THE HON'BLE SRI JUSTICE P.V.SANJAY KUMAR WRIT PETITION No:16537 of 2004 DATED:14-02-2011 Between: V.Kishan & another. ..... PETITIONERS And The Commissioner for Cooperation & Registrar of Cooperative Societies, Hyderabad & 3 others. .....RESPONDENTS ORDER: The petitioners, the Secretary and Treasurer of DRDA Employees’ Cooperative Credit Society, Nizamabad, filed the present Writ Petition aggrieved by the proceedings dated 08-08-2004 of the Commissioner for Cooperation & Registrar of Cooperative Societies, Hyderabad, sanctioning their prosecution under Section 83 (3) r/w Section 79(A) of the Andhra Pradesh Cooperative Societies Act, 1964 ( for brevity, ‘the Act of 1964’). 2. This Court, by interim order dated 16-09-2004, directed stay of prosecution of the petitioners pursuant to the impugned proceedings dated 08-08-2004. This order was made absolute thereafter. 3. The case of the petitioners is that the Auditor, Co-operative department detected misappropriation of funds of the Society to the tune of Rs.11,88,134/- during his audit of the accounts in February 2004. The President of the Society, according to the petitioners, admitted that he had utilized the misappropriated amounts for his personal use. The Project Director, DRDA, Nizamabad is also stated to have recorded the statement of the President of the Society, wherein he admitted misappropriation of the funds, leading to his suspension from the service of the DRDA. The District Cooperative Officer, Nizamabad ordered an enquiry under Section 51 of the Act of 1964. Pursuant to the report dated 24-07- 2004 of this enquiry under Section 51 of the Act of 1964, the impugned proceedings came to be issued. 4. It is now brought to my notice by Sri P.Giri Krishna, learned counsel for the petitioners, that after the filing of the Writ Petition, proceedings under Section 60 of the Act of 1964 were initiated against the petitioners which culminated in the surcharge order dated 03-02-2007 holding them responsible and liable for recovery of the sums, allegedly misappropriated by them. Aggrieved thereby, they filed C.T.A.No.26 of 2007 before the Andhra Pradesh Cooperative Tribunal, Hyderabad. By judgment dated 02-03-2009, the Tribunal set aside the surcharge order dated 03-02-2007 on the ground that there was a gross violation of the principles of natural justice and the procedure contemplated by the statute. The Tribunal took into account the fact that the petitioners’ explanations were badly rejected as not being satisfactory and no enquiry was conducted in the matter as contemplated in the provision itself. The Tribunal therefore remanded the matter to the surcharge authority directing him to give an opportunity to the petitioners to adduce oral and documentary evidence and to pass a reasoned order after hearing them. This order was passed on 02-03-2009 directing the surcharge authority to pass fresh orders within three months. It is stated by the learned counsel for the petitioners that in spite of the remand the surcharge authority did not complete the proceedings within the time stipulated. 5. In that view of the matter, except for the enquiry report submitted under Section 51 of the Act of 1964, there is no foundation for the sanction to prosecute the petitioners. Taking into account the fact that the President of the Society admitted misappropriation of the entire amount and the surcharge proceedings under Section 60 of the Act of 1964 initiated against the petitioners were set aside in appeal, there is practically no sustainable basis for sanctioning prosecution of the petitioners. 6. The Writ Petition is accordingly allowed setting aside the impugned proceedings dated 08-08-2004. In the circumstances, there shall be no order as to costs. _______________________ P.V.SANJAY KUMAR,J 14th February, 2011. Tsy