Choutuppal Handloom Weaver''s Co-op. Society Ltd., Nalgonda Dist. and Others vs Commissioner of Handlooms and Director of Handlooms and Textiles, A.P. and Others

The Choutuppal Handloom Weaver''s Co-operative Society Limited and its Managing Committee members have filed this writ petition assailing the order of R1 appointing R3 as an Enquiry Officer by proceedings dated 20-12-1993 to enquire under the provisions of Section 51 of A.P. Co-operative Societies Act, 1964 (for short Act), into the working, constitution and finances of the Society. Various allegations of malfeasance of law, the enquiry having been initiated consequent upon dictation by an extraneous person viz., a local M.L.A., procedural irregularities such as inadequacy of notice and opportunity and the like, have been alleged assailing the initiation of inquiry. In the view that this Court is taking it is not necessary to adjudicate upon all the said contentions.

The strength of the Managing Committee of the petitioner-Society (13) and the Managing Committee was elected in January, 1992 for a period of three years, while so a complaint has been received by R!, the Commissioner, regarding the management and affairs of the Society in general and of the conduct of the President in particular. The allegations having been considered serious by orders dated 4-10-1993 a preliminary enquiry having been ordered and conducted, a report was submitted. Thereafter founded on the said preliminary report by orders dated 16-10-1993 R2 was appointed as an Officer to enquire into the affairs of the Society by virtue of the powers available under Sections 51 of the Act. The report of R2 was received on 20-12-1993 by R1, who it is alleged, instead of placing the report before the general body of the petitioner-Society as warranted u/s 51 of the Act has chosen to issue the impugned proceedings authorising R3 to conduct a de novo enquiry into the constitution and working and also financial position of the Society with particular reference to the issue of benami cheques by the President of the Society. Assailing these orders the writ petition is filed contending that successive enquiries are prescribed u/s 51 of the Act. It is also contended alternatively that in any view of the matter the impugned orders are vitiated by non-application of mind inasmuch as no reasons are vouch-safed as to why the earlier enquiry by R2 and the consequent report had to be rejected nor is anything stated as to in what respects the earlier enquiry was found unsatisfactory. It is contended that the mere statement in the impugned orders that the report of the earlier enquiry was not found to be satisfactory would in law amount to an arbitrary and irrational exercise of power particularly in the context of rejecting a report of an enquiry conducted under statutory provisions. The learned Counsel for the petitioner has also brought to the notice of this Court a decision of a Division Bench in Primary Agricultural Co-op. Society v. B. Malla Reddy, 1996 (2) ALD 803. The Division Bench of this Court in the said judgment enunciated the principle of law in the following terms:

"2. After a thorough examination of the case we are in respectful agreement with the learned single Judge. It is a well known proposition that a second enquiry or successive enquires are hit by the theory of double jeopardy to which a person cannot be subjected to. Apart from the reasons advanced by the learned single Judge, the further fact that remains is that the report of the enquiry officer is only recommendatory in nature and the authority to initiate enquiry has himself the power to either accept the enquiry report or reject it either fully or in some respects and in the event he disagrees with any part of the enquiry report, he can call upon the person proceeded to explain his conduct and in the course of such proceedings may also call upon him to explain any evidence, documentary or oral, appearing against him. The authority is not bound to accept the views expressed by the Enquiry Officer and can also take a different view on the same set of materials. It was hence not necessary for the District Cooperative Officer to direct a second enquiry if he was dissatisfied with the first enquiry report but could have proceeded in respect of matters which he felt were left untouched by the Enquiry Officer on his own, and called upon the respondent to explain such facts. In that view of the matter, the second proceedings was misconceived and has been rightly quashed. We, however, make it clear that the District Cooperative Officer can take action as is available to him as explained above."

Though it is settled principle that the theory of double jeopardy which is a principle applicable to convictions in criminal law as provided in the Constitution may not be applicable to administrative or quasi-judicial proceedings, the under-lying principle of irrational successive enquiries by statutory authorities being hit by the vice of arbitrariness would be applicable to vitiate any successive enquiries which are ordered without any rational reasons. In the circumstances, having regard to the totally cryptic nature of the impugned orders this Court is unable to sustain the same. No reasons as already stated, have been given for ordering a de novo enquiry. The impugned order of R1 directing a second enquiry by R3 is accordingly set aside. This invalidation however does not disentitle the R1 to take action or further proceedings to regulate and preserve the management and affairs of the petitioner-Society or to take action against any or all members of the management for any violation of the Act or of any other law, in accordance with the observations contained in the judgment of the Division Bench extracted supra and in accordance with such other law as would entitle any such action.

In the result, the impugned order is set aside and the writ petition is disposed of. No order as to costs.