APHC010334822017 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3327] WEDNESDAY, THE TWENTY FOURTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE K SREENIVASA REDDY WRIT PETITION NO: 1568/2017 Between: 1. G. CHENCHAIAH, S/O CHENNAIAH, AGED ABOUT 64 YEARS, OCC: RETIRED EMPLOYEE, R/O. CHANDRASEKHARAPURAM VILLAGE, CHANDRASEKHARAPURAM MANDAL, PRAKASAM DISTRICT. ...PETITIONER A N D 1. THE STATE OF ANDHRA PRADESH, REP. BY ITS SECRETARY, CO-OPERATIVE DEPARTMENT, AMARAVATHI, GUNTUR DISTRICT. 2. THE DEPUTY REGISTRAR COOPERATIVE SOCIETIES, KANDUKUR DIVISION, KANDUKUR, PRAKASAM DISTRICT. 3. THE C S PURAM PRIMARY AGRICULTURAL, CO- OPERATIVE SOCIETY CHANDRASEKHARAPURAM, C.S. PURAM MANDAL, PRAKASAM DISTRICT, REP, BY ITS PRESIDENT. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ Order or direction declaring the impugned Surcharge order Rc.No.553/2006-D dated 24-03-2008 on the file of the Deputy Registrar of Cooperative Societies, Kandukur, Prakasam District, as illegal, arbitrary and without jurisdiction and pass SRK, J W.P.No.1568 of 2017 2 IA NO: 1 OF 2017 (WPMP 1794 OF 2017) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the impugned Surcharge order Rc.No.553/2006-D dated 24-03-2008 on the file of the Deputy Registrar of Co-operative Societies, Kandukur, Prakasam District, pending disposal of the above Writ Petition and pass such other orders as deem fit and proper in the facts IA NO: 2 OF 2017 (WPMP 3797 OF 2017) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to permit the petitioner to file additional affidavit and take the same on record and pass IA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Registry to reconstruct the file relating to Writ Petition No. 1568/2017 and to post the Writ Petition for hearing before the concerned court immediately and pass Counsel for the Petitioner: 1. D KRISHNA MURTHY Counsel for the Respondent(S): 1. GP FOR COOPERATION (AP) 2. SIMHACHALAM KARUKOLA The Court made the following: SRK, J W.P.No.1568 of 2017 3 O R D E R This Writ Petition is filed seeking to declare the impugned Surcharge Order vide Rc.No.553/2006-D, dated 24.03.2008 passed by the Deputy Registrar of Cooperative Societies, Kandukur, Prakasam District, as illegal, arbitrary and without jurisdiction. 2. Contents of the affidavit, filed by the Writ Petitioner, are that, the petitioner worked as Secretary of the Primary Agricultural Cooperative Society, Chandrasekharapuram village of Prakasam District for the period from May, 2000 to 30.06.2010 and retired from service on 30.06.2010 on attaining the age of superannuation; that while the petitioner was in service, Surcharge Proceedings were initiated against him under Section 60 of the Andhra Pradesh Cooperative Societies Act, 1964 (for brevity ‘the Act, 1964’) alleging that the petitioner had drawn excess salary, but, later, the said charge was withdrawn vide Order in G.O.Ms.No.308, dated 30.12.2006; that later, Surcharge Order was passed for recovery of Rs.91,246/- stating that the petitioner had withdrawn salary for the period of suspension period during 01.07.2004 to 18.02.2005. (b) The petitioner was placed under suspension pending inquiry by the Chairperson of the Chandrasekharapuram PACS SRK, J W.P.No.1568 of 2017 4 Limited by an Order, dated 02.07.2004; that though the petitioner was placed under suspension, no one took charge from the petitioner and he was asked to continue till the same was taken over by a competent person, but it was not done so. (c) Respondent No.2 issued orders vide Rc.No.1212/ 2003/B, dated 14.07.2004, canceling the disciplinary proceedings initiated against the petitioner. Consequently, the Chairperson of the Chandrasekharapuram PACS Limited/Sub-Divisional Cooperative Officer, Kanigiri issued orders reinstating the petitioner into service vide Orders in Rc.No.1/2005, dated 18.02.2005. After withdrawal of the order of suspension, there was no subsequent disciplinary inquiry against the petitioner. Though the disciplinary proceedings were cancelled by 2nd respondent on 14.07.2004, the consequential order of reinstatement was given to the petitioner on 18.02.2005 only. The order of suspension was in force hardly for a period of 12 days, in fact, the petitioner was not relieved and he continued to work during that period, therefore, it cannot be said that petitioner had drawn salary irregularly for the period of suspension from 02.07.2004 to 18.02.2005; that the petitioner had drawn the salary after cancellation of disciplinary proceedings on 04.06.2005, 25.06.2005 and 29.06.2005, SRK, J W.P.No.1568 of 2017 5 therefore, the order of Surcharge, is illegal, arbitrary and without jurisdiction. (d) When respondent No.3-Society issued orders on 06.07.2009 for recovery of Surcharge amount of Rs.94,611/-, petitioner filed Writ Petition No.17096/2009. But, as the Surcharge Order, dated 24.03.2008 was not challenged, this Court vide Order, dated 03.11.2016 dismissed the Writ Petition No.17096 of 2009, giving liberty to take appropriate proceedings in accordance with law. The petitioner already retired from service on 30.06.2010 and his retirement benefits of Rs.2,57,692/- was held up due to the impugned Surcharge Order. Hence, the Writ Petition. 3. Subsequently the petitioner filed additional affidavit by way of filing W.P.M.P.No.3797 of 2017 in Writ Petition No.1568 of 2017 contending that the limitation to file appeal under Section 76 of the Act, 1964 before the Cooperative Tribunal is 60 days and the petitioner was in apprehension that filing appeal nearly after nine years may not yield any benefit in view of said inordinate delay. 4. Respondent No.2 filed counter-affidavit rejecting the averments in the Writ affidavit and it is urged, among other points, that the petitioner had drawn salary amount of Rs.91,246/- during SRK, J W.P.No.1568 of 2017 6 his suspension period from 01.07.2004 to 18.02.2005 and an amount of Rs.3,365/- towards T.A. Bills without knowledge or consent of the President or the Chairperson/Person In-charge of the society; that the petitioner without following due process of law, violated the provisions of bylaws and according to his will and wish and thereby, misappropriated the amounts, which were collected from loanee members. Respondent No.2 passed Surcharge Orders and the petitioner had drawn the salary of Rs.4,74,376/- from out of cash balance from April, 2003 onwards against the provisions of Section 116-C of the Act, 1964 without obtaining prior permission either from the President or Person In- charge of the society. G.O.Ms.No.308, dated 30.12.2006 issued by the Government of Andhra Pradesh was applicable only for any excess amount drawn by the paid Secretaries, but here, the excess salaries drawn by the petitioner, were kept under the head of ‘Due to accounts from 14.10.1991 to 29.06.2005 an amount of Rs.3,83,130/- had allowed from exemption of Surcharge orders as per G.O., and the remaining amount of Rs.91,246/- is to be recovered from the petitioner as he was placed under suspension for the period from 01.07.2004 to 18.02.2005. SRK, J W.P.No.1568 of 2017 7 (b) The Cooperative Central Bank, Prakasam conducted inquiry against the petitioner by the Supervisor of Prakasam District Cooperative Central Bank and after receipt of report on 01.07.2004, the petitioner suspended from his service from 02.07.2004 by the President of Chandrasekharapuram PACS, as he had drawn salaries out of cash balance from April, 2003 onwards, which is contrary to the provisions of Section 116-C (1) of the Act, 1964 without taking prior permission or consent either from the Department or the Prakasam District Cooperative Central Bank. (c) Respondent No.2 issued orders vide RC.No.1212/ 2003-B, dated 14.07.2004 as disciplinary action was cancelled against the petitioner as per W.A.Nos.32 of 2003 and 413 of 2003 and W.P.Nos.3706 of 2002 and 8522 of 2003 regarding refixation and recovery of salaries of the Secretaries of PACS. The suspension order came into force on 02.07.2004; that as and when the disciplinary action was cancelled against the petitioner, the Managing Committee resolves that they reinstate the petitioner into service and send the same to the higher authorities for approval; that there is no proposal for the petitioner and after passing of Surcharge Orders, the petitioner challenged the same SRK, J W.P.No.1568 of 2017 8 and he was reinstated into service under R.C.No.1/2005, dated 18.02.2005 by the same person of the society, drawing of salaries from July, 2004 onwards in three spells i.e. 04.06.2005, 25.06.2005 and 29.06.2005 including the suspension period is highly irregular without passing order by the President/ Chairperson/Person In-charge; that the petitioner already filed Writ Petition No.17096 of 2009 and the same was dismissed on 03.11.2016 giving liberty to the petitioner to take appropriate steps according to law; that the Court verified the records and came to conclusion that the Surcharge Orders were disbursed on 30.04.2004 and the petitioner received the same on 02.05.2008 with acknowledgment, and this Court rightly dismissed the Writ Petition, but the petitioner wantonly and intentionally filed the present Writ Petition without opting the remedy of appeal under Section 76 of the Act, 1964. (d) Respondent No.2 rightly passed Surcharge Orders for recovery of suspension period salary and TA Bill amount from the petitioner and the petitioner suppressed all the facts and tried to mislead the Court. Hence, it is prayed to dismiss the Writ Petition. 5. Heard the learned counsel for the petitioner and learned Government Pleader for Cooperation representing SRK, J W.P.No.1568 of 2017 9 respondent Nos.1 and 2. Perused the entire material available on record. 6. Learned counsel for the petitioner would contend that the disciplinary proceedings against the petitioner were cancelled by 2nd respondent vide Proceedings in Rc.No.1212/2003/B, dated 14.07.2004, and the period of suspension of petitioner was only for 12 days, but the consequential order of reinstatement was issued to the petitioner on 18.02.2005 and accordingly, the petitioner had drawn the salary after cancellation of disciplinary proceedings on 04.06.2005, 25.06.2005 and 29.06.2005. Learned counsel would further contend that in the General Body Meeting held on 21.04.2008 among the Members of Chandrasekharapuram PACS, it was resolved that the suspension orders against the petitioner were not implemented, treating the salary drawn by him during suspension period as regular salary and the same was approved by the Administrative Body in a meeting held on 26.05.2008. When such is the case, issuance of impugned Surcharge Order, dated 24.03.2008 directing the President of Chandrasekharapuram PACS to recover an amount of Rs.94,611/- along with interest at the rate of 18% per annum SRK, J W.P.No.1568 of 2017 10 from the petitioner, from the date of misappropriation of funds is nothing but arbitrary and violation of principles of natural justice. 7. Learned Government Pleader for Cooperation representing respondent No.2 would contend that the petitioner misappropriated the amounts collected from loanee members and he had also drawn an amount of Rs.94,611/- during his suspension period without knowledge or consent of the President or the Chairperson/Person In-charge of the society. Learned Government Pleader further contends that there is no proposal that the disciplinary action was cancelled against the petitioner and it only after passing of Surcharge Order, the petitioner challenged the same and he got reinstated into service under R.C.No.1/2005, dated 18.02.2005 and had drawn salaries from July, 2004 onwards in three spells i.e. 04.06.2005, 25.06.2005 and 29.06.2005 including the suspension period without there being any passing order by the President/Chairperson. 8. A perusal of entire material on record goes to show that petitioner worked as Secretary of Chandrasekharapuram Primary Agricultural Cooperative Society, Chandrasekharapuram village from the month of May, 2000 to 30.06.2010 i.e. till the date of his superannuation. The Chairperson of the SRK, J W.P.No.1568 of 2017 11 Chandrasekharapuram PACS vide Proceedings, dated 02.07.2004 suspended the petitioner from the post of Secretary of the Chandrasekharapuram PACS basing on the Special Report got filed by the Supervisor of Pamur Branch. In the said report, it was alleged that the petitioner being the Secretary of Chandrasekharapuram PACS, committed irregularity in remittance of cash collections from the Members of the Society into the loan account with Pamur Branch. It was further alleged that the petitioner had drawn salaries contrary to the provisions of Section 116-C (1) of the Act, 1964 without obtaining sanction of staffing pattern and pay scales from the Divisional Cooperative Officer, Kandukur as required under the Act, 1964. 9. Section 116-C of the Act, 1964 deals with Staffing Pattern of Societies. It reads as under: (1) A society shall have power to fix the staffing pattern, qualifications, pay scales and other allowances for its employees with the prior approval of the Registrar of Cooperative Societies subject to the condition that expenditure towards pay and allowances of the employees shall not exceed two percent of the working capital or thirty percent of the Gross profit, in terms of actuals in a year whichever is less.] A plain reading of the above provision mandates that the society has got power to fix the staffing pattern, qualifications, SRK, J W.P.No.1568 of 2017 12 pay scales and other allowances for its employees with prior approval of the Registrar of the Cooperative Societies subject to the condition that expenditure towards pay and allowances of the employees. A perusal of the Proceedings, dated 02.07.2004 issued by the Chairperson of the Chandrasekharapuram PACS further goes to show that the petitioner was placed under suspension with immediate effect i.e. from 02.07.2004, pending framing of charges and enquiry and the petitioner was directed to hand over the charge to the Chairperson immediately. Indisputably, the material on record does not disclose as to whether the charge was handed over to the Chairperson. But, it is the contention of petitioner that though he was placed under suspension, no one took charge from him and he was asked continue till the charge was taken over by a competent person. In the meantime, the Deputy Registrar of Cooperative Societies, Kandukur issued Proceedings vide Rc.No.1212/2003, dated 14.07.2004 cancelling the disciplinary action in respect of withdrawal of salaries by the Secretaries and Staff of Chandrasekharapuram PACS pursuant to the Common Judgment passed by the High Court of Judicature at Hyderabad in Writ Appeal Nos.32 of 2003 and 413 of 2003 in Writ Petition Nos.3706 SRK, J W.P.No.1568 of 2017 13 of 2002 and 8522 of 2003. As can be seen from the said proceedings, it is further evident that the Writ Appeal Nos.32 of 2003 and 413 of 2003 were preferred against the orders passed in Writ Petition Nos.3706 of 2002 and 8522 of 2003 in regard to re- fixation and recovery of salaries of Secretaries of the Primary Agricultural Cooperative Societies. 10. However, though the Deputy Registrar of Cooperative Societies, Kandukur issued the aforesaid proceedings in Rc.No.1212/2003, dated 14.07.2004, the same was communicated to the petitioner on 18.02.2005 vide Rc.No.1 of 2005. Therefore, though the disciplinary action against the petitioner was cancelled on 14.07.2004 i.e. twelve (12) days from the date of his suspension on 02.07.2004, he was placed under suspension till 18.02.2005 and his services were reinstated only on his representation. A perusal of the Proceedings of the Chairperson of Chandrasekharapuram PACS in Rc.No.1/2005, dated 18.02.2005 goes to show that the Managing Committee of C.S.Puram PACS, in a meeting conducted on 18.02.2005 and resolved to accept the plea of the petitioner for his reinstatement as Secretary to the said C.S.Puram PACS. SRK, J W.P.No.1568 of 2017 14 11. A perusal of the proceedings further goes to show that subsequent to suspension of petitioner, the entire work of the said society was stayed and the work was pending for the last six months. The President of Chandrasekharapuram PACS addressed letter to the Deputy Registrar, Cooperative Societies, Kandukur Division on 26.05.2008 stating that pursuant to the Surcharge Order issued in R.C.No.553/2006, dated 24.03.2008, they collected Rs.94,611/- from the petitioner on 26.05.2008 and therefore, it was stated that there was no necessity to take any legal action against the petitioner and requested to drop further action. To that effect, a receipt, dated 26.05.2008, showing remittance of Surcharge amount of Rs.94,611/- by the petitioner was filed, in which, it was mentioned that the said sum of Rs.94,611/- was deposited by the petitioner towards the amount mentioned in the impugned Surcharge Order. 12. As per F.R. 54-B of the Andhra Pradesh Fundamental Rules and Subsidiary Rules, prescribes (1) when a Government servant who has been suspended is reinstated or would have been so reinstated but for his retirement [xxxxxxx] while under suspension; the authority competent to order reinstatement shall consider and make a specific order— (a) regarding the pay and SRK, J W.P.No.1568 of 2017 15 allowances to be paid to the Government servant for the period of suspension ending with reinstatement or the date of his retirement on superannuation, as the case may be: and (b) whether or not the said period shall be treated as a period spent on duty. F.R.54-B (3) states, where the authority competent to order reinstatement is of the opinion that the suspension as wholly unjustified, the Government servant shall subject to the provisions of sub-rule (8), be paid the full pay and allowances to which he would have been entitled, had he not been suspended. It is provided that where such authority is of the opinion that the termination of the proceedings instituted against the Government servant had been delayed due to reasons directly attributable to the Government servant, it may after giving him an opportunity to make his representation [within sixty days from the date on which communication to this regard is served on him] and after considering the representation, if any submitted by him, direct for reasons to be recorded in writing, that the Government servant shall be paid for the period of such delay [only such amount (not being the whole) of such pay and allowances as it may determine]. Proviso (4) of said F.R.54-B mandates that in a case SRK, J W.P.No.1568 of 2017 16 falling under sub-rule (3) the period of suspension shall be treated as a period spent on duty for all purposes. 13. It is pertinent to mention that earlier, the petitioner filed Writ Petition No.17096 of 2009 challenging the communication, dated 06.07.2009 issued by 2nd respondent therein i.e. 3rd respondent herein, and the Proceedings of the Divisional Cooperative Officer, Kandukur of Prakasam District, dated 26.06.2009 addressed to the President of the Primary Agricultural and Cooperative Society, C.S.Puram, Prakasam District on the ground that the Surcharge Order, dated 26.05.2008, directing the petitioner herein to pay an amount of Rs.94,611/- along with interest at 8% per annum was not communicated. The material on record discloses that this Court vide Order, dated 03.11.2016 dismissed the Writ Petition on the ground that the Writ Petition is not maintainable without challenging the surcharge proceedings. Pursuant to the said Order, the petitioner filed the present Writ Petition challenging that Surcharge Order vide Rc.No.553/2006-D, dated 24.03.2008 issued by 2nd respondent. 14. Indeed, a perusal of the Proceedings of the President of PACS, Chandrasekharapuram vide in R.C.No.1/2005, dated SRK, J W.P.No.1568 of 2017 17 26.05.2008 goes to show that the suspension orders of the petitioner was not implemented from 02.07.2004 inasmuch as the petitioner discharged his duties and by treating the said period as duty period, the salary of an amount of Rs.91,246/- was treated as regular salary. Therefore, when the petitioner was reinstated into his duty as per the Proceedings of the Chairperson of the PACS, Chandrasekharapuram village vide Rc.No.1/2005, dated 18.02.2005 and further, when the President of Chandrasekharapuram PACS in his letter to the Deputy Registrar, Cooperative Societies, Kandukur Division on 26.05.2008 stated that pursuant to the Surcharge Order issued in R.C.No.553/2006, dated 24.03.2008, they collected Rs.94,611/- from the petitioner on 26.05.2008 and there was no necessity to take any legal action against the petitioner and the suspension orders against the petitioner was not implemented from 02.07.2004 and ratified the same as duty period by treating the salary of the petitioner for an amount of Rs.91,246/- as regular salary, issuance of Surcharge Order by 2nd respondent under Section 60 (1) of the Act, 1964 besides initiating execution proceedings against the petitioner is nothing but violation of principles of natural justice. The petitioner retired from service on 30.06.2010 on attaining the age of SRK, J W.P.No.1568 of 2017 18 superannuation and he is roaming around the office of the society to get his retirement benefits of Rs.2,57,692/- which was hindered due to issuance of Surcharge Order. In view of the foregoing discussion, the Surcharge Order in Rc.No.553/2006-D, dated 24.03.2008 issued by 2nd respondent is arbitrary and illegal and it is deserved to be set-aside. 15. Accordingly, the Writ Petition is allowed, setting-aside the Surcharge Order in Rc.No.553/2006-D, dated 24.03.2008 issued by 2nd respondent-Deputy Registrar of Cooperative Societies, Kanukur, Prakasam District. There shall be no order as to costs. As a sequel thereto, the miscellaneous applications, if any, pending in this Writ Petition shall stand closed. ________________________ JUSTICE K. SREENIVASA REDDY 24th September, 2025. DNB