THE HON’BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION Nos.16777 of 2006 and 28705 of 2008 COMMON ORDER: Petitioners in both these Writ Petitions are one and the same as such they are heard together and being disposed of by this common order. In these Writ Petitions, the petitioners have questioned the proceedings initiated against them in Crime No.52 of 2006 on the file of Phirangipuram Police Station, Guntur District. The petitioners were the Chairman and Supervisor of Takkellapadu Primary Agricultural Cooperative Society Limited in Phirangipuram Mandal, Guntur District. The Joint Registrar/Divisional Cooperative Officer, Guntur, vide proceedings in Rc.No.500/2001-C1, dated 25.01.2002 has ordered inspection into the constitution, working and financial position of erstwhile Takkellapadu PACS, which was merged with Phirangipuram PACS, with special reference to the financial irregularities and misappropriation of funds by the Secretary of the society, by name, T.Subramanyam. The Inspecting officer conducted inspection and submitted his report on 11.11.2002 under Section 52 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short ‘the Act’) indicating the names of the persons, who are responsible for misappropriation of amounts of the society. The same reads as under: S.No. Name of the Person Brief description of the fraud Amount involved Rs. 1. T.Subramanyam, Secretary K.Prasada Rao, Supervisor S.A.O. Loans issued by issuing receipts and not accounted for. 3,35,564-00 2. T.Subramanyam, Secretary K.C.C., NODP and MTC Loan amounts collected and not accounted for but issued recovery statement to the bank 2,18,357-00 3. T.Subramanyam, Secretary False remittance under double remittance 35,000-00 4. T.Subramanyam, Secretary Interest on the amount retained or utilized under president advance refund 13,750-00 5. T.Subramanyam, Secetary Site advance taken 73,000-00 6. T.Subramanyam, Secretary Vehicle advance 43,488-00 7. N.Peda Rama Rao, Chairperson and M a n a g i n g Committee Members and T.Subramanyam, Secretary jointly and severally Interest on retention of cash balance 18,489-00 8. T.Subramanyam, Secretary Arrear salary 36,777-00 9. T.Subramanyam, Secretary Amount collected by issuing receipts and not accounted for and not produced for audit 84,763-00 10. T.Subramanyam, Secretary Cash balance not handed over 40,487-84 11. N.Peda Rama Rao, Chairperson Excess amount of honorarium 3,475-00 Total: 9,05,550-84 Based on the said report, the Divisional Cooperative Officer (FAC), Guntur, issued instructions to the Sub-Divisional Cooperative Officer, Sattenapalli, to file a criminal complaint against such persons. There upon, such complaint was filed and was registered as a case in Crime No.52 of 2006 against the petitioners and the Secretary of the Society, by name, T.Subramanyam, for violation under Section 406 IPC. So far as the petitioners are concerned, as per the contents of the said report, there is an allegation of misappropriation of an amount of Rs.3,35,564/- jointly by the second petitioner and the Secretary of the Society on the ground that they have collected loans by issuing receipts but they have not accounted for. Similarly, there is an allegation of misappropriation of Rs.18,489/- by the first petitioner and the Secretary of the society on the ground that they have illegally retained cash balance. Further, there is also an allegation of misappropriation of Rs.3,475/- against the first petitioner on the ground that he has drawn the honorarium in excess of his entitlement. In these Writ Petitions, it is the case of the petitioners that pursuant to the orders passed by the Divisional Cooperative Officer, Guntur, to conduct inspection into the financial condition of the society under Section 52 of the Act, detailed enquiry was conducted by initiating surcharge proceedings, upon which, the Deputy Registrar of Cooperative Societies, Guntur, passed orders on 31.08.2004 in Rc.No.129/2002-B3, by recording a finding that for the entire misappropriated amount, Mr.T.Subramanyam, who is the Secretary of the society, is responsible and the petitioners are not responsible for the same. It is submitted by the learned counsel for the petitioners that in the light of the final orders passed under Section 60 of the Act and findings recorded therein, there is absolutely no basis to proceed against the petitioners for the alleged offence under Section 406 IPC. I have heard the learned counsel for the petitioners and the learned Government Pleader for Cooperation, and perused the contents of the complaint, which resulted in registration of the case in Crime No.52 of 2006 for the offence under Section 406 IPC and also order, dated 31.08.2004 passed by the Deputy Registrar of Cooperative Societies, Guntur. It is to be noticed that though there is an allegation of misappropriation of Rs.3,35,564/- by the second petitioner and the Secretary of the society jointly, in the final order passed under Section 60 of the Act, a clear finding is recorded stating that the Secretary (under suspension of the society) has collected SAO loan amount of Rs.3,35,564/- and could not record the same into the cash book as such the said amount shall stand recoverable from Sri T.Subramanyam, Secretary of PACS with interest @ 18% from the respective dates shown in the records of the society till the date of realization. With regard to the amount of Rs.18,489/- alleged to have been misappropriated by the first petitioner along with the Secretary, in the order passed under Section 60 of the Act, a finding is recorded that the Secretary of the society is the custodian of cash balance as per the bye-laws of the society and the said amount shall be recoverable only from the Secretary of the society with interest @18% from 31.10.2000. With regard to allegation of excess drawn honorarium, the authority under Section 60 of the Act has recorded a finding that though the first petitioner has drawn an amount of Rs.3,475/- towards excess honorarium, he has already remitted Rs.5,000/- vide receipt No.743204, dated 23.02.2004 as such no further action is necessary. From a perusal of final order, dated 31.08.2004 passed under Section 60 of the Act, it is clear that with regard to the amounts alleged to have been misappropriated, for which the complaint was lodged against the petitioners, for all the amounts, only the Secretary of the society is made responsible and the same is to be recovered from him. In this view of the matter, the complaint which itself is based on the inspection report, cannot be taken as the basis to proceed against the petitioners for the alleged offence under Section 406 IPC as much as full-fledged findings are recorded holding that for all the amounts, the Secretary of the society is responsible, as such, it cannot be said that the petitioners are to be prosecuted for the offence under Section 406 IPC, so far as Cr.No.52 of 2006 registered against them. In that view of the matter, taking into account the findings recorded by the competent authority in order, dated 31.08.2004 passed under Section 60 of the Act, this Court is of the view that it is evidently a fit case to quash the proceedings initiated against the petitioners in Crime No.52 of 2006. For the aforesaid reasons, these Writ Petitions are allowed and Crime No.52 of 2006 registered against the petitioners on the file of Phirangipuram Police Station is hereby quashed so far as they are concerned. No order as to costs. ______________________ R.SUBHASH REDDY, J 13th OCTOBER, 2011. kvni