ANDHRA PRADESH CO OPERATIVE SOCIETIES HOUSING FEDERATION LTD Vs. SAPANA CO OPERATIVE HOUSING SOCIETY LTD

JUDGEMENT

(1.) THE writ petition is filed challenging the judgment passed by the Co-operative Tribunal. Hyderabad in CTA No. 269 of 2000 dated 2-7-2001.

(2.) THE facts, which are not in dispute are that the petitioner is Society which is involved in business of lending money to other societies. The 1 st respondent, a Co-operative housing Society, took loan of considerable amount to provide flats to its members. The properties of the 1 respondent have been mortgaged with the petitioner while obtaining the loans, phase-wise. Many of the flats have been constructed and distributed to its members. As per the agreement, the rate of interest is 14. 20% and 14. 30% per annum and as many as four different mortgage deeds were executed for different properties. At one point, the 1 respondent became defaulter. The petitioner initiated proceedings underthe provisions of the A. P. Co-operative Societies act, 1964 (for short 'the Act') and proceedings under Section 71 of the Act in order to recover, the loan amounts. The competent authority under Section 71 of the Act calculated the interest at a compounding rate. The first respondent has no dispute with regard to the amounts defaulted but disputed only the calculation of interest at the compounding rate. According to the 1 respondent, the rate of interest should be only as prescribed under the terms and conditions of the mortgage and they are entitled to a further slash in the rate of interest because of the pendency of the litigation for a considerable period. Since the competent authority under Section 71 of the Act did not accept the plea of the 1 respondent, permitted the petitioner to collect the dues with compounding rate of interest as claimed by the petitioner. The same has been challenged by the first respondent by way of an appeal before the Tribunal. The tribunal having gone into the matter and after appreciating the whole issue held that the petitioner-Society is entitled to calculate at 14. 20% to 14. 30% simple interest and also awarded future interest at the rate of 6% per annum from the date of certificate under section 71 (1) of the Act. Hence, the Writ petition.

(3.) IT is the specific contention of the petitioner that the Society being involved in banking business is entitled to recover the dues with compounding interest after recalling the dues if necessary as contemplated under the agreement.