ORDER
A. Gopal Reddy, J.
1. The facts relevant for the decision of this writ petition are in a short compass.
2. The petitioner while working as Assistant Secretary, Pulikundaram PACS, the Senior Inspector of Audit, Puttur has
conducted final audit of Pulikundaram PACS of Pitchatoor branch for the years 1992-93; 1993-94 and 1994-95 and submitted a special report alleging misappropriation of funds by the Secretary and the Ex-President of the Society. On receipt of the said report the District Co-operative Officer -R3 authorised the Extention Officer (Rural Development), Pitchatoor to conduct inspection under Section 52 of the A.P. Co-operative Societies Act, 1964 (Act 7/64), who is turn after inspection submitted his report stating that the petitioner has misappropriated an amount of Rs.2,12,178.96 ps. and thereby caused loss to the Society -1. By decreasing the cash balance; 2. Amounts collected and not remitted to the Society and 3. Created unnecessary advances, falsification of records etc., and recommended for talking civil and criminal action by detailing the misappropriation. He also fixed the responsibility on T. Veeraraghavulu, Secretary for Rs. 73,786.50 ps. and N. Mannachi Raju, Ex-President for Rs.4,000/-. Basing upon the said report a surcharge notice dated 9-9-1998 under Section 60 of the Act 7/64 was issued to the petitioner calling upon him to submit his explanation within 15 days from the date of receipt of the notice. The petitioner on receipt of the above surcharge notice requested one-month time for submitting his explanation on 1-10-1998. Even after expiry of the said period, the petitioner has not chosen to submit his explanation. Therefore, surcharge order dated 14-5-1999 was issued, which is impugned in the present writ petition. Thereafter, the petitioner submitted a letter to the 2nd respondent, who is turn by notice dated 23-6-1999 directed the petitioner and the Secretary – 1st respondent to appear before him on 29-6-1999 with connected records such as cash book, loan ledgers, vouchers, receipt book, minutes book etc., relating to the period 1992-1993 to 1994-1995 and also the records relating to special report and inspection report under Section 52 of the Act for his verification
about the genuineness. The Secretary neither attended the enquiry nor produced any records, but directed the petitioner to remit the amount specified in the surcharge order dated 14-5-1999. On failing the petitioner to deposit the amount the 1st respondent filed EP 27 of 1999-2000 on the file of Deputy Registrar of Co-operative Societies, Tirupathi.
3. The 2nd respondent filed a counter admitting all the above facts and further stated that at the time of visit of the then Divisional Co-operative Officer, Tirupathi to Pitchatoor basing upon the representation of the petitioner that he has not committed any misappropriation of funds of the Society and requested to re-examine the records issued a notice dated 23-6-1999 requesting the Secretary to be present before him along with records. Due to pre-occupation, with regard to collection of Short Term loans, he has not produced the relevant records. But later the Divisional Co-operative Officer transferred and the deponent was transferred in his place. Once surcharge order was issued by the Deputy Registrar, he has no power to reopen or to review the same, which was issued basing upon the inspection under Section 52 of the Act, and the same has to be recovered as per the procedure contemplated under the Act. The petitioner’s remedy, if any, is to file an appeal against the said order, but the 2nd respondent cannot review the same.
4. The 1st respondent filed a separate counter in similar lines.
5. Learned Counsel for the petitioner made the following submissions :
1. Once the 2nd respondent reopened the case for further enquiry and called upon the Secretary to produce the records, no coercive steps can be taken under the surcharge order passed earlier.
2. The earlier surcharge order was passed without enquiry and the same cannot be sustained in view of the law declared by this Court in S. Kama Subba Rao v. President, Kaikaluru Irrigation and Power Department Sub-Divisional Employees Cooperative Credit Society Limited, 1994 (1) APLJ 200 (HC).
3. When the surcharge order is passed without any enquiry and even if it attained finality, this Court cannot put a seal on the illegal order and the same has to be set aside in exercise of power under Article 226 of the Constitution.
4. The petitioner cannot be relegated to statutory appeal wherein he will be forced to deposit 50% of the surcharge amount. Therefore, prayed for allowing the writ petition.
6. On the other hand, learned Government Pleader for Co-operation contended that once the Deputy Registrar in exercise of powers under Section 60 of the Act passed surcharge order, the successive Divisional Co-operative Officer cannot review the same. The only remedy available to the petitioner is to file an appeal under Section 76(1) of the Act 7/64 and the 2nd respondent has rightly refused to proceed with the matter, as he lacks inherent jurisdiction to review the same.
7. Learned Counsel for the 1st respondent also contended that once the surcharge order has become final, it is not open for the petitioner to seek judicial review of the said order. The petitioner having received the notice under Section 60 of the Act 7/64 has not filed any explanation. In view of the same, surcharge order once passed basing upon the special report under Section 52 of the Act cannot be subject-matter of review by the 2nd respondent and once the surcharge order
has become final, society is justified in filing EP for recovery of the said amount. It is also submitted that a crime was also registered against the petitioner in FIR 4 of 2001 on the file of Pitchatoor Police Station, hence, the present writ petition is filed only to stall the further proceedings by the police including filing of the charge-sheet and the same cannot be stalled at this stage.
8. In order to appreciate the rival
contentions of the parties, it is relevant to notice Section 60 of the Act 7/64, which reads as under:
60. Surcharge :–(1) Wherein the course of an audit under Section 50 or an inquiry under Section 51 or an inspection under Section 52 or Section 53, or the winding up of a society, it appears that any person who is or was entrusted with the organizations affairs or management of the society or any part or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or has been guilty of breach of trust in relation to the society or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has made any payment contrary to the provisions of this Act, the rules or the bye-laws, the Registrar himself, or any person specially authorised by him in this behalf, of his own motion or on the application of the committee, liquidator or any creditor or contributor may inquire into the conduct of such person or officer or servant and made an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar or the person authorised as aforesaid thinks just or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, misapplication of funds, fraudulent retention, breach of trust, or wilful negligence as the Registrar or the person, authorised as aforesaid thinks just.
Provided that no order shall be passed against any person referred to in this sub-
section unless the person concerned has been given an opportunity of making his representation.
(2) Any sum ordered under this section to be repaid to a society or recovered as a contribution to its assets may be recovered on a requisition being to its assets may be recovered on a requisition being made in this behalf by the Registrar to the Collector in the same manner as arrears of land revenue.
(3) This section shall apply notwithstanding that such person or officer or servant may have incurred criminal liability by this Act.
9. Against any surcharge order passed under Section 60(1) of the Act 7 of 1964 an appeal lies under Section 76(1) of the appellate authority, constituted for the said purpose under Section 75. Once the Deputy Registrar of Co-operative Societies passes the surcharge order in exercise of the powers of the Registrar, the Divisional Cooperative Officer to whom certain powers of Registrar are delegated cannot exercise the review power or re-open the surcharge order. It is only the Registrar under Section 77 can exercise revisional jurisdiction subject to the condition no appeal is provided to the Tribunal under Section 76(1) of the Act against the said proceedings but not otherwise.
10. It is not in dispute that the Senior Inspector of Audit, who conducted, a final audit of the Society, submitted a special report bringing out to the notice of the society about the misappropriation of Society’s funds. On receipt of the said report, the District Co-operative Officer authorised the Extention Officer to conduct inspection under Section 52 of the Act 7/64, who submitted his report pointing out that the petitioner has misappropriated an amount of Rs. 2,12,178.96 ps. Basing upon the same, surcharge notice was issued to him asking the petition to file his explanation. Though the petitioner sought one-month time
for filing explanation, but the fact remains that he has not submitted his explanation. Ultimately surcharge order was passed. The remedy, if any provided to the petitioner is to file an appeal as contemplated under Section 76(1) of the Act 7/64. But mere making a representation to the 2nd respondent about the illegalities, it is not open for him to seek review of the said order nor re-open the same for the reason the Deputy Registrar of Co-operative Societies, who was also delegated the powers of the Registrar, passed the surcharge order. In view of the same, 2nd respondent lacks inherent jurisdiction to reopen the issue and review the surcharge order.
11. It is well settled that power to review is not inherent power but must be conferred by law either specially or by necessary implication. (See P.N. Thakershi v. Pradyumnsinghi, .)
12. This Court in P. Tata Rao v. Government of A.P., (DB), categorically held that even the Deputy Registrar appointed under Section 3(1) is a Registrar for the purpose of the Act. Once the Deputy Registrar is appointed within the meaning of Section 2(n) the Government has every right to entertain the revision petition and no writ of prohibition as such could be issued,
13. From the conspectus of the discussion made and for the reasons aforementioned it is clear that the 2nd respondent cannot exercise any review nor can reopen the case and further enquire into the matter and the notice issued for such review or reopening of the case as contended by the learned Counsel for the petitioner is without any jurisdiction. Hence, the successive officer rightly refused himself to proceed further pursuant to the notice issued earlier.
14. In view of the same, I do not see any merit in the writ petition and it is
accordingly dismissed. No costs. However, it is open for the petitioner to question the surcharge order before the appellate authority within four weeks from the date of receipt of a copy of this order with an application seeking condonation of law
under Section 14 of the Limitation Act.