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2013 DIGILAW 1019 (KAR)

D. v. Shivanna VS Assistant Registrar of Co-Operative Society

2013-08-30

B.S.PATIL

body2013
JUDGMENT 1. In this writ petition, petitioners are calling in question the order dated 14.08.2013 passed by the Karnataka Appellate Tribunal (for short, the KAT) posting the appeal to 12.11.2013 by holding that the locus standi of the petitioners who are appellants before the KAT to maintain the appeal had to be examined after the other parties were served and that it was not appropriate to grant interim order of stay of the order impugned therein at that stage. 2. Petitioners are the President and Directors of the Milk Producers Cooperative Society Limited, Debur, Nanjangud Taluk, Mysore District. They are aggrieved by the refusal by the KAT to grant an interim order of stay staying the order passed by the Registrar of Co-operative Societies, Mysore Sub-Division, Mysore, as per the order dated 27.06.2013 produced at Annexure-F. By the said order, the Registrar of Co-operative Societies has allowed the dispute raised under Section 70 of the Karnataka Cooperative Societies Act, 1959 (for short, 'the Act') by the 2nd respondent -Shivakumar thereby directing his reinstatement as Secretary of the Society along with backwages with effect from 16.09.2011. 3. Brief facts necessary for the disposal of this writ petition stated in nutshell are that admittedly, respondent No.2 was working as a Secretary of the Society. He submitted his resignation on 15.09.2011. As asserted by the petitioners, the Managing Committee of the Society accepted the same on 16.09.2011 and the acceptance was communicated to the 2nd respondent. However, respondent No.2 sought to withdraw his resignation on 21.09.2011 by submitting a representation. The said representation was rejected by the Managing Committee on 22.09.2011. As a result, the 2nd respondent raised a dispute under Section 70 of the Act before the 1st respondent. 4. After holding enquiry, the 1st respondent - Registrar of the Co-operative Societies passed an order on 27.06.2013 holding that the resignation given by the 2nd respondent was not voluntary and that the same had been obtained by exerting pressure on him. Consequently, the Society was directed to reinstate the 2nd respondent with all consequential benefits. 5. This order has been challenged before the KAT by the petitioners herein, who are the President and Directors of the Society. The KAT has declined to grant interim order of stay and has passed the impugned order. Consequently, the Society was directed to reinstate the 2nd respondent with all consequential benefits. 5. This order has been challenged before the KAT by the petitioners herein, who are the President and Directors of the Society. The KAT has declined to grant interim order of stay and has passed the impugned order. It has held that if an interim order of stay were to be granted, it will tantamount to virtually passing a final order on merits of the matter. It has further expressed some reservation with regard to the locus standi of the petitioners to maintain the appeal. Having said so, the KAT has found that keeping open the question of limitation, notice had to be issued to the otherside posting the case to 12.11.2013. The order does not disclose that the interim application filed for grant of stay has been rejected. 6. Learned counsel for the petitioners submits that the reasons assigned by the KAT are totally illegal and unsustainable inasmuch as grant of stay in a matter like this would not require adjudication of the merits of the main matter, nor would it tantamount to expressing opinion on the merits of the matter. He further points out that the petitioners being the President and Directors of the Society are representing the cause of the Society and if the order passed by the Registrar is implemented, the Society will have to bear the financial burden of paying the backwages for two years apart from reinstating the Secretary who had voluntarily resigned from his post. 7. Learned counsel for respondent No.2 who is the contesting respondent submits that as the KAT has not dismissed the application for stay and has deferred its consideration till service of notice on all the respondents, the petitioners are not entitled to maintain this writ petition. 8. In reply, counsel for the petitioners invites the attention of the Court to Annexure-H notice of disqualification issued on 20.08.2013 invoking the provisions of Section 29C of the Act calling upon the petitioners to show-cause why action for disqualification should not be taken for violating the order passed by the Registrar in not reinstating the 2nd respondent by paying the backwages as directed. 9. Respondents 3 & 4 are the Directors of the Society. They have very little role in the matter. The order that is now being passed will not in any manner affect their interest. 9. Respondents 3 & 4 are the Directors of the Society. They have very little role in the matter. The order that is now being passed will not in any manner affect their interest. Therefore, issue of notice to respondents 3 & 4 is dispensed with. The contesting respondent is respondent No.2 only. 10. Having heard the learned counsel for the parties including the learned High Court Government Pleader, I find that the impugned order passed by the KAT does not disclose that the application filed by the petitioner seeking interim stay has been rejected. If the KAT was of the view that the application had to be considered only after service of notice on the otherside, it was not necessary for the KAT to express its views holding that grant of stay would tantamount to writing an order on the main matter and that the locus standi of the petitioners herein -appellants before it to maintain the appeal was itself doubtful and also that no prejudice whatsoever would be caused to the petitioners, if the interim order of stay was not granted. 11. The above opinion expressed by the KAT, as rightly contended by the petitioners, would virtually amount to rejecting the application filed. Although learned counsel for respondent No.2 submits that the application for stay filed by the petitioners is still pending and the same has to be considered after service of notice, as rightly pointed out by the learned counsel for the petitioners, as long as the instant order holds the field, it will certainly adversely affects the interest of the petitioners in considering the request for grant of stay in future by the KAT. 12. The opinion expressed by the KAT that consideration of the prayer for stay would tantamount to writing an order on the main matter is incorrect. At the stage of grant of interim stay, what all is required to be examined is the prima facie case made out. For that purpose, the merits have to be examined only to express a prima facie view and that will not affect the disposal of the main matter when the case comes up for hearing. At the stage of grant of interim stay, what all is required to be examined is the prima facie case made out. For that purpose, the merits have to be examined only to express a prima facie view and that will not affect the disposal of the main matter when the case comes up for hearing. If the KAT were to find that the petitioners herein -appellants before it had no locus standi, a positive finding in this regard could have been recorded after hearing both the parties, so that the petitioners would know the further course of action they have to take. 13. As a result of the order now passed by the KAT which has virtually declined to grant an interim order of stay, petitioners have been now proceeded against under Section 29C of the Act, for their disqualification alleging that they have violated the order passed by the Registrar. As rightly pointed out by the counsel for the petitioners, such proceeding initiated while the application for stay is yet to be considered would result in serious injury to their rights. 14. In the result and for the foregoing, in my considered view, the appropriate course is to set aside the order passed by the KAT and direct the KAT to consider the application filed for grant of interim stay within a time frame. Though the matter is now listed on 12.11.2013, having regard to the urgency involved, parties are directed to appear before the KAT on 05.09.2013, on which day the KAT shall consider the application for stay and pass orders in accordance with law uninfluenced by the observations made by this Court as regards the merits of the case. Writ Petition is accordingly disposed of. Learned High Court Government Pleader is permitted to file memo of appearance within three weeks from today.