Andhra HC (Pre-Telangana)
Kolluri Bhaskara Rao vs Dy. Registrar Of Co-Operative ... on 24 April, 1998
Equivalent citations: 1998(4)ALD154, 1998 A I H C 4256, (1998) 4 ANDHLD 154
Author: V. Bhaskar Rao
Bench: V. Bhaskar Rao
ORDER
1. Since the point involved in both the writ petitions is common they are clubbed and disposed of by a common order.
2. WP No.8830/89 was filed by one Kothuri Bhaskara Rao seeking for a direction to declare the proceedings of the 1st respondent in Re N0.2914/84-B, dated 18-1-1988 as confirmed by the Co-operative Tribunal, Gudivada (2nd respondent) in CMA No.2/85, dated 19-4-1989 as illegal, null and void and contrary to the provisions of the A.P. Cooperative Societies Act. Whereas WP No.13589/91 was filed by one Ch. Prasada Rao seeking for a similar direction to declare the proceedings of the 2nd respondent in Re. No.4453/83-A, dated 16-11-1989 as confirmed by the 1st respondent in CMA No.4/90, dated 5-12-1990 as null and void.
3. A few facts that' are necessary to dispose of the writ petitions are as follows :
The petitioner in WP No.8830/89 is a clerk in Krishna District Co-operative Central Bank, Machilipatnam. Previously he worked as Supervisor in the 2nd respondent society from 29-6-1977 to 9-8-1982 covering 11 societies and holding Additional charge as Secretary between 14-5-1983 and 9-8-1994. Due to heavy work load, the work had been divided by the Managing Committee and the President of the Society and one Mr. Sri Reddy was entrusted with collection of amounts, issue of receipts, sale of fertilisers, to maintain cash and ledger books daily, whereas one G.P, Brahmam was entrusted with the maintenance of stock, sale of cloth etc., and, accordingly, a resolution was passed by the 2nd respondent on 16-1-1981 to that effect. While so, he came to know about certain irregularities in June, 1984 and on 10-6-1984 and accordingly brought the same to the notice of the authorities. The petitioner also intimated the same to the Divisional Co-operative Officer on 23-6-1984 under a resolution dated 20-6-1984 requesting to make statutory enquiry in the irregularities. Consequently the Senior Inspector (Fanning) Gudivada,conducted an enquiry and submitted his report to the Divisional Co-operative Officer, Gudivada. According to the petitioner the said enquiry was not conducted properly and the Enquiry Officer relied on bye-laws of other societies without referring to the resolution of the society dated 16-11-1981 and the work distribution arrangement made earlier with the approval of the President. The Enquiry Officer held in his report that "even though during the course of enquiry a particular person who is responsible for committing the fraud is not established I have fixed up the responsibility on the basis of the duties and responsibilities" and thus holding, fixed the total amount of misappropriation of Rs.49,680.50ps. Basing on the said report, the 1st respondent issued a show cause notice under Section 60 of the A.P. Co-operative Societies Act purporting to issue surcharge orders against the petitioner. The petitioner submits that the said notice is vague and no specific charges have been framed. The petitioner filed objections to the said notice before the 1st respondent on 16-6-1986. The petitioner alleged that the 1st respondent did not conduct any enquiry into the issue of surcharge but solely relied on the enquiry report conducted under Section 52 of the Act which is contrary to law. He further submitted that no evidence was recorded nor any issues were framed by the 1st respondent and without giving sufficient opportunity, the impugned order was passed holding that the petitioner and K. Sri Reddy arc jointly responsible for an amount of Rs. 15,354/- The petitioner alleged that no enquiry as contemplated under Section 60 of the Cooperative Societies Act was held and time and again the Courts including a Division Bench of this Court in WA Nos.55/87 and 56/87 held that before fixing up financial responsibilities a detailed enquiry should be held under Section 60 of the Co-operative Societies Act. The Tribunal failed to appreciate the contention of the petitioner that due enquiry as contemplated in law was not held and erroneously held fixing the liability on the petitioner.
4, The 1st respondent filed counter admitting the employment of the petitioner in the 2nd respondent-society and holding of additional charge by him, but denied passing of resolution by the 2nd respondent on 16-1-1981 in respect of work distribution between the petitioner and one K. Sri Reddy and one G.P. Brahmam. He stated that the petitioner deposed before the Enquiry Officer as to the sale of stocks by himself and the clerk till 22-10-1981 and sale of fertilizers was entrusted to Sri Reddy and sale of cloth was entrusted to G.P. Brahmam as per the Board's Resolution dated 22-10-1981. He submitted that the petitioner further deposed that stocks were not handed over to the clerk and sales man but only the keys of the godowns where stock was kept were given to them. It shows the irresponsibility of the petitioner and the petitioner having put up 20 years of service as Supervisor is not expected to do so. The petitioner also deposed that while holding additional charge he arranged handing over of stock of fertilizer to Sri Reddy and cloth to G.P. Brahmam on the note orders of the then President of the Society and hence the petitioner cannot absolve his responsibility as Secretary by simply entrusting the work to the clerk and salesman by obtaining note orders and cannot plead ignorance now. The petitioner cannot plead that he is not aware of the actual bags and the variety of fertilizers sold daily, discharging the duties of Chief Executive. The respondent denied the bringing about the irregularities by the petitioner to the notice of the authorities. On the other hand, it is stated that the General Manager of Krishna Cooperative Central Bank, Machilipatnam in his letter Re. No. 8/27/83-84, dated 21-6-1984 communicated the Special Report of the Supervisor of the said bank who in feet brought the irrgularities to the notice of the audiorities.
On the strength of the said report only, the Senior Inspector (Farming), Gudivada conducted the inspection. He alleged that both the petitioner and the clerk colluded together and committed fraud resulting in loss to the society. He stated that the petitioner was permitted to peruse the records and he perused the records and filed objections and after considering his objections only, the impugned proceedings were passed. Thus, the petitioner was given ample opportunity to put forth his case. The petitioner never requested the respondent at any time to record any evidence before passing the proceedings. Thus, the petitioner was given sufficient opportunity and it is only after hearing the petitioner and considering his objections, the impugned proceedings were issued duly following the procedure laid down in law.
5. The case of the petitioner in WP No.13589/91 is that he was an Ex. Director of the 3rd respondent society and member of that society. This petitioner also attacked the notice issued under Section 60 of the A.P. Cooperative Societies Act on the lines on which the petitioner in WP No.8830/89. He further submitted that on a day the 2nd respondent called him and recorded his answers given by him to certain proceedings bearing No. Rc.4452/83-A, dated 16-11-1989 making him responsible for an amount of Rs.59,092/- which is contrary to law. He also submitted that no documents were provided to him during enquiry. The figure given by the 2nd respondent are whimsical and all the amounts paid by him are properly accounted by him which can be seen from the documents available with the respondents. Aggrieved by the said order he filed CMA 4/90 before the 1st respondent. The 1st respondent without looking into his explanation dismissed the appeal. Thereafter he filed IA No.2924/90 to review the order dated 5-12-1990. Later he filed a memo not pressing the said IA without prejudice to his rights to seek other legal remedies. The respondents 1 and 2 failed to consider the entire record in proper perspective. The 2nd respondent is now bringing the property for sale taking advantage of the illegal orders. Hence this writ petition.
6. Heard the arguments on both sides in these two writ petitions.
7. The scope of Article 226 of the Constitution is not to reappreciate the evidence. It has to look into whether in the complaint made is there any deprivation of fundamental right of a citizen or whether the order complained of is illegal or unlawful or violation of any statute; or the order complained of suffers from non-compliance of principles of natural justice or grave injustice or injury has been caused to the person who has approached this Court. The facts admitted are that the petitioners are the employees of the respective societies. Their service conditions are governed by the bye-laws of the society and other recruitment rules. As long as they are in service, they arc supposed to discharge their duties with utmost care and devotion. Whatever work that has been entrusted to them, they are bound to carry out the same. Any negligence in discharge of their duties will amount to dereliction of duty. In such an event, the employer will be at liberty to initiate the proceedings. The employer in these cases initiated proceedings under Sections 52 and 60 of the A.P. Co-operative Societies Act. It is proper to extract the above sections.
Section 52 of the Act reads as follows :
"Inspection :--(1) The Registrar may, of his own motion or on the application of a creditor of a society inspect or direct any person authorised by him by a general or special order in this behalf to inspect the books of the society:
Provided that no such inspection shall be made or directed on the application of a creditor unless the creditor :
(a) satisfies the Registrar that the debt is a sum then due and that he has demanded payment thereof and has not received satisfaction within a reasonable time; and
(b) deposits with the Registrar such sum as security, for the costs of the proposed inspection as the Registrar may require.
(2) The Registrar or any person authorised by him under sub-section (1) shall prepare a report of inspection which shall be placed before the general meeting of the society together with the findings of the Registrar of Co-operative Societies thereon."
Section 60 of the Act deals with surcharge which reads as follows:
"Where in the course of an audit under Section 50 or any inquiry under Section 51 or an inspection under Section 52 or Section 53, or the winding up of a society it appears that any person who is or was entrusted with the organisations, affair or management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or has been guilty of breach of trust in relation to the society or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has made any payment contrary to the provisions of this Act, the rules or the bye-laws the Registrar himself, or any person specially authorised by him in this behalf, of his own motion or on the application of the committee, liquidator or any creditor or contributory, may inquire into the conduct of such person or officer or servant and make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar or the person authorised as aforesaid thinks just or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, misapplication of funds, fraudulent retainer, breach of trust, or wilful negligence as the Registrar or the person authorised as aforesaid thinks just:
Provided that no order shall be passed against any person referred to in this sub-section unless the person concerned has been given an opportunity of making his representation.
(2) Any sum ordered under this section to be repaid to a society or recovered as a contribution to its assets may be recovered on a requisition being made in this behalf by the Registrar to the Collector in the same manner, as arrears of land revenue.
(3) This section shall apply notwithstanding that such person or officer or servant may have incurred criminal liability by this Act"
8. The grounds on which the petitioners have disowned their liability are that there was no entrustment of work; no deficiency of the funds of the society caused at their instance and for the loss caused by others, the petitioners should not have been made responsible. The management did not supply the material to the petitioners which was the basis for the management to initiate the proceedings in question. They also contended that during enquiry no opportunity of either adducing evidence of hearing has been given to them. The same contentions were raised before the tribunal. The tribunal found that the orders passed by the Co-operative Authorities fixing the liability on the petitioners based on proper appreciation of evidence. The tribunal being an appellate authority again went through the entire material and found that there is no illegality or irregularity in the orders passed by the authorities fixing the liability on the petitioners. The findings given by the tribunal are on reappreciation of evidence and consideration of all the contentions which were raised by the petitioners. The tribunal and the Co-operative authorities serutinised the material properly and reached correct conclusion fixing the liability on the petitioners. The petitioners have not shown how the orders under challenge have resulted in depriving of their fundamental rights or violation of any legal or statutory right nor they are result of non-compliance of principles of natural justice. Thus, the liability part on the petitioners is concerned. We see no reason to interfere with the impugned orders. So far as interest ordered by the tribunal and the authority is concerned, we think that justice will be met if the same is reduced to 10% instead of 18%. Thus, we direct the petitioners in both the writ petitions to pay the amount ordered to be due from them with 10% interest in eight equal installments with a single default clause. First installment commencing from First July, 1998.
9. Subject to the above modification in interest, the writ petitions are dismissed. No costs.