An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous”. Fraud is to be pleaded and proved. 12. A proper and necessary parties as they have interest in the subject-matter of the litigation and their presence will be necessary and proper to effectively adjudicate upon and determine the cause of action in the proceedings. In the present case the proposed parties are not necessary parties to the lis as they have no interest in the lis as rightly held by the Arbitrator the proposed parties are not necessary parties to these proceedings and this held against the writ petitioners. 13. However the Arbitrator is vested with the power to Power to summon witnesses and requisition documents under section 120;of Andhra Pradesh Co-operative societies Act 1964 and the Branch Manager of Attili Co-operative Bank have knowledge about the transaction and he also lodged a report to the police about the fraud committed by the then Elamanchali Co-operative Bank (arrayed as 14th respondent) in the writ petition as the petitioners have pleaded fraud committed then Elamanchali Co-operative Bank (arrayed as 14th respondent) and this Court is of the opinion to discharge the burden, it is necessary to examine the following proposed implead respondents as witness. Therefore, this Court directs the Arbitrator to examine the proposed implead respondents viz., 1) CEO of the District Cooperative Central Bank, Eluru, West Godavari District, 2) The Branch Manager, District Co-operative Central Bank, Attili Branch, 3) Sri S.P. Srinivasamutyam, erstwhile Branch Manager, District Co-operative Central Bank, Yelamanchili branch, now residing at Naggipudi, Marter, Penugonda Mandal, West Godavari District and 4) Sri S. Radha Krishna, Assistant General Manager (ST Loans),District Co-operative Central Bank Limited, R.R. Pet, Central Office, Eluru, West Godavari District. as witnesses on behalf of the writ petitioners in the Claim No.49 of 2018-19 for doing justice and to discharge the alleged fraud played by the Elamanchali Co-operative Bank (arrayed as 14th respondent) in the Writ Petition and it is needless to say the Arbitrator/3rd respondent is directed to examine the above proposed parties, as expeditiously as possible, not later than 4 weeks from the date of receipt of the order. 14. Accordingly, the Writ Petition is disposed of. There shall be no order as to cost. As a sequel, interlocutory applications, if any pending in this Writ Petition shall stand closed.