1 APHC010507982023 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3208] TUESDAY,THE SEVENTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE D RAMESH WRIT PETITION NO: 26305/2023 Between: 1. A SRINIVAS NAIDU, S/0 LATE RAMA NAIDU AGE. 52 YRS, OCC. DISTRICT CO-OPERATIVE CENTRAL BANK LTD. VIZIANAGARAM DISTRICT. ...PETITIONER AND 1. THE STATE OF AP, REP. BY ITS PRINCIPAL SECRETARY CO-OPERATION DEPARTMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI. 2. THE DISTRICT COOPERATIVE CENTRAL BANK, VIZIANAGARAM DISTRICT REP. BY ITS CHIEF EXECUTIVE OFFICER. 3. PERSONAL INCHARGE, DCCB LTD., VIZIANAGARAM DISTRICT ...RESPONDENT(S): Counsel for the Petitioner: 1. V V SATISH Counsel for the Respondent(S): 2 1. GP FOR COOPERATION 2. V UMA DEVI WRIT PETITION NO: 33378/2023 Between: 1. A SRINIVAS NAIDU, S/O LATE RAMA NAIDU AGE. 52 YRS, OCC ASST. GENERAL MANAGER, DISTRICT CO- OPERATIVE CENTRAL BANK LTD. VIZIANAGARAM, VIZIANAGARAM DISTRICT. ...PETITIONER AND 1. THE STATE OF AP, REP. BY ITS PRINCIPAL SECRETARY CO-OPERATION DEPARTMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI. 2. THE DISTRICT COOPERATIVE CENTRAL BANK, VIZIANAGARAM DISTRICT REP. BY ITS CHIEF EXECUTIVE OFFICER. 3. PERSONAL INCHARGE, , DCCB LTD., VIZIANAGARAM DISTRICT. 4. R B LAKSHMANA RAO, M S/O. APPALA SURYANAIYANA, AGED 59 YEARS, DEPUTY GENERAL MANAGER, DCCB LTD., NEAT KOTA, VIZIANAGARAM- 535501. 5. P RAMA MOHAN, S/O. LATE CHIRANJEEVI, AGED 45 YEARS. ASST. GENERAL MANAGER, DCCB LTD., NEAT KOTA, VIZIANAGARAM- 535501. ...RESPONDENT(S): 3 Counsel for the Petitioner: 1. V V SATISH Counsel for the Respondent(S): 1. V UMA DEVI 2. GP FOR COOPERATION The Court made the following: 4 THE HONOURABLE SRI JUSTICE D.RAMESH WRIT PETITION Nos.26305 and 33378 of 2023 COMMON ORDER: Writ Petition No.26305 of 2023 is filed declaring the action of respondent Nos.2 and 3 in not promoting the petitioner to the post of Deputy General Manager, as illegal, arbitrary and consequently to direct the respondents to promote the petitioner without referring to regulation 4.12 (iii) of Andhra Pradesh Co- operative Bank Association Staff Service Regulations dated 17.04.2023. 2. Writ Petition No.33378 of 2023 is filed declaring the action of respondent Nos.2 and 3 in promoting respondent No.4 to the post of Deputy General Manager ignoring the seniority of the petitioner in promotions conducted on 16.10.2023, as illegal, arbitrary and consequently set aside the impugned promotion and direct the respondents to promote the petitioner to the post of Deputy General Manager. 3. Heard learned counsel for the petitioner, learned Government Pleader appearing on behalf of respondent No.1 and 5 learned Standing Counsel appearing on behalf of respondent Nos.2 and 3. 4. Considering the submissions, this Court has granted the following interim order in W.P.No.26305 of 2023 on 16.10.2023: “Heard Sri V.V.Satish, learned counsel for the petitioner as well as Ms. V.Uma Devi, learned Standing Counsel appearing for the respondents 2 and 3. Having considered the submissions made by the learned counsel on both sides, there shall be interim direction to the respondents to consider the case of the petitioner for promotion to the post of Deputy General Manager. However, said promotion shall be subject to the result of the writ petition. Registry is directed to print the name of learned Government Pleader for Cooperatives in the place of Government Pleader for Services I in the cause list. Post the matter after four (04) weeks for filing counter.” 5. Based on the above direction, the respondents have considered the case of the petitioner along with Sri P.Rama Mohan. The case of the petitioner was also recommended to the existing post of Deputy General Manager. But, surprisingly, the 6 respondents have considered the case of only Sri P.Rama Mohan and no orders have been passed with regard to the petitioner. 6. In fact, for dereliction of duties in discharging duties, disciplinary proceedings were initiated against the petitioner and an enquiry was conducted and a report was submitted on 22.02.2018 under Sub-Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for short, „the Act‟) holding that the charge against the petitioner was not held proved. Based on the same, a show-cause notice was issued to the petitioner on 10.08.2018 proposing the punishment of withholding two increments without cumulative effect. Aggrieved by the same, the petitioner has preferred an appeal. The said appeal was allowed vide order dated 10.07.2019 with the following observations: “Having considered the charge and allegations, explanation of Sri A.Srinivasanaidu, Manager, Enquiry findings, explanation to the show case notice of the charged officer, proceedings of the disciplinary authority and grounds of appeal and after careful and independent examination of the relevant material placed and the gravity of the proven misconduct, the President in the capacity of Appellate Authority has observed that the enquiry officer has not established any delinquency and as such any action against the charged officer is a long drawn 7 conclusion. Hence, it is decided to drop the punishment imposed against him.” 7. Subsequently, the petitioner‟s case was considered and he was promoted as Assistant General Manager on 27.05.2020. His next promotion is to the post of Deputy General Manager. In view of the above said dropping of disciplinary proceedings against the petitioner, he is eligible and entitled for promotion to the post of Deputy General Manager. Accordingly, he made a representation/request on 25.08.2023. However, the same was not considered by the respondents. Though the petitioner is eligible and entitled, his case was not considered only on the ground that a criminal case is pending against him. In fact, proceedings were initiated under Section 51 of the Act, in which certain allegations were made against the petitioner while he was working as Branch Manager of the District Co-operative Central Bank (for short, „DCCB‟), Parvathipuram Branch. Based on the enquiry report under Section 51 of the Act, surcharge proceedings under Section 60 of the Act were initiated and are pending. 8. In the meanwhile, the amounts which are due to the society were already cleared by the farmers. There are no financial 8 irregularities and the case is pertaining to surcharge proceedings which are pending only against the society. Being a Manager of the DCCB, the petitioner is no way concerned with the said proceedings. When the case of the petitioner was considered along with others based on the merit and his name was recommended by the Board, but for the reason of pendency of proceedings against the petitioner, the respondents have not considered the case of the petitioner and have not passed any order. Left with no option, the petitioner filed Writ Petition No.33378 of 2023. 9. Based on the above facts, learned counsel for the petitioner has submitted that an identical issue was considered by the Composite High Court for the State of Telangana and Andhra Pradesh in K.Satyanarayana v. A.P.Cooperative, Tribunal, Visakhapatnam, represented by its Registrar, in a batch of writ petitions, with the leading Writ Petition No.22815 of 2009. In the said batch, the issue was considered by the Co-ordinate Bench and it was held as follows: “The normal process of disbursement of loans involves release of amounts by the Bank to the concerned societies as per their norms and acceptance of loan 9 applications by the societies. In the said process the petitioners may have been connected with the discharge of loans at the time of their scrutiny for sanction, but the ultimate loan amount would be disbursed by the concerned Co-operative Society to the borrowers, who would repay the amount to the Society only. In the event of default committed by the borrowers, the Society would be put to loss. The bank, on its own, can insist for payment of the amount due to it from the Society, but no loss would be caused to the bank. It is submitted by the learned Senior Counsel for the petitioners that in order to attract Section 60 of the Act, there must be a loss occasioned to the bank and the loss caused to the Society cannot be a cause of action for proceeding against the employees of the bank, like the petitioners herein. He further submitted that though the wording employed in Section 60 of the Act is not satisfactory, since the ultimate order passed by the concerned authority in proceedings under Section 60(1) of the Act results in fixing the liability, the provisions must be strictly construed. The words “breach of trust” and “willful negligence” occurring in the above Section 60 are related to the conduct of the employees of the Co-operative Society only. Though the job chart of the employees of the Co- operative Central Bank include scrutiny of loan applications submitted by the Society, any failure in the discharge of their duties would not attract an action under Section 60 of the Act. The employees of the Co-operative 10 Bank are governed by a settlement entered with the Andhra Pradesh Co-operative Banks Association with their employees and their conduct and service rules are regulated by such settlement. Though a joint notice was issued to the petitioners along with the President and Secretary of the Society, the petitioners stand on a different footing in view of the nature of duties undertaken by them as employees of the Bank. The primary responsibility for the irregularities committed in the affairs of the society rests on the office bearers of the Society and the employees working therein. Though the employees of the bank are connected in the process of sanction of the loans and the bank itself is a Society, no action can be taken against the employees of another Society, “bank” in respect of the irregularities committed in a Society. In any event, the joint and several liability cannot be mulcted on the petitioners. In view of the above, the proceedings taken against the petitioners are held to be without jurisdiction. Accordingly, the Writ Petitions are allowed by setting aside the impugned orders of the Deputy Registrar of Cooperative Societies, Vizianagaram, and confirmed by the Andhra Pradesh Cooperative Tribunal, Visakhapatnam, in so far as the petitioners are concerned. The miscellaneous petitions pending in these Writ Petitions, if any, shall stand closed. There shall be no order as to costs.” 11 10. In the instant case, though the respondents have not passed any order, the case of the petitioner has been deferred only on the ground that proceedings are pending against him. 11. Learned counsel for the petitioner submitted that Regulation 4.12 (iii) of Andhra Pradesh Co-operative Bank Association Staff Service Regulations provides that candidates against whom ACB/criminal proceedings on bank related issues are ongoing shall not be eligible for consideration for promotion. In the instant case, no such proceedings are pending against the petitioner in relation to DCCB. The only proceedings pending are against the Co-operative Society, in which the petitioner name was also included. 12. This aspect was already considered by the Co-ordinate Bench in the above referred judgment and held that in matters pertaining to the societies, employees of the bank cannot be held responsible. 13. Considering the above observations of the Co-ordinate Bench and also on perusal of the record, both the Writ Petitions are allowed directing the respondents to consider the case of the petitioner in accordance with the resolution dated 30.06.2023 12 pertaining to issue No.40 and to effect promotion to the petitioner to the post of Deputy General Manager within a period of two (2) months from the date of receipt of a copy of this order. There shall be no order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed. _______________________ JUSTICE D.RAMESH Date: 17.03.2026 Ivd 13 THE HONOURABLE SRI JUSTICE D.RAMESH WRIT PETITION Nos.26305 and 33378 of 2023 Dated: 17.03.2026 Ivd