HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.7833 of 2009 Tuesday, the 18th day of August, 2009 Between: Girijan Coop. Corporation Limited, Chinna Waltair, Visakhapatnam, Represented by its Vice Chairman & Managing Director. … Petitioner And 1. A.P. Cooperative Tribunal, Visakhapatnam, represented By its Registrar and 2 others. …. Respondents * * * HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.7833 of 2009 ORDER: This Court issued Rule Nisi and granted interim suspension in W.P.M.P.No.10272 of 2009. W.V.M.P.No.1595 of 2009 is filed by the vacate stay petitioner, second respondent in the writ petition, praying this Court to vacate the interim orders granted in W.P.M.P.No.10272 of 2009 in W.P.No.7833 of 2009, dated 21.4.2009, and pass such other suitable orders. 2. When the vacate stay application was taken up for hearing, the counsel on record made submissions in elaboration and further made a request for final disposal of the writ petition itself. Hence, the writ petition itself is being disposed of finally after hearing the counsel on record. 3. The writ petition is filed for a writ of Certiorari to call for records pertaining to the Order dated 03.3.2009 in O.A.No.27 of 2008 and the Order dated Nil made in M.A.No.10 of 2008 in O.A.No.27 of 2008 on the file of the first respondent and quash the same declaring them to be illegal, arbitrary and unconstitutional and pass such other suitable orders. 4. Sri N. Sridhar Reddy, learned counsel representing the petitioner had pointed out to the order under challenge and would maintain that such order being unsustainable, this Court while issuing Rule Nisi on proper appreciation of the factual position and legal position as well, had granted interim suspension. Hence, the writ petition to be allowed. The learned counsel also had explained the scope and ambit of Sections 76 and 77 of the Andhra Pradesh Co-operative Societies Act, 1964 (hereinafter in short referred to as “the Act” for the purpose of convenience) and would maintain that in the light of the clear stand taken in the affidavit filed in support of the writ petition, the writ petition to be allowed. 5. The learned Government Pleader for Co-operation had taken this Court through the order made on Memo in O.A.No.27 of 2008 by the A.P. Co-operative Tribunal, Visakhapatnam-District Judge- Chairman and would maintain that inasmuch as the main contention is that the appeal as against an interlocutory order could not have been entertained, since the Tribunal, on appreciation of facts, prima facie was of the opinion that the appeal is maintainable and the merits in the impugned proceedings can be examined by the Tribunal and consequently the memo was rejected. Instead of challenging it, the Tribunal as well could have disposed of the main matter itself. 6. Smt. Bobba Vijayalakshmi, learned counsel representing second respondent, who filed vacate stay application, had taken this Court through the contents of the counter-affidavit and further would maintain that in the light of the series of events, especially, in view of the fact that though an order was made on an interlocutory application, since the same may amount to a final decision as far as this respondent is concerned, it would be just and proper to decide the main matter instead of the writ petitioner challenging such order by way of this writ petition. The learned counsel also relied on the decision in R. Anand Kumar v. The Co-operative Tribunal-cum-V Asst. Judge, City Civil Court, Hyderabad and others[1]. 7. Heard the counsel, perused the respective stands taken by the parties in the respective pleadings and also the order under challenge. 8. The A.P. Co-operative Tribunal, Visakhapatnam, made an order on memo on 03rd March 2009. The present writ petitioner, second respondent in O.A.No.27 of 2008 aforesaid filed a memo challenging the maintainability of appeal under Section 76 of the Act. The stand taken by the writ petitioner is that the appeal is not maintainable, as the order passed by the first respondent therein, third respondent in the writ petition, is not a final order. Further stand had been taken that the order in the review petition also would not fall within the ambit of Section 76 of the Act. Section 77 of the Act also had been referred to. The learned Tribunal further referred to A.R.C.No.2/2000-01 and also I.A.No.14 of 2007 and also referred to Section 62 of the Act and Rule 49 of the A.P. Co-operative Societies Rules and Rule 167 and Rule 170 of the Civil Rules of Practice as well and the learned Tribunal also further referred to Section 104, Order 43 Rule 1, Order 47 Rule 4 of the Code of Civil Procedure (hereinafter in short referred to as “the Code” for the purpose of convenience) and in the light of the wide language of Section 76 of the Act, the learned Tribunal came to the conclusion that there is no bar in entertaining an appeal on an interlocutory order. 9. It is averred in para 4 of the affidavit filed in support of the writ petition that the petitioner corporation had initiated arbitration proceedings against one Sri P. Thamma Rao on account of P.P. Chemicals purchased by him which ultimately remained unutilized, expired and rendered unfit for use and also on the ground that the said P. Thamma Rao did not obtain prior permission for purchase of such chemicals. When the matter was pending before the third respondent, Arbitrator in A.R.C.No.2/2000-01, it had come to light that apart from P. Thamma Rao, there were other officers involved in the said matter. Hence, Sri M.S.N. Sastry, retired Junior Manager, was appointed to probe into the matter and for report. The said Sastry submitted his report dated 28.10.2006 stating that certain other persons including second respondent herein were also responsible for the said purchases and loss caused to the corporation to the tune of Rs.30.00 lakhs. Therefore, the petitioner corporation filed an application before the third respondent under Order 1 Rule 10 of the Code to implead those persons responsible, including the second respondent, to the arbitration proceedings and the same was allowed by the third respondent by order dated 17.01.2008. 10. Questioning the said impleadment, the second respondent herein filed O.A.No.27 of 2008 before the first respondent and obtained interim order dated Nil in M.A.No.10 of 2008 which is also impugned in the present writ petition. Immediately, on service of notices of summons, the petitioner corporation filed a memo stating that the appeal itself was not maintainable under Section 76 of the Act, more so, it could not have been numbered as O.A. i.e., as original application, but should have been registered as an appeal. By order dated 03.3.2009, the first respondent decided that the appeal filed by the second respondent was maintainable under Section 76 of the Act, as the powers under Section 76 of the Act are wide enough for the appellate authority to decide the matter. It is also stated that the powers of Section 76 of the Act are limited. Appeal under Section 76 of the Act can be filed only against few proceedings including the proceeding arising under Sections 60 and 62 of the Act. In the case on hand, the appeal is filed against an interlocutory order allowing implead application. In the light of the same, the said order being illegal and without jurisdiction, the same is liable to be quashed. 11. In the counter-affidavit filed by the second respondent it is stated that arbitration proceedings were initiated against one P. Thamma Rao for certain chemicals purchased by him. While the case in A.R.C.No.2/2000-01 was pending consideration, the petitioner filed an application under Order 1 Rule 10 of the Code to implead those persons, who were alleged to be responsible as per the alleged report dated 28.10.2006 submitted by the junior manager who was appointed to probe into the matter. The second respondent was also sought to be impleaded in the said application. The third respondent by order dated 18.6.2007 dismissed the application by an order in detail after recording reasons. Curiously, the writ petition filed review application I.A.No.14 of 2007 before the third respondent praying for review of the findings on 25.10.2007 under Section 62 (4) of the Act read with Section 114 (a), Order 47 Rule 4 (2) of the Code. The third respondent allowed the said review application on 17.01.2008. Challenging the said order, second respondent filed O.A.No.27 of 2008 before the first respondent and also filed M.A.No.10 of 2008 praying for suspension of the order dated 17.01.2008 in I.A.No.14 of 2007. The first respondent suspended the said order. The present writ petition is filed challenging the order made in M.A.No.10 of 2008. 12. While further narrating the facts it is stated that the main contention in the writ petition is that the appeal is not maintainable before the first respondent, as the same is against an interlocutory order. No doubt, Section 76 of the Act provides an appeal against any decision passed or order made under Section 62 of the Act among other Sections. 13. This is a peculiar case where the petitioner found certain irregularities committed while purchasing chemicals in the year 1992. The second respondent worked as Divisional Manager, Girijan Cooperative Corporation Ltd., Visakhapatnam at Palwancha during the period from 01.4.1990 to 21.3.1992 and was succeeded by P. Thamma Rao. He placed purchase order for supply of fertilizers and P.P. Chemicals on 07.5.1992 and he was transferred and relieved on 21.5.1992. Subsequently, his successor P. Thamma Rao received the stocks and acknowledged on 19.6.1992 duly making payment to the supplier. He made further purchases subsequently in addition to these stocks. As certain items of P.P. Chemicals remained unutilized and expired, the writ petitioner filed arbitration under Section 61 of the Act for Rs.27.09 lakhs against the said Thamma Rao on 18.5.2000 in A.R.C.No.2/2000-01. Disciplinary proceedings were concluded against the said Thamma Rao and he was dismissed from service on these charges. Though he filed an appeal before the Board of Directors of the writ petitioner, the same was dismissed. 14. It is further stated that the writ petitioner filed an application for impleading the second respondent and 5 others on 25.11.2006. Till then, the second respondent was not even aware of the said arbitration case. Immediately, second respondent filed counter denying his involvement and also raised ground of limitation under Rule 49 of the Rules. The said counter was filed on 25.4.2007. The Arbitrator-3rd respondent passed orders on 18.6.2007 rejecting the application for impleading him. The writ petitioner filed another application I.A.No.14 of 2007 praying for review of the order dated 18.6.2007. The third respondent entertained the said application even though the second respondent filed objections on 10.01.2008 stating that the review petition itself was not maintainable, as the third respondent cannot review his own order and application of the Code is only to the extent mentioned in Section 120 of the Act. However, he passed order in review petition on 17.01.2008, which was challenged by the second respondent before the first respondent under Section 76 of the Act in O.A.No.27 of 2008. The second respondent also filed M.A.No.10 of 2008 for grant of stay of the order dated 17.01.2008 and the same was granted on 21.4.2008. 15. It is also stated that the first respondent made the order after hearing both sides. The writ petitioner filed a memo on 24.11.2008 questioning the maintainability of the appeal on the ground that the order dated 17.01.2008 reviewing the order dated 25.10.2007 is only an interlocutory order and, therefore, the appeal under Section 76 of the Act is not maintainable. The first respondent, in a well considered order, dated 03.03.2009, had dismissed the said memo and held that the appeal is maintainable. Challenging the same, the present writ petition had been filed and interim suspension had been obtained as already aforesaid. Several other further facts in detail also had been narrated in paras 7, 8 and 9 of the counter-affidavit as well filed in support of the vacate stay application. 16. Whether it is styled as O.A or an appeal; whether such O.A. or appeal be maintained under Section 76 of the Act, this question also may be decided at the stage of final disposal of the matter. 17. Elaborate submissions were made relating to the scope and ambit of Sections 76 and 77 of the Act and also the relevant rules as well. Smt. Bobba Vijayalakshmi, the learned counsel representing the contesting respondent placed strong reliance on the decision in R. Anand Kumar v. The Co-operative Tribunal-cum-V Asst. Judge, City Civil Court, Hyderabad, and others (1 supra) wherein, at paras 6, 12 and 13, the learned Judge observed as hereunder. “Omitting the immaterial portion, Sec. 61 reads: "61 Dispute which may be referred to the Registrar: (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) xx xx xx (d) xx xx xx The dispute raised before the Arbitrator was between not only two members inter se but also against the society. The dispute, therefore, falls within the ambit of 61 (1) (a) and (b). The Registrar on reference of a dispute under sec. 61 is empowered by Sec. 62 to decide the dispute by himself or transfer it for disposal to any person who has been invested by the Government with powers in that behalf or refer it to any other arbitrator. Sub-section (4) enjoins that the Registrar or the Arbitrator shall decide the dispute in accordance with the provisions of the Act and the Rules and Byelaws and such a decision shall, subject to the provisions of Sec. 76, be final. The Registrar or arbitrator as the case may be has power to make interlocutory orders pending final decision of the dispute, in the interest of justice. Under Sec. 120 the Registrar shall have the power of a civil court while trying a suit under the Code of Civil Procedure in respect of (a) summoning and enforcing the attendance of any person, (b) compelling the production of documents, (c)issuing a commission for the examination of any witness; and (d) receiving evidence on an affidavit. Rule 49 so far as it bears on the question under consideration reads: “49. Procedure for arbitration and settlement of disputes:- (1) A reference to the Registrar of any dispute under Sec. 61 of the act shall be in writing. (2) The period of limitation for referring a dispute touching the constitution, management or the business of a society to the registrar under sub-section (1) of Sec. 61 of the Act shall be regulated by the provisions of the Limitation Act, 1963 as if the dispute were a suit and the Registrar, a civil court : provided xx xx xxx provided further xx xxx (3) xx xx xx xx (4) The Registrar, the arbitrator or other person deciding the dispute shall record a brief note of the evidence of the parties and witnesses who attended and upon the evidence so recorded and after consideration of any documentary evidence produced by the parties, shall pass a decision in accordance with justice, equity and good conscience and such decision given shall be in writing. In the absence of any party duly summoned to attend, the dispute may be decided ex- parte. " Rule 49 (2) of the Rules obligates that the period of limitation in respect of disputes under Sec. 61, as already noticed, "shall be regulated by the provisions of the Limitation Act as if the dispute were a suit and the Registrar, a civil court. " for the purpose of ascertaining the period of limitation the Registrar, by rule 49 (2), acts as a civil court. There is no provision either in the Act or in the Rules that the Registrar shall try all the issues arising in any dispute before him and that he shall not try the issue relating to limitation as a preliminary issue. The provisions of Order XIV Rule 2 of the C. P. C. which enjoin the court to pronounce judgment on all issues subject to the exceptions contained therein have no application in so far as resolution of disputes under sec. 61 of the Act are concerned. The contention advanced in this regard by Shri Saradhy, learned counsel for the fourth respondent that the Registrar is bound to decide all the issues based on Order XIV Rule 2 C. P. C. is untenable. The obligation cast on the Registrar or the Arbitrator by sub-rule (4) of Rule 49 to decide the dispute by recording a brief note of the evidence of the panics and witnesses, consider the evidence adduced before him and pass a decision in accordance with justice, equity and good conscience comes into play only after the Registrar is satisfied that the petition filed before him is not barred by limitation. If he is satisfied that the dispute referred to him is not barred by limitation, his duty to decide the matter in the manner laid down by sub-rule (4) will arise. If at the threshold stage itself a dispute is not entertainable by virtue of its being barred by time, the Registrar is not obliged to render a decision in the manner obligated by sub-rule (4 ). The decision of the Allahabad High Court in Anand prakash vs. Asst. Registrar Co. Op. Societies relied upon by Shri Saradhy lays down the proposition that the Arbitrator under the U. P. Co-operative societies Act has no power to grant injunction or interm stay during the pendency of arbitration proceedings. It has no application to the case on hand. The U. P. Co-operative Societies Act does not contain any provision empowering the Arbitrator to pass interlocutory orders and, therefore, the Allahabad High Court held that the Arbitrator being a creature of the statute has no inherent power to pass interim orders. The Registrar although acting under Sec. 61 as a civil court, is not governed by all the provisions of the C. P. C. To the extent the Act and the rules permit, the provisions of C. P. C. come into play and this is clear from Sec. 62 (4) which mandates that the Registrar or Arbitrator "Shall decide the dispute in accordance with the provisions of this act and the Rules and bye-laws. . . . . . . . . . . " Any power conferred on the Registrar-Arbitrator by the Act or the Rules cannot be read in conjunction with the provisions of the C. P. C. That power has to be exercised by him independently. The view taken by the Tribunal that the : "Registrar under Rule 49 (2) is a competent civil court and he can resort to the provisions of Civil Procedure Code and has to give a finding on all aspects after examining the witnesses and marking documents". is clearly contrary to principle and precedent.” 18. It is pertinent to note that no regular application as such had been filed, but a memo had been filed questioning the maintainability of the said O.A. under Section 76 of the Act and the same was rejected by the learned Tribunal after recording certain reasons. This Court is not inclined to express any opinion relating to this question, the maintainability of such proceeding under Section 76 of the Act. 19. In the light of the reasons recorded by the learned Tribunal, this Court is of the considered opinion that instead of deciding the memo, the main proceeding itself could have been disposed of by the learned Tribunal. Let the learned Tribunal decide the main matter itself as early as possible. This Court, however, is not inclined to interfere with the order under challenge, especially, in the light of the limitations imposed on the writ court while exercising the Certiorari jurisdiction. 20. Subject to the above observation, the writ petition shall stand dismissed. No order as to costs. ____________________ (P.S. NARAYANA, J) Date: August 18, 2009. BSB [1] 1989 (3) ALT 401