JUDGMENT:- Rule By consent, heart forthwith.

2. This Writ Petition is directed against the order of the Co-operative Tribunal dated 7/04/2008, by which the application dated 20/06/2001 filed by respondents nos. 1 to 3 has been allowed and they have been discharged as sureties.

3. Some undisputed facts may be stated to dispose of this Writ Petition.

4. The petitioner herein had advanced two loans in the sum of Rs.3,47,000/- to respondent no.4 as principal borrower with respondents nos. 1 to 3 standing as sureties for repayment of the said loan.

5. The respondents shall hereinafter be referred to as principal borrower and sureties, respectively. The said loan was advanced to enable the principal borrower to purchase a Tata Tipper Truck. The principal borrower/sureties did pay some amount towards the said loan, but as on 30/06/1997, an amount of Rs.2,30,952/- was due and payable with interest at 18% and, as such, the petitioner raised a dispute before the Registrar of the Co-operative Societies and the same was referred to the nominee for decision. The principal borrower and the sureties filed their reply and in the said reply they contended that the tipper truck which was supplied was of a different description and, as such, there was variance of contract and therefore the sureties were liable to be discharged. Two of the sureties also took the plea that they were not members of the petitioner bank and as such the nominee had no jurisdiction. They also took the plea that because there was variance of contract they were not required to pay more than the principal amount.

6. The principal borrower having found that TELCO had supplied a defective truck raised a consumer dispute for compensation and ultimately he was awarded compensation in the sum of Rs.5,56,680/- to be paid by TELCO. The said amount was directly sent to the petitioner bank as the said truck was hypothecated to them. The petitioner bank therefore adjusted a sum ofRs.3,03,444/- towards the balance in the loan account and the remaining balance was credited to the private savings account of the Principal Borrower.

7. After having found that the loan was repaid and there was no amount due towards the loan, the petitioner bank filed an application to withdraw the application filed, raising the dispute. This was on 10/ 01/1998. The said application was allowed by the nominee but an appeal having been filed by the Principal Borrower to the Co-operative Tribunal, the same was allowed, and as a result of which the dispute was kept alive. Then the sureties filed the said application dated 20/06/2001, inter alia, praying that the sureties be discharged; that they were entitled to receive back the loan amount with 18% interest; to credit the amount of TELCO'-s cheque back to the saving account of the principal borrower. The said application came to be rejected by the learned Assistant Registrar by his order dated 10/01/2002 which has now been reversed by the learned Co-operative Tribunal by the order impugned in this Writ Petition. The learned Assistant Registrar of Cooperative Societies in rejecting the said application, in para 6 had stated as follows:

"6. The issues in the case are yet to be settled and if at all the Opponents Nos.2, 3 and 4 are entitled to be discharged, in my opinion the same was to be decided on merits of the case and it could not be decided by merely filing an application. As rightly submitted by the Disputant Bank, appropriate issues would have to be framed in the matter taking into consideration the pleadings of the parties. Whether the Opponents are entitled to be discharged for not being members of the Disputant Bank or whether they are entitled to be discharged by virtue of any alleged violation of the agreement dated 30/09/1991 is only to be decided on merits of the case after appreciating the pleadings and the Disputant Bank is given opportunity to adduce evidence in the matter."

8. The learned Co-operative Tribunal came to the conclusion that the object

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