Nathu Lal Gupta Vs Rajasthan State Coopertative T

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

S.B. Civil Writ Petition No. 4630/2001

Nathu Lal Gupta S/o Shri Ram Narayan aged about 61 years, R/o Chhatri Chowk, Brahampuri Mohalla, Pachpahar, District Jhalawar.

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----Petitioner

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Versus

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Rajasthan State Cooperative Tribunal, Jaipur through its Presiding Officer.

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Assistant Registrar, Office of Joint Registrar, Cooperative Societies, Kota Division, Kota.

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Managing Director, Jhalawar Central Cooperative Bank Ltd. Mukhyawas, Jhalarapatan, District Jhalawar.

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----Respondents

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For Petitioner(s) : Mr. Abhishek Pareek For Respondent(s) : Mr. Rakshit Jaimini & Mr. S.M. Sharma on behalf of Mr. Manoj Sharma, AAG

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HON'BLE MR. JUSTICE ANAND SHARMA

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RESERVED ON :: 09.04.2025 PRONOUNCED ON :: 17.04.2025

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By way of filing the instant writ petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 28.04.2001 passed by the Rajasthan State Cooperative Tribunal, Jaipur (for short, ‘the Tribunal’) in Appeal No. 35/1996 as well as the order dated 31.05.1996 passed by the Assistant Registrar-Leave reserve, Cooperative Societies, Kotakhad, Kota, under Section 75 of the Rajasthan Cooperative Societies Act, 1965 (for short, ‘the Act of 1965’). He has further prayed for giving direction of reinstatement

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of petitioner on the post of Branch Manager along with all consequential benefits.

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It has been stated by the petitioner in the memo of writ petition that he was initially appointed on 16.03.1964 on the post of Apprentice in the Jhalawar Central Cooperative Bank Ltd. Jhalrapatan and was further promoted on the post of Branch Manager. Petitioner states that one Clerk-Cum-Cashier in his branch namely Shri Krishna Chand Anjana was indulged in embezzlement and thereupon the petitioner lodged FIR at Police Station, Gangdhar on 01.08.1980 and this fact was also brought to the notice of higher authorities. However, in quite surprising manner, the petitioner was placed under suspension vide order dated 04.08.1980 issued by the respondent-Bank. His suspension continued for two years and thereafter vide order dated 20.12.1982, he was reverted from the Branch Manager to Clerk and was placed at the minimum Pay Scale of Clerk and forfeited the benefits of suspension period except the subsistence allowance.

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It was also averred by the petitioner that the aforesaid order dated 20.12.1982 was based upon an enquiry conducted by the Joint Registrar, Kota under Section 74(2) of the Act of 1965, which was concluded vide decision dated 28.06.1982 wherein the petitioner as well as Clerk Krishna Chand Anjana were jointly found guilty of embezzled amount in the tune of Rs. 56,008.36 and hence, directions were given to recover the said embezzled amount from both the erring officials in equal half share, such

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recovery was to be made along with interest at the rate of 18% per annum in addition to surcharge. The petitioner further states that he along with Shri Krishna Chand Anjana challenged the decision taken by the Joint Registrar Cooperative Societies, Kota dated 28.06.1982 under Section 74(2) of the Act of 1965 and in appeal the Additional Registrar-II, Cooperative Societies, Rajasthan, Jaipur has given a decision dated 19.12.1992 that the embezzlement was committed only by Shri Krishna Chand Anjana and not by the petitioner, however, petitioner was held liable for supervisory negligence and the entire embezzled amount along with interest were directed to be recovered from Shri Krishna Chand Anjana and not from the petitioner, however, it was also observed that against the petitioner, action has already been taken by the department for not supervising the matter properly.

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Thereafter, the petitioner initiated reference proceedings under Section 75 of the Act of 1965 for arbitration in which the Assistant Registrar, Leave reserved, Office, Kota, has appointed Arbitrator, however, the Arbitrator rejected the claim of the petitioner on the ground that earlier order dated 20.12.1982 was not challenged within limitation by the petitioner. The Arbitrator passed its order on 31.05.1996.

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The aforesaid order dated 31.05.1996 was further challenged by the petitioner before the Tribunal by way of filing an appeal under Section 123 of the Act of 1965, which has also been rejected by the Tribunal vide order dated 28.04.2001. Hence, the instant writ petition has been filed.

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On receiving the notice of the writ petition, reply to the writ petition has been filed by the respondents, who have supported the impugned decision and have stated that the punishment given to the petitioner in departmental proceedings is sufficient. Petitioner was given complete opportunity to defend his case. Notice of hearing was also published in the newspaper. Petitioner sought time on 31.05.1992 to submit the evidence but he did not turn up. As per the respondents, enquiry has been conducted under Section 74 of the Act of 1965 and therefore, the order has already been examined by the Arbitrator as well as by the learned Tribunal and concurrent findings have been given against the petitioner, hence, no interference is called for in the instant writ petition and the same may be rejected by this Court.

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Heard and considered the record meticulously.

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The petitioner has argued that the action of reverting the petitioner and withholding the other benefits has been taken against him solely on the basis of fact of finding is conducted under Section 74 of the Act of 1965 and no separate departmental enquiry has been conducted in the matter so as to award punishment of reversion and other penalty against the petitioner. The respondents have submitted that the enquiry under Section 74 of the Act of 1965 was sufficient and no other departmental enquiry was required to be undertaken.

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In this regard, it would be relevant to refer the provisions of Section 74 of the Act of 1965 which is being reproduced as under:-

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“ 74. Surcharge. (1) If in the course of an audit, inquiry, inspection or the winding up of a co-operative society, it is found that any person, who has taken any part in the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act, the rules or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has misappropriated or fraudulently retained any money or other property belonging to such society, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquiry himself or direct any person authorised by him by an order in writing in this behalf, to inquiry into the conduct of such person:Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub-section [or as the case may be, from the date of knowledge of the Registrar of such act or omission, whichever is later] [Inserted by Rajasthan Act No. 2 of 1991 [27.3.1991] ],

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(2) Where an inquiry is made under sub-section (1), the Registrar may. after giving the person concerned an opportunity of being heard, make an order requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable.

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(3) This section shall apply notwithstanding that such person or officer may have incurred criminal liability by his act or omission.”

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Bare perusal of the aforesaid provision would reveal that in case in the course of an audit, inquiry, inspection or the winding up of a co-operative society, it has come out that there is any person, who has taken any part in the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment

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contrary to the Act, the rules or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has misappropriated or fraudulently retained any money or other property belonging to such society, then the Registrar may, on his own motion or otherwise make an enquiry and Section 74(2) states that under Section 74(1) Registrar, after giving opportunity of hearing to the concerned person, may make an order requiring him to repay or restore the money or property or any part thereof, with interest, or to pay contribution and costs or compensation to such extent, which the Registrar may consider just and equitable. Thus, content of the reply of Section 74(1) and (2) would make it clear that the aforesaid provision is meant for recovery of embezzled amount involved or irregular payment or involved any other financial irregularity. It provides for recovery of such amount from the erring person, however, does not empower the authority to penalize any employee by awarding any penalty relating to his service. For that, the authorities under the Cooperative Societies Act are required to conduct a separate enquiry under the disciplinary rules, which has not been done in the instant case as the counsel for the respondents has utterly failed to produce anything on record to show that apart from enquiry under Section 74, any other disciplinary enquiry was undertaken by the respondents against the petitioner.

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The petitioner has placed on record order dated 19.12.1992 whereby the decision taken under Section 74(2) of the Act of 1965 has been diluted against the petitioner to the extent to which the allegation of embezzlement was lavelled against him and it was

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held that petitioner had never embezzled any amount. In view of the above it has already been held that petitioner is not guilty of any embezzlement or financial irregularity, therefore, there was no occasion for the respondents to pass order for penalizing the petitioner in the manner to revert him on the post of clerk and to forfeit other benefits admissible to him, without conducting a separate disciplinary enquiry against him. Learned Tribunal in its order dated 28.04.2001 has utterly failed to examine the scope and amplitude of Section 74 of the Act of 1965 and the impugned action of the respondents has erroneously been held to be valid by the Tribunal only on the basis of enquiry under Section 74.

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Thus, learned Tribunal in its order dated 28.04.2001 has committed serious error of law and therefore, order dated 28.04.2001 passed by the Tribunal Rajasthan, Jaipur in Appeal No. 35/96 is hereby quashed along with order dated 31.05.1996 passed by the Arbitrator.

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As held hereinabove that on the basis of enquiry under Section 74, the petitioner could not have been penalised by reverting him vide order dated 27.12.1982, without conducting any separate and independent departmental enquiry, the order dated 27.12.1982 is also held to be illegal. The petitioner is entitled for consequential benefits arising out of quashing of aforesaid orders. Compliance of this order may be made within a period of four months from the date of certified copy of this order. 14. Accordingly, this writ petition is allowed.

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