Andhra Pradesh High Court - Amravati
A.P. State Weavers Cooperative Society ... vs The State Of Andhra Pradesh on 15 October, 2019
Author: U. Durga Prasad Rao
Bench: U. Durga Prasad Rao
HON'BLE SRI JUSTICE U. DURGA PRASAD RAO
WRIT PETITION No.8027 OF 2019
ORDER:
Challenge in this Writ Petition at the instance of the petitioner, who is the Chairman of A.P. State Weavers Co-operative Society Limited, Vijayawada, is to the notice in Lr.C.No.13/RE-TCD/2019, dated 28.05.2019, issued by the Deputy Superintendent of Police, Anti-Corruption Bureau (ACB), Kadapa, respondent No.4 herein, and declare the same as illegal, arbitrary and without jurisdiction and consequently set-aside the same.
2. In the impugned notice, dated 28.05.2019, respondent No.4 informed the Divisional Marketing Officer (DMO) of AP State Handlooms and Weavers Co-operative Society Limited (APCO), Kadapa, that the ACB was conducting regular enquiry on the allegations of certain irregularities committed by APCO Chairman in the management of AP Co-operative Society, Kadapa district, and instructed the DMO to furnish the total receipts of the funds from the central Government during the period 2013-14, total purchase of cloth materials from the societies, and the total transactions for the above period.
3. Heard Sri V.R.Machavaram, learned counsel, appearing on behalf of Sri Vangala Venugopalam, learned counsel for the petitioner, learned Government Pleader for Industries and Commerce, UDPR,J W.P. No.8027 of 2019 2 appearing on behalf of respondent Nos.1 and 2, and learned Special Standing Counsel, appearing on behalf of respondent Nos.3 and 4.
4. Learned counsel for the petitioner would submit that the petitioner was elected as Chairman of the APCO on 04.08.2016 and after expiry of his chairmanship by 24.02.2018, 1st respondent/government have appointed the Person-In-Charge Committee under Section 32(7) of the Andhra Pradesh Co-operative Societies Act, 1964 (for short, 'the APCS Act') including the petitioner as Chairman and he is continuing as such till date. Learned counsel would further submit that respondent Nos.1 and 2 made arrangements to conduct enquiries on the complaints received against the primary weavers societies and APCO for taking civil and criminal action against the malpractices like misappropriation, mis-utilization of funds including substandard works, maintenance of stock registers and shortage of material etc., as per the provisions of the APCS Act. He would submit that APCO is a society registered under the AP Co- operative Societies Act, 1964 and therefore the provisions under the AP Co-operative Societies Act, 1964 are applicable to the APCO. He would submit that Section 79A is a penal provision where under punishment is provided for certain corrupt practices adopted by any Officer of a Society or an employee or a paid servant or any member of such society. Further, as per Section 83, cognizance of such offences has to be taken by a Court of Judicial Magistrate of First Class by following the procedure prescribed under Cr.P.C. by treating UDPR,J W.P. No.8027 of 2019 3 the offence as cognizable offence. Learned counsel would also submit that since some of the corrupt practices envisaged under Section 79A also fall within the ambit of the offences under Sections 7 and 13 of the Prevention of Corruption Act, 1988 (for short, 'the PC Act'), giving jurisdiction to the ACB Police, to overcome the overlapping of the jurisdictions of general Police and ACB police, the Director of General of ACB, Hyderabad, issued a Circular Memorandum in C.No.20/RPC(C)/2002, dated 18.11.2002, where under he gave guidelines to the effect that all cases of traps and disproportionate assets against co-operative employees will be taken by the ACB and recommend for prosecution, whereas the allegation in respect of misappropriation, simplicitor, malpractices like granting of loans, mis-utilization of funds including the substandard works, maintenance of stock registers, shortage of material etc., may be referred and entrusted to the local police for registration of cases and investigation of the same. Learned counsel for the petitioner would submit that in view of the clear-cut demarcation made in the Circular, the DSP, ACB has no jurisdiction to issue the impugned notice, dated 28.05.2019, to conduct regular enquiry on the allegations of irregularities allegedly committed by the petitioner. He thus prayed to allow the writ petition.
5. Per contra, while severely opposing the petition, learned Special Standing Counsel appearing for the respondent Nos.3 and 4 would firstly argue that so far only a notice was issued to the UDPR,J W.P. No.8027 of 2019 4 Divisional Marketing Officer, APCO, by the DSP, ACB to furnish certain information and also records for conducting enquiry and crime is yet to be registered and in that view, the present writ petition filed by the APCO represented by its Chairman is a premature one and hence the Writ Petition is liable to be dismissed in limine. Secondly, he would argue that the ACB Police have jurisdiction to conduct investigation in respect of the corrupt practices enumerated under Section 79A of APCS Act and in this regard the guidelines issued by the Director General, ACB cannot be said to have any legal sanctity so as to prune the powers of ACB Police. The guidelines issued under the Circular might have been issued to mitigate the work load of the ACB Police and hence it cannot have any statutory force. He thus prayed to dismiss the writ petition.
6. Now the point for consideration is whether there are merits in this Writ Petition to allow?
7. POINT: The impugned notice issued by the DSP, ACB, Kadapa district, is germane for our discussion and hence extracted thus:
"GOVERNMENT OF ANDHRA PRADESH ANTI-CORRUPTION BUREAU From To Sri M.Nagabhushanam, Divisional Marketing Officer, Dy. Supdt. Of Police, A.P. State Handlooms & Weavers Co-
Anti-Corruption Bureau (ACB), operative Society Ltd., (APCO)
Kadapa Range, KADAPA. Kadapa.
Lr.C.No.13/RE-TCD/2019,dt.28.05.2019.
Sir,
UDPR,J
W.P. No.8027 of 2019
5
Sub:- Public Servants - APCO Department - Allegations of
irregularities by APCO Chairman Mr. Gujjala Srinivasa in the management of AO Cooperative Society, Kadapa District - Furnishing of information for the year 2013-14 in connection with Central Govt. funds - Conducting Regular Enquiry - Certain information called for - Regarding.
Ref:- Memo C.No.13/RE-TCD/2019, dt.03.05.2019 of DG, ACB, AP, Vijayawada.
-oo0oo-
It is to inform you that the Bureau is conducting Regular enquiry on the allegations of certain irregularities by APCO Chairman Mr.Gujjala Srinivasa in the management of AO Cooperative Society, Kadapa District.
In the above connection, you are requested to furnish the total receipts of funds from the central Govt. during the period 2013-14 and total purchase of cloth materials from the societies and the total transactions for the above period.
This may be treated as "MOST URGENT".
Yours faithfully, S/d.xxxxx (M.Nagabhushanam) Dy. Supdt. Of Police, Anti-Corruption Bureau, Kadapa district."
8. Thus, in the above impugned notice, the DSP, ACB perspicuously stated that the ACB was conducting regular enquiry on the allegations of certain irregularities by the petitioner i.e., APCO Chairman i.e., G.Srinivasa in the management of AP Co-operative Society, Kadapa district, and requested the Divisional Marketing Officer of AP State Handlooms and Weavers Co-operative Society Limited (APCO), Kadapa, to furnish the information relating to the total receipts of funds from the Central Government during the period 2013-14, total purchase of cloth materials from the societies, and the total transactions for the above period. It appears he also issued another notice under Section 91 Cr.P.C. directing him to attend before him on 28.06.2019 and furnish certain information. Thus, it is clear UDPR,J W.P. No.8027 of 2019 6 that though no crime is registered yet, as argued by the learned Special Standing Counsel, a preliminary enquiry was set afoot on the alleged irregularities of the Chairman of APCO while managing the affairs of AP State Handlooms and Weavers Co-operative Society, Kadapa district. That being the tone and tenor of the notice which says that the ACB Police are engaged in conducting enquiry against the acts of the petitioner in the course of management of Co-operative Society, Kadapa district, the writ petition challenging the jurisdiction of the ACB Police though no formal crime is registered, cannot be said to be a prematured act, in my considered view. So, the argument of learned Special Standing Counsel in that regard cannot be countenanced. Therefore, the jurisdictional powers of the ACB Police to register crime, enquire, investigate and file final report require a judicial review.
9. As submitted by learned counsel for the petitioner, the petitioner society is registered under the provisions of A.P. Co- operative Societies Act, 1964 and therefore the provisions of APCS Act, are applicable to it.
10. Section 79A and 83 of APCS Act are pertinent in this regard and thus they are extracted below:
"79A. Punishment for corrupt practices: - (1) Where any officer of a society or an employee or a paid servant or any member of such society,-
(a) commits any irregularity in receipt or sanction of loans or in purchases or causes, deficit in stocks; or UDPR,J W.P. No.8027 of 2019 7
(b) accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification whatever, other than legal remuneration as a motive or reward for doing or forbearing to do any official act or showing or forbearing to show, in the exercise of his official functions or duties favour or disfavour to any person or rendering or attempting to render any service or dis-
service to any person; or
(c) uses or allows the use of funds of the society otherwise than in accordance with the provisions of this Act, rules or the bye-laws of the society; or
(d) signs in the minutes books of committee meetings of the society without actually attending such meetings; or
(e) passes a meeting without proper quorum as valid, he shall be deemed to be guilty of a corrupt practice in relation to the society.
Explanation: - For the purposes of this section,-
(i) 'irregularity in receipt or sanction of loan' includes,-
(i) receipt of loan by or sanction of loan to any person who does not own or cultivate a land or the extent of land shown in the application for loan, where owning or cultivating land is a condition precedent for the sanction of loan; and
(ii) fictitious loan;
(ii) irregularity in purchases' includes purchases, made with the intention to gain wrongfully, of,
(i) sub-standard or adulterated goods;
(ii) goods by paying higher price;
(iii) goods in excess of requirement.
(2) Every person guilty of a corrupt practice shall be punishable with imprisonment for a term which may extend up to one year or with fine which may extend to rupees five thousand or with both]"
11. Section 79A deals with punishment for corrupt practices. This Section says that where any officer of a society or an employee or a paid servant or any member of such society involves in the corrupt UDPR,J W.P. No.8027 of 2019 8 practices envisaged in clauses (a) to (e) therein, shall be punishable with imprisonment which may extend to one year or with fine which may extend to Rs.5,000/- or with both. Then, Section 83 says that the offences under this Act including the one under Section 79A shall be tried by a Judicial Magistrate of First Class as if the offence under this Act is a cognizable one and prosecution shall be instituted only upon the previous sanction of the Registrar of the Co-operative societies. This is the scheme of the Act which defines the offence of corrupt practices and provides machinery for trial of such offences and other offences mentioned in the Act.
(a) Be that it may, one of the corrupt practices as mentioned in clause (b) of Section 79A(1) of the APCS Act is the acceptance of gratification other than legal remuneration as a motive or reward for doing or forbearing to do any official Act. Since this offence overlaps with the offence under Section 7 of the PC Act, and as the ACB Police have jurisdictional power to register the crime and investigate the latter offence under the PC Act, it appears the Director General of Police ACB, Hyderabad, issued the Circular Memorandum in C.No.20/RPC/(C)/2002, dated 18.11.2002. In the said Circular, he mentioned that to avoid the conflict of exercise of powers vested in the authorities concerned due to overlapping of jurisdiction for proceeding against the office bearers, officers, employees and members of the co-operative societies registered under the Co- operative Societies Act in A.P., certain guidelines were issued. Of UDPR,J W.P. No.8027 of 2019 9 those, the following guidelines are germane for our discussion, which read thus:
"With regard to the strategies to be adopted in respect of allegations against officers and employees of registered Co- operative Institutions, the following guidelines/instructions are issued to avoid overlapping of the jurisdiction.
1. All cases of Traps and Disproportionate Assets against Co- operative Employees will be taken up by the A.C.B. and recommend for prosecution if the cases are established with evidence.
2. The allegations in respect of misappropriation, simplicitor, malpractices, granting of loans, mis-utilization of funds including the substandard works, maintenance of stock registers, shortage of material etc. may be referred and entrusted to the local police for registration of cases and investigation of the same."
12. Thus, in the above guidelines, he pellucidly stated that the cases relating to traps and disproportionate assets concerning to co- operative employees will be taken up by ACB Police and rest of the offences relating to misappropriation, simplicitor, malpractices relating to granting of loans, mis-utilisation of funds including the substandard works, maintenance of stock registers, shortage of material etc., will be referred and entrusted to the local police for registration of cases and investigation of the same. It is to be noted that the offences of acquisition of disproportionate assets by a public servant including an employee of co-operative societies is not enumerated in Section 79A of the APCS Act. The said offence is one of the offences prescribed under Section 13 of the PC Act. Therefore, UDPR,J W.P. No.8027 of 2019 10 to avoid overlapping of the jurisdictions of the ACB Police and general Police, the Director General has made it clear that the trap cases and disproportionate assets cases relating to the employees of co-operative societies shall be dealt with by the ACB Police leaving the other type of offences concerning to the officers of the society or an employee or paid servant or any member of such society to the General Police. The Circular is issued by the head of the department of ACB to facilitate smooth functioning by the two departments i.e., ACB and General Police to avoid overlapping of jurisdictional powers. Hence, it cannot be castigated by learned Special Standing Counsel as of not having statutory powers. It should be noted that every department will have rule making power for smooth functioning of its organization, such rules cannot be said to be having no sanctity unless it is established that they are contrary to any of the statutory provisions. The aforesaid guidelines were issued by the Director General, ACB, on 18.11.2002. Learned Special Standing Counsel has not produced any material to show that subsequently the ACB department has superseded those guidelines and issued fresh guidelines contrary to the earlier guidelines. He has also not produced any material to show that the subject guidelines were held to be illegal by any Court of law.
13. So to sum up, the alleged irregularities committed by the petitioner in respect of AP Co-operative Society, Kadapa district, would fall within the scope and ambit of Section 79A of APCS Act UDPR,J W.P. No.8027 of 2019 11 but they do not fall within the scope of trap cases or disproportionate assets cases so as to confer jurisdiction on ACB Police to register the case and investigate into. Of course, in the present case so far no crime is registered but the intention is clearly written on the wall. Therefore, I find force in the submission of learned counsel for the petitioner that the preliminary enquiry, registration of crime, and investigation is not within the jurisdictional power of ACB Police, since Section 83 of APCS Act provides for separate forum.
14. In the result, the writ petition is allowed declaring the action of respondent No.4 in issuing the letter in Lr.C.No.13/RE-TCD/2019, dt.28.05.2019, to the Divisional Marketing Officer, A.P. State Handlooms and Weavers Co-operative Society Limited (APCO), Kadapa, is without jurisdiction and is accordingly set-aside. However, this order does not preclude concerned authorities from initiating the proceedings strictly in accordance with law. No order as to costs.
15. As a sequel, miscellaneous petitions pending, if any, shall stand closed.
____________________________ U. DURGA PRASAD RAO, J Date:15.10.2019 DSH