D. Gopala Krishna Rao v. The Deputy Registrar, Cooperative Societies

Order

Heard Sri K. Govind, learned counsel representing writ petitioner and learned Government Pleader for Cooperation representing R-1 and Sri A. Prabhakar Rao, representing R-2.

2. The writ petition is filed for a writ of Certiorari to call for records of the Cooperative Tribunal, Warangal, dated 20.01.2006 in C.T.A.No.19 of 2005 confirming the orders dated 15.10.1997 in Rc.No.593/93-C and quash the same as arbitrary, illegal and violative of Articles 14 and 16 of the Constitution of India and contrary to the provisions of the A.P. Co-operative Societies Act and consequently declare petitioner is not liable to pay Rs.2,38,000/- as the proceedings are without jurisdiction and pass such other suitable orders.

3. This Court issued Rule Nisi on 17.3.2006. On 26.4.2006 in W.P.M.P.No.6553 of 2006 the following order was made: “Prima impugned order dated 15.10.1997 envisages leading of evidence by the second facie, respondent society after providing Section 51 enquiry report to the petitioner, in which the petitioner was permitted to cross-examine and lead evidence in rebuttal of the same. Pursuant to the said remand order, no evidence was let in by the society which can be rebutted by the petitioner, and the surcharge order passed on remand is not in tune with the remand order. Therefore, there shall be interim suspension as prayed for.”

4. W.V.M.P.No.1741 of 2006 was filed and on 20.9.2006 this Court made the following order:

“Unless the writ petition itself is disposed of considering vacation of interim order granted in a case of this nature does not arise. The interim order dated 26.4.2006 is made absolute and the writ petition was directed to appear in the list for final hearing immediately after Dasara Vacation 2006.” Thus, the matter is coming up for final hearing before this Court.

5. Sri K. Govind, learned counsel representing the writ petitioner had taken this Court through the contents of the affidavit filed in support of the writ petition, the counter-affidavit and also the findings recorded in C.T.A.No.19 of 2005 on the file of the A.P. Cooperative Tribunal at Warangal (hereinafter in short referred to as “Tribunal” for the purpose of convenience) and would maintain that in the facts and circumstances of the case the order impugned cannot be sustained. The learned counsel also had taken this Court through the contents of the counter-affidavit filed by the first respondent. While further elaborating his submissions the learned counsel also pointed out to the orders of remand made by the Tribunal in C.T.A.No.191 of 1995 and would maintain that whether the writ petitioner attended the inquiry or not. When an order of remand had been made, the first respondent ought to have complied with the order of remand. The counsel also would maintain that since the order of remand was not complied with in letter and spirit, the Tribunal, without considering this crucial aspect, confirmed the same, also cannot be sustained. The counsel also had taken this Court through the ratio laid down in M. Venkata Rami Reddy v. Deputy Registrar of Cooperative Societies, Anantapur and another[1] and would maintain that on facts the said decision being not applicable and distinguishable, the order under challenge cannot be sustained, since the said decision was followed and certain findings had been recorded in the light of the ratio laid down in the said decision. The learned counsel also further pointed out that the proceeding dated 15.10.1997 of the Deputy Registrar of Cooperative Societies is without jurisdiction and is in violation of principles of natural justice. The learned counsel also further pointed out that the said Deputy Registrar of Cooperative Societies, the first respondent, had not given any opportunity to the petitioner and even otherwise after remand when additional explanation had been submitted, instead of passing cryptic order, the first respondent ought to have complied with the order of remand and further ought to have appreciated the additional objections raised in this regard and should have made a reasoned order. The explanation submitted by the petitioner subsequent to the order of remand also had been specifically pointed out. While further elaborating his submissions the learned counsel also pointed out that the inquiry conducted is not in accordance with Section 51 of the A.P. Cooperative Societies Act (hereinafter in short referred to as “Act” for the purpose of convenience). The counsel also further pointed out that the scope and ambit of Sections 51, 52 and 60 of the Act had not been appreciated by the Tribunal in proper perspective and, hence, in the light of the facts and circumstances the order under challenge to be quashed and the writ petition to be allowed. The learned counsel also placed reliance on certain decisions.

6. The learned Government Pleader for Cooperation had taken this Court through the contents of the order made by the Tribunal and would maintain that in the light of the convincing reasons recorded by the Tribunal, this is not a fit matter to be interfered with while exercising Certiorari jurisdiction. The learned counsel also would maintain that after the order of remand when opportunities had been given and when the petitioner had not availed such opportunities at all, the mere fact that the direction to record evidence as directed by the order of remand had not been complied with. On this ground, the order under challenge cannot be interfered with, since this was not seriously alter the situation. At any rate, in the light of the grave charges and also the material available on record and the findings in detail which had been recorded, this is not a fit matter to be interfered with.

7. Sri A. Prabhakar Rao, leaned counsel representing second respondent had pointed out to the material available on record and also the findings recorded in C.T.A.No.191 of 1995 and further pointed out to the reasons recorded by the first respondent and would maintain that in the light of the clear and convincing reasons recorded by the first respondent the order under challenge wherein the said order had been confirmed also cannot be found fault and, hence, the writ petition to be dismissed.

8. Heard the counsel on record, perused the respective stands taken by the parties in the affidavit filed in support of the writ petition and the counter-affidavit and also the findings recorded by the Tribunal in the order which is under challenge and other material placed before this Court.

9. Sri D. Gopala Krishna Rao, the writ petitioner filed the present petition praying for a writ of Certiorari as already aforesaid. It is stated that the Primary Agricultural Cooperative Society, Chennaraopet, was registered with No.25183 on 15.10.1957 and there are about 7,971 members with a paid up share capital of Rs.17.64 lakhs. The area of operation of the society is confined to 16 villages.

10. It is the case of the writ petitioner, D. Gopala Krishna Rao, that the petitioner worked as Secretary of the said society from 01.8.1998 onwards. Based on the information by the Regional Manager, State Bank of Hyderabad, Region-I, Warangal, about financial irregularities of the said society, the Deputy Registrar/District Cooperative Officer, Warangal, appointed one K. Rajaiah, Cooperative Sub-Registrar, as Inquiry Officer to inquire into the financial conditions of the Primary Agricultural Cooperative Society, Chennaraopet, under Section 51 of the Act in proceedings Rc.No.1056/92-D1, dated 12.8.1982, and the Inquiry Officer submitted his report vide proceedings E.No.1/92, dated

30.3.1993, holding that the petitioner had misappropriated the funds of the society amounting to Rs.2,38,000/-.

11. Further it is averred that the Deputy Registrar of Cooperative Societies, Mahabubabad, Warangal District, invoking powers under Section 60 of the Cooperative Societies Act, issued surcharge order dated 18.5.1995 for recovery of the said amount. Against the said orders, the petitioner had preferred an appeal C.T.A.No.191 of 1995 before the Cooperative Tribunal at Hyderabad, and the Tribunal, by order dated 15.4.1997, set aside the surcharge order and remitted back with a direction to conduct fresh inquiry. Thereafter, notice dated

28.8.1997 was issued directing the petitioner to appear on 12.9.1997 and another notice dated 15.9.1997 was issued fixing the date of hearing 27.9.1997. The petitioner made a representation that it may be heard after 11.10.1997. Thereafter, inquiry was posted to

14.10.1997.

12. Further it is stated that the petitioner submitted additional explanation on 10.10.1997 setting out all the facts that he is not guilty of the charges. However, the Deputy Registrar of Cooperative Societies had passed surcharge order on 15.10.1997 without conducting inquiry and considering the explanation submitted by him including the explanation dated 10.10.1997. Thus, the order passed by the Deputy Registrar of Cooperative Societies, the first respondent, is without jurisdiction and a cryptic order was made without application of mind.

13. Further it is stated that the report submitted by the Inquiry Officer under Section 51 of the Act runs into 31 pages. The first respondent, without discussing the explanation submitted by the petitioner, made the said order.

14. The writ petitioner challenged the same preferring an appeal before the Cooperative Tribunal in C.T.A.No.19 of 2005 and the Tribunal, without considering the case on merits, observed that the petitioner had not availed the opportunities given to him and, hence, cannot plead that the impugned surcharge order is bad in law. The Tribunal also had not considered his explanation and without any discussion held that there is neither irregularity nor illegality in conducting inquiry under Section 60 of the Act. Thus, the order of the first respondent, the Deputy Registrar of Cooperative Societies, Mahaboobabad, and the Tribunal are not in conformity with the provisions of the Act and the said orders are also in violation of the principles of natural justice. Further stand had been taken that the inquiry date was fixed on 14.10.1997 and the explanation of the petitioner was acknowledged by the authorities on 13.10.1997 and the surcharge order was passed on 15.10.1997. The above events would conclusively prove that the respondent had acted with undue haste in fixing the liability on the petitioner without following due process of law.

15. The Tribunal, after narrating the factual matrix, referred to the grounds of appeal in detail, and having formulated the point for consideration at para 5, recorded reasons at paras 6 to 12, referred to M. Venkata Rami Reddy v. Deputy Registrar of Cooperative Societies, Anantapur and another (1 supra) and came to the conclusion that the appeal is devoid of merit, since the surcharge order dated 15.10.1997 cannot be found fault in any way and accordingly dismissed the appeal.

16. The details of the explanation submitted had been argued in elaboration before this Court. In C.T.A.No.191 of 1995 on the file of the Tribunal by order dated 15th day of April, 1997, the Tribunal made the following order. “In these circumstances we allow the appeal by setting aside the impugned order and remand the case back to the lower competent authority i.e., respondent for fresh enquiry and disposal according to law and also to facilitate him to get the section 51 enquiry report placed before the general body of the society with the findings of the Registrar and also to conduct independent enquiry u/s 60 of the Act by calling upon the society to lead the evidence and the appeal to cross-examine and to lead rebuttal evidence and then hear the arguments and pass a well reasoned order. With these directions we dispose of the appeal and in the circumstances without costs.”

17. It is no doubt true that it is pointed out that there was non- cooperation on the part of the writ petitioner. Evidently the conduct of the petitioner also is not free from blameworthiness. But however, the learned counsel representing the writ petitioner made elaborate submissions that when an order of remand had been made by the Tribunal, irrespective of the fact whether the writ petitioner participated as required or not, it is the bounden duty of the Deputy Registrar of Cooperative Societies, the first respondent, to follow the procedure. Since the same had not been followed, the said order is vitiated. The further contention is that when additional explanation had been submitted raising certain objections, it is the bounden duty of the first respondent to consider such objections also and pass a reasoned order and not a cryptic order as one which in fact had been challenged before the Tribunal and the Tribunal, without considering these aspects, erroneously dismissed the C.T.A. aforesaid.

18. The counsel also placed strong reliance on the decision in Roop Singh Negi v. Punjab National Bank and others[2] and the said decision is concerned with departmental inquiry in the context of Service Law and the Apex Court after referring to the under noted decisions observed at para 23 as hereunder.

1. (2008) 3 SCC 484 : (2008) 1 SCC (L&S) 819, Moni Shankar v. Union of India.

2. (2007) 1 SCC 566 : (2007) 1 SCC (L&S) 401, Jasbir Singh v. Punjab & Sind Bank.

3. (2006) 5 SCC 88 : 2006 SCC (L&S) 919, M.V. Bijlani v. Union of India.

4. (2006) 4 SCC 713 : 2006 SCC (L&S) 840, Narinder Mohan Arya v. United India Insurance Co. Ltd.

5. (2005) 5 SCC 100 : 2005 SCC (L&S) 609, RBI v. S. Mani.

6. (2004) 8 SCC 200 : 2004 SCC (L&S) 1067, Krishnakali Tea Estate v. Akhil Bharatiya Chah Mazdoor Sangh.

7. (1999) 3 SCC 679 : 1999 SCC (L&S) 810, Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.

8. (1999) 2 SCC 10 : 1999 SCC (L&S) 429, Kuldeep Singh v. Commr. Of Police.

9. 1987 Supp. SCC 579 : 1988 SCC (L&S) 243 : (1987) 5 ATC 321, Bhagwati Prasad Dubey v. Food Corpn. Of India.

10. (1987) 2 Cal LJ 344, Export Inspection Council of India v. Kalyan Kumar Mitra.

11. (1986) 3 SCC 454 : 1986 SCC (L&S) 662, Sawai Singh v. State of Rajasthan.

12. (1984) 1 SCC 43 : 1984 SCC (L&S) 62, K.L. Tripathi v. SBI.

13. (1970) 1 SCC 709, State of Assam v. Mahendra Kumar Das.

14. (1969) 3 SCC 775, State of U.P. v. Om Prakash Gupta.

15. AIR 1969 SC 983 : (1969) 1 SCR 735, Central Bank of India Ltd. V. Prakash Chand Jain.

16. AIR 1964 SC 364 : (1964) 4 SCR 718, Union of India v. H.C. Goel.

17. AIR 1958 SC 300 : 1958 SCR 1080, Khem Chand v. Union of India. “Furthermore, the order of the disciplinary authority as also the appellate authority are not supported by any reason. As the orders passed by them have severe civil consequences, appropriate reasons should have been assigned. If the enquiry officer had relied upon the confession made by the appellant, there was no reason as to why the order of discharge passed by the Criminal Court on the basis of self-same evidence should not have been taken into consideration. The materials brought on record pointing out the guilt are required to be proved. A decision must be arrived at on some evidence, which legally admissible. The provisions of the Evidence Act may not be applicable in a departmental proceeding but the principles of natural justice are. As the report of the Enquiry officer was based on merely ipse dixit as also surmises and conjectures, the same could not have been sustained. The inferences drawn by the enquiry Officer apparently were not supported by any evidence. Suspicion, as is well known, however high may be, can under no circumstances be held to be a substitute for legal proof.”

19. In M. Venkatrami Reddy v. Deputy Registrar of Cooperative Societies, Anantapur[3], it was held as hereunder: “Here is a case, where an independent enquiry has been initiated under Section 60 of the Act and reasonable opportunity was afforded to the petitioner, proceedings were repeatedly adjourned at the instance of the petitioner and yet the petitioner has chosen not to submit his explanation. There was no other material before the authority concerned, except the material on record made available to the authority prepared under Section 52 of the Act. The material could definitely constitute reason for initiating action. Even the show-cause notice dated 25. 8. 1990 does not say as to why the order of surcharge should not be passed against the petitioner, as he is found responsible for misappropriation of the funds of the society in terms of inspection report under Section 52 of the Act. The show-cause notice, on the other hand, gives details of the amounts alleged to have been misappropriated by petitioner. Nothing prevented the petitioner to raise an objection and no reason is forth coming from the petitioner as to why he had failed to peruse the records in spite of an opportunity given to him. The conduct of the petitioner suggests that he was making an attempt for eternal postponement of the proceedings initiated against him under Section 60 of the Act. The material available on record against the petitioner, including the Inspection report prepared and submitted under Section 52 of the Act could not have been ignored by the Registrar and the same was taken into consideration and rightly so, in my considered opinion, the petitioner could have satisfied the registrar as to why such material should not be taken into consideration. Having failed to do so, in my considered opinion, the petitioner cannot be allowed to raise hue-and cry in this writ petition. Fairness is not one way affair.”

20. It is true that in the counter-affidavit filed by the first respondent specific stand had been taken that it is not mandatory to place the inquiry report before the General Body of the society, as such the question of approval by the General Body does not arise. Further, it is stated that sufficient opportunities were provided to the writ petitioner to appear and to lead evidence, but the writ petitioner failed to appear before the Deputy Registrar of Cooperative Societies in spite of issuing notices on 28.8.1997, 15.9.1997 and 01.10.1997 directing the writ petitioner to appear before the Deputy Registrar of Cooperative Societies on 14.10.1997. After receiving the notice dated 01.10.1997 the writ petitioner simply submitted his explanation through post dated

10.10.1997 which was received by the Deputy Registrar of Cooperative Societies on 13.10.1997 and the writ petitioner failed to appear on 14.10.1997. After perusing the reply submitted by the writ petitioner and after going through the entire record, the orders were passed on 15.10.1997 basing on material available on record. Therefore, the contention of the writ petitioner that no reasons were given for coming to the conclusion is not tenable.

21. Further, it is stated that the writ petitioner though an employee of the State Bank of Hyderabad, he was deputed and posted as Secretary of PACS, Chennaraopet. Since the Primary Agricultural Co- operative Society comes under the purview of the Deputy Registrar of Co-operative Societies and vested with all powers under Section 51 of the Act, the Deputy Registrar of Co-operative Societies is competent authority to inspect and direct the concerned to render proper accounts to the Department whenever the audit of the society is conducted.

22. Further specific stand had been taken that sufficient opportunity was provided to the writ petitioner to appear and lead evidence, but the writ petitioner failed to appear before the Inquiry Officer in spite of providing sufficient opportunity to put forth his case and to hear on charge. Hence, the contention of the petitioner otherwise cannot be sustained. Several other factual details also had been narrated in the counter-affidavit.

23. As already aforesaid it is true that there was element of non- cooperation on the part of the writ petitioner also, but however, when an order of remand had been made by the Tribunal, which had been referred to supra, the first respondent is expected to comply with the order of remand made irrespective of the fact that whether the writ petitioner participated or not.

24. In the light of the same, especially, in the light of the order of remand which had been made since this Court is satisfied that the additional explanation submitted by the writ petitioner also had not been considered, let the first respondent give opportunity to the petitioner and the second respondent as well to lead further evidence as directed by the order of remand aforesaid and in the event of the writ petitioner not cooperating in this regard, let the reasons be recorded in relation thereto by the first respondent and dispose of the same in accordance with law, especially, keeping in view the order of remand of the Tribunal referred to supra. Inasmuch as it is brought to the notice of this Court that the writ petitioner is adopting delaying tactics to postpone the conclusion of the inquiry, let the first respondent further proceed with the matter in accordance with law without any further delay, whatsoever, preferably the exercise to be completed within a period of three months from the date of receipt of this order.

25. Subject to the above observations the impugned order of the Tribunal under challenge and that of the first respondent are hereby set aside to the extent indicated above. It is needless to say that the writ petition is hereby allowed to the extent indicated above. No order ___________________ (P.S. NARAYANA, J) as to costs. Date: October 21, 2009. BSB [1] 1997 (6) ALD 98 [2] (2009) 2 SCC 570 [3] 1997 (6) ALD 98