THE HON'BLE SRI JUSTICE M.S.RAMACHANDRA RAO W.P.Nos.8910, 8911, 9044, 9045, 9047, 9084, 1204, 1205 and 1206 of 2007 COMMON ORDER: Heard Sri V.Venkata Ramana, learned Senior Counsel for petitioners in all these Writ Petitions, learned Government Pleader for Cooperation for 2nd respondent and Sri R.N. Hemendranath Reddy, learned counsel for 3rd respondent. 2. The 1st petitioner in W.P.Nos.8910 of 2007, 8911 of 2007, 9045 of 2007 and 9047 of 2007 is the Hyderabad Cooperative Urban Bank Limited (for short ‘the Bank’). It was incorporated under the provisions of the provisions of the A.P. Cooperative Societies Act, 1962 (for short “the Act”). THE LOANS GIVEN TO BORROWER BY THE BANK 3. The said Bank granted a cash credit loans to Mohd. Abdullah Khan (hereinafter referred as principal borrower) of (i) of Rs.10 lakhs on 01-06-2000, (ii) Rs.15 Lakhs on 01-06-2000 and (iii) Rs.15 lakhs on 30-08-2000. The said three loans were given loan Account Nos.CC375, CC 374 and CC 419 respectively by 1st petitioner Bank. One Wahaz Mirza stood as surety for the said loans. 4. The borrower’s father Baquer Khan had executed a regd. General Power of attorney being doc.No.7264/1982 dt.11-08-1982 in his favor authorizing him to hold, dispose of and even to sell his moveable and immoveable properties. A house bearing Municipal MSR,J W.P.Nos.8910 of 2007 & batch 2 No.5-8-606 and 5-8-607 of Cellar+ Ground+ 2 floors situated at Abids, Hyderabad belonged to Baquer Khan. THE EXECUTION OF SIMPLE MORTGAGE DEEDS 5. In respect of all the above loans, as G.P.A Holder of his father Baquer Khan, the borrower executed a registered simple mortgage deed dt.01-06-2000 (doc.No.1626/2000) in respect of 2nd floor of above house property of built up area of 263.33 sq. ft; registered mortgage deed dt.01-06-2000 (doc.No.1623/2000) for the ground floor portion of the same premises of area 263.33 sq. ft.; registered mortgage deed dt.01-06-2000 (doc.No.1624/2000) for the cellar portion of the said premises; registered mortgage deed dt.01- 06-2000 (doc.No.1625/2000) for the 1st floor of the above premises admeasuring 145 sq.ft.; and registered mortgage deed dt.01-06-2000 (doc.No.1627/2000) in respect of ground floor portion of the same premises of area 263.33 sq.ft. 6. Since these loans were not paid, following proceedings under Section 61(1) of the Act were initiated by the 1st petitioner against the borrower and surety as under: (1) ARC No.432/2001/J/1 in respect of loan A/c.No.CC375, (2) ARC No.431/2001/J/1 in respect of loan A/c.No.CC374 and (3) ARC No.433/2001/J/1 in respect of loan A/c.No.CC419. These proceedings were taken up by the Cooperative Sub- Registrar/Arbitrator, attached to the Office of the Divisional Cooperative Officer, Charminar Division. MSR,J W.P.Nos.8910 of 2007 & batch 3 THE DECISIONS IN THE ARCS DT.30.3.2002 7. Three (3) separate awards were passed on 30-03-2002 in the 3 ARCs by the Cooperative Sub-Registrar. 8. In A.R.C.No.432/2001/J/1 it was directed that the borrower shall pay to the Bank, Rs.9,04,358/- as on 30-09-20001 together with interest @ 24% p.a. plus 12% penal interest on the overdue amount and other incidental charges till the date of complete realization of cash credit loan amount within one month from the date of issue of the award and in the event of non-payment by the borrower, it was declared that the 1st petitioner Bank would be entitled to recover the entire dues jointly and severally from the surety or from the movable or immovable properties or both. 9. In A.R.C.No.431/2001/J/1, it was directed that the borrower shall pay to the Bank a sum of Rs.16,58,375/- as on 30-09-2001 together with interest @ 24% p.a. plus 12% penal interest on overdue amount and other incidental charges till the date of complete realization of cash credit loan amount within one month from the date of issue of the award and in the event of non-payment by the borrower, it was declared that the Bank would be entitled to recover the entire due jointly and severally from the surety or from the movable or immovable properties or both. 10. In A.R.C.No.433/2001/J/1, it was directed that the borrower shall pay to the Bank a sum of Rs.20,22,784/- as on MSR,J W.P.Nos.8910 of 2007 & batch 4 30-09-2001 together with interest @ 24% p.a. plus 12% penal interest on overdue amount and other incidental charges till the date of complete realization of cash credit loan amount within one month from the date of issue of the award and in the event of non-payment by the borrower, it was declared that the Bank would be entitled to recover the entire due jointly and severally from the surety or from the movable or immovable properties or both. 11. In these proceedings, the borrower was served with summons and he attended the Court in person on 29-01-2002 and accepted the liability for the cash credit loans availed by him. He also engaged an Advocate by name Sri G.Hanumanth Reddy, who filed vakalat, but the borrower did not file any written statement even after being given adequate opportunity. The surety, who was 2nd respondent in all these ARCs, was called absent and was set ex parte. 12. Assailing these awards, C.T.A. Nos.86, 87 and 88 of 2002 were filed by the borrower. 13. On 30-06-2003, these three appeals were dismissed for default. ISSUANCE OF SALE CERTIFICATES TO AUCTION PURCHASERS 14. E.P.Nos.8, 9 and 10 of 2003 were filed by the Bank before the competent authority for execution of the said awards. 15. On 26-07-2005, an auction was held against the mortgaged assets and the petitioners in W.P.Nos.12014, 12015 and MSR,J W.P.Nos.8910 of 2007 & batch 5 12016 of 2007 became the auction purchasers by bidding for a sum of Rs.2.26 crores. On 26-09-2006 sale certificate was also issued to them, but possession of the property was not delivered. 16. The borrower and the surety Wahaj Mirza both filed C.T.A.Nos.89, 90 and 91 of 2006 before the A.P. Cooperative Tribunal to set aside the sale certificates dt.26-09-2006. 17. In the meantime, the borrower filed applications for condonation of delay in seeking to set aside the order dt.30-06-2003 dismissing C.T.A.Nos.86, 87 and 88 of 2002 (which had been dismissed for default on 30-06-2003), to set aside the dismissal orders and restore them to the file of the said Tribunal. These applications were allowed on 19-10-2006 and C.T.A.Nos.86, 87 and 88 of 2002 were restored to the file of the said Tribunal. THE IMPUGNED COMMON ORDERS DT.9.3.2007 18. Thereafter 3 separate orders were passed by the Tribunal on 09-03-2007 in C.T.A.No.87 of 2002 + C.T.A.No.91 of 2006, C.T.A.No.86 of 2002 + C.T.A.No.90 of 2002 and C.T.A.No.88 of 2002 + C.T.A.No.89 of 2006. In these orders, the Tribunal set aside the award dt.30-03-2002 as well as the sale certificates and remanded the matter back to the Arbitrator/Cooperative Sub-Registrar for fresh adjudication. MSR,J W.P.Nos.8910 of 2007 & batch 6 19. The Tribunal held: (i) that the surety was not at all served the summons by the Dy. Registrar of Co-operative Societies before passing of the orders in A.R.Cs. adverse to him and therefore the Awards against him dt.30.03.2002 cannot be sustained and is void; (ii) that contents of the mortgage deeds do not show that the property bearing Municipal No.5-8-606 and 5-8-607 belonged to Mohd. Baquer Khan and was mortgaged by the borrower in his capacity as G.P.A. of Mohd. Baquer Khan; that even Xerox copy of the title deed of Mohd. Baquer Khan was not found in the records relating to the loan accounts; (iii) that along with a document titled ‘equitable mortgage’ dt.01.06.2000 only copy of the G.P.A. No.644 / 1982 dt.17.08.1982, which was the G.P.A. executed by Mohd. Baquer Khan in favour of the borrower was found and it appears that only the said document was deposited with the Bank; and therefore, it cannot be said that the property referred to above belonging to Mohd. Baquer Khan was mortgaged by the borrower in his capacity as G.P.A. of his father Mohd. Baquer Khan with the Bank; (iv) that there was no pleading that the property in question was mortgaged by the borrower as G.P.A. holder at the instance of the principal though it is mentioned that the borrower offered MSR,J W.P.Nos.8910 of 2007 & batch 7 the said property as collateral security; and it is also not mentioned that the registered mortgage deeds dt.01.06.2000 were executed by the borrower with the Bank. (v) that the Bank erred in accepting documents executed by the borrower in his capacity as G.P.A. of Mohd. Baquer Khan though the G.P.A. was executed more than two decades back without verifying whether it was still subsisting or not; (vi) that the initiation of arbitration proceedings without impleading Mohd. Baquer Khan was bad in law and without notice to him, no proceedings can be taken in law against the said property. It went to the extent of saying that had he been impleaded, he might have even taken a plea of denial of execution of the G.P.A. in favour of the borrower and that it is forged; (vii) that the G.P.A. did not authorize the borrower to mortgage the property and the Bank’s plea that power to sell includes the power to mortgage or encumber, cannot be accepted, and therefore the execution of the mortgage by the borrower in respect of the subject property is contrary to law; (viii) that the G.P.A. is not coupled with any interest and was a revocable document, revocable at the pleasure of the principal; (ix) that the arbitrator has not followed mandatory procedure contemplated under Rule 49(4) of the Rules framed under the MSR,J W.P.Nos.8910 of 2007 & batch 8 Act for conduct of arbitration proceedings since Mohd. Baquer Khan was not impleaded and the surety was also not served. (x) that though the borrower appeared in person and accepted the liability for the cash credit loan availed by him, his statement alone is not sufficient to fasten liability on him since the borrower has denied making such statement in the CTAs and that there was no mention in the arbitrator’s Award that the statement of the borrower admitting liability was read over to him and accepted by him; and the Bank ought to have examined an official of the Bank to prove its claim by marking the documents executed by the borrower. It therefore set aside not only the Arbitration Awards but also the consequent proceedings issuing sale certificates to the auction purchasers though they deposited Rs.2.26 crores with the Bank. According to it, once the Arbitration proceedings are held illegal and void, the subsequent proceedings taken in the E.P. of such award also become null and void. It rejected the contention of the Bank that no appeal lies under Section 71 of the Act against issuance of a sale certificate at the instance of the borrower and that C.T.A Nos.89, 90 and 91 of 2006 are not maintainable. The remanded the matter to the Arbitrator for fresh disposal and also permitted him to record evidence of the parties and pass a fresh reasoned award. MSR,J W.P.Nos.8910 of 2007 & batch 9 THE PRESENT WRIT PROCEEDINGS 20. Assailing the same, the Bank filed: (i) W.P.No.8910 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.91 of 2006, (ii) W.P.No.8911 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.90 of 2006, (iii) W.P.No.9044 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.89 of 2006, (iv) W.P.No.9084 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.86 of 2002, (v) W.P.No.9045 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.88 of 2002, and (vi) W.P.No.9047 of 2007 challenging the order dt.09-03-2007 in C.T.A.No.87 of 2002. 21. The auction purchasers by name Ahmed Bin Abdullah, Syed Viquaruddin, Syed Imranuddin and Syed Infanuddin filed W.P.Nos.12014, 12015 and 12016 of 2007 challenging the orders dt.09-03-2007 in C.T.A.Nos.89, 90 and 91 of 2006 of the A.P. Cooperative Tribunal insofar as the sale certificates issued in their favour came to be set aside by the said Tribunal in the above orders. 22. No interim orders were granted in the Writ Petitions. 23. After filing of the Writ Petitions, the Commissioner for Co-operation and Registrar of Co-operative Societies passed order on 29.01.2009 cancelling the Banking licence issued to the Bank to carry on business under Section 22 of the Banking Regulation Act, 1949 invoking Section 69 of the A.P. Co-operative Societies Act, 1964 and directed the Bank to be converted into a Co-operative Credit Society. MSR,J W.P.Nos.8910 of 2007 & batch 10 Thereafter, the Hyderabad Co-operative Credit Society Limited was incorporated and the properties, assets, effects and actionable claims and liabilities of the Bank as on the date of the orders of conversion were directed to be devolved on the said Society w.e.f. 29.01.2009 and bye-laws of the said Society were registered on 06.06.2009 by the Dy. Registrar / Divisional Co-operative Officer, Charminar Division under Section 16(3) of the Act. Thereafter, the said Society filed applications to implead itself as the 2nd petitioner in W.P.Nos.8910 of 2007, 8911 of 2007, 9045 of 2007 and 9047 of 2007 and the said applications were ordered. CONTENTIONS OF COUNSEL FOR THE PETITIONERS: 24. Sri V.Venkata Ramana, learned Senior Counsel appearing for the petitioners contended that the common orders passed by the Tribunal are contrary to law and the provisions of the Act and are unsustainable. 25. According to him, the Tribunal proceeded on an incorrect premise that there were no registered simple mortgage deeds and that there was only a mortgage by deposit of title deeds; that the contents of the simple mortgage deeds Nos.1623 to 1627 of 2000 show that different portions of the same property being H.No.5-8-606 and 5-8-607, Abids, Hyderabad were mortgaged to the Bank and the finding of the Tribunal that there is no document creating mortgage over this property is palpably incorrect and is a manifest misreading of evidence. MSR,J W.P.Nos.8910 of 2007 & batch 11 26. He pointed out that no doubt the recitals therein that Mohd. Baquer Khan is the borrower might be incorrect, but the borrower, who is the executant of the said documents as G.P.A. holder of his own father, cannot take advantage of the same and contend that the property in question was not given as security for the amounts taken by him or by contending that the terms of the G.P.A. executed in his favour by Mohd. Baquer Khan, his father, did not permit such a mortgage of the said property. 27. Even if the surety Wahaj Mirza cannot be made liable for the debts incurred by the borrower, once the borrower receives notice, engages a lawyer, and admits his liability in the arbitration proceedings, the borrower cannot wriggle out of the said liability and deny the said admission of liability itself before the Tribunal. 28. According to him, the G.P.A. holder was the borrower and he could have even sold the property to himself as G.P.A. holder of his father Mohd. Baquer Khan and once power to dispose of property is conferred under a G.P.A., it includes power to subject the property to mortgage also and recitals in the mortgage are not determinative and the right in the property created by the simple mortgage deed continues to bind the borrower. 29. He contends that when there is no denial of the principal Mohd. Baquer Khan at any time about the execution of the G.P.A. and he did not object to any acts of the borrower, the Bank can, on the MSR,J W.P.Nos.8910 of 2007 & batch 12 basis of the mortgage deeds recover its dues; even if Mohd. Baquer Khan is made a party, he cannot deny the loan transaction and at best he could have repudiated the action of his son and G.P.A. holder and tried to save his property; and so, non-impleadment of Mohd. Baquer Khan cannot be a ground to set aside the sale. 30. According to him, under Rule 52(14) of the Rules framed under the Act, if no application is made to set aside sale, within 30 days from the date of sale, the sale has to be confirmed; that there was no challenge to set aside sale before the Arbitrator and so no appeal can be maintained against issuance of sale certificate and the appeal if at all has to be confined to the question whether it is issued to the rightful person or not. 31. He contended that a Court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances (Rafeque Bibi (Dead) by LRs. Vs. Sayed Waliuddin (Dead) by LRs and others1) and since the borrower has not questioned the sale, the sale certificate cannot be set aside. He stated that Mohd. Baquer Khan died on 07-09-2012 leaving the borrower, a wife and two daughters and none of them can object to the award or the sale of the subject property. 32. Learned counsel for petitioners in W.P.Nos.12014, 12015 and 12016 of 2007 supported and adopted the said contentions. 1 (2004) 1 SCC 287 MSR,J W.P.Nos.8910 of 2007 & batch 13 CONTENTIONS OF THE BORROWER: 33. Sri R.N. Hemendranath Reddy, learned counsel for the borrower contended that the orders passed by the Tribunal are correct and do not suffer from any error apparent on the face of the record warranting interference by this Court under Article 226 of the Constitution of India. 34. He contended that any stage in the execution taken up under Rule 52 of the Rules r/w Section 70 of the Act, if an order is passed, it is appealable under sub-Section (1) of Section 76 of the Act and merely because a judgment-debtor/borrower failed to avail remedy provided under Rule 52(14) of the Rules, he cannot be debarred from filing appeal under Section 76(1) of the Act in relation to the sale certificate. He relied on an unreported judgment in M.Krishna and another Vs. A.P. Co-operative Tribunal, Hyderabad and others2, which according to him was affirmed in Shyam Trading Company Vs. M.Krishna and others3 arising out of the same case. 35. According to him, even if the borrower admitted liability, it does not absolve the arbitrator from following the procedure in Rule 49 and that such admission is not conclusive and is only a piece of evidence and it is open to the borrower to show that it is erroneous or 2 Order dt.18-09-2003 in W.P.No.13773 of 2003 3 2010(4) ALT 97 (D.B.) MSR,J W.P.Nos.8910 of 2007 & batch 14 untrue. He relied on Nagubai Ammal and others Vs. B.Shama Rao and others4. 36. Even if the borrower was ex parte, the arbitrator had an obligation to verify the accounts and records of filing as to the amount due after giving credit to the repayments and decide legality of the interest claimed and the liability of the borrower or guarantor. He relied on Prasanth Food Products, Secunderabad Vs. A.P. State Co-operative Bank Ltd., Hyderabad and others5. 37. He also raised a plea that the decree of the Arbitrator did not specify the immovable property to be sold and that Order 34 CPC was not followed. 38. He also took a plea that the terms of the G.P.A. do not permit mortgage and relied on Malukchand Bin Gyanmal (original defendant) Vs. Shan Moghan Vardraj (Original plaintiff)6 and of the Supreme Court of Manila in Philippine National Bank Vs. Tan Ong Sze7 to contend that no words can be added to the recitals in a G.P.A. and that it must be construed as it stands. REPLY CONTENTIONS OF PETITIONERS: 39. In reply, Sri V.Venkata Ramana, learned Senior counsel contended that Order 34 C.P.C. applies only to suits and not to proceedings under Section 61 of the Act since it is not a suit; if no 4 AIR 1956 SC 593 5 2012(3) ALD 742 6 ILR 14 Bombay 590 (1860) 7 Case No.G.R.No.30831 dt.02-09-1929 MSR,J W.P.Nos.8910 of 2007 & batch 15 objection is raised to sale within 30 days, under Rule 52(14)(vi) of the Rules, there is no remedy available at all and the sale certificate cannot be questioned; the borrower executed the mortgage deed in favour of the Bank and so he is estopped from setting up any defences which are available to his father Mohd.Baquer Khan on the principle of estoppel by execution and plead on behalf of the other L.Rs. of Mohd.Baquer Khan apart from himself to save the property; so the borrower cannot plead that the terms of the G.P.A. did not authorize him to mortgage the property which can only be raised by Mohd.Baquer Khan and which was not done by him during his lifetime. 40. According to him, Section 61 only permits dispute resolution between borrower and Bank and not third parties to the loan such as Mohd.Baquer Khan and so he was not a necessary party to the arbitration proceedings. He therefore prayed that the Writ Petitions be allowed and the sale certificates in favour of the petitioners in W.P.Nos.12014, 12015 and 12016 of 2007 be confirmed. POINT FOR CONSIDERATION: 41. Having regard to the above contentions, the following point arises for consideration : “Whether the three orders passed by the Tribunal setting aside the awards of the Arbitrator and canceling the sale certificate MSR,J W.P.Nos.8910 of 2007 & batch 16 issued to the auction purchasers are liable to be interfered with in these Writ Petitions ?” CONSIDERATION BY THE COURT: 42. There is no dispute that the borrower availed cash credit loan of Rs.10 lakhs, Rs.15 lakhs and another Rs.15 lakhs on 01.06.2000 from the Bank under loan account Nos.CC375, 374 and 419.ARC.No.432/2001/J/1, ARC.No.431/2001/J/1 and ARC.No. 433/2001/J/1 are the three proceedings initiated by the Bank against the borrower and the surety Wahej Mirza for recovery of Rs.9,04,358, Rs.16,58,375 and Rs.20,22,784/- as on 30.09.2001 with interest at 24% per annum plus penal interest and other incidental charges till realization of the full loan amount. 43. The borrower attended the Court of the Arbitrator in person on 29.01.2002 accepting his liability for the cash credit availed by him without filing any counter disputing his liability, though he engaged an Advocate G. Hanumanth Reddy in the said proceedings. 44. It is not the case of the borrower in the CTA.No.86, 87 and 88 of 2002 filed under Section 76 of the Act before the Tribunal that he did not make any such admission of liability before the Arbitrator. The grounds of appeal in CTA.No.88 of 2002 filed by the borrower before the Tribunal against the order dt.30.03.2002 in ARC.No.431/2001/J/1 do not contain any such ground raised by him. MSR,J W.P.Nos.8910 of 2007 & batch 17 45. Ground no.(ii) therein states that adequate opportunity was not given to file written statement and ground (iii) states that ex parte award could not be passed without given any opportunity to him. 46. Both grounds raised by the borrower are not tenable. 47. As regards ground (ii), the arbitration awards themselves show that hearings took place before the Arbitrator on 13.12.2001, 10.01.2002, 21.01.2002, 29.01.2002, 12.02.2002, 28.02.2002, 05.03.2002, 11.03.2002, 19.03.2002 and 27.03.2002 and Award was passed on 30.03.2002. What prevented the borrower from filing a written statement on any of these dates of hearing is not mentioned anywhere by the borrower. 48. As regards ground (iii), having received summons, engaged counsel G.Hanumanth Reddy and having appeared in person and admitted liability before the Arbitrator in the three cases, the borrower cannot contend that the Awards are ex parte awards as far as he is concerned. 49. It is settled law that an admission is the best evidence that an opposing party can rely on, and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous. (see Narayan Bhagwantrao Vs. Gopal Vinayak8). In the present case, there is no nothing on record to show that the finding about admission 8 AIR 1960 S.C. 100 MSR,J W.P.Nos.8910 of 2007 & batch 18 of liability by the arbitrator was erroneous or that he withdrew the same before the arbitrator. 50. Only the surety Wahaj Mirza was entitled to raise both above pleas since he did not receive summons admittedly. 51. The decision in Nagubai Ammal and