IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE SECOND DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE C.V.RAMULU WRIT PETITION Nos.28018 and 28019 of 2005 WRIT PETITION No.28018 of 2005: Between: B.Rajeswara Rao, S/o.Veeraiah, R/o.10-37, Vinayaknagar Colony, Balanagar, Hyderabad. ..... PETITIONER AND 1 A.P. Cooperative Tribunal, Hyderabad. Rep by its Chairman. 2 The Deputy Registrar / Divisional Cooperative Officer, Hyderabad West Division, Mehdi Gate, Mehdipatnam, Hyderabad. 3 P.Vijaya Bhaskar Reddy, Kranti CUB Ltd., Balanagar, RR.District. 4 The Chief Executive Officer, Kranthi Cooperative Urban Bank Ltd., Balanagar, 4-49/1, 1st Floor, RR.District. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Certiorari or any other appropriate writ and quash the order passed by the 1st respondent A.P Cooperative Tribunal, Hyderabad, in C.T.A.No.19 of 2002 dt.5-9-2005 and also the order of cessation of membership passed by the 2nd respondent in R.C.No.2679/94-D dt.26-11-2001 as null and void and direct the 2nd respondent not to interfere with the functioning of the petitioner as Member of the Managing Committee of the 4th respondent Bank, grant such other relief as it deems fit in the circumstances of the case. WRIT PETITION No.28019 of 2005: Between: B.Rajswara Rao S?o.Veeraiah R/o.10-37, Vinayakanagar colony Balanagar, Hyderabad ..... PETITIONER AND 1 A.P. Cooperative Tribunal, Hyderabad rep.by its Chairman. 2 The Deputy Registrar/Divisional Cooperative Officer, Hyderabad West Division, Mehdi Gate, Mehdipatnam Hyderabad 3 P.Vijaya Bhaskar Reddy, Ex-Chief Promoter, Kranti CUB Ltd Balanagar, Ranga Reddy District 4 The Chief Executive Officer, Kranthi Cooperative Urbna Bank Ltd., Balanagar, 4-49/1,1st floor, Ranga Reddy District. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a writ of Certiorari or any other appropriate writ and quash the order passed by the 1st respondent A.P. Cooperative Tribunal, Hyderabad in C.T.A.No.194 of 2001 dated 5.9.2005 and also the surcharge order passed by the 2nd respondent in R.C.No.2679/94-D dated 31.8.2001 as null and void and unsustainable in law grant such other relief as it deems fit in the circumstances of the case. Counsel for the Petitioner: MR.V.VENKATARAMANA Counsel for the Respondents: GP FOR COOPERATION MR. K.K. MAHENDER REDDY The Court made the following: COMMON ORDER: In these two writ petitions, common questions of fact and law arise for consideration, and, therefore, they are being disposed of by this common order. It appears, in the year 1996, an enquiry under Section 51 of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’), was conducted into the affairs of Kranthi Cooperative Urban Bank Limited, Balanagar, Ranga Reddy District, and the Enquiry Officer submitted his report stating that an amount of Rs.30,000/- was stated to have been paid to one Maganlal Ratan Sri Patel through crossed cheque bearing No.185125 dated 17.01.1996 towards cost of the doors, painting of furniture etc. and that the said cheque was issued with the joint signatures of the petitioner herein, who was the Director of the bank, and the 3rd respondent herein, who was the Chief Promoter, but there was no voucher for the said amount and it was established that the said amount was misappropriated by the petitioner and the 3rd respondent. Thereupon, the petitioner and the 3rd respondent were issued show- cause notices by the 2nd respondent-Deputy Registrar/Divisional Cooperative Officer, Hyderabad West Division, and both of them submitted their explanations denying their liability. However, the 2nd respondent, holding that the 3rd respondent failed to prove that the expenditure is genuine and failed to produce bills/vouchers for the said amount and that the petitioner, being the joint signatory, is equally responsible for proper maintenance of vouchers for the amounts paid from the funds of the bank, passed the surcharge order dated 31.08.2001, under Section 60 of the Act, making the petitioner and the 3rd respondent jointly and severally liable for payment of Rs.30,000/- to Kranthi Cooperative Urban Bank Limited, with interest @ 18% per annum from 17.01.1996 till the date of realization of the entire amount. Subsequently, another show-cause notice, under Section 21 AA (2) of the Act, was issued to the petitioner on 24.09.2001 by the 2nd respondent, and after receiving his explanation, the 2nd respondent passed another order dated 26.11.2001, declaring that the petitioner was ceased to be the member of the Board of Directors of the bank. The petitioner preferred C.T.A.No.194 of 2001 before the A.P. Cooperative Tribunal, Hyderabad, 1st respondent herein, questioning the surcharge order dated 31.08.2001 and also preferred C.T.A.No.19 of 2002 questioning his disqualification as a member of the Board of Directors of the bank. It was the case of the petitioner before the Tribunal that he is not responsible for the alleged misappropriation and even the 3rd respondent paid the entire surcharge amount admitting the total liability and, as such, the petitioner cannot be surcharged and disqualified as a member of the Board of Directors of the bank. The Tribunal, after a detailed consideration of the matter, holding that the reasons assigned by the 2nd respondent for coming to the conclusion that the petitioner and the 3rd respondent were jointly and severally liable to pay the surcharge amount of Rs.30,000/- are convincing and trustworthy and though the surcharge amount was stated to have been paid by the 3rd respondent, the petitioner cannot be given clean chit and he cannot escape disqualification, dismissed both the appeals on 05.09.2005, by two separate orders. Aggrieved thereby, these two writ petitions have been filed i.e. W.P.No.28018 of 2005 against the order passed in C.T.A.No.19 of 2002 and W.P.No.28019 of 2005 against the order passed in C.T.A.No.194 of 2001. Heard the learned counsel on either side and perused the impugned orders and other material made available on record. The petitioner had to suffer surcharge proceedings and disqualification as a member of the Board of Directors for his being a joint signatory to the cheque said to have been issued to one Maganlal Sri Ratan Patel towards purchase of certain materials, for which there was no voucher. According to the petitioner, he had signed the cheque in good faith, as it was already signed by the 3rd respondent. The enquiry report submitted by the Enquiry Officer under Section 51 of the Act also does not indicate any dishonest intention on the part of the petitioner for signing the cheque and there is no allegation on the petitioner except stating that he signed the cheque as a joint signatory. It can also be seen from the enquiry report that the said Maganlal Sri Ratan Patel, in the enquiry, accepted that he has received Rs.30,000/- from the 3rd respondent. However, non-availability of the voucher formed the basis for the authorities to hold the petitioner and the 3rd respondent responsible for misappropriation of the said amount of Rs.30,000/-. Generally speaking, in a case where a cheque or a document requires signatures of two signatories; when one signatory signs the cheque, the other signatory would sign it automatically as it was conceded by the co- signatory. In the instant case also, since the 3rd respondent had already signed the cheque, the petitioner might have signed the same in good faith as a joint signatory. No oral or documentary evidence is available to prove any mala fides on the part of the petitioner for being the joint signatory to the cheque in question. Further, the payment of entire surcharge amount by the 3rd respondent indicates that he had shouldered the entire responsibility for the alleged misappropriation. In these circumstances, I am of the opinion that the petitioner could not have been found guilty of misappropriation merely because he is a joint signatory to the transaction and thus could not have been disqualified as a member of the Board of Directors of the bank. For the foregoing reasons, the order dated 31.08.2001 insofar as the liability of the petitioner is concerned and the order dated 26.11.2001, passed by the 2nd respondent, as confirmed by the 1st respondent Tribunal by orders dated 05.09.2005, are liable to be set aside and are, accordingly, set aside. The writ petitions are, accordingly, allowed. No costs. _________________ JUSTICE C.V. RAMULU 2nd July, 2009. IBL