Surcharge liability fixed jointly and severally against former office-bearers of a cooperative society was upheld by the Tribunal; writ petition challenging it failed as no perversity or procedural illegality was shown, and joint and several liability for misappropriated funds was affirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI
(Special Original Jurisdiction)
WEDNESDAY, THE FOURTH DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION NO: 45481 OF 2016
Between:
...PETITIONER
AND
...RESPONDENTS
Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, Order or direction more particularly one in the nature of Writ of Certiorari by calling the recordsonthefileoftheAPCo operative Tribunal at Vijayawada, in O.A.No.31 of 2015dated25.10.2016is illegal, arbitrary and against the principles of natural justice, contrary to the
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provisions of the ARCS Act 1964, violation of Article 14 & 21 of constitution of India, Quash the same.
I.A. NO: 1 OF 2016(WPMP. NO: 56064 OF 20161
Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the order of the 2^'" respondent vide proceedings in Rc.No.1329/ 2005-C dated 20.11.2014 pending disposal of the above writ petition.
Counsel for the Petitioner: SRI S. APPADHARA REDDY Counsel for the Respondent Nos.1 & 2: GP FOR COOPERATION Counsel for the Respondent Nos.3 & 4:--
Counsel for the Respondent No.5: SRI V. PADMANABHA RAO The Court made the following: ORDER
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THE HON’BLE SRI JUSTICE TARLADA RAJASEKHAR RAO
WRIT PETITION No.45481 of 2016
ORDER:
The present Writ Petition is filed under Article 226 of Constitution of India for the following relief/s;
pleased to issue a Writ, Order or direction more particularly one in the nature of Writ of Certiorari by calling the records on the file of the A.P. Co-operative Tribunal at Vijayawada, in O.A.No.31 of 2015 dated 25.10.2016, is illegal, arbitrary and against the principles of natural justice, contrary to the provisions of the APCS Act 1964, violation of Articles 14 & 21 of Constitution of India, quash the same and to pass such other order or orders....”
- The surcharge enquiry under Section 60(1) of the Cooperative Societies Act, was conducted against the petitioner herein and Respondent Nos.4 and 5. The 2"^^ respondentwhois the Registrar, Cooperative Societies conducted the Surcharge enquiry and fixed the liability jointly and severally against Sri Siva Rama Krishna, Ex-President, Sri S.V.N. Ramachnadra Rao, ExSecretary and Sri M. Augistin, Secretary, K. Gokavaram Primary Agricultural Cooperative Society.
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- The petitioner herein assailed the said order before the Andhra Pradesh Cooperative Tribunal at Vijayawada under Section 77 of the Cooperative Societies Act, in O.A. No.31 of 2014. After considering the evidence, learned Tribunal dismissed the O.A. vide order dated 28.10.2010. The said order was assailed in the present Writ Petition, on several grounds. All the grounds raised are not on the substantial question of law relying the factual evidence and it is very settled law thatintheWritof Certiorari, this Court cannot go and re-appreciatetheevidence unless the decision is perverse. A Tribunal is the competent to enter upon an enquiry but in making of the enquiryitmustnotact in flagrant disregard to the rules or procedure it may amounts to
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violation of principles of natural justice. A Writ of Certiorari may be available in such cases.
- As seen from the order, the Tribunal has consideredthe evidence in proper manner and this Court does not foundany perversity or illegality in the order passed by theTribunalorthe order is in disregard of the rules or procedure. Therefore,this Court found no reasons to allow the Writ Petition.
- The counsel for the petitioner submits that the Tribunaland the authorities under the Co-operative Societies Act erredinfixing liability jointly and severally without making an appropriate apportionment of the liability between the petitioner and respondents 4 and 5. It is contended that, the Tribunalaswellas the respondents authorities have failed to assess andapportion liability according to the respective fault or contributiontotheloss caused by each party involved. Therefore, the petitionerargues that it is obligatory to fix several liability basedoneachparty’s respective share of fault or contribution to the misappropriation(or loss), rather than imposing a joint and several liabilitywithoutthis proper apportionment.
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the 7. The counsel for the petitioner further submits that petitioner has already paid a substantial amount Rs.4,74,000/-out of the outstanding amount of Rs.7,84,549/- as orderedbythe Court, which is an indication of their compliance withtheliability imposed. Therefore, the petitioner prays that the liability be reconsidered and that the petitioner be held liable onlyforhis respective share, in accordance with his proportionate fault or contribution to the loss.
- The answer to contention that is raised by the petitioner’s counsel, when multiple parties are involved in a wrongdoing,they are typically only held jointly and severally liable if they acted in concert or had a common intention that led to the damage.This means that each person can be held responsible fortheentire loss, and the society can recover the full amount from all those
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who have misappropriated its funds. [For example; Even if is more A is at fault (for misappropriating a larger amount),Bcan still be held liable for the entire damage, and A and B may be required to settle the amounts between themselves.]Unlesstheir actions were independent or their contributions tothelossvaried that did not involve a common, concerted effort, theycould be considered as joint and several liability.
- Upon perusal of the record, the Court observed thatinthe surcharge proceedings, it was stated that the PresidentandChief Executive Officer of the society had misappropriated thesociety’s funds and created fraudulent loan records to obtain subsidies from government agencies, thereby misappropriating a total amount of Rs.6,38,100/-. In view of the above, both the petitioner and respondent Nos. 4 and 5 are jointly responsible for the misappropriation of the funds. 11. Under the circumstances the Court found that both petitioner and as well as the respondent Nos. 4 and5haveacted in concert and had a common intention that led to the damage. hence the liability can be fixed be jointly and severally.
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As a sequel, interlocutory applications if any pending in this Writ Petition shall stand closed.
RAO //TRUE COPY// ^registrar /%SECTION OFFICER
To,
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HIGH COURT
DATED:04/12/2024
ORDER
WP.No.45481 of 2016
DISMISSING THE W.P. WITHOUT COSTS
2 issues framed by the court
Whether a writ of certiorari lies against the Tribunal's order confirming surcharge liability absent perversity or breach of natural justice?
Whether joint and several liability could be fixed on petitioner and respondents 4 and 5 without apportionment based on individual fault?
4 provisions across 3 enactments
M. Siva Rama Krishna
The State of Andhra Pradesh, rep. by its Principal Secretary (Cooperation Department)
The Deputy Registrar of Cooperative Societies, Eluru
K. Gokavaram Primary Agricultural Cooperative Society Ltd
S.V.N. Ramachandra Rao
M. Augistin
Tarlada Rajasekhar Rao
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
