P. RAMANJANEYA Vs. JOINT REGISTRAR OF CO-OPERATIVE

JUDGEMENT

(1.) The petitioner was serving as a Branch Manager with the second respondent-Co-operative Bank at its Pavagada Branch, Tumkur District. While the petitioner was the Branch Manager, financial assistance was granted to the Taluk Agricultural Primary Marketing Societies Limited (TAPCMS for short), Pavagada, to the tune of Rs.40,00,000.00. When the Society defaulted in repayment, the second respondent-Bank raised a dispute before the Arbitrator under Sec. 70 of the Karnataka Co-operative Societies Act, 1959 seeking recovery of a sum of Rs.18,78,814.00 along with interest. The Arbitrator proceeded to hold that 75% of the award amount shall be recovered from TAPCMS Limited and 25% from the responsible officials of the Bank. The order was passed by the Arbitrator on 26/3/2007. Thereafter, the Managing Director of the second respondent-Bank proceeded to pass an order dtd. 4/5/2009, at Annexure 'B' holding the petitioner herein responsible for payment of Rs.7,03,253.00 and another official by name Seetharamu, liable to pay the balance of Rs.7,03,253.00. The Managing Director thereafter passed an order dtd. 1/6/2009 calling upon the petitioner to pay a sum of Rs.4,69,704.00 along with interest at the rate of 14% and 2% compound interest from 22/5/2004.

(2.) In the meanwhile, it appears that a disciplinary enquiry was initiated against the petitioner on the very same charges and a report was submitted by the Enquiry Officer. Consequent to the report submitted by the Enquiry officer, the charges against the petitioner were dropped with a warning. The Bank dropped the charges against the petitioner on 4/3/2005. However, since the order of recovery was passed by the Managing Director on 1/6/2009, the petitioner raised a dispute before the Joint Registrar of Co-operative Societies. The Joint Registrar rejected the appeal filed by the petitioner by order dtd. 5/8/2011. Thereafter, the petitioner approached the Karnataka Appellate Tribunal in Appeal No.607/2011. The Tribunal too dismissed the appeal by order dtd. 13/7/2016. Consequently, the petitioner is before this Court.

(3.) Learned Counsel for the petitioner submits that the order of recovery passed by the Managing Director of the Bank is in total violation of the principles of natural justice. It is submitted hat no opportunity was granted to the petitioner calling upon him to explain as to why action for recovery in terms of the directions given by the Arbitrator in a proceedings between the bank and the Society-borrower. Learned Counsel would therefore submit that on this ground alone, the order of recovery is required to be set aside. Moreover, it is submitted that on the very same charges, a departmental enquiry was held against the petitioner and the Enquiry officer exonerated the petitioner from all charges. Consequently, the Bank having accepted the report submitted by the Enquiry officer and having dropped the charges against the petitioner, there was no reason for the Managing Director to pass an order of recovery.