THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.21655 OF 2000 Dated: 04.02.2011 Between: K. Suryanarayana … Petitioner And A.P. Co-op. Tribunal, Vijayawada, Krishna District, and others. … Respondents THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.21655 OF 2000 ORDER : The petitioner herein was appointed as a Paid-Secretary in the year 1973. While he was working as Paid-Secretary of the 2nd respondent-society, an enquiry was initiated against him alleging misappropriation of funds of the society. It appears that the Enquiry Officer submitted a report and on the basis of the same, show cause notice 04.12.1990 was issued calling upon the petitioner to explain as to why a sum of Rs.44,212/- should not be recovered from him under Section 60 of the A.P.Co-operative Societies Act, 1964 (for short ‘the Act’). Though the petitioner submitted an explanation denying the allegations, by order dated 20.06.1992, the 3rd respondent made an order under Section 60 (1) of the Act directing recovery of the said amount together with interest at the rate of 18% per annum. Challenging the said order, the petitioner preferred O.A.No.163 of 1998 on the file of the Court of the A.P.Co-operative Tribunal, Vijayawada, which was dismissed by order dated 26.09.2000. Hence, the present writ petition seeking a declaration that the surcharge order dated 20.06.1992 as confirmed by the Tribunal by order dated 26.09.2000 in O.A.No.163 of 1998 is arbitrary and illegal. Heard the learned counsel for both parties and perused the material available on record. It is primarily contended on behalf of the petitioner that the impugned surcharge order passed by the 3rd respondent merely on the basis of the inspection report held under Section 51 of the Act, is arbitrary and illegal. In support of the said submission, the learned counsel for the petitioner relied upon a decision of a Division Bench of this Court in CHALLA SANYASINAIDU v. DEPUTY REGISTRAR OF COOPERATIVE SOCIETIES[1]. A perusal of the impugned order shows that except referring to the report of inspection held under Section 51 of the Act, the 3rd respondent had not made an independent enquiry before passing the surcharge order under Section 60 of the Act. As held in CHALLA SANYASINAIDU’S case (1 supra), no surcharge order can be made under Section 60 merely on the basis of inspection report without conducting a regular enquiry by examining the witnesses and allowing the delinquent to cross-examine them. Since it is admitted that no such regular enquiry was held, the impugned surcharge order is illegal and is liable to be set aside on that ground alone. Accordingly, the impugned surcharge order dated 20.06.1992 as confirmed by the Tribunal is hereby set aside and the Writ Petition is disposed of with a direction to the respondents to pass appropriate orders afresh following due process of law. No costs. The sum of Rs.10,000/- (Rupees Ten thousand only) deposited by the petitioner in compliance with the interim order passed by this Court in this writ petition shall be subject to further orders that may be passed by the 3rd respondent. _____________ G. ROHINI, J. Dt. 04.02.2011 gbs [1] 1998 (1) ALT 482