Karnataka High Court

Sri. H. S. Shivakumar vs Karnataka Co-Operative Milk ... on 7 July, 2022

Bench: Acting Chief Justice, J.M.Khazi

                               1


       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

             DATED THIS THE 7TH DAY OF JULY 2022

                           PRESENT

               THE HON'BLE MR. ALOK ARADHE
                   ACTING CHIEF JUSTICE

                             AND

             THE HON'BLE MS.JUSTICE J.M. KHAZI

                W.A. NO.395 OF 2022 (GM-RES)
                              IN
                W.P.No.14520 OF 2020 (GM-RES)
BETWEEN:

SRI. H.S. SHIVAKUMAR
S/O SRI. H.S. SHIVALINGASWAMY
AGED ABOUT 52 YEARS
PROPRIETOR
M/S. GANESH ENTERPRISES
NO.71/3, SHOP BUILDING
'A' BLOCK, BANDIPALYA MARKET YARD
BANDIPALYA, MYSURU-570 025.
                                           ... APPELLANT
(BY MR. S. KALYAN BASAVARAJ, ADV.,)

AND:

1.     KARNATAKA CO-OPERATIVE MILK PRODUCERS
       FEDERATION LIMITED
       KMF COMPLEX, P.B. NO. 2915
       DR. M.H. MARIGOWDA ROAD
       BENGALURU-560 029
       REPRESENTED BY ITS MANAGING DIRECTOR.

2.     THE DIRECTOR
       (MARKETING)
       KARNATAKA CO-OPERATIVE MILK PRODUCERS
       FEDERATION LIMITED
       KMF COMPLEX, P.B. NO. 2915
       DR. M.H. MARIGOWDA ROAD
                                      2


     BENGALURU-560 029
     REP. BY ITS MANAGING DIRECTOR.

3.   M/S. NAVEEN AND CO.,
     NO.15/4, 1ST CROSS
     'A' BLOCK, APMC YARD
     BANDIPALYA
     MYSURU - 570024
     REP. BY ITS PARTNER
     SRI. M.S. NAVEEN
     S/O SRI. M.S. SHIVASWAMY
     AGED ABOUT 47 YEARS.

                                       ... RESPONDENTS
(BY MR. S.S. NAGANAND, SR. COUNSEL FOR
  MRS. SUMANA NAGANAND, ADV., FOR R1 & R2
    MR. K.J. KAMATH, ADV., FOR R3)
                               ---

     THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH
COURT ACT, PRAYING TO CALL FOR THE RECORDS IN W.P. NO.
14520/2020 ON THE FILE OF THE LEARNED SINGLE JUDGE OF THIS
HON'BLE COURT. SET ASIDE THE ORDER DATED 31.03.2022 PASSED
BY THE LEARNED SINGLE JUDGE OF THIS HON BLE COURT IN W.P.
NO. 14520/2020 BY ALLOWING THIS APPEAL. AND PASS ANY OTHER
ORDER OR ORDERS AS THIS HON BLE COURT DEEMS FIT IN THE
FACTS AND CIRCUMSTANCES OF THE CASE.

     THIS W.A. COMING ON FOR PRELIMINARY HEARING, THIS DAY,
ACTING CHIEF JUSTICE DELIVERED THE FOLLOWING:

                               JUDGMENT

This intra-Court appeal has been filed under Section 4 of

Karnataka High Court Act, 1961 against the order dated 31.03.2022

passed by the learned Single Judge by which the appellant has been

relegated to avail the alternative remedy of raising dispute under

Section 70 of the Karnataka Co-operative Societies Act, 1964.

(hereinafter referred to as 'the Act' for short).

2. The appellant was a wholesale distributor of Nandini Milk

products of Karnataka Milk Federation Ltd. (Hereinafter referred to as

'the Federation' for short). By an order dated 25.08.2015, the

appellant was allotted an additional area viz., an area towards the

right side of Bandipalya entrance for distribution of Nandini Milk

Products. It appears that Minister for Co-operation, Government of

Karnataka, requested the Managing Director of the Federation to allot

complete distribution area of Nandini products outside APMC Yard to

M/s. Naveen Enterprises. The Federation by a communication dated

26.11.2020 informed its Director (Marketing) to identify a separate

market place for allotment to the appellant on the ground that

wholesale distribution in respect of APMC Yard, Bandipalya area falls in

Mysuru area which has been licensed to one M/s. Naveen Enterprises.

3. The appellant challenged the communication dated

26.11.2020 in a writ petition. The learned Single Judge by an order

dated 31.03.2020 disposed of the writ petition with liberty to the

appellant to take recourse to the remedy of raising a dispute as

prescribed under Section 70 of the Act. In the aforesaid factual

background, this appeal has been filed.

4. Learned counsel for the appellant submitted that appellant

is not an agent of the Federation. Therefore, the appellant cannot

take recourse to remedy prescribed under Section 70 of the Act. It is

also urged that availability of an alternative remedy is not a bar in

entertaining the writ petition. It is contended that the appellant is only

a nominal member of the Federation and the impugned order has been

passed in violation of principles of natural justice and at the instance of

the Minister for Co-operation, Government of Karnataka. In support of

the aforesaid submission, reliance has been placed on THE DFA

SOUTH KHERI & ORS v. RAM SANEHI SINGH 1971 (3) SCC 864;

HARBANSLAL SAHNIA & ANR v. INDIAN OIL CORPORATION

LTD & ORS (2003) 2 SCC 107; RADHA KRISHAN INDUSTRIES v.

STATE OF HIMACHAL PRADESH & ORS (2021) 6 SCC 771 AND

MAGADH SUGAR & ENERGY LTD v. STATE OF BIHAR & ORS

(2021) SCC ONLINE SC 801.

5. On the other hand, learned Senior Counsel for the

Federation submitted that Minister for Co-operation, Government of

Karnataka has neither been impleaded nor any malafide has been

alleged. It is submitted that, the appellant is a nominal member of the

Federation and therefore, a statutory alternative remedy is available to

him to raise the dispute. It is also urged that principles of natural

justice have no application in contractual disputes. In support of

aforesaid submissions, learned counsel for respondent has referred to

decisions of the Supreme Court in MUNICIPAL COUNCIL GONDIA v.

DIVI WORKS AND SUPPLIERS, HUF & ORS in Civil Appeal No.

1538/2022 dated 28.02.2022 and STATE OF KERALA & ORS v.

M K JOSE (2015) 9 SCC 433 and decisions of this Court in SURESH

v. THE MANAGING DIRECTOR, KARNATAKA MILK FEDERATION

& ANR ILR 2008 KAR 3243 and SRI G. MANJANAIK v.

MANAGING DIRECTOR, KMF & ORS in W.P. No.111499/2017

dated 17.01.2018.

6. We have considered the rival submissions and have

perused the records. Undoubtedly availability of a statutory alternative

remedy is not a bar in entertaining a writ petition. However, it is an

equally well-settled legal proposition that extraordinary jurisdiction of

this Court under Article 226 is not exercised if a statutory remedy is

available. The appellant had deposited a fee of Rs.600/- on

11.11.2020 and had become a nominal member of the Federation.

Section 70 of the Act reads as under:

70. Disputes which may be referred to Registrar for decision:

(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society [xxxx] 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 [board] or any officer, agent or employee of the society or

(c) between the society or its [board] and any past [board] any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representative of any deceased officer, deceased agent, or deceased employee of the society, or

(d) between the society and any other co-operative society [or a credit agency]

Such dispute shall be referred to the Registrar for decision and [no Civil or Lobour or Revenue court or Industrial Tribunal] shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.

(2) For the purpose of sub-section [1] the following shall be deemed to be disputes touching the

constitution, management or the business of a co- operative society, namely.-

(a) a claim by the 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,

(b) a claim by a society against the principal debtor where the 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,

(c) any dispute arising in connection with the election of a President, Vice-President, or any office- bearer or Member of board of the society].

(d) any dispute between a co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society not withstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947).

(e) a claim by a co-operative society for any deficiency caused in the assets of the co-operative society by a member, past member, deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its [board], past or present whether such loss be admitted or not.

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

(4) xxxx

(5) xxxx

7. Thus, from perusal of Section 70(1)(b), it is evident that if

there is any dispute touching the constitution, management or the

business of a cooperative society between a member, past member or

a person claiming through a member, and the society, its board, or

any other officer, such dispute has to be referred to the Registrar for

adjudication. In view of the fact that the petitioner has an alternative

efficacious remedy to raise the dispute under Section 70, we are not

inclined to invoke the extraordinary discretionary jurisdiction under

Article 226 of the Constitution of India. The contention that the order

has been passed at the behest of Minister for Co-operation need not