HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.15 of 2010 19th April 2010 Between: M/s. Business Enterprises and another … PETITIONER(S) and The Deputy Registrar of Co-operative Societies/OSD, Malakpet, Hyderabad and another … RESPONDENT(S) THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.15 OF 2010 ORDER: Heard Sri T. Lakshminarayana, Learned Counsel for the petitioners, Learned Government Pleader for Cooperation and Sri A. Ananda Rao, Learned Counsel appearing on behalf of the 2nd respondent-Bank. At their request the Writ Petition is being disposed of at the stage of admission. The 1st petitioner is a partnership firm. The 2nd respondent is one of its partners. They were admitted as members of the 2nd respondent-society and were granted a loan exceeding Rs.1 Crore on 31.03.2001. Since the petitioners failed to repay the said amount, the 2nd respondent-Bank initiated action for recovery of the money by filing a petition before the Arbitrator under Section 61 of the Andhra Pradesh Co-Operative Societies Act, 1964 (hereinafter referred to as – ‘the Act’). The Arbitrator passed an Award dated 18.05.2007 in favour of the 2nd respondent-Bank. Aggrieved thereby the petitioners preferred an appeal in C.T.A. No.36 of 2008 before the A.P. Co-operative Tribunal, Hyderabad, which scaled down the rate of interest from 21% per annum with quarterly rests to 12% per annum with simple interest on the principal amount from the date of filing the Arbitration Case till its realization. Aggrieved by the order of the Tribunal, scaling down the interest, the 2nd respondent-Bank filed W.P. No.11658 of 2008 which is said to be pending on the file of this Court. In so far as the petitioners are concerned they were satisfied with the order of the Tribunal in as much as they chose not to challenge the order passed by it. While matters stood thus, the 2nd respondent-Bank initiated proceedings for sale of the properties mortgaged by the petitioners with it. Aggrieved thereby the present writ petition is filed. This Court, by order dated 06.01.2010, granted interim stay of all further proceedings pursuant to the impugned notice of sale dated 18.11.2009 in E.P. No.036/2008/OSD/VCUB issued by the 1st respondent on condition that the petitioner deposited 1/3rd of the amount demanded within a period of six weeks. The six weeks period fixed by this Court expired on 18.02.2010. Not a single rupee has been paid by the petitioner pursuant to the interim order of this Court. A petition for extension is filed even to pay this 1/3rd amount claiming recession as a ground for failure to make payment and that the petitioner was making arrangements to pay the said amount. Sri T. Lakshminarayana, Learned Counsel for the petitioners, would contend that the 2nd respondent-Bank could not have taken any action for recovery of the amount from the petitioners in as much as the action which can be taken is only against members of the society and the 1st respondent, being a partnership firm, is ineligible even to be admitted as a member of the society under the provisions of the Act. This contention is only to be noted be rejected. The petitioners cannot approbate and reprobate. The petitioners, as a partnership firm, have borrowed money from the 2nd respondent which factum is not in dispute. The order of the Tribunal required them to repay the principal amount with simple interest at 12% per annum which factum is also not in dispute. The order of the Tribunal, in so far as the petitioners are concerned, has attained finality. At this stage, having failed to make payment, the petitioners can ill-afford to contend that they should not have been admitted as a member of the 2nd respondent-Bank and, since the 2nd respondent-Bank had acted contrary to law in doing so and having advanced monies to persons ineligible, the amounts due and payable cannot be so recovered. Sri A. Ananda Rao, Learned Counsel appearing for the 2nd respondent-Bank, would point out that the 2nd respondent-Bank is in liquidation and that several depositors, who had put in their hard earned savings/retiral benefits with the 2nd respondent-Bank, were being denied repayment of even the principal amount deposited by them in as much as the 2nd respondent-Bank is not in a position to recover the amounts due from persons such as the petitioners herein. Having borrowed money from the 2nd respondent-Bank, and having failed to repay the principal along with interest at 12% per annum as directed by the Tribunal, the petitioners are not justified in faulting the action of the 1st respondent in seeking to auction their property for recovery of the dues payable to the 2nd respondent-Bank. The Writ Petition is an abuse of process of Court. Having borrowed money from the 2nd respondent-Bank, the petitioners herein contend that they are not liable to repay the money on the ground that the 2nd respondent-Bank could not have admitted them as a member of the society in the first place, and that they are not entitled to initiate proceedings under the Act for recovery of the amounts due and payable by the petitioner. This is but a ruse to avoid repayment of the amounts borrowed by the petitioners from the respondent-Bank. I consider it appropriate, therefore, to dismiss the Writ Petition with exemplary costs of Rs.10,000/- payable to the 2nd respondent-Bank by the petitioners herein. ______________________________ 20.04.2010 RAMESH RANGANATHAN, J CVRK/MRKR