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2007 (3) ALD 505
IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
L. NARASIMHA REDDY, J.
Jaggampeta Co-operative Rural Bank Ltd., Jaggampeta Village and Mandal Appellant
versus
Deputy Registrar of Co-operative Societies, Peddampuram, E.G. District and others Respondent
WP Nos.26271, 26272 and 26366 of 2006
Decided on 27th February, 2007
Advocate appeared
(Mrs.) Bobba Vijayalakshmi, Counsel for the Petitioner in all WPs.; Government Pleader for Co-operation, Counsel for the Respondent Nos.1 and 2 in all WPs; Y.V. Ravi Prasad, Counsel for the Respondent No.3 in all WPs.
A.P. Co-operative Societies Act, 1964 – Section 51, 60, 61 - Issuing Notice – financial Irregularities - Petitions are directed against common order passed by A.P. Co-operative Tribunal third respondent herein functioned as President of Society – District Co-operative Officer directed an enquiry, under Section 51 of Act, into working of said Society through his proceedings enquiry was conducted by Divisional Co-operative Officer and a report was submitted on pointing out certain financial irregularities on the part of the third respondent and the then Secretary, by On basis of this report proceedings were initiated under Section 60 of Act and second respondent was authorised in this regard – After issuing notice to third respondent and other affected parties, the second respondent passed surcharge orders requiring third respondent and then Secretary to restore a sum with interest at rate per annum – Petitioner Society filed two applications for execution of surcharge orders – Held, Tribunal proceeded as though the third respondent was not provided with any opportunity at all order does not refer to the deposition of third respondent nor to request, if any, made by him to the second respondent to permit him to cross-examine the witnesses that deposited in enquiry under Section 51 of Act – If third respondent was of view that report under Section 51 of Act suffers from any serious illegality or irregularity, he ought to have pointed out same through a written representation. He did not choose to do so – Tribunal had simply accepted contention of third respondent and has straight away set aside surcharge order – Tribunal fell in error in setting aside surcharge order as a whole – Such a course was available to Tribunal if only proceedings were initiated by an authority not vested with power – If any minor mistakes or irregularities crept into order it ought have mentioned same and remanded matter to second respondent for fresh consideration – Further Tribunal did not have any occasion to adjudicate upon merits of matter inasmuch as it did not record any evidence on its own nor evidence recorded in previous proceedings was discussed – Simply because surcharge order did not point out extent of liability of third respondent or that it did not made clear as to whether liability was joint and several or otherwise there was no basis for setting aside entire proceedings – Writ petitions are allowed.
2. The petitioner is a Society registered under the A.P. Co-operative Societies Act, 1964 (for short the Act). The third respondent herein functioned as the President of the Society between 1.8.1995 and 8.9.2003. The District Co-operative Officer, Kakinada, directed an enquiry, under Section 51 of the Act, into the working of the said Society, through his proceedings dated 29.4.2003. The enquiry was conducted by the Divisional Co-operative Officer, Peddapuram and a report was submitted on 2.9.2004, pointing out certain financial irregularities on the part of the third respondent and the then Secretary, by name G. Trimurthulu. On the basis of this report, proceedings were initiated under Section 60 of the Act and the second respondent was authorised in this regard.
3. After issuing notice to the third respondent and other affected parties, the second respondent passed surcharge orders, dated 26.4.2005, requiring the third respondent and the then Secretary, to restore a sum of Rs.2,76,000/- with interest at the rate of 24% per annum. The petitioner Society filed two applications for execution of the surcharge orders. Thereupon, the third respondent filed one O.A. against the order, dated 26.4.2005, under Section 60 of the Act and two O.As. against the two execution proceedings, before the A.P. Co-operative Tribunal. It was urged that he was not issued proper notice and no opportunity was given to him to participate in the proceedings. Accepting the contention of the third respondent, the Tribunal allowed the Original Applications. Hence, these three writ petitions.
4. The petitioner contends that the second respondent followed all the steps and the third respondent had not only participated in the proceedings but also deposed as a witness in the surcharge proceedings and in that view of the matter, the order passed by the Tribunal cannot be sustained in law.
5. The third respondent filed a common counter-affidavit on behalf of respondents 1 to 3. He states that he was not provided with an opportunity to cross-examine the witnesses that were examined in the proceedings under Section 51 of the Act and the same resulted in serious procedural lapse. He further contends that the second respondent was not certain and clear about the nature of liability to be fastened against various persons, against whom the surcharge proceedings were initiated.
6. Smt. Bobba Vijaya Lakshmi, learned Counsel for the petitioner submits that the Tribunal committed factual and legal errors in setting aside the surcharge order, as a whole. She contends that the third respondent did not choose to file any written statement in response to the notice issued under Section 60 of the Act and all the same, he was examined as a witness. She contends that when there was no denial of the charge against him, the question of his being permitted to examine the witnesses that deposed in enquiry under Section 51 of the Act does not arise. Learned Counsel submits that even if there was any minor error, the Tribunal ought to have remanded the matter to the second respondent for fresh consideration and disposal.
7. Sri Y.V. Ravi Prasad, learned Counsel for the third respondent submits that the enquiry under Section 51 of the Act is administrative in nature and no witnesses would be permitted to be cross-examined, therein. He also submits that when the report under Section 51 of the Act constituted the basis for surcharge proceedings, the third respondent ought to have been provided with an opportunity to cross-examine all the concerned witnesses and ultimately, contends that the order passed by the Tribunal does not warrant interference.
8. The third respondent functioned as a President of the petitioner-Society almost for eight years. Even while he was in Office, enquiry under Section 51 of the Act
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