S SEETHARAMA RAO Vs. SECRETARY

JUDGEMENT

(1.) THE petitioner, questioning the legality and validity of the order dated 18th February 1991 in surcharge Case No. 5/84-85 on the file of the Assistant Registrar of Co-operative Societies - the second respondent herein, and the order passed by the Karnataka Appellate Tribunal ('tribunal' for short) dated 25th March 1996 in Appeal No. 128/1991 vide Annexures A and B respectively, has presented this Writ Petition.

(2.) THE petitioner was working as Secretary in the first respondent - Society. The first respondent society raised the surcharge proceedings under Section 69 of the Karnataka Co-operative societies Act ('act' for short) before the second respondent for recovery of a sum of Rs. 45,433. 44 with interest at the rate of 18% for the loss caused to the first respondent - Society as per the audit report for the years 1967-68 and 1968-69. During the relevant period, the petitioner was working as a Secretary of the first respondent Society. The second respondent, after considering the oral and documentary evidence and other materials available on file, exercising his power under Section 69 of the Act, has passed the order holding that the petitioner is liable to pay the said loss incurred by the said first respondent Society by its order dated 18th February 1991. Assailing the correctness of the said order passed by the second respondent, petitioner herein has filed an Appeal in No. 128/1991 on the file of the Karnataka Appellate Tribunal bangalore. The Tribunal after going through the order passed by the second respondent, the submissions of the respective counsel appearing for the parties, and after careful perusal of the lower Court records, held that it does not find any reasons to interfere with the order passed by the second respondent and also held that the impugned order passed by the second respondent is sustainable in law. In the result, the appeal filed by the petitioner stood dismissed by its order dated 25th March 1996. Feeling aggrieved by the impugned order passed by both the authorities below the petitioner has present this Writ Petition.

(3.) THE principal submission canvassed by the learned Counsel appearing for the petitioner is that, the proceedings initiated by the second respondent on an application filed by the Secretary is one without jurisdiction. He contended that as per- Section 111 of the Act, the proceedings cannot be initiated against the petitioner he being an honorary secretary and when another secretary also was present. Further, he vehemently submitted that if at all there is any misappropriation of funds; the petitioner alone cannot be held responsible for the same. The entire committee members are responsible for disbursing the said loan to one of the Directors of the first respondent - Society. He further submitted that he has taken specific ground before the Appellate tribunal that the Arbitrator has, inspite of a request made by the petitioner that the auditor should be examined, has not considered the said request nor examined the auditor. He further submitted that the said loan was disbursed by the petitioner in view of the endorsement and the memo issued by the then president of the Society. Therefore he alone should not be held liable or responsible for misappropriation of the funds as pointed out by the Audit Department at the time of auditing the Accounts of the first respondent - Society for the year 1967-68 and 1968-69. This specific grounds urged before the Tribunal have not been taken into consideration and the tribunal has dismissed the appeal filed by the petitioner holding that the there are no good grounds calling for interference in the impugned order passed by the second respondent. He submitted that both the authorities have committed an error and dismissed the stand taken by the petitioner contrary to the mandatory provisions of the Act and Rules. Hence, both the impugned orders passed by both the authorities are liable to be set aside.