IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE THIRTY FIRST DAY OF MARCH TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE GODA RAGHURAM WRIT PETITION NO : 10721 of 2001 Between: M. Rama Reddy S/o Abbayi Park Line, Sattenapalli, Guntur District-522 403. ..... PETITIONER AND 1 Joint Registrar/District Coop. Officer Guntur. 2 The Deputy Registrar of Coop. Societies, Guntur. 3 The Guntur District Coop. Central Bank Ltd., Rep. by its General Manager Guntur. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue, a Writ, order or direction more particularly in the nature of Writ of Mandamus declaring that the action of the 3rd Respondent (i.e.) The Guntur District cooperative Central Bank Ltd., Guntur, respresented by its General Manager, in not releasing the gratuity and other retiral benefits due to the petitioner after his retirement on 30-9-2000 AN, as illegal, arbitrary, without jurisdiction, without application of mind, harsh, and capricious, inhuman, unconstitutional and aganist the provisions of Payment of Agratuity Act 1972, besides being violative of Articles 14 & 21 of the Constitution of India and consequently declare that petitioner is entitled for release of all retiral benefit viz., gratuity, including leave encashment, GSLI etc., with the bank rate of interest theron for the delayed payment from the date of accorual till date of actual payment and pass Counsel for the Petitioner:MR.D.V.BHADRAM Counsel for the Respondent No.: GP FOR AGRICULTURE The Court made the following : Oral order: The petitioner retired from service in the status of a Manager of the 3rd respondent-Bank, a District Co-operative Central Bank (the Bank). The Bank, on 12-5-2000, issued the petitioner a charge memo alleging that while he was working as a Supervisor in Rentapally Primary Agricultural Cooperative Society Ltd., colluded with the Paid Secretary of the Society and enabled misappropriation by the Secretary of an amount of Rs.1,35,000/- by way of recommending loans to the borrowers who had already outstanding and unpaid dues of earlier loans. After a due process of domestic enquiry, the Bank by an order dated 23-11-2000 found the petitioner guilty of supervisory negligence and directed him to repay the alleged misappropriated amount of Rs.1,35,000/-, concurring with the conclusions of the Enquiry Officer that the petitioner failed to take proper care in recommending the loans proposed by the Secretary of the society, on account of which negligence of the petitioner, the Secretary could misappropriate the said amount. The 3rd respondent by letter dated 23-11-2000 intimated the petitioner that should the petitioner fail to repay the amount, the Bank would recover the amount from out of the retiral amounts payable to the petitioner. Meanwhile, the petitioner retired from service on superannuation on 30-9-2000. Against the order of the 3rd respondent, the petitioner had preferred appeal dated 29-12-2000 to the Chairperson of the Bank. There has been no order in the appeal and on the 3rd respondent-Bank’s refusal to pay the petitioner the terminal benefits including the gratuity amount, the writ petition is filed. On behalf of the 3rd respondent-Bank, the General Manager has filed a counter-affidavit in August, 2001. According to the counter, the Bank was in the business of advancing loans to farmers through Primary Agricultural Cooperative Societies (i.e., PACS). According to the ordained procedure, the Supervisor of the Bank, after verification of the proposals has to recommend for sanction of loans. A person who had already availed a loan is not entitled for grant of another loan without repayment of the earlier loan. This factorshould be verified by the concerned PACS as well as the Supervisor of the Bank. In grossly negligent performance of this function, the petitioner who previously worked as Supervisor of the Rentapalli Primary Agricultural Cooperative Society had recommended for grant of loan to persons who had already availed loans and failed to repay and has thus caused loss to the Bank. An enquiry under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964 was ordered into the affairs of the society. In the report dated 31-10-1998 the petitioner was found guilty of having recommended loans without verification and thus having caused loss to the society. Pursuant to such report, the 3rd respondent initiated disciplinary proceedings by issuing a charge memo dated 12-5-2000. After a due process including appointment of an Enquiry Officer and conduct of an enquiry, a report was submitted on 29-9-2000 wherein the petitioner was found guilty of supervisory negligence and thus having occasioned loss to the Bank. The report further found that the petitioner by his negligence had facilitated the Secretary of the society to misappropriate Rs.1,35,000/-. As the petitioner was due to retire on superannuation with effect from 30-9- 2000, the 3rd respondent-disciplinary authority by an order dated 28-9- 2000 allowed the petitioner to retire without prejudice to continuance of the disciplinary proceedings. The petitioner was also called upon by a notice dated 23-11-2000 to pay up Rs.1,35,000/-. Thereagainst, the petitioner preferred an appeal to the Board of Management of the Bank. In so far as the gratuity of Rs.2,96,306/- payable to the petitioner, the counter-affidavit of the 3rd respondent states that the said amount was paid up by the Bank in full on 12-7-2001 pursuant to the interim orders of this court in this writ petition. With regard to the other terminal benefits payable, such as, leave encashment and the like, the Bank claims entitlement to recover the amount pursuant to the report of the domestic enquiry. In so far as the gratuity due and payable to the petitioner is concerned, the said area is covered by the provisions of the Payment of Gratuity Act, 1972. The other terminal benefits, such as leave encashment are not statutorily provided for but are part of an arrangement provided by the 3rd respondent-Bank. In Konaseema Cooperative Central Bank Ltd., Amalapuram v. N.Seetharama Raju[1], a Full Bench of this Court had declared the legal position that a District Cooperative Bank is not a State within the meaning of Article 12 of the Constitution. Therefore, the non-statutory obligations of a body like the 3rd respondent, which is not an instrumentality of the State, are not amenable to the public law adjudicatory process under Article 226 of the Constitution. The obligations of the 3rd respondent-Bank under the Payment of Gratuity Act have been complied with. In respect of other obligations, if any, the petitioner has to pursue appropriate remedies in private law. In the circumstances and in view of the fact that the gratuity due to the petitioner has already been paid by the 3rd respondent-Bank, the writ petition is dismissed as regards the other reliefs sought. The petitioner is however, at liberty to pursue appropriate remedy in respect of the other grievances. There shall be no order as to costs. _______________________ GODA RAGHURAM, J 31st March, 2008 GRR To 1.2CCs to 2.2CD copies [1] AIR 1990 AP 171 (FB)