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2013 Supreme(Kar) 548
HIGH COURT OF KARNATAKA
B.S. PATIL, J.
D.V. Shivanna & Others
Versus
Assistant Registrar of Co-Operative Society & Others
W.P. No. 38171 of 2013 (CS-RES)
Decided on : 30.08.2013
For the Petitioners:P. Mahesha, Advocate.
For the Respondents:R1, T.K. Vedamurthy, HCGP, R2, B.S. Nagaraj, Advocate.
The main legal point established is that at the stage of granting interim stay, only the prima facie case needs to be examined, and a positive finding on the petitioners' locus standi could have been recorded after hearing both parties.
Headnote:
Karnataka Cooperative Societies Act - Dispute under Section 70 - Summary
Fact of the Case:
The petitioners, President and Directors of a Cooperative Society, challenged the refusal by the Karnataka Appellate Tribunal (KAT) to grant an interim order of stay staying the order reinstating the 2nd respondent as Secretary of the Society with backwages under Section 70 of the Karnataka Cooperative Societies Act, 1959.
Finding of the Court:
The Court found that the KAT's refusal to grant an interim order of stay was based on incorrect reasoning and directed the KAT to consider the application for stay within a time frame, uninfluenced by the observations made by the Court.
Issues: The issues involved the refusal of the KAT to grant an interim order of stay and the petitioners' locus standi to maintain the appeal.
Ratio Decidendi: The KAT's opinion that consideration of the prayer for stay would tantamount to writing an order on the main matter was incorrect. At the stage of grant of interim stay, only the prima facie case needs to be examined, and a positive finding on the petitioners' locus standi could have been recorded after hearing both parties.
Final Decision: The Court set aside the KAT's order and directed the KAT to consider the application for grant of interim stay within a time frame, uninfluenced by the Court's observations as regards the merits of the case.
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. 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
