The court held that the Registrar was not required to consult NABARD before superseding the Managing Committee of the society, as DCC bank was the relevant financing bank under the TCS Act.

ORDER:

In this writ petition, the petitioner is seeking a writ of certiorari calling for the records relating to Rc.No.115/2024-C, dated 14.11.2024 passed by the respondent No.3 under Section 34(1)(c) of TSCS Act superseding the Managing Committee of LSCS Ltd (i.e., Large Size Co-operative Society Ltd), Pothangal, Nizamabad, for a period of six months while appointing Sri.Md.Riyazuddin, Senior Inspector/Rudrur Cluster, Administrator, Sri.N.Venkateshwar Rao, Assistant Manager NDCCB Kotagiri, Administrator to manage the affairs of LSCS Ltd (i.e., Large Size Co-operative Society Ltd), Pothangal, Nizamabad, as without jurisdiction and to quash the same as illegal, arbitrary, bad and also without jurisdiction and to consequently restore the Managing Committee of the LSCS Ltd (i.e.,Large Size Co-operative Society Ltd) and to pass such other order or orders in the interest of justice.

2. Brief facts leading to the filing of the present writ petition are that the petitioner, Large Size Co-operative Society Limited was established in the year 1952 under the A.P. Co- operative Societies Act, 1961 and it is submitted that currently there are nearly 3000 members. It is submitted that there were certain complaints against the management committee of the society and therefore, an enquiry under Section 51 of the TCS Act was ordered and the respondent No.3 has conducted the enquiry and found that the petitioner’s society has caused loss to the tune of Rs.57,95,415/-. According to the petitioner, this loss included an amount of Rs.56,95,415/- which was the amount paid to the direct or indirect tax authorities or the Provident Fund authority for earlier year dues and therefore, it cannot be considered as loss caused by the managing committee only Rs.1 lakh was shown as debited by the erstwhile secretary, who is now under suspension and is not traceable. It is thus submitted that only managerial and technical defects have been pointed out in the enquiry and no substantial allegations have been proved against the management committee. It is submitted that a show cause notice was issued to the committee as to why action should nto be taken in view of the above findings and a detailed reply has been filed, but without considering the same, the respondents have issued the proceedings dated 14.11.2024 superseding the Managing Committee under Section 34(1)(b)& (c) of the Act.

3. Learned counsel for the petitioner submitted that Section 34(1)(d)(6) provides that a committee cannot be superseded or kept under suspension unless the Registrar, before taking any action under sub-section (1) in respect of that society, consults the financing bank when a society is indebted to any financing bank.

4. It is submitted that in this case, the NABARD is the financing bank as it finances the Telangana State Co-operative Apex Bank (TSCAB), which in turn finances the District Co- operative Central Bank (DCCB) and it is the District Co- operative Central Banks which again finances the Primary Agricultural Credit Societies (PACS). Therefore, according to the learned counsel for the petitioner, the respondent authority, i.e., respondent No.3 ought to have consulted the NABARD i.e., respondent No.8 before passing the orders of supersession under Section 34(1)(b) & (c) of the Act. It is submitted that the order passed by the respondent No.3 is thus beyond his jurisdiction and the same has been challenged in this writ petition.

5. Learned Government Pleader for Co-operation has obtained written instructions and submitted that Section 2(f) of the TCS Act defines the ‘ financing bank’ to means a society, the main object of which is to assist any affiliated or other society by giving loans or advancing moneys; and includes any scheduled bank as defined in the Reserve Bank of India Act, 1934 (Central Act 2 of 1934) and such other body corporate or financial institution as may be notified by the government from time to time which gives financial or other aid to a society and f