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2006 DIGILAW 900 (KAR)

K. H. NALLAPPA v. SECRETARY, DEPARTMENT OF CO-OPERATION, BANGALORE

2006-11-10

AJIT J.GUNJAL

body2006
ORDER To appreciate the controversy in question, few facts are required to be noticed. 2. The petitioner was working as a Sales Clerk at Kotthannur Sericulturist-cum-Farmers Services Co-operative Bank. During the relevant period i.e., in the year 1988-89, a case was registered against the petitioner for the offences punishable under Sections 408 and 409 of the Indian Penal Code, 1860 in C.C. No. 246 of 1993. The amount of misappropriation was Rs. 51,511.15 paise. The defence taken by the petitioner in the said proceedings was that he was not an employee of the said Society and further the evidence on record does not disclose that the offence is committed under Sections 408 and 409 of the Indian Penal Code. After trial, the learned Magistrate, pursuant to his judgment dated 20-9-2003, acquitted the petitioner on the ground that the prosecution has failed to prove beyond all reasonable doubt that the petitioner has misappropriated the amount of Rs. 51,511.15 paise. A copy of the said judgment is produced at Annexure-A. During the interregnum, the petitioner became a member of the 6th respondent-Society, contested elections and eventually became the President of the said Society. But, however, proceedings were initiated against him on the ground that in a parallel proceedings initiated by the 4th respondent before the Assistant Registrar of Co-operative Societies under Section 69 of the Karnataka Co-operative Societies Act, 1959 to the effect that there is misappropriation to the tune of Rs. 51,511.15 paise, the Assistant Registrar has recorded a finding that indeed the petitioner has misappropriated the said amount. The said order was questioned by the petitioner before the Karnataka Appellate Tribunal and the appeal was dismissed confirming the order of surcharge under Section 69 of the Act. A copy of the order passed by the Assistant Registrar is produced at Annexure-R4 along' with the statement of objections filed by respondent 5. Annexure-R3 is the order passed by the Karnataka Appellate Tribunal. In the meantime as stated earlier since the petitioner was elected as President of the 6th respondent-Society, proceedings were initiated under Section 29-C of the Act for disqualification on the ground that the petitioner owed the Society namely the 4th respondent-Society a sum of Rs. 51,511.15 paise. The said complaint was lodged by the 6th respondent. The 3rd respondent pursuant to his order at Annexure-B, notified the petitioner of the said disqualification proceedings. 51,511.15 paise. The said complaint was lodged by the 6th respondent. The 3rd respondent pursuant to his order at Annexure-B, notified the petitioner of the said disqualification proceedings. Pursuant to the said show-cause notice dated 8-4-2005, the petitioner entered appearance and contested the proceedings inter alia contending that for the same offence the Criminal Court had acquitted him, consequently, the proceedings initiated at the behest of respondent 5 cannot be sustained. This contention did not find favour with the 3rd respondent and disqualified the petitioner. The copy of the same is produced at Annexure-B. The said order of disqualification was questioned by the petitioner before the Appellate Authority-2nd respondent. The respondent 2 having reconsidered the material as well as the contentions urged regarding the acquittal of the petitioner in the criminal proceedings was of the opinion that the order passed by the 3rd respondent cannot be found fault with and has dismissed the appeal. The said order passed by the original authority as well as the Appellate Authority are questioned in this writ petition. 3. Mr. N. Sriram Reddy, learned Counsel appearing for the petitioner submits that for the alleged misappropriation the petitioner was already prosecuted and the Criminal Court has acquitted him. In the circumstances, the question of the 3rd respondent initiating proceedings under Section 29-C regarding disqualification does not arise. He mainly relied on certain observations made by the Criminal Court during the course of its judgment to the effect that the prosecution has failed to prove that at the relevant point of time the petitioner was working as the Sales Clerk and that no material was forthcoming to show that indeed the petitioner had misappropriated the said amount. He would also contend that notwithstanding the fact that surcharge proceedings have been concluded against him, that by itself will not be a disqualification as it does not attract any of the provisions of Section 29-C. 4. Mr. A.G. Shivanna, learned Additional Government Advocate would support the orders passed by respondents 2 and 3. He would further submit that Sections 29-C(1) clearly indicates that it is not necessary that a disqualified person should be a member of the Society, but, if h~ is an employee of another Society and if any amount is due from him to the said Society, it would also be one of the grounds for disqualification. 5. Mr. He would further submit that Sections 29-C(1) clearly indicates that it is not necessary that a disqualified person should be a member of the Society, but, if h~ is an employee of another Society and if any amount is due from him to the said Society, it would also be one of the grounds for disqualification. 5. Mr. P.V. Chandrashekar, learned Counsel appearing for the 4th respondent-erstwhile Society where the petitioner was working submits that surcharge proceedings were initiated under Section 69 of the Act and it was found that the petitioner had misappropriated the amount to the tune of Rs. 51,511.15 paise and the said order having been confirmed by the Tribunal and the same having attained finality, Section 29-C is squarely attracted and the order of disqualification is just and proper. 6. Mr. Sheik Zaheer Hussain, learned Counsel appearing for the 5th respondent would also reiterate what has been stated by the learned Additional Government Advocate and would also rely on the statement of objections as well as the documents produced along with the statement of objections i.e., Annexures-R3 and R4, which are referred to earlier. 7. The question whether notwithstanding the acquittal of the criminal proceedings initiated against a delinquent person, whether parallel proceedings could be initiated for the same alleged offence is concerned is set at rest by the two judgments of the Apex Court in the case of Corporation of 'the City of' Nagpur, Civil Lines, Nagpur and Another v Ramchandra G. Modak and Others1, wherein the Apex Court has observed thus: "Normally where the accused is acquitted honourably and completely exonerated of the charges it would not be expedient to continue a departmental inquiry on the very same charges or grounds or evidence, but the fact remains, however, that merely because the accused is acquitted, the power of the authority concerned to continue the departmental inquiry is not taken away nor is its direction (discretion) in any way fettered. However, where, as in the present case, quite some time has elapsed since the departmental inquiry had stated the authority concerned will take into consideration this factor in coming to the conclusion if it is really worthwhile to continue the departmental inquiry in the event of the acquittal of the respondents. If, however, the authority feels that there is sufficient evidence and good grounds to proceed with the inquiry, it can certainly do so". If, however, the authority feels that there is sufficient evidence and good grounds to proceed with the inquiry, it can certainly do so". In Management of' Krishnakali Tea Estate v Akhil Bharatiya Chah Mazdoor Sangh and Another2, it is observed thus: "From the above, it is seen that the approach and the objectives of the criminal proceedings and the disciplinary proceedings are together distinct and different. The observations therein indicate that the Labour Court is not bound by the findings of the Criminal Court". It is to be noticed that the approach and the objective in the criminal proceedings and the disciplinary proceedings are altogether distinct and different. In the disciplinary proceedings, the question is whether the respondent is guilty of such conduct as would merit his removal from service or a lesser punishment, as the case may be, whereas in the criminal proceedings the question is whether the offences registered against him under the Prevention of Corruption Act, 1988 (and the Indian Penal Code, if any) are established and, if established, what sentence should be imposed upon him. The standard of proof, the mode of enquiry and the rules governing the enquiry and trial in both the cases are entirely distinct and different. 8. In view of the authoritative pronouncement of the Apex Court on the question whether parallel proceedings could be initiated for the same offence, I am of the opinion that indeed, there was no impediment for respondents 2 and 3 to embark upon an enquiry regarding disqualification of petitioner on the ground that in an earlier proceedings he had suffered an order of misappropriation. It is also to be noticed that for the said misappropriation, the 4th respondent had sought to initiate an enquiry under Section 69 of the Act. The said proceedings were initiated in the year 1994-95, when the matter was pending adjudication before the Criminal Court. A perusal of Annexure-R4, the order passed on surcharge proceedings under Section 69 of the Act would indicate that the amount to be recovered from the petitioner after giving deduction to the opening stock and the stock received was Rs. 51,511.15 paise. Its order on surcharge proceedings reads as under: "An order is passed against the respondent and he shall pay an amount of Rs. 51,511.15 paise along with 18% interest from the date of misappropriation till its realisation. 51,511.15 paise. Its order on surcharge proceedings reads as under: "An order is passed against the respondent and he shall pay an amount of Rs. 51,511.15 paise along with 18% interest from the date of misappropriation till its realisation. In the event of default, the petitioner-Society is at liberty to sell the movable and immovable properties belonging to the respondent". 9. This order is passed on 12-2-1996. The petitioner questioned this order before the Appellate Tribunal, which has affirmed the said order. It is not in dispute that the said proceedings have attained finality inasmuch as the finding recorded by the Assistant Registrar under Section 69 of the Act proceedings determining the amount due has remained unchallenged. This would take us to Section 29-C. Section 29-C would relate to the disqualification for membership of the Committee. A reading of the said provisions would indicate that any person is precluded and is not eligible for being elected, appointed or continued as a member of any Committee or Co-operative Society. There are several categories under which a person cannot be a member of the Society where if he is a defaulter; if he has an interest directly or indirectly in any of the business of the society; or if any of his kith and kin member carries on the business with the Society etc. What is relevant for our purpose is Section 29-C(1)(1), which reads as under: "(1) he has failed to remit to any Co-operative Society any amount (other than a loan) retained by him in contravention of the provisions of this Act, rules or bye-laws". 10. A reading of the said provision would disclose that if any person who is liable to pay certain amount to the Society which is determined and it is retained by him in contravention of the bye-laws or the Act, such person is disqualified from becoming a member of any other Society. Indeed, as on the date when the misappropriation was noticed, he was not a member of the Society. But he was working as a clerk in the 4th respondent-Society. But, however, in the surcharge proceedings under Section 69 of the Act, the Assistant Registrar has determined the amount due to the 4th respondent-Society. The nomenclature "he" in the said provision does not necessarily mean that he should be a member of the erstwhile Society. But he was working as a clerk in the 4th respondent-Society. But, however, in the surcharge proceedings under Section 69 of the Act, the Assistant Registrar has determined the amount due to the 4th respondent-Society. The nomenclature "he" in the said provision does not necessarily mean that he should be a member of the erstwhile Society. It is enough if any amount is due to the Society and if it is retained by him notwithstanding the order passed under Section 69 of the Act. To my mind, it would appear that the said amount was retained by the petitioner in contravention of the provisions of the Act. Since one of the ingredients of Section 29-C(1) having been satisfied, I am of the view that the order passed by the respondents 2 and 3 namely, the original authority as well as the Appellate Authority cannot be found fault with. Both respondents 2 and 3 have considered indeed the circumstances as to the validity and the extent to which the judgment of the Criminal Court could be relied upon. To my mind, they were right in not overtly relying on the judgment of the Criminal Court acquitting the petitioner in view of the law laid down by the Apex Court on parallel proceedings, one under the criminal law and another under the Act itself. Hence, there is no merit in this petition. 11. Petition is dismissed. 12. Sri A.G. Shivanna, learned Additional Government Advocate is permitted to file memo of appearance.