JUDGMENT : The petitioner functioned as President of the P.A.C.S., K.Gokavaram, for a term. An enquiry under Section 51 of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’) was caused into the affairs of the society. Based on the report submitted therein, surcharge proceedings under Section 60(1) of the Act were initiated and the Deputy Registrar of Cooperative Societies, Eluru, the first respondent, passed an order, dated 30.10.2006, holding that the petitioner and two other employees are liable to pay a sum of Rs.11,11,536/- with accrued interest. The petitioner filed W.P.No.1043 of 2007 challenging the order, dated 30.10.2006. He alleged that the advocate engaged by him, had reported no instructions, before the first respondent, without any intimation to him and the first respondent passed the order without issuing any notice to him. The writ petition was allowed by this Court on 05.02.2007. The order, dated 30.10.2006, was set aside. The matter was remanded to the first respondent for fresh consideration and disposal. The petitioner was required to make a deposit of Rs.3,00,000/-. After the remand, the first respondent passed order, dated 18.08.2008, repeating his findings recorded earlier. The petitioner challenges the said proceedings, on the ground that the first respondent rested his conclusions solely upon the report of enquiry under Section 51 of the Act and no independent initiation of the matter was undertaken. Certain other grounds are also urged. Learned counsel for the petitioner submits that though the findings recorded in an inspection, enquiry or audit under the relevant provisions of the Act can constitute basis for initiation of surcharge proceedings, the authority under Section 60 of the Act must examine the matter independently and arrive at conclusions. He contends that the society, of which the petitioner was the President, did not place any material before the first respondent, nor did the latter undertake any independent discussion, in this regard. Learned Government Pleader for Cooperation, on the other hand, submits that the first respondent has undertaken extensive discussion with reference to each and every item of charge and arrived at independent conclusions. He contends that the petitioner has to avail the remedy of appeal, if he feels aggrieved by the impugned order. The petitioner faced surcharge proceedings on earlier occasion, on the basis of the enquiry report, dated 18.01.2006, submitted by the second respondent. An order of surcharge was passed on 30.10.2006. He contends that the petitioner has to avail the remedy of appeal, if he feels aggrieved by the impugned order. The petitioner faced surcharge proceedings on earlier occasion, on the basis of the enquiry report, dated 18.01.2006, submitted by the second respondent. An order of surcharge was passed on 30.10.2006. It was almost an ex parte order, inasmuch as the counsel for the petitioner reported no instructions. In W.P.No.1043 of 2007, this Court made the following observations and accordingly set aside the order, dated 30.10.2006 and remanded the matter to the first respondent. “When the record clearly discloses that the advocate engaged by the petitioner reported no instructions, the first respondent ought to have either issued a fresh notice to the petitioner, or verified whether the advocate had issued notice to the petitioner, before reporting no instructions. No such steps were taken. On the other hand, the matter was adjourned on two subsequent dates. The net result is that there is absolutely no representation on behalf of the petitioner. Notwithstanding the service of notice on the petitioner, he stood denied of an opportunity to present his case before the 1st respondent.” Though the petitioner made an effort to convince this Court that he was not given an opportunity even after remand also, this Court is not inclined to accept the same. In the impugned order itself, reference is made to various dates of hearing, some of which are after the remand. The reports submitted after conducting enquiry, inspection or audit under the relevant provisions of the Act would, no doubt, constitute the basis for initiation of surcharge proceedings. However, an individual cannot be surcharged, solely on the basis of the findings in the respective reports. The society, or the agency, at whose instance the surcharge proceedings are initiated, must independently establish the allegation against the person, who is sought to be proceeded against. There is substantial support in the form of precedents, for this proposition. An authority under Section 60 of the Act cannot rest, or base, his conclusions solely upon the report that became basis for initiation of the proceedings. The burden to prove the allegations in the proceedings squarely rests upon the concerned society, or the agency, which caused the proceedings. Those who face the surcharge proceedings cannot be required to prove the negative. The burden to prove the allegations in the proceedings squarely rests upon the concerned society, or the agency, which caused the proceedings. Those who face the surcharge proceedings cannot be required to prove the negative. Reverting to the facts of the case, the first respondent, no doubt, passed an order, which runs to six typed pages. However, the order is nothing but repetition of the opinion expressed by the Enquiry Officer under Section 51 of the Act. The record does not disclose that either any witness was examined or any document was produced before the first respondent. That the first respondent did not rely upon any other material in recording his findings vis-à-vis the petitioner, and that he placed entire burden upon the petitioner is evident from the following paragraphs. “On verification of Enquiry report and records the Surcharge authority opined that fixing liability on the 1st respondent is not genuine. As per the society bye-law, the President and secretary are liable for retention of heavy cash balance. Hence, Surcharge order passed for Rs.1,52,954/- against the Ex-President Sri M.Siva Rama Krishna and Ex-Secretary those who are worked for the period from 01.08.1995 to 31.03.2004 jointly and severally liable together with 18% interest per annum from date of mentioned in the Inquiry report to the assets of the society. The enquiry Officer has reported that Sri SVN Ramachandra Rao, Ex-Secretary and M. Augusteen, Secretary and Sri M. Sivarama Krishna, Ex-President have caused loss to the assets of the K. Gokavaram PACS, to an extent of Rs.11,11,536/- towards principal and Rs.17,00,096/- towards interest as mentioned hereunder. Whereas in spite of the reasonable opportunities given to them in the reference 5 to 7 read above No.3 by giving Notices under Section 60(1) of the APCS Act 7 of 1964 and hearings conducted on and so on to submit their representation if any the Ex-President, M. Sivarama Krishna, M.Augusteen, Ex-Secretary, Sri SVN Ramachandra Rao, Ex-Secretary did not choose to file their representation if any except the written statement filed by the Ex-President Sri M. Siva Rama Krishna on 19.05.2007. As such it is construed that the Ex-President, M. Sivarama Krishna, M. Augusteen, Ex-Secretary, SVN Ramachandra Rao, Ex-Secretary has no representation to the proposed action under section 60(1) of APCS Act 7 of 1964 in this case and the following orders are passed basing on the records available in the case.” From a perusal of the above paragraphs, it becomes clear that the adjudication, though quasi-judicial in nature, was undertaken in totally untenable lines. The proceedings under Section 60 of the Act were treated as though they are mechanical and logical extension of the enquiry under Section 51 of the Act. This is contrary to the very scheme under the Act and the Rules. This Court finds it somewhat delicate to repeatedly interfere in the same proceedings. However, once the first respondent is found to have deviated from the basic tenets of adjudication, it cannot remain oblivious. Hence, the Writ Petition is allowed and the impugned order is set aside. The first respondent shall resume the hearing of the proceedings once again and require the concerned society to substantiate its allegations against the petitioner and prove them. The first respondent shall take into account, the fact that the burden to prove the charges is upon the society and that he cannot rest his findings solely on the basis of the report of Enquiry under Section 51 of the Act. There shall be no order as to costs.