Allowed

A.P. Mahesh Cooperative Bank Ltd. v. State of Telagnana And 3 Others

Telangana HC13 Feb 2020WP/1654/2020

Case brief

AI extract

What is this about?

The High Court set aside an order by the Registrar of Co-operative Societies that attempted to re-enter a closed revision. The Court held the Registrar was functus officio and directed the disputed matter to be resolved by an Arbitrator appointed under Section 84 of the Multi-State Co-operative Societies Act, 2002.

What did the court decide?

Impugned order setting aside the closed revision is set aside; matter directed to appointed Arbitrator.

A.P. Mahesh Cooperative Bank Ltd. Vs State of… — Cooperative Societies | Telangana HC (2020)

¶1

HON’BLE SRI JUSTICE ABHINAND KUMAR SHAVILI

¶2

WRIT PETITION No.1654 of 2020

¶3

ORDER:

¶4

This writ petition is filed seeking the following relief :-

¶5

“ …..to issue a Writ of Mandamus or any other appropriate Writ, Order or Orders, Direction or Directions to declare the proceedings of the 2^nd respondent in F.No.R11017/ 27/ 2013-LandM dated 21/ 01/ 2020, as without jurisdiction, violative of natural justice, illegal and ultra vires his powers and to set aside the same and direct the 2nd respondent to act in accordance with law ……” .

¶6

Heard Sri Vedula Srinivas, learned counsel appearing for the

¶7

petitioner, learned Assistant Solicitor General appearing for the 2^nd respondent, learned Government Pleader for Co-operation appearing for respondents 1 and 3 and Sri M.Karuna Sagar, learned counsel appearing for the 4^th respondent.

¶8

It has been contended by the petitioner that it is a Co-operative Bank engaged in banking business and it is registered under the Multi-State Co-operative Societies Act, 2002 (for short ‘the Act) and it has intended to move an agenda on 10.09.2015 making one Sri Ramesh Kumar Bung conferring the title of Chairman Emeritus and the 4^th respondent is objecting for such conferment of Chairman Emeritus and the 4^th respondent has approached the 3^rd respondent on 09.09.2015 and contended that Sri Ramesh Kumar Bung had already rendered two terms as Chairman of the petitioner’s Bank and, therefore, he is not entitled for conferring the title of Chairman Emeritus. The 3^rd respondent vide order dated 09.09.2015 had directed the petitioner not to place the Agenda on 10.09.2015 in respect of Item No.9, which was dealing with conferring the title of Chairman Emeritus on Sri Ramesh Kumar Bung. Aggrieved thereby, the petitioner has approached the 2^nd

¶9

¶10

respondent on 10.09.2015. The 2^nd respondent vide order dated 10.09.2015 was pleased to keep the order passed by the 3^rd respondent in abeyance. Pursuant thereto, the petitioner has passed a Resolution in accordance with the Agenda and conferred the title of Chairman Emeritus in favour of Ramesh Kumar Bung and since then, Sri Ramesh Kumar Bung was continued with the title of Chairman Emeritus, which was conferred as co-terminus, for a period of five years and the tenure would come to an end by April 2020. The petitioner has further contended that aggrieved by the order passed by the 2^nd respondent dated 10.09.2015, keeping the order of the 3^rd respondent in abeyance, the 4^th respondent had filed W.P.(C).No.5566 of 2018 before the Delhi High Court and while the matter was pending, the 4^th respondent sought permission to withdraw the said writ petition with a liberty to pursue his remedies before the revisional authority i.e., the 2^nd respondent and the Delhi High Court vide order dated 24.05.2018 dismissed the said writ petition as withdrawn and directed the revisional authority to dispose of the revision in accordance with law within a period of three months from the date of receipt of the communication of the said order. Pursuant to the order passed by the Delhi High Court, the 2^nd respondent has taken up the revision and closed the revision on 29.10.2018 by observing as follows :-

¶11

“ In view of the order dated 24.05.2018 passed by the Hon’ble High Court of Delhi, the matter has been re-examined. Since arbitration petition has already been filed before the office of RCS Telangana, therefore, the Arbitrator/ Additional Registrar/ Registrar of Co-operative Societies (RCS), Telangana, is advised to take a decision in the matter by providing a reasonable opportunity of hearing to all the parties and following all the rules, regulations and

¶12

¶13

the procedures applicable in the Arbitration & Conciliation Act, 1996 read with MSCS Act, 2002. ”

¶14

Pursuant to the said order passed by the 2^nd respondent, the 3^rd respondent vide orders dated 19.02.2019 and 17.08.2019 requested the 2^nd respondent to take up the matter once again and the 2^nd respondent, after closing the revision on 29.10.2018 has re-entertained the case and passed the impugned order dated 21.01.2020 by observing as follows :-

¶15

“ In view of the above, the Management of the Bank is directed to rectify the said anomaly within seven days from the date of this order and submit a compliance report before this authority. Any non-compliance of this order shall be viewed seriously. Parties to appear again for the next hearing on 3.2.2020 at 4.00 p.m.”

¶16

Challenging the same, the present writ petition is filed. Learned counsel for the petitioner contended that W.P.(C).No.5566 of 2018 filed by the 4^th respondent was dismissed as withdrawn by the Delhi High Court and directed the revisional authority to dispose of the revision in accordance with law within a period of three months from the date of receipt of the communication of the said order. Pursuant thereto, the 2^nd respondent has passed orders on 29.10.2018 closing the revision and once the 2^nd respondent has closed the revision, it has become functus officio and it cannot re-entertain the revision and pass orders adverse to the petitioner. Further, the co-terminus tenure of Ramesh Kumar Bung would be ended within a couple of months i.e., during April, 2020. Therefore, the impugned order is liable to be set aside, as the 2^nd respondent has no jurisdiction to pass the impugned order as it had already closed the revision on 29.10.2018 and having closed the revision, the 2^nd respondent cannot re-open

¶17

¶18

the revision, pursuant to the order passed by the Delhi High Court in W.P.(C).No.5566 of 2018.

¶19

Learned Assistant Solicitor General appearing for the 2^nd respondent has contended that the 2^nd respondent has rightly considered the revision and passed orders, pursuant to the order passed by the Delhi High Court in W.P.(C).No.5566 of 2018 dated 24.05.2018 and therefore, there are no merits in the writ petition and the same is liable to be dismissed.

¶20

Learned Counsel appearing for the 4^th respondent has contended that Ramesh Kumar Bung has already rendered his service as Chairman twice and as per the bye-laws, he is not entitled to be continued as Chairman for any other term. But, the petitioner intends to continue Sri Ramesh Kumar Bung in the form of conferring the title of Chairman Emeritus though he has been discharging his duties as Senior Vice Chairman. The 4^th respondent has been pursuing his remedies since 2015 before the Authorities to prove the illegality committed by the petitioner’s Bank in continuing Sri Ramesh Kumar Bung as Chairman. Inspite of the 3^rd respondent passing orders, the petitioner is continuing Ramesh Kumar Bung as Chairman Emeritus in addition to the post of Senior Vice Chairman, which is illegal and contrary to the bye-laws. He further contended that for creation of any post, there should be a resolution to that effect. But, in the absence of any resolution in accordance with the bye-laws, the petitioner cannot confer title of Chairman Emeritus in favour of Ramesh Kumar Bung. Therefore, the 2^nd respondent has rightly directed the petitioner Bank to remove Ramesh Kumar Bung from the post of Chairman Emeritus within seven days and pass orders in accordance with the directions given

¶21

¶22

by the Delhi High Court in W.P.(C).No.5566 of 2018 dated 24.05.2018 and therefore, the 2^nd respondent has rightly passed the impugned orders.

¶23

Insofar as the contention of the petitioner that the 2^nd respondent has closed the revision vide order dated 29.10.2018, he stated that it is false and incorrect, as the 2^nd respondent has not closed the revision on 29.10.2018 and it has directed the 3^rd respondent to take up the matter and the 3^rd respondent has initially entertained the grievance of the 4^th respondent and passed orders on 09.09.2015. Aggrieved by the same, the petitioner has preferred a revision before the 2^nd respondent and the 2^nd respondent, without adjudicating the case on previous occasion, had placed the order passed by the 3^rd respondent in abeyance vide order dated 10.09.2015 and therefore, it should be treated as continuation of proceedings, which were initiated way back in the year 2015 by the 4^th respondent by giving complaint before the 3^rd respondent as early as on 09.09.2015. Therefore, the order passed by the 2^nd respondent is to be treated as continuation of proceedings, which were initiated way back in the year 2015 and the 2^nd respondent has rightly passed impugned orders in favour of the 4^th respondent. Learned counsel appearing for the 4^th respondent further contended that as per Section 11 (1) of the Act, the petitioner’s Bank must obtain necessary permission from the 2^nd respondent for creation of post of Chairman Emeritus. Admittedly, in the instant case, the petitioner has not obtained any permission from the 2^nd respondent for creation of post of Chairman Emeritus. Therefore, the creation of post of Chairman Emeritus by the petitioner bank and conferring the same on Ramesh Kumar Bung is

¶24

¶25

arbitrary and illegal and therefore, the 2^nd respondent has rightly passed orders directing the petitioner to remove the title of Chairman Emeritus granted in favour of Ramesh Kumar Bung and report within seven days.

¶26

Learned counsel for the 4^th respondent further contended that the 3^rd respondent has passed orders on 09.09.2015 on the revision submitted by the 4^th respondent and rightly directed the petitioner not to place the agenda in the meeting scheduled to be held on 10.09.2015 in respect of Item No.9 and within twelve hours, the petitioner could appear before the 2^nd respondent and the 2^nd respondent on the earlier occasion has passed illegal orders at 9.56 hours early in the morning i.e., even before the office could open. Therefore, the order passed by the 2^nd respondent on 10.09.2015 is illegal and arbitrary and the same was rectified by the impugned order passed by the 2^nd respondent that too in compliance of the order passed by the Delhi High Court in W.P.(C).No.5566 of 2018 dated 24.05.2018. Therefore, there are no merits in the writ petition and the same is liable to be dismissed.

¶27

This Court, having considered the rival submissions, is of the considered view that the 2^nd respondent has passed final orders on the revision and closed the revision on 29.10.2018 and the 2^nd respondent has entertained the said revision, at the instance of the 3^rd respondent and passed the impugned order. When the 2^nd respondent passed orders closing the revision on 29.10.2018, the 2^nd respondent becomes functus officio and it is not entitled to re-entertain the revision once again and pass the impugned order. Therefore, the impugned order is liable to be set aside and it is accordingly set aside.

¶28

¶29

As per Section 84 of the Act, an Arbitrator has to be appointed to look into the affairs of each of the Co-operative Societies, which has to be registered under the Act. As per Section 84 of the Act, the 2^nd respondent has appointed one Damodar Bura as Arbitrator to look into the affairs of the petitioner’s Bank vide proceedings dated 22.11.2019.

¶30

Section 84 of the Act reads as follows :-

¶31

84. Reference of disputes:

¶32

(1) Notwithstanding anything contained in any other law for the time being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-State cooperative society against its paid employee or an industrial dispute as defined in clause (k) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947) touching the constitution, management or business of a multi-State cooperative society arises-

¶33

(a) among members, past members and persons claiming through members, past members and deceased members, or

¶34

(b) between a member, past members and persons claiming through a member, past member or deceased member and the multi-State co-operative society, its board or any officer, agent or employee of the multi-State co-operative society or liquidator, past or present, or

¶35

(c) between the multi-State co-operative society or its board and any past board, any officer, agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the multi-State cooperative society, or

¶36

(d) between the multi-State co-operative society and any other multi-State co-operative society, between a multiState co-operative society and liquidator of another multiState co-operative society or between the liquidator of one multi-State co-operative society and the liquidator of

¶37

¶38

another multi-State co-operative society, such dispute shall be referred to arbitration.

¶39

(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-State co-operative society, namely:-

¶40

(a) a claim by the multi-State co-operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;

¶41

(b) a claim by a surety against the principal debtor where the multi-State co-operative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;

¶42

¶43

(3) If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-State co-operative society, the decision thereon of the arbitrator shall be final and shall not be called in question in any Court.

¶44

(4) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.

¶45

(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996).

¶46

A perusal of Section 84 of the Act touches upon the Constitution, Business and Management of the Society. The issue

¶47

¶48

raised by the 4^th respondent also touches upon the Constitution, Business and Management of the Society. Therefore, the 4^th respondent is at liberty to approach the said Arbitrator, who was appointed by the 2^nd respondent in terms of Section 84 of the Act. It is needless to state that if the 4^th respondent approaches the Arbitrator, the Arbitrator will adjudicate the matter and pass appropriate orders within a period of two weeks from the date the 4^th respondent approaches the Arbitrator.

¶49

With the above observations, the writ petition is allowed. No

¶50

order as to costs.

¶51

Pending miscellaneous petitions, if any, shall stand closed.
____________________________
ABHINAND KUMAR SHAVILI, J
Date: 13-02-2020
Note:
Issue C.C. by tomorrow
(B/ o)
Prv

¶52

A.P. Mahesh Cooperative Bank Ltd. v. State of Telagnana And 3 Others

Case brief

What is this about?

What did the court decide?

A.P. Mahesh Cooperative Bank Ltd. v. State of Telagnana And 3 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

All India Induction Furnaces Association Vs Telangana State Electricity Regulatory Commission

Telangana Spinning and Textile Mills Association Vs Telangana State Electricity Regulatory Commission

M/s.The India Cements Limited, Vs Telangana State Electricity Regulatory Commission

Smt. Satya Prabha Mishra, Vs the Ap Housing Board and Another

Sri M. Uppal Reddy Vs The Regional Passport Officer

Kondapally Raghu Ram Reddy Vs The State of Telangana