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2022 DIGILAW 1076 (AP)

V Kodandaramaiah v. State Of A. P.

2022-10-19

V.SUJATHA

body2022
ORDER : The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:- “to issue any writ or direction more particularly one in the nature of Writ of Certiorari in calling the records by declaring the action, things and deeds of Respondents in dismissing the Petitioner from the post of C.E.O. of 7th Respondent by Termination Proceedings dated 09.01.2019 issued by 7th Respondent, which are illegal, irregular, arbitrary, contra to the provisions of A.P. Co-Operative Societies Act, 1964 and its Rules and against to the Service Regulations of the Employees of District Cooperative Central Bank Ltd., and also in violation of Articles 14, 19, 21 and 311 of Constitution of India, consequently set aside the Termination Proceedings dated 09.01.2019 by reinstating the Petitioner into service with all benefits including back wages and to pass such other orders”. 2. The facts of the case are that the petitioner joined as Attender in the year 1992 in Dandikuppam, Santhipuram, P.A.C.S. Limited and thereafter, he was promoted as Salesman/Accountant in the year 2005. After some time, the Dandikuppam, P.A.C.S. Limited was merged in Santhipuram, P.A.C.S. Limited and thereafter the petitioner temporarily worked as Chief Executive Officer from 12.07.2012 to 30.06.2013. On 23.06.2016, he was promoted as C.E.O. and while discharging his duties as C.E.O., a show-cause notice dated 06.04.2018 was served on the petitioner by the 7th respondent asking him to submit his explanation in respect of the irregularities found in the Audit Report for the year 2016-17 vide letter dated 16.03.2018 of Deputy Divisional Co-operative Officer. In the said show-cause notice, 15 allegations have been made against the petitioner contending that there was misappropriation of funds of Santhipuram P.A.C.S. Limited. In response to the said show-cause notice, the petitioner submitted a detailed explanation on 16.04.2018, explaining that the said differences were carried forward since 10 to 15 years and it was not done during the petitioner’s tenure and the Societies were computerized in the year 2016-17 and after verifying the Society records, the said difference has been found in respect of items 1 to 8, for which, the petitioner was not responsible and the truth would come out if the earlier C.E.Os are enquired. 3. 3. In his explanation, the petitioner further submitted that in respect of long term loans and Janatha loans, they were granted only after obtaining permission from the President since last ten years, and if any discrepancy arises, for which the earlier C.E.Os would be responsible but not the petitioner. In reply to 10th allegation, the petitioner submitted that the temporary receipts have been issued on the oral instructions of the President as the said practice was being continued since several years and if the enquiry is conducted through the Co-operative Department, the total information would come out. In respect of items 11 to 15 of the show-cause notice, if the Society records are verified for the last 10 to 15 years, the actual position would be known, since there was a complaint to the officials of the D.C.C. Bank even five years back, for which, no action was initiated. Misappropriation of funds in respect of conduct of business of Groundnut, Pulses and Fertilizers is that if proper enquiry is conducted by the Deputy Divisional Co-operative Society Officer, Madanapalli, the truth would be known. One of the points raised in the show-cause notice is also about the irregularities in issuing gold loans, wherein it is found that an amount of Rs.16,86,952/- was not brought to the cash book and loan ledger and misappropriated of funds of the 7th respondent. 4. It was further alleged that four ornamental packets in respect of four loans were missing shortfall collection of interest to a tune of Rs.27,142/- and therefore, the petitioner was informed that why action should not be initiated against him for recovery of Rs.17,14,094/- along with interest @ 18% per annum from the date of misappropriation till its realization and he was asked to attend for enquiry before the 5th respondent on 03.07.2018. As per said show-cause notice dated 26.06.2018, the petitioner was also instructed to attend before the Divisional Co-operative Officer, Madanapalle on 03.07.2018 at 11-00 A.M. along with his explanation. Thereafter, the petitioner was placed under suspension on 05.07.2018. The petitioner submitted his explanation on 09.07.2018, by which date, he was placed under suspension. On 20.11.2018, a resolution was passed to appoint a Domestic Enquiry Officer and after a thorough enquiry, a show-cause notice for removal was issued on 27.12.2018 which was received by the petitioner on 29.12.2018. Thereafter, the petitioner was placed under suspension on 05.07.2018. The petitioner submitted his explanation on 09.07.2018, by which date, he was placed under suspension. On 20.11.2018, a resolution was passed to appoint a Domestic Enquiry Officer and after a thorough enquiry, a show-cause notice for removal was issued on 27.12.2018 which was received by the petitioner on 29.12.2018. On 03.01.2019, the petitioner submitted a representation requesting to furnish the copies of records to give proper reply to the show-cause notice dated 27.12.2018. Inspite of the said request, the 7th respondent instead of furnishing the copies of the record to the petitioner, has straight away removed the petitioner on 09.01.2019 basing on the report of the enquiry committee, even without giving any opportunity for filing the explanation of the petitioner, which was served on the petitioner on 09.02.2019 i.e. after one month. 5. The main grievance of the petitioner is that the removal of the petitioner is not in consultation with the District Level Committee, but only basing on Audit report, even without conducting an enquiry under Section 51 of the A.P. Co-operative Societies Act, 1964. The further case of the petitioner is that before placing him under suspension, the petitioner was not even paid any salary and no subsistence allowance was also paid to him during the period of suspension. 6. The 7th respondent has filed a detailed counter stating that the their society is registered under the Andhra Pradesh Cooperative Societies Registration Act, 1964, vide Registration No.CR331, dated 20.12.1977 and the said Society is called as Santhipuram Primary Agricultural Co-operative Society. The society’s operational area is entire Kuppam Mandal. The petitioner was elected as President of their society in the year 2013, for a period of 5 years i.e. from 2013 to 2018 and after completion of the said term also, he continued as President as per the orders of the State Government. Even prior to 2013, he worked as President of said Society for more than 13 years. 7. The 7th respondent further submitted that since the date of the formation of the society, the audits have been taken place in every cooperative area. Even prior to 2013, he worked as President of said Society for more than 13 years. 7. The 7th respondent further submitted that since the date of the formation of the society, the audits have been taken place in every cooperative area. In the said process for the year 2016- 17 also, final audit was conducted by the Assistant Registrar of the Co-operative Societies by name Sri S.Arifulla, who found the irregularities and misappropriation of loan amounts and other irregularities committed by the Chief Executive Officer of the said society. The said Assistant Registrar informed the same to the District Co-operative Officer and requested to initiate necessary action. On 16.03.2018, the office of the Sub-Divisional Co-operative Officer, Kuppam issued a memo whereby calling for explanation from the petitioner within a period of three (03) days. In the said memo, it was categorically stated that huge funds were misappropriated such as fertilizers business, gold loans, Janatha loans etc., and further held that the loans were disbursed under Janatha loans without proper scrutiny. Even before issuance of the said memo by the statutory authorities, the 7th respondent society addressed a letter to the petitioner on 19.01.2017 requesting him to submit a detailed report on re-schedulement ST loans along with relevant records, otherwise, the disciplinary action shall be initiated against him, which was endorsed by the petitioner on 22.01.2017 as received. The said misappropriation of funds and other irregularities were also found even in the final audit report. The petitioner failed to give any reply to the said notice issued by the 7th respondent. 8. The 7th respondent further submitted that the statutory authorities after receiving the information regarding the misappropriation of funds and other irregularities committed by the petitioner, issued a show-cause notice dated 06.04.2018 by relying upon the final audit report and proceedings of the District Co-operation Officer, Kuppam dated 16.03.2018, requesting the petitioner to explain the issues 1 to 15, as stated in the said show-cause notice in accordance with the bye-laws of the society. Though the petitioner received the said notice on 06.04.2018, has failed to give any explanation to the same. As such, the petitioner was suspended by an order dated 05.07.2018 duly placing the issue before the Board Meeting held on 05.07.2018. Though the petitioner received the said notice on 06.04.2018, has failed to give any explanation to the same. As such, the petitioner was suspended by an order dated 05.07.2018 duly placing the issue before the Board Meeting held on 05.07.2018. The 7th respondent’s society suspended the petitioner keeping in view the interest of the society for the reason of misappropriation of the society funds to a tune of Rs.17,14,094/-. 9. The 7th respondent further submitted that on 23.08.2018, articles of charges were framed against the petitioner and in pursuance of the said Articles of charges, domestic enquiry was ordered by passing a resolution in the Committee on 20.11.2018. Thereafter, the domestic enquiry Committee also issued a notice to the petitioner on 27.12.2018 which was endorsed by the petitioner vide acknowledgment receipt dated 29.12.2018. The Domestic Enquiry Committee after duly giving sufficient opportunity to the petitioner, submitted a report dated 07.01.2019, thereby found that the petitioner being a paid employee of the Society, collected gold loans, share capitals and doing banking business on behalf of the society and accordingly, has committed financial irregularities, misappropriated the society funds for his personal use and requested to take further action against the petitioner in accordance with the bye-laws of the society. 10. The 7th respondent further submitted that, on 09.01.2019, the 7th respondent society after considering the entire material available on record, passed an order terminating the petitioner from the services with immediate effect which was communicated to the petitioner. The 7th respondent further stated that the writ petitioner himself admitted his guilt to the effect that he voluntarily executed acceptance letter dated 16.03.2018, thereby accepted that if any misappropriation of funds happened during his tenure, he will be liable to pay back the amount to the society. The 7th respondent further contended that, as per the bye-laws, if the employee commits any financial mistake relating to management of the Society, such employee is liable to be dismissed from the society. Further contended that as the issues involved herein are pure question of facts, the petitioner has to avail alternative remedy by filing an appeal before the appropriate authority and without availing the said alternative remedy, the petitioner approached this Court, because of which, the writ petition is not maintainable and requested to dismiss the writ petition with costs. 11. Further contended that as the issues involved herein are pure question of facts, the petitioner has to avail alternative remedy by filing an appeal before the appropriate authority and without availing the said alternative remedy, the petitioner approached this Court, because of which, the writ petition is not maintainable and requested to dismiss the writ petition with costs. 11. Heard Sri Narasimha Rao Gudiseva, learned counsel for the petitioner and the learned Government Pleader for Cooperation for respondents 1, 2, 4 and 5 and Sri Naga Praveen Venkayalapati, learned Standing Counsel for the 7th respondent. 12. Learned counsel for the petitioner reiterated the facts as stated in the writ petition. 13. Learned counsel for the petitioner relied upon a Judgment in Banta Singh Khushal Singh v. Anjuman Imdad Bahmi and Thrift Society, Tanoli, AIR 1970 Punjab and Haryana 203, wherein it was held at Para No.8 as follows:- “……According to Section 59 of the Evidence Act, all facts, except the contents of documents, might be proved by oral evidence and documents under Section 64 of the same Act must be proved by primary evidence, except in the cases thereinafter mentioned. It was not the position of the respondent that in the present case, the audit notes could be proved otherwise than by primary evidence. Learned counsel, however, submitted that the objection regarding the mode of proof should have been taken at the time when D.W. 1 was giving evidence. Counsel for the appellant, on the other hand, contended that if the audit notes had been exhibited without any objection from their side, perhaps the submission of the learned counsel for the respondent in that case might have some force. But in the instant case, those audit notes were not produced and made a part of the record of the case by the defendant-Society. This apart, assuming for the sake of argument, even if the audit notes had been brought on the record, could it be said that a presumption of correctness with regard to their contents also arise? All that Section 17(1) of the Cooperative Societies Act, 1912, says is that the Registrar shall audit or cause to be audited by some person authorised by him the accounts of every registered Society once at least in every year. All that Section 17(1) of the Cooperative Societies Act, 1912, says is that the Registrar shall audit or cause to be audited by some person authorised by him the accounts of every registered Society once at least in every year. According to sub-Clause (2) of that section, the audit under sub-section (1) shall include an examination of overdue debts if any and evaluation of assets and liabilities of the Society. If the auditor, who had prepared those audit notes had appeared in the witnessbox, he could be asked on what basis the entry regarding the appellant's membership of the Society was made therein. No law had been cited under which the contents of those audit notes could be presumed to be correct. 14. The case of the petitioner is that as per Bye-law 7, which deals with the procedure for disciplinary action, the competent authority to impose the punishment of removal or dismissal, would be the managing Committee in consultation with the District Level Committee and as per Bye-law 8, the Appellate authority would be the District Level Committee as the petitioner is a C.E.O. 15. Learned counsel for the petitioner further relied upon a judgment in Rakesh Kumar Vs. State of U.P., 2019 SCC Online All 4004, wherein, it was held that: “….this court under its power conferred by Article 226 of Constitution of India, can interfere in the matter of disciplinary proceedings if the disciplinary/enquiry proceedings were conducted in violation of manner prescribed and against the principles of Natural Justice and if the order of concerned authority is non-speaking and unreasoned. This Court can interfere in the matter of disciplinary proceedings if the decision making process is in violation of Rules and against Principles of Natural Justice. The judicial review in the matter of departmental proceedings is permissible with respect to decision making process and not against the decision itself unless it is shown that the decision is without any evidence or suffers from malafide and malice or harsh or without jurisdiction’. It was also observed in Allahabad Bank V. Krishna Narayana Tewari, (2017) 2 SCC 308 , by the Apex Court that: "7. We have given our anxious consideration to the submissions at the Bar. It is true that a writ court is very slow in interfering with the findings of facts recorded by a departmental authority on the basis of evidence available on record. We have given our anxious consideration to the submissions at the Bar. It is true that a writ court is very slow in interfering with the findings of facts recorded by a departmental authority on the basis of evidence available on record. But it is equally true that in a case where the disciplinary authority records a finding that is unsupported by any evidence whatsoever or a finding which no reasonable person could have arrived at, the writ court would be justified if not dutybound to examine the matter and grant relief in appropriate cases. The writ court will certainly interfere with disciplinary enquiry or the resultant orders passed by the competent authority on that basis if the enquiry itself was vitiated on account of violation of principles of natural justice, as is alleged to be the position in the present case. Non-application of mind by the enquiry officer or the disciplinary authority, non-recording of reasons in support of the conclusion arrived at by them are also grounds on which the writ courts are justified in interfering with the orders of punishment. The High Court has, in the case at hand, found all these infirmities in the order passed by the disciplinary authority and the appellate authority. The respondent's case that the enquiry was conducted without giving a fair and reasonable opportunity for leading evidence in defence has not been effectively rebutted by the appellant. More importantly the disciplinary authority does not appear to have properly appreciated the evidence nor recorded reasons in support of his conclusion. To add insult to injury the appellate authority instead of recording its own reasons and independently appreciating the material on record, simply reproduced the findings of the disciplinary authority. All told, the enquiry officer, the disciplinary authority and the appellate authority have faltered in the discharge of their duties resulting in miscarriage of justice. The High Court was in that view right in interfering with the orders passed by the disciplinary authority and the appellate authority." It was also observed in State of U.P. Vs. Deepak Kumar, W.P.No.34093 of 2018(S/B), dated 28.11.2016 by the Division Bench of this High Court that: "It is settled by the catena of judgments that it is the duty of Enquiry Officer to hold ''Regular Enquiry'. Deepak Kumar, W.P.No.34093 of 2018(S/B), dated 28.11.2016 by the Division Bench of this High Court that: "It is settled by the catena of judgments that it is the duty of Enquiry Officer to hold ''Regular Enquiry'. Regular enquiry means that after reply to the charge-sheet the Enquiry Officer must record oral evidence with an opportunity to the delinquent employee to cross-examine the witnesses and thereafter opportunity should be given to the delinquent employee to adduce his evidence in defence. The opportunity of personal hearing should also be given/awarded to the delinquent employee. Even if the charged employee does not participate/co-operate in the enquiry, it shall be incumbent upon the Enquiry Officer to proceed ex-parte by recording oral evidence. For regular enquiry, it is incumbent upon the Enquiry Officer to fix date, time and place for examination and crossexamination of witnesses for the purposes of proving of charges and documents, relied upon and opportunity to delinquent employee should also be given to produce his witness by fixing date, time and place. After completion of enquiry the Enquiry Officer is required to submit its report, stating therein all the relevant facts, evidence and statement of findings on each charge and reasons thereof, and thereafter, prior to imposing any punishment, the copy of the report should be provided to charged officer for the purposes of submission of his reply on the same. The punishment order should be reasoned and speaking and must be passed after considering entire material on record.” 16. Learned counsel for the petitioner also relied upon a Judgment in W.P.No.520 of 2020 on the question of competency for inflicting punishments, wherein it was held at para Nos.5 and 6 as follows:- “5….insofar as the procedure followed by the 5th respondent while issuing the above said impugned proceedings dated 16.08.2019 and 16.09.2019 respectively are concerned there is no answer for the counsel for the 4th and 5th respondents that they have followed the prescribed procedure contemplated under the Bye-laws of the society as mentioned above with regard to the reversion and suspension of an employee of the society much less in the case of the petitioner herein. The record on hand does not disclose any valid procedure that has been followed as contemplated under Bye-laws Nos.5, 7 and 6 of the said Bye-laws of the Primary Agricultural Cooperative Societies before passing the impugned proceedings. 6. The record on hand does not disclose any valid procedure that has been followed as contemplated under Bye-laws Nos.5, 7 and 6 of the said Bye-laws of the Primary Agricultural Cooperative Societies before passing the impugned proceedings. 6. In the result, the impugned proceedings are set aside and the 4th and 5th respondents are directed to reinstate the petitioner as CEO/Secretary of the 4th respondent society within two (02) weeks from the date of receipt of copy of this order. However the liberty is given to proceed with any “disciplinary enquiry” that may be warranted against the petitioner strictly in accordance with law. In such view of the matter it is open for the 4th and 5th respondents either to assign or not to assign any financial powers and other powers that may be regulated time to time after such reinstatement pending such disciplinary enquiry if any till it’s disposal as per law.” 17. In view of the observations made in the above judgments and on perusal of the impugned proceedings dated 09.01.2019, it is very clear that the respondents have violated the procedure as contemplated under Bye-laws Nos.5, 7 and 6 of the said Primary Agricultural Cooperative Societies before passing the impugned proceedings. 18. In view of the above stated facts, this Court is inclined to allow the writ petition by setting aside the impugned proceedings dated 09.01.2019 issued by the 7th respondent by duly directing the respondents to reinstate the petitioner as C.E.O. of the 7th respondent within four (04) weeks from the date of receipt of a copy of this order, leaving it open to the respondents to proceed with any disciplinary enquiry that may be warranted against the petitioner, strictly in accordance with law. 19. Accordingly, the Writ Petition is allowed. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any in this writ petition, shall stand closed.