G. Eswara Reddy v. The Govt. of A.P.
Case brief
What is this about?
This judgment deals with appeals against orders decreeing suits for recovery of unaccounted essential commodity stocks stored by a cooperative society. The Court held directors personally liable for the stocks but reduced the recovery quantum due to respondent's laxity in verification.
What did the court decide?
Appeals allowed in part. Respondents entitled to half of the suit claim; trial decrees modified accordingly.
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 directors of the cooperative society are jointly and severally liable for the recovery of unaccounted stocks?
Whether the suit claim for recovery at 200% is maintainable when there was omission in verifying stock position?
Whether the appellants can be held liable for the deficiency in the stocks received by the society?
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
Andhra Pradesh State Commodities Corporation Limited
- respondent
3rd Respondent Society (Cooperative)
Coram
Case details
As recorded by the court registry
- Court
- Telangana HC
- Decided on
- · June
- Registered
- Case no.
- AS/2298/1998
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