Jalligampala Venkata Satyamurthy v. State of Andhra Pradesh
2019-10-17
D.V.S.S.SOMAYAJULU
body2019
DigiLaw.ai
ORDER : 1. This Writ Petition is filed by the petitioners seeking the following relief: "...to issue a Writ of mandamus or any other appropriate writ declaring that the action of the 1st and 2nd respondents in obeying the suggestion/remark of the 5th respondent and directing conduct of an enquiry which may be preliminary or enquiry under Section 51 of the A.P. Co-operative Societies Act, 1964, without compliance of the ingredients of the said provision of law and at the instance of the 5th respondent-MLA, is arbitrary, without jurisdiction and mala fide and direct the respondents 1 to 4 to forbear from conducting any enquiry at the instance of the 5th respondent into the affairs of the 6th and 7th respondent societies including enquiry under Section 51 of the Act and direct the respondents 1 to 4 to forbear from conducting any enquiry pursuant to the memo of the 1st respondent dated 16.07.2019 into the affairs of the 6th and 7th respondents and grant such other relief as it deems fit in the circumstances of the case." 2. This Court has heard Sri Vedula Venkata Ramana, learned senior counsel appearing for the petitioners and the learned Government Pleader for Co-operation appearing for the 1st to 4th respondents. 3. The essential action that is questioned in this case is the proposal of the 1st and 2nd respondents to conduct an enquiry into the affairs of the 6th and 7th respondents societies. 4. Learned Senior counsel appearing for the petitioners argued that the entire action that is initiated in this case proceeded on the basis of the letter addressed by the 5th respondent, who is the MLA, Prathipadu Assembly Constituency. The learned senior counsel for the petitioners submits that Memo has been issued on 16.07.2019 by the 1st respondent at the behest of the 5th respondent-MLA to conduct enquiry into the affairs of the 6th and 7th respondents societies. Learned senior counsel submits that the MLA does not have any right either legal or otherwise to initiate the action. Learned senior counsel submits that such action can only be initiated under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (in short "the Act").
Learned senior counsel submits that the MLA does not have any right either legal or otherwise to initiate the action. Learned senior counsel submits that such action can only be initiated under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (in short "the Act"). As per Section 51 of the Act an enquiry can commence only the Registrar on his "own" motion or on the application of the Society or one third of the members of the Committee or on the request of one fifth of the total number of members of the society. He submits, therefore, Section 51 of the Act does not permit the initiation of enquiry whether it is preliminary or otherwise at the instance of a third party. He also submits that there are no valid or tenable grounds for initiating any enquiry. He points out that the letter addressed to the M.L.A. Itself does not contain any material even to enable the respondents to prima facie come to a conclusion that there are some irregularities, which need to be verified. He points out that the very letter of the MLA refers to Section 51 of the Act and that it is void under law. He points out that a virtual witch hunt has been carried out at the instance of the MLA and the respondents are not entitled to proceed with the enquiry by whatever name it is called. Learned senior counsel points out that a reading of the documents filed shows that a comprehensive enquiry was directed to be carried out and a report has to be submitted to the Government. In that view of the matter, it is submitted that the very initiation of the enquiry is wrong in law. Apart from that he also submits that Section 115-D of the Act clearly gives functional autonomy to Co-operative Credit Societies like respondents 6 and 7 and that an enquiry under Section 51 of the Act cannot be initiated into those matters as autonomy is granted to the said societies. He points out that the complaint that is allegedly given by the villagers on the basis of which the MLA-5th respondent acted talks of wrong entries in the loans obtained.
He points out that the complaint that is allegedly given by the villagers on the basis of which the MLA-5th respondent acted talks of wrong entries in the loans obtained. He therefore submits that under Section 115-D (2) of the Act applies and that the loan policies, individual loan decisions etc., cannot be subject matter of an enquiry under Section 51 of the Act in view of the language used in Section 115-D of the Act. Learned senior counsel also relies upon the compilation of case law, which has been filed. The three decisions cited by him are:- (1) Mandava Laxmana Rao vs. Primary Agricultural Co-operative Society and Others, 1996 (4) ALT 299 : 1996 (4) ALD 141 (2) Akkayapalli Co-operative House Building Society Ltd. vs. The Joint Registrar/District Co-operative Officer, Y.S.R. and Others, 2011 ALT 342 : 2011 (1) ALD 662 (3) Mallukunta Primary Agricultural Co-operative Society and Others vs. District Co-operative Officer and Joint Registrar and Others, 2017 (1) ALT 515 5. Section 115-D of the Act is also reproduced in the same. 6. In reply to this, learned Government Pleader for Co-operative on the other hand argues that the mere initiation of an action on the basis of letter by the 5th respondent-MLA cannot be a ground to set aside the entire proceedings. The counter affidavit that is filed on behalf of the 4th respondent clearly states that the enquiry is limited to a fact finding in respect of the contents of the petition only and that is not a statutory enquiry under Section 51 of the Act. This clearly spelt out in paragraph-5 of the counter affidavit. It is also pointed out that the enquiry is already commenced and the same is in progress. Learned Government Pleader also relies upon the judgment of the learned single Judge of this Court reported in Araja Narasimha Rao vs. District Co-operative Officer/Joint Registrar, Krishna District, Machilipatnam, 2009 (5) ALT 30 : 2007 (5) ALD 698 and argues that an enquiry can be commenced on the basis of an information received from any sources. In the case on hand learned Government Pleader submits that the local MLA has forwarded a complaint received from the villagers, which is being looked into, and therefore he submits that there are no procedural irregularities in this matter.
In the case on hand learned Government Pleader submits that the local MLA has forwarded a complaint received from the villagers, which is being looked into, and therefore he submits that there are no procedural irregularities in this matter. He also submits that Section 115-D of the Act is also not at all applicable in the facts and circumstances of this case. 7. This Court after hearing both the learned counsel notices that Section 51 of the Act states that the Registrar may of his own motion hold an enquiry or direct some other person authorized by him to enquiry into the constitution, working and financial condition of a society. Therefore, for the exercise of this power, particularly of his own motion, the Registrar has to get information either personally or from other sources. If he inspects the books personally in the course of discharge of his duties he may find an irregularity, which will have to be further investigated under Section 51 of the Act. If he gets some credible information, this Court is of the opinion that nothing prohibits him for initiating action. In the case on hand, it is clearly spelt out in the counter that the enquiry is only being limited to verify the correctness of the complaint that is made in paragraph-5 of the counter. Apart from this, in the decision relied upon by the learned Government Pleader for the respondents it is very clearly held in paragraph-9 that the Registrar can initiate an enquiry on the basis of information received from any source. Apart from this, even the case law cited by the learned senior counsel also tends to support the submissions of the learned Government Pleader to some extent. The 1st judgment cited by learned senior counsel for the petitioners i.e. Monday a Laxamana Rao Case 1996 (4) ALT 299 (supra) also directed that the enquiry should be conducted into the affairs of the society. While holding that an action initiated at the behest of the Minister is not correct, the Court felt that it should not interfere and permit an enquiry into the affairs of the society. In that case a request was made on 23.06.1985 to the Minister, who ordered the enquiry and the Special Grade Deputy Registrar passed an order on the next date i.e. 24.06.1985 to conduct an enquiry. These facts make a vital difference. 8.
In that case a request was made on 23.06.1985 to the Minister, who ordered the enquiry and the Special Grade Deputy Registrar passed an order on the next date i.e. 24.06.1985 to conduct an enquiry. These facts make a vital difference. 8. In the second judgment in Akkayapalli Co-operative House Building Society Limited Case 2011 (1) ALT 342 (supra) also in paragraph-8 it was held that the 1st respondent merely directed holding of an enquiry into the affairs of the society. The learned single Judge held in the interest of cooperative movement it is desirable that whenever alleged lapses are pointed out the enquiries should be held. This judgment was followed by another single Judge of this Court in a decision reported in Mallukunta Prima Agricultural Co-operative Society Case 2017 (1) ALT 515 (supra), where also learned single Judge of this Court came to a conclusion that the Court should be slow in enquiry proceedings when there is some material for the authority to proceed further. 9. In the case on hand the complaint of the members addressed to MLA is that:- (A) Although the loan is discharged the same is not reflected in the accounts. (B) The books are reflecting higher amount than the actual loan amount availed. (C) Benami loans are created and money is advanced to such benami persons. 10. This complaint was forwarded by the MLA-5th respondent. Further enquiry was directed to be made into the contents of the said representation. Both the letter dated 21.08.2019 by the District Co-operative Officer and the letter dated 24.08.2019 from the Divisional Co-operative Officer refer to the representation of the farmers. 11. Therefore, the apprehension expressed that the Registrar did not have exercised the needed discretion and merely ordered the enquiry under Section 51 of the Act does not, in the opinion of this Court, appear to be totally correct. However, there is a point made by the learned senior counsel. The three instances which are specifically named by the members of the society in the letter to the MLA should form the basis for this enquiry. Matters beyond this cannot be enquired into at this stage. For the purpose of eliciting whether there is any truth in the representation submitted by the members of the society the enquiry should be carried out.
Matters beyond this cannot be enquired into at this stage. For the purpose of eliciting whether there is any truth in the representation submitted by the members of the society the enquiry should be carried out. This Court is of the opinion that a roving enquiry into all the affairs of the society is not really warranted. If the preliminary report on the three specific grounds, that are raised by the members, is found that further proceedings are necessary then the respondents are at liberty to take action as warranted under law. As it is also contended by the learned Government Pleader for Cooperation that they are only making a preliminary enquiry into the truth or otherwise of the representation submitted by the villagers, the same shall proceed further. This Court however not inclined to stop the entire procedure. In the opinion of this Court, the functional autonomy granted under Section 115-D of the Act does not preclude an enquiry of this nature. The "autonomy" is limited to the points (1) to (5) of Section 115-D(2) of the Act. This autonomy merely gives greater freedom to the credit societies but it cannot extend to immunity from action for any wrongs done. Even when Section 115-C/D of the Act were introduced by amendment, the applicability of the other provisions of the Act was not ruled out. 12. With the above observations the writ Petition is disposed of. There shall be no order as to costs. 13. Miscellaneous Petitions, if any, pending in this Writ Petition, shall stand closed.