S.S.Karri v. Deputy Registrar, Cooperative Society,

In the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh WRIT PETITION No.23337 of 2006 S.S.Karri and another.

... Petitioners and The Deputy Registrar of Cooperative Societies and another.

...Respondents

Date of Judgment Pronounced: 29-10-2018 Submitted for Approval:

THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM

1. Whether Reporters of Local newspapers may be allowed to see the judgments? Yes/No

2. Whether the copies of judgment may be marked to Law Reporters/Journals? Yes/No

3. Whether Their Ladyship/Lordship wish to see the fair copy of the Judgment ?

Yes/No _____________________________ CHALLA KODANDA RAM,J

* THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM + WRIT PETITION No.23337 of 2006 % Dated 29.10.2018 Between:

# S.S.Karri and another.

... Petitioners and The Deputy Registrar of Cooperative Societies and another.

...Respondents

! Counsel for the petitioner : Sri Challa Dhanamjaya ^ Counsel for respondents : G.P. for Cooperation GIST:

HEAD NOTE:

? Cases cited:

THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No.23337 of 2006 O R D E R:

Notice, dated 16.10.2006, issued by respondent No.1Deputy Registrar of Cooperative Societies, Vizianagaram, under Section 60(1) of the Andhra Pradesh Cooperative Societies Act, 1964 (for short 'the Act'), is challenged in this writ petition. Petitioners state that they are the President and Vice-President of respondent No.2-East Coast Railway Employees Consumer Cooperative Stores Limited, Vizianagaram. While so, enquiry under Section 51 of the Act was ordered against the affairs of respondent No.2 and the Enquiry Officer submitted a report on 19.04.2003 fixing the liability of Rs.52,051/- along with interest @ 21% per annum against the petitioners jointly and severally and pursuant to the same, respondent No.1 issued surcharge notice, dated 08.07.2003, to the petitioners, who, in turn, submitted their explanation. However, respondent No.

1, without conducting any enquiry and without considering the explanation submitted by them, passed surcharge order, dated 29.03.2004, directing recovery of Rs.52,051/- with interest @ 21% per annum. Aggrieved by the same, the petitioners filed O.A.No.

the enquiry said to have been conducted is not in accordance with the Act and the Rules made thereunder and the surcharge order, dated 29.03.2004, was solely based on the enquiry report. The Tribunal, observing that the surcharge order is in violation of the provisions of Section 60 of the Act, according to which, there is a duty cast on the Registrar to conduct enquiry independently by following the procedure prescribed, set aside the same and remanded the matter to respondent No.1 for fresh consideration. Upon such remand, respondent No.1 issued the impugned notice to the petitioners.

Respondent No.1 filed a counter-affidavit supporting the issuance of the impugned notice.

Sri Challa Dhanamjaya, learned counsel for the petitioners, submits that respondent No.2 became defunct and a Liquidator came to be appointed on 18.12.2004 under Section 65 of the Act and that respondent No.2 would be under the control of the Liquidator, as such, issuance of the impugned notice is ultra vires. Learned Government Pleader for Cooperation submits that there is nothing wrong in issuing the impugned notice by respondent No.1 and at any rate, it would be open for the petitioners to raise all their objections before respondent No.1, as such, no writ would lie against it.

Having regard to the respective submissions, the only question which requires to be considered is 'whether the impugned notice issued by respondent No.1 is liable to be set aside on the ground that the Liquidator was appointed to look after the affairs of respondent No.2'. Since it is a pure question of law, it is for the Registrar/competent authority to initiate proceedings under Section 60 of the Act.

Provided that no order shall be passed against any person referred to in this sub-section unless the person concerned has been given an opportunity of making his representation.

(2) Any sum ordered under this section to be repaid to a society or recovered as a contribution to its asserts may be recovered on a requisition being made in this behalf by the Registrar to the Collector in the same manner as arrears of land revenue.

(3) This section shall apply notwithstanding that such person or officer or servant may have incurred criminal liability by his act. (emphasis applied)" A bare perusal of the above provision leaves no manner of doubt that it is the Registrar or his delegatee to initiate proceedings under Section 60 of the Act. Under Section 65 of the Act, the power of the Registrar is not limited, unlike in other enactments where the Liquidator is having full power and control over the affairs in relation to a Society. Yet another distinction is that the Registrar is empowered to initiate proceedings either on his own accord or on an application of the Committee, Liquidator, Creditor or Contributor. The power conferred on the Registrar is wide and at any rate, the same is not limited by Section 65 of the Act and it reads as under:

"Section 65: Appointment of Liquidator: (1) Where the Registrar has made an order under Section 64 for the winding up of a society, he may appoint a liquidator for that purpose and fix his remuneration.

(2) On the appointment of Liquidator, the property, assets, effects and actionable claims or liabilities of the society as on the date of appointment shall vest in or devolve on the

liquidator. He shall take such steps as he may deem necessary or expedient to prevent loss or deterioration of, or damage to, such property, asserts, effects and actionable claims.

(3) Where an order of winding up of a society is set aside in appeal the property, assets, effects and actionable claims or liabilities of the society as on the date of such setting aside shall revest in or devolve on the society." The Liquidator may have the control with respect to various aspects as specified under Sections 66 and 67 of the Act. However, the same does not confer any right on the Liquidator either to initiate proceedings or to conduct enquiry in terms of Section 60 of the Act and such power exclusively vests with the Registrar. Therefore, the argument of the learned counsel for the petitioner does not commend acceptance.

In those circumstances, the writ petition is dismissed. Miscellaneous petitions, if any, pending in this writ petition shall stand dismissed. There shall be no order as to costs. _________________________ CHALLA KODANDA RAM, J Dt:29.10.2018 Note: L.R. Copy to be marked.

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