THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.17890 OF 2000 DATED 16TH SEPTEMBER, 2011 BETWEEN I.V.Raghavulu …Petitioner And The District Collector, East Godavari District, Kakinada and others. …Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.17890 OF 2000 O R D E R The petitioner challenges the order dated 21.07.2000 passed by the Andhra Pradesh Co-operative Tribunal, Vijayawada, in O.A.No.153 of 1997 whereby the Tribunal, while remitting the matter back to the authority for reconsideration, in effect, confirmed the liability of the petitioner under the surcharge proceedings dated 18.08.1997 of the District Collector, East Godavari, to pay an amount of Rs.1,74,112.80 ps. for having caused loss to the Kakinada District Co-operative Central Bank Limited, Kakinada. The petitioner worked as the General Manager of the Kakinada District Co-operative Central Bank Limited, Kakinada, (for brevity, ‘the Bank’) during the period 01.01.1993 to 14.06.1995. He was thereafter transferred to the Andhra Pradesh State Co-operative Bank, Hyderabad, and retired from service on 31.05.1996. Pursuant to an enquiry under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for brevity, ‘the Act of 1964’) into the affairs of the Bank, report dated 27.11.1995 was submitted holding the petitioner responsible in connection with the payment of salaries to one Ch.S.Prakasa Rao, the then Assistant General Manager of the Bank by extending his services even after he attained the age of superannuation. Basing thereon, a surcharge notice under Section 60 of the Act of 1964 was issued to the petitioner on 19.09.1996. He responded thereto under his reply dated 18.11.1996. Having considered the same, the District Collector, Kakinada, East Godavari, issued surcharge proceedings dated 18.08.1997 holding him liable to pay the sum of Rs.1,74,112.80 ps. along with interest for having caused loss to the Bank. Aggrieved thereby, the petitioner filed an appeal in O.A.No.153 of 1997 before the Andhra Pradesh Co-operative Tribunal, Vijayawada. The Tribunal, by the impugned order dated 21.07.2000, while remitting the matter to the District Collector, East Godavari, being of the opinion that the President of the Bank and the District Co-operative Officer were also responsible, confirmed the liability of the petitioner as per the surcharge proceedings leading to the filing of this writ petition. By order dated 22.09.2000, this Court granted interim stay of all further proceedings pursuant to the order under challenge. Heard Sri Polavarapu Srinivas, learned counsel for the petitioner, and the learned Government Pleader for Co-operation for the respondents. It is not in dispute that Ch.S.Prakasa Rao attained the age of superannuation on 31.05.1993. He however sought extension of his services by making a representation. Thereupon, the petitioner, being the General Manager of the Bank, informed the President of the Bank of the Settlement Award dated 28.05.1970, which enabled extension of service beyond the age of retirement but only upto the age of 60 years. He also put up a note about the fitness certificate submitted by the employee, the vacancy position and that there was a ban on recruitment. Acting thereupon, the President of the Bank granted extension of service for a period of six months to Ch.S.Prakasa Rao, which was thereafter ratified by the Board of the Bank on 02.08.1993. Again, on 01.12.1993 a further extension was granted to Ch.S.Prakasa Rao. On this occasion also, the petitioner informed the President of the settlement under the Award and again the President granted extension for a further six months which found ratification by the Board of the Bank. A third extension was granted once again for a period of six months on 01.06.1994. At this stage, the petitioner brought it to the notice of the President of the Bank that the Government in its Memo dated 08.04.1994 had instructed all Co-operative Institutions in the State not to employ retired employees without obtaining prior approval of the Registrar of Co-operative Societies. Despite the same being brought to his notice, the President of the Bank extended the services of Ch.S.Prakasa Rao for a further six months. The said employee thereafter retired from service in October, 1994. The petitioner is now sought to be made responsible for the extensions of service given to Ch.S.Prakasa Rao beyond the age of superannuation and on that count, he is also held liable for causing loss to the Bank due to the payment of salaries to the said employee during his extension in service. Perusal of the order of the Tribunal and the surcharge proceedings reflects that the petitioner is held liable on the ground that he failed to apprise the legal position as to the age of retirement of 58 years obtaining under Rule 28(5) of the Andhra Pradesh Co-operative Societies Rules, 1964 to the notice of the President of the Bank at the relevant time. It is however to be noticed that the petitioner did inform the President of the Bank as to the regular age of retirement and the settlement Award whereby extension was permitted beyond such age of retirement upto the age of 60 years. It is pertinent to note that at the time of the third extension, the petitioner also brought to the notice of the President of the Bank that Government instructions had been received prohibiting such employment of retired personnel. Despite this act on the part of the petitioner, the President of the Bank and thereafter, its Board approved the extension of services of Ch.S.Prakasa Rao. Pertinent to note, the District Co-operative Officer himself was a member of the Board of the Bank. In these circumstances, the petitioner cannot be said to have acted in breach of trust or with wilful negligence nor can he be accused of making any payments contrary to the provisions of the Act of 1964, the Rules or the Bye-laws. Further, the facts on record establish that Ch.S.Prakasa Rao did, in fact, work during the period for which his services stood extended and he was accordingly paid for such services. There was thus no loss caused to the Bank on payment of his salary during such extended period of service. It is therefore a misnomer to pin liability on the petitioner on the ground that he caused loss to the Bank to the tune of Rs.1,74,112.80 ps. by the payment of salary to Ch.S.Prakasa Rao. Viewed from any angle, the surcharge proceedings against the petitioner cannot be sustained. The appellate order of the Tribunal confirming the findings against the petitioner is equally unsustainable. The writ petition is accordingly allowed quashing the order dated 21.07.2000 passed by the Andhra Pradesh Co-operative Tribunal, Vijayawada, in O.A.No.153 of 1997 and also the surcharge proceedings dated 18.08.1997 of the District Collector, East Godavari. In the circumstances, no order as to costs. ____________________ SANJAY KUMAR, J. 16TH SEPTEMBER, 2011. PGS/VGSR