THE HONOURABLE SRI JUSTICE P. S.NARAYANA W.P.No.15214 OF 2006 BETWEEN: The Ubalanka Cooperative Rural Bank Ltd., No.X777, Ubalanka, East Godavari District, Rep.by its Secretary … Petitioner and The A.P.Coopertive Tribunal at Visakhapatnam and Two others … Respondents THE HONOURABLE SRI JUSTICE P. S.NARAYANA W.P.No.15214 OF 2006 ORDER: This court issued Rule Nisi on 24.07.2006. This writ petition is filed for a writ of Certiorari calling for records pertaining to the order of the first respondent dated 02.05.2006 made in O.A.No.128 of 2004 in setting aside the order of the third respondent dated 26.12.2003 made in Rc.No.2695/2001-B, while declaring the same as contrary to law, non-application of mind and non-consideration of the relevant material available on record, apart from being violative of the procedure contemplated under the provisions of the A.P.Cooperative Societies Act, 1964 and the Rules made there under and consequently set aside the same and pass such other suitable orders. 2. It is stated that the District Cooperative Officer, Kakinada ordered enquiry under Section 51 of Act 7 of 1964 into the affairs of the petitioner and appointed the Divisional Cooperative Officer, Amalapuram to conduct enquiry under Section 51 of the A.P.Cooperative Societies Act (for brevity the Act), and submit report. The said officer was pleased to conduct a detailed enquiry and submitted a report, dated 17.02.2003. The Deputy Registrar/District Cooperative Officer reviewed the enquiry report vide order dated 31.12.2003, and surcharge proceedings were initiated under Section 60(1) of Act 7 of 1964 vide order dated 26.12.2003, fixing the responsibility on the 2nd respondent herein who was the Secretary of the petitioner. It is further stated that the 2nd respondent participated in the enquiry proceedings pursuant to the surcharge proceedings. However, he did not examine any of the witnesses on his behalf and did not choose to recall any witness examined during the course of enquiry, for cross-examination. The 2nd respondent participated in the enquiry held on 30.08.2003, 08.09.2003, 25.09.2003, 14.10.2003 and 21.10.2003. However, he did not choose to participate on 22.11.2003. Thus, he had an ample opportunity to take all the pleas that are available to him to defend his case in the surcharge proceedings and at no point of time, he raised objections regarding the procedural irregularities either in respect of the statutory enquiry held under Section 51 or surcharge proceedings. Finally, the 3rd respondent passed surcharge order dated 26.12.2003 after considering the explanation submitted by the 2nd respondent, fixing the responsibility on the 2nd respondent. A reading of the said surcharge order would indicate the details of the enquiry, the opportunity given to the 2nd respondent, permission given to him to verify all records, apart from giving opportunity to submit explanation as sought for by him. A categorical finding is given by the competent authority in the surcharge order at page 3 paragraph 2 that Sri Ch.Gangi Reddy was given opportunity to inspect the records pertaining to the case and the explanation submitted by him was taken into consideration for arriving at the observations therein and finally he was found guilty on 14 counts. Hence, the competent authority passed orders under Section 60(1) of the Act, directing Mr. Gangi Reddy to repay a sum of Rs.8,82,905.40ps together with interest @ 18% from the date of occurrence of fraud till the date of realization. 3. Further it is stated that the authority was pleased to consider the admissions made by the 2nd respondent in respect of misappropriation of the funds of the Bank and the payments made by him after the enquiry was initiated, establishing the factum of fraud committed by him. However, having considered the repayment made by the delinquent officer and after deducting the said amounts, the responsibility was fixed for recovery. In fact, the 2nd respondent submitted a detailed letter dated 29.10.2001 to the Manager, D.C.C.Bank, Ravulapalem Branch, admitting the guilt and sought time for repayment of the misappropriated amounts. 4. It is also averred that curiously the 2nd respondent challenged the surcharge order dated 26.12.2003 before the 1st respondent by way of O.A.No.128 of 2004 will all false and frivolous pleas and also suppressed several relevant material facts relevant for proper appreciation of the facts and circumstances of the case. The petitioner filed a detailed counter affidavit narrating the events that have taken place, resulting in misappropriation of lakhs of rupees of the Bank funds and the admissions made by the 2nd respondent. Similarly, the Deputy Registrar also filed a detailed counter rebutting the allegations made in the appeal and categorically stated that the 2nd respondent/appellant utilized the opportunity to verify the record and he participated in the surcharge proceedings from time to time and cannot turn around for the first time in the appeal and complaint that the impugned order therein is liable to be set aside on the ground of violation of principles of natural justice. 5. It is also stated that the first respondent curiously referred to the grounds to appeal and two judgments of this Court and allowed the appeal impugned in this writ petition. A reading of the impugned order would clearly show that the first respondent totally ignored the stand taken by the petitioner as well as the 3rd respondent herein, in support of the surcharge proceedings. The first respondent also totally believed the version of the appellant while ignoring the case of the effected persons including the petitioner. If the first respondent properly looked into the record and carefully verified the impugned surcharge order before it, the finding that the appellant was not given an opportunity in the surcharge proceedings, ought not to have been arrived at. Further, the 1st respondent failed to see that the 2nd respondent admitted the guilt and repaid about half of the amount misappropriated by him. Thus, it is not true to say that the 3rd respondent solely relied upon the enquiry held under Section 51 and passed the surcharge order. So long as an officer who is empowered to conduct enquiry submitted the report after following due process, thereafter the competent authority passed the surcharge proceedings under Section 60 of the Act, more so, after considering the explanation submitted by the 2nd respondent and giving him opportunity to participate in the enquiry. Hence, it cannot be said that the Divisional Cooperative Officer, who was the Enquiry Officer, initiated the surcharge proceedings based on his own enquiry report against the principles of natural justice. At any rate, the 1st respondent totally failed to appreciate the facts and circumstances of the case as a quasi-judicial Authority and as such the impugned order is liable to be set aside on the ground of colourable exercise of power, non-application of mind, non- consideration of relevant material available on record and violation of the provisions of the Act. Taking advantage of the impugned orders, the 2nd respondent is trying to alienate/create third party interest over the properties owned by him. If he succeeds in his nefarious attempts, the petitioner will suffer grave and irreparable loss. In such circumstances, the writ petitioner filed the present writ petition. 6. The A.P.Cooperative Tribunal in O.A.No.128 of 2004 after referring to the grounds of appeal at Paragraph No.3 having formulated the point for consideration at Paragraph No.5 and referred to Section 51 and 60 of the A.P. Cooperative Societies Act and also referred to 1998(1) ALT 482(DB) approving the judgment in 1994(1) APLJ 200 and came to the conclusion that the Deputy Registrar, Cooperative Societies/Respondent No.1 had no authority to pass surcharge proceedings and that the principles of natural justice had not been followed and ultimately allowed the appeal. 7. When certain submissions had been made and when certain payments also are said to have been made and after referring to certain decisions and also after referring to Sections 51 and 60 of the Act aforesaid, especially on the grounds of violation of principles of natural justice, when the appeal be allowed, the A.P.Cooperative Tribunal at Visakhapatnam while setting aside such order should have remitted the matter to the original authority instead of allowing the appeal straight away. It is needless to say that the original authority, the Deputy Registrar, Cooperative Societies, Amalapuram to give opportunity to both parties in this regard and to decide the matter afresh in accordance with law. 8. Accordingly, the impugned order is set aside to the extent indicated above by making an order of remand to the original authority, Deputy Registrar of Cooperative Societies, Amalapuram, to afford opportunity to the parties concerned and decide the matter afresh in accordance with law. It is needless to say that the second respondent is at liberty to raise other appropriate objections also in this regard before the original authority to the said extent. 9. The writ petition is accordingly allowed to the extent indicated above. No order as to costs. _______________ P.S.NARAYANA, J. 16th September 2009 Rns