Reinstatement pending inquiry may be modified to an alternative branch to protect the inquiry’s fairness.

Respondent No. 16, the Society’s Chief Executive Officer (CEO), was suspended by a resolution dated 13 August 2025 following allegations of misconduct and misappropriation.

A dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959, resulted in her dismissal on 16 January 2026.

On her appeal under Section 105, the Karnataka Appellate Tribunal set aside the dismissal, allowed the dispute, and directed her reinstatement as CEO within seven days, with the domestic inquiry to be completed within two months.

The Society challenged the Tribunal’s order, arguing that the Tribunal had gone beyond the issue before it and that reinstatement as CEO at the same branch could impede the inquiry.

The Society offered instead to post her as Branch Manager In-charge at its Shirali branch during the inquiry.

1. Whether the Tribunal exceeded the scope of the appeal by addressing the charges in the ongoing inquiry while considering the legality of the suspension.

2. Whether reinstatement as CEO at the same branch was appropriate pending the inquiry, given the Society’s concern that it could impede a fair inquiry.

3. Whether observations by the Tribunal concerning the charges could prejudice the ongoing inquiry.

Section 70 of the Karnataka Co-operative Societies Act, 1959, provides the statutory basis for the dispute described in the proceedings, while Section 105 provides for the appeal to the Karnataka Appellate Tribunal.

The petition invoked Articles 226 and 227 of the Constitution, under which the High Court considered the challenge to the Tribunal’s order.

The judgment does not cite or formulate any further statutory test or precedent governing reinstatement during an inquiry; its order instead addresses the proposed posting and the need for the inquiry to proceed without being influenced by the Tribunal’s observations.

The Court noted that the suspension resolution referred to allegations of misconduct and dereliction of duty, and that the Society relied on alleged irregular loan transactions to support its concerns.

Rather than finally determining the validity of the charges or the parties’ competing submissions about the Tribunal’s scope, the Court accepted the Society’s offer to reinstate respondent No. 16 at the Shirali branch as Branch Manager In-charge.

This arrangement permitted her to return to service while addressing the stated concern about her access to records at the original branch.

The Court also directed that the inquiry proceed without influence from the Tribunal’s observations.

The Tribunal’s direction to reinstate respondent No. 16 as CEO was modified: she was to be reinstated as Branch Manager In-charge at the Society’s Shirali branch until completion of the inquiry.

The inquiry was to be completed within three months, and the Tribunal’s observations touching on the merits of the inquiry were not to form part of the record or influence its conduct.