WP(C) 3147/2010 BEFORE THE HON’BLE MR JUSTICE B.K. SHARMA 1. Both the writ petitions being inter connected have been heard an alogously and are disposed of by this common judgment and order. Facts involved in W.P. (C) No. 3147/2010 2. In this writ petition the petitioner is aggrieved by his removal from th e Chairmanship of Assam State Cooperative Union by the impugned order dated 29. 05.2010 (Annexure-H). The Assam State Cooperative Union (hereinafter referred to as the Union) which is a State Cooperative Union is primarily concerned with th e promotion and development of the cooperation movement in the State of Assam. T he said Union is managed and run by the managing committee. On expiry of the ter m of the earlier managing committee on 26.06.09, the petitioner was elected as t he Chairman in the Annual General Meeting (AGM)/ election. The proceeding of the AGM in which the election was also held electing the petitioner as the Chairman was approved by the Registrar of Cooperative Societies, Assam vide Annexure-B l etter dated 01.07.09. 3. Being aggrieved by the proceedings of the election and the results there of, some of the members of the Society/Union made a petition dated 21.07.09 to t he Registrar for review of the approval contained in the aforesaid Annexure-B le tter dated 01.07.09. The petition was rejected by order dated 22.09.09 against w hich an appeal under Section 80 of the Assam Cooperative Societies Act, 1949 was preferred to the Govt. of Assam in the Cooperation Department. 4. The aforesaid appeal having not been decided for a considerable period o f time, the aggrieved persons invoked the writ jurisdiction of this Court by fil ing a writ petition registered and numbered as W.P.(C) No. 1885/2010. The writ p etition was disposed of by order dated 19.03.2010 with a direction to dispose of the appeal within 45 days. Pursuant to such direction, the Deputy Secretary to the Govt. of Assam in the Cooperation Department by his order dated 12.04.2010 d irected the parties including the present petitioner to appear before the Secret ary to the Govt. of Assam in the Cooperation Department on 20.04.2010 for hearin g of the appeal. 5. When the instant writ petition was filed, the appeal was not disposed of , but in the meantime the Secretary, Cooperation Department issued a show cause notice to the petitioner under Section 39(B) (B)(1) of the Act asking the petiti oner to submit his written statement of defence. By the said show cause notice, four charges were levelled against the petitioner. For a ready reference the sho w cause notice dated 11.03.2010 is reproduced below: Show cause notice You are hereby required to show cause under Sec 39 (B)(1) of the Assam Cooperati ve Socities Act, 1949, as to why you shall not be removed from the Chairmanship of the Assam Cooperative Union on the following charge based on Report submitted by Registrar of Cooperative Societies, Assam and enquiry report submitted by Jt . Registrar of Cooperative Societies. Charge No.1: That during your tenure as Chairman, the Assam State Cooperative U nion had received a total Rs. 14,76,025/- (Rupees Fourteen Lakhs Seventy Six Tho usand Twenty five) only from the National Coopeative Union of India towards re-i mbursement of 50% of expenditure borne by ASCU for organizing various training p rogrammes by cooperatives training centres, under the Central Sector Scheme for Cooperative Education and training of Govt. of India. Out of this amount receive d from NCUI only Rs. 2,41,000/- has been recorded in cash book as received . Th e rest amount Rs. 12,34,825/- has not been recorded in same cash book. The Case Book in which the fund received from NCUI is recorded cannot be termed as Sub Ca sh book. Maintenance of three cash Books, one main and two sub Cash Books have b een found to be irregular. This receipt from NCUI has not been reflected in the report of the internal Auditor as placed in the General Meeting. Besides, disbur sement to District cooperative Unions were made in cash instead of cheque/ draft in breach of financial discipline. Charge No. 2: As per report, the Training Programmes were conducted in violati on of the terms and conditions of the Sanction order. As per sanction order, the programmes are to be carried out through ACTI, but due to lack of infrastructur e the training was conducted through District Union on behalf of ACTI. On test scrutiny by the enquiry officer, it is found that the Guwahati D istrict cooperative Union and Nagaon cooperative union, maintenance of programme wise separate accounts have not been found to be marinated. Therefore the total expenditure made on the programme could not be authentic. All disbursements are made in cash. The highest recipients of sums are Guwahati and Nagaon District Coop. Un ion. But the cash book of these two District Unions do not reveal to have receiv ed the amount. There is no records in the Guwahati and Nagaon District Cooperative Unio n to show that training programmes were conducted. The expenditure on teaching materials/aids and critical repairs/ renovat ion have not been recorded in the cash book and purchases were made without foll owing any rules. The expenditure are not certified by the CEO. Charge No. 3: The enquiry report shown that there is no records as to how much amount were raised as corpus fund. The receipt books have not been returned leav ing scope for further collection of amounts. Charge No. 4: The report shown that ASCU has not maintained any record regarding holding of AGM by the District Unions. The enquiry reveals that District Unions have not convened AGM since long which means allocation taken by these Unions a fter expiry of tenure of last elected Committee are irregular. You are hereby asked to submit your written statement in defence within 10 (ten) days from the date of receipt of this communication failing which neces sary action will be taken against you as deemed fit 6. On receipt of the said show cause notice, the petitioner submitted his w ritten statement of defence dated 06.04.10 (Annexure- E) which is also reproduce d below: To Dated 06.04.2010 The Secretary of the Govt. of Assam Co-operative Department Dispur, Guwahati (Assam) Sub: Submission of written statement of defence against the show cause notice Ref: Your letter No. Co-op. 74/97/261 dated 1.03.2010 Sir, In response to your subject & reference letter cited above, I would like to laid a few points regarding the matter above and to submit the answer of show cause notice for your perusal and necessary action. That, Sir as a president of ASCU I have not received any letter from the concern ing authority during the period of enquiry. Without involving me in the enquiry process I have got the show cause notice from your end. As per bye laws of the A ssam State Co-operation Union the management committee and president of ASCU has got some duties and responsibilities under Sec. 14 (a) bye laws of ASCU. The ma nagement committee is the policy makers only. So, far my knowledge is concerned the following parawise comment on the show cau se notice forward for your perusal and necessary action. Answer to the Show cause Charge No. 1 During the tenure of my presidentship, the state Co-operative Union had received a total amount of Rs. 14,76,025/- up to 31st March, 2009 as per Bank pass book of the A/c maintain for the purpose. Out of this amount an amount of Rs. 2, 41,0 00/- has been recorded in the main cash book of ASCU at the initial stage (Recei ved before 31st March, 2008). The amount paid as reimbursement against the train ing programme conducted at Sibsagar, Morigaon, Dibrugarh, Nalbari, Guwahati to m eet up the expenditure of various training programme hold as said places and col lected proper receipt and vouchers against each camp. At the initial stage we ha ve not got the details guideline of the NCUI and the rest amount Rs. 12,34,825/- received after 31st March, 2008, has been recorded in a separate cash book as p er guideline collected from NCUI (Guideline enclosed page No. 8 (XXIV) Annex-II) . It can be mentioned here that it was also reflected in the Balance Sheet and c ash amounts of the main Cash Book. That Sir, the Central Sector Training Programme under NCUI started from the 1st year of the 10th plan and due to lack of infrastructure facility of ACTI , Assam was deprive the said training during the said plan. After holding the ch air of president of ASCU, myself including my officer invited to a regional conf erence of NCUI hold at Arunachal Pradesh by November 2008, where the president o f NCUI suggested us to conduct training programmes particularly in Assam under t he principal ship of ACTI Joysagar (Assam). After returning from the conference I was holding a DCEDO’s meeting and to give the responsibilities to conduct trai ning as per as possible. According a resolution was adopted by the (Resolution e nclosed Annexure-III) The amount received from NCUI during the year 2007-08 and 2008-09 audite d (as per guideline) by a Chartered Accountant and audited utilization on certif icate sent NCUI for their information and necessary action. Till date no audit o bjection raised on ASCU/ACTI, for which they have approved the running financial years calendar of proposed programme. The receipt of NCUI has not been reflected in the report of the internal auditor as placed in the General meeting due to maintenance of separate A/c. as per guideline and sectioning letter received from NCUI. The training programme conduct under Central Sector Training was reflect ed in the secretarial report disclosed in the same AGM- (Secretarial report encl osed in the Annexure-V) (Annexure-VI & VII enclosed) Due to some technical difficulties the fund disbursement made by cash not in Dra ft/Cheque, i.e. we have to incur expenditure against grants received from NCUI u nder Central Section Scheme of Co-operative education and training in the follow ing head 1) Study Material 2) Stationery 3) Payment of Guest faculty 4) Payment of Training (TA &DA) 5) Boarding expenses on trainees 6) Lodging Expenses 7) Hired Vehicle (Field training) 8) Traveling Exp. Of faculty 9) Hiring charges on training aids (Computer class room etc.) 10) Other institutional expenses That is why it is not possible to incur expenditure by cheque/ draft. In this re gards page No. 21 of the Guideline is enclosed herewith. Answer to the show cause Charge No. 2 The training programme were conducted peripatetically under principal ship of AC TI Joysagar. The fund release for the purpose distributed as cash disbursement against the proper receipt and voucher due to lack of infrastructure and shorta ge of staff ACTI, Joysagar. On behalf of ACTI the ASCU has maintain a separate A /c and separate cash book and audited the A/c. as per suggestion of NCUI. All the District Co-operative Union would not be able to come forward for conduc t central sector training programme due to pre-expenditure incurable in the prog ramme as per Guideline (Annexure-II - Sec (VI)). Programme wise separate A/c not only maintained by Guwahati and Nagaon DCU the e ntire amount released from ASCU, disbursed as cash against the each training pro gramme hold at different venue after receiving proper receipt and voucher for fu ture record and Audit by ASCU all the records maintain in our office separately on behalf of ACTI. So the DCUs not maintain the separate records, the enquiry of ficer probably not enquired the matter at ASCU. Due to ignorance of the DCUs the y have not retain photocopy of the receipt & vouchers of central sector training programme in future the matter will be taken seriously. The expenditure incurred for teaching aids/ critical repairs/ renovation have be en recorded in the same separate cash book (as mentioned earlier) and purchases were made following rules. Due to shifting of our office and paucity of place so me records have been misplaced. Answer to the Show cause charge No. 3 An amount of Rs. 1 (one) lakh received against corpus fund have been already sen t to NCUI and all the receipt books are available in the office records. But a f ew receipt books yet to receivable from the recipients for which notice issue/as ked to recipients for early submission. The deposited amount at NCUI published i n the NCUIs mouth piece. (enclosed page no in the Annexure- VIII). Answer to the Show cause charge No. 4 The ASCU maintain the records of adopted particular resolution from every DCU (a s mentioned in the notice of AGM) approved by the concerning ARCs of concerning district which is required for represent the AGM of ASCU hold on 26.06.2009. (The notice of AGM and some approved resolution appended for your convenience at Annexure-IX). The District Co-operative Union are registered under the Co-operative Societies Act, 1949 and they have got their own independent bye laws. The responsibilities of Audit inspection supervision vested in the ARCS of the concerning districts. The State Co-operative Union has no rights to inspect audit holding of AGM etc. except supervision of training education, publicity and propagandas works. The D istrict Co-operative Union has got affiliation from Assam State Co-operative Uni on as per national policy adopted. Respondent Sir, so far may knowledge is concerned, I offer my duties and respons ibilities for development of Co-operative movement as a whole and I would like t o request you if anything wrong unknowingly seeks you kind co-operation and co-o rdination and the under signed may not be removed from the chairmanship of the Assam State Co-operative Union. Thanking you, Yours cooperatively Sd/- (Shri Kiran Kakati) President Assam State Co-operative Union Guwahati 7. According to the petitioner he had submitted an additional reply to the show cause notice vide his Annexure-G letter dated 29.05.2010 which is also repr oduced below: To, The Secretary Department of Co-operation Govt. of Assam, Dispur Date: 29.05.2010 Sub: Additional reply to the Show Cause Notice dated 11.03.2010 under No. COOP. 74/97/261 Ref: 1) My reply dated 06.04.2010 & 2) Order dated 23.09.2009 issued by the Additional Registrar of Co-operative Societies. Sir, With due respect and in addition to and without prejudice to the sand already ta ken by the undersigned, following contentions are raised for your kind considera tion. That Sir, in the above show cause notice, while contemplating exercise o f powers conferred under Section 39 (B) (1) of the Assam Co-operative Societies Act, 1949, it has been specifically mentioned that the charges were framed on th e basis of reports submitted by the Registrar of Co-operative Societies, Assam a s well as on an enquiry report submitted by the Joint Registrar of Co-operative Societies. However, till date no copy of such reports has been furnished to the undersigned, as a result of which the undersigned has been placed in a comparati vely disadvantageous position. As such, it is respectfully prayed that the under signed may be furnished with copies of such reports so as to adequately defend t he charges levelled in the show cause notice, else same would result in gross vi olation of the principles of natural justice. That Sir, in connection with the same incidents, the Additional Registra r of Co-operative Societies vide letter under reference has already held that th e records of the Society goes to show that there is no defalcation of any fund r eceived by the society. Moreover the undersigned has reliably come to learn that the Registrar and the Joint Registrar has already deposed before you goodself a nd has submitted in favour of the undersigned. As such, the statement deposed by the Registrar as well as any officer of his department may also be provided to the undersigned as to submit effective reply to the charges. That without admitting but assuming that some instance of irregularities have been found in the functioning of the society, same being a collective acti vity/ decision, any responsibility cannot be fixed upon the under signed. In view of the above, your goodself is requested to look into the above aspect of the matter, including furnishing of reports submitted by the Registrar and Joint Registrar before any final decision is taken upon the above show caus e notice. 8. After the aforesaid process, the impugned Annexure-H order dated 29.05.2 010 was passed removing the petitioner as Chairman under Section 39(B)(1) of the Act and the Registrar of the Cooperative Societies, Assam was directed to take over the whole charge of the Chairman of the Cooperative Union till election of a new Chairman. The impugned order dated 29.05.2010 is also quoted below: GOVERNMENT OF ASSAM DEPARTMENT OF COOPERATION ORDERS BY THE GOVERNOR No. Coop 74/97/308 Dated Dispur, the 29th May, 2010 WHEREAS various allegations including serious financial irregularities w ere received against the Assam State Cooperative Union, headed by Shri Kiran Kak ati. The Govt. of Assam, Cooperation Department ordered to Registrar of Coope rative Societies, Assam to conduct a through enquiry into these allegations, and WHEREAS the Registrar of Cooperative Societies, Assam had submitted a re port (Vide No. CMP 7/2006/244, dated 6th February, 2010) alongwith an enquiry re port, conducted by a Senior Officer, i.e. Joint Registrar of Cooperative Societi es (H.O.) and WHEREAS the enquiry reports pointed out and held serious irregularities including financial irregularities/misuse of grant from NCUI to the extent of Rs . 12,34,825/- for which the President of Assam State Cooperative Union is mostly responsible and therefore notice under Sec. 39(B) of the Assam Coop. Societies, 1949 was issued to Shri Kiran Kakati, Chairman, Assam State Cooperative Union t o show cause as to why he shall not be removed from the Chairmanship of Assam St ate Cooperative Union on specific charges (vide No. Coop. 74/97/261 dated 01.03. 2010) and WHEREAS reply submitted to the show cause notice by Sri Kiran Kakati, Ch airman, Assam State Cooperative Union is not at all satisfactory the State Govt. is inclined to hold that continuance of Shri Kiran Kakati as Chairman of Assam State Cooperative Union shall be against the interest of Cooperative Movement o f the State and therefore. The Governor of Assam is in the interest of Cooperative movement of the state and in the interest of public Service pleased to order that Shri Kiran Kak ati, Chairman, Assam State Cooperative Union be removed from Chairmanship under Sec. 39 (B) (1) of the Assam Cooperative Societies Act, 1949. The Governor of Assam is further pleased to order under Sec. 31(3) of th e Assam Cooperative Societies Act, 1949 that the Registrar of Cooperative Societ ies, Assam shall takeover and hold charge of Chairman, Assam State Cooperative U nion till a new Chairman is elected. Sd/- Secretary to the Govt. of Assam Cooperation Department. Facts involved in W.P. (C) No. 3588/2010 9. In this writ petition the challenge is Annexure-O order dated 09.06.2010 by which managing committee of the Cooperation Union itself has been dissolved on the ground of the AGM/election earlier held being illegal. The order has been passed in the appeal preferred under Section 80 (3) of the Act about which ment ion has been made above. As noted above, the appeal was preferred against the or der dated 22.09.09 by which the petition for review of the decision contained in letter dated 01.07.09 conveying the approval to the AGM/election was challenged . The petition having been rejected by the aforesaid order dated 22.09.09, the a ppeal was preferred. As the appeal was not disposed of, the aforementioned writ petition (W.P.(C) No. 1885/2010) was preferred in which the order was passed for disposal of the appeal within the stipulated period following which parties wer e directed to appear before the authority for hearing which they accordingly did . On conclusion of the hearing, the authority passed the impugned order dated 09 .06.09 dissolving the elected body. Stand of the Respondents 10. In both the writ petitions the respondents both official and private, ha ve filed their counter affidavits to which the petitioners have also filed their reply affidavits. The stand of the respondents, in a nutshell is that the impug ned decisions have been taken on the basis of the materials available on records . It has been stated that the appeal was disposed of upon hearing both the parti es. As regards the allegation of the petitioner that the enquiry report which fi nds mention in the impugned appellate order dated 11.03.2010 was not furnished t o the petitioner and that he was also not associated in the proceedings of the s aid enquiry, the stand of the respondents is that the show cause notice itself d id mention about the contents of the enquiry reports making the petitioner aware of the contents thereof and consequently the petitioner had full knowledge of t he same based on which he also submitted his written statement of defence. It ha s also been stated that the petitioner on receipt of the show cause notice had p rayed for extension of time till 05.04.2010 for submitting written statement and the same was allowed. It has also been stated that as per the information furni shed by the enquiry officer, prior intimation was given to the petitioner and th e enquiries made by him were also met with. 11. As regards the dissolution of the managing committee of the Union, it h as been stated that the impugned order was passed on the basis of the materials on records and that there was no infirmity in the procedure adopted towards pass ing the said order. The respondents in their affidavits have also annexed certai n documents in support of the impugned orders. 12. I have heard Mr. I. Choudhury, learned counsel appearing for the petitio ners as well as Mr. U. Bhuyan, learned Sr. counsel assisted by Ms. A. Hazarika r epresenting the private respondents. I have also heard Ms. R. Chokraborty, learn ed Addl. Sr. Govt. Advocate and Ms. H.M. Phukan and Mr. R.K. Borah, learned Stat e counsel appearing for the official respondents. I have also gone through the e ntire records produced by the learned State counsel. W.P.(C) No. 3147/2010 Basic ground of challenge and findings 13. The basic grounds of challenge to the impugned order dated 29.05.2010 (A nnexure-H) involving W.P.(C) No. 3147/2010 is that the petitioner was not appris ed of the reports which finds mentioned in the order. it is in this context, the petitioner has referred to Annexure-G additional reply to the show cause notice dated 11.03.2010 in which the documents pertaining to the enquiries and the enq uiry reports was requested to be furnished. It will be pertinent to mention here that by the show cause notice dated 11.03.2010, the petitioner was granted 10 d ays time to submit written statement of defence which the petitioner submitted o n 06.04.2010. As noted above, earlier he had prayed for time to file written sta tement. Extension of time was prayed till 05.04.2010 and the same was allowed. T hereafter he submitted the written statement on 06.04.2010 answering each and ev ery charge in details. The written statement was furnished without any reservati on regarding non-furnishing of any documents and/or the reports. It was after tw o months the petitioner submitted the purported additional reply on 29.05.2010 a sking for documents/reports mentioned therein without pointing out as to the rel evance thereof. 14. Apart from the fact that the proceedings under Section 39 (B) (1) of the Act being not a proceeding like that of a departmental proceeding, it is the st and of the respondents that the petitioner was duly apprised of the enquiry. Fur ther, the show cause notice itself clearly mentioned that the charges had been b rought on the basis of the reports mentioned therein. The contents of