HON’BLE SRI JUSTICE G.BHAVANI PRASAD Criminal Petition Nos.5487, 5778, 5836, 5839 and 5843 of 2009 Dated : 26.08.2009 Between : T.Prasad ….. Petitioner V. The State of A.P. ….. Respondent HON’BLE SRI JUSTICE G.BHAVANI PRASAD Criminal Petition Nos.5487, 5778, 5836, 5839 and 5843 of 2009 C O M M O N O R D E R : Heard Smt.K.Sesharajyam, learned counsel for the petitioner, and Sri A.Ramesh, learned counsel representing the learned Public Prosecutor for the sole respondent, in all the criminal petitions. The petitioner is arrayed as the 14th accused/13th accused in C.C.Nos.20 to 24 of 2009 on the file of the IV Additional Judicial Magistrate of First Class, Chittoor, for the offences punishable under Sections 79 (1) (h) r/w. (3) (iii) of the A.P.Co-operative Societies Act, 1964, Section 109 of the Indian Penal Code read with Sections 409, 420 and 477-A of the Indian Penal Code and Section 55-A read with Section 79 (1) (a) & (2), Section 79-A (1) (c) & (2) of the A.P. Co- operative Societies Act, 1964 (for short, ‘the Act’). The other accused are the Ex-Chairman and Ex-Directors of the Chittoor Co-operative Town Bank Limited while the petitioner is the Chief Executive Officer. The petitioner stated that the Board of Directors of the bank were entrusted with the properties of the bank and were in-charge of the day-to-day affairs of the bank. The petitioner worked as the Chief Executive Officer during 27.01.1999 to 01.09.2002 and the auditors pointed out certain defects and irregularities during his tenure based on which the District Co-operative Officer ordered an enquiry in connection with the irregularities for the period from 01.10.2001 to 30.09.2003. The Enquiry Officer submitted his report on 31.01.2005 and while recommending civil and criminal action against the other accused, he did not recommend any such action against the petitioner. However, on the report of the Divisional Co-operative Officer on the strength of the enquiry report, the crime was registered and disciplinary action against the petitioner was also initiated by proceedings dated 13.07.2006 of the Registrar of Co-operative Societies. The disciplinary authority framed 8 charges and the petitioner submitted his explanation. Ultimately after thorough enquiry, the petitioner was exonerated by holding that all the irregularities were committed by the previous Managing Committee with which the petitioner had nothing to do. It was also noted that the Managing Committee had in fact acted against the suggestions and objections of the petitioner in some issues. The petitioner, therefore, submitted that most of the allegations relate to the period when he was not the Chief Executive Officer and even concerning allegations against the petitioner for alleged abetment of the commission of offences, the petitioner had no other option except to implement the resolutions or decisions or orders of the Managing Committee and the Board of Management alone is responsible for such actions and not the petitioner. In view of the exoneration of the petitioner in the disciplinary proceedings, the continuance of the criminal proceedings against the petitioner is an abuse of process of law and the petitioner is not even remotely liable for any of the offences alone. Hence, he sought for quashing of the proceedings against him. The contents of the respective charge sheets also show that the petitioner’s liability for punishment under the provisions of the Act or the Indian Penal Code in respect of misappropriation of funds was consequential to the actions of the Managing Committee in which the petitioner’s participation is in performance of his official duties as the Chief Executive Officer only. The proceedings of the Commissioner for Co-operation and Registrar of Co-operative Societies A.P., Hyderabad, dated 29.11.2007 in Rc.No.15037/2005/G5 show that the petitioner was subject to specific charges concerning the same sequence of events and it was found that the petitioner is not responsible for investment of funds in other Co-operative Urban banks as such investment was made prior to his joining as Chief Executive Officer in the subject bank and as the Board did not take a decision on the issue in spite of the petitioner brining to its notice the circular of the Reserve Bank of India in this regard. It was also found that the petitioner only executed the decisions taken by the Board of Management in its meetings on the scheme of proposed SOD loans and the SOD loans were placed before the Board for sanction. The proposal by the petitioner and the acceptance of the same by the Bank were as per the prescribed procedures, according to the findings. The sanction of advance of Rs.9.81 lacs by the Board was deferred by the Registrar of Co-operative Societies and hence the petitioner was considered not responsible for the same. Similarly, it was also found that there was no violation in purchasing a building in favour of the bank and that the petitioner had in fact taken steps but the Managing Committee did not take necessary steps for rectification of the defects pointed out in the final audit report. The enquiry report also found that the guide lines of the Reserve Bank of India were not communicated and that it was the Managing Committee, which created a lesser sum as reserve for which the petitioner cannot be made responsible. The enquiry report further cleared that the appointments of 19 employees temporarily in the Bank were made by the Chairman and the Board in spite of the petitioner bringing to notice the existing rules. The enquiry report also found that the promotions of employees were also effected against the suggestions of the petitioner with reference to the existing rules. On all these grounds, therefore, it is found that the explanation of the petitioner has to be accepted and consequently the disciplinary action has to be dropped. The proceedings of the Commissioner for Co-operation and Registrar of Co-operative Societies had obviously become final and the exoneration of the petitioner from the charges framed against him, which again formed the subject matter of these criminal petitions, makes it clear that the continuance of the criminal proceedings will be opposed to the interests of justice. The Apex Court held in P.S.Rajya v. State of Bihar[1] where the Central Vigilance Commissioner after a detailed enquiry submitted a report exonerating the appellant of all the charges with which the Union Public Service Commission concurred and final orders were passed, that there is nothing further to proceed in the criminal petition if an identical charge could not be established in a departmental proceeding. The Apex Court noted that the charge in the departmental proceeding and criminal proceedings is one and the same and the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. The Apex Court also referred to State of Haryana v. Bhajan Lal[2] and concluded that the criminal proceedings are not open to be pursued on the facts of the case. In the present case also, while the petitioner was never the primary culprit even according to the prosecution, the exoneration from all the charges framed against him in the departmental disciplinary proceedings, which are identical to the allegations made against him in the criminal proceedings, entitles the petitioner to have the criminal proceedings quashed, as their continuance on the same material and evidence will be unjust and inequitable. Though, any departmental proceeding may not by itself conclude the criminal proceedings, on the peculiar facts of the case and the positive findings in the departmental disciplinary proceedings, the further proceedings against the petitioner are to be quashed in exercise of inherent jurisdiction of this Court under Section 482 of the Code of Criminal Procedure to prevent an abuse of process of law. Therefore, the further proceedings in C.C.Nos.20 to 24 of 2009 on the file of the IV Additional Judicial First Class Magistrate, Chttoor, against the petitioner are quashed and the criminal petitions are allowed accordingly. ________________________ G.BHAVANI PRASAD, J 26th August, 2009 sur [1] (1996) 9 Supreme Court Cases 1 [2] 1992 SCC (Crl) 426