no specific act is attributed against the petitioner herein in the Inquiry Officers report and hence, he cannot be subjected to any action, as contemplated by the Registrar of Cooperative Societies, which is liable to be initiated only against Sri Ramayya. I am afraid, this contention does not hold any water. The finding recorded by the Inquiry Officer is that Sri Ramayya, the Branch Manager of Devarakonda Branch of Nalgonda District Cooperative Central Bank in collusion with seven other Chief Executive Officers of the Primary Agricultural Cooperative Societies, including the one headed by the petitioner herein, has been alleged to have misappropriate large sums of money. Therefore, the proceedings initiated against the petitioner, at this stage, cannot be faulted and it is for him to establish either in the civil Court or in the criminal Court or in any other suitable action initiated against him, to demonstrate that he has played no role whatsoever in the act of misappropriation of public funds and hence, he is not guilty of the allegations levelled against him. At this stage, it will be hard and hazardous for the Court to speculate that the petitioner has not played any role. That would only be available at the stage when a thorough and detailed investigation in all respects is carried out by the respective Courts/agencies to whom the task is liable to be entrusted. Hence, I have no hesitation to reject this Writ Petition at the admission stage and accordingly, it is dismissed. No costs.

THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO            

W.P. No.7759 of 2015

24-03-2015

M.D. Gaffar.Petitioner

The State of Telangana rep. by its  Principal Secretary, Cooperation
Department, Hyderabad & others.....Respondents

Counsel for the petitioner: Sri M. Rama Rao

Counsel for the Respondent 1 to 3:GP for Cooperation

<GIST:

>HEAD NOTE:  

?Cases referred

THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO            

WRIT PETITION No. 7759 OF 2015  

O R D E R:
      The petitioner herein is employed as the Chief Executive
Officer and Secretary of the Primary Agricultural Cooperative
Society, Thimmapuram. He now seeks a writ of mandamus for  
declaring the action of the 2nd respondent Commissioner for
Cooperation and Registrar of Cooperative Societies, State of
Telangana, Hyderabad in issuing the proceedings, dated
17.11.2014 ordering a second inquiry and then issuing the
consequential proceedings, dated 16.02.2015 directing the 3rd
respondent, the District Cooperative Officer, Nalgonda District, to
take civil, criminal and institutional actions against the petitioner
holding him also responsible for the irregularities committed in
disbursement of loans along with the Branch Manager and the
Presidents of various Agricultural Cooperative Societies, even
though the Inquiry Officer has not found him as responsible for
any of the irregularities committed, as illegal.
      It appears, certain serious allegations have surfaced with
regard to the gross irregularities committed in conducting the
affairs of various societies, in particular relating to disbursal of
large sums of money towards loans.  Seven Primary Agricultural
Cooperative Societies are adversely reported in that regard.
Therefore, the Registrar of Cooperative Societies has ordered an
inquiry to be conducted under Section 51 of the Andhra Pradesh
Cooperative Societies Act, 1964 (for short, the Act) and appointed
the District Cooperative Officer, Nalgonda as an Inquiry Officer.
The said Inquiry Officer drew up his report and submitted it on
20.10.2014.  Thereafter, the Registrar of Cooperative Societies,
according to the learned counsel for the petitioner Sri M. Rama
Rao, ordered for a second inquiry, by his proceedings, dated
17.11.2014.  Such a measure adopted by the Registrar of
Cooperative Societies is clearly illegal and contrary to the provision
contained under Section 51 of the Act and also the ruling of this
Court rendered in Cooperative Electric Supply Society Limited
(CESS) v. State of Andhra Pradesh . It is further contended by
Sri Rama Rao, learned counsel that in spite of the inquiry report
submitted on 20.10.2014, not attributing any specific allegations
of commission of irregularities by the petitioner, but nonetheless,
in his report, dated 02.02.2015 in the second inquiry, the District
Cooperative Officer, unnecessarily tried to implicate the petitioner
as well.  Not satisfied and content with the illegalities committed so
far, according to the learned counsel for the petitioner, the
Registrar of Cooperative Societies, through his proceedings, dated
16.02.2015, has directed the 3rd respondent District Cooperative
Officer, Nalgonda to initiate civil, criminal and institutional actions
with regard to the irregularities allegedly committed by the
petitioner and submit the developments of the cases from time to
time to him. Thus, gross injustice is committed by the Registrar of
Cooperative Societies in conducting not only the second inquiry
but also ordering for civil, criminal and institutional actions to be
initiated against the petitioner herein.  Hence, this Writ Petition.
      Before proceeding any further, it would be more appropriate
to take into account the provision contained under Section 51 of
the Act.  It enabled the Registrar of Cooperative Societies, either on
his own motion and shall, on the application of a society to which
the society concerned is affiliated, or at the request of not less than
one-third of the members of the Committee of the society
concerned, or at the request of one-fifth of the total number of
members of the society, to hold an inquiry or direct some person
authorized by him in that behalf to hold an inquiry into the
constitution, working and financial condition of a society.  Such
inquiry shall also be required to be completed within a period of
four months and thereafter, the report of the inquiry along with the
findings of the Registrar thereon shall be communicated to the
Managing Committee of the society concerned, which shall place
the inquiry report before the General Body or Special General Body
of the society convened for the purpose of its information within a
period of one month from the date of communication of the inquiry
report by the Registrar of the Cooperative Societies.  If, for any
reason, the Managing Committee of the society fails to initiate the
appropriate action, as desired by the Registrar, Section 51 of the
Act further enabled the Registrar of Cooperative Societies to take
the necessary action by convening a general body meeting of the
society.  The proviso added thereafter holds the key to the present
controversy and hence, it is appropriate to consider it in detail.  It
reads as under:
               Provided that notwithstanding anything contained in this
Act and the Rules made thereunder, the bye laws of a society and
the action of the society in placing the 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:
        Provided also that the Registrar may for reasons to be
recorded in writing extend the period of four months for completion
of inquiry for a further period not exceeding two months.

      The proviso has been couched in very wide language and it
has also begun with a non-obstante clause setting out that the
Registrar shall not be precluded from taking follow up action as
may be required on the basis of the inquiry report. The next
proviso added to Section 51 insulated the action initiated by the
Registrar in that regard by setting out that the general body of the
society cannot nullify the action of the Registrar by passing a
resolution negativing the findings of the inquiry.
        To my mind therefore, the provision contained under Section
51 of the Act is a complete code in itself and has far-reaching effect
and ramifications. Whenever the Registrar of Cooperative Societies
receives any information about the serious irregularities committed
with regard to the affairs of any society, he has the competence to
order for an inquiry under Section 51 of the Act and such an
inquiry can be conducted either by himself or by authorizing any
other person in that behalf.
      In the instant case, the Registrar of Cooperative Societies
has appointed the District Cooperative Officer, Nalgonda to
conduct the inquiry under Section 51.  That Inquiry Officer
summed up his report and submitted the same to the Registrar of
Cooperative Societies on 20.10.2014.  At that stage, the Registrar
of Cooperative Societies was required by Section 51 to examine the
report of the inquiry and then, firm up his findings thereafter.
After examining the inquiry report submitted under Section 51 of
the Act, the Registrar of Cooperative Societies has entertained
certain doubts and hence, through his proceedings, dated
17.11.2014, addressed to the District Cooperative Officer-cum-
Inquiry Officer, under Section 51, solicited certain clarifications.
The District Cooperative Officer, the Inquiry Officer was asked to
concentrate on some of the aspects, which are forming part of his
earlier report dated 20.10.2014.  For instance, the Inquiry Officer,
in his report, dated 20.10.2014, has returned a finding that Sri
B. Ramayya, Branch Manager, Nalgonda District Cooperative
Central Bank, Devarakonda Branch, though denied the allegations
of irregularities committed by him, was held to have committed the
alleged financial irregularities in collusion with the Chief Executive
Officers of the Primary Agricultural Cooperative Societies and he
has also violated the loan policy intentionally and a total amount of
more than Rs.8.58 crores has been misappropriated in
disbursement of the loans between the years 2010-11 and August,
2013.  Therefore, the Registrar of Cooperative Societies, in his
communication, dated 17.11.2014, specifically directed the Inquiry
Officer to re-examine his finding in this regard and make a specific
recommendation as to whether the responsibility has to be fixed
only on Sri Ramayya, Branch Manager or both the Branch
Manager and the Chief Executive Officers concerned of the Primary
Agricultural Cooperative Societies.  To my mind, the proceedings,
dated 17.11.2014 of the Registrar of Cooperative Societies is not a
case of ordering for a re-inquiry or a second inquiry.  It is, in fact, a
continuation of the inquiry ordered by him earlier under Section
51.  Since the findings of the Inquiry Officer are some what
opaque; in that he has not named the other players, who colluded
with Sri Ramayya, the necessary clarifications have got to be called
for.  Therefore, the action, which resulted in the proceeding, dated
17.11.2014 of the Registrar of Cooperative Societies, is in
conformity with and within the four corners of Section 51 itself.
When once Section 51 required the Registrar of Cooperative
Societies to record his findings upon the Inquiry Officers report, it
pre-supposes that the Registrar of Cooperative Societies is required
to apply his mind and give specific findings.  Hence, the
proceedings, dated 17.11.2014 of the Registrar is in conformity
and well within the limits specified under Section 51 of the Act.  I
have therefore, no hesitation to reject the contention canvassed by
the learned counsel Sri Rama Rao that it amounted to a second
inquiry.
      Now turning our attention to the proceedings dated
02.02.2015 submitted by the District Cooperative Officer,
Nalgonda to the Commissioner of Cooperation-cum-Registrar of
Cooperative Societies, it is in fact, in response to the clarifications
sought for by the Registrar of Cooperative Societies on 17.11.2014.
Therefore, even this proceedings, dated 02.02.2015 of the District
Cooperative Officer does not amount to a second inquiry report.  It
is in fact, an extension of the report submitted earlier by him on
17.10.2014 and clarifying the gray areas pointed out in his report
by the Registrar of Cooperative Societies.  Clearly, the principle
enunciated by this Court in Cooperative Electric Supply Society
Limiteds case (cited supra) is not attracted.
      This  apart, the copies of the proceedings, dated 17.11.2014
and the response thereto through proceedings, dated 02.02.2015
are filed in the Writ Petition paper book at pages 24 and 20
respectively.  I was left wondering whether the petitioner has
secured these copies under the Right to Information Act, 2005.  If
he has not done so, it is a pity that the District Cooperative Officer,
Nalgonda and the Commissioner and Registrar of Cooperative
Societies for the State of Telangana are not able to protect and
insulate their official records from being pouched by the
unauthorized agents.
      While dealing with the proceedings, dated 16.02.2015, all I
need to observe is that the Registrar of Cooperative Societies has
ordered the action to be initiated against those persons, who were
prima facie found guilty of misappropriation of large sums of public
money.  No fault can be taken to this exercise.  If public money is
misappropriated, the competent authority is entitled under law to
recover and restore the same.  Therefore, the civil action for
recovery of the misappropriated amount is a legitimate action.
Insofar as the criminal culpability is concerned, it is beyond any
pale of doubt that misappropriation of public money is a breach of
conduct, which attracts several penal provisions.  Therefore,
initiation of criminal case against all such persons, who are found
prima facie responsible for the misappropriation cannot be faulted.
So far as the institutional actions are concerned, no person can
think that he can misappropriate large sums of public money and
still expect himself to be very safe and secure.  Every servant is
bound by the Code of conduct and discipline.  If he has breached
the said code of conduct, he exposes himself to the risk of being
hauled up for the said breach.  Therefore, the institutional action
initiated against the petitioner also cannot be faulted with.
      There is one contention, which Sri Rama Rao presses too
hard i.e. no specific act is attributed against the petitioner herein
in the Inquiry Officers report and hence, he cannot be subjected to
any action, as contemplated by the Registrar of Cooperative
Societies, which is liable to be initiated only against Sri Ramayya.
I am afraid, this contention does not hold any water.  The finding
recorded by the Inquiry Officer is that Sri Ramayya, the Branch
Manager of Devarakonda Branch of Nalgonda District Cooperative
Central Bank in collusion with seven other Chief Executive Officers
of the Primary Agricultural Cooperative Societies, including the one
headed by the petitioner herein, has been alleged to have
misappropriate large sums of money.  Therefore, the proceedings
initiated against the petitioner, at this stage, cannot be faulted and
it is for him to establish either in the civil Court or in the criminal
Court or in any other suitable action initiated against him, to
demonstrate that he has played no role whatsoever in the act of
misappropriation of public funds and hence, he is not guilty of the
allegations levelled against him.  At this stage, it will be hard and
hazardous for the Court to speculate that the petitioner has not
played any role. That would only be available at the stage when a
thorough and detailed investigation in all respects is carried out by
the respective Courts/agencies to whom the task is liable to be
entrusted.
      Hence, I have no hesitation to reject this Writ Petition at the
admission stage and accordingly, it is dismissed. No costs.
          Consequently, the miscellaneous applications, if any shall
also stand dismissed.
-----------------------------------------
NOOTY RAMAMOHANA RAO, J        
24th March 2015 

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