SAMMETA RAMA SUBBA RAO Vs. PRESIDENT KAIKALURU IRRIGATION AND POWER DEPARTMENT SUB DIVISIONAL EMPLOYEES CO OP CREDIT SOCIETY LIMITED

JUDGEMENT

(1.) Challenging the Surcharge Order passed under S. 60(1) of the A. P. Cooperative Societies Act, 1964, in proceedings Re. No.4277/86-D dated 10-7-1991 by the Second Respondent this Writ Petition is filed. Before initiation of proceedings under S. 60(1) of the Act, inspection was conducted by the officer concerned under S. 52 of the Act. The Inspection report pointed out that the petitioner was to be surcharged. Basing on the same, proceedings were initiated under S. 60(1) of the Act. Show cause notice dated 24-4-1991 was issued to the petitioner to show cause why surcharge order should not be passed for realisation of Rs.41,164.00 as opined by the Inspecting Officer. The petitioner filed a reply dated 6-5-1991 denying his liability to pay the same. Strictly speaking, he disputed all the allegations levelled against him in the show cause notice issued for surcharging him. In such cases, as a necessary corollary, an enquiry ought to have preceded the surcharge order. The principal point in the instant case is whether any enquiry took place before the passing of surcharge order and if any such enquiry conducted, whether it conforms to the rules of fair-play. The only consideration of the Deputy Registrar who passed the surcharge order is to the following effect:

(2.) While Mr. Parabrahma Sastry, learned counsel for the petitioner contends that no enquiry has been conducted before surcharging the petitioner as contemplated under law, the learned Government Pleader and Mr. G. Suryanarayana Murthy appearing for the subject society advanced arguments to the contra.

(3.) According to the respondents, the enquiry whatever conducted during inspection under S. 52 of the Act is sufficient and surcharge order can be passed on the said inspection report and no further enquiry is contemplated to pass a surcharge order under S. 60(1) of the Act. I do not accede to these contentions. Report under S. 52 only enables the Registrar to initiate the sur-charge proceedings. On such initiation, the regular enquiry has got to be conducted, The Registrar while dealing with the provisions under S. 60( 1) of the Act to surcharge a person is a Court. His order is only appellable under S. 76 of the Act, but civil court's remedy by way of suit is barred. It is pertinent to mention that surcharge order fastening liability on any person including that of the petitioner in such a fashion has got the effect of depriving the right to property which was hitherto a fundamental right guaranteed under Art. 31 of the Constitution of India, now transformed into a constitutional guarantee under Art.300-A by which no person can be deprived of his property save by authority of law. The authority of law being in the instant case the statutory provision contained under S. 60(1) of the Act, the rules of fair-play have got to be followed. The rules of fair-play imply that there should be an enquiry wherein opportunity is given to elicit the truth by adduction of oral and documentary evidence, opportunity of cross-examination opportunity to advance arguments and then passing of a well reasoned order. Dealing with anologous principles of law it was held by a Division Bench of this Court in M. Chenna kesava Reddy v. Dvl. Co-op. Officer, 1972(2) APLJ 16 that a statute requiring affording of opportunity has got to be construed that it implies adherence to the rules of fair-play.