THE HON’BLE SRI JUSTICE G.CHANDRAIAH W.P.NO.21291 OF 2007 O R D E R Heard both the counsel. 2. The petitioner was appointed as Paid Secretary in the Koilakonda Primary Agricultural Co-operative Society Ltd., Krishnagiri Mandal, Kurnool District on 12.6.1979 and subsequently, he was transferred to the 4th respondent – society on 2.4.1997. While so, the General Manger, District Co- operative Central Bank Ltd., Kurnool District issued proceedings 14.6.2007 directing the Branch Manager, Dhone to conduct enquiry on the allegation that the petitioner has not given rebate provided by the Government of A.P. Accordingly, the Branch Manager, after conducting enquiry, submitted report stating that the petitioner misappropriated the interest rebate amount provided by the Government of A.P. By letter dated 14.6.2007, the General Manager, District Co-operative Central Bank Ltd., Kurnbool District, advised the 4th respondent – Krsihnagiri Primary Agricultural Co-operative Society, represented by its President, to keep the petitioner under suspension and to file a complaint. Accordingly, the petitioner was placed under suspension by order dated 4.7.2007 and the 4th respondent filed a complaint before the 5th respondent – Station House Officer, Krishnagiri Police Station, Dhone, Kurnool District, who registered the same in F.I.R.No.60 of 2007 for the office punishable under Section 409 and 420 I.P.C. Now the grievance of the petitioner is that without initiating surcharge proceedings under Section 60(1) of the Co-operative Societies Act, based on the proceedings of the 3rd respondent – General Manager dated 14.6.2007, the 4th respondent filed compliant and the same was registered by the 5th respondent. Hence, the writ petition. 3. The only issue for consideration in this writ petition is whether the 4th respondent is justified in filing a complain against the petitioner without initiating surcharge proceedings under Section 60(1) of the Act? 4. The above issue is squarely covered by the judgment of a learned single Judge of this court in W.P.No.4563/2003 dated 4.4.2003, wherein it was held as under: “Chapter VII of the Act provides for audit, enquiry, inspection and surcharge as regards the affairs of any society. Audit, enquiry and inspection are provided for under Sections 50, 51 and 52 of the Act. The results of these steps, do not by themselves give rise to any fixation of liability on the elected representatives or officials of the society. During the course of these steps, the persons who are tentatively found to have misappropriated the amounts are neither provided an opportunity nor issued notices. On the basis of the outcome of the audit, enquiry or inspection, as the case may be, surcharge proceedings under Section 60 of the Act are required to be initiated. It is in the surcharge proceedings under Section 60 that the persons against whom the liability is sought to be fastened, are issued notices. 5. The surcharge proceedings have not yet been initiated against the petitioner. The 1st respondent had addressed the impugned proceedings to the 3rd respondent to initiate criminal proceedings against the petitioner even before the initiation of surcharge proceedings against the petitioner. It is only when the authority that had initiated proceedings under Section 60 of the Act fixes or apportions the liability of an individual, that such individual can be said to have misappropriated the funds of the society. Till such an exercise is undertaken, the question of prosecuting the Member of the Society or its Managing Committee does not arise. 6. Hence, the impugned proceedings are set aside. It is however left open to the respondents to initiate proceedings if in the proceedings under Section 60 of the Act, the liability against the petitioner is fixed and if he fails to discharge the same.” 7. From the above judgment of this court it is clear that without fixing the liability on the individual by initiating the surcharge proceedings under Section 60 of the Act, no criminal proceedings can be initiated and however, in the event of fixing the liability under the surcharge proceedings, it is open to the respondents to initiate criminal proceedings. 8. In view of the above facts and circumstances, the impugned proceedings of the 3rd respondent dated 14.6.2007 in Opr/Misc/07-08dated 14.6.2007 directing the 4th respondent to file criminal complaint and the subsequent filing of complaint in F.I.R.No.60/2007 dated 25.8.2007, are set aside. 9. However, it is needless to observe that if the petitioner is found guilty in the surcharge proceedings under Section 60 of the Act, it is open to the respondents 1 to 4 to initiate criminal proceedings in accordance with law. 10. The writ petition is accordingly allowed. No costs. AVS ---------------------------------- 06—04—2011