Andhra HC (Pre-Telangana)
L.N.Peta Primary Agricultural ... vs The Government Of Andhra Pradesh, ... on 13 October, 2014
Author: C.V.Nagarjuna Reddy
Bench: C.V.Nagarjuna Reddy
THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY
Writ Petition No.26627 of 2014
13-10-2014
L.N.Peta Primary Agricultural Cooperative Society Petitioner
The Government of Andhra Pradesh, rep.by its Principal Secretary, Cooperative
Societies Department, Secretariat Buildings, Hyderabad and others Respondents
^Counsel for the Petitioner: Sri V.Mallik
for Sri M.Krishna Rao
!Counsel for respondent Nos.1 to 4: AGP for Cooperation
<Gist:
>Head note:
?Cases referred:
1. AIR 1952 SC 16(1)
2. 2002 Suppl.(2) ALD 687 (DB)
THE HONBLE SRI JUSTICE C.V.NAGARJUNA REDDY
Writ Petition No.26627 of 2014
Dated 13th October, 2014
The Court made the following:
ORDER:
This writ petition is filed for a mandamus to set aside proceedings in Rc.No.1007/2014-C, dated 01.07.2014, of respondent No.2, whereby he has instituted an inquiry under Section 51 of the A.P.Cooperative Societies Act, 1964 (for short the Act).
I have heard Sri V.Mallik, learned counsel, representing Sri M.Krishna Rao, learned counsel for the petitioner; the learned Assistant Government Pleader for Cooperation appearing for respondent Nos.1 to 4 and perused the record.
The short issue that arises for consideration in this writ petition is whether respondent No.2 has ordered institution of an inquiry under Section 51 of the Act in exercise of his suo motu power or based on the directions issued by an external agency?
A perusal of the impugned proceedings shows that the Divisional Cooperative Officer, Srikakulam submitted a report in letter bearing Rc.No.1478/2011-B, dated 03.06.2014, to respondent No.2, wherein he has stated that L.N.Peta Primary Agricultural Cooperative Society (for short the Society) sanctioned short term loans to 66 members of Mathalabupeta Village in the area of operation of the said Society to a tune of Rs.25,45,815/-, that out of the said 66 loans, 32 loans were obtained on forged documents and that therefore, an inspection under Section 52 of the Act to the loans sanctioned through the said Society is necessary. Based on the said letter, respondent No.2 has brought the issue to the notice of the Commissioner for Cooperation and Registrar of Cooperative Societies, Andhra Pradesh, Hyderabad recommending for ordering inspection under Section 52 of the Act to probe into the loans sanctioned by the Society on the alleged forged documents. The Additional Registrar vide his memo, dated 26.06.2014, requested respondent No.2 to take immediate action for ordering statutory inquiry into the affairs of the Society for onward submission of the report to Honble Lokayukta.
Sri V.Mallik, learned counsel for the petitioner, submitted that while undoubtedly respondent No.2 is vested with the suo motu power to order inquiry, the impugned order would show that though he has initially formed an opinion that an inspection under Section 52 of the Act was sufficient, on the directions issued by the Honble Lokayukta to the Commissioner for Cooperation and Registrar of Cooperative Societies, who in turn directed respondent No.2 to institute an inquiry under Section 51 of the Act, such an inquiry is ordered and that therefore, respondent No.2 has not exercised his suo motu power in ordering inquiry under Section 51 of the Act. He has relied upon the judgment of the Supreme Court in Commissioner of Police, Bombay v. Gordhanda Bhanji and the judgment of a Division Bench of this Court in D.Ramesh Sinha v. Cadre Authority for Key Personnel of Cooperative Central Bank/Apex Bank, Hyderabad in support of his submission that if power is vested in a statutory authority, it shall alone exercise that power and it cannot be allowed to be dictated by any other agency.
I have carefully considered the submissions of the learned counsel for the petitioner.
An inquiry under Section 51 of the Act can be instituted on an order of a Registrar either suo motu or on the application of the society or if a request is made by 1/3rd of the members of the Committee of the society or not less than 1/5th of the total number of members of the society.
As noted hereinbefore, the Divisional Cooperative Officer, Srikakulam has requested respondent No.2 in his letter, dated 03.06.2014, that an inspection under Section 52 of the Act is necessary in order to find out whether the loans distributed to 32 persons were based on forged documents. No doubt, respondent No.2 appeared to have felt it fit that an inspection under Section 52 of the Act is necessary. However, subsequently one R.Trinadha Rao (respondent No.7 herein) appeared to have approached Honble Lokayukta which in turn has sensitised the Commissioner for Cooperation and Registrar of Cooperative Societies. Consequent on the said development, respondent No.2 evidently changed his mind and directed institution of an inquiry under Section 51 of the Act instead of ordering an inspection under Section 52 of the Act.
While under Section 51 of the Act, an inquiry into the constitution, working and financial condition of the Society can be held, under Section 52 of the Act inspection of books of the Society can be made. Undoubtedly, the scope of Section 51 of the Act is larger than that of Section 52 of the Act. In a case involving serious allegation of sanction of substantial loans to as many as 32 members based on forged documents, an inquiry under Section 51 of the Act is more appropriate than a mere inspection under Section 52 of the Act. Even for an authority to exercise suo motu jurisdiction, he needs to gather information from various external agencies. Merely because the Commissioner has requested respondent No.2 to order an inquiry under Section 51 following intervention by the Honble Lokayukta, that by itself would not change the nature and complexion of exercise of jurisdiction by respondent No.2. At best, the intervention by the Honble Lokayukta may be an additional factor which would have firmed up the opinion of respondent No.2 that an inquiry under Section 51 is more appropriate than inspection under Section 52 of the Act. After all, the object of an inquiry under Section 51 of the Act is to ensure that misfeasance and malfeasance, if any, indulged in by the persons in the management of the Society are exposed and the loss if any caused on account of such acts are recovered by initiating proceedings under Section 60 of the Act. If a bona fide effort is made towards this direction, the same cannot be allowed to be scuttled based on technicalities.
While there is no quarrel on the propositions laid down in the two judgments cited by the learned counsel for the petitioner that the statutory authority vested with the power shall alone exercise such power, the said propositions have no application to the facts and circumstances of this case. As noted hereinbefore, the intervention of Honble Lokayukta is not the sole reason for institution of an inquiry under Section 51 of the Act. As the facts and circumstances of the case justify institution of a more detailed inquiry than mere inspection, respondent No.2 in my opinion is justified in ordering such inquiry. In the absence of any allegations of mala fides made by the petitioner against exercise of power by respondent No.2, I am of the opinion that this Court in exercise of its discretionary jurisdiction under Article 226 of the Constitution shall not prevent an inquiry intended to be held for unearthing fraud, if any, allegedly committed in disbursement of public money.
For the above-mentioned reasons, I do not find any merit in the writ petition and the same is accordingly dismissed.
As a sequel to dismissal of the writ petition, interim order, dated 17.09.2014, shall stand vacated and W.P.M.P.No.33280 of 2014 shall stand disposed of as infructuous.
_______________________ C.V.NAGARJUNA REDDY, J 13th October, 2014