THE HON’BLE SRI JUSTICE P. S. NARAYANA AND THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY W.P.No.6212 of 2006 %20.04.2010 # M.Venkataramana ...Petitioner VERSUS $ The A.P. Cooperative Tribunal, Hyderabad & 7 others ...Respondents W.P.No.6375 of 2006 # R.C.S.Raju … Petitioners Vs. $ The A.P. Cooperative Tribunal, Hyderabad & 7 others < GIST: > HEAD NOTE: !Counsel for Petitioner (WP No.6212/06): Sri Vedula Venkataramana !Counsel for petitioner (WP No.6375/06): Sri V R Reddy Kovvuri ^Counsel for Respondents: G.P. for Cooperation Sri B. Narayana Reddy Sri K.Venkatesh Guptha, for R.3 to R.7 ? Cases referred 1. AIR 1969 SC 78(1) 2. AIR 1969 SC 1320 3. ILR (1979) I Delhi 300 4. 1993(2) ALT 276 5. AIR 1993 AP 213 6. AIR 2002 AP 175 7. 200(1) ALD 55 IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD TUESDAY, TWENTIETH [20TH] DAY OF APRIL, TWO THOUSAND AND TEN Present: HON’BLE SRI JUSTICE P.S.NARAYANA AND HON’BLE SRI JUSTICE G.V.SEETHAPATHY W.P.No.6212 of 2006 & W.P.No.6375 of 2006 WP No.6212 of 2006: Between: M.Venkata Ramana … Petitioner And: A.P. Cooperative Tribunal, Hyderabad 7 others … Respondents WP No.6375 of 2006: Between: R.C.S.Raju … Petitioner And: A.P. Cooperative Tribunal, Hyderabad 7 others … Respondents THE HON’BLE SRI JUSTICE P.S.NARAYANA AND THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY W.P.No.6212 of 2006 & W.P.No.6375 of 2006 COMMON ORDER: [Per GVS, J] These two writ petitions arises out of the common judgment dated 27.02.2006 in CTA Nos.42, 52, 75 and 82 of 2004 on the file of the A.P. Cooperative Tribunal, Hyderabad (for short ‘the Tribunal’). 2. W.P.No.6212 of 2006 is filed by the appellant in CTA No.42 of 2004 seeking a writ of certiorari to quash the order dated 27.02.2006 of the first respondent-Tribunal and also the order dated 28.01.2004 of the 2nd respondent-Divisional Cooperative Officer, Kadapa in AR No.2/2002-2003 insofar as it relates to the petitioner concerning his premises No.7/544, admeasuring 3.2 cents situated in NGOs Colony, Jayanagar, Kadapa. 3. W.P.No.6375 of 2006 is filed by the appellant in CTA No.52 of 2004 seeking similar relief in respect of an extent of 0.03 cents in Sy.No.91/1 & 752/2, NGOs Colony, Jayanagar, Kadapa. 4. As two writ petitions involve common questions of fact and law and arise out of the same impugned common order of the first respondent-Tribunal, they are heard together and are being disposed of by this common order. 5. The petitioners in both Writ petitions filed CTA Nos.42 and 52 of 2004 assailing the award dated 28.01.2004 passed by the Divisional Cooperative Officer, Kadapa in AR No.2/2002-2003. Two others also filed appeals, CTA Nos.75 and 82 of 2004, questioning the same award. All the four appeals were disposed of by the first respondent-Tribunal and impugned award passed by the Arbitrator was confirmed. Few facts, which are relevant, may be stated thus: 6. The President, Jayanagar Welfare Association and others filed arbitration petition before the District Cooperative Officer, Kadapa on 15.10.2002 alleging in brief as follows: The Government of Andhra Pradesh in G.O.Ms.No.956, Revenue Department, assigned an extent of Ac.78.37 cents of land in Sy.Nos.91/1 and 75/2 of Chinnachowk village for a consideration of Rs.1,01,881/- in favour of Kadapa District NGOs Cooperative Building Society for allotting house sites to the members of the said society. The society got prepared a lay out plan marking the house sites for allocation for some specific public purpose i.e., parks, play ground, school, religious places, shopping, market and some vacant places adjacent to the above plots for roads, parking places for vehicles. The lay out plan was approved by Chinnachowk gram panchayat, and the Director, Town Planning, Hyderabad. Specific plots were allotted for small shops bearing Nos.S.27 to 36 and for big shops bearing Nos.B.30 to 40 and also for market and hotel in Section No.4. The small shops bearing Nos.S.27 to 36 are in one block with vacant site admeasuring 47.6” x 23.9” situated on the east and south of the shops to serve as parking places for the entire commercial complex. The said vacant site is facing Jayanagar colony main road on the eastern side and Link road on the southern side. The defendant society sold the said vacant site meant for parking to one M. Venkatramana (writ petitioner in WP No.6212 of 2006) through the registered sale deed bearing document No.1513 dated 07.04.2000 admeasuring 3.2 cents. The said action of the society was alleged to be illegal and contrary to the byelaws of the society and in violation of the approved lay out plan of the society. The defendant society also sold away rasta (road) to various persons under sale deeds for varying consideration. The defendant society also sold an extent of 3 cents to one R.C.S.Raju (writ petitioner in WP No.6375 of 2006), which was earmarked for community centre by registered sale deed dated 20.04.2000. One G.Gangulaiah, Vice President acting on behalf of the President, was not elected by general body of the society and he was illegally empowered to perform statutory functions of the President. Alleging that the acts committed by the said Gangualaiah without the approval of the general body or the Registrar of Cooperative Societies, are null and void, the President of the Jayanagar Colony Welfare Association and others, who are respondents 3 to 8 herein, filed arbitration application before the District Cooperative Officer, Kadapa seeking the following reliefs: i) Declare that the sale deeds executed by first defendant in favour of other defendants are null and void and restore the approved plan; ii) Cancel the allotment of the disputed site to Sri M. Venkataramana, defendant No.2, herein and cancel the registered sale deed executed by D.No.1 in favour of D.2 and order to demolish the building in ABCD site, which is meant for parking purpose. iii) Cancel the allotment of the site to K.Lakshmi Narayana and others; iv) Cancel the registered sale deed executed by D.No.1 in favour of D.No.9 dated 20.4.2002 consisting of 0.03 cents in between the defendant society office and Chinnachowk police station and for costs. 7. The defendant before the arbitrator filed written statement with the following averments: The arbitration application filed under Section 61(1)(b) of the Act was not maintainable, as the Jayanagar Welfare Association is not a member of the society and the plaintiffs 4 and 5 were also not members of the society. Nowhere either in the original plan approved by the Chinnachowk gram panchayat or by the Director of Town Planning the said open space is shown as parking place. It was only shown as vacant site, not marked for any public purpose like park, ground or religious place etc. The plaintiffs 4 and 5 sought to purchase the sites, but since they are not members of the society, society sold the site in accordance with the resolutions of the Board of Management. The suit in OS No.37 of 2000 filed by the plaintiffs was also dismissed by the Senior Civil Judge, Kadapa and the appeal filed against the same was also dismissed. 8. On the basis of the above pleadings, the Arbitrator framed the following issues: 1. Whether the dispute is cognizable by this Court (Arbitrator)? 2. Whether 3.2 cents of site sold by the first defendant/society to the second defendant (M.Venkatramana), abutting south of the block of small plots 27 to 36 was meant for parking place of vehicles? 3. Whether the action of the first defendant society in selling the land covered by the area reserved for a public purpose (viz. community purpose or commercial purpose) to defendants 2 to 9 is legal and within its powers? 9. The learned Arbitrator on Issue No.1 held that the Arbitrator- Tribunal had jurisdiction to take cognizance of the dispute in view of the dismissal of OS No.37 of 2000 on the file of the Senior Civil Judge, Kadapa, wherein, it was held that the Civil Court has no jurisdiction to entertain the case. It is stated that by the date of passing of the award on 28.01.2004, the appeal suit No.12 of 2003 preferred against the dismissal of OS No.37 of 2000 was pending and subsequently, the said appeal was also dismissed. On issue Nos.2 and 3 the learned Arbitrator held that the sale in favour of M.Venkataramana in respect of 3.2 cents of site covered by the sale deed dated 7.4.2000 is null and void and therefore, cancelled. Further direction was given to the society to cause demolition of the building constructed by Venkataramana in the disputed site of 3.2 cents and to surrender vacant site to facilitate parking of vehicles in the commercial area. The learned Arbitrator further held that the sales in favour of defendants 3 to 9 are null and void and accordingly cancelled the sale deeds. The suit filed by the President of Jayanagar Welfare Association was therefore decreed. 10. The writ petitioners herein and 2 others, who are alienees, filed separate appeals before the first respondent-Tribunal. During the course of hearing of the appeals Exs.A.1 to A.18 were marked on behalf of the respondents therein [i.e., plaintiffs in AR No.2 of 2003] and Exs.B.1 to B.19 were marked on behalf of the appellants therein (defendants in ARC No.2 of 2003). 11. The first respondent-Tribunal framed the following points for consideration. (i) Whether there is any dispute for reference under Section 60(1) (b) of the APCS Act 7 of 1964? (ii) Whether 3.2 cents land sold by the President of the society to Sri Venkataramana (appellant in CTA No.42 of 2000) was meant for public purpose such as parking place? (iii) Whether the land of 3.2 cents allotted to Sri Venkataramana by the President of the society is justified and within the powers of the President of the society? (iv) Whether the action of the President of the society in selling the land covered by the area reserved for public purpose (viz. common purpose or commercial purpose) to the defendant Nos.2 to 9 is legal and within his power or authority? (v) Whether the impugned award passed by the Arbitrator suffers from any illegalities or infirmities and liable to be set aside? 12. On point No.1 the first respondent-Tribunal held that the dispute is cognizable by the Arbitrator for adjudication under Section 62(1) (b) of the A.P. Cooperative Societies Act 7 of 1964 (for short ’the Act’) in view of the dismissal of OS No.37 of 2000 by the Civil Court wherein it was held that the civil Court has no jurisdiction to try the case, which finding was confirmed in the appeal also expressing the opinion that the cooperative authority alone has jurisdiction over the dispute. On points 2 and 3, the first respondent-Tribunal held that the Managing committee of the society without taking any legal steps surrendered to the encroachers and executed the sale deeds under the guise that permission was given by the Divisional Cooperative Officer, Kadapa and such an action of the society is not permissible under law. Accordingly, the finding of the Arbitrator declaring the sale deeds as null and void was confirmed by the Appellate-Tribunal. On point No.5, it was held that the Arbitrator has given sufficient opportunity to both parties and the same does not suffer from any infirmities and illegalities. All the appeals were accordingly dismissed by the first respondent confirming the award passed by the Arbitrator, wherein, it was held that the alienation in favour of the writ petitioners herein were invalid and the sale deeds in favour of the writ petitioners herein in respect of 3.2 and 3 cents respectively, are null and void and stood cancelled. Aggrieved by the said dismissal of their appeals CTA Nos.42 and 52 of 2004, the present writ petitions are filed. 13. While admitting the writ petitions, an interim order in WP MP No.7910 of 2006 dated 28.03.2006 was passed directing stay of demolition of the building situated in the disputed site and also further directing that the petitioner shall not make any further constructions on the property covered by the registered sale deed, which is now sought to be cancelled. 14. The respondents, 4, 6 and 7 filed WV MP No.1047 of 2006 for vacating the interim stay and the said petition was dismissed on 14.07.2006 and the interim stay was made absolute observing that having regard to the facts and circumstances of the case and the very nature of the interim order, it was deemed appropriate to continue the interim order granted 28.03.2006 during the pendency of the writ petition. 15. When the matter came up for final hearing before one of us (P.S.Narayana, J), by order dated 03.12.2009, it was held as follows: “The scope and ambit of Section 61 of the Act and the reliefs which had been prayed for in these writ petitions can be granted by the Primary Authority at all or whether such reliefs to be prayed for before a competent civil court only, these aspects had been argued in elaboration and in the light of the decisions of the Apex Court referred to supra and also the decisions of this Court as well on which strong reliance had been placed, this Court is of the considered opinion that it would be just and proper if these matters are decided by an appropriate Division Bench.” 16. Accordingly, the matter was referred in toto to be heard by the Division Bench and the same came up before this Bench. 17. Arguments of Sri Vedula Venkatramana, learned senior counsel, representing the writ petitioners, learned Government Pleader for Cooperation-respondents 1 and 2 and Sri B. Narayana Reddy and Sri K. Venkatesh Gupta, learned counsel, representing other respondents, are heard. Perused the record. 18. The principal contention of Sri Vedula Venkatramana, learned senior counsel, for the petitioners is that the Arbitrator i.e., Divisional Cooperative Officer, Kadapa, has no authority or jurisdiction to decide the dispute of this nature or grant relief prayed for declaring the sale deeds as null and void and cancelling the allotment and granting other reliefs. 19. Learned Government Pleader for Cooperation and the learned counsel for other respondents, on the other hand, contended that in the light of the facts and circumstances of the case and the reasons recorded by both Arbitrator and the appellate authority i.e., Cooperative Tribunal, the impugned order is justified in the light of relevant provisions of the A.P. Cooperative Societies Act. They further contend that the Arbitrator had jurisdiction to entertain a dispute of this nature under Section 61(1)(b) of the Act and in fact, civil Court also up held the same by dismissing the suit OS No.37 of 2000, which finding was confirmed by dismissal of AS No.12 of 2003. 20. In view of the rival contentions of the parties, the question which primarily arises for consideration is whether the Arbitrator-2nd respondent had jurisdiction to entertain a dispute of the nature and grant reliefs of declaring that the sale deeds are null and void and cancelling the same and whether such reliefs can be granted only by a civil Court? 21. This is not much of a dispute regarding the factual matrix relevant for the purpose of considering the above question relating to the jurisdiction. The Government of Andhra Pradesh in G.O.Ms. No.956, Revenue Department, assigned an extent of Ac. 78.37 cents of land in Sy.Nos.91/1 and 75/2 of Chinnachowk village for a consideration of Rs.1,01,881/- for NGOs Coop. Building society for allotting house sites to the members of the said society. The society got prepared a lay out plan in the said area, marking house sites for allocation for some specific public purpose i.e., parks, play ground, school, religious places, shopping, market places etc. and some vacant place earmarked for the purpose of roads, parking places for vehicles etc. The lay out was approved by Chinnachowk gram panchayat and also Director of Town Planning, Hyderabad. Some specific plots were allotted for the purpose of small shops bearing Nos.S.27 to 36 and big shops bearing Nos.B.30 to 40 in Section IV. The vacant site admeasuring 47.6” x 23.9” situated on the east and south direction of the shops meant to serve as parking place for the entire commercial complex in Section IV and the said vacant site marked as ABCD in the plaint plan, is facing towards Jayanagar Colony main road on the east and a link road on the south. The said vacant site is sold by the society in favour of M. Venkatramana, petitioner in WP No.6212 of 2006, under a registered sale deed dated 07.04.2000 in an extent of 3.2 cents. The respondents 3 to 7 raised a dispute regarding the same and the same was referred to the 2nd respondent-Arbitrator for adjudication. The 2nd respondent declared that the alienation is invalid and the sale deed in favour of the petitioner is null and void. On appeal by the petitioner, the first respondent-Tribunal confirmed the award passed by the 2nd respondent-Arbitrator. Similarly, it is alleged that an extent of 3 cents was sold away by the society in favour of RCS Raju, petitioner in WP No.6375 of 2006, which was meant for community centre under a registered sale deed dated 20.4.2000. 22. The question, which arises for consideration, is whether such a dispute is referable to the Arbitrator under the provisions of the Act and whether the Arbitrator has jurisdiction to entertain and adjudicate upon such a dispute? 23. Section 61 of the Act deals with disputes, which may be referred to the Registrar. To the extent relevant in the preset context it is extracted below: “Section 61(1) Notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, arises – (a) among members, past members and persons claiming through members, past members and deceased members; or (b) between a member, past member or person claiming through a member, past member or deceased member and the society its committee or any officer, agent or employee of the society; or (c) between the society or its committee, and any past committee, any officer, agent or employee, or any past officer, past agent, or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent or deceased employee of the society; or (d) between the society and any other society, such dispute shall referred to the Registrar for decision.” 24. A perusal of the above provision would show that any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, can be referred to the Registrar. Such a dispute can be referred when it arises inter-alia among the members, past members and persons claiming through members, past members and deceased members or when it arises between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society etc. or between the society and any other society. 25. Though sub-section (1) of Section 61 used expression ‘any dispute’, the provision when read in its entirety shows that only certain classes or types of dispute and that too arising between certain classes of persons alone are to be referred to the Registrar. Firstly, the dispute shall be one touching the Constitution, management or the business of the society. Secondly, such a dispute touching upon the constitution, management or business of the society, must have been between the members or past members or persons claiming through them inter-se or between a member, past member or persons claiming through them and the society or between the society and its officers or employees, agents, nominees or between the subject society or some other society. Under Section 62 of the Act, the Registrar may, on receipt of the reference of a dispute under Section 61 either elect to decide the dispute himself; or transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or refer it for disposal to an Arbitrator. 26. In the present case, the dispute was referred to the 2nd respondent-Divisional Cooperative Officer-Arbitrator. The award of the 2nd respondent-Arbitrator shows that in view of the objections raised by the defendants therein regarding the maintainability of the application a specific issue No.1 was framed as to whether the dispute is cognizable by the said Court and a finding was recorded on the said issue to the effect that ‘as the civil court expressly opined that the Cooperative authority alone has jurisdiction to decide the dispute and so the dispute is taken on file under Section 61(1)(b) for decision under Section 62(1)(a) of the APCS Act 7 of 1964 and the provisions, rules and byelaws of the society, I hold that the dispute is cognizable by this Court’. 27. The finding of the 2nd respondent-Arbitrator was confirmed by the first respondent-Tribunal, mainly proceeding on the ground that OS No.37 of 2000 filed by Jayanagar colony welfare association i.e., 3rd respondent herein, was dismissed by the civil Court holding that they had no jurisdiction to try the case and the same was confirmed in the appeal also. Neither the first respondent-Tribunal nor the 2nd respondent-Arbitrator, examined the issue independently to ascertain whether the dispute raised falls within the ambit of Section 61 of the Act. 28. Section 121 of the Act stipulating bar of jurisdiction of the Court states as follows: Section 121(1) Save as otherwise expressly provided in this Act, all orders, refusals, decisions or awards passed or directions issued or actions taken in accordance with this Act or the Rules made thereunder shall be final subject to the provisions for appeal, revision and review and no such order, refusal, decision, award, direction or action taken shall be liable to be called in question in any court or forum. 29. It can be seen from the above provision that among other things, actions taken in accordance with the Act or rules made thereunder shall be final subject to the provisions of the appeal, revision and review and no such action taken shall be liable to be called in question in any Court or forum. In order to attract immunity from being questioned in a civil Court, action taken must be one, which is in accordance with the Act or Rules made thereunder. Before a dispute can be referred to Arbitration under Section 61(1), it must be shown that the said dispute is one touching the constitution, management or business of the society. Admittedly, the present dispute regarding the alienation of an extent of 3.2 cents in favour of M. Venkatramana and 3 cents in favour of RCS Raju, are not disputes touching the constitution or management of the society. According to the respondents 3 to 7, the dispute is one touching the business of the society, which proposition is vehemently opposed by the petitioner. It is, therefore, to be considered whether the dispute, which arose due to the alienation of the above extents by the 8th respondent-society in favour of the petitioners, is a dispute touching the ‘business’ of the society? 30. It is not disputed that 8th respondent society is registered under the provisions of APCS Act 1964 and the objective of the society among other things is to carry on for the benefit of its members, trade of building and buying, selling, hiring, acquiring, allotting and developing the land in accordance with the cooperative principles and to give loans to the members for construction of dwelling houses. In order to full-fill the said objectives, the society purchased the government land of an extent of Ac.78.37 cents in Sy.Nos.91/1 and 75/2 of Chinnachowk village for allotting house sites to its members. 31. Byelaw 41 of the Byelaws of the society states that subject to such resolutions as the general body may from time to time pass, the