K. SATYANARAYANA AND OTHERS Vs. A.P. COOPERATIVE TRIBUNAL, VISAKHAPATNAM, REP. BY ITS REGISTRAR, AT VISAKHAPATNAM, AND OTHERS

JUDGEMENT

(1.) These three Writ Petitions are being disposed of by this common order as a common point of law relating to the interpretation of Sec. 60 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short, the Act), is involved in these three cases.

(2.) The undisputed facts in the instant cases are that the first petitioner in W.P.No.22815 of 2009 and the petitioners in W.P.Nos.22828 and 22829 of 2009 were working as the employees of the District Co-operative Central Bank Limited, Gajapathinagaram Branch. Petitioner Nos.2 to 6 in W.P.No. 22815 of 2009 are the legal heirs of one Sri P.Lakshmana Rao, who was also the employee of the same bank and who died during the pendency of the proceedings. Proceedings were taken against them before the second respondent pursuant to an enquiry conducted under Sec. 51 of the Act into the affairs of the third respondent Society. The enquiry revealed sanctioning of benami loans, and drawing the amount by the Ex-President and Ex-Secretary of the Society with the help and cooperation of the employees of the District Co-operative Central Bank Limited, Gajapathinagaram Branch, the petitioners in these Writ Petitions. Surcharge notices were issued calling upon the delinquents, including the petitioners, to show cause as to why an order under Sec. 60(1) of the Act should not be passed against them making them liable jointly and severally. The petitioners submitted their explanation stating that they were not employees of the Co-operative Society, they were not entrusted with the duties of the Society and proceedings cannot be taken against them. When an order of surcharge was passed on 30.04.2003, the petitioners filed O.A. Nos.208, 209 and 210 of 2004 before the Andhra Pradesh Co-operative Tribunal, Visakhapatnam, and the Tribunal by its orders dated 29.06.2005 and 07.04.2005 set aside the orders of surcharge passed by the second respondent and remanded the matter back to the second respondent for conducting a fresh enquiry. After remand, fresh notices were issued to the employees of the Society as well as employees of the bank. After recording the statements of the delinquents, elaborate orders were passed on 06.09.2007 by the second respondent, making the petitioners jointly and severally liable along with the employees of the Co-operative Society for the loss caused to the Society. The plea taken by the petitioners that the duties and responsibilities discharged by them do not come under the provisions of Sec. 60(1) of the Act and the notices issued to them were beyond the jurisdiction of the second respondent, was negatived. Against the said orders, the petitioners filed O.As before the Andhra Pradesh Co-operative Tribunal, Visakhapatnam, the details of which are as under: <FRM>JUDGEMENT_33_LAWS(APH)1_2017_1.html</FRM>

(3.) A specific contention was raised by the petitioners before the Tribunal that they are employees of the District Cooperative Central Bank and since they were discharging their duties as per the job chart on the instructions of the bank and were not entrusted with any duty of the Society, no proceedings under Sec. 60 of the Act can be taken against them. The Tribunal came to the conclusion that the duties of the Supervisor and Branch Manager are closely related to the disbursement of loan. The Supervisor takes part in the loan process from the stage of documentation till the disbursement of loan amount, whereas the Branch Manager verifies the entire loan documentation and on satisfaction, disburses the loan amount through bank accounts. Since the petitioners failed to perform their duties, which resulted in misappropriation by way of benami loans, which could be foreseeable, the loss caused to the Society shall be made good by all the persons who were entrusted with the duties. Accordingly, the appeals preferred by the petitioners were dismissed by orders dated 09.09.2009. Challenging the said orders, the present Writ Petitions were filed.