Nookala Gavaraiah vs Special Category Deputy Registrar and others

The petitioner in each of these writ petitions is the paid officer of the 4th respondent Bank. The petitioners have assailed the validity of the proceedings in Rc.No. 1455/97-C dated 20-5-1997 issued by the Special Category Deputy Registrar/ District Co-operative Officer, Srikakulam, the 1st respondent herein, who is the Registrar for the purpose of the Andhra Pradesh Cooperative Societies Act, 1964 (for short ''the Act''). By the impugned proceedings, the 1st respondent has directed the management of the 4th respondent Bank to place the petitioners under suspension forthwith pending enquiry u/s 51 of the Act. At this stage itself, it is relevant to note that the enquiry to which reference is made in the impugned proceeding was ordered by the Registrar u/s 51 of the Act against one Rana Primary Agricultural Cooperative Society, Rana by the proceedings dated 27-3-1997. There- afterwards, on the basis of the interim report submitted by the enquiry officer dated 15-5-1997 the impugned proceedings was issued.

The validity of the impugned proceeding is questioned mainly on the ground that the 1st respondent had no authority to direct the management of the 4th respondent Bank to place the petitioners under suspension pending enquiry u/s 51 of the Act initiated against the Rana Primary Agricultural Cooperative Society, Rana u/s 59(1) of the Act. Elaborating this contention taken in the writ petition, Shri D. V. Bhadram, learned Counsel for the petitioners, pointed out that u/s 59 (1) of the Act the Registrar can direct suspension of a paid employee of the Society against which the proceedings are initiated either u/s 50 or Section 51 or Section 52 or Section 53, and in the instant case, no enquiry was ordered against the 4th respondent Bank and the petitioners never worked as paid servants of the Rana Primary Agricultural Cooperative Society, Rana at any point of time. The learned Counsel for the petitioners would maintain that the conditions precedent for invoking the power u/s 59 (1) of the Act against the petitioners do not exist and, therefore, the action of the 1st respondent should be held to be the one without authority of law and ultra vires of Section 59 (1) of the Act. On the other hand, the learned Government Pleader for Cooperation would contend that in the course of the enquiry u/s 51 of the Act against the Rana Primary Agricultural Cooperative Society, it was found that the petitioners were also responsible for misappropriation of the funds of the Rana Primary Agricultural Co-operative Society and on that basis the petitioners were placed under suspension, pending enquiry.

If the petitioners are guilty of misconduct in the sense that they connived with the paid officials or officers of the Rana Primary Agricultural Co-operative Society in misappropriating the funds of the said society, the management of the 4th respondent Bank being the employer certainly can initiate disciplinary proceedings against the petitioners under the relevant C.C.A. Regulations and it can also place the petitioners under suspension pending or in contemplation of such enquiry. The question before the Court is whether the Registrar could invoke the power u/s 59(1) of the Act in the facts - situation of this case. Sub-Section (1) of Section 59 of the Act reads:

"(1) Where in the course of an audit u/s 50 or on inquiry u/s 52 or an inspection u/s 52 or Section 53, it is brought to the notice of the Registrar that paid officer or servant of a society has committed or has been otherwise responsible for misappropriation, breach of trust or other offence, in relation to the society, the Registrar may, if in his opinion there is prima facie evidence against such officer or servant and the suspension of such paid officer or servant is necessary in the interests of the society, direct the committee pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant under suspension from such date and for such period as may be specified by him, but not retrospectively."

A careful reading of sub-section (1) of Section 59 of the Act makes it very clear that the Registrar by virtue of the power granted to him under this sub-section can direct suspension of only those paid servants or officers of the Cooperative Society against which inquiry/investigation is ordered either u/s 51 or 52 or 53 of the Act. The phrases, "Paid officer or servant of a Society" and "in relation to the Society" occurring in sub-section (1) are significant and key words in construing the provision. ''A society'' or ''the Society'' is ultimately referable to the Society against which an inquiry or investigation was ordered u/s 50 to 53 of the Act and such inquiry/ investigation is pending, and not any other society. Here is a case where the action initiated u/s 51 of the Act is not against the 4th respondent-Bank which is also a ''Cooperative Society'' within the meaning of that term. Added to this, the petitioners never served in tire establishment of the Rana Primary Agricultural Co-operative Society as paid employees or officers. Therefore, the submission of the learned Counsel for the petitioner that necessary conditions for exercising the power u/s 59 (1) of the Act did not exist before the impugned direction was issued by the 1st respondent is well-founded.

In the result, the writ petitions are allowed. The impugned proceeding in Rc.No.1455/97-C dated 20-5-1997 of the 1st respondent is quashed. No costs.

However, it is made clear that this order shall not come in the way of the management of the 4th respondent-Bank to proceed against the petitioners departmentally in terms of the relevant C.C.A. Regulations on the basis of the adverse materials collected in the enquiry, and place them under suspension pending or in contemplation of such departmental enquiry, if it is so advised, to avoid the apprehended manipulation of the records by the petitioners.