HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY W.P.No.30544, 30545 & 30551 of 2010 Date : 7-12-2010 W.P.No.30544/2010 Between : K.Venkateshwara Rao .. Petitioner And State of Andhra Pradesh, Represented by its Principal Secretary, Co-operative Department, Secretariat, Hyderabad and others .. Respondents Counsel for petitioners (in all cases): Sri S.Vivek Chandra Shekar Counsel for respondents (in all cases) : Government Pleader for Co- operation The Court made the following : COMMON ORDER: As common questions of fact and law arise in these Writ Petitions, they are being disposed of by this common order. The petitioner in these Writ Petitions is the founder of a Bank called M/s.Krishsi Co-operative Urban Bank. He was allegedly involved in large scale violation of various statutory enactments and indulged in serious commissions and omissions depriving scores of depositors of their hard earned savings which were invested in the said Bank. F.I.R.No.156/2001 was registered against him for offences under Section 406 and 420 IPC besides various provisions of A.P. Protection of Depositors of Financial Establishments Act, 1999 (for short, "the Depositors Act"). On filing of charge sheet by the C.I.D. of Police, the Metropolitan Sessions Judge, Hyderabad had taken the case on file in C.C.No.7/2001. As the petitioner at that time was at large, the case was split up as C.C.No.3/2002 which is presently pending. The petitioner who was staying in Bangkok was eventually extradited on 17-11-2005 and he is presently facing the prosecution. It is the pleaded case of the petitioner that by sale of some of the properties, an amount of Rs.10,67,52,338/- was realized and that along with interest the said amount has risen to Rs.15 crores. It was stated to have been distributed among the depositors. While the criminal case has been pending, respondent No.2 has issued the impugned notices on 30-3-2009 under Section 60(1) of A.P. Co- operative Societies Act, 1964 (for short, "the 1964 Act") for recovery of sums of Rs.54,43,693.93 ps., Rs.12,93,89,621-52 ps. and Rs.12,04,72,596-00 ps., respectively, which were allegedly borrowed by the petitioner by way of fictitious loans. Challenging these proceedings, the petitioner has filed the present Writ Petitions. At the hearing, Sri S.Vivek Chandra Shekar, learned counsel appearing for the petitioner has advanced two submissions, namely, (i) that in view of Section 14 of the Depositors Act, the proceedings initiated by respondent No.2 under the provisions of the 1964 Act cannot be maintained and (ii) that even assuming that such proceedings are maintainable, in the absence of audit under Section 50, inquiry under Section 51 and inspection under Section 52 of 1964 Act, no proceedings could be initiated. I have carefully considered the above submissions of the learned counsel for the petitioner and I do not find any merit therein. As regards the first contention of the learned counsel, Section 14 of the Depositors Act reads as under : “Act to override other laws: Save as otherwise provided in this Act, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any custom or usage or any instrument having affect by virtue of any such law.” From the provision noted above, nothing could be discernable by which it has barred initiation of proceedings under the provisions of the other enactments such as 1964 Act. In my opinion, the overriding effect given to the provisions of the Depositors Act comes into play when a conflict between the provisions of that Act and any other Act arises. In the same way, if any conflict arises between the Depositors Act and any custom or usage or any instrument having the effect by virtue of any law, the provisions of that Act would prevail. The sweep of this provision would not encompass a situation where the competent authority acting under another existing enactment seeks to exercise his powers. In the instant case, the petitioner has not pleaded as to in what manner the provisions of 1964 Act are inconsistent with the provisions of the Depositors Act. As the statutory provisions of these two enactments operate in their respective spheres, respondent No.2 shall be free to exercise his powers under the 1964 Act and such exercise of powers do not fall in the teeth of the provisions of Section 14 of the Depositors Act. For these reasons, the first contention of the learned counsel is rejected. As regards the second contention, no doubt, Section 60 of the 1964 Act refers to the provisions of Sections 50, 51, 52 or 53 or the winding up of a society and if it appears that any person entrusted with the management and affairs of the society has misappropriated or fraudulently retained any money or any other property or has been guilty of breach of trust etc., the Registrar on his own motion or on the application of the committee, liquidator or creditor or contributory, may inquire into the conduct of such person or officer or servant and make an order requiring him to repay or restore the money or property with interest. The learned Government Pleader for Co-operation, on instructions, submitted that winding up proceedings were already initiated in respect of the Bank and the Deputy Registrar/Liquidator of the Bank has addressed letters dated 8-12-2008 and 22-12-2008 regarding the alleged illegalities in availing Simple Over Draft Against Securities (SODAS) loans pertaining to various accounts and through his another letter dated 6-2-2009 he has informed respondent No.2 that on verification of different types of 27 loans, a sum of Rs.13,77,786/- was found due for non-recovery and requested respondent No.2 to take necessary action for recovery of these amounts. Indeed, these facts are stated in the impugned show cause notices dated 30-3-2009. As such I am of the opinion that the condition precedent for initiation of proceedings under Section 60(1) of 1964 Act has been fully complied with by respondent No.2 before issuing the impugned show cause notices. For the above mentioned reasons, I do not find any merit in the Writ Petitions and accordingly they are dismissed. As a sequel to dismissal of the Writ Petitions, all the interlocutory applications in the Writ Petitions are disposed of as infructuous. ____________________ C.V.Nagarjuna Reddy.,J Date : 7-12-2010 AM