Procedural fairness mandates an enquiry before imposing surcharge, allowing opportunities for evidence and argument.

1. Challenging the Surcharge Order passed under S. 60(1) of the A. P. Co - operative Societies Act, 1964, in proceedings Re. No. 4277/86 - D dated 10-7-1991 by the Second Respondent this Writ Petition is filed. Before initiation of proceedings under S. 60(1) of the Act, inspection was conducted by the officer concerned under S. 52 of the Act. The Inspection report pointed out that the petitioner was to be surcharged. Basing on the same, proceedings were initiated under S. 60(1) of the Act. Show cause notice dated 24-4-1991 was issued to the petitioner to show cause why surcharge order should not be passed for realisation of Rs. 41,164/- as opined by the Inspecting Officer. The petitioner filed a reply dated 6-5-1991 denying his liability to pay the same. Strictly speaking, he disputed all the allegations levelled against him in the show cause notice issued for surcharging him. In such cases, as a necessary corollary, an enquiry ought to have preceded the surcharge order. The principal point in the instant case is whether any enquiry took place before the passing of surcharge order and if any such enquiry conducted, whether it conforms to the rules of fair - play. The only consideration of the Deputy Registrar who passed the surcharge order is to the following effect :
"Now, therefore, after careful examination of records and inspection report etc. the Deputy Registrar of Co - operative Societies, Gudivada by virtue of powers vested in him under S. 60(1) of the Andhra Pradesh Co - op. Societies Act 7 of 1964 hereby orders that Sri S. Ramasubha Rao Ex - President of Kaikaluru Irrigation and Power Department, Sub-Divisional Employees Co - operative Society Ltd., No. Y 397 has to make good the following amounts to the subject society together with interest at Rs. 18% from the date of receipt of the amounts till the date of realisation of the amounts as he is held responsible for payment of the amounts."

2. While Mr. Parabrahma Sastry, learned counsel for the petitioner contends that no enquiry has been conducted before surcharging the petitioner as contemplated under law, the learned Government Pleader and Mr. G. Suryanarayana Murthy appearing for the subject society advanced arguments to the contra.

3. According to the respondents, the enquiry whatever conducted during inspection under S. 52 of the Act is sufficient and surcharge order can be passed on the said inspection report and no further enquiry is contemplated to pass a surcharge order under S. 60(1) of the Act. I do not accede to these contentions. Report under S. 52 only enables the Registrar to initiate the surcharge proceedings. On such initiation, the regular enquiry has got to be conducted. The Registrar while dealing with the provisions under S. 60(1) of the Act to surcharge a person is a Court. His order is only appealable under S. 76 of the Act, but civil Court's remedy by way of suit is barred. It is pertinent to mention that surcharge order fastening liability on any person including that of the petitioner in such a fashion has got the effect of depriving the right to property which was hitherto a fundamental right guaranteed under Art. 31 of the Constitution of India, now transformed into a constitutional guarantee under Art. 300 - A by which no person can be deprived of his property save by authority of law. The authority of law being in the instant case the statutory provision contained under S. 60(1) of the Act, the rules of fair - play have got to be followed. The rules of fair - play imply that there should be an enquiry wherein opportunity is given to elicit the truth by adduction of oral and documentary evidence, opportunity of cross - examination opportuni