IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SIXTH DAY OF MARCH, TWO THOUSAND NINE PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.24763 of 2001 Between: V. Venkataiah … Petitioner AND Handloom Weavers Cooperative Societies, Choppadandi, Karimnagar District, Rep., by its Special Officer & another. … Respondents Counsel for the petitioner : Sri K. Vasudeva Reddy Senior Counsel assisted by Sri T.S. Praveen Kumar Counsel for respondent No.1: Legal Trainee for GP for Industries & Commerce Counsel for respondent No.2 : Sri C. Ramesh Sagar This Court made the following: THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.24763 of 2001 ORDER:- This writ petition is filed for a writ of Certiorari to quash award dated 16.05.1989 in ARC.No.5103/87-B on the file of the Arbitrator/Development Officer, office of the Assistant Director of Handlooms and Textiles, Karimnagar, and judgment dated 28.12.1998 in CTA.No.571 of 1996 on the file of the Cooperative Tribunal, Hyderabad (for short, ‘the Tribunal’). The petitioner was the President of respondent No.1 Society at the relevant time. One Sri Ramakrishna Handlooms Weavers Cooperative Society (for short, “the merged society”) got merged with respondent No.1 Society on 19.12.1986. One Sri S.Laxmikantha Rao was the paid Secretary of both the societies. The stocks of the merged society were handed over by the Secretary of the said society to respondent No.1 society on 30.01.1987. Disputes arose in view of the deficit stocks having been found after handing over of the stocks of the merged society. The paid Secretary and the petitioner received the stocks and signed the relevant registers. After expiry of the term of the petitioner, proceedings were initiated before the Arbitrator under Section 62 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short, ‘the Act’), wherein respondent No.1 society claimed recovery of Rs.2,91,149=35 ps towards the value of the deficit stocks from the petitioner and respondent No.2, who was the President of the merged society. The case of respondent No.1, as reflected from the Arbitrator’s award, is that for the deficit stocks worth Rs.2,91,149=35 ps, the petitioner and respondent No.2 are responsible. The petitioner and respondent No.2 filed their written statements. The petitioner, who was impleaded as defendant No.2 before the Arbitrator, inter alia stated that the assets and liabilities of the merged society were received after the Managing Committee of respondent No.1 discussed about the same and that after issue of the certificate by the paid Secretary (Sri S. Laxmikantha Rao), he signed the balance sheet, the stock statements etc. It is also his case that he was only the head of the society and not an employee to look after the day-to-day administration and its business and that on the petitioner being apprised of the deficit stocks, a meeting of the Managing Committee was called on 20.02.1987 and it was decided to recover the value of the deficit stocks from respondent No.2. At the hearing, the Legal Trainee appearing for the learned Government Pleader for Industries for respondent No.1 produced the record of the Arbitrator. The docket sheet contained in the record reveals that after receiving the pleadings of the parties, hearing was fixed for 05.05.1989, on which date the petitioner, respondent No.2 and the representatives of respondent No.1 were present. The paid Secretary i.e., Sri S. Laxmikantha Rao, sent a telegram requesting for adjournment of the proceedings. The Arbitrator recorded in the proceedings that in view of the said request for adjournment, he adjourned the proceedings to 16.05.1989, as he felt it necessary to examine Sri Laxmikantha Rao. The petitioner, respondent No.2 and the representatives of respondent No.1 signed the proceeding sheet. On 16.05.1989, the Arbitrator noted that Sri S.Laxmikantha Rao was present and submitted his written statement. On behalf of respondent No.1, Sri S. Bhadrinath was present and respondent No.2 was also present. He further recorded that the petitioner was not present and that as no extension of time was requested by the petitioner, award was reserved and delivered on the same day itself. Aggrieved by the said award, the petitioner filed an appeal before the Tribunal, which was dismissed by judgment dated 28.12.1998. Sri K. Vasudeva Reddy, learned counsel for the petitioner submitted that the Arbitrator has denied the petitioner reasonable opportunity of hearing. He further submitted that the manner in which the Arbitrator conducted the proceedings is not fair and transparent because he closed the arbitration proceedings on 16.05.1989 itself and delivered the award on the same day. The learned counsel pointed out certain anomalies in the findings of the Arbitrator and submitted that those findings are contrary to the material on record available before the Arbitrator. The legal trainee and Sri C. Ramesh Sagar representing respondent Nos.1 and 2 respectively submitted that the Arbitrator passed award on the basis of the record. They further submitted that as the petitioner failed to avail the opportunity given to him, there was no illegality on the part of the Arbitrator in closing the proceedings and passing the award. I have carefully considered the submissions of the learned counsel for the parties and perused the record. From the docket proceedings referred to above, it is evident that the petitioner was present on 05.05.1989 and was aware of the adjournment of the proceedings to 16.05.1989. It is no doubt true that the petitioner was not present on 16.05.1989 and no explanation was offered for his absence. But, a perusal of the record would reveal certain unusual features. In the proceeding sheet, having noted that Sri S. Laxmikantha Rao, Ex-paid Secretary was present, the Arbitrator has further written the words “and submitted w/s”. It is clearly noticeable even to the necked eye that the said words are written with different pen and obviously with a different hand writing also. This has significance because the entire award of the Arbitrator is mainly based upon the statement of Sri Laxmikantha Rao. The record also contains the sworn statement of Sri Laxmikantha Rao, which was stated to have been recorded on 16.05.1989 itself. The said statement runs to more than three pages in manuscript. The Arbitrator passed award on the same day itself and the award is a lengthy one, which runs to sixteen pages. Ordinarily, it is not possible for an adjudicating authority to record the lengthy statement of a witness, analyze the entire evidence on record both documentary and oral and pass a detailed award on the same day on which the proceedings were closed on account of the absence of the petitioner. In the background of these admitted facts, the addition of the words “and submitted w/s” assumes significance. From the facts noted above, it is reasonable to presume that the Arbitrator has obviously recorded the sworn statement of the paid Secretary after reserving the award on 16.05.1989. That is the reason why the original docket proceedings recorded by the Arbitrator do not contain the words “and submitted w/s”. Obviously, after recording the sworn statement (referred to as w/s by the Arbitrator) of Sri S. Laxmikantha Rao and preparation of the award by mentioning the date as 16.05.1989, the Arbitrator added the words “and submitted w/s” in the proceeding sheet dated 16.05.1989. The haste with which the Arbitrator has acted by closing the proceedings, purporting to record a lengthy statement of a witness and passing a lengthy award, clearly suggests that the whole proceedings were manipulated in such a way as to give an impression that the award was passed on 16.05.1989 itself obviously with an intention to see that the petitioner will not have an opportunity of seeking reopening of the proceedings and requesting for an opportunity to cross-examine Sri S.Laxmikantha Rao. I am also not convinced with the way in which the Arbitrator conducted himself in closing the proceedings in a hurried manner. Ordinarily, even if one of the parties was not present on a particular day, it is reasonable to expect the Arbitrator to adjourn the case at least once, after recording the sworn statement of the main witness, so that the party to the proceedings may appear and participate in the proceedings on the next date of hearing. The manner in which the Arbitrator has hurriedly closed the proceedings and passed the award leaves no doubt in the mind of this Court that he failed to act in a fair and reasonable manner expected of him as an Arbitrator. The Tribunal has failed to appreciate any of the above aspects and mechanically confirmed the award of the Arbitrator. Having carefully considered the entire material on record, I am of the view that the award of the Arbitrator and the judgment of the Tribunal, confirming the award are liable to be set aside. Accordingly, both these orders are set aside. The matter is remitted back to the Registrar of Cooperative Societies to nominate an Arbitrator to decide the dispute raised by respondent No.1. He shall appoint an Arbitrator within a period of two months from the date of receipt of a copy of this order and ensure that the arbitration proceedings be completed within a period of three months from the date of appointment of the Arbitrator. The writ petition is accordingly allowed. C.V.NAGARJUNA REDDY, J Date: 06.03.2009 ES