Andhra HC (Pre-Telangana)
Chowtupali Satyanarayana vs Deputy Registrar Of Co-Op. Societies ... on 1 September, 1998
Equivalent citations: 1998(5)ALT521
ORDER S.R. Nayak, J.
1. This writ petition is directed against the show cause notice bearing Re. No. 1610/98-C dated 12-8-1998 issued by the Deputy Registrar of Cooperative Societies, Kovvur, West Godavari District under Section 21-A(1)(b) of the Andhra Pradesh Co-operative Societies Act, 1964, for short 'the Act' read with Rule 24(4) of the Andhra Pradesh Co-operative Societies Rules, 1964, for short 'the Rules' (Sub-rule (4) is wrongly mentioned. It should be read as Sub-rule (3), calling upon the petitioner who is presently the President of Tyajampudi Primary Agricultural Co-operative Society, Tyajampudi to show cause as to why it should not be declared that the petitioner ceased to be the President of the Primary Agricultural Co-operative Society with effect from the date of default alleged to have committed by him.
2. From the impugned order it appears that the Secretary of the Primary Agricultural Co-operative Society submitted a report dated 27-7-1998 to the Deputy Registrar of Co-operative Societies, Kovvur alleging that the petitioner had borrowed S.A.O. loan of Rs. 10,000/- on 15-7-1997 and he did not repay the loan by the due date i.e., 31-3-1998 and therefore he became defaulter. The Deputy Registrar of Co-operative Societies, Kovvur directed the second respondent-the Co-operative Sub-Registrar-cum-Superintendent, Office of the Divisional Co-operative Officer, Kovvur to conduct an enquiry on the report of the Secretary. The second respondent in his report dated 11-8-1998 submitted to the Deputy Registrar of Co-operative Societies, Kovvur reported that the petitioner failed to repay the loan taken by him by the due date and thereby he incurred disqualification to be President/Member of Managing Committee of the Society. On receipt of the report, the first respondent-Deputy Registrar of Co-operative Societies issued the impugned notice referred to above.
3. Sri C. Krishna Murthy, the learned Counsel for the petitioner contended that in view of the law declared by this Court in Mannavaram China Venkaiah and Ors. v. The Deputy Registrar of Co-operative Societies and Divisional Cooperative Officer, Nellore and Ors., 1994(1) ALT 641, the impugned order should be held to be invalid and the first respondent-Deputy Registrar of Co-operative Societies has no competence to issue the impugned show-cause notice.
4. In Mannavaram China Venkaiah's case the complaint was filed by respondents 2 to 11 therein before the Divisional Co-operative Officer alleging that the writ petitioners therein defaulted in payment of loan amounts. On receipt of the said complaint, the Divisional Co-operative Officer referred the matter to the Co-operative Sub-Registrar for enquiry and report. The Cooperative Sub-Registrar reported that there was default on the part of the petitioners. Basing on that report, the Divisional Co-operative Officer issued show-cause notices to the petitioners as contemplated under Rule 24(3) of the rules, and the validity of the same was assailed before the Court in a writ petition. The Court held that the Divisional Co-operative Officer who is the Registrar for the purpose of Rule 24(3) should alone hold the enquiry in the absence of any clause in Rule 24(3) empowering him to delegate his power to anyone else. The Court placed reliance on the maxim 'delegatus non potest delegare' and held that the impugned notice is invalid and set aside the same and remanded the proceedings to the Divisional Co-operative Officer with a direction to enquire himself into the matter without reference to the enquiry report of the Co-operative Sub-Registrar, after affording reasonable opportunity to the parties and to pass a reasoned order. If the law declared by the Court in Mannavamm China Venkaiah's case (1 supra) has to be applied to the facts of this case, it is trite, the petitioner should succeed because the facts of this case are substantially similar to those in Mannavaram China Venkaiah's case (1 supra). After necessary reflection and in view of the well settled position by the pronouncements of the Supreme Court in Pradyat Kumar Bose v. The Honble Chief Justice of Calcutta High Court, and Union of India and Anr. v. P.K. Roy and Ors., . I could not persuade myself to fall in line with the opinion delivered in, Mannavaram China Venkaiah's case (1 supra). I, therefore, with utmost respect, differ from the opinion expressed by the Court in Mannavaram China Venkaiah's case (1 supra).
5. A careful reading f the judgment of the Mannavaram China Venkaiah's case (1 supra) shows that the Court in that case thought that what the Divisional Co-operative Officer did before issuing the impugned show-cause notice under Rule 24(3) was a part of the enquiry contemplated under Rule 24(3) of the Rules. Sub-section (3) of Section 21 of the Act reads:
Section 21(3) : Where any person, who is not eligible for being admitted as member has been admitted as member or where a member who is disqualified to continue as such under sub-section (1) continued as member he shall be removed,-
(i) by the Registrar on his own motion or on a representation made to him by any member of the society or its federal society or financing bank; or
(ii) by the Committee of the society:
Provided that no member shall be removed under this sub-section unless he had an opportunity of making a representation against the proposed action and where the removal is sought to be made by the Committee, until the resolution of the Committee is approved by the Registrar. The order of the Registrar, or as the case may be, a copy of the resolution removing the member as approved by the Registrar, shall be communicated to such person and on such communication he shall be deemed to have ceased to be member of the society.
Sub-rule (4) of Rule 24 of the Rules reads:
Rule 24(3): If any person disqualified to be a member of the Committee, the Registrar may, on his own motion or on a representation made to him, by any member of the Committee of the said society or its financing bank, by an order in writing declare that he shall cease to be member of Committee of the society concerned from the date of such disqualification. Before passing an order, the Registrar shall give such person an opportunity to state his objections, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard. The Registrar's decision shall be final and binding on the society and it shall not be called in question in any Court.
At the outset, it may be relevant to note that what the Divisional Co-operative Officer did in that case before issuing the impugned show-cause notice under Rule 24(3) is not at all a part of the enquiry contemplated under Rule 24(3). It cannot be gainsaid that the enquiry contemplated under Rule 24(3) begins with the issuance of the notice. Neither Section 21(3) nor Rule 24(3) does contemplate any preliminary enquiry before taking steps under Section 21 (3) read with Rule 24(3) against a member or an office bearer of a Co-operative Society. Rule 24(3) contemplates an enquiry after issuing the notice to the concerned member. That sub-rule mandates the Registrar before passing final order shall give the affected person an opportunity to state his objections to the proposed action, and if the affected person wishes to be heard, he should be given an opportunity of being heard. Since Section 21(3) and Rule 24(3) do not require the Registrar to conduct any preliminary enquiry before he takes steps under those provisions, there is no legal obligation on the part of the Registrar to conduct a preliminary enquiry in the first instance, and then to take steps under Rule 24(3). Although there is no such legal obligation on the part of the Registrar to conduct a preliminary enquiry in respect of the allegations made against a member or an office bearer of a Co-operative society, it is quite often emphasized by the Courts that before a man is charged with misconduct or violation of law or allegation of disqualification, it is healthy and proper for the statutory or administrative authorities to apply their mind to the allegations and find out whether there is any substance or truth in the allegations before the authorities proceed to take adverse action against the persons concerned. I do not find it necessary to dilate this aspect further. In a recent judgment, a Division Bench of this Court in Depot Manager, APSRTC v. Sri Mohd. Ismail, (D.B.)has to deal with the nature, scope, purpose and utility of preliminary enquiries in relation to an alleged adverse finding recorded by the disciplinary authority. The Division Bench in paras 9, 10 and 12 observed:
"9. Unless in a given case, a statute requires that the Disciplinary Authority should hold a preliminary enquiry preceding a regular departmental enquiry against a delinquent, preliminary enquiry is not compulsory. However, the Courts have emphasized the desirability of holding preliminary enquiry before initiating a regular departmental enquiry. The reason is that a person should not be charged with misconduct recklessly and without proper basis and reason; although the initiation of a departmental enquiry as such will not violate any of the legal rights of the delinquent, the fact remains that he will be subjected to the inconvenience and rigour of facing a departmental enquiry, In N.N. Bhattacharjee v. Secretary to Government of West Bengal (1962) 1 LLJ 317(Cal. H.C.), the Calcutta High Court held that to charge a person with disobedience of an order without being so sure revealed a fault finding mind and a mala fide disposition of the Disciplinary Authority. The Supreme Court also in a slightly different context in P. Sirajuddin v. State of Madras, held that in departmental proceedings against a Government servant charged with delinquency, the normal practice before issue of a charge-sheet is to take down statements of persons involved in the matter and to examine documents which have a bearing on the issue involved and it is only then that a charge-sheet is issued, and, therefore, the same procedure should be followed to find out a prima facie evidence of guilt before launching criminal proceedings. Therefore, it is an aspect of good administration to hold preliminary enquiry to satisfy itself whether there is a prima facie case to proceed against the delinquent, before it launches departmental enquiry. But, this is not an indispensible requirement.
10. Preliminary enquiry is neither a judicial nor a quasi-judicial act; it is purely an administrative action. The purpose of holding departmental enquiry is to decide whether the disciplinary action should or should not be taken against a delinquent employee. The said enquiry results in either punishment or exoneration of the employee concerned. On the other hand, the purpose of a preliminary enquiry is to find out whether there is sufficient justification for embarking on a fullfledged departmental enquiry against a particular employee. Such a preliminary enquiry does not result either in exoneration or punishment, but it merely guides the employer whether to proceed against a particular employee or not, and its purpose is to see whether a prima facie case is made out for issuing a charge-sheet calling for explanation. In other words, the purpose of the preliminary enquiry is for the personal satisfaction of the Disciplinary Authority to enable him to come to a decision whether the matter should be dropped or any further action should be taken, it is also relevant to note that there is no obligation on the part of the Disciplinary Authority to disclose the materials and evidence collected in the course of the preliminary enquiry to the delinquent. There is also no obligation cast on the Disciplinary Authority to disclose its findings in the preliminary enquiry. But, the satisfaction arrived at and the materials and the evidence collected in the preliminary enquiry may be a basis for initiating departmental enquiry and if the Disciplinary Authority wants to make use of the materials and evidence collected in the preliminary enquiry against the delinquent in the departmental enquiry, then, law requires that such materials and evidence should be disclosed to the delinquent and the delinquent should be given a reasonable opportunity to have his say regarding those materials. 12. A preliminary enquiry is of very informal character and the methods are likely to vary in accordance with the requirements of each case. The delinquent employees have no vested right in any form or procedure of holding preliminary enquiry. The object being the satisfaction of the officer concerned, the procedure of enquiry is wholly at the discretion of the officer holding the enquiry. After holding preliminary enquiry, the Disciplinary Authority need not record its satisfaction in writing nor is it required to give reasons for initiating the regular departmental enquiry. As already pointed out, that a preliminary enquiry does not result either in exoneration or punishment. Therefore it should be held that whatever be the finding in the preliminary enquiry, that will not affect any of the legal rights of the delinquent."
6. Preliminary enquiries are quite often resorted to by the administrative and statutory authorities before they initiate adverse proceedings against a person or an employee, and such a course of action is not only healthy aspect of good governance but also for the benefit of the persons against whom adverse actions have to be taken. An action taken in ignorance of full facts may not only fail to correct the given situation, but may even create more problems. The administrators and statutory authorities can initiate effective remedial measures to deal with specific problems only when they are in full possession of the relevant information, facts and figures and to collect these, enquiries and investigations become necessary. Investigations and enquiries are resorted for various purposes, such as rule making, law enforcement, adjudication of disputes, supervision, licensing, collecting information and "for purposes no more specific than illuminating obscure areas to find out what if anything should be done", to borrow from Davis. I Administrative Law Treatise (1958).
7. Now let me advert to the facts of the present case. It is true that before the impugned notice was issued a preliminary enquiry was held on the allegations levelled against the petitioner by the Secretary of the Society and the impugned show-cause notice refers to the report submitted by the Cooperative Sub-Registrar. As already pointed out supra, the Deputy Registrar of Co-operative Societies was under no obligation to refer the matter to the Co-operative Sub-Registrar for enquiry, and if he were to issue the impugned show-cause notice without any preliminary enquiry, such notice would have been inconformity with the provisions of Rule 24(3). The Deputy Registrar ordered the preliminary enquiry in order to satisfy himself whether the allegations made by the Secretary are justified and correct before he could take steps under Rule 24(3) of the Rules, and the procedure adopted by the Deputy Registrar of Co-operative Societies is in conformity with the opinion expressed by the Courts. There is no legal obligation cast on the Deputy Registrar of Co-operative Societies that he should himself conduct the preliminary enquiry. It is well settled that a statutory authority vested with a power to take adverse action against a person or employee can cause a preliminary enquiry into the allegations or complaints received against a person by taking aid and assistance of his subordinate officials unless in a given case the statute mandates that even the preliminary enquiry should be held by the authority itself. There is no such statutory restriction in the present case. Therefore, no exception can be taken to the action of the Deputy Registrar of Co-operative Societies in causing preliminary enquiry through the second respondent Co-operative Sub-Registrar and that fact itself is not a vitiating factor to annul the impugned show-cause notice issued under Rule 24(3) of the Rules.
8. Alternatively, it should be held that even in the enquiry that may be conducted in pursuance of the impugned show-cause notice, there is no legal requirement that the Deputy Registrar himself conduct the enquiry, and it is permissible for him to take the aid and assistance of other officials in the department. The crux of the matter is that the Deputy Registrar of Co-operative Societies being a donee of the power to disqualify a member of the Co-operative Society should always retain that power, and he cannot sub-delegate that power in favour of any one else because neither Section 21(3) or Rule 24(3) permits him to sub-delegate that power to anyone else. It is not a case where the Sub-Registrar of Co-operative Society sub-delegated his power to someone to take a decision under Section 21(3) read with Rule 24(3).
9. In Pradyat Kumar's case (2 supra) the Chief Justice of Calcutta High Court was the Disciplinary Authority as regards the Registrar and Accountant General of the High Court. The Chief Justice initiated disciplinary proceedings against the Registrar and Accountant General of the High Court and named a puisne Judge of the High Court as Inquiring authority to conduct a departmental enquiry against the Registrar and the Accountant General, and on the basis of the report submitted by the Inquiring authority, removed the Registrar from service as a disciplinary measure. One of the contentions in assailing the action of the Chief Justice was that the Chief Justice alone ought to have conducted the enquiry and his action in appointing the puisne Judge as the Inquiring authority tantamounts to sub-delegation of his power, and such sub-delegation is impermissible under the Rules, and therefore, the action of Chief Justice violated the principle "detegatus non potest delagare". The Constitution Bench of the Supreme Court while rejecting that contention was pleased to observe thus:
"It is well recognised that a statutory functionary exercising such a power cannot be said to have delegated his functions merely by deputing a responsible and competent official to enquire and report. That is the ordinary mode of exercise of any administrative power. What cannot be delegated except where the law specifically so provides is the ultimate responsibility for the exercise of such power.
The above dictum of the Constitution Bench in Pradyat Kumar's case (2 supra) was followed and reaffirmed by another Constitution Bench of the Supreme Court in Union of India v. P.K. Roy (3 supra). In that case, it was contended that the work of integration was exclusively entrusted to the Central Government by Section 115(5) of the States Organisation Act and that the final gradation list as published was illegal and ultra vires because there was improper delegation of its power and duties by the Central Government to the State Government. The Constitution Bench of the Supreme Court repelling this contention was pleased to observed thus:
"It is not disputed that the provisional and final gradation lists were prepared by the State Government on the principles laid down by the Central Government itself subject to one change in the matter of determining seniority and the provisional gradation list was sent for approval of the Central Government together with representations made by the officers concerned for being dealt with and decided upon by the Central Government. The principle of the maxim "delegatus non potest delegare" has therefore no application to the present case. The maxim deals with the extent to which a statutory authority may permit another to exercise a discretion entrusted by the statute to itself. It is true mat delegation in its general sense does not imply a parting with statutory powers by the authority which grants the delegation but points rather to the conferring of an authority to do things which otherwise that administrative authority would, have to do for itself. If, however, the administrative authority named in the statute has and retains in its hands general control over the activities of the person to whom it has entrusted in part the exercise of its statutory power and the control exercised by the administrative authority is of a substantial degree, there is in the eye of law no "delegation" at all and the maxim "delegatus non potest delegare" does not apply.
10. From the above two decisions of the Supreme Court, it is quite clear that even in the course of enquiry proper contemplated under the statute, it is permissible for the statutory authorities to take assistance/co-operation of others. However, both the decisions emphasize that the ultimate power to take the decision should be with the donee of the power, and that power cannot be delegated to anyone else unless a particular statute provides for sub-delegation. The judgments of the Supreme Court in Pradyat Kumar's case (2 supra) and P.K. Roy's case (3 supra) were not brought to the notice of the Court in Mannavaram China Venkaiah's case (X supra) and the opinion delivered by the Court in that case is quite contrary to the law laid down by the Supreme Court in Pradayat Kumar's case (2 supra) and in that view of the matter it should be held that the judgment in Mannavaram China Venkaiah's case (1 supra) is not a good law, and per incuriam. However, since there is no direct decision of the Division Bench or Full Bench of this Court on the point, and the decision in Mannavaram Chinna Venkaiah's case (1 supra) is by a learned single Judge of this Court, I think it appropriate to refer this case to the Division Bench to have an authoritative pronouncement on the point involved in this case. Accordingly, I refer this writ petition to the Division Bench under Rule 14 of the Writ Proceedings Rules, and the Registrar is directed to post this writ petition for admission before the appropriate Division Bench after obtaining orders from the Hon'ble The Chief Justice in that/regard.