HON’BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.12071 of 2005 ORDER: This writ petition is filed seeking a direction by way of Mandamus to set aside the Certificate dated 2.9.2003 issued by the 2nd respondent under Section 71(1) of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’) and to declare the consequential notice dated 10.5.2005 issued in proceedings No.E.P.No.376/2003/OSD/VCUB, OD3 Uppal Branch, by the 2nd respondent as illegal and arbitrary. The 3rd respondent company has availed an overdraft facility of Rs.83.00 lakhs from the 1st respondent-Cooperative Urban Bank Ltd. The petitioner herein stood as surety to the said loan account. When the 3rd respondent failed to repay the same, the 1st respondent-bank has filed a claim for an amount of Rs.90,94,807/- on 28.2.2003 and for issuance of a Certificate under Section 71(1) of the Act. The 2nd respondent has issued the said Certificate on 2.9.2003 for recovery of an amount of Rs.94,19,493.51ps., from the loan account of the 3rd respondent. When the respondents were taking steps to enforce that order and issued proceedings for sale of the immovable property, by issuing notice under Rule 52 of the Rules, the petitioner approached this Court and filed the instant writ petition. It is the case of the petitioner that the 3rd respondent has already paid an amount of Rs. 90,66,000/- after issuance of the Certificate under Section 71 (1) of the Act, on different dates, as detailed below: 1. Rs. 2,50,000/- on 25.11.2003 2. Rs. 20,00,000/- on 22.12.2003 3. Rs. 52,50,000/- on 30.12.2003 4. Rs. 66,000/- on 04.02.2004 5. Rs. 15,00,000/- on 24.4.2004 It is further stated that the respondents have subsequently, modified the One Time Settlement Scheme (OTS) and issued letter to the third respondent on 28.1.2005 vide proceedings No. VCUB/2005/1217, by showing the crystalized amount of Rs.70,94,193.51ps., as per the said scheme. It is contended by the learned counsel for the petitioner that the One Time Settlement Scheme was not implemented as the same was suspended by this Court and subsequently the modified one time settlement was upheld by this Court. It is the grievance of the petitioner that when the third respondent has paid an amount of Rs. 90,66,000/- by the time the modified one time settlement scheme is notified, there is no reason or justification for the 2nd respondent not to extend the said benefit to the loan account of the third respondent. It is further submitted that by the time the modified one time settlement scheme is notified, the third respondent has already paid the crystalised amount of Rs. 70,94,193.51ps., and as such no further amounts are payable and hence the impugned sale notice issued by the 1st respondent-bank is unsustainable. Though the writ petition is of the year 2005, no counter affidavit has been filed by any of the respondents and none appeared on behalf of the respondents 1 and 3. Heard the learned counsel for the petitioner and perused the modified One Time Settlement Scheme dated 28.1.2005 issued vide letter No. VCUB/2005/1217 of the 1st respondent, which is addressed to the third respondent and also the material filed by the petitioner showing the way in which the third respondent has responded to the modified one time settlement scheme vide covering letter dated 14.2.2005. When the 2nd respondent has notified the modfiied One Time Settlement Scheme on 28.1.2005, the crystalised amount of the loan amount was shown as Rs.70,94,193.51 ps. and by that time, the 3rd respondent had already paid a sum of Rs. 90,66,000/-. Hence, there appears to be no justification or reason for not considering the application of the third respondent for extending the benefit of the said scheme. Whether the third respondent will be extended the benefit of modified One Time Settlement Scheme or not is a matter which requires consideration. But, once an application is filed, it has to be considered. Whether the claim of the third respondent will fit into the scheme or not is to be considered before taking further steps for sale of the properties belonging to the sureties. As it is stated that an amount of Rs. 90,66,000/- is already paid by the third respondent after issuing the Certificate under Section 71(1) of the Act and as it is stated that the third respondent has already applied for settlement of loan account under the modified One Time Settlement Scheme, in the absence of any counter affidavit, and in the absence of any counsel appearing for the third respondent, I deem it appropriate to dispose of the writ petition with a direction to the respondents to consider the application of the third respondent for modified One Time Settlement Scheme, if the same is still pending, and pass appropriate orders within a period of two months from today. Till the application of the third respondent for modified one time settlement is considered and decision is taken with regard to entitlement or otherwise of the third respondent for the said scheme, no further steps will be taken pursuant to sale notice dated 105.2005 issued in E.P. No. 76/2003 OSD/VCUB, OD 3, Uppal Branch. At the same time, I do not find any illegality to invalidate the Sale notice when a Certificate under Section 71(1) of the Act was issued against the third respondent. It is also made clear that after the disposal of the application filed by the third respondent for one Time Settlement Scheme is disposed of, it shall be open to respondent No.2 to take appropriate steps for recovery of the amounts, if any due from the third respondent in accordance with law. Subject to the above observations, the writ petition is disposed of. No costs. ____________________ R. SUBHASH REDDY,J Date: 3rd March, 2011 pnb