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Judgment
L. Narasimha Reddy, J.—The petitioner functioned as Secretary of the Golugonda Mandal Teachers Co-operative Credit Society Ltd. Inspection, u/s 52 of the A.P. Co-operative Societies Act (for short "the Act") was caused, into the affairs of the Society. Certain findings were recorded against the petitioner. The same gave rise to surcharge proceedings, u/s 60 of the Act, and an order dated 28.6.2003 was passed, against the petitioner. He filed O.A. No. 50 of 2007, before the A.P. Co-operative Tribunal, Visakhapatnam. An order of interim stay was granted on 2.7.2007 in M.A. No. 26 of 2007. The said proceedings are pending.
The District Co-operative Officer, Visakhapatnam, the 1st respondent herein, directed enquiry u/s 51 of the Act, into the affairs of the Society. Almost the same findings were repeated, against the petitioner. Based upon this report, surcharge proceedings were initiated by the 2nd respondent, vide notice dated 4.9.2008. The petitioner challenges the same.
Sri V.V.N. Narayana Rao, learned Counsel for the petitioner, submits that the subject matter of inspection, u/s 52 of the Act, and enquiry u/s 51, was one and the same, so much so, the amount indicated against the petitioner is identical. He contends that once the petitioner has been subjected to surcharge proceedings, as regards certain transactions, he cannot be made to face identical proceedings for the same amount.
Learned Government Pleader for Cooperation submits that the purpose and object underlying the inspection, u/s 52 of the Act, is different from the enquiry, u/s 51. He contends that the petitioner can put forward all his objections, in the on-going surcharge proceedings, and the writ petition is not maintainable, against the impugned notice.
With a view to ensure proper functioning of societies, the legislation has provided for three measures viz, enquiry, inspection and audit, under Sections 51, 52 and 53 of the Act. This is in addition to the internal mechanism evolved by the respective societies. Section 60 of the Act provides for initiation of surcharge proceedings, on the basis of the findings recorded in the enquiry, inspection or audit, as the case may be, subject to certain preliminary steps. The report has to be placed before the general body of the society, and based on its recommendations, or the directions to it by the Registrar, surcharge proceedings are to be initiated.
It may be true that the purpose of various steps mentioned above, under the relevant provisions and the findings therein, are different from each other. Where, however, the same acts or omissions have already been enquired into, under one such measure, and they have given rise to the surcharge proceedings, it is impermissible to resort to another measure, and thereafter to initiate surcharge proceedings. Such a course would result in initiation of two sets of proceedings, for one and the same cause.
In the instant case, in an inspection caused u/s 52 of the Act, the petitioner was found responsible for an amount of Rs. 6,50,353/- under six separate heads. After following the prescribed procedure, notice u/s 60(1) of the Act was issued and an order of surcharge was passed on 28.6.2003, holding that the amount of Rs. 6,50,353/- is liable to be recovered from the petitioner. He availed the remedy of appeal, u/s 76 of the Act, and the appeal is pending.
Enquiry u/s 51 of the Act was caused into the financial irregularities of the Society. To this extent, there cannot be any difficulty. However, the findings mentioned in the enquiry are nothing but those, indicated in the report of inspection u/s 52 of the Act. As though this duplicity is not sufficient, the 2nd respondent issued the impugned notice, initiating the surcharge proceedings. Had there been difference between the purport of the surcharge, which was already concluded against the petitioner, and the one, which is initiated, there would have been some basis for the 2nd respondent, to proceed with the present exercise. Except changing the language to describe the amount said to have been misappropriated by the petitioner in certain respects, there is no difference between the two sets of proceedings. The following two statements would demonstrate the same.
Abstract in surcharge proceedings, dated 28.6.2003, based upon inspection u/s 52 of the Act.
Basis indicated in the impugned proceedings, on the strength of enquiry report u/s 51 of the Act
The only difference is that slightly different language was employed to describe items 1 and 5. Not only the total amount, but also the individual items are identical. Once the petitioner has been subjected to surcharge proceedings for the amounts referred to above, the question of initiation of another set of proceedings, does not arise.
Hence, the writ petition is allowed, and the impugned proceedings are set aside. There shall be no order as to costs.