ORDER
P.S. Narayana, J.
1. This Court ordered notice before admission on 22-6-2009 and made the following interim order:
The proceedings as scheduled may go on. However, no final orders shall be passed.
2. 1st respondent filed counter affidavit.
3. Sri Y. Krishna Mohan Rao, learned Counsel representing writ petitioner had taken this Court through the contents of the affidavit filed in support of the writ petition and the stand taken in the Counter affidavit and would maintain that the 1st respondent never move any appropriate application for reopening the matter. However, the Co-operative Tribunal, Hyderabad ( herein after referred to as 'The Tribunal' for the purpose of convenience) had exercised suo-motu power in the light of the decision of the Apex Court in State Bank of India and Ors. v. Jaspal Kaur 2007(3)SCJ 448 and this approach adopted by the Tribunal being illegal and without jurisdiction and the same is liable to be set aside. Learned Counsel also placed strong reliance on certain decisions to substantiate his submissions.
4. Sri Anand Rao, learned standing counsel representing 1st respondent would maintain that this is a case where the Tribunal without any application whatsoever in the light of the decision of Full Bench of this Court thought of closing the matter and subsequent thereof in the light of the decision of the Apex Court, had exercised the discretion by recalling the said order and reopened the same, so that the matter may be decided on merits. The counsel also would maintain that in the light of the reasons recorded by the Tribunal below the order under challenge cannot be found fault. At any rate this is not a fit matter to be interfered with by this Court under Article 226 of the Constitution of India by issuing a writ of certiorari.
5. Learned Government Pleader for Co-operation would maintain that in the light of the facts and circumstances, since no prejudice is caused to the petitioner, the petitioner may raise all these grounds before the Tribunal and contest the matter. Learned Counsel would also maintain that in the peculiar fact situation, it cannot be said that the Tribunal has no jurisdiction at all to pass such an order. Even otherwise, at the best, this may be an irregularity and not an illegality touching the very jurisdiction of the Tribunal and hence, it is not a fit matter to be interfered with while exercising power under Article 226 of the Constitution of India.
6. This writ petition is filed praying for the issuance of the writ of certiorari calling for the records from the Tribunal, pertaining to appeal proceedings in C.T.A. No. 215/2004, dated 16-7-2007, consequently to declare that the order in I.A. No. 591 of 2008 dated 16-1-2009 as bad in law and quash the same declaring as null and void and pass such other suitable orders.
7. The petitioner preferred the appeal before the Tribunal, Hyderabad in C.T.A. No. 215 of 2004 as against the Award made by Respondent No. 3 in ARC No. 819 of 2000, dated 12-5-2004, when the appeal was pending before the Tribunal taking into consideration the decision of this Court in W.A. No. 1754 of 2004 in (M. Babu Rao and Ors. v. The DR/OSD, Vasavi Coop Bank Ltd and Ors. the impugned award/certificate issued in ARC No. 819 of 2000, dated 12-5- 20004 deemed to have been set aside, that any award or order passed, certificate issued or an order in execution proceedings, by the Registrar on any claim or application of a Cooperative Bank, is patently and inherently without jurisdiction, null, void and in operative. Hence, the appeal was disposed of.
8. 1st Respondent did not prefer an appeal or writ and thus the order made by the Tribunal had attained finality. It is also stated that the petitioner was under the impression that the proceedings came to an end in view of the setting aside of the Award made by the 3rd Respondent, but surprisingly, the petitioner received notice from the counsel of Respondent No. 1 intimating the petitioner, the appeal preferred by him posted for hearing before the Cooperative Tribunal on 9-5-2008.
9. On enquiry, the petitioner came to know that the Tribunal suo-motu exercising the power reopened the appeal by its order dated 16-7-2007 by recording the reasons as follows:
In view of the decision of the full bench of the Hon'ble High Court of A.P. In W.A. No. 1754/2004 M. Babu Rao and Ors. v. The DR/OSD, Vasavi Coop. Bank Ltd., and Ors. dated 5-7-2005 : 2005 (4) ALT (FB) P. 327, that the Arbitrators a well as the Tribunals have no jurisdiction to entertain the disputes relating to the Coop. Banks doing Banking business, this appeal was closed suo-motu on29-8-2005. Now in view of the law laid down by the Hon'ble Supreme Court of India in Greater Bombay Cop. Bank Ltd., v. United Yarntex P. Ltd. and Ors. Civil Appeal No. 432 of 2004 and batch reported in 2007 (3) SCJ 415, that the Coop. Banks established under A.P.C.S. Act, 1964, transacting the business of Banking do not fall within the meaning of Bank Company as defined in Section 5(c) of the Banking Regulation Act, 1949, the order of closing the appeal is suo-motu set aside and the appeal is restored to file. Issue notice to both the parties. Call on 30-7-2007.
10. It is stated that the Tribunal was under the impression that the proceedings were closed, but in fact, the Award of the Arbitrator was set aside and the appeal was disposed of on 5-7-2005. After disposal of the appeal, the Tribunal has became functus officio and had no jurisdiction to reopen the appeal suo motu. The counsel filed application to set aside the order of the reopening by mentioning all the reasons the said I.A. No. 591 of 2008 was dismissed by the Tribunal by its order dated 16-1-2009 on the ground that the appeal was not disposed of on merits. Aggrieved by the same, the present writ petition had been filed.
11. In the counter affidavit filed by the 1st respondent, it is stated that the Respondent Bank sanctioned the term loan of Rs. 5 lakhs to one M/s V.J. A/c Systems Rep. by its Partners Respondents No. 4 to 6 herein on 2-6-1997. The said term loan is to be repayable in 60 monthly instalments at Rs. 14,400/- per month with quarterly rests @ 21% per annum. The above said loan had been released by the respondent Bank after due execution of necessary documents in favour of the Respondent Bank including D.P. Note and Memorandum of deposit of title deeds. The respondents No. 4 to 6 are the parties to the said loan transaction.
12. It is also stated that the petitioner mortgaged his own house property bearing H. No. (old) 3-51 and New No. 3-10-61 admeasuring 500 sq. Yards, situate at Lingojiguda, Saroornagar, Hyderabad vide Sale Deed Document No. 8780/1981, dated 29-11-1981, and deposited his original title deeds of the above said property as collateral security for the loan availed by the Respondents 4 to 6 on 24-5-1997. When the borrowers failed to repay the loan dues which fell overdue, the respondent Bank filed arbitration case Vide A.R.C. No. 819/2000-J1 before the Deputy Registrar/O.S.D. and obtained award by order dated 13-01-2000 for Rs. 8,14,479-15 together with interest 21% per annum with costs till the date of realisation of the entire dues jointly and severally from the borrowers i.e. respondents 4 to 6.
13. It is also stated that petitioner preferred an appeal before the 9th Respondent vide C.T.A. No. 215 of 2004. It is also true that pending adjudication of the said appeal this Court in W.A. No. 1754 of 2004 in the matter of M. Babu Rao and Ors. v. Dy. Registrar/OSD of the Respondent Bank and Ors. declared that the Registrar/DR/OSD had no jurisdiction to entertain the disputes under Section 61 and 71 of the APCS Act, 1964. In view of the above judgment, the appeal in CTA No. 215/2004 was closed by the 9th Respondent herein on 29-8-2005 to this effect the 9th respondent served notices to all the parties through their counsel appearing on behalf of petitioners and respondent Bank. Having aggrieved by the judgment of this Court SLPs were filed before the Supreme Court.
14. The Apex Court by order dated 4-4-2007 was pleased to set aside this Court order on 4th April, 2005 in Greater Bombay Coop. Bank v. United Yarn Text. Pvt. Ltd. Civil Appeal No. 432/2004 and batch cases and held that business of banking do not fall within the meaning of Banking Company as defined in the B.R. Act, 1945 considering the Apex Court judgment, the C.T.A.215 of 2004 was reopened and notices were served to both parties and ordered its restoration. It is also stated that challenging the restoration of the said appeal as suo motu by the 9th Respondent, the petitioner filed I.A. No. 591 of 2008 in C.T.A. No. 215 of 2004 and the same was dismissed by order dated 16-1-2009 by the 9th Respondent, wherein the reasons had been recorded. It is also further stated that there is no illegality or irregularity in restoring the closed appeal C.T.A. No. 215 of 2004 In fact, 9th Respondent had rightly conducted itself in consonance with legal principles and reopened the closed matter suo-motu and issued notices to both the parties in the said appeal.
15. As such it is very clear that the intention of the petitioner of filing the above writ petition is only to delay and drag on the recovery process from time to time. The writ petitioner is equally responsible and liable par with the principal borrowers to repay the due loan amount of Rs. 25,00,000/- as on today as the award was passed on12-5-2004 and there is a repayment of only Rs. 20,105/- from the date of availment of loan. As such, this respondent bank has no other alternative remedy to realise the dues except to put the mortgaged property for sale.
16. Further the following grounds had been specified in the counter affidavit:
1. The C.T.A. No. 215/2004 was not disposed of on merits.
2. The order was not passed on any findings of facts.
3. As such, the facts are left open for the consideration by Appellate Tribunal. Even if any matter is dismissed for default, the same court can restore and in such cases there is no estoppel or resjudicata.
4. The Court which has power to decide on an application can also well decide the same by suo-motu power without any application being filed to meet the ends of justice. Even if any judgment is pronounced by error of law the same can be rectified by the same Court on being realised that there is an error of law.
5. It may not be out of place to mention here that, there is no change in law and the Apex Court was pleased to take the final view on interpretation of statute. Therefore, unless there is a change in law the jurisdiction remains the same. Therefore, the learned Judge has ample power suo-motu to reopen the case even though it was disposed of. In this regard it is submitted that the point of jurisdiction was subject to challenge for a limited period and in view of the Apex Court judgment the jurisdiction remains the same and there is no amendment of any law. It is only an interpretation of statute and there is no amendment of law. As such, the order passed by the learned 9th respondent is in accordance with law.
17. In Greater Bombay Co-op Bank's case, cited supra the Apex Court at paras 69 and 70 observed:
For the reasons stated above and adopting pervasive and meaningful interpretation of the provisions of the relevant statues and entries 43,44 and 45 of List I and Entry 32 of List II of the Seventh Schedule of the Constitution we answer the Reference as under:
Co-operative banks established under the Maharashtra Co-operative Societies Act, 1960 (MCS Act, 1960) the Andhra Pradesh Co-operative Societies act, 1964 (APCS Act, 1964) and the Multi-State Cooperative Societies Act, 2002 (MSCS Act, 2002) transacting the business of banking, do not fall within the meaning of 'banking company' as defined in Section 5(c) of the Banking Regulation act, 1949 (BR Act) . Therefore, the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, 1993 (RDB Act) by invoking the doctrine of Incorporation are not applicable to the recovery of dues by the Cooperatives from their members.
The field of cooperative societies cannot be said to have been covered by the Central Legislation by reference to Entry 45, List 1 of the Seventh Schedule of the Constitution. Co-operative Banks constituted under the Co-operative Societies Acts enacted by the respective States would be covered by Co-operative societies by Entry 32 of List II of Seventh Schedule of the Constitution of India.
Strong reliance has been placed on the decision of the Division Bench of this Court in P. Satayanarayana v. The Land Reforms Tribunal : AIR 1980 Andhra Pradesh 149 wherein the Division Bench observed that the Court or Tribunal cannot review its own order or judgment unless there is statutory provision to that effect, but Court or Tribunal has inherent powers to recall orders obtained by practising fraud or misrepresentation on it.
Reliance also placed on the decision of this Court in W.P. No. 13693 of 2007 ( Vasavi Cooperative Urban Bank Ltd. v. Star Function Palace, rep. by its Proprietor Sri Omeshwar Baldawa and Ors.) wherein learned Judged of this Court by order dated 5-7-2007 observed:
C.T.A. No. 212 of 2003 , preferred by respondents 1 to 6, was not disposed of on merits, but was allowed, on the sole ground that the award passed in favour of the petitioner cannot be sustained, in view of the judgment rendered by a Full Bench of this Court. It is no doubt true that the judgment rendered by the Full Bench has since been revered by the Supreme Court. That by itself does not revive the award. As a formality, the award ought to have been restored, duly setting aside the order dated 30-8-2005, passed in C.T.A. No. 212 of 2003. The result thereof, would have been that C.T.A. No. 212 of 2003 is restored. The legal position, referred to above, is not disputed by the learned Counsel for the parties.
Hence, the writ petition is allowed, and the order dated 30-8-2005, passed in C.T.A. No. 212 of 2003,is set aside. As a result, C.T.A.No212 of 2003 shall stand restored to the file of the A.P.Co-operative Tribunal at Hyderabad, and it shall be disposed of, on its own merits.
In view of this development, C.T.A. No. 47 of 2007 would become infructuous, and the Tribunal shall close it accordingly. The Tribunal shall take up C.T.A. No. 212 of 2003, or any Miscellaneous Petition filed in it, to pass any interim orders, in the light of the steps taken by the petitioner to put the mortgaged property to sale.
In Sangram Singh v. Election Tribunal Kotah : AIR 1955 Supreme Court 425 the Apex Court while following : AIR 1955 SC 233 observed.
Certiorari will be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction as when it decides without giving an opportunity tot he parties to be heard, or violates the principles of natural justice. Strong reliance was placed on M.S. Grewal v. Deep Chand Sood : AIR 2001 Supreme Court 3660 In Sri Budhia Swain v. Gopinath 1999 (5) Supreme 49, while dealing with an order and when such power to be exercised, the Apex Court observed at paras 7 to 9 as follows:
In Corpus Juris Secundum ( Vol. XIX ) under the Chapter 'Judgment Opening and Vacating' (paras 625 to 284 at pages 487-510) the law on the subject has been stated. The grounds on which the courts may open or vacate their judgments are generally matters which render the judgment void or which are specified in statutes authorising such actions. Invalidity of the judgment of such nature has to render it void is a valid ground for vacating at least if the invalidity is apparent on the face of record. For fraud or collusion in obtaining a judgment is a sufficient ground for opening or vacating it. A judgment secured in violation of an agreement not to enter judgment may be vacated on that ground. However, in general, a judgment will not be open or vacated on grounds which have been pleaded in the original action. A motion to vacate will not be enter when the proper remedy is by some other proceedings, such as by appeal. The right to vacation of the judgment may be lost by waiver or estoppel. Where a party injured acquiescence in the rendition of the judgment or submits to it, waiver or estoppel results.
In our opinion a tribunal or a Court may recall an order earlier made by it if
(i) the proceedings culminating into an order suffer from inherent lack of jurisdiction and such lack of jurisdiction is patent.
(ii)There exists fraud or collusion in obtaining the judgment.
(iii) There has been a mistake of the Court prejudicing a party or
(iv) A judgment was rendered in ignorance of the fact that a necessary party had not been served at all or died and the State was not represented. The power to recall a judgment will not be exercised when the ground for reopening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceedings such as by way of appeal or revision was available, but was not availed. The right to seek vacation of the judgment may be lost by waiver, estoppel or acquiescence.
A distinction has to be drawn between lack of jurisdiction and a mere error in exercise of jurisdiction. The former strikes at the very root of the exercise and want of jurisdiction may vitiate the proceedings rendering them and the orders passed therein in nullity. A mere error in exercise of jurisdiction does not vitiate the legality and validity of the proceedings and the order passed thereon unless set aside in the manner known to law by laying a challenge subject to the law of limitation. In Hira Lal Patni v. Sri Kali Nath it was held:...The validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seisin of the case because the subject matter was wholly foreign to its jurisdiction or that the defendant was dead at the time of suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it.
18. This Court is not inclined to express any opinion relating to the factual controversy between the parties. The reasons recorded in the impugned order under challenge being self explanatory, need not be discussed in elaboration. It may be true that the 1st respondent had not initiated any action. It is pertinent to note that initially in the light of the decision of the Full Bench and the ratio laid down in the said Full Bench Judgment, suo-motu power had been exercised by the Tribunal and subsequent thereto after noticing ratio laid down by the Apex Court aforesaid supra, the Tribunal was of the opinion that such suo-moto power to be exercised.
19. While exercising such inherent powers, recalling the order, in the light of the peculiar fact situation, at the best this may be an irregularity, definitely not an illegality, touching the very jurisdiction of the Tribunal.
20. This Court is satisfied that the Tribunal exercised such power in the peculiar facts and circumstances on justifiable reasons. Hence, this Court is not inclined to interfere with the order under challenge.
21. Accordingly, the writ petition is hereby dismissed. No order as to costs.