COMMON ORDER:

WRIT PETITIONS No. 10029 AND 13025 OF 2008 In Writ Petition No. 10029 of 2008, heard Sri M.

Venkata Divakar, learned counsel for petitioner, learned Government Pleader for Cooperation on behalf of the Tribunal, Sri G. Rama Sharma, learned counsel for the 1 st respondent, Sri R.V.Nagabhushanam Rao, learned counsel for the 4 th respondent. In Writ Petition No. 13025 of 2008, heard Sri R.V. Nagabhushanam Rao, learned counsel for petitioner, learned Government Pleader for Cooperation on behalf of the 1 st respondent and Sri M. Venkata Divakar, learned counsel for the 6 th respondent.

2. Both these Writ Petitions are preferred against the Judgment in O.P. No. 1038 of 2000 dated 18.02.2008 on the file of the A.P. Cooperative Tribunal at Hyderabad. Hence, with the consent of learned counsel for both the parties, these Writ Petitions are disposed of by this common order.

3. Parties are referred to as arrayed in O.P. No.1038 of

2000. Petitioner is Bank. Respondent No.1 is borrower, Respondents 2 to 7 are guarantors and Respondent No.8 is purchaser of the property in question.

4. Petitioner’s case is that Respondent Nos. 1 to 7 are members of petitioner Bank. They availed Over Draft facility to an extent of Rs. 30 lacs for business purpose with agreed rate of interest at 21% p.a. flexible with quarterly rests and penal interest at 2% p.a. on the overdue amount. The said amount was released by the Bank on execution of necessary documents by Respondents 2 to 7 on 10.04.1995 who stood as guarantors and executed guarantee agreements. Respondents 2 to 6 created equitable mortgage on 10.04.1995 on the schedule property in favour of the Bank. Respondent No.1 having utilized the overdraft in full, committed default. The bank got issued legal notice dated 02.05.2000, but in vain. Hence, subject O.P. was filed for recovery of Rs. 94,94,428/- with interest at 22% per annum compounded with quarterly rests and for costs.

5. Respondents 1 to 3 filed common counter in O.P. mainly contending that the 1 st respondent is a registered partnership firm under Partnership Act and not a member of petitioner-Bank, hence Section 37(1) of the AP Mutually Aided Cooperative Societies Act (for short, ‘the Act’) cannot be invoked. The OP is not maintainable due to inherent lack of jurisdiction to entertain the same without exhausting the remedies available u/Sec. 37(1). The respondents did not agree for the rate of interests claimed by petitioner-Bank. They filed additional counter inter alia claiming that after filing OP, they deposited/credited amount to the loan account as below: Amount . Date i) Rs. 4,24,421.00-04.08.2000 ii)

Rs. 75,00,000.00-28.12.2000 iii) Rs. 5,34,202.00-23.01.2001 Respondent Nos. 4 to 7 remained ex parte.

6. Respondent No. 8 filed counter contending that respondents 1 to 7 have not mortgaged the schedule property by way of deposit of title deeds. The guarantor agreement deed dated 10.04.1995 is neither acknowledgement of deposit of title deeds nor an agreement creating an equitable mortgage by depositing title deed within the meaning of the Transfer of Property Act. It is stated that the 8 th respondent is in no way concerned with the loan. He purchased the schedule property by registered sale deeds bearing Document Nos. 873 and 875, dated

28.03.2000;

Document Nos. 897 to 899, dated

30.03.2000; and Document Nos. 924 to 926, dated 31.03.2000 respectively. The 2 nd respondent requested one of the Directors of the 8 th respondent Firm that they required sale deeds for some purpose and took the same. Later he informed the latter that sale deeds are filed in the OP. This respondent contends that there is no equitable mortgage in favour of petitioner Bank created by Respondent Nos. 1 to 7.

7. After considering the evidence on