THE MALLUKUNTA PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETY Vs. THE DISTRICT CO-OPERATIVE OFFICER AND JOINT REGISTRAR

JUDGEMENT

(1.) The first petitioner is the Society and the second petitioner is its President. The second petitioner swears the affidavit stating that the first petitioner Society consists of 13 Directors and they were elected in October, 2005. The second petitioner was elected as the President of the Society. The Society was running in losses and the enquiry held by the Divisional Cooperative Officer in 1994 revealed that it sustained a loss of Rs.5,99,737/-. The second petitioner has nothing to do with the said loss since he was elected only in 2005. It is his case that due to political rivalry, at the instance of the local Member of Legislative Assembly, an enquiry was ordered under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for short, the Act) alleging some irregularities in the working of the first petitioner Society by proceedings dated 22.12.2006. Challenging the initiation of the said enquiry, the present Writ Petition is filed.

(2.) This Court, by order dated 03.01.2007, granted interim suspension and seeking vacation of the said order, W.V.M.P.No.2698 of 2008 was filed admitting the fact of election of a new Managing Committee in the elections held in the month of October 2005. It was further stated that the loss incurred by the Society and found during the enquiry in 1994 was recovered from responsible persons. The allegation that the enquiry was initiated at the instance of the local Member of Legislative Assembly was denied. It was stated that a representation was made by the said Member of Legislative Assembly to the Incharge Minister of West Godavari District, Eluru, under a copy to the Honble Minister for Cooperation, Government of Andhra Pradesh on the irregularities that took place in the first petitioner Society. The Commissioner for Cooperation and Registrar of Cooperative Societies, Andhra Pradesh, forwarded the representation to the District Cooperative Officer, West Godavari District to submit a report. The District Cooperative Officer, in turn, forwarded the same to the Divisional Cooperative Officer, Eluru, calling for a report. The Divisional Cooperative Officer reported the retention of huge cash balance during the year 1995 to 1999, irregular sanction of loans to the members and also reported that the Society sustained huge loss. The District Cooperative Officer, West Godavari, Eluru, examined the issue and ordered an enquiry keeping in view the interest of the members of the Society, in order to fix up the responsibility on the irregularities noticed and recover the amounts from the responsible persons. The challenge to the procedure in conducting the enquiry was also refuted. When an Enquiry Officer is appointed under Section 51 of the Act, the Enquiry Officer will fix the date, time and will give an opportunity by issuing notices to the members of the Society during the course of enquiry. After receiving the report from the Enquiry officer, the Registrar will consider findings in the enquiry report. Thereafter, the findings would be communicated to the Managing Committee of the Society to be placed before the General Body of the Society. The enquiry under Section 51 of the Act is a statutory function to protect the interest of the members and to safeguard the funds of the Society by detecting the frauds in the working of the Society and helping in recovering the amounts of the Society. The Joint Registrar/District Cooperative Officer, West Godavari District, Eluru, is vested with powers vide G.O.Ms.No.34, Food & Agriculture (Coop.IV) Department dated 18.01.1989, for ordering an enquiry and the enquiry now ordered was in consonance with the said powers. The mere conduct of an enquiry into the affairs of the Society will not hamper the day to day administration and transactions of the Society.

(3.) Learned Senior Counsel, Sri Y.V.Ravi Prasad, appearing for the petitioners submitted that the enquiry ordered by the first respondent is vitiated due to non-application of mind and at the instance of the local Member of Legislative Assembly. He relied on a decision of this Court in Mandava Laxmana Rao v. Primary Agricultural Co-operative Society, Warangal District and submitted that this Court, in the said decision, held that the enquiry ordered at the instance of Honble Minister was bad in law. He further submitted that when a report was submitted by the second respondent stating that efforts are being made to recover the losses, the first respondent should not have ordered for an enquiry. Learned Government Pleader, on the other hand, submitted that the enquiry under Section 51 of the Act is a statutory function and a reading of the impugned order clearly shows that the first respondent had applied his mind and in due exercise of the powers vested in him had ordered the enquiry and hence such an enquiry cannot be found fault.