( 1 ) THE plaintiff in O. S. No. 131 of 1983 on the file of Subordinate Judge Court, cuddapah filed this appeal questioning the correctness of the decree and judgment wherein the suit was decreed against the first defendant-Co-operative Society and the third defendant, the paid Secretary while dismissing the suit against the President of the society second defendant on the ground that the Paid-Secretary is wholly responsible for the maintenance of the day to day affairs of the society basing on the bye-laws marked as Ex. B. 1.

( 2 ) THE parties are referred to as arrayed in the suit. The plaintiff-Corporation represented by its District Manager, cuddapah appointed Simhadripuram Cooperating marketing Society, Pulivendla on the recommendation of the District Collector, cuddapah for supply of levy sugar to fair price shop dealers on commission basis. The duty of the Co-operative Society is to receive the levy sugar from the transport contractor and store the same in the godowns and issue the levy sugar after collecting demand drafts from the persons to whom the permits are issued by the plaintiff- corporation and deposit in the bank. The society has to send fortnightly returns showing the stock received, permits received, drafts received from fair price shop dealers, sugar delivered and the balance of stock of sugar remaining to the District supply authorities.

( 3 ) IN the annexure the relevant portion reads as follows:"and whereas the Commission agent has qualified for such appointment and has agreed to perform the duties hereinafter described under the terms and conditions mentioned below: (1) Receipt of sugar, unloading the same from trucks, weighment and stocking in the go downs, meeting the handling charges; (2) Storage and Insurance of stocks; (3) Issue of sugar after weighment to fair price shops and load the same into vehicles/carts of the fair price shops meeting the handling charges. (4) Issue of release orders to fair price shops against allotment made by the Tahsildars duly collecting the payments in the form of D. D. s. , banker Cheques or pay order obtained in favour of A. P. State Civil supplies Corporation Limited. (5) Depositing of D. Ds. Banker cheques or pay orders daily into the corporation s Depository account opened at the Taluk Headquarters. (6) Maintenance of various registers prescribed for the purpose. (7) Giving Bank Guarantee for Rs. 10,000/- before signing the agreement. The case of the plaintiff is that initially the society was appointed as Commission Agent for a period of one year from 4-5-1980 to 3-5-1981 and was renewed for another period of one year from 4-5-1981. It is also his case that the transport agents delivered 14,767,20 Qts. of levy sugar from March, 1980 to November, 1981 and the defendants acknowledged the same. As per the books of accounts maintained by the Corporation and the acknowledgment receipt submitted by the defendants, the commission agent received the stock as mentioned above and remitted an amount of Rs. 45,15,029-98 ps. only towards the cost of 13, 950-30 Qtls. of levy sugar. The then District Manager inspected the society s premises on 6-11 -1981 and on 23-11 -1981 and found no representative of the President and third defendant were available to show the stock register. Once again the District Manager visited the defendants-society. On 24-11 -1981 the plaintiff Corporation issued a notice to the first and second respondents to send fortnightly returns for which there was no reply. Lastly on 27-11-1981 the District mananer visited the premises of the first defendant. As the second and third defendants were not available he waited till the afternoon of 28-11 -1981 and afterwards locked the premises in the presence of panchayatdars. On 17-12-1981 the District manager of the plaintiff Corporation opened the lock in the presence of the Tahsildar, village Munsif and other mediators and found stock of 242-91 Qtls. of sugar only. The difference of levy sugar