2016 Supreme(AP) 519

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
A. RAMALINGESWARA RAO, J.
The Mallukunta Primary Agricultural Co-operative Society, Rep. by its President, S. Suryanarayana Raju & Another – Appellants
Versus
The District Co-operative Officer and Joint Registrar & Others – Respondents
Writ Petition No. 108 of 2007
Decided On : 24-10-2016

Headnote:

Civil Law - Co-operative Societies Act, 1964 - Section 51 - Petitioner is the Society and the second petitioner is its President - Nsecond petitioner swears the affidavit stating that the first petitioner Society consists of 13 Directors and they were elected second petitioner was elected as the President of the Society - The Society was running in losses and the enquiry held by the Divisional Cooperative Officer in revealed that it sustained a loss - The second petitioner has nothing to do with the said loss since he was elected only - It is his case that due to political rivalry, at the instance of the local Member of Legislative Assembly an enquiry was ordered under Section 51 of the Andhra Pradesh Co-operative Societies Act alleging some irregularities in the working of the first petitioner Society by proceedings dated - Challenging the initiation of the said enquiry, the present - Society and found during the enquiry in was recovered from responsible persons - The allegation that the enquiry was initiated at the instance of the local Member of Legislative Assembly was denied - It was stated that a representation was made by the said Member of Legislative Assembly to the Incharge Minister of West Godavari District a copy to the Minister for Cooperation Government of Andhra Pradesh on the irregularities that took place in the first petitioner Society - Commissioner for Cooperation Registrar of Cooperative Societies Andhra Pradesh forwarded the representation to the District Cooperative Officer, West Godavari District to submit a report. The District Cooperative Officer, in turn, forwarded the same to the Divisional Cooperative Officer calling for a report Divisional Cooperative Officer reported the retention of huge cash balance during the year irregular sanction of loans to the members and also reported that - Society sustained huge loss - The District Cooperative Officer, West Godavari, Eluru examined the issue and ordered an enquiry keeping in view the interest of the members of the Society in order to fix up the responsibility on the irregularities noticed and recover the amounts from the responsible persons - Challenge to the procedure in conducting the enquiry was also refuted - When an Enquiry Officer is appointed under Section 51 of the Act the Enquiry Officer will fix the date, time and will give an opportunity by issuing notices to the members of the Society during the course of enquiry - After receiving the report from the Enquiry officer, the Registrar will consider findings in the enquiry report - Findings would be communicated to the Managing Committee of the Society to be placed before the General Body of the Society - Vested with powers vide G.O.Ms. Food & Agriculture Department dated for ordering an enquiry and the enquiry now ordered was in consonance with the said powers - Mere conduct of an enquiry into the affairs of the Society will not hamper the day to day administration and transactions of the Society - Held, Committee or of not less than one fifth of the total number of members of the society hold an inquiry or direct some person authorized by him by an order in this behalf to hold an inquiry into the constitution working and financial condition of a society - Such inquiry shall be completed within a period of four months and the report of inquiry along with the findings of the Registrar thereon shall be communicated to the managing committee of the society - It shall be the responsibility of the managing committee to place the inquiry report before the General Body or Special General Body convened for the purpose of its information within a period of one month from the communication of the inquiry report by the Registrar - Registrar shall be competent to initiate action under the provisions of this Act if the committee fails to take action as aforesaid - Provided that notwithstanding anything contained in this Act and the Rules made the bye laws of a society and the action of the society in placing inquiry report along with the findings of the Registrar the Registrar shall not be precluded from taking follow up action as may be required on the basis of inquiry report - Provided further that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the inquiry - Registrar can exercise that power and exercise of the power on his own motion is one of such circumstances on which reliance is placed by the learned Senior Counsel this Court came to the conclusion that the Registrar has not exercised the powers but on the directions of the Minister - In the instant case there is enough material for the first respondent to set the enquiry process into motion and this Court cannot sit in appeal over such a decision - In fact the decision in (supra) came up for consideration before another learned single Judge of this Court in Co-operative House Building Society Limited Joint Registrar/District Co-operative Officer, Y.S.R. District ALD and the learned single Judge also came to the same conclusion which I have expressed - Court will be slow in interfering with the enquiry proceedings and exercise of discretionary powers when there is some material for the authority and when such material is available in this case this Court sees no ground to interfere with the same - Petition is accordingly dismissed.