IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY FIRST DAY OF OCTOBER TWO THOUSAND AND NINE PRESENT: THE HON'BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.1873 of 2007 Between: Sabbineni Satyanarayana Prasad ..... PETITIONER AND The Secretary, Ullipalem Milk Producers Mutually Aided Cooperative Society Limited, Ullipalem, NagaramMandal, Guntur District and two others .....RESPONDENTS ORDER: Heard Sri B. Nalin Kumar, learned counsel representing the writ petitioner and the learned Government Pleader for Co- operation and Sri P. Prabhakar Rao, learned counsel representing the respondents. 2. Sri B. Nalin Kumar, the learned counsel representing the writ petitioner had pointed out to the findings recorded by the A.P. Cooperative Tribunal at Vijayawada (hereinafter referred in short as ‘Tribunal’ for the purpose of convenience) and would maintain that having recorded positive findings on all aspects on the ground that at another remedy is provided for by the bye-laws the relief had been negatived. The counsel also would maintain that the said bye-laws are not applicable to the facts of the case at all and on erroneous ground the relief had been negatived and hence, the writ petition is allowed. 3. The learned counsel representing the respondents however, had taken this court through the order under challenge and would maintain that in the light of the findings recorded by the Tribunal it is not the fit matter to be interfered with and hence, the writ petition is dismissed. 4. Heard the counsel. 5. The writ petition is filed praying for the relief of writ of Certiorari or other appropriate order or direction in the nature of a writ calling for the records resulting in the order dated 19-12-2005 in O.P.No.5 of 2002 on the file of A.P. Cooperative Tribunal, Vijayawada, Krishna district and set aside the same as illegal and arbitrary and consequently direct decree the said O.P.No.5 of 2002 as prayed for in the interest of justice and pass such other suitable orders. 6. It is the case of the petitioner that the Ullipalem Milk Producers Mutually Aided Cooperative Society Limited was founded in the year 1988 vide registration No.1988/DD. It is also stated that the said society was founded to meet the objectives stipulated by the bye-laws of the said society. The petitioner was the President of the Ullipalem Milk Producers Mutually Aided Cooperative Society Limited (hereinafter in short referred as ‘Society’ for the purpose of convenience) for the period between 1992 to January, 1995. It is also the case of the writ petitioner that on 12-08-1992 the Executive Committee of the said society passed a resolution for construction of its own building at a cost of Rs.1,20,836/- from the general funds of the society. The said resolution and the translated version are placed before this court. In the said meeting it was resolved to request the Special Cadre Deputy Registrar (Cooperative Society), A.P. Dairy Development Federation for grant of permission for construction of building for the society. In the said meeting the petitioner agreed to advance the deficit amount for construction of building as the construction of the building requires Rs.1,20,836/- whereas the financial report of the said society disclosed only a balance of Rs.87,003.43 Ps. 7. It is also the case of the writ petitioner that on 29-08-1992 the members of the society held General Body Meeting and resolved to construct a building by incurring an amount of Rs.1,20,836/- from the General Funds of the society and the copy of the said resolution and the translated version also are placed before this court. 8. Further it is stated that in the said meeting it was also resolved to request the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Cooperative Federation Limited, Hyderabad to grant permission to incur the expenditure of Rs.1,20,836/- for construction of the building from General Fund of the society. On 03-12-1993 the Guntur District Milk Producers Cooperative Union, Hyderabad also addressed a letter dated 03-12-1993 to the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Cooperative Federation Limited to accord permission to the society under Rule 39 (i)(b) of A.P. Cooperative Society Rules to invest from the general fund a sum of Rs.1,20,836/- for construction of building. A copy of the letter dated 03-12-1993 is placed before this court. 9. It is also the case of the writ petitioner that the petitioner advanced a sum of Rs.31,743.16 Ps. to the society for construction of building and the said advance amount given by him is also reflected in the audited accounts of the society for the year 1994-95 and1995-96. The society having received the said advance amount of Rs.31,743.16 Ps. from the petitioner failed to refund the same and as such the petitioner addressed a letter to the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Federation Limited, Hyderabad bringing to their notice the said fact and to direct the society to refund the amount to him. A copy of the said letter also is placed before this court. 10. It is also stated that pursuant to the said letter the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Federation Limited, Hyderabad addressed a letter dated 18-04-1998 bearing reference No.572/98/P2, directing him to refund the amount of Rs.31,743.16 Ps. to the petitioner provided the said amount is still outstanding as per the latest audit report for the year 1996-97 or 1997-98. A copy of the said letter is also placed before this court. It is also stated that subsequently the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Federation Limited also addressed another reminder dated 22-09-1998 to the second respondent directing him to implement the orders issued by him vide letter dated 18-04-1998. A copy of the said letter also is placed before this court. 11. It is further stated that subsequently on 18-12-1998 the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Federation Limited, Hyderabad directed the second respondent to implement the orders issued by him on 18- 04-1998 immediately and report compliance. A copy of the said letter is also placed before this court. The working committee of the society addressed a letter to the Senior Manager, Sangam Dairy that they have no objection for refund of the advance amount to the petitioner as per the audit report and as per the orders of the Special Cadre Deputy Registrar of Cooperative Societies, A.P. Dairy Development Federation Limited, Hyderabad. The said letter also is placed before this court. 12. It is also stated that the petitioner also addressed a letter dated 13-01-1999 to the second respondent society calling upon him to refund the amount advanced by him failing which he would initiate appropriate action for refund of the same and also claim interest and other expenses. The said letter also is placed before this court. The petitioner also addressed another reminder dated 02-02-1999 for refund of advance amount to the second respondent. The said letter also is placed before this court. 13. In the said circumstances the petitioner filed O.P.No.5 of 2002 on the file of the Tribunal against respondents 1 and 2 for recovery of an amount of Rs.62,216/- together with interest and costs while claiming interest for the days of delay. After enquiry the Tribunal held all the issues in favour of the petitioner holding that the petitioner is entitled to recover an amount of Rs.62,216/- together with interest and that the claim made by the petitioner is within time but however dismissed the same on the ground that the petitioner failed to exhaust the remedy available to him under the bye-laws of the respondent society under Section 37 (1) of Mutually Aided Cooperative Society Act, 1995 (hereinafter in short referred as ‘the Act’ for the purpose of convenience). 14. It is also the case of the petitioner that the Tribunal-third respondent dismissed the O.P. filed by him purportedly under an impression that the petitioner did not approach the arbitration committee before invoking its jurisdiction. The said findings recorded that without exhausting the remedies available under the bye-laws of the society the petitioner cannot invoke the jurisdiction under Section 37 (i)(c) of the Act aforesaid is erroneous. 15. It is also stated that Clause 16 (c) of the bye-laws of the first respondent society reads as follows: “Any member can conduct the middle level committee appointed under this sub rule to the immediate settlement of any dispute between the members of the society or between the members of the working committee, or, or the working committee members or any matter related with the working committee, such committee shall initiate the required action for quick settlement of such dispute. The concerned party may bring the issue with the cooperative Tribunal for its subsequent decision and even for deciding to do so they shall be bound over with the decision of the committee till the judgment is delivered by the Tribunal”. A copy of the extract of bye-law 16 also had been placed before this court. 16. Section 37 of the Act reads as hereunder: “Settlement of disputes:- (1) If any dispute arises touching the constitution, management or business of a Co-operative Society, and matters connected therewith or incidental thereto:- (a) among members, past members or persons claiming through members, past members and deceased members ; or (b) between a member, past member or a person claiming through a member, past member or deceased member and the Co-operative Society, its Board, Director, office-bearer or liquidator, past or present ; or (c) between the Co-operative Society or its Board and any past Board, Director, office bearer, or the Nominee, Heirs, or Legal Representatives of any deceased Director, deceased Officer, of the Co-operative Society ; or (d) between the Co-operative Society and any other Co-operative Society ; or (e) between the promoters of a Co-operative Society and the Registrar; or a Co-operative Society and the Registrar ; or (f) between a Co-operative Society and liquidator of another Co-operative Society, or between the liquidators of two or more Co-operative Societies; such disputes may be referred to the Co-operative Tribunal for decision: Provided that no dispute shall be referred under this section to the Co-operative Tribunal unless the disputing parties exhausted all remedies that may be available in the bye-laws for the settlement of disputes. (2) Any dispute relating to elections held to a Co-operative Society may be referred to the Co- operative Tribunal for decision.“ 17. It is also the case of the writ petitioner that Section 37 (1) of the Act aforesaid stipulates that no dispute shall be referred under this Section to the Tribunal unless disputing parties exhausted all the remedies that may be available under the bye- laws for settlement of disputes. The third respondent/Tribunal being under an impression that the petitioner had not exhausted the remedies available under Section 16(i)(c) of the bye-laws of the society dismissed the O.P. and the said order cannot be sustained. 18. Further it is stated that Clause 16 (c) of the bye-laws makes it clear that any member can contact middle level committee for immediate settlement of any dispute between the members of the society and or between members of the working committee or working committee members or any matter relating to the working committee member. 19. The petitioner filed O.P.No.5 of 2002 for recovery of amount advanced by him and the working committee of the society also addressed a letter to the Senior Manager, Sangam Dairy and they expressed no objection whatsoever for refund of the advance amount. Further more inasmuch as the claim made by the petitioner is only for recovery of amount advanced by him which are duly reflected in the audit report of the first respondent society such relief cannot be denied. A copy of the statement of the society reflecting that the amount is due to the petitioner also is placed before this court. 20. It is also the case of the petitioner that since the claim made by the petitioner is not a dispute between the members of the society or between the members of the working committee or any matter relating to the working committee the petitioner could not have approached the middle level committee under the bye-laws of the society. 21. Further it is stated that the third respondent/Tribunal without going into the aspect as to whether the claim made by the petitioner herein falls within the realm of Clause 16(i)(c) of bye- laws, dismissed the claim made by the petitioner on the ground that the petitioner had not exhausted the remedy available under Section 16(i)(c) of bye-laws before invoking its jurisdiction. It is also specifically stated that inasmuch as the claim of the petitioner does not fall within the meaning of the dispute between the members of the society or between the members of the working committee or working committee members or any matter related with working committee, the proviso to Section 37(1) of the Act cannot be made applicable to the case of the petitioner and as such the very finding of the third respondent/Tribunal that the petitioner did not exhaust remedies available under Clause 16(i)(c) of the bye-laws before invoking its jurisdiction, cannot be sustained. In such circumstances the present writ petition had been filed. 22. This court had carefully analyzed the order made by the Tribunal in O.P.No.5 of 2002 and several of the findings which had been recorded in this regard. The Tribunal at para 9 had formulated the following points for determination: “i) Whether the petitioner is entitled to recover the amount of Rs.62,216/- as claimed? ii) Whether the petitioner is entitled to claim the interest as prayed for? iii) Whether the claim is in time? iv) Whether the petition is maintainable? v) To what relief?” Before the Tribunal PW-1 was examined and Exs.P-1 to P-8 were marked and on behalf of the respondents RWs.1 to 3 were examined and Exs.R-1 to R-7 were marked. 23. The Tribunal while answering point No.1 - whether the petitioner is entitled to recover the amount of Rs.62,216/- as claimed, recorded findings at Paras 12 to 27 and came to the conclusion that the petitioner is entitled for the refund of the amount, and accordingly, answered the point in favour of the petitioner. The Tribunal while answering point No.2 - whether the petitioner is entitled to claim the interest as prayed for, recorded reasons at paras 28 to 32 and came to the conclusion that the petitioner is entitled for interest on the amount due to him only from the date of first notice dated 13-01-1999 but not earlier, as there is no contract to pay any interest particularly in view of Ex.R-1 resolution dated 12-08-1993, and accordingly, answered the point. While answering point No.3 whether the claim is in time, the Tribunal recorded reasons at paras 33 to 35 and came to a conclusion that the petition is within time. While answering point No.4 whether the petition is maintainable, recorded the reasons at paras 36 to 39 and a finding had been recorded that the petition is premature, since without exhausting the remedies, the petitioner had approached the Tribunal, and accordingly, answered the point against the petitioner. While answering point No.5 - to what relief, the relief had been negatived. 24. It is no doubt true that the Tribunal relied on a decision of this court in writ petition No.729 of 2003 dated 26-06-2003 (A. Rama Rao v. Cooperative Tribunal) wherein it was held that it is not the case of the petitioner that he has exhausted the remedies which are available and under the above circumstances the writ petition cannot be allowed as the petitioner had not exhausted the remedies available to him and accordingly the writ petition is dismissed at the stage of admission. 25. Here is a case where the petitioner filed the O.P. for refund of the amount simplisitor. No doubt, because of the delay caused in making such refund, interest also had been claimed for. 26. In the light of the clear evidence of PW-1, RWs.1 to 3 and also Exs.P-1 to P-8 and Exs.R-1 to R-7 and further in the light of the findings recorded by the Tribunal, this court is of the considered opinion that negativing the relief on the ground of non- exhausting of the remedies definitely, cannot be sustained. The nature of relief prayed for also to be taken into consideration while appreciating the other remedies available to the petitioner, if any, under the bye-laws referred to above. The counsel representing the petitioner, no doubt referred to several additional documents which had been placed before this court, but inasmuch as an order made by the Tribunal is being challenged, the additional material, if any, placed before this court, which already had been referred to above, need not be looked into. Even otherwise in the light of the positive findings recorded by the Tribunal either the consideration or non-consideration of that additional documents placed before this court may not alter the situation. Suffice to state that the Tribunal having recorded the reasons in detail and positively upholding the right of the petitioner to have the refund of the amount and having held that the O.P. was filed within time, negativing the relief on the ground of non-exhaustion of the other remedies under the bye-laws definitely cannot be sustained, the same being unjust and also inequitable. Hence, viewed from any angle, especially in the light of the fact that the said remedies available under the bye-law aforesaid, may not be applicable to the facts of the present case. This court is satisfied that negativing the relief on that ground, being unsustainable and the order under challenge is liable to be quashed and accordingly, the same is hereby quashed. 27. The writ petition is accordingly allowed. But however, it is made clear that the petitioner is entitled to the interest at 6% per annum only from 13-01-1999 till the date of realization. No order as to costs. ___________________ P.S. NARAYANA, J October 21, 2009. PN THE HON'BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.1873 of 2007 October 21, 2009