THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.16634 OF 2009 DATED _______JUNE, 2011 Between: A.R.K.Aqua Farm, rep. by its Managing Partner, G.K.Narasimha Rao … Petitioner and State of Andhra Pradesh, rep. by its Secretary, Co-operative Department, Secretariat, Hyderabad, and others. … Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.16634 OF 2009 O R D E R The petitioner firm, having availed a loan of Rs.51,60,508/- from the District Co-operative Central Bank Limited, Visakhapatnam, the second respondent, committed default in its repayment. Thereupon, the Deputy Registrar of Co-operative Societies, Visakhapatnam, issued recovery certificate dated 30.04.1996 under Section 71 of the Andhra Pradesh Co-operative Societies Act, 1964 (for brevity, ‘the Act of 1964’) for a sum of Rs.60,34,117/- with simple interest at 17% per annum. This certificate was not challenged by the petitioner firm and therefore attained finality. In execution thereof, notice in Form No.9 was issued under Rule 52 of the Andhra Pradesh Co-operative Societies Rules, 1964 (for brevity, ‘the Rules of 1964’) in E.P.No.100 of 2002-03, notifying the sale by auction of the agricultural lands at Gogullanka Village, Polavaram Mandal, East Godavari District, mortgaged by the petitioner firm as security for its loan. The said notice was challenged by the petitioner firm along with its partners individually in an appeal filed under Section 76(1) of the Act of 1964 in O.A.No.153 of 2006 on the file of the Andhra Pradesh Co-operative Tribunal, Visakhapatnam. By Judgment dated 30.01.2009, the Tribunal dismissed the appeal. Hence, this writ petition by the firm. This Court, by order dated 09.10.2009, granted stay of all further proceedings including the auction of the mortgaged agricultural lands on the condition that the petitioner firm deposits an amount of Rs.10,00,000/- within four weeks and a further sum of Rs.5,00,000/- within four weeks thereafter. The petitioner firm having complied with the condition, the auction of its mortgaged properties stood stayed. WVMP No.4405 of 2009 is filed by the District Co-operative Central Bank Limited, Visakhapatnam, to vacate the said order. With the consent of the counsel, the writ petition is taken up for final disposal. Earlier, when the respondent bank issued an auction notice in respect of the property situated in Ganjipet, Waltair Ward, Visakhapatnam, mortgaged to it by the petitioner firm, Writ Petition No.446 of 2003 was filed by the petitioner firm before this Court and by order dated 29.04.2004, this Court directed the respondent bank to first sell the other mortgaged properties before initiating action against the subject property situated in Ganjipet, Waltair Ward, Visakhapatnam. The impugned auction notice was accordingly issued proposing sale of part of the agricultural lands situated at Gogullanka Village. The petitioner firm challenged the impugned auction notice before the Tribunal on the following grounds: (1) that its objections had not been considered during the Section 71 proceedings and reasonable opportunity was not provided to it; (2) that the authority while issuing the certificate under Section 71 of the Act of 1964 had failed to consider the losses sustained by the petitioner firm and conduct an independent enquiry in that regard; (3) that its repayments had not been given due credit; (4) that the interest rate levied was excessive; (5) that the authority had failed to follow the due procedure for valuation of the property; and (6) that its representation for opting for a one time settlement had not been considered; The Tribunal held against the petitioner firm on all the grounds. As rightly pointed out by the Tribunal, it was not open to the petitioner firm to maintain a challenge against the Section 71 certificate issued as long back as in the year 1996 at the stage of its execution in the year 2003. Once the said certificate remained unchallenged and attained finality, it was conclusive proof of the arrears stated to be due therein as per Section 71(3) of the Act of 1964 and could therefore be executed under Section 70(2) thereof. Pertinent to note, the challenge to the auction notice was not on the ground that there was any procedural irregularity in the issuance thereof in the context of Rule 52 of the Rules of 1964. The petitioner firm, on the other hand, sought to challenge the said notice on the ground that the Section 71 proceedings underlying the same were not valid. Such a challenge was not maintainable. The Tribunal also took note of the fact that the petitioner firm had failed to comply with the requirements for eligibility to close the loan under a One Time Settlement scheme. Further, the petitioner firm failed to demonstrate before the Tribunal as to how there was any error in the adjustment of the amount repaid by it or the fixation of the interest rate. There was also no substance in the challenge that the property was undervalued as the upset price had not even been fixed. Before this Court, an attempt is made once again by the petitioner firm to re-open its challenge to the Section 71 proceedings. As pointed out supra, it is not open to the petitioner firm to seek to turn back the clock at this late stage and mount an attack against the certificate issued under Section 71 of the Act of 1964 in the year 1996. As regards its plea that it was not granted the benefit of the One Time Settlement schemes floated by the respondent bank pursuant to Reserve Bank of India guidelines, it is pertinent to note that the respondent bank addressed letters dated 24.09.2004 and 23.04.2008 calling upon the petitioner firm to avail the One Time Settlement schemes offered pursuant to the guidelines at those points of time. The petitioner firm obviously failed to take the benefit of the said schemes by abiding with the terms thereof. It is now contended that the said schemes were not in keeping with the guidelines framed by the Reserve Bank of India. However, the petitioner firm did not choose to lay a challenge to the schemes or their implementation in the context of such guidelines at the relevant point of time. Having failed to do so, it is no longer open to the petitioner firm to hark back upon this issue and seek to stall the execution proceedings. The effort of the petitioner firm appears to be to ward off the inevitable, the liquidation of the security offered by it. It has been successful in delaying the same but this Court finds no merit in its challenge to the auction notice or the Judgment of the Tribunal in O.A.No.153 of 2006 upholding the same. The Writ Petition is devoid of merit and is accordingly dismissed. Interim order dated 09.10.2009 shall stand vacated. Miscellaneous petitions in the writ petition shall consequently stand dismissed. No order as to costs. -------------------------- SANJAY KUMAR,J _______JUNE, 2011 PGS