Ayyangar, J. - (1.) The appellant was the President of the Anakapalli Co-operative Marketing society Ltd. -a Society constituted mainly for the purpose of enabling its members to obtain credit facilities and to arrange for the sale of agricultural products at reasonable prices. There were complaints regarding the working of the Society and accordingly an enquiry was instituted into its affairs by the Registrar of Cooperative Societies, Madras at a time when Anakapalli, now in Andhra Pradesh, was in the State of Madras. As a result of the facts disclosed in the inquiry the Committee then in management of the Society was, after due notice to show cause and a hearing, superseded by order of the Registrar dated February 15, 1952, such suppression being authorised by S. 43 of the Madras Co-operative Societies Act (Act VI of 1932) hereinafter called the Act. A special officer was appointed to take charge of the affairs of the Society and this officer filed a claim before the Registrar, inter alia, against the appellant. The amount claimed was Rs. 13,000/- and odd and details were given as to how this sum was made up. The main item of the claim was commission stated to have been actually earned by the Society on the sales effected by it of jaggery belonging to its producer-members but which was not credited to the society. On receipt of this claim the Registrar appointed, under S. 51 (2) of the Act, the Deputy- Registrar of Co-operative Societies, Visakhapatnam to act as an arbitrator to adjudicate the claim.
(2.) Immediately this order was passed the appellant filed a petition in the High Court of Andhra Pradesh for the issue of a writ of prohibition under Art. 226 of the Constitution prohibiting the Deputy Registrar from dealing with the claim which he was directed to try. The learned Single Judge who heard the petition allowed the petition and granted the appellant the relief he sought. The Co-operative Society took the matter in appeal to the Division Bench of the High Court which allowed the appeal and dismissed the writ petition. Thereafter the appellant moved this Court for special leave (certificate of fitness having been refused by the High Court) and has preferred the present appeal.
(3.) Before adverting to the arguments addressed to us by Mr. Ram Reddy learned Counsel for the appellant, it is necessary to state a few facts concerning the transactions which have given rise to these proceedings. The Co-operative Society of which the appellant was the President till November, 1951 held a licence under the Madras General Sales Tax Act for doing business as a Commission Agent and the Society was earning commission on the turnover of the sales effected of the agricultural produce of its members and others. In October, 1950 the Government of India promulgated the Gur Control order fixing the maximum price at which gur could be sold in different States. The prices fixed varied from State to State. The prices fixed for sale at Anakapalli, then in the State of Madras, were somewhat low than those which had been fixed in other States. This gave occasion for the members of the Society to sell their jaggery at higher prices than fixed because there was demand for jaggery from merchants at prices higher than the controlled price. It was alleged that while on paper the transactions entered into between the members of the Society and the purchasers showed sales at the prices fixed by law, in reality, higher prices were charged. As stated already, the Society was entitled to charge commission on the sales effected through it. As regards this was stated that commission was owned on the entire price at which the gur was sold, and while the amount of commmission payable on the basis of controlled prices was credited to the Society, the commission earned in respect of the extra price which its members obtained, was, it was stated, not brought to the credit of the Society in its accounts but appropriated by members of the management. These were the allegations and it is on the basis of these allegations that the claim against the appellant and others had been made. Their correctness have yet to be tested in the arbitration proceedings.;