Andhra HC (Pre-Telangana)
M. Sivudu Naidu vs Deputy Registrar Of Co-Op. Societies ... on 10 March, 2003
Equivalent citations: 2003(3)ALT403
ORDER D.S.R. Varma, J.
1. The petitioner challenges the final order in Rc. No. 1261/92-E, dated 26-7-1994, passed by the 1st respondent under Subsection (1) of Section 60 of the A.P. Co-operative Societies Act, 1964 (for short "the Act") which was confirmed by the A.P. Cooperative Tribunal at Vijayawada (for short "the Tribunal") in O.A. No. 213 of 1999 through common order, dated 10-11-2000, as illegal, arbitrary and violative of the provisions of Section 60 of the Act.
2. For better appreciation, the facts to the extent relevant are as under:
An enquiry under Section 51 of the Act into the affairs of 2nd respondent-society (for short "the society") had been conducted by the competent authority and found that 4 individuals, petitioner being one among them, had committed some irregularities. Pursuant to the said enquiry and the report thereof, a notice, dated 31-1-1994, was issued by the 1st respondent as contemplated under Sub-section (1) of Section 60 of the Act. Representations were offered by the petitioner along with 3 others seeking supply of report of the enquiry under Section 51 of the Act and having no further action could be initiated, final order under Sub-section (1) of Section 60 of the Act has been passed surcharging the petitioner. Challenging the said order, the petitioner had preferred an appeal under Section 76 of the Act and the tribunal in O.A. No. 213 of 1999 had confirmed the said final order through order, dated 10-11-2000, against which the present writ petition is filed.
3. Sri D.V. Badram, learned counsel for the petitioner challenges the order of the 1st respondent passed under Sub-section (1) Section 60 of the Act as confirmed by the Tribunal mainly on 2 grounds; firstly that since the petitioner is an employee of the District Co-operative Central Bank, Palakonda, Vijayawada, and not an employee of the society, no action under Sub-section (1) of Section 60 of the Act could be initiated against a person who is not an employee of the society particularly when the irregularities said to have been committed and found by the petitioner related to the society and consequently no independent enquiry had been conducted as contemplated under Sub-section (1) of Section 60 of the Act and in other words the final order passed surcharging the petitioner under Sub-section (1) of Section 60 of the Act cannot be passed only on the report submitted during the enquiry under Section 51 of the Act.
4. Per contra, it is the contention of Smt. B. Vijayalakshmi, the learned Government Pleader for Co-operation that after conducting an enquiry under Section 51 of the Act as per Sub-section (2) of Section 60 of the Act, surcharge notice was issued, which was acknowledged by the petitioner, a representation was made seeking supply of report of enquiry, but there is no further participation in the enquiry and hence the 1st respondent could not proceed with the enquiry any further nor there is any necessity for him to proceed with any independent enquiry. She further contends that the final order has been passed after giving adequate opportunity to the petitioner and having no other option for the 1st respondent the final order has been passed.
5. In order to substantiate the first contention of the learned counsel for the petitioner, he relies on a judgment rendered by a Division Bench of this Court in Special Category Deputy Registrar/District Cooperative Officer, Srikakulam and Anr. v. Nookala Gavariah and Ors., (D.B.).
6. The issue involved in the said case was whether an employee of the bank can be kept under suspension in the course of an enquiry under Section 51 of the Act against the society. In that view of the matter, their Lordships had considered the aspect of the scope of Sections 51 and 59 of the Act and held at para No. 5 as under:
"Sections 51 and 59 of the said Act, in our considered opinion, must be read conjointly. So read, there cannot be any doubt whatsoever that an order of suspension can only be passed only in relation to a paid officer or servant of a society in relation whereto, upon an enquiry, a prima facie satisfaction can be arrived at by the Registrar that it is necessary in the interest of the society to direct the committee, pending investigation and disposal of the matter, to place or cause to be placed such paid officer or servant under suspension. "Committee" has been defined in Section 2 (b) of the said Act to mean the governing body of a society by whatever name called, to which the management of the affairs of the society is entrusted. It is, therefore, clear that the direction to place employees of a society under suspension can only be issued upon the committee of the said society itself. If no enquiry had been pending against the Bank only because of the statutory authority has come to a conclusion that its employees are also involved in the matter, the same ipso facto would not attract the provisions of Section 59 (1) of the said Act. The order of suspension involves civil or evil consequences. In that view of the matter, apart from the fact that literal reading of the statute does not permit any other construction, the same-should also required to be construed strictly."
7. It is to be noted that Section 59 of the Act specifically deals with the power of the Registrar to keep an officer or servant of the society under suspension. However, Section 59 of the Act is subject to certain qualifications viz., if it is brought to the notice of the Registrar that a paid officer or servant of a society has committed any irregularity of the nature mentioned in the section and if in his opinion such an officer or servant is desirable to be kept under suspension direct the committee of the society to keep such an officer or servant under suspension. The Registrar has no direct authority to keep an officer or servant of the society under suspension if a prima facie case is made out and subject to his satisfaction he can only direct the committee of the society to keep such an officer or servant under suspension pending investigation. Therefore, in the said facts and circumstances of the case, a Division Bench of this court had taken the view that since the respondents therein were employees of the bank but not an officer or servant of the society and particularly when there was no enquiry against the bank, the Registrar cannot invoke Section 59 of the Act.
8. It is to be noted that in the said case suspension was the main issue consequent upon the enquiry under Section 51 of the Act. It is to be further noted that surcharge proceedings are different from the authority of the Registrar under Section 59 of the Act and they have to be exercised in different circumstances. Therefore, the judgment of the Division Bench of this court in Special Category Deputy Registrar/District Cooperative Officer, Srikakulam and Anr. v. Nookala Gavariah and Ors. (1 supra) is applicable only to the facts and circumstances of the said case but cannot be made applicable to the present set of facts. Hence, the first contention of the learned counsel for the petitioner cannot be countenanced.
9. Apropos the second contention of the learned counsel for the petitioner that there is no independent enquiry as contemplated under Sub-section (1) of Section 60 of the Act, the learned counsel for the petitioner places reliance on the judgment of a Division Bench of this Court in Challa Sanyasinaidu v. Dy. Registrar of Co-op. Society, .
10. The specific contention of the learned counsel for the petitioner basing on the said decision of the Division Bench of this court is that after conducting the enquiry, basing on the report in the said enquiry, a show-cause notice was issued, and after offering representations by the petitioners, no independent enquiry was conducted as held by the Division Bench of this court and hence final order passed under Sub-section (1) of Section 60 is vitiated.
11. In this connection, it is to be noted that the Division Bench of this court, having been in agreement with the earlier judgments rendered by the learned single Judge of this court in S. Ramadas v. Subordinate Judge, Kothagudem and Ors., and S. Rama Subba Rao v. President, Kaikaluru Irrigation and Power Department Sub-Divisional Employee's Co-operative Credit Society Limited, observed that the enquiry under Section 51 is only administrative in nature, and if the Registrar prima facie is satisfied of the irregularities on the basis of the report of the Enquiry Officer, he may initiate surcharge proceedings under Section 60 of the Act; that the person against whom such a report is sent under Section 52, has no opportunity to squarely meet the allegations at that stage and that there is no opportunity of cross-examination of the witnesses from whom statements were recorded and that there is no opportunity to adduce rebuttal evidence. It was further observed by the Division Bench of this court that Section 60 clearly contemplates an opportunity being given to the delinquent by making a representation to explain his stand and allow him to participate in the enquiry before passing the final order. This is a valuable right given to the delinquent, which cannot be brushed aside in a routine manner.
12. In the instant case, it is to be noted that after the enquiry was conducted under Section 51 of the Act, a show-cause notice, dated 31-1-1994, was issued to the petitioner along with 3 others and that representations, dated 15-2-1994, were also submitted. It is to be further noticed from the said representation of the petitioner that instead of offering any explanation, he sought for supply of enquiry report. In response to the said representations, a circular memo, dated 29-4-1994, was issued by the Divisional Cooperative Officer informing the petitioner and 3 others that the enquiry report was kept ready for supply in the office of the society as desired by them and that they should obtain the same at anytime from the office of the society and submit their explanation for such surcharge notice. It is also made clear in the said circular memo that if there is no explanation to submit, further action will be taken basing on the record available.
13. From the above, the undisputed facts are; show-cause notice was issued, representations were submitted seeking supply of copy of enquiry report, which was made available at the office of the society and the information in that regard was in fact made through a circular memo, dated 29-4-1994, and thereafter no explanation was offered by the petitioner.
14. Now, the question in such a case is as to whether a detailed enquiry as envisaged under Sub-section (1) of Section 60 as held by the Division Bench of this court is essential or not?
15. In this connection, it is to be noted that the Division Bench of this court in Challa Sanyasinaidu v. Dy. Registrar of Co-op. Society (2 supra) after laying down the principle went into the facts of the said case and held as follows:
"Coming to the facts of this case, the petitioner though granted number of opportunities to submit his explanation, having asked for time on number of occasions to submit his explanation and having engaged an Advocate, finally failed to submit his explanation. Although he asked for a copy of the inspection report and when the authorities directed him to pay the charges for supply of a copy, he failed to do so. He never informed the Registrar that he intends to examine anybody on his behalf, nor filed any list of witnesses. Having regard to these circumstances, it is clear that although sufficient opportunity was given to the petitioner, he did not avail of the same. He did not even dispute the inspection report by filing his explanation. Under these circumstances, we are rather constrained to hold that the petitioner is not denied fair play or sufficient opportunity before the order under Section 60 is passed. As such, we do not find any ground to interfere with the order of the lower court."
16. In the instant case also it is to be noted that even though the petitioner was granted an opportunity for offering his explanation, he made a representation seeking supply of copy of enquiry report and when the copy of enquiry report was made available and when it was informed to him by the concerned authority that copy of enquiry report (was available) and again required the petitioner to offer his explanation, the petitioner having received copy of enquiry report remained mute without offering any explanation. It is not as though the petitioner did not have the knowledge that copy of enquiry report is made available to him. It is also seen that through circular memo dated 24-9-1994, the petitioner was informed that copy of enquiry report was made available in the office of the society. It is to be further noted that the learned counsel for the petitioner submitted at the Bar that copy of enquiry report was received by one of the 4 delinquent officers and that the said copy of enquiry report covers the irregularities of all the 4 delinquent officers.
17. It is to be further noted that by way of representation the petitioner sought for supply of copy of enquiry report meaning that he was inclined to participate in the enquiry as contemplated under Sub-section (1) of Section 60 of the Act and in accordance with the principle laid down by the Division Bench of this court.
18. From the above, it is to be presumed that copy of enquiry report was made available to the petitioner also. Now, the situation is in spite of making available the copy of enquiry report and in spite of receiving copy of enquiry report and having knowledge of the contents of the same, the petitioner did not come forward with any explanation. That means, in my considered view, even though the petitioner has received copy of enquiry report, as desired by him, and in spite of notice with regard to surcharge proceedings, did not come forward to participate in the enquiry. In such a case, the competent authority cannot be rendered helpless and cannot be expected to remain silent without proceeding further in the matter. As it happened in the case in Challa Sanyasinaidu v. Dy. Registrar of Co-op. Society (2 supra) in the present case also the petitioner had not opted to participate in the enquiry proceedings in spite of the fact that the copy of enquiry report was made available, as desired by him. In such circumstances, the principle laid down by the Division Bench of this court in the said case (2 supra) cannot be permitted to be made use of by the petitioner inasmuch as the petitioner has waived the valuable right conferred upon him by the Division Bench of this court, inasmuch as the adequacy of reasonable opportunity is satisfied.
19. For the foregoing reasons, I do not find any merit in the writ petition and hence the same is liable to be dismissed.
20. In the result, the writ petition is dismissed. However, there shall be net order as to costs.