AI Structured Summary
Not yet generated for this judgment
Judgment
Sri A. Rajasheker Reddy, J.—The Writ Petition is filed seeking to issue a writ, order, or direction, more particularly one in the nature of writ of certiorari declaring the award in A.R.C.No.125/02/CUB/GD of the 1st Respondent, dated 31-07-2002 and as confirmed in CTA No.45 of 2004, dated 30-08-2004 and in R.P.No.5 of 2004, dated 01-09-2008 of the A.P. Cooperative Tribunal, Hyderabad, as illegal and arbitrary.
The case of the petitioner is that the third respondent herein represented by its Managing Director / Chief Executive Officer has filed A.R.C.No.125/02/CUB/GD before the 1st respondent against the petitioner and respondents 4 & 10 for recovery of loan amount of Rs.20,87,583/- and also for interest and penal interest till the date of realization. The respondents 4 and 10 are members of the 3rd respondent Cooperative society. It is the case of the 3rd respondent that respondents 4 and 10 have applied to the 3rd respondent for sanction of term loan of Rs.10,00,000/- (Rupees Ten Lakhs only) each and the same was sanctioned vide Sanction Letter, dated 10-11-2000 and the said amount is repayable in 36 monthly instalments together with interest @ 21% per annum and 2% penal interest in case of default of repayment. Respondents 4 to 7 alleged to have executed guarantee agreement for securing payment of loan advanced. The petitioner is stated to have pledged his landed property in Survey No.18/1, 24/p, situated at Rayannaguda Village, Shamshabad Mandal, R.R. District totally admeasuring Ac.5.08 guntas as collateral security by executing Memorandum of deposit of title deeds on 22-11-2000 for repayment of said loan amount obtained by respondents 4 and 10. The respondents 4 and 10 failed to repay the said term loan and 3rd respondent filed the A.R.C. before the 1st respondent for recovery of amount due to it.
It is the further case of the petitioner that before the 1st respondent the original borrower i.e., the 10th respondent herein remained ex parte and the respondents 6 to 9 are also set ex parte. The petitioner filed his written statement. The 1st respondent on the basis of the material placed before it i.e., Ex.P1 to Ex.P10 by order, dated 31-07-2002 ordered the defendants 1 to 8 to pay a sum of Rs.20,87,583/- to the plaintiff-bank with interest @ 22% and penal interest from 19-02-2002 till the realization of the entire amount. Since the property of the petitioner is put to auction, the petitioner was compelled to pay award amount of Rs.40,72,500/- to the 3rd respondent in order to protect his property. Thereafter, the petitioner filed C.T.A. No.45 of 2004 before the A.P. Cooperative Tribunal, Hyderabad challenging the award of the 1st respondent. The Hon''ble A.P. Cooperative Tribunal, Hyderabad, dismissed the appeal of the petitioner by its order, dated 30-08- 2004. Thereafter, the petitioner filed Review Petition in R.P.No.5 of 2004 and the same was also dismissed on 01-09-2008 by the Hon''ble A.P. Cooperative Tribunal, Hyderabad.
The learned counsel for the petitioner submits that two separate loans were sanctioned to respondents 4 and 10 i.e., Rs.10,00,000/- each. It appears that the amount has been transferred from account No.22 to Account No.24 and no notice was issued to the respondent No.10 herein. It is submitted that only one application is made by the 3rd respondent for recovery of the loan amounts instead of filing two applications and paying two sets of Court fee under Rule 49(5)(a) of A.P. Cooperative Societies Rules, 1964. He also submits that registered memorandum of deposit of title deed Nos.3332 and 3333, dated 22-11-2000 in respect of petitioners plot are to the extent of an amount of Rs.1,00,000/- each only. Therefore, the liability of the petitioner at the most has to be restricted only to Rs.2,00,000/-. Without discussing the said aspect and without discussing the documents marked, straight away the liability of the entire loan amount sanctioned in favour of respondents 4 and 10 was fastened on the petitioner. He also submit that the petitioner also executed registered memorandum of deposit of title deeds in respect of another loan and when A.R.C. No.124 of 2002 was filed by the 3rd respondent, the petitioner paid an amount of Rs.54,000/- and the 3rd respondent issued No Due Certificate to the petitioner in respect of the said account. The terms and conditions of memorandum of deposit of title deeds in the present case and in that case wherein petitioner stood guarantor for the 9th respondent are one and the same. As such, the award of the 1st respondent fastening the entire liability of loan amount sanctioned in favour of respondents 4 and 10 on the petitioner is erroneous. He also submits that when appeal is filed, the appellate authority simply relying on some unregistered memorandum of deposit of title deeds upheld the award of the 1st respondent. When review is filed, the same was dismissed without considering the said aspect. He further submits that under Section 17 of Registration Act, unregistered memorandum of deposit of title deeds are not enforceable.
The matter was heard on 09-12-2016 and since there was no representation for respondents, the matter was posted under the caption for judgment to today and even today, there is no representation for respondents.
A reading of the impugned award, dated 31-07-2002 passed by the 1st respondent in A.R.C.No.125/02/CUB/GD, goes to showed that simply relying on Exs.P1 to P10 the impugned award was passed and the liability of Rs.20,87,583/- was fastened on defendants therein along with the petitioner who was D8 before the 1st respondent without considering the plea of petitioner that liability of the petitioner is to the extent of Rs.2,00,000/- as per two registered memorandum of deposit of title deed Nos.3332 and 3333, dated 22-11-2000.
The petitioner filed appeal before the Cooperative Tribunal under Section 76(1) of Cooperative Societies Act stating that the petitioners liability to an extent of Rs.1,00,000/- only, as such there cannot be any joint liability as far as defendants 3 to 7. It is also one of the ground in the appeal that the appellant executed registered mortgage by depositing title deeds to an extent of the open plot Nos.48 to 51, 58 to 77 totally admeasuring 4800 square yards for discharging the liability of the principal borrower to an extent of Rs.1,00,000/- only.
The appellate authority framed three points and point No.3, which is relating to the liability of the petitioner as guarantor, who was 8th defendant before the 1st respondent, has been answered by the appellate authority as follows :
"It is the case of the plaintiff bank that D8 stood as guarantor and also executed a Memorandum of Deposit of Title Deeds and marked Ex.P-6 registered document executed before the Sub-Registrar, Shamshabad, vide Doc.No.3333 of 2000, dated 22-11-2000. Therefore, the defendant having executed a registered document cannot turn around now and say that he has not executed a document as he is bound by the terms & contents of the registered document under Section 91 of Indian Evidence Act. Further, the defendant has not produced any evidence whatsoever to showed that he has not executed the Memorandum of deposit of title deeds. The burden of proving the document Ex.P6 initially lies on the plaintiff. Once the plaintiff have proved through a registered document Ex.P6 the burden shifts to the defendant to prove anything contrary. Having failed to do so, D8 bound by the contents of Ex.P6 under Sections 91 & 92 of Indian Evidence Act. Therefore, the issue is answered accordingly."
The appellate authority has rendered the judgment without adverting to the ground raised by the petitioner that as per Ex.P6, the liability of the petitioner is only to the extent of Rs.1,00,000/- in respect of one loan, totally to the extent of Rs.2,00,000/- as per two registered memorandum of deposit of title deeds Nos.3332 and 3333, dated 22-11-2000.
The review petition filed under Section 78 of the Cooperative Societies Act read with Order 47 of C.P.C. stating that above aspect was not considered. A specific plea was also raised in review that unregistered memorandum of deposit of title deeds cannot be taken into account as the same are hit by Section 17 of the Registration Act. The same was also rejected, which is erroneous.
Registered memorandum of deposit of title deeds - Ex.P6 executed by the petitioner reads as follows :
Memorandum Of Deposit Of Title Deeds
This memorandum made and executed on this the 22nd day of November, 2000 By
Arvind Kumar Goel S/o Late Surendra Kumar Goel,
Aged about 48 years, occupation : Business, R/o 401, Sai Pragati Towers, Himayat Nagar, Hyderabad, witnesses as follows :
The title deeds relating to the property described in the Schedule herein to have been delivered and deposited by me to day to and with the Mother Theresa Hyderabad Co-Operative Urban Bank Limited, YMCA Complex, Narayanaguda, Hyderabad, represented by Manager Sri T.Christopher S/o Charles, Aged about 60 years, R/o Hyderabad, for securing the repayment of the sum of Rs.1,00,000/- (Rupees One lakh only), borrowed by Syed Ali Hasan Kazmi S/o S.M.Hasan Kazmi, Aged about 42 years, occupation : Business, R/o Noorkha bazaar, Hyderabad-500 004, with the interest thereon at 21% percent per annum and also for the payment of any further sums that I may borrow from the Bank from time to time with interest thereon at the aforesaid rate or, the payment to the Bank of all such sums of money as are now due or shall be from time to time or at any time due to the said Mother Theresa Hyderabad Co-operative Urban Bank Limited, from me either on at any current account or for money advanced or discounted, interest, commission or any other usual or lawful charges together with all costs and expenses which may be incurred in connection therewith.
Sd/-
Signature.
As per Ex.P6, the petitioner has delivered the title deeds for securing repayment of a sum of Rs.1,00,000/- borrowed by the principal debtor and it further says payment of any further sums that petitioner may borrow and that the word I is used in the said documents. The said aspect was not discussed by the 1st respondent while passing the award and though a specific plea is raised in the appeal with this regard, the appellate authority has also not taken the same in proper perspective. Even in the appeal xerox copies of the so-called some more unregistered memorandum of deposit of title deeds are relied upon, which is not permissible. The said unregistered documents were not relied before 1st respondent nor marked by Tribunal and same are not registered though required registration under Section 17 of Registration Act. As such, the orders of the original authority as well as the appellate authority are erroneous and liable to be set aside. Even though the said ground is raised in the review, the same was not properly appreciated.
The relevant portion of the judgment of the Supreme Court reported in Rachpal v. Bhagwandas, 1950 (37) AIR 372 reads as follows :
" But, if the parties choose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. As the deposit alone is not intended to create the charge and the document, which constitutes the bargain regarding the security, is also necessary and operates to create the charge in conjunction with the deposit, it requires registration under Section 17, Registration Act, 1903, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards."
The plea raised by learned counsel for petitioner regarding maintainability of one application by the 3rd respondent before the 1st respondent for recovery of two loan amount cannot be entertained as the same was neither raised before the appellate authority nor it was the ground for review, as such, the said contention is rejected.
In view of the facts and circumstances, I am of the opinion that the liability of the petitioner can only be restricted to an extent of Rs. 2,00,000/- as per the memorandum of deposit of title deed Nos.3332 and 3333, dated 22-11-2000 and in view of the same, the impugned award is modified restricting the liability of the petitioner to Rs.2,00,000/- along with interest and penal interest on the said amount.
Accordingly, the Writ Petition is allowed to the extent indicated above. It is stated that during pending of proceedings, the petitioner has paid the entire award amount. If that be so, the petitioner is entitled for refund of the amount paid after deducting Rs.2,00,000/- along with interest and penal interest on the said amount. No order as to costs.
Miscellaneous petitions, if any, pending in this writ petition shall stand disposed of.