IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTIETH DAY OF SEPTEMBER TWO THOUSAND AND TEN PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.499 of 2005 Between: S.Krishnanandam, S/o.Ramanjaneyulu, Hindu, Aged about 29 years, Bill Collector (under suspension), R/o.P.Ramadas Buildings, beside J.Sikile School, Roypet, Narsapuram, West Godavari District … Petitioner And The Revenue Divisional Officer & Vice-Chairperson, The Narsapur Cooperative Urban Bank Ltd., Narsapur, West Godavari District … Respondent Counsel for the petitioner: Mr.V.S.R. Anjaneyulu Counsel for the respondent: Smt.Bobba Vijaya Lakshmi The court made the following Order: The petitioner, who was working as Bill Collector in Narsapur Cooperative Urban Bank Ltd., Narsapur, West Godavari District, a Society registered under Andhra Pradesh Cooperative Societies Act, 1964, has filed this Writ Petition questioning validity of order dated 01-12-2004 passed by the respondent-Revenue Divisional Officer and Vice- Chairperson of the said Bank, vide proceedings Rc.No.1/NSP CUB/4. By the aforesaid order, the petitioner was terminated from service on the ground that he was appointed contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationlisation of Staff Pattern and Pay Structure) Act, 1994 and also on the ground that his continuance is in contravention of the provision under Section 116 C of A.P. Cooperative Societies Act, 1964. 2. The petitioner was appointed as Bill Collector vide proceedings dated 04-11-1996, in Narsapur Cooperative Urban Bank Ltd., Narsapur, West Godavari District. On 17-07-2004, he was suspended pending enquiry on the allegation of dereliction of duties, i.e., not taking steps to recover loan amounts. Challenging the order of suspension, he filed W.P.No.21942 of 2004 before this court, in which notice before admission was issued and the same was subsequently dismissed as having become infructuous. 3. It is the case of the petitioner that the impugned order of termination is in violation of the provisions under Andhra Pradesh Cooperative Societies (Amendment) Act, 2001 and his appointment and continuation are not contrary to Section 116-C of A.P. Cooperative Societies Act, 1964. It is his case that in view of the amendments made to A.P. Cooperative Societies Act, 1964, by inserting the provision under Section 116-C and also Rule 28(2) of Andhra Pradesh Cooperative Societies Rules, 1964, the respondent is not empowered to terminate him from service. It is stated that while working out 2% of the working capital or 30% of the gross income, the respondent has not calculated the same as per the Rules. It is his grievance that accumulated losses cannot be taken for the purpose of calculating gross income and the impugned order has been passed without arriving at the gross income as per the Rules. It is stated that as against the order suspending him from service, he has, earlier, approached this court by filing a Writ Petition, in which notice before admission was ordered and thereafter, as a colourable exercise of powers, the impugned order, terminating him from service, has been passed. 4. On behalf of the respondent, counter-affidavit is filed. In the counter-affidavit, it is stated that the petitioner, earlier, filed W.P.No.21942 of 2004 before this court challenging the order of suspension dated 17-07-2004 and the same was dismissed on 23-09-2005. It is stated that the petitioner was appointed as Bill Collector on 04-11-1996 and was earlier suspended for dereliction of duties, on failure of taking legal action against overdue loans, as noticed in the inspection made under Section 52 of A.P. Cooperative Societies Act, 1964. The counter-affidavit further states that the Society was running in losses for the year 2003-04 and it was detected, in the statutory inspection under Section 52 of A.P. Cooperative Societies Act, 1964, that an amount of Rs.53.46 lakhs was misappropriated and it was also found that the retrenched employees were appointed after 23- 11-1993 contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994 and also continuance of the petitioner in service was in violation of the provision under Section 116-C of A.P. Cooperative Societies Act, 1964; hence the impugned order has been passed terminating the petitioner from service, along with 32 others. It is also stated that the petitioner was paid one month salary, which he en-cashed on 10-12-2004 and he had also withdrawn security deposit of Rs.15,710/- on 07-12-2009. It is further stated that as the appointments were made without prior approval from the Registrar of Cooperative Societies and as the respondent-Society is not able to meet the financial stipulation under Section 116-C of A.P. Cooperative Societies Act, 1964, the impugned order has been passed. 5. Heard Sri V.S.R.Anjaneyulu, learned counsel for the petitioner and Smt.Bobba Vijaya Lakshmi, learned standing counsel appearing on behalf of the respondent. 6. It is contended by learned counsel for the petitioner that the expenditure limits prescribed under Section 116-C of A.P. Cooperative Societies Act, 1964 came into picture with effect from 25-04-2001; as such, without even submitting the proposals to the Registrar of Cooperative Societies, no order could have been passed terminating the petitioner from service. It is submitted that when the petitioner was suspended from service without giving any opportunity, he, earlier approached this court by filing W.P.No.21942 of 2004. 7. On the other hand, it is submitted by the learned standing counsel appearing on behalf of the respondent that the very appointment of the petitioner, which was made in the year 1996, was contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994; as such order of termination has been passed. It is submitted that not only the petitioner but also 32 others were terminated from service as the Society was not able to meet the expenditure or pay salaries in view of losses suffered by it on account of misappropriation of huge funds. It is further submitted that in view of serious allegations of misappropriation against the members of the Managing Committee, a Person In- charge Committee was appointed to manage the affairs of the Society. The learned counsel would further submit that as the expenditure limits are crossing the restrictions under Section 116-C of A.P. Cooperative Societies Act, 1964, it is always open to cut short the expenditure of the Society by terminating the services of the persons who are appointed contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994. 8. In this Writ Petition, it is not in dispute that the petitioner was appointed as Bill Collector with effect from 04-11-1996. To regulate appointments and prohibit irregular appointments in offices and Establishments under the control of the State Government, Local Authorities, Corporations owned and controlled by the State Government and other bodies established under a Law made by the Legislature of the State, the State of Andhra Pradesh brought into force a Legislation namely Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994. In view of the provision under Section 2(vi) (e) of the said Act, service in the respondent- Society is included within the meaning of ‘Public Service’. In that view of the matter, it is clear that, for the societies registered under A.P. Cooperative Societies Act, 1964, Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994 is made applicable. In view of the provision under Section 4 of Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994, recruitments are prohibited except from a panel prepared by any Selection Committee constituted for the purpose in accordance with the relevant rules or orders issued in that behalf. However, there is an exception with regard to appointments made on compassionate grounds. 9. Although it is the case of the petitioner that he was appointed in the year 1996, no material is placed before this court showing that a regular selection process has taken place before making his appointment; as such, it runs contrary to Section 4 of Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994. The impugned order of termination of the petitioner from service is passed mainly on the ground that his appointment was made contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationlisation of Staff Pattern and Pay Structure) Act, 1994. In that view of the matter, the Person In-Charge Committee has taken a decision to terminate the employees appointed on or after 23-11-1993, i.e., the date on which the Ordinance came into force, which resulted in Act 2 of 1994. Although it is the case of the petitioner that the proposals of expenditure and staffing pattern are not submitted to the Registrar of Cooperative Societies; by virtue of the provision under Section 116-C of A.P. Cooperative Societies Act, 1964, it is always open to the Cooperative Societies to restrict their expenditure towards pay and allowances of the employees to see that it will not exceed 2% of the working capital or 30% of the gross profits in terms of A.P. Cooperative Societies Act, 1964ual in a year, whichever is less. Merely because proposals were not submitted to the Registrar, that will not prevent Societies to bring down the expenditure within the limits prescribed under Section 116-C of A.P. Cooperative Societies Act, 1964. In view of the reasons stated in the impugned order, namely, that the appointment of the petitioner is contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994 and also the expenditure limits prescribed under Section 116-C of A.P. Cooperative Societies Act, 1964, it cannot be said that the impugned order is passed as a measure of colourable exercise of powers, in view of the earlier approach of the petitioner to this court by filing W.P.No.21942 of 2004. It is the specific stand of the respondent in the counter-affidavit that not only the petitioner but also similarly placed 32 others were retrenched along with him. In view of the reasons stated in the impugned order and also averments made in the counter-affidavit and, further, in absence of any material placed before this court to show that a regular selection procedure has been followed while appointing the petitioner, the said appointment itself should be termed contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994. Though it is submitted by learned counsel for the petitioner that no notice and opportunity was given to the petitioner; as much as it is not in dispute that he was appointed in the year 1996, contrary to the provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994, any interference with the impugned order of termination, will result in restoration of an illegal order of appointment, which runs contrary to the statutory provisions under Andhra Pradesh (Regulation of Appointments to Public Services and Rationlisation of Staff Pattern and Pay Structure) Act, 1994. Though the petitioner has disputed the conclusions arrived at by the respondent, it is to be seen that he has not availed alternative remedy of appeal before the appellate authority and no reasons are assigned by him for his failure to approach the appellate authority. Further, by virtue of the provision under Section 77 of Andhra Pradesh Shops & Establishments Act, 1988, provisions of the said Act are made applicable to Cooperative Societies registered under A.P. Cooperative Societies Act, 1964. It is also to be noted that the respondent-Bank, which is a Society registered under A.P. Cooperative Societies Act, 1964 is not made party, but only the Person In-charge, who is the Vice-Chairperson is only made party-respondent in this Writ Petition. Further, in A. Subramanyam Naidu and others V. Government of Andhra Pradesh and another[1], a learned single Judge of this court, interpreting the provision under Section 116-C (1) of A.P. Cooperative Societies Act, 1964, held that the aforesaid provision is mandatory and any violation thereof will create not only charge on the members of the Managing Committee, but also penal action on all concerned. 10. For the foregoing reasons, I see no reason to interfere with the impugned order, in this petition, under Article 226 of the Constitution of India. 11. The Writ Petition is devoid of merits and is accordingly dismissed. No order as to costs. ___________________ (R. SUBHASH REDDY, J) September 20, 2010 MRR [1] 2005 (5) ALD 682