Section 61 of the AP Cooperative Societies Act, 1964 (for short, 'the Act')= As the borrower committed default in payment of the loan to the Bank, the Bank filed ARC.No.21 of 2000 against the borrower and the guarantor of his loan for recovery of Rs.22,73,848/- with interest from 01-01-2000 thereon under Section 61 of the AP Cooperative Societies Act, 1964 (for short, 'the Act') before the Divisional Cooperative Officer, Golconda Division/Arbitrator (for short, 'the arbitrator') for recovery of the outstanding loan. = Attachment before judgment in proceedings under the Act are governed by Section 73 of the Act r/w Rule 54 of the Rules framed under the Act. Section 73 of the Act states as follows : "73. Attachment of property before decision or order : - If the Registrar is satisfied on application, report, inquiry or otherwise that any person with intent to delay or obstruct the enforcement of any decision or order that may be made against him under the provisions of this Act, -- (a) is about to dispose of the whole or any part of his property; or (b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, the arbitrator or liquidator, as the case may be, he may unless adequate security is furnished direct the attachment of the said property, and such attachment shall have the same effect as if made by a competent Civil Court." Rule 54 states : "54. Mode of making attachment before judgment under Section 73 of the Act : - (1) Every attachment of property directed under Section 73 of the Act shall be made in the same manner as provided in Rule 52. (2) Where a claim is preferred to property attached under sub-rule (1), such claim shall be investigated in the manner and by the authority specified in Rule 52. (3) A direction made for the attachment of any property under Section 73, may be withdrawn by the Registrar of the district - (a) when the party concerned furnishes the security required, together with security for the costs of the attachment; or (b) when the liquidator determines under clause (c) of sub-section (1) of Section 66 of the Act that no contribution is payable by the party concerned; or (c) when the Registrar passes an order under sub-section (1) of Section 60 of the Act that the party concerned need not repay or restore any money or property or any part thereof with interest or contribute any sum to the assets of the society by way of compensation; or (d) when the dispute referred to in sub-section (1) of Section 61 of the Act has been decided against the party at whose instance the attachment was made. (4) Any attachment made under sub-rule (1) shall not effect the rights existing prior to the attachment, of persons not parties to the proceedings in connection with which the attachment was made, nor bar any person holding a decree against the person whose property is attached from applying for the sale of the property under attachment in execution of such decree. (5) Where the property is under attachment by virtue of the provisions of this rule and a decree is subsequently passed against the person whose property is attached, it shall not be necessary upon an application for execution of such decree to apply for reattachment of the property." 28. Rule 52 deals with procedure in execution of decrees, decisions or orders and sub Rule 21 (a) thereof deals with claims preferred/objections made to attachment of property made under sub Rule 11 after decree/decision/order. Rule 52 (21) (a) states: "(21) (a) Where any claim is preferred or any objection is made to the attachment of any property under this rule on the ground that such property is not liable to such attachment, the officer shall investigate the claim or objection and dispose it of on the merits." 29. A reading of the above provisions indicates that claim petitions to raise attachment before award are governed by Rule 54 and claim petitions to raise attachments after award are governed by Rule 52 (21) (a) of the Rules. Although sub-Rule (2) of Rule 54 states that a claim petition to raise attachment before award is to be investigated in the manner and by the authority specified in Rule 52, sub Rule (3) of Rule 54 specifies in what circumstances an attachment of property made before award/judgment under Section 73 may be withdrawn. Only in the circumstances mentioned in Clauses (a) to (d) of sub Rule (3) of Rule 54, attachment made before judgment may be withdrawn. In view of this, when an application to raise attachment before judgment is made under Rule 54 by a third party to an arbitration under Section 61 objecting to such attachment, it cannot be decided on merits as if it was an attachment after judgment applying sub Rule (21) (a) of Rule 52. In view of sub Rule (2) of Rule 54, only the manner of investigation into the claim can be done as specified in Rule 52 but the disposal of the claim to raise attachment before judgment can only be done as per sub Rule (3) of Rule 54. 30. But a perusal of the order dt.28-07-2004 in claim petition No.1/2001 in A.R.C.No.21 of 2000 indicates that the Arbitrator, without noticing the provisions of Rule 54 (3), followed Rule 52 (21) (a) and adjudicated the claim petition on merits instead of considering whether or not the attachment before judgment can be raised as per Clauses (a) to (d) of Rule 54 (3). The Arbitrator appears to have been swayed by the fact that the agreement of sale is prior in point of time to the mortgage in favour of the Bank and so it would prevail over the same. In taking such a view, the arbitrator went into the following issues: The parties have also stated that the agreement holders have filed O.S.No.9 of 2003 before the II Additional Chief Judge, City Civil Courts, Hyderabad for specific performance of the agreement of sale dt.28-02-1998 against the borrower and they have also impleaded the Bank therein and the said suit is pending.= (i) whether the agreement of sale dt.28-02-1998 in favour of the agreement holders is true and valid, (ii) whether any consideration was paid to the borrower by them, (iii) whether the agreement holders were in lawful possession of the property and (iv) whether the claim petition is maintainable in view of the provisions of the Transfer of Property Act, 1882. 31. In my opinion, considering the language of Rule 54, it was impermissible for the Arbitrator to have gone into issues (i) to (iii) and these issues could only be decided in O.S.No.9 of 2003 where the claim for specific performance of the agreement of sale dt.28-02-1998 made by the agreement holders against the borrower is being decided. It was also not permissible for the Arbitrator to go into issue (iv) as that issue could have been gone into only if it was a case of attachment after judgment to which Rule 52 (21) (a) applies.= This is because at present there is only attachment before judgment under Section 73 of the Act r/w Rule 54 (1) and as per sub Rule (4) of Rule 54, such attachment will not affect the rights existing prior to attachment, of persons not parties to the proceedings in connection with which the attachment was made, nor bar any person holding a decree against the person whose property is attached from applying for sale of the property under attachment in execution of such decree. Therefore it is clear that the order dt.11-05-2000 passed by the Arbitrator in A.R.C.No.21 of 2000 does not affect the rights of the agreement holders who are claiming interest in the property under the alleged agreement of sale dt.28-02-1998. = Both the arbitrator and the tribunal have not taken note of Rule 54(4) of the above Rules. Moreover, the agreement holders are admittedly strangers to the loan transaction between the Bank and the borrower. So in a proceeding between the borrower and the Bank initiated under S.61 of the Act, such persons are not proper or necessary parties merely because they claim to have an interest in the property mortgaged by the borrower to the Bank. Rule 54(4) clearly protects the interest of the agreement holders. Thus their orders are vitiated by error apparent on face of record. So W.P.No.13216/2009 is also allowed and the order dt.25.4.2008 in CTA No.66/2007 of the Tribunal confirming the order dt.24.3.2007 in I.A.No.5/2006 in ARC No.21/2000 of the arbitrator is set aside. 34. Accordingly, W.P.No.21151 of 2008, W.P.No.23718 of 2008 and W.P.13216/2009 are allowed. No costs.