G. Eswara Reddy v. The Govt. of A.P.
Case brief
What is this about?
This appeals court examined suits for recovery of unaccounted essential commodities stocks entrusted to cooperative society directors. It held the directors jointly liable as agents but reduced the recovery quantum from 200% to 50% due to the trustee's lack of due diligence in verifying stock positions.
What did the court decide?
Decrees of trial courts modified; respondents entitled to only 50% of the suit claims instead of the awarded amounts.
What the court decided
HON’BLE SRI JUSTICE L. NARASIMHA REDDY AND HON’BLE SRI JUSTICE S.V. BHATT
A.S.Nos.2297 & 2298 OF 1998
COMMON JUDGMENT: (Per SVB,J)
The parties and the subject matter in both the appeals are common. Hence, they are disposed of through the common judgment. While defendant Nos.2 to 13 in O.S.No.13 of 1991, on the file of the Senior Civil Judge, Rayachoti are the appellants in A.S.No.2297 of 1998, defendant Nos.2 to 14 in O.S.No.12 of 1991, on the file of the Senior Civil Judge, Rayachoti, are appellants in A.S.No.2298 of 1998.
Respondents 1 and 2 in A.S.No.2297 of 1998 filed O.S.No.13 of 1991 for recovery of a sum of Rs.17,26,416.80 Ps or such other amount, as may become due and payable after rendition of accounts by the appellants. Briefly stated, their case was that for proper distribution of essential commodities i.e., rice, wheat, edible oils etc., through public distribution system under various schemes viz., NREP/RLEGP were launched and the District Supply Officer is designated as Ex-officio District Manager of 2nd respondent.
The 3rd respondent is a body registered under the provisions of the A.P. Cooperative Societies Registration Act, 1964 (for short ‘the Act’). The 1st appellant was the President
and other appellants were the Directors of 3rd respondent Society between 1982 and 1985. It was pleaded that the 3rd respondent Society represented through its President was appointed as Taluq Level Stockist for distribution of essential commodities to fair price shops and designated as Storagecum-Distribution Agent at Rayachoti and Lakkireddypalli. The duties and obligations of the 3rd respondent Society are to store and distribute essential commodities to Fair Price Shop Dealers for and on behalf of the 2nd respondent. On 15.04.1983, agreement was entered into between 2nd and 3rd respondents incorporating various conditions including the rates of commission. Over the period, huge varieties of essential commodities were supplied to the 3rd respondent for distribution.
Issues for consideration
3 issues framed by the court
Whether the claims for recovery are true, valid, and enforceable against the appellants?
Whether the appellants作为 directors are jointly and severally liable for the suit claims?
Whether the quantum of the claim at 200% is tenable or should be reduced based on respondent's diligence?
Parties & counsel
- appellant
Defendant Nos. 2 to 13 in O.S.No.13 of 1991
- appellant
Defendant Nos. 2 to 14 in O.S.No.12 of 1991
- respondent
Respondents 1 and 2
Coram
Case details
As recorded by the court registry
- Court
- Telangana HC
- Decided on
- · June
- Registered
- Case no.
- AS/2297/1998
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