THE HON’BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.18728 of 2006 ORDER: This writ petition is filed with the prayer, which reads as under: “For the reasons stated in the accompanying affidavit, the petitioners herein humbly prays that this Hon’ble Court may be pleased to issue a writ, order or direction more particularly one in the nature of writ of Mandamus, declaring the action of respondent No.3 in conducting the proceeding in ARC.No.4/03 as illegal and set aside the same as illegal, arbitrary and against the law.” The first respondent is a society registered under the Andhra Pradesh Cooperative Societies Act, 1964 (for short ‘the Act’). The petitioners as well as the second respondent were members of the first respondent society. The second respondent borrowed a loan of Rs.75,000/- from the first respondent society on 01.12.2000 under loan account No.24. The petitioners were sureties to the loan taken by the second respondent and necessary documents were executed. The second respondent has paid only an amount of Rs.7,300/- and failed to pay the balance amount of Rs.67,700/-. To recover the said amount, on the application made by the first respondent society, proceedings under Section 61 of the Act were initiated and arbitration proceedings were numbered as ARC.No.4 of 2005-06. Alleging that the notices were not issued to the petitioners in the arbitration proceedings, this writ petition is filed. It is mainly submitted by the learned counsel for the petitioners that the petitioners were only sureties as such no arbitration proceedings can be maintained against them. Secondly, it is submitted that the second respondent retired from service and on retirement, all the benefits, namely, provident fund, gratuity etc., were paid to him without recovering any amount due to the first respondent society as such there is no reason to proceed with the arbitration proceedings against the petitioners. Thirdly, it is submitted that ARC.No.4 of 2005- 06 itself was filed after expiry of the term of the President of the first respondent society, as such, arbitration proceedings itself are not maintainable. A detailed counter-affidavit is filed by the third respondent – Deputy Registrar of Cooperative Societies and Arbitrator, Srikakulam, denying various allegations made by the petitioners. With regard to the first submission made by the learned counsel for the petitioners, it is to be seen that the petitioners are sureties for the loan obtained by the second respondent. In view of the same, as the second respondent has not paid the loan amount, it is always open to the first respondent society to initiate arbitration proceedings against the petitioners, who stood as sureties to secure the loan granted by it. As regards the second submission, it is to be noticed that unless the claim of the first respondent society is crystallized, simply because, there was due by the second respondent, the first respondent society cannot recover the amount from the amounts, which were paid towards Provident Fund, Gratuity etc., to him. Merely because such amounts are paid to the second respondent itself is also no ground to say that the arbitration proceedings cannot be initiated against the petitioners. In regard to the other submission that the Arbitration Case was filed after expiry of the term of the President of the first respondent society, as evident from the counter-affidavit filed by the third respondent, one Y.Ramakrishna was elected as President of the first respondent society on 17.10.2000 for a period of five years and during his tenure, Arbitration Case was filed i.e. on 22.07.2005. In view of the same, it cannot be said that he had no authority to file the Arbitration Case. There is also another argument advanced by the learned counsel for the petitioners that after expiry of the term of the President, the Person- In-Charge i.e. Assistant Registrar was appointed so as to manage the affairs of the first respondent society and as the said Officer is subordinate to the Deputy Registrar of Cooperative Societies, no arbitration proceedings can be continued by the Deputy Registrar of Cooperative Societies. Merely because the Assistant Registrar was appointed as Person-In-Charge, it cannot be said that the Arbitrator, who is the Deputy Registrar of Cooperative Societies, will have any bias while deciding the arbitration proceedings. For the aforesaid reasons, I do not find any ground to declare that very initiation of arbitration proceedings against the petitioners as illegal. In any event, as there is no order passed by the competent authority, such objections can be raised before the Arbitrator itself but they cannot be entertained by this Court at this stage, even before the order is passed. It is to be noticed that if award is passed, ultimately, there is a right of appeal available to the petitioners under the scheme of the Act. In that view of the matter, I do not find any merit in this writ petition. The writ petition is accordingly dismissed. No order as to costs. _______________________ R.SUBHASH REDDY, J 24th MARCH, 2011. kvni