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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
K. SREENIVASA REDDY, J.
Perarapu Satyanarayana – Petitioner
Versus
State of Andhra Pradesh – Respondent
Writ Petition No. 24614 of 2021
Decided On : 20-04-2022
CO-OPERATIVE SOCIETIES - APPOINTMENT OF ENQUIRY OFFICER - JURISDICTION - DISTRICT COLLECTOR - POWER TO APPOINT ENQUIRY OFFICER - DELEGATION OF POWERS - G.O.MS. NO. 34, FOOD AND AGRICULTURE (COOP.IV) DEPARTMENT, DATED 16.01.1989 - VALIDITY - CHALLENGE - WRIT PETITION - MAINTAINABILITY.
Fact of the Case:
Petitioner, the Chief Executive Officer of a Primary Agricultural Co-operative Society, challenged the order appointing an Enquiry Officer to conduct an enquiry into the affairs of the society under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (the Act). The petitioner contended that the District Collector, who appointed the Enquiry Officer, lacked jurisdiction and that only the Registrar of Co-operative Societies had the authority to do so.
Finding of the Court:
The court found that the District Collector had the authority to appoint an Enquiry Officer in this case because the transactions between the co-operative society and the District Co-operative Central Bank were interlinked and could not be separated. Additionally, employees of both institutions had acted in collusion to misappropriate funds to the tune of Rs. 23.00 crores, as per the enquiry report under Section 51 of the Act. The court also noted that the petitioner had not challenged the enquiry under Section 51 of the Act but was only challenging the consequential notice under Section 60 of the Act.
Issues: 1. Whether the District Collector had the jurisdiction to appoint an Enquiry Officer to conduct an enquiry into the affairs of the co-operative society under Section 51 of the Act. 2. Whether the petitioner's challenge to the consequential notice under Section 60 of the Act was maintainable.
Ratio Decidendi: 1. The court held that the District Collector had the authority to appoint an Enquiry Officer in this case because: a) The transactions between the co-operative society and the District Co-operative Central Bank were interlinked and could not be separated. b) Employees of both institutions had acted in collusion to misappropriate funds to the tune of Rs. 23.00 crores, as per the enquiry report under Section 51 of the Act. 2. The court held that the petitioner's challenge to the consequential notice under Section 60 of the Act was not maintainable because he had not challenged the enquiry under Section 51 of the Act.
Final Decision: The court dismissed the writ petition, holding that the District Collector had acted in accordance with law by appointing the Enquiry Officer and that the petitioner's challenge to the consequential notice under Section 60 of the Act was not maintainable.
ORDER :
1. Heard Sri O. Manohar Reddy, learned counsel, appearing for Sri V.V. Satish, learned counsel for the petitioner, the learned Government Pleader for Cooperation for respondents 1 to 4 and Sri Srinivas Basava, learned counsel for respondent No. 5.
2. The present Writ Petition is filed challenging the order in Rc. No. 2636/2020-A, dated 18.03.2021 passed by 2nd respondent-District Collector and the notice in Rc. No. 2636/2020-H/ST SA01, dated 16.04.2021 issued by 3rd respondent.
3. It is stated in the affidavit filed in support of the Writ Petition that the petitioner is the Chief Executive Officer of Primary Agricultural Co-operative Society, Gandepalli, East Godavari District (for short ‘PACS’). The District Co-operative Central Bank, Gandepalli branch, East Godavari District (for short ‘DCCB’) is the creditor bank of the PACS. It is stated that 2nd respondent-District Collector, vide order in Rc. No. 2636/2020-A, dated 23.12.2020, appointed 4th respondent as Enquiry Officer to conduct an enquiry into the affairs of the DCCB under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for short ‘the Act 1964’). It is stated that no enquiry is ordered into the affairs of PACS.
It is further stated that while so, 3rd respondent issued the impugned notice dated 16.04.2021 which states that the Enquiry Officer conducted enquiry and submitted report on 17.03.2021 and that 2nd respondent-District Collector issued the proceedings dated 18.03.2021 for initiating civil, criminal and disciplinary action against the persons responsible for misappropriation of funds and financial irregularity and authorized 3rd respondent to take action under Section 60 (1) of the Act, 1964 for recovery of the amount quantified. It is further stated that the notice dated 16.4.2021 states that the Enquiry Officer recommended for recovery of the amounts and that the petitioner and the employee of DCCB and the Ex-President of the PACS are jointly liable to pay an amount of Rs. 4,59,80,902/- towards sanction of irregular loan and called for appearance of the petitioner. Challenging the same, the present Writ Petition has been filed.
4. A counter affidavit has been filed by respondents 1 to 4 resisting the Writ Petition and justifying the impugned action, stating inter-alia that on the report submitted by the Chief Executive Officer (FAC) of DCCB suspecting misappropriation of amounts in the Bank, 4th respondent conducted enquiry on the request of 3rd respondent and submitted a report stating that Rs. 22.83 crores was misappropriated by way of irregular loans sanctioned to the members of PACS without proper documentation, scrutiny and verification by the branch and requested to order enquiry under Section 51 of the Act, 1964 into the affairs of DCCB with reference to loans sanctioned and disbursed to the members of the PACS. It is further stated that 2nd respondent-District Collector, vide proceedings dated 23.12.2020, ordered an enquiry under Section 51 of the Act, 1964 and 4th respondent herein conducted enquiry and submitted report dated 16.3.2021 finding that Rs. 22,07,40,067/- was misappropriated by way of issue of various types of irregular loans to the members of PACS on fake documents without proper documentation, scrutiny and verification and recommenced for recovery of the same from the persons responsible by invoking action under Section 60(1) of the Act, 1964 and suggested initiation of civil, criminal, disciplinary and other actions against the said persons. It is further stated that 2nd respondent-District Collector, vide proceedings dated 18.03.2021, issued directions to take action against the persons responsible as recommended by the Enquiry Officer. It is further stated that pursuant to the orders of 2nd respondent-District Collector, 3rd respondent initiated surcharge enquiry and the same is pending.
It is further stated that there are serious allegations against the petitioner, in the capacity of CEO of PACS, viz. preparing l
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