*THE HON’BLE Ms. JUSTICE G. ROHINI + WRIT PETITION No.22958 OF 2007 % 02/09/2008 # 1. Ch. Veerabhadreswara Rao and 7 others. … Petitioners Vs. $ 1. The Govt. of A.P., represented. by its Principal Secretary, Industries & Commerce (Handlooms and Textiles), Secretariat, Hyderabad., and 3 others. .. Respondents < Gist > Head Note: ! Counsel for the petitioners : Sri A.V. Sesha Sai ^ Counsel for the respondents : G.P. for Industries & Commerce, and Smt. Bobba Vijayalakshmi s Cases referred : --- THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.22958 OF 2007 ORDER: The 1st petitioner herein is a member of the 4th respondent Co-operative Society; whereas the petitioners 2 to 8 are its employees. In the election held on 14.02.2003 one Jana Nagamallaiah was elected as President of the society. On the basis of a complaint made by the said President, the 2nd respondent ordered statutory enquiry under Section 51 of the A.P. Co-operative Societies Act, 1964 (for short, “the Act”) into the constitution, working and ﬁnancial position of the 4th respondent society for the period from 1995-96 to February, 2003. Pursuant thereto, an enquiry was conducted and a report dated 14.05.2004 was submitted stating that the 1st petitioner herein who was the ex-President of the society with the help of the staﬀ of the society misappropriated amounts in two exhibition sales. Basing on the said report, the 2nd respondent directed the 3rd respondent to take civil and criminal action against the concerned under the provisions of the Act. Accordingly, the 3rd respondent commenced surcharge proceedings under Section 60 of the Act and issued notice dated 17.06.2005 to all the petitioners herein calling upon them to show-cause as to why a sum of Rs.6,87,186/- should not be recovered from them. The petitioners submitted their explanation and during enquiry, the Enquiry Oﬃcer, who conducted the enquiry under Section 51 of the Act and submitted his report dated 14.05.2004, gave evidence as P.W.1 on behalf of the authorities. At that stage, the petitioners herein made a representation dated 1.04.2007 to the 2nd respondent requesting to appoint an oﬃcer higher in rank to P.W.1 to conduct the enquiry under Section 60(1) of the Act. Alleging that the said request of the petitioners was not considered, the petitioners earlier ﬁled W.P.No.15968 of 2007. The said writ petition was disposed of at the stage of admission by order dated 31.07.2007 with a direction to the 2nd respondent to pass appropriate orders on the representation of the petitioners, dated 1.04.2007 within a period of four weeks. In the meanwhile, though the enquiry was allowed to be proceeded by the 3rd respondent, this Court ordered that no final orders shall be passed. In pursuance thereof, the 2nd respondent passed the impugned order dated 12.09.2007 rejecting the request of the petitioners for appointment of an Enquiry Oﬃcer who is superior in rank to P.W.1. The said order dated 12.09.2007 is challenged in this writ petition contending inter alia, that the 2nd respondent failed to properly appreciate the apprehension of the petitioners that there is every likelihood of departmental bias. While pointing out that though the petitioners requested to furnish six documents which are crucial for the surcharge proceedings initiated against the petitioner, the 3rd respondent made available only four documents, the petitioners alleged that non-furnishing of important documents as prayed for by the petitioners, demonstrated arbitrary attitude on the part of the 3rd respondent and, therefore, on that ground continuation of the 3rd respondent as Enquiry Oﬃcer under Section 60 of the Act is irrational and unreasonable. On behalf of the 3rd respondent a counter aﬃdavit is ﬁled stating that the enquiry has been commenced as contemplated under Section 60 of the Act by examining the Enquiry Oﬃcer in chief and marking relevant documents. It is also stated that since the Enquiry Oﬃcer is presently working as the Principal of Sri Pragada Kotayya Indian Institute of Handloom Technology, Venkatagiri, Nellore District and he is not having any administrative control over the 3rd respondent, the allegation of the petitioners that the 3rd respondent cannot be expected to hold the enquiry independently, is incorrect. It is further stated that the 3rd respondent had never acted in any manner prejudicial to the enquiry and that the allegation of departmental bias is absolutely false and without any basis. With regard to the alleged non- furnishing of documents sought by the petitioners, it is explained that the two documents sought by the petitioners could not be furnished, as they were not available on ﬁle. It is further stated that having participated in the enquiry and cross-examined the Enquiry Oﬃcer, the present writ petition is ﬁled with all false allegations only to stall the enquiry proceedings. On behalf of the 4th respondent-society a separate counter-aﬃdavit has been ﬁled on the same lines stating that since the surcharge proceedings initiated against the petitioners relate to the loss caused to the society to the tune of Rs.14,26,064/-, any further delay in concluding the enquiry would adversely aﬀect the interest of the society. I have heard the learned counsel for both the parties and perused the material on record. Under Section 60 (1) of the Act which deals with surcharge proceedings, the Registrar himself or any person specially authorized by him in this behalf may enquire into the conduct of any person or oﬃcer who is entrusted with the aﬀairs of the society and alleged to be misappropriated the funds of the society and make an order requiring him to repay or restore the money or property with interest. In the case on hand, surcharge proceedings under Section 60 (1) of the Act were initiated against the petitioners on the basis of the enquiry report dated 14.05.2004 submitted by the Deputy Director of Handlooms and Textiles, Visakhapatnam. It is true that the 2nd respondent herein/Commissioner & Director of Handlooms and Textiles, who is the Registrar under the Act authorized the 3rd respondent/Assistant Director of Handlooms and Textiles to conduct surcharge proceedings under Section 60 of the Act. It is also true that the 3rd respondent is a subordinate oﬃcer to the Deputy Director of Handlooms and Textiles on whose report proceedings were initiated and who was examined as P.W.1 during enquiry. However, the mere fact that P.W.1 is superior in rank by itself does not disqualify the respondent No.3 to conduct the enquiry under Section 60 (1) of the Act. As noticed above, under Section 60 of the Act the Registrar can specially authorize any person to conduct the surcharge proceedings and there is no other provision under the Act, which mandates that such person shall be superior in rank to the oﬃcer on the basis of whose report surcharge proceedings are initiated. May be that, subordinate status of the enquiry oﬃcer is one of the circumstances which may give rise to departmental or administrative bias, however such bias cannot be inferred on a mere allegation or suspicion. Though the bias need not be established as a fact, the law is well-settled that a real likelihood of bias must be made to appear by the party complaining (See AIR 1975 SC 425, AIR 1987 SC 454 and AIR 1988 SC 1099). In the case on hand, the 3rd respondent in conducting the proceedings under Section 60 (1) of the Act is discharging the function under a Statute having been legally authorized by the Registrar. The apprehension of the petitioners as to departmental bias was already considered by the 1st respondent and was held to be hypothetical and without any basis. Moreover, the Deputy Director of Handlooms and Textiles, who gave evidence as P.W.1 is not holding any administrative control over the 3rd respondent as on today. Hence, it cannot be held that there is any real likelihood of bias as apprehended by the petitioners on any of the grounds raised by the petitioners. The 1st respondent, therefore, cannot be held to have committed any error in rejecting the request of the petitioners for appointment of an enquiry oﬃcer who is superior in rank to P.W.1. Accordingly, the writ petition is dismissed. No costs. 02.09.2008. Kgr Note:- LR copy to be marked. (B/O) gbs