IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) SATURDAY, THE EIGHTEENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NOs: 8804 and 20275 of 2007 WRIT PETITION NO: 8804 of 2007 Between: V. Chainnaiah Naidu S/o. Venku Naidu, R/o. Vellanchi Street, Kothakota, Ravikamatham Mandal, Visakhapatnam District. ..... PETITIONER AND 1 The Dy. Registrar of Cooperative Societies Yelamanchaili, Visakhapatnam District. 2 The Primary Agricultural Coop. Society, Kothakota, Ravikamatham Mandal, Visakhapatnam District , Rep. by its President, 3 The Primary Agricultural Coop. Society, Kothakota, Ravikamatham Mandal, Visakhapatnam District , Rep. by its Secretary. .....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, order or direction more particularly one in the nature of writ of Mandamus declaring the inaction on the part of the respondents in not paying the substance allowance at the rate of 100% to the petitioner from May 2005 to till today as illegal, arbitrary and against the Fundamental Right guaranteed under the Constitution of India and consequently direct the respondents to reinstate the petitioner into service as Assistant secretary in the 2nd Respondent society forthwith and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.V.V.N.NARAYANA RAO Counsel for the Respondent Nos.1&2: GP FOR COOPERATION Counsel for the Respondent No.3: MR. D.V.NAGARJUNA BABU *** WRIT PETITION NO : 20275 of 2007 Between: V.Chinnaiah Naidu S/o.Venku Naidu, R/o.Vellanchi Street, Kothakota, Ravikamatham Mandal, Visakhapatnam District. ..... PETITIONER AND 1 The Dy. Registrar of Cooperative Societies Yelamanchili, Visakhapatnam District. 2 The Sub Divisional Coop Officer, Paderu and Domestic Enquiry Officer, Kothakota Primary Agrl. Coop Society Limited, Kothakota, Ravikamatham Mandal, Visakhapatnam District. 3 The Primary Agricultural Coop. Society, Kothakota Ravikamatham Mandal, Visakhapatnam District. Rep. by its President. 4 Chennam Setty Ramu Naidu Director, Parimary Agrl. Cooperative Society Ltd., Kothakota, T.Arajapuram Post, Ravikamatham Mandal, Visakhapatnam 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, order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the 3rd respondent in appointing the 4th respondent for conducting enquiry against the petitioner who was placed under suspension as illegal, arbitrary and set aside the proceedings dated 23.8.2007 issued by the 4th respondent ans pass such other order or orders. Counsel for the Petitioner: MR.V.V.N.NARAYANA RAO Counsel for the Respondent Nos.1&2: GP FOR COOPERATION Counsel for the Respondent No.3: MR. D.V.NAGARJUNA BABU The Court made the following : COMMON ORDER: The issue involved in these two writ petitions is identical and therefore they are heard together and are being disposed of by this common order. 2. Sri.V.Chinnaiah Naidu is the petitioner in these two writ petitions. He was appointed as a Clerk in Primary Agricultural Cooperative Society, Kothakota, Ravikamatham Mandal, Visakhapatnam (for short Society). He was promoted as an Accountant in the year 1977. Thereafter he was further promoted as a Manager in the year 1984. In the year 1994 the post of Manager came to be redesignated as Assistant Secretary and as such he has been working as Assistant Secretary since 1994. In the year 2001 an enquiry under section 51 of A.P. Cooperative Societies Act, 1964 (for short, ‘the APCS Act’) was conducted with regard to the affairs of the society. The enquiry officer submitted his report on 20.11.2001 stating that the petitioner misappropriated an amount of Rs.1,38,655.65. Surcharge proceedings u/s 60 of the APCS Act came to be initiated against the petitioner. The said proceedings came to be dropped vide Rc.No.1692001/B, dated 29.5.2003. The Society placed the petitioner under suspension in the year 2001 and thereafter reinstated into service in the month of December, 2001. A criminal case was registered against the petitioner basing on the enquiry report under section 51 of the APCS Act. He came to be arrested in the criminal case and he was in judicial custody for about 10 days. The Society placed the petitioner under suspension on 30.12.2004. The Divisional Cooperative Officer, Yellamanchili appointed the Sub-Divisional Co-operative Officer, Paderu, as an enquiry officer to conduct domestic enquiry on the allegations leveled against the petitioner. The enquiry officer has not proceeded with the enquiry in view of the petitioner approaching this Court by filing W.P.No.8804 of 2007 and informed the same to the Divisional Co- operative Officer, Yelamanchili under letter dated 31.07.2007. While so, the managing committee of the society appointed one of its Directors viz., Channam Setty Ramu Naidu as Enquiry Officer to proceed with the enquiry on the allegations leveled against the petitioner. The petitioner filed W.P.No.8804 of 2007 assailing the action of the Society in not paying subsistence allowance @ 100 percent of the last drawn pay from May, 2005. He impleaded Deputy Registrar of Cooperative Societies, Yelamanchili and Primary Agricultural Cooperative Society, Kothakota as respondents. He also filed W.P.No.20275 of 2007 questioning the action of the society in appointing Chennam Setty Ramu Naidu as Enquiry Officer. He impleaded the Deputy Registrar of Cooperative Societies, Yelamanchili, Visakhapatnam, Sub-Divisional Cooperative Officer, Paderu, Primary Agricultural Cooperative Society, Kothakota and Chennam Setty Ramu Naidu as party respondent in the writ petition. In the affidavit filed in support of W.P.No.20275 of 2007 it is stated that the managing committee of the society has hatched a plan to remove him and therefore, appointed one of its Directors viz., Chennam Setty Ramu Naidu as enquiry officer. For better understanding the grievance of the petitioner, I deem it appropriate to refer paras.6 and 7 of the affidavit filed in support of W.P.No.20275 of 2007, which read as hereunder: “6. While things stood thus, as I have already submitted that the entire Managing Committee of the 3rd respondent society has inimically disposed against me and hatched a plan to remove me from service and fixed the alleged misappropriated liability on me either hook or cook and appointed the 4th respondent who is the Director of the 3rd respondent society as an Enquiry Officer. Accordingly, the 4th respondent herein has issued notice dated 23.8.2007 and directed me to appear before him on 3.9.2007 and I have appeared before him and requested him to grant time for submitting my explanation and accordingly the same was adjourned to 21.9.2007. Assailing the same, the present writ petition is filed on the ground that the initiation of the Domestic Enquiry after a lapse of 7 years cannot be permitted and the 1st respondent has conducted the enquiry under Section 60 of A.P. Coop. Societies Act, 1964 for the very same set of allegations and the 1st respondent was pleased to drop all further proceedings as there was no material evidence to show that I have caused deficiency to the assets of the society. 7. I submit that the entire Management of the 3rd respondent society has hatched a plan to remove me from service based on the enquiry report dated 30.11.2001 conducted under Section 51 of A.P. Coop. Societies Act, 1964, and the 3rd respondent society with a malafide intention and abusing the power vested with them and without terminating the Domestic Enquiry to be conducted by the 2nd respondent and appointed the 4th respondent for the very same purpose as illegal, arbitrary and abuse of process of law and without assigning any reasons. I am advised to submit that, it is not the case of the 3rd respondent society that, the report under Section 51 of A.P. Coop. Societies Act, 1964 is not satisfactory and ordering the second enquiry for the same set of facts is one without application of mind and arbitrary and irrational exercise of power.” 3. The official respondents and the society have filed counter affidavits in the writ petitions. It is suffice to refer the counter affidavit filed by the 1st respondent in W.P.No.20275 of 2007. The counter affidavit of 1st respondent, in brief, is : The petitioner was placed under suspension in the month of January 2001 by the then person incharge committee basing on the preliminary enquiry report of the Enquiry Officer. Thereafter, the petitioner came to be reinstated in the year 2001 and continued upto 25.11.2004. On the basis of the recommendations of the Enquiry Officer, proposals came to be submitted to the Commissioner of Cooperative Societies and Registrar of Cooperative Societies, Andhra Pradesh for sanction and prosecution of the petitioner and 19 others. ;The Commissioner for Cooperation and Registrar of Cooperative Societies accorded sanction under Rc.No.4202/04/PACS, dated 31.8.2004. A criminal complaint was lodged against the petitioner before the Station House Officer, Kothakota. The Investigating Officer arrested the petitioner on 27.11.2004. The petitioner was remanded to judicial custody for 10 days. The person incharge of the Society in the meeting held on 22.12.2004 resolved under resolution No.3 to keep the petitioner under suspension with immediate effect and consequently the petitioner came to be kept under suspension. As per the byelaws No.6(b) of the Society the petitioner is entitled to draw 50 percent of the last pay drawn as subsistence allowance and accordingly the Society paid the subsistence allowance upto March, 2006. The Society in its meeting held on 4.3.2006 under resolution No.20 unanimously resolved to request the Deputy Registrar of Cooperative Societies, Yelamanchili to appoint a domestic enquiry officer under his control to finalize the disciplinary action against the petitioner. In view of the resolution, the Deputy Registrar of Cooperative Societies, Yelamanchili appointed the Sub-Divisional Cooperative Officer, Paderu as domestic enquiry officer. The petitioner appeared before the domestic enquiry officer and submitted his written statement on 17.7.2007 by explaining the details of the allegations leveled against him. The Domestic Enquiry officer filed the interim report since the petitioner filed W.P.No.8804 of 2007. 4. Heard Sri V.V.N.Narayana Rao, learned counsel appearing for the petitioner and learned Government Pleader for Cooperation appearing for the R1 in WP No.8804 of 2007 and R1 and R2 in WP No.20275 of 2007 and Sri D.V.Nagarjuna Babu, learned counsel appearing for R2 & R3 in WP No.8804 of 2007 and R3 in WP No.20275 of 2007 and perused the affidavits filed in support of the writ petitions and counter affidavits filed thereto. 5. Learned counsel appearing for the petitioner submits that the petitioner is entitled to subsistence allowance at the rate of 100% of last drawn pay since the enquiry is not completed within an year as provided in the A.P. Shops and Establishments Act, 1988 (for short, ‘the APS&E Act’). A further submission has been made that since the enquiry has not been completed within an year, the petitioner is entitled for reinstatement. He would also contend that appointment of one of the directors of the managing committee as Enquiry officer amounts to ordering successive enquiry since the Enquiry Officer already appointed by the Divisional Co-operative Officer, Yellamanchili, had submitted a report. In support of his contentions, he placed reliance on the following judgments: 1) P.R.Venkataiah v. A.P. Co-op. Central Agricultural Dev. Bank Ltd.[1]; 2) V.C.U. Bank Ltd. v. Authority appointed U/S.48(1) of APS&E Act, 1988[2] 3) Choutuppal Handloom Weaver’s Coop. Society Ltd. v. Commissioner of Handlooms and Director of Handlooms and Textiles, A.P.[3] 4) State of Madhya Pradesh v. Bani Singh and anr.[4] 5) N.Prabhakar Murthy v. TTD, Tirupati[5] 6) Primary Agrl. Coop. Society v. B.Malla Reddy[6] 7) State of A.P. v. N.Radhakishan[7] 8) Sri Konaseema Coop. Central Bank Ltd. v. N.Seetharama Raju[8] Learned counsel laid much emphasis on paras.9 and 49 of the judgment i n Sri Konaseema Coop. Central Bank Ltd.’s case (8 supra), which reads as hereunder: “9. The power to make law belongs to the Legislature and other persons and authorities, empowered by the Constitution. (We are not concerned herein with the other sources of law, namely, the custom or usage having the force of law, Personal Law laid down in Texts, or Judge-made law ). Besides the Parliament and the Legislatures, the Constitution has empowered the President and Governor to make laws in certain situations. Some of the examples are the power to issue Ordinances, conferred upon the President and Governor (Arts. 123 and 213); power to make Rules governing service conditions (proviso to Art. 309); Governor's power to make laws with respect to scheduled areas (Schedules V and VI), and the power to issue statutory orders conferred upon the President or other authorities under various provisions of the Constitution, like Cls. (1) and (3) of Art. 371-D. The main organ empowered to make laws is, of course, the Legislature - whether at the Centre or in the States. It is the prerogative of the Legislature -and Legislature alone - either to enact the law itself, or to delegate that function to a person or authority - so long as it does not delegate its essential legislative function. The law made by such delegate is called delegated legislation. The delegate may be a Government, University, Corporation, local authority, or even an individual. Several enactments in India, particularly those creating statutory Corporations, empower both the Government and the Corporation to make Rules/regulations to carry out the purposes of the enactment. Very often local authorities, like Municipal Corporations, are empowered to issue, what are called `bye-laws', governing various matters specified and to carry out generally the purposes of the Act. What is material, however, is not the name given to it, but its essential nature. The test is whether it is made by a delegate of the Legislature. Applying this test, it is difficult to say that bye-laws constitute delegated legislation. Section 130 of the A. P. Co-operative Societies Act confers the rule-making power upon the Government to carry out all, or any of the purposes of the Act. The Rules so made are a species of delegated legislation. But, bye-laws are not. They cannot be equated to Rules. The bye-laws have to be framed and submitted by a Society at the time of its registration; it is a condition of registration. All that the Act says is that, before registering a Society, the Registrar should be satisfied that "the proposed bye-laws are not contrary to the provisions of the Act and the Rules". Section 16 provides for the manner in which the bye-laws of a Society can be amended. It says that an amendment to the bye-laws of a Society shall not be valid unless it is approved by the Registrar. Power is also conferred upon the Registrar to direct the amendment of a bye-law, and in case of default or refusal of the society, he can himself amend such bye-laws in the manner indicated by him. These bye-laws can by no stretch of imagination be characterised as delegated legislation. 49. Apart from the Industrial Disputes Act, the A. P. Shops and Establishments Act also applies to a co-operative society. The definition of `commercial establishment' in Section 2 (5) of the Shops and Establishments Act includes "an establishment under the management and control of a co-operative society". Section 77 of the Act expressly declares: "Notwithstanding anything in the Andhra Pradesh Co-operative Societies Act, 1964, the provisions of this Act shall apply to the co-operative societies". (The A. P. Shops and Establishments Act too has received the assent of the President ). Section 47 of the Act provides a certain protection to employees of shops and establishments governed by the Act, in the matter of termination of their service. According to sub-section (1), "no employer shall, without a reasonable cause, terminate the service of an employee who has been in his employment continuously for a period of not less than six months, without giving such employee at least one month's notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for the period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment". It further requires that every order of termination shall be in writing, and that copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination. It is provided by sub-section (2) that "the services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed. . . . ". The Rules framed under the Act prescribe the acts and omissions which constitute misconduct, and the procedure to be followed while terminating the service of an employee; (see Rules 19 and 20 framed under the 1966 Act, and continued under the new Act).” 6. Learned counsel appearing for the respondents-Society submits that the Society has its own Byelaws, which are in tune with the Model Byelaws framed by the Registrar of Cooperative Societies in pursuance to the Rule 72 (3)(b) of the A.P. Co-operative Societies Rules, 1964 and therefore, the byelaws have statutory flavour and in which case the maximum subsistence allowance is 50% of the last drawn pay and the same is being paid to the petitioner. A further submission has been made that in case of conflict between the provisions of the APS&E Act and the model byelaws framed by the Registrar of Cooperative Societies pursuant to the Rule 72(3)(b) of the A.P. Cooperative Societies Rules, 1964, the model byelaws prevail over the provisions of the APS&E Act. In support of his submission, reliance has been placed on the Division Bench judgment of this Court in President, Buchireddipalem Coop. Rural Bank Ltd. v. D.Siva Subrahmanyam, Ex-Secretary[9]. 7. In Sri Konaseema Coop. Central Bank Ltd.’s case (8 supra), it is not clear whether the byelaws fell for consideration therein are pursuant to the Rule 72(3)(b) of the A.P. Cooperative Societies Rules, 1964. Even otherwise, there is a specific observation in the judgment that in case of service matters the byelaws are binding between the employer and employee. In N. Radha Krishna’s case (7 supra), the Supreme Court held that it is not possible to lay down any predetermined principles applicable to all cases and in all situations where thee is delay in concluding the disciplinary proceedings. The question has to be decided on facts and circumstances of each case. I n N.Prabhakar Murthy’s ase (5 supra), the action taken by the authorities by suspending the petitioner therein merely on the ground that a charge- sheet has been filed against him after a long lapse of six years has been held as illegal and arbitrary. I n Bani Singh’s case (4 supra), departmental enquiry has been quashed where disciplinary proceedings have been initiated after a delay of 12 years. 8. The proposition of law laid down is well settled that the question as to whether delay vitiated the disciplinary proceedings is to be decided on the facts and circumstances of each case. In the case on hand, an enquiry under Section 51 of the APCS Act came to be conducted by the Cooperative Sub-Registrar, office of the Divisional Cooperative Officer, Yellamanchili. The enquiry report speaks the misappropriation of amounts by the petitioner. Indeed proceedings under Section 60 of the APCS Act have been initiated against the petitioner and the petitioner appeared before Deputy Registrar of Cooperative Societies, Yellamanchili and made certain statements. Ultimately, the proceedings initiated under Section 60 of the APCS Act came to be dropped. Learned counsel appearing for the petitioner by referring the report dated 29.05.2003 submits that the initiation of the disciplinary proceedings against the petitioner again is unwarranted in view of the dropping of proceedings initiated under Section 60 of the APCS Act. His contention appears to be appealing on the first blush, but on close scrutiny of the report dated 29.05.2003, I do not detain myself long to reject his contention. The report is explicit that the petitioner appeared before the enquiry officer and admitted of withdrawing of certain amounts. The final conclusion of dropping of the proceedings is immaterial. 9. The issues that calls for adjudication are: (1) Whether the petitioner is entitled to subsistence allowance at the rate of 100% of the last drawn pay since the disciplinary proceedings are not concluded within an year? (2) Whether the appointment of one of the directors of the managing committee of the society as enquiry officer is impermissible? (3) Whether the enquiry ordered by the managing committee amounts to successive enquiry? 10. As per Model Byelaws the maximum subsistence allowance during the period of suspension is 50% of the last drawn pay. Byelaw No.6 deals with suspension which reads as hereunder: “6.SUSPENSION: I) An employee of the Society may be placed or kept under suspension pending inquiry by the competent authority, if a) he is found to have prima-facie involved in misappropriation or otherwise responsible for it or breach of trust. b) he is engaging/has engaged himself in any activities prejudicial to the interest of the society. c) a case against him in respect of any criminal offence is under investigation, enquiry or trial. d) an employee is detained under Police custody/judicial whether on criminal charge or otherwise for a period exceeding 48 hours. II) a) The suspension shall ordinarily be for a period of six months and in special circumstances the period may be extended beyond six months with the prior approval of the Committee recording the reasons after review. Provided an employee suspended U/S.59 of Act shall be reinstated with the previous sanction of Registrar. b) Subsistence allowance: Employees placed under suspension shall be entitled to receive 50% of the last drawn salary as subsistence allowance during the period of suspension. To receive the subsistence allowance the suspended employee has to give a declaration that he has not engaged in any other employment on a month-to-month basis and he shall also furnish the address for the communication during the suspension period.. c) If a direction is given by the Society U/s.59 of Act. d) The Competent authority shall initiate disciplinary action by following the procedure and guidelines specified in these regulations.” The learned counsel appearing for the petitioner submits that the petitioner is entitled to subsistence allowance at the rate of 100% of the last drawn pay since the disciplinary proceedings initiated against him are not concluded within a period of an year as per the provisions of the APS&E Act. Per contra, learned counsel appearing for the respondent- Society submits that as per the Model byelaws, the petitioner is entitled to receive 50% of the last drawn pay during the period of suspension and the same is being paid to him and therefore, the petitioner is not entitled more than what is permissible under the byelaws. In response to the same, learned counsel appearing for the petitioner submits that the byelaws of the society have no statutory flavour and it is the provisions of the APS&E Act which govern the field and in which case, the petitioner is entitled to full pay since the enquiry is not completed within an year. Reliance has been placed on the decision of this Court i n P.R.Venkataiah’s case (1 supra), wherein it has been held that byelaws are merely supplementary to statutory rules, providing further details for proper implementation of those Rules. 11. Though the bye-laws of the Society do not have the force of law, they would be binding between the Society and the employees just in the same manner as conditions of service laid down by contract between the parties. In fact, after such bye-laws laying down the conditions of service are made and any person enters the employment of a society, those conditions of service will have to be treated as conditions accepted by the employees when entering the service and will thus bind them like conditions of service specially forming part of the contract of service. 12. A question came up for consideration before the Division Bench of this Court in D.Siva Subrahmanyam’s case (9 supra)