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2026 DIGILAW 6 (TS)

Viswa Bharathi Mutually Aided Co-Operative Credit Society Limited v. State of Telangana

2026-01-05

T.MADHAVI DEVI

body2026
ORDER : 1. These two writ petitions are filed by the petitioner society and the respondents are also the same in both the writ petitions. These two writ petitions are filed against the common order dated 07.03.2024 passed in I.As.No.97 of 2023 & 98 of 2023 in O.P.No.17 of 2021 on the file of the Hon’ble Co-operative Tribunal, Hyderabad. 2. Brief facts leading to the filing of the present writ petitions are that the respondents No.2 to 4 are the members of the petitioner society and the respondent No.2 is the Principal borrower, while respondents No.3 and 4 are her sons. The respondents approached the petitioner society for a loan of Rs.70 lakhs vide application dated 05.02.2020 and the petitioner society sanctioned and disbursed the said loan amount in three installments i.e., Rs.30 lakhs on 18.03.2020, Rs.20 lakhs of two installments each on 25.06.2020. The respondents No.3 and 4 stood as sureties to respondent No.2 and executed a demand promissory note, general loan agreement and other loan documents in favor of the petitioner society. The respondent No.2 had mortgaged the property by way of deposit of title deeds in favour of the petitioner society towards security vide registered document No.10610 of 2010, dated 11.03.2020. According to the loan agreement, the respondent No.2 had agreed to repay the loan amount in 84 equated monthly installments i.e., Rs.1,55,443/- per annum which carried interest @ 20% per annum compounded with monthly interest. It is submitted that when the respondents No.2 to 4 were irregular in repaying the loan amount, the petitioner society got issued a legal notice dated 22.04.2021 calling upon them to repay a total sum of Rs.77,35,246/-, which was outstanding as on 31.03.2021. However, the respondents No.2 to 4 failed to repay the same and therefore, the matter was referred to the Disputes Resolving Committee, which issued notices to the respondents No.2 to 4 to appear before them on 10.07.2021 for amicable settlement of dispute, but the settlement could not be reached and therefore, the petitioner society filed O.P.No.17 of 2021 before the Cooperative Tribunal, Hyderabad, under Section 37(1) of the Telangana Mutually Aided Cooperative Societies Act, 1995 on 06.12.2021, for recovery of outstanding loan amount of Rs.82,41,708/-. 3. 3. It is stated that the respondents No.2 to 4 have filed their counters on 28.03.2022, wherein they admitted the sanctioning and disbursement of the loan amount and have taken a plea that due to Covid-19 Pandemic situation, they could not carry out the construction as per the schedule and have further taken a plea that the Reserve Bank of India has issued a guideline granting moratorium to the stressed loans. On 05.08.2022, the petitioner society has filed its chief examination affidavit of PW1 and got marked Exs.A1 to A33 and the PW1 was cross examined by respondents No.2 to 4 on 06.06.2023. It is stated that during the course of cross examination of PW1, the counsel for the respondents No.2 to 4 had suggested that the respondents No.2 to 4 made payment of Rs.2,80,000/- by way of cheque bearing No.427086, drawn on Bank of Baroda, but the same was denied by PW1, as the writ petitioner society was not aware of the said payment. It is stated that the said payment was admittedly made without informing them and was made directly into their bank account. It is stated that the said branch of Bank of Baroda is a non-home branch and therefore, the respondents No.2 to 4 got issued a cheque by using banking facilities available at a branch other than their home branch and therefore, the said payment was not noticed by the petitioner society. It is submitted that after the cross examination of PW1, the petitioner society got the accounts reconciled and that the payment of Rs.2,80,000/- was found and therefore, the writ petitioner was constrained to file I.A.No.97 of 2023 on 19.06.2023 under Section 37 of the Act read with Order 8 Rule 14 read with Section 151 of C.P.C., praying the Hon’ble Court to recall PW1 to mark the latest statement as an additional document on behalf of the society and I.A.No.98 of 2023 under Section 37 of the Act read with Order 18 Rule 17 read with Section 151 of C.P.C. to recall PW1 to lead further evidence. 4. Learned counsel appearing for the respondents, supported the averments of the respondents in their counters filed in the above I.As., opposing the said contentions on the ground that the PW1 statement was made on oath and therefore, it cannot be recalled and therefore, he prayed for dismissal of the I.As. 5. 4. Learned counsel appearing for the respondents, supported the averments of the respondents in their counters filed in the above I.As., opposing the said contentions on the ground that the PW1 statement was made on oath and therefore, it cannot be recalled and therefore, he prayed for dismissal of the I.As. 5. Both the I.As., were dismissed by the Tribunal on the ground that by way of said I.As., the writ petitioner society intends to fill up the omissions of evidence, which is contrary to the settled principle of law and that the additional evidence could be lead only to enable the parties to clarify any doubts which they may have with regard to the evidence already lead by them, but not to file new evidence contrary to the evidence already given by them. 6. Aggrieved by the order of Tribunal in dismissing the I.As., these writ petitions are filed. 7. Learned counsel for the petitioner submitted that the respondents No.2 to 4 have made the payment of Rs.2,80,000/- directly into the bank account and since it was not the home branch, the petitioner society was not aware of the said payment, but on coming to know about the same in the cross examination, they have filed the IA’s bonafidely for recall of the witness and to bring on record the statement of account only to bring the correct facts on record. It is submitted that the bonafide intention of the petitioner should be taken into consideration and the writ petitions should be allowed. 8. Learned counsel appearing for the petitioner society, has filed a copy of the account statement and also relied upon the following two judgments in support in his contentions: 1. K.K. Veluswamy Vs. N. Palanisamy , (2011) 11 SCC 275 2. Vadiraj Naggappa Vernekar (Dead) through LRs. Vs. Sharadhcandra Prabhakar Gogate, (2009) 4 SCC 410 9. Learned counsel appearing for the respondents vehemently opposed the contentions of the petitioner and submitted that by leading the evidence, the petitioner society wants to defeat the claim of the respondents and therefore, it should not be permitted to do so. 10. Vadiraj Naggappa Vernekar (Dead) through LRs. Vs. Sharadhcandra Prabhakar Gogate, (2009) 4 SCC 410 9. Learned counsel appearing for the respondents vehemently opposed the contentions of the petitioner and submitted that by leading the evidence, the petitioner society wants to defeat the claim of the respondents and therefore, it should not be permitted to do so. 10. Having regard to the rival contentions and the material on record and having particular regard to the account statement of the respondents filed by the petitioner, it is noticed that the Bank of Baroda account reflects the repayment of Rs.2,80,000/- on 21.09.2021 but it does not refer to any name but only refers to 427086 MICR CLG (CTS) i.e., the cheque number. It does not demonstrate as to the origin of the transfer. Therefore, the contention of the petitioner society that it was not aware of the transfer cannot be doubted. In these circumstances and when there is a bonafide mistake on the part of the petitioner society, the Tribunal ought to have considered the same and ought to have allowed the I.As. In the case of K.K. Veluswamy (cited supra), the Hon’ble Supreme Court has observed thus: 19. We may add a word of caution. The power under Section 151 or Order 18 Rule 17 of the Code is not intended to be used routinely, merely for the asking. If so used, it will defeat the very purpose of various amendments to the Code to expedite trials. But where the application is found to be bonafide and where the additional evidence, oral or documentary, will assist the court to clarify the evidence on the issues and will assist in rendering justice, and the court is satisfied that non- production earlier was for valid and sufficient reasons, the court may exercise its discretion to recall the witnesses or permit the fresh evidence. But if it does so, it should ensure that the process does not become a protracting tactic. The court should firstly award appropriate costs to the other party to compensate for the delay. Secondly the court should take up and complete the case within a fixed time schedule so that the delay is avoided. Thirdly if the application is found to be mischievous, or frivolous, or to cover up negligence or lacunae, it should be rejected with heavy costs. 20. Secondly the court should take up and complete the case within a fixed time schedule so that the delay is avoided. Thirdly if the application is found to be mischievous, or frivolous, or to cover up negligence or lacunae, it should be rejected with heavy costs. 20. If the application is allowed and the evidence is permitted and ultimately the court finds that evidence was not genuine or relevant and did not warrant the reopening of the case recalling the witnesses, it can be made a ground for awarding exemplary costs apart from ordering prosecution if it involves fabrication of evidence. If the party had an opportunity to produce such evidence earlier but did not do so or if the evidence already led is clear and unambiguous, or if it comes to the conclusion that the object of the application is merely to protract the proceedings, the court should reject the application. If the evidence sought to be produced is an electronic record, the court may also listen to the recording before granting or rejecting the application. 11. In the case of Vadiraj Naggappa Vernekar (cited supra), the Hon’ble Supreme Court has observed thus: 25. In our view, though the provisions of Order 18 Rule 17 CPC have been interpreted to include applications to be filed by the parties for recall of witnesses, the main purpose of the said rule is to enable the Court, while trying a suit, to clarify any doubts which it may have with regard to the evidence led by the parties. The said provisions are not intended to be used to fill up omissions in the evidence of a witness who has already been examined. 12. Respectively following the above rationale propounded by the Hon’ble Apex Court, the orders of the Tribunal in I.As.No.97 of 2023 & 98 of 2023 in O.P.No.17 of 2021, dated 07.03.2024, are set aside and both the writ petitions are allowed. There shall be no order as to costs. 13. Miscellaneous petitions, if any, pending in these writ petitions, shall stand closed.