ORDER : This Writ Petition under Article 226 of the Constitution of India is filed seeking to issue a Writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the action of respondents 6 and 7 in suspending the petitioner through their minutes of meeting, dated 10.08.2022 is illegal, arbitrary and violative of principles of natural justice and against the procedure laid down in the Andhra Pradesh Cooperative Society Act, 1964 (for short ‘the Act’). 2. Heard Sri M. Vijay Kumar, Senior counsel appearing on behalf of Sri M. Chinnappa Reddy, learned counsel for the petitioner, learned Government Pleader for Co-operation appearing for respondents 1 to 3 as well as Sri Harish Kumar Rasineni, learned Standing Counsel appearing on behalf of respondents 6 & 7. 3. Facts in brief are as follows : The petitioner was appointed as Attender on 30.10.1991 in Vidapanakal Farmer’s Service Co-operative Society Limited (for brevity ‘V.F.S.C.S’) of Anantapur District, and his services were regularized on 01.09.1996. Thereafter, in the year 2015, he was promoted as Staff Assistant and subsequently, got promotion as Chief Executive Officer (CEO) of V.F.S.C.S on 04.06.2018. (ii) As the 6th respondent being the Chairperson of V.F.S.C.S is doing illegal fertilizer business with the collusion of local fertilizer business people and making loss to the V.F.S.C.S, the petitioner made objections and rejected to cooperate with him, for which, the 6th respondent bore grudge against the petitioner and threatened him with dire consequences by using political background. The said issue was also brought to the notice of the District Collector on 10.07.2022. (iii) While the things stood thus, on one occasion, the 6th respondent in collusion with local fertilizer shop owner requested through letter, dated 04.12.2021 to transfer an amount of Rs.6,00,000/-, vide Cheque No.033490, dated 04.12.2021, (2) Rs.2,56,743/- vide Cheque No.064281, dated 06.01.2022 and (3) Rs.2,60,000/- vide Cheque No.064280, dated 06.01.2022, which is against the Rules of the Society and the petitioner bluntly refused to cooperate with his illegal activities. (iv) Thereafter, while the 6th respondent is doing illegal fertilizer business at Palthur Sales Point, in Palthur Village, the petitioner visited the said Sales Point, verified stock on 02.12.2021 & 12.12.2021 and found misappropriation and deficit of stock of 297 bags of fertilizers, worth of Rs.4,11,605/- and noted the same in the stock register. (iv) Thereafter, while the 6th respondent is doing illegal fertilizer business at Palthur Sales Point, in Palthur Village, the petitioner visited the said Sales Point, verified stock on 02.12.2021 & 12.12.2021 and found misappropriation and deficit of stock of 297 bags of fertilizers, worth of Rs.4,11,605/- and noted the same in the stock register. (v) While the things stood thus, surprisingly, on 10.08.2022, respondents 6 & 7 passed a resolution, suspending the petitioner from the post of CEO of V.F.S.C.S, alleging that an amount of Rs.64,00,000/- was misappropriated and did not recover from the concerned farmers, thereby caused financial loss to the Society. Aggrieved by the same, the petitioner filed the present writ petition. 4. After receipt of the notice, the 3rd respondent filed counter and the same was adopted by the respondents 1 & 2. As per averments of the counter, it is alleged that the Chairperson has taken up business at Palthur Sales Point without valid resolutions of the Society. The Chairperson has extended credit sales without epos against the instructions of Agriculture Department for the sale of fertilizers and accordingly, the Chairperson has caused deficit stock worth Rs.4,02,970/- and reported that he repaid the amount of Rs.2,50,000/- to the Society on 16.05.2022. Basing on the information received from the CEO, an enquiry was conducted and during the course of enquiry, it came to light that the Chairperson has caused deficit stock worth of Rs.4,02,970/- and issued instructions to the concerned for recovery, later, the same was recovered from the Chairperson. 5. It is further stated in the counter that the 7th respondent passed Resolution on 10.08.2022 suspending the petitioner from the service. It is also stated that the petitioner has taken over the charge for the post of the Chief Executive Officer soon after demise of S. Rahamathulla, Ex-Chief Executive Officer on 31.05.2018. The petitioner has failed to report the issue of deficit stock immediately, hence there is definite lapse on the part of the petitioner. Further, a Surcharge case is filed under Section 60 of the Act before the Deputy Registrar of Co-operative Societies, Ananthapuramu on this issue for recovery of amounts, in which, the petitioner is also one of the respondents and the said case is pending disposal. It is further stated that during the course of Final Audit for the year 2020-2021, deficit stock of Rs.44,81,375/-was reported. It is further stated that during the course of Final Audit for the year 2020-2021, deficit stock of Rs.44,81,375/-was reported. The CEO has not brought the happening of irregularities into light immediately and same has been brought to light only during the final audit or enquiry. It is also stated that directions have been issued, vide Proceedings, dated 21.09.2019 by the District Co-operative Officer, Ananthapuramu to the newly appointed persons, in-charge Committee “not to remove or recruit new employees against the rules and regulations”. 6. Learned Senior counsel for the petitioner has strenuously contended that the impugned Resolution, dated 10.08.2022 is contrary to the above proceedings, issued by the District Co-operative Officer, Ananthapuramu, dated 21.09.2019, wherein, the District Co-operative Officer has given clear directions to the newly appointed 3 men official committee not to take any policy decisions without prior permission of the Government/Registrar and not to remove or appoint any officer without approval/permission of the Government or Registrar. But, contrary to the said instructions, respondents 6 & 7 have passed the impugned Resolution without obtaining prior permission from the concerned authorities. Hence, the said impugned proceedings are contrary to the instructions issued by the District Co-operative Officer, Ananthapuramu, accordingly, the same should be set aside. 7. Further, learned Senior counsel has submitted that as per Final Audit report for the year 2020-2021 of V.F.S.C.S Ltd., it reveals that some irregularities were noticed on sale of fertilizers and they are : (1) Shortage of stock by credit sales of Rs.27,33,440/- and responsibility fixed on T. Mohan, Vidapanakal Salesman and Managing Committee of V.F.S.C.S (2) Shortage of stock by credit sales of Rs.1,95,030/- and responsibility fixed on P. Raja Reddy, Ex-Chairperson (3) Shortage of stock by credit sales of Rs.13,13,635/- and responsibility fixed on B. Veeresh Kumar, Govindawada Salesman and Managing Committee of V.F.S.C.S. (4) Shortage of stock by credit sales of Rs.2,39,270/- and responsibility fixed on K. Koteswara, Chabala Salesman and Managing Committee of V.F.S.C.S. In the report, it is stated that the Chief Executive Officer i.e., the petitioner herein and Managing Committee of the said Society were failed to collect the above amounts from the concerned. 8. On perusal of the above said order, it clearly discloses that there is no responsibility fixed on the petitioner, though, they have pointed out that some lapses in recovering the said amounts against the petitioner. 8. On perusal of the above said order, it clearly discloses that there is no responsibility fixed on the petitioner, though, they have pointed out that some lapses in recovering the said amounts against the petitioner. In the said circumstances, without initiating any action against the concerned persons, the Committee ought not to have passed the resolution, suspending the petitioner, which is contrary to the said Audit Report. 9. Learned Senior counsel also pointed out that cheques were issued in favour of third parties by the 6th respondent with regard to his illegal business and the same were refused by the petitioner, in turn, the petitioner brought to the notice of the District authorities about the illegal activities of the 6th respondent. Consequent to the same, the Committee and Management has passed the present Resolution, suspending the petitioner, which is nothing but vindictive action taken by the respondents against the petitioner. 10. Finally, learned Senior counsel argued that the procedure contemplated under Section 59 of the Act was not followed in this case. Section 59 of the Act, reads as follows : 59. Suspension of officer or servant of society. – (1) Where in the course of an audit under Section 50 or an inquiry under Section 51 or an inspection under Section 52 or Section 53, it is brought to the notice of the Registrar that a paid officer or servant of a society has committed or has been otherwise responsible for misappropriation, breach of trust or other offence, in relation to the society, the Registrar may, if in his opinion there is prima facie evidence against such paid officer or servant and the suspension of such paid officer or servant is necessary in the interests of the society, direct the committee pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant under suspension from such date and for such period as may be specified by him, but not retrospectively. (2) On receipt of such direction, the committee shall, notwithstanding any provision to the contrary in the bye-laws, place or cause to be placed the paid officer or servant under suspension forthwith. (3) The Registrar may direct the committee to extend, from time to time, the period of suspension and the paid officer or servant suspended shall not be reinstated except with the previous sanction of the Registrar. 11. (3) The Registrar may direct the committee to extend, from time to time, the period of suspension and the paid officer or servant suspended shall not be reinstated except with the previous sanction of the Registrar. 11. According to the above said provision, in the course of an audit under Section 50 or an inquiry under Section 51 or an inspection under Section 52 or Section 53, if there is any misappropriation, breach of trust or other offence, in relation to the society, the Registrar may, if in his opinion there is prima-facie evidence against such paid officer or servant and the suspension of such paid officer or servant is necessary in the interests of the society, direct the committee pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant under suspension. On receipt of such directions, the committee shall place the servant under suspension, forthwith. 12. But, in the instant case, any audit under Section 50 or any enquiry under Section 51 of the Act was not conducted and the Registrar is the competent authority to give directions to the committee, if he prima-facie satisfied with regard to misappropriation or involvement of servant. Furthermore, in this case, no such directions were given by the Registrar or no such clarification is sought by the committee before passing such an order. Hence, the said proceedings are contrary to the provisions contemplated under Section 59 of the Act. 13. Refuting the above said contention raised by the learned counsel for the petitioner, learned Standing Counsel appearing on behalf of respondents 6 & 7-Society has submitted that pursuant to the requisition, the Divisional Co-operative Officer (DLCO) has appointed the Sub-Divisional Co-operative Officer (SDLCO), Gooty, as enquiry officer, vide Proceedings, dated 13.05.2022 and the matter was enquired by the SDLCO and submitted a report, dated 11.07.2022 and found that the Writ Petitioner, who is the CEO of the Society along with the past committee have committed forgery and fraud and requested the DLCO to fix responsibility and take action against the CEO and others and also recommended for action under Section 51 of the Act. He further submits that the enquiry report submitted by the SDLCO has clearly indicated that the petitioner is responsible for the fraud and misappropriation of funds. He further submits that the enquiry report submitted by the SDLCO has clearly indicated that the petitioner is responsible for the fraud and misappropriation of funds. He also submits that the petitioner is not removed, but only suspended as CEO of the Society. Therefore, the allegations made by the petitioner are not tenable and denied. 14. Learned Standing Counsel further submitted that in fact even after passing the impugned Resolution, the petitioner has not handed over all the books and documents pertaining to the Society and till today, he is holding the same with him. He also brought to the notice of this Court the observations made in the Audit report, that the CEO and Managing Committee of the Society have failed to collect the above amounts from the concerned. Hence, the said observations are made against the petitioner as he has failed to discharge his duties, accordingly, 3 men committee has taken appropriate action by suspending the petitioner. 15. Considering the submissions made by both the counsel, no doubt, there is a clear bar in the instructions issued by the District Co-operative Officer, vide Proceedings, dated : Nil.09.2019 stating that 3 men Committee has directed not to remove or not to appoint any officer without permission of the Government/ Registrar and there is a clear embargo in the Section 59 of the Act that the Registrar alone is competent authority to issue directions to the Committee to place servants/ officers under suspension, based on the Audit report under Section 50 of the Act or enquiry under Section 51 of the Act. 16. No doubt, in the instant case, no such procedure has been followed before suspending the petitioner. Further, as contended by the learned Senior Counsel, with regard to the allegations mentioned in the Audit report against 4 persons about misappropriation of amounts, it is also mentioned that the responsibility is also fixed against them, but the committee has not initiated any action against those persons. Further, in the counter also, there is no whisper on that aspect. Hence, it can be concluded that there is no such evidence to prove that the petitioner misappropriated the Society funds. The aforesaid discussion clarifies that the respondents have passed the impugned orders, thereby made the petitioner alone as scapegoat for the fault of others. Further, in the counter also, there is no whisper on that aspect. Hence, it can be concluded that there is no such evidence to prove that the petitioner misappropriated the Society funds. The aforesaid discussion clarifies that the respondents have passed the impugned orders, thereby made the petitioner alone as scapegoat for the fault of others. Even according to the counter filed by the respondents, they have requested the District authorities for enquiry under Section 51 of the Act, but no direction has been given with regard to initiation of enquiry under Section 51 of the Act. In such circumstances, on perusal of the record, this Court is of the considered opinion that the impugned Resolution, dated 10.08.2022 is contrary to the instructions issued by the District Co-operative Officer, vide Proceedings, dated NIL-09-2019 and also contrary to the provisions contemplated under Section 59 of the Act. Therefore, taking into consideration all the aspects, this Court deems it fit that the same is liable to set aside. 17. In view of the aforesaid discussion, the Writ Petition is allowed and the impugned Resolution, dated 10.08.2022 is hereby set aside. The respondents are directed to continue the petitioner in his job and they are at liberty to take appropriate action, after getting the enquiry report under Section 51 of the Act. No order as to costs. As a sequel, miscellaneous applications pending, if any, shall also stand closed.