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2022 DIGILAW 422 (AP)

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

2022-04-20

K.SREENIVASA REDDY

body2022
ORDER : Heard Sri O.Manohar Reddy, learned counsel, appearing for Sri V.V. Satish, learned counsel for the petitioner, the learned Government Pleader for Co-operation for respondents 1 to 3, 5 and 6 and Sri Srinivas Basava, learned counsel for respondent No.4. 2. The present Writ Petition is filed challenging the notice in Rc. No.864/2020-D1, CA-3, dated 01.09.2021 and order in Rc. No.864/2020-D1, CA-3, dated 03.09.2021, issued by 2nd respondent. 3. It is stated in the affidavit filed in support of the Writ Petition that the petitioner is the absolute owner and possessor of agricultural land admeasuring Ac.1.76 cents in survey No.284 and an extent of Ac.2.65 cents in survey No.285, of Mallepalli village, Gandepalli mandal, East Godavari district. Petitioner is member of 4th respondent society and used to take loans. He has no dues to 4th respondent society. 4th respondent society is affiliated to District Co-operative Central Bank, Gandepalli branch, East Godavari District (for short, ‘DCCB’). The District Cooperative Officer, East Godavari district initiated enquiry into the affairs of DCCB under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for short, ‘the Act, 1964’), and the Enquiry Officer submitted a report stating that financial irregularities have taken place in the Society and that an amount of Rs.23,93,602/- was transferred to the account of the petitioner. On the said allegation, an FIR was registered. While so, on 03.09.2021, 2nd respondent served the two impugned notices. In the notice dated 01.09.2021, it is stated that the petitioner is held responsible, among others, for misappropriation of the amount of the bank and trying to dispose of whole or part of the property from the jurisdiction of the Divisional Co-operative Officer, Peddapuram in order to escape from his liability and trying to delay and defeat the surcharge order to be passed against him, and called upon the petitioner to furnish security for Rs.23,03,603/-, failing which immovable property specified therein would be attached conditionally under Section 73 of the Act, 1964. In the order dated 03.09.2021, it is stated that as the petitioner failed to furnish the security as called for in the aforesaid notice, the petitioner is prohibited and restrained until further orders from transferring or charging the subject property. Challenging the same, the present Writ Petition is filed. 4. In the order dated 03.09.2021, it is stated that as the petitioner failed to furnish the security as called for in the aforesaid notice, the petitioner is prohibited and restrained until further orders from transferring or charging the subject property. Challenging the same, the present Writ Petition is filed. 4. A counter affidavit has been filed by respondents 1 to 3 resisting the Writ Petition and justifying the impugned action, stating inter alia that the petitioner and his family members, immediately after initiation of enquiry under Section 51 of the Act, 1964, transferred all the properties stood on their names, and accordingly, proceedings under Section 73 of the Act, 1964 were initiated by serving notice to furnish security, followed by conditional attachment of the property of the petitioner. Petitioner has no right to question the proceedings initiated to protect public money. Father of the petitioner was the President, and mother of the petitioner was a Director, of the Society, in which there is misappropriation of huge public money, and to escape from the recovery proceedings, the petitioner and his family members are filing the petitions. It is stated that if the petitioner is willing to furnish security, this respondent is always willing to permit him, however, the petitioner is not willing to furnish any security and hence, has filed the Writ Petition with a mala fide intention. Hence, it is prayed to dismiss the Writ Petition. 5. Learned counsel for the petitioner submits that the petitioner was not entrusted with the affairs of the society and he is not personal employee of the society; that Section 60 of the Act, 1964 empowers initiation of surcharge proceedings only against specific persons and the employees enumerated therein, and only the person, who is or was entrusted with the organization, affairs or management of the society are only liable to repay the money. It is his submission that the petitioner does not fall within the category of persons enumerated under Section 60 of the Act, 1964 and hence initiation of surcharge proceedings and taking a decision to direct the petitioner to repay the amount does not arise. It is further argued that the notice dated 01.09.2021 was followed by the notice dated 03.09.2021 without sufficient time for furnishing the security. 6. It is further argued that the notice dated 01.09.2021 was followed by the notice dated 03.09.2021 without sufficient time for furnishing the security. 6. On the other hand, the learned Government Pleader for Co-operation and the learned counsel for respondent No.4 sought to justify the impugned order since the petitioner is a member of the society, and as he has already transferred, and is contemplating to transfer, his property in order to defeat or delay the order that may be passed in surcharge proceedings against him, 2nd respondent is justified in passing the impugned order. 7. The factual matrix is not in dispute. Petitioner is member of 4th respondent society and used to take loans from it, and the society is affiliated to DCCB. The District Co-operative Officer, East Godavari district initiated enquiry into the affairs of DCCB under Section 51 of the Act, 1964. The Enquiry Officer found financial irregularities in the Society and that an amount of Rs.23,93,602/- was transferred to the account of the petitioner. 2nd respondent issued the impugned notice dated 01.09.2021 stating that the petitioner is held responsible for misappropriation of the amount of the bank and is trying to dispose of whole or part of the property from the jurisdiction of the Divisional Co-operative Officer, Peddapuram in order to escape from his liability and trying to delay and defeat the surcharge order to be passed against him, and called upon the petitioner to furnish security for Rs.23,03,603/-, failing which immovable property specified therein would be attached conditionally under Section 73 of the Act, 1964. Stating that the petitioner failed to furnish the security as called for in the notice dated 01.09.2021, the order dated 03.09.2021 has been passed prohibiting and restraining, until further orders, from transferring or charging the subject property. 8. Grievance of the petitioner is that since the petitioner is not entrusted with the affairs or management of the society, the order dated 03.09.2021 ordering attachment of his properties is not sustainable in law. A perusal of Section 74 of the Act, 1964 would go to show that any amount due from the society or from an officer or a member of a society to Government, be recovered by the Registrar or any other authorized by him in this behalf or by the Collector in the same manner as arrears of land revenue. A perusal of Section 74 of the Act, 1964 would go to show that any amount due from the society or from an officer or a member of a society to Government, be recovered by the Registrar or any other authorized by him in this behalf or by the Collector in the same manner as arrears of land revenue. Under Section 73 of the Act, 1964, the Registrar, in order to make good any loss caused by a member, may bring under notice for attachment of properties pertaining to the person responsible for causing such loss, unless adequate security is furnished, direct attachment of the said property. 9. Admittedly, petitioner is a member of the society and it is observed in the report of the enquiry under Section 51 of the Act, 1964 that an amount of Rs.23,93,602/- was transferred to the account of the petitioner, more so the properties belonging to him have been transferred to some other persons in view of the accusations he is facing in the enquiry under Section 51 of the Act, 1964. In the notice dated 03.09.2021, it is stated that the authorities served notice dated 01.09.2021 on the petitioner for furnishing the security and the petitioner failed to provide security and thereby the said order came to be passed prohibiting and restraining from transferring or charging the subject property until further orders. It is pertinent to mention here that the petitioner has not come forward offering any security to the said extent and the affidavit is silent in respect of the said aspect. Counter affidavit has been filed wherein it is stated that the petitioner has not come forward to offer any security though notice was issued to him. Thereafter, the attachment has been made as against the properties belonging to the member of the society, after issuing show-cause notice to furnish security. Therefore, there is no infirmity in the mode and manner in which 2nd respondent has acted in attaching the subject properties. The Writ Petition is not maintainable. 10. Accordingly, the Writ Petition is dismissed. No order as to costs of the Writ Petition. As a sequel, interlocutory applications pending, if any, in the Writ Petition shall stand closed.