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Judgment
K. Sreedhar Rao, J.—The Petitioners are the employees of the third Respondent -society. The first Respondent after inspecting the third Respondent -society passed an order u/s 68 of the Co-operative Societies Act at Annexure-A dated 19.3.2003. In the order at Annexure-A it was found that the appointment of the Petitioners to the post is not in accordance with law therefore directed that they have to be terminated. Pursuant to the order u/s 68 the first Respondent directed compliance report from the third Respondent . The Petitioners are relieved from the services of third Respondent . The Petitioners aggrieved by the action filed an appeal to the 4th Respondent u/s 106(1)(h) of the Co-operative Societies Act.
The appeals filed by the Petitioners have been dismissed as not maintainable as per orders at Annexure-C in all the writ Petitions. Aggrieved by the orders, the writ Petitions are filed.
The Counsel for the Respondents argued that the Petitioners have no locus standi to file an appeal u/s 106 of the Act and their remedy is only to seek arbitration u/s 70, thus supported the order of 4th Respondent at Annexure-C. The provisions of Section 68 and Section 106(1)(h) are extracted hereunder for convenient reference.
Order of Registrar.-[(1)] The Registrar may make an order directing the co-operative society or its [office bearers] to take such action as may be specified in the order within the time mentioned therein to remedy the defects disclosed in the audit u/s 63 or the inquiry u/s 64 or inspection u/s 65 [and 65-B]
[Explanation. ***]
[(2)] A report about rectification of defects by the co-operative society shall be sent by the committee of such society periodically till all such defects are rectified to the Registrar, the credit agency and the financial Bank, and where the defects were pointed out in the audit, to the Director of Co-operative Audit.
(3) When the Registrar makes an order under Sub-section (1) to remedy the defects disclosed in the inquiry or inspection, be shall send a copy of the order alongwith the result of the inquiry or inspection as the case may be, to the Director of Co-operative Audit who shall take action for incorporation of such results in the next audit report and financial statements wherever necessary.]
106(1)(h).-An order of the Registrar u/s 68;
The report u/s 68 passed by the first Respondent contains directions to the third Respondent for implementation. At the stage of enquiry u/s 68 it is true the Petitioners have not been heard and their explanation is not taken. The provision of Section 106(1)(h) permits an appeal against the order of registrar u/s 68. The Counsel for the Respondent argued that it is the society alone can file an appeal and not the Petitioners. The plain reading of provisions do not say who are all entitled to file an appeal. But the basic principle that a person affected by an order can always appeal to the appellate authority, although he may not be a party to the proceedings. In that view of the matter, the order of the 4th Respondent at Annexure-C is had in law. The 4th Respondent should have heard the Petitioners and adjudicated their claims regarding the validity of their appointment and pass orders on merits. The petition is allowed, the order at Annexure-C is quashed in all the petitions. The 4th Respondent is directed to reconsider the appeals of the Petitioners and pass appropriate orders in accordance with law.
Learned HCGP is permitted to file her memo of appearance within four week.