THE HON’BLE SRI JUSTICE V. ESWARAIAH W.P.No.2070 of 2002 ORDER: The petitioner questions the order, dated 19-11-2001, passed by the A.P.Co-operative Tribunal, Vijayawada (for short “the Tribunal”) in O.A.No.121 of 1999, wherein the Tribunal dismissed the said O.A. filed by the petitioner confirming the Certificate issued by the 1st respondent, dated 25- 03-1998. It is the case of the petitioner that he being the member of the 2nd respondent Sri Rama Co-operative Building Society, Mamidikuduru Mandal, East Godavari District, availed loan for a sum of Rs.25,000/- under L.I.G.H. scheme on 03-10-1998, pursuant to the agreement, dated 02-08- 1988. The said loan is repayable in 15 instalments at Rs.1,667/- each under principal along with interest @ 12 ½% per annum. The petitioner repaid a sum of Rs.11,400/- on various dates. It is further stated that clause 6 of the agreement, dated 02-08-1998, reads as follows:- “The mortgaged property shall be insured through the agency of the Federation for an amount equivalent to the loan outstanding at the end of each year in the joint names of the Federation and the borrowing Society with General Insurance Corporation of India or any other agency nominated by the Housefed against the risk of fire, risk of riots, civil commotion and against the earthquake damage including fire damage caused thereby throughout the period of the mortgage in force. The insurance premium shall be paid to the Federation, which in turn remit to the agency concerned.” It is further stated that on account of cyclone occurred on 06-11- 1996, the house of the petitioner was damaged and crops in his lands were totally damaged. The said fact was also informed to the 2nd respondent. In fact, the Mandal Revenue Officer, Mamidikuduru Mandal, East Godavari District, had issued a Certificate, dated 21-07-1997 to that effect. But, the 2nd respondent did not take necessary steps for recovery of the claim from the Insurance Company. The petitioner also issued a legal notice, dated 25-07- 1999, to the 2nd respondent. But, the 2nd respondent failed to act on the said legal notice. Thereafter, pursuant to the application made by the 2nd respondent under Section 71 of the Andhra Pradesh Co-operative Societies Act, 1964 (for short “the Act”) for issuance of Certificate for a sum of Rs.59,652/- as arrears due as on 31-07-1997, the 1st respondent issued a notice, dated 21-02-1998, under Section 71(1) of the Act to the petitioner to show cause as to why the request of the 2nd respondent should not be granted. It is stated that pursuant to the said notice, dated 21-02-1998, the petitioner submitted a reply on 15-03-1998 stating that on account of cyclone occurred on 06-11-1996, the house of the petitioner was damaged and crops in his lands were totally damaged. It is stated that in spite of issuance of legal notice, dated 25-07-1999 to the 2nd respondent, the 2nd respondent has not taken any steps for recovery of claim from the Insurance Company. It is stated that payment of penal interest at Rs.14,885/- is abnormal. It is the primary duty of the Society and financing bank to claim loss and damages from the Insurance Company. In fact, the Government recognised the damages caused on account of cyclone and the same was published in the official gazette and granted 75% of the compensation to the farmers and the Co-operative Society Debts were re-scheduled and fresh loans were also granted. Accordingly, it is stated that the Federation has to give necessary instructions and directions to the 2nd respondent Society to pursue for the insurance claim on behalf of the petitioner. Therefore, the petitioner requested the 1st respondent not to issue any Certificate as demanded by the 2nd respondent. Without considering the said explanation, the 1st respondent on 25-03-1998 issued a Certificate under Section 71 (1) of the Act directing the petitioner to pay a sum of Rs.65,541/- along with interest at 16% per annum from 26-03-1998 till the date of payment. The said Certificate was questioned before the Tribunal in O.A.No.121 of 1999 and the Tribunal by its order, dated 19-10-2001, dismissed the O.A. Aggrieved thereby, the present writ petition is filed. I am of the opinion that the appellate authority cannot cure defect in the original order. In the instant case, the 1st respondent has not considered any of the contentions raised by the petitioner in his explanation and without conducting any enquiry issued the Certificate under Section 71(1) of the Act. When the constitutional validity of Section 71 of the Act has been questioned, a Division Bench of this Court in MADADI CHENNAKESAVA REDDY Vs. THE DIVISIONAL CO-OPERATIVE OFFICER, KARIMNAGAR[1] held that notice is inadequate to meet the requirement of principles of natural justice and while upholding validity of Section 71 of the Act held that before grant of Certificate under Section 71 of the Act, the principles of natural justice are required to be followed by conducting enquiry. Section 71 (1) of the Act reads as follows:- Notwithstanding anything in this Act or in any other law for the time being in force and without prejudice to any other mode of recovery which is being taken or may be taken, the Registrar may, (on the application made by a society or financing bank or federal society as the case may be, for the recovery of arrears of any sum advanced to any of its members and on furnishing a statement) of accounts in respect of the arrears and after making such inquiry as he deems fit issue a certificate for the recovery of the amount stated therein to be due as arrears.” Section 71 (1) of the Act contemplates making an enquiry when explanation has been submitted raising various contentions. In the instant case, no enquiry has been conducted and, therefore, it cannot be said that principles of natural justice have been followed while issuing Certificate under Section 71 of the Act. I am not inclined to express any opinion as to whether the petitioner is entitled for any damages from the Insurance Company on account of cyclone and whether the petitioner is entitled for re-schedule of the loan instalment on account of cyclone. But, while issuing Certificate under Section 71 of the Act, the 1st respondent is bound to conduct enquiry and, in the instant case, no such enquiry has been conducted and, therefore, I am of the opinion that the impugned order is liable to be set aside. Accordingly, the writ petition is allowed setting aside the impugned order and the matter is remitted to the 1st respondent to give reasonable opportunity to the petitioner and pass a reasoned order afresh in accordance with law. There shall be no order as to costs. __________ 19-08-2010 Prv [1] 1972 (2) APLJ 16