1. A. Swathi v. The State of Telangana

Petition under Article'226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, Order or Direction more particularly one in the nature of Writ of Certiorari, call for the records in connection with the O.P. NO. 43 OF 2016 on the file of court of the Telangana Co-Operative Tribunal at Hyderabad and quash the Order and Decree dated 12.07.2023 in O.P. No. 43 of 2016 by directing the petitioners to pay claim amount of Rs.20,60,3081 with subsequent interest at the rate of 24 percentage per annum thereon from the date of petition till the date of realization to the 3rd respondent society without givinlt any opportunity to the petitioners passed the impugned order is highly illegal, arbitrary and against the principles of natural justice and also violative of Articles 14, 19,21 and 300-4 of Constitution of lndia and consequently setting aside the C)rder and Decree dated 12.07.2023 in O.P. No. 43 of 2016 the interest of justice. lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Order and Decree daled 12.07.2023 passed in O.p. NO. 43 OF 201 6 passed by the 2nd respondent, pending c isposal of the main writ petition. lA NO: 1 OF 2024 Petition under Seclion 151 CPC praying that in the lircumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the following documents which are as follows: I 1) Copy of the Ex.A1 Membership Application of Rl for Rs. 6.00 lakhs dated 10.12.2015, (2) Copy of the Ex.A2 original Membership Application of R2 dated 10.12 2015 , (3) Copy of the Ex.A3 original Membership Application of R3 dated 16.12J,t015 (4) Copy of Ex.A4 certified copy of loan application of Respondents for tts. i 8.00 lakhs dated 04.02.2016, (5) Copy of Ex.AS is the certified copy of General Agreement of Respondents for loan transaction of Rs. 18.00 daled 2Ct.04.2016, (6) Copy of Ex.A6 is the copy of Demand promissory note (Origina I enclosed along with Memo) for Rs. 18.00 lakiis. Date 20-04-2016,( 7) Copy of Ex.A7 is the certified copy of Memorandum of Ddposit of Title Deed bearing [)oc.No. 3560/2016, by Respondent No. 2, (8) Copy of Ex.A8 is the original Gift Setflement Deed bearing Doe.No. 425512008, dated 19.07.2008, (9)Copy of the Ex.,\9 is the certified copy of Receipt for Rs. 18.00 lakhs dated 20.4.2016 (10) Cop,-' of the Ex.A1O is the Demand/recall notice in respect of loan A/c. No. 7812016 dated 13.8.2016, (1.1) Copy of the Ex.All is the certified copy of postal acknowle lgment of Respondent No. 2 dated 20.8.2016 (12) Copy of the Ex.Al2 is the c,riginat postat Ack., of Respondent NO. 2 dated 20.8.2016 (13) Copy of the Ex.A'1 3 is the original postal Ack., of Respondent NO. 3 dated 20.8.2016 (1 a) Copy of the Ex.A14 is the Original 0/c of letter of the society to Dispute (14) Resolving Committee, dt. 26.9.2016 (15) Copy of the Ex.A15 is the attested copy of letter of DRC to the Respondents calling upon them to appear, daled 20.10.2016 (16) Copy of the Ex.A16 is the Original Postal acknowledgment of Respondent No. 1 , dated 24.10.2016 (17) Copy of the Ex.A17 is the Original Postal acknowledgment of Respondent No. 2, dated 24.10.2016 (18) Copy of the Ex.A'l8 is the Original Postal acknowledgment of Respondent No. 3, dated 24.1O.2016 (19) Copy of the Ex.A19 is the original report of DRC, dated 26.10.2016 (20) Copy of the Ex.A20 is the Original authorization letter of Board Meeting held on 26.10.2016 dated 11.11.2002 (21) Copy of the Ex.21 is the copy of registration certificate of the society dated 11.1 .2OO2, (22) Copy of the Ex.A22 is the Original Statement of Account oI from 20.4.20'16 lo 24.11.2016, (23) Copy of the Ex.Bl is if the certified copy of the complaint vide CC NO. 138/2017 daled 15j2.2016, (24) Copy of the Ex.B2 is the certified copy of the Judgment passed in CC No. 13812017 dated

13.4.2018 (25) Copy of the Debit Slip dated 20.4.2016, (26) Copy of the Credit slip daled 20.4.2016, (27) Copy of the Withdrawal form dated 20.4.2016, (28) Copy of the Affidavit and petition filed by Respondent No. '1 in I.A.No. 179 of 2021 in O.P.No. 43 of 2016 in the interest of justice and pass Counsel for the Petitioners: SRI B. S. S. PRASAD Counsel forthe Respondent Nos.1 and 2: GP FOR COOPERATION Counsel for'the Respondent No.3: SRI MALLIPEDDI SRINIVAS REDDY The Court made the following: ORDER ) - HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 25258 oF 20.23 'l ORDER pt:titioners question the order d,ated 12.OT.2023 in O. P. No. 43 of 2O 16 on the file of Telangana Co_Ope rative Tribunal zrt Hyderabad wherein petitioners and the 4t]) respondcnt wcre directed to pay Rs. 20,6tt,3,Og/- with subsequt:nt intcrest at 24o/o per annum thereon from the dzrte of pctition till thc clatc of realization to the 3.d responrlenr society, on the ground that they were not given any opportr_lnrty u,hich is highly illegal, arbitrary and against the principr:s of naturar justicc.

2. The case of petitioners is that they ar: rnernbers of Respond<'nt No 3 Societlz. They made an Appl cation dateci 04.O2.2O l6 lor grernr of term loan of Rs. lg,00,OOO/ . .{t the time of appl-ving lozrn, the Sociery obtained signatures cr petitioners on vrtrious documents i.e. loan agreement, promiss;ory notc an.l reccipt for palmen[ of cash as loan and also obt:uned blank cheque br:aring No. OOO132 dated O1.10.2O16 (drarvn on Karoor Vysya Bank, Mernikonda Branch) towards securitv lrom the lsr petitioner; the S-cie ry got deposited the title deeds .f.immovabre property belonging to the 2nd petitioner and got Lhe same 1l h h h 2 registered before the authority concerned by giving assurance to release the loan amount subject to approval and ratihcation by the Board of Directors. Petitioners on lulfilling all the required procedure, waited for three months and hnally, oo 26.07.2016, the 3rd respondent demanded Rs.1O,OOO/- towards processing and miscellaneous charges and even after depositing the same, loan was not released. While things are going on, all of sudden, the lst petitioner received legal notice dated 02.ll.2016 from the 3'd respondent Authority calling upon them to pay Rs. 19,00,0OO/- under Negotiable Instruments Act which was allegedly bounced. According to petitioner, the 3'd respondent misused the cheque without releasing loan amount to him. After the said notice, the

3.d respondent hled C.C. No.138 of 2Ol7 under section 138 of the Negotiable Instruments Act on the file of the l sr Special Magistrate, Hasthinapuram, Ranga Reddy District and the same was dismissed on 13.04.2018 for the reason "it is not proved that the cheque was not issued towards outstanding dues and that the complainant' has not proved all ingredients of Section 138 of the Act and no Appeal was filed thereon so far. It is also stated, the 3'd respondent Iiled the OP without releasing single rupee and harassing them by keeping / _) ') all the documents in their custody. The Tribunal without 't considering the counter and evidence, had erroneously allowed thc OP by the ordcr impugned.

3. Learned Senior Counsel for petition:r Sri B.S.S. Prasad submits that the Tribunal ought to have c rnsidered the admitted fact that C.C. No. 138 of 2077 filed by the Society against petitioner was dismissed wherein the So<;iety failed to prove the existence of legally-enforceable debt. It is also submittcd that there is no Appeal filed so far.

4. [n the counter filed by the 3.d respondent, it is stated that in O.P., Petirioners Iiled counter afhdavi[ on 22-04-2019 arrd additional counter affidavit on 12 07 -2021 , further, adduced cvidence, hence, their assertion that they were not given an opportunity is absolutely false anl was made deliberately to mislead this Court, as such they are guilty of perjury and also committed offences punishable under various provisions of L.P.C. including offence under Sectjon 199 read with Sections 191 and 193 of the Indian penal C,tde and also liable for punishment under Section 2O9 of L.p.C. It is also stated, upon the Application of petitioner, by creating an equitable mortgage for the purpose ol business development, entered loan general agreement on 2O-Ol 2016, 'l \ "j 4 the Society sanctioned and disbursed Rs. 18,00,000/- on 20-04-2016 by way of deposing the same in the lst Petitioner Account repayable at Rs. 44,416 / - tn 84 monthly instalments on or before 5fi of every month which carried an agreed rate of interest @ 24% Per annum compounded with monthly rest. Further, along with the loan agreement, the 1st Petitioner had executed a demand promissory note dated 20-04-2016 for Rs. I 8,00,OOO/ - in favour of the Society. The 2nd petiLioner, t, father of the I st Petitioner stood as guarantor and mortgaged his immovable property by way of deposing of title deeds in favour of Society vide Document No. 3560/2016 dated 19 04 2016. As such, it is absolutely false to say that Petitioner No. t had executed the said documents on alleged assurance of releasing the Ioan amount and it is only after approval and ratificatlon by the Board of Directors of the Society, loan was sanctioned and d isbursed to Petitioner. It is pertinent to slate that there is absolutely no iota of truth that loan amount was not disbursed for, in her counter hied, petition6r No. t had categorically admitted that she received Rs. 18,00,000/- for the purpose of business development and she further admitted that she was very regular in payment of monthly instalments and never committed default -/ I' .) l at any point of time and she lurther admitted that she was only due a sum of Rs. I ,T2,644/- being four EMIs.. lt amounts to deliberate suppression of fact, as such, the Writ [,e trtion itself is liable to be dismissed on this ground alone. It is also stated, if no loan amount was disbursed, petitioners would harve taken legal recourse againsI the Societ5r. Since the 1"t petitioner committed default in repaying the monthly ins,talments, the Society had issued notice for recall of entire loan lmount, upon receipt of recall notice, pctitioner No. 1 issued cheque for Rs. 19,O0,00O/- for settlement ol entire loan amount. F.urther, when the said cheque was dishonoured, C.C.No. 73g of 2Ol7 was filed which ended in acquittal as the Society .,r.as unable to prove that the subject cheque was issued towardrs outstanding loan amount. It is scttlcd principal of law that tl-re findings of Criminal Court in civil proceedings will only have limited application i.e. for the purpose as to who was the a<:cused and what was the result of thc criminal proceedirrgs and any findings in criminal proceedings by no stretch ot. imagination would be binding on the civil proceedings. pertinently, there is absolutely no finding in the criminal proceedings that there was no disbursement of loan amount to petitioner No. l, as such the lrldinSs of lhe afore mentioncd criminal proceedings have no '-' ,l ,l I I 6 t, bearing in the present proceedings which are initiated under the provlsrons of the Telangana Mutually Aided Cooperative Societies Act

5. The I,r petitioner filed rejoinder stating thar respondcn r / socie ty itself admitted that document No.356o/2016 is execured by petitioners in lavour of the respondenr/ socie tt, is dated 19.O4.2016 which implies that the said document has been executed a day before the alleged sanction and disbursal of loan amount to the first petitioner. Even though thc findings of criminal court we have only limited application in civil proceedings, it does not mean that they have no application uit ali

6. Hcard Sri Mallipeddi Srinivas Reddy, Iearned counsel for the 3.a rcspondent and learned Government pleader for Cooperation 7 I,-rom a perusal of the counter hled by petitioners in the o'p, particularry paragraph 5 shows that they are regular in pa-r,ntcnt of monthly EMI and never defaulted; EMI amount was Rs.44,416/- p.m. and the said loan arrangcd on 2O.O4.2016; rhe lirst EMi srarts in May, 2016; trre Society issued dcmand norice on l3.Og.2Ol6 for a total amount 7 \ 'l of Rs.19, B,6aS l -; in fact they arc due only zr sum of Rs. I ,77 ,644 l- being four EMIs., bur Lhe Society filcrl thc above case for a total sum of Rs. l g lacs along witl. intt:rest o[ Rs. 1 , 13,645/ - roralling to Rs_ 19, 13,645 / _ which s nor at all maintainable petitioner No. 1 filel zrddiLional Subsequcn Lly, counter stating that despite executing loan documt:nts, loan no LC which is amount was not clisbursed rnconsistent . In this regard, it is to be seen that petitioner No. l is not rn illiterate, she admitted her signatures on Ex.AS General Agrt'ement, Ex.A6 demand promissory and Ex.A7 Memora nclum of deposit of title deeds; before the Tribunal she laiieri to cxplain how the original gift settlement decd trx.Ag is with If really, the loan amount was not disbursed, p(rtil ioners certainly would have taken legal recoLlrse either b1, i:;string legal notice or steps against lhe Society for obtaining loan documents without disbursing the loan amount, but thcy have rot initiated any such steps. lhc Society.

8. The Tribunal in the order impugn::cl r.learly mentioned that in the affidavit, petitioner No. I state cl th:Lt she received Rs.18 lacs but in the cross_examination, she chirnged her version ancl stated that she never entered into loan transaction wittr the Society; she contradicted hcr own { I 8 statement and it is not supported by any documentary evidence, thus, it cannot be believed. lt is also observed that Ex.A6 promissory notc signed by petitioners clearly raises a presumption under Section I 18 of the Negotiable Ins[ruments Act and that presumption is in lavour of the Society and against petitioners u'ho failed to rcbut the same by way of convincing evidence. Further, trx.A9 also proves that Rs.18 lacs were received by petitioners. Ex.A 1O is the demand / recall notice in respect of loan which u,as received by petitioners uide Exs.A11 to A13. All these documents would clinchingly show that petitioner No. I is in receipt of the loan amount. Since the 1st petitioner commitled default in repaying the monthly instalments, thc case ol thc Society is that, they issued notice t, t, I for recall of entirc loan amount, upon receipt of recall notice, Petitioner No. 1 issued cheque for Rs.19,OO,OO0/- for settlement of entire loan amounL 9 In vie',v of the above, this Court is of the considered opinion that the Tribunal, upon considering the evidence before it, had come to a just conclusion. Hence, the other contentions of learned counsel for petitioner that P.W.1 before the Tribunal t, has no authorig to file the O.P., the cheque was not issued in discharge of legally-enforcea ble debt and the judgment rendered 9 by the criminal court will have bearing on the crlil proceedings, etcetera pale into insignificance. In the circumslilnrres, the writ Petition does not merit consideration and the sirrnt: is liable to be dismissed. lO. costs.

11. The Writ petition is accordingly, drsnrrssed. No Consequently, Miscellancous Applicrrr()ns. i[ any I shall stand closed. t SD/- AHMED ABDULLA KHAN ASS STANT REGISTRAR //TRUE COPY// SECTION OFFICER To,

1. The Prl. Secretary, Co-operative Society Department, Secretariat' The State

2. The Dist-rict Judg-e/ Chairman, The Telangana Co-Operative Tribunal, of Telangana, Hyderabad. Namapally, Hyderabad.

3. One CC to Sri B. S. S. Prasad, Advocate [OPUC] 4. One CC to Sri l\Iallipeddi Srinivas Reddy, Adovcate[OPLIC] - 5. Two CCs to GP foi Cooperation ,High Court for the State of Telangana,

6. Two CD Copies TJ PVL \qr ,l HIGH COURT DATED:2910712025 ) ORDER WP.No.25258 of 2023 0 2 StP /02i , D a s t a1 qni.'-) ' DISMISSING THE WRIT PETITION WITHOUT COSTS X{,, q*