P NARAYAN RAO Vs. STATE OF ORISSA

JUDGEMENT

(1.) These tour writ petitions filed by the ex-directors and the ex-cashier of Central Co-operative Marketing & Textile Syndicate, Limited against the order of the appellate authority--Minister of State, Co-operation, Orissa--in a surcharge proceeding have been heard together and are being disposed of by this common judgment. Petitioners in " O. J. Cs. 512, 696 and 769 of 1978 are the ex-directors or their substituted legal representatives while petitioner in O. J. C. No. 513 of 1978 is the former cashier of the society.

(2.) A society in the name and style of Ganjam District Co-operative Cloth and Yarn Society had been registered under the Madras Co-operative Societies Act, 1932, on 3-7-1945. The name of the society was changed to Central Cooperative Marketing & Textile Syndicate, Limited on 10-7-1949. The accounts of the society were audited on different dates in 1953 and 1954 and audit reports were submitted. The said audit reports revealed acts of omission and commission as also mismanagement of the society's lunds. On the basis of the said audit report, surcharge proceedings were initiated by issuing notice under Section 49 of the Madras Co-operative Societies Act against the directors, Secretary, .Branch Managers, General Manager, Distribution Manager, Godown Keeper, Typist and other employees. Notice against the directors was issued on 2-12-1954 alleging breach of trust to the tune of Rupees 2,17,712.57 and notice against the cashier was issued on 7-12-1954 on the allegation of misappropriation and breach of trust to the tune of Rs. 76,768-14-0. On 1-11955, the Orissa Co-operative Societies Act, 1951 came Into force and the Orissa Act repealed the Madras Act, but under sub-sec. (2) of Section 4 of the Orissa Act, the notices issued or proceedings instituted under any of the repealed Acts were deemed to have been issued or instituted under the corresponding provisions of the Orissa Act. Though the notice under the Madras Act had been issued on 2-12-1954, yet, the proceedings continued for a pretty long period and ultimately the Registrar of the Co-operative Societies passed final orders on 4-9-1963 holding the directors as well as the cashier liable to the extent indicated in the said order. The delay in disposal of the original proceedings appears to be mainly on account of long adjournments given by successive Registrars. On other feature with respect to the society which deserves attention is that on 29-7-1955. the Registrar of the Co-operative Societies dissolved the Managing Committee of the society and appointed an agent and on 10-6-1957, the society was ordered to be wound up. Those orders have been passed on account of unsatisfactory financial position due to mismanagement by the Board and lack of control over the activities of the society. In the winding-up proceeding, the Assistant Registrar, Co-operative Societies, Ganjam Circle, Berhampur, was appointed as the Liquidator.

(3.) Being aggrieved by the order of the Registrar, appeals were carried to the appellate authority--the Minister of State, Co-operation, who by his order dt. 42-1978 allowed the appeals in part by reducing the liability of the different appellants. The order of the Registrar as well as that of the Minister are being impugned in these writ petitions.