Research › Search › Judgment

Andhra High Court · body

2022 DIGILAW 349 (AP)

P. v. V. Gangadhar VS State of Andhra Pradesh

2022-03-25

K.SREENIVASA REDDY

body2022
ORDER : 1. This Writ Petition is filed seeking to declare action of 4th respondent in not adjudicating the petition filed by the petitioner on 18.11.2021 under Order VII Rule 11(d) and Section 151 C.P.C. about maintainability and jurisdiction of surcharge proceedings initiated against him under Section 60(1) of the Andhra Pradesh Co-operative Societies Act, 1964 (for short ‘the Act 1964’) in R.C. No. 2636/2020-H/LT (Banana) as illegal and arbitrary and consequently direct 4th respondent to number and dispose of the said petition in accordance with law. 2. The facts, in brief, as set out in the affidavit filed in support of the Writ Petition are as follows: Alleging irregularities in the affairs of 8th respondent Bank in sanctioning loans to members of 9th respondent society, 3rd respondent ordered statutory enquiry under Section 51 of the Act, 1964, by appointing 6th respondent as Enquiry Officer to conduct statutory enquiry into the management and affairs of 8th respondent bank. 6th respondent conducted enquiry and submitted a report stating that huge amount of about Rs. 22.00 crores was misappropriated holding that not only employees of 8th respondent bank but also authorities of 9th respondent society are responsible therefor. The enquiry report was forwarded to 3rd respondent with the remarks of 5th respondent to review the report and give necessary approval for further course of action. Thereupon, 3rd respondent issued proceedings in R.C. No. 2636/2020-A, dated 18.03.2021, authorizing 4th respondent to initiate proceedings under Section 60(1) of the Act, 1964 against employees of 8th respondent bank and the persons belonging to 9th respondent society. According to the petitioner, he is one of the general members of 9th respondent society and the action of 6th respondent-Enquiry Officer, so also 3rd respondent, in fixing the responsibility on authorities of 9th respondent society and ordering to initiate proceedings under Section 60(1) of the Act, 1964 is beyond the scope and ambit of the enquiry and without jurisdiction. According to him, petitioner is only a general member of 9th respondent society and no proceedings under Section 60(1) of the Act, 1964 can be initiated against the general members of the Society, and the same can be done only against a person who is or was entrusted with the affairs or management of the society or any past or present officer or servant of the society. As such, the petitioner filed an interlocutory application on 18.11.2021 under Order VII Rule 11(d) CPC and Section 151 CPC with a prayer to drop the surcharge proceedings against him. Grievance of the petitioner is that 4th respondent is not entertaining the said interlocutory application stating that it is not possible to entertain the interlocutory application in surcharge enquiry and only final orders can be passed and as such the petitioner has to file his objections and cross-examine the witnesses produced by the Bank. 3. Learned counsel for the petitioner contended that the action of 4th respondent in not considering the interlocutory application filed by the petitioner in the surcharge enquiry is highly illegal and arbitrary, besides being violative of the provisions of the Act, 1964 and he ought to have adjudicated the interlocutory application. 4. On the other hand, it has been contended by the learned Government Pleader appearing for respondents 1 to 5 that as the surcharge cases are under trial, without completion of surcharge hearings, the decision on interlocutory application will not be possible. It is his further submission that opportunity is given to the petitioner to submit his explanation and statement of defence and to cross-examine the witnesses. 5. The factual matrix is not in dispute. Grievance of the petitioner is that the interlocutory application filed by him under Order VII Rule 11 (d) and Section 151 C.P.C. to drop the surcharge proceedings has to be disposed of before passing orders in the surcharge proceedings. He relied on a decision R.K. Roja vs. U.S. Rayudu and Another, (2016) 14 SCC 275 . It is the contention of the learned counsel for the petitioner that when once an application has been filed under Order VII Rule 11 CPC, 3rd respondent has to dispose of the same before proceeding with the trial. 6. It is stated that the petitioner has fraudulently received an amount of Rs.23,03,603/- along with other delinquents and caused misappropriation in 8th respondent bank. The subject interlocutory application has been filed with a prayer to drop surcharge proceedings against the petitioner as the same is contrary to statute and against the principles of natural justice, and decide the maintainability of surcharge proceedings as preliminary issues, is not correct. The issues in the interlocutory application and the surcharge proceedings are one and the same. The subject interlocutory application has been filed with a prayer to drop surcharge proceedings against the petitioner as the same is contrary to statute and against the principles of natural justice, and decide the maintainability of surcharge proceedings as preliminary issues, is not correct. The issues in the interlocutory application and the surcharge proceedings are one and the same. In view of the same, it has been rightly stated that without completion of surcharge proceedings, decision on interlocutory application will not be possible and the petitioner can as well put forth his defence during trial. Since opportunity is given to the petitioner, this Court also feels that it is desirable that both surcharge proceedings and the interlocutory application are taken up and disposed of together. 7. In view of the foregoing discussion, the Writ Petition is dismissed. No order as to costs of the Writ Petition. 8. As a sequel, interlocutory applications pending, if any, in the Writ Petition shall stand closed.