Britto N.A., J.@mdashRule. By consent, heard forthwith.
2. This writ petition is directed against the order of the Co-operative Tribunal dated 7/4/2008, by which the application dated 20/6/2001 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 30/6/1997, 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 of Rs. 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 10/1/1998. The said application was allowed by the nominee but ah" 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 20/6/2001, 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 10/1/2002 which has now been reversed by the learned Co-operative Tribunal by the order impugned in this writ petition. The learned Assistant Registrar of Co-operative 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 30/9/1991 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 objections of the said sureties that they were not members of the Petitioner bank were clear from the records. The learned Tribunal also came to the conclusion that there was variance in the contract and that was clear from the agreement and other records and, moreover, the objections taken were on points of law and there was no substance in the arguments of the Petitioner and therefore proceeded to allow, the application and set aside the order of the Assistant Registrar dated 10/1/2002.
9. Shri Ramani, the learned Counsel appearing on behalf of the Petitioner submits that the learned Tribunal could not have passed the impugned order without the parties having led evidence in the dispute raised by them. Learned Counsel further submits referring to Section 44 of the Maharashtra Co-operative Societies Act, 1960, as applicable to the State of Goa, that Section 44 only deals with policy matters and otherwise there are no restrictions placed in giving loans to non members or non members standing as sureties. Learned Counsel further submits that whether two of the sureties were members or not could have been decided by the Assistant Registrar only after evidence was led and not otherwise. Learned Counsel submits that admittedly, Respondent No. 2, was a member of the Petitioner bank and under no circumstances he could have been discharged.
10. Shri Nigalye, the learned Counsel appearing on behalf of Respondents Nos. 1 to 3, submits that the order of the learned Co-operative Tribunal is just and proper. Learned Counsel submits that the documents produced clearly showed that there was variance in the terms of contract without the consent of the sureties when TELCO supplied a truck to the principal borrower of a different description than the one ordered. Shri Ramani submits that the order of the supply of the tipper truck was in fact placed by the principal borrower and the Petitioner was only to finance the order placed by the principal borrower.
11. In my view, the submissions made by the learned Counsel appearing on behalf of the Petitioner are correct and need to be accepted. The correct position in law has been indicated by the learned Assistant Registrar in para 6 of his order reproduced herein above. If the order was placed by the principal borrower for the supply of the truck and the company had supplied a defective truck or a truck of a different model, one fails to understand as to how the sureties could be discharged claiming that there was variance of the terms of contract but I must hasten to add that this controversy could be decided by the Nominee only after evidence was led by the parties and could not be decided on mere pleas taken by the sureties. Whether two of the sureties were members or not of the disputant bank was again an issue which was required to be decided in the inquiry or trial of the dispute. In case the Petitioners are not interested in leading evidence, is another matter, but they were certainly entitled to dispute the claims made by the Principal Borrower as well as by the sureties. As rightly pointed out by the learned Assistant Registrar, no issues were framed nor evidence produced. Whether the sureties stood discharged or not could be decided only after issues were framed and evidence was led. Without knowing what were the terms of the contract and how there was variance, the learned Co-operative Tribunal could not have come to the conclusion that there was variance in the terms of the contract. The dispute raised was essentially a civil dispute between the parties though the authorities to decide the same are different. A civil dispute had to be decided either by the manner prescribed or in the same manner, as far as possible, provided by the Code of Civil Procedure. The pleas taken by the sureties did not relate either with jurisdiction of the Registrar nor to a bar created by any other law in force. Not only issues were not framed, but issues to be framed could not have been decided as preliminary issues. Therefore, issues were required to be framed and then decided on basis of evidence produced by the parties. Both the issues decided by the Co-operative Tribunal cannot be said to be purely of law to be decided without leading evidence.
12. In the light of the above, this writ petition deserves to succeed. The impugned order of the Co-operative Tribunal is hereby set aside and the parties are remitted to the learned Assistant Registrar of Co-operative Societies, who shall frame the issues and decide the controversy involved in the dispute after giving an opportunity to the parties to lead evidence. Rule made absolute in terms of prayer (a) of the petition with no order as to costs.
