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2002 Supreme(AP) 887

Andhra Pradesh High Court
Judges : ELIPE DHARMA RAO
Lankala Koderu Co-operative Rural Bank Ltd., Palacol Mandal, W.G.District - Appellant
Versus
Ungarala Pullaiah Naidu - Respondent
Decided On : 07-23-02

Headnote:

A. P. Co-operative Societies Act, 1964 - Sec. 51 - Sec. 60 - Section 60 (1) – Constitution of India, 1950 - Art. 311 (2) – Debt recovery and Monetary laws – Bank - Loan amount - Irregularities and Misappropriated of amount - District Co-operative Officer, during course of elaborate enquiry, found that first respondent has rounded off respective entries in loan ledgers without crediting amounts in cash book and without issuing receipts to loan in collusion with others and thereby misappropriated amounts - Petitioner-Bank to tune and thus caused huge loss to petitioner-Bank - On receipt of enquiry Report, Deputy Registrar, Cooperative Societies, satisfied himself that findings of Enquiry Officer are true and accordingly gave show-cause notice, directing first respondent to submit his explanation under Section 60 (1) of Act - Held, Court view that during course of enquiry u/s. 51 of Act if delinquent employee has not made any explicit, clear and unambiguous admission of his guilt, a regular enquiry should be conducted, contemplated under Sec. 60 of Act herein and Registrar is empowered to inquire into conduct of such person or officer or servant and make an order enquiring him to repay or restore the money or property or any part thereof, with interest at such rate as the Registrar or the person authorized as aforesaid thinks just or to contribute such sum to assets of society by way of compensation in respect of misappropriation, misapplication of funds, fraudulent retainer, breach of trust or wilful negligence as the Registrar or person authorized, (except) after giving an opportunity to delinquent officer to make his representation - court view of above discussion, court not able to appreciate contentions raised by learned counsel for petitioner. Court do not see any illegality or infirmity in order passed by Tribunal in setting aside surcharge proceedings issued by respondent (Deputy Registrar) and remanding matter for fresh disposal for imposing of punishment under Sec. 60 of Act - If respondent (Deputy Registrar) is contemplating to proceed with enqiry, same has to be completed and final orders to be passed within a period of six months from date of receipt of a copy - Writ Petition Dismissed.

ELIPE DHARMA RAO, J.

( 1 ) THE petitioner-The Lankala Koderu co-operative Rural Bank Limited, Palacol, west Godavari District, represented by its secretary filed this writ petition, aggrieved of the order dated 30-4-1997 passed in o. A. NO. 252 of 1994 by the 2nd respondent co-operative Tribunal, Vijayawada, which was directed against the order of surcharge proceedings issued by the Deputy Registrar, co-operative Societies, on the basis of report of enquiry conducted under Sec. 51 of the a. P. Co-operative Societies Act, 1964 (for brevity, the Act ). The Co-operative Tribunal interfered with the order impugned therein on the ground that the Deputy Registrar, bhimavaram has not conducted regular enquiry as contemplated under Sec. 60 of the act before passing surcharge order and directed the first respondent herein to refund an amount of Rs. 2,96,784. 40 Ps. collected from 57 loanees of the petitioner-Bank, which was found to be misappropriated by the first respondent. Accordingly, the Tribunal remanded the matter to the Deputy Registrar, Co-operative societies, Bhimavaram, to conduct enquiry into the matter.

( 2 ) AGGRIEVED of the said order, the present writ petition is filed mainly raising two grounds by Mr. C. Ramachandra Raju learned Counsel for the petitioner firstly the second respondent proceeded on the assumption that the enquiry contemplated under Sec. 60 of the Act is akin to trial of the suit and consequently held that the surcharge order passed by the Deputy registrar is bad for want of regular trial, but in fact, the enquiry contemplated under sec. 60 of the Act is summary in nature. It is next contended that when the first respondent has confessed his guilt before the Enquiry Officer as well as in his explanation to the surcharge notice that he manipulated the loan ledgers at the instance of one Sri V. V. Narasimha Raju and he did not ask the Deputy Registrar to examine the enquiry Officer or any other person as witnesses and also did not ask for examining any witness on his behalf, the question of violation of principles of natural justice does not arise. It is also submitted that when once the surcharge order is passed based on record and which was not disputed by the first respondent, it is highly improper on the part of the 2nd respondent in laying down guidelines as to how the enquiry has to be conducted by the Deputy Registrar.

( 3 ) THE brief facts of the case, in narrow compass, are that the first respondent worked as clerk in the petitioner-Bank and during the enquiry into the affairs of the petitioner-Bank, it was found that the petitioner collected loan amount of 57 loanees and the loan ledgers were rounded off, showing nil balance, and thus he committed serious irregularities and misappropriated a sum of Rs. 2,96,784. 40 Ps. The District Co-operative Officer, during the course of elaborate enquiry, found that the first respondent has rounded off the respective entries in the loan ledgers without crediting the amounts in the cash book and without issuing receipts to the loanees in collusion with others and thereby misappropriated the amounts of the petitioner-Bank to the tune of rs. 2,96,784. 40 Ps. and thus caused huge loss to the petitioner-Bank. On receipt of the enquiry Report, the Deputy Registrar, Cooperative Societies, satisfied himself that the findings of the Enquiry Officer are true and accordingly gave show-cause notice dated 16-6-1993, directing the first respondent to submit his explanation under Section 60 (1) of the Act. On consideration of the explanation submitted by the first respondent, decided to pass final order and hence issued surcharge proceedings on 29-4-1993 in exercise of the powers conferred under Sec. 60 of the Act. Against that order, the first respondent filed OANo. 252 of 1994 before the second respondent, which after enquiring into the matter and on appreciation of both oral and documentary evidence, by the order impugned, remanded the matter for fresh disposal according















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