Bombay High Court
Hindurao Devaba Mane vs Kolhapur District Central Co Op Bank ... on 17 January, 2024
Author: Gauri Godse
Bench: Gauri Godse
2024:BHC-AS:5169
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rrpillai IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8211 OF 2017
1. Shri. Nazir Issamuddin Pirjade
2 Shri. Rajendra Balu Pishte
3 Shri. Bandu Balu Begade ... Petitioners
Versus
1. Kolhapur District Central Co-operative
Bank Ltd through its
Chairman/managing Director
2. The Authorized Enquiry Officer and
Deputy Registrar, Co-operative
Societies, Kolhapur ... Respondents
WITH
WRIT PETITION NO. 9670 OF 2017
1. Shri. Deepak Shivaji Chougale
2 Shri. Dinkar Dattatraya Kerle ... Petitioners
Versus
1. Kolhapur District Central Co-operative
Bank Ltd through its
Chairman/managing Director
2. The Authorized Enquiry Officer and
Deputy Registrar, Co-operative
Societies, Kolhapur ... Respondents
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WITH
WRIT PETITION NO. 9669 OF 2017
Late Shri Yashwant Ganu Kumbar through
Legal heirs
1a. Smt. Vimal Yashwant Kumbhar
1b. Shri. Vinayak Yashwant Kumbhar
1c. Ms. Suvarna Yashwant Kumbhar
... Petitioners
1d. Sou.Kalpana Madhusudan Kumbhar
Versus
1. Kolhapur District Central Co-operative
Bank Ltd through its
Chairman/managing Director
2. The Authorized Enquiry Officer and
Deputy Registrar, Co-operative
Societies, Kolhapur ... Respondents
WITH
WRIT PETITION NO. 16448 OF 2023
1. Shri. Hindurao Devaba Mane ... Petitioners
Versus
1. Kolhapur District Central Co-operative
Bank Ltd through its
Chairman/managing Director
2. The Authorized Enquiry Officer and
Deputy Registrar, Co-operative
Societies, Kolhapur ... Respondents
Mr. Prashant Bhavake for the Petitioner.
Mr. C. D. Mali, AGP for Respondent Nos. 2.
Mr. G. B. Naik for Respondent No. 1
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CORAM : GAURI GODSE, J.
DATE : 17th JANUARY 2024
ORAL JUDGMENT
1. Heard. These petitions challenge the order dated 6 th February
2015 passed by the learned Minister, Co-operation rejecting the
appeal preferred by the petitioners along with other two employees of
the bank challenging the inquiry report holding the petitioners
responsible for misappropriation of funds.
2. Appellant no. 1 in the appeal before the State Government was
working as a Branch Manager of Kagal branch-1 at the relevant time.
Learned counsel for the petitioners pointed out that appellant no. 1 in
the appeal had also challenged the inquiry report as well as the order
dated 6th February 2015 by filing Writ Petition No. 6204 of 2016. He
submitted that the said Writ Petition is allowed by this court [Coram:
Sandeep V. Marne, J.] on 8th September 2023. He placed on record a
copy of the said order.
3. Learned counsel for the petitioners submitted that the allegations
against the petitioners were general in nature stating that they were
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responsible for maintaining cash transactions and hence they were
held responsible for the financial irregularities. He submitted that
perusal of the inquiry report would show that there were no specific
roles alleged against the petitioners and that there is no specific
finding recorded against the petitioners holding them responsible for
any financial irregularities.
4. He further submitted that in the impugned order, none of the
submissions of the petitioners are taken into consideration, and only
by relying upon the inquiry report the appeal has been dismissed.
5. Learned counsel for the petitioners also pointed out the order
passed by the Hon'ble Minister on 1 st June 2015 in the appeal
preferred by certain other employees who were working as Chief
Accountants / Cashiers at the relevant time, who were also held
responsible for the financial irregularities. He submitted that based on
the same inquiry report the said appeal was allowed by the Hon'ble
Minister and the persons holding higher posts in the bank were
exonerated. However, so far as petitioners who were working as clerk/
cashier/branch manager in the bank are held responsible by relying
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upon the same inquiry report. He submitted that Petitioners in Writ
Petition No. 8211 of 2017 were working as clerks in Kagal Branch No.
2, Petitioner No. 1 in Writ Petition No. 9670 of 2017 was working as
Receiving Cashier in Kagal Branch No. 1 and Petitioner No. 2 was
working as Cashier in Kagal Branch No. 2, Petitioner in Writ Petition
No. 9669 of 2017 was working as Branch Manager in Kagal Branch
No. 2 and Petitioner in Writ Petition No. 16448 of 2023 was working as
Sub-Accountant.
6. He submitted that in the impugned order, none of the
submissions are considered, and without there being any specific
finding in the inquiry report against the petitioners they are held
responsible for the financial irregularities. There is a direction issued
for the recovery of amounts from the petitioners as apportioned by the
inquiry officer. He submitted that the inquiry report runs over 400
pages, however, there is no finding recorded against the petitioners for
holding them responsible for any misappropriation of the amount as
well as the amount apportioned against them.
7. Learned counsel further submitted that the Branch Manager of
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Kagal Branch No. 1 has been exonerated by this court by order dated
8th September 2023 by taking into consideration similar submissions
as made by the petitioners in the common appeal that was preferred
before the Hon'ble Minister. He thus submitted that the petitioners
stood on a better footing who were working as clerk, cashier and one
petitioner who was also working as Branch Manager who was similary
placed as the petitioner who is exonerated by this court. He therefore
submits that even the present petitions be allowed on the similar
grounds.
8. Learned counsel for the respondent bank as well as learned
AGP does not dispute aforesaid submissions regarding the order
passed by this court. The reasons recorded in paragraphs 7 to 11 of
the said order dated 8th September 2023 passed by this court read as
under :
"7. Having heard the submissions canvassed by the learned
counsels for the parties, it is seen that the Respondent No.1 has
initiated action under Section 88 of the Act of 1960 on account
of financial irregularities committed in various branches of the
Bank. Mr. Shah has contended that under Section 88 of the Act
of 1960, the employee of a society cannot be held responsible
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unless such an employee is associated with organization or
management of the Society. He has contended that Petitioner
was not associated with the organization or management of the
Society. Mr. Shah has placed reliance on the judgment of
Shriram Dhonduji Raut (supra) in which this Court held in paras-
6, 7 and 8 as under :
6. On a plain construction, this section empowers the
Registrar to make an inquiry on the basis of an Auditor's
report in respect of any misfeasance or breach of trust
in relation to the funds of the society. This section also
empowers the Registrar to make an order requiring to
pay, repay or restore the money or property or any part
thereof with interest at such rate as the Registrar may
determine. But who does section 88 apply to? A plain
reading of the section makes it clear that the Registrar is
empowered to take this action in regard to "any person
who has taken any part in the organisation or
management of the society or any deceased, or past or
present officer of the society".Therefore, whether
section 88 was available in the present case depends
on the answer to the question whether the petitioner
was a person who has taken part in the organisation or
management of the society or was an officer of the
society. Now there seems to be no dispute about the
fact that the petitioner was appointed on a salary of
Rs.90/- per month and was placed incharge of the cloth
section of the shop of the society at Shendurwafa. In the
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dispute, the society has described the petitioner as
Manager. However, a perusal of the appointment order
shows that the petitioner was appointed as a Pramukh
i.e. head or a person incharge of the cloth section.
Therefore, the petitioner cannot be said to be a person
who has taken part in the organisation or management
of the society in the sense used in section 88 of the Act.
This phrase contemplates a person who has taken part
in organising the society itself i.e. in forming it or its
management. There is an appreciable difference
between a person having taken part in the organisation
and management of the society and someone having
taken part in the organisation and management of a
shop belonging to or run by the society. Clearly the
petitioner belongs to the latter category. On the principle
that the greater includes the lesser, a person who has
taken part in the management of the society may be
considered to be a person who has taken part in the
management of a shop, but the reverse is not true.
7. The next thing that requires consideration is whether
the petitioner can be said to be an officer of the society.
The word "officer" has been defined by the Act itself.
Sub-section (20) of section 2 of the Act defines "officer"
as follows:-
"(20) "officer" means a person elected or appointed by a
society to any office of such society according to its bye-
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laws; and includes a chairman, vice-chairman,
president, vice-president, managing director, manager,
secretary, treasurer,member of the committee and any
other person elected or appointed under this Act, the
rules or the bye-laws, to give directions in regard to the
business of such society."
8. On application of the section, it is clear that the
petitioner is not a person elected. He is a person who is
appointed. But that still does not make him an officer as
defined because the election or the appointment must
be in order to "give directions in regard to the business
of such society." There is nothing on record to show that
the petitioner was empowered to give directions in
regard to the business of the society. If anything, it
appears that he was subject to the directions of the
society having been appointed to be incharge of one of
its shops at Shendurwafa.
8. In my view, the judgment in Shriram Raut (supra) cannot be
cited in support of an absolute proposition that no employee of
the Society can ever be held responsible under Section 88 of the
Act of 1960. The judgment in Shriram Raut is rendered in the
facts that case where the employee therein was posted as a
Head in clothing section at one of the shops of the society.
Considering the role of employee therein, this Court arrived at a
conclusion that he was not a person who took part in
organisation or management of the Society nor he was its officer.
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Petitioner was admittedly holding the position of 'Branch
Manager'. Definition of the term 'Officer' undoubtedly includes a
Manager. As a Branch Manager, Petitioner was undeniably
empowered to give directions with regard to business of the
Society. It is therefore difficult to hold that Petitioner did not take
any part in managing the business of the Society. In that view of
the matter, the contention raised by Mr. Shah that in his capacity
as an employee, Petitioner would be outside the purview of
provisions of Section 88 of the Act of 1960 deserves to be
repelled.
9. Coming to the next submission advanced by Mr. Shah
about non-discussion of Petitioner's role, perusal of the order
passed by Respondent No. 1 would indicate that though
Respondent No.1 has passed detailed Order running into over
400 pages, there is absolutely no finding as to how Petitioner is
responsible for any misappropriation and why the amount is
apportioned against him. Though Respondent No. 1 has devoted
pages after pages to record contents of replies and submissions
advanced during the course of hearing, the sketchy findings
recorded by him does not even refer to Petitioner's name. In my
view, under the provisions of Section 88 of the Act of 1960, it was
incumbent upon Respondent No.1 to record specific findings in
respect of each of the employees as to how they were
responsible for alleged misappropriation. Unless such a
conclusion is reached, it was impermissible for Respondent No.1
to direct recovery of any amount under Section 88 of the Act of
1960. In my view therefore, the order of Respondent No.1 suffers
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from the vice of non-application of mind and perversity and for
absence of any findings qua the Petitioner, the same would be
unsustainable.
10. The order passed by the Minister does not make the case
of the Respondents any better. The Hon'ble Minister has merely
recorded the events that have occurred leading to institution of
enquiry and passing of order by Respondent No.1. Though nine
employees had preferred Appeal before the Hon'ble Minister, no
attempt is made by the Hon'ble Minister to find out the exact role
assigned to each of those employees by Respondent No.1 in the
enquiry. The Appeals are rejected by recording general and vague
findings. While deciding the Appeal, the Minister has not
discussed the role of the Petitioner and why he could be found
guilty of misappropriation of the amount assigned to him.
Therefore, the order passed by the Minister also suffers from the
vice of perversity.
11. Resultantly, I find the order passed by Respondent No.1 on
3 October 2013, as well as the order of the Minister, Co-operation
dated 6 February 2015 to be indefensible. Both orders are
accordingly set aside qua the Petitioner only. Any consequential
action for recovery initiated against Petitioner also stands set
aside. The Writ Petition is accordingly allowed and disposed of.
9. The aforesaid reasons are also applicable to the petitioners'
case as they are similarly placed. Learned counsel for respondent no.
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1 was unable to point out any specific finding recorded against the
petitioners in the inquiry report. Perusal of the impugned order does
not indicate consideration of any of the submissions made on behalf of
the petitioners. By the impugned order, the appeal filed by the
petitioners along with other employees is dismissed only by relying
upon the inquiry report.
10. I therefore find substance in the argument made on behalf of the
petitioners, that the impugned order is passed without any application
of mind and thus suffers from perversity and without any finding
recorded against the petitioners. Hence the order is not sustainable so
far as the petitioners are concerned.
11. In the absence of any specific role attributed to the petitioners
and/or any specific finding in the inquiry report the petitioners cannot
be held responsible for the irregularities. Thus, the order directing
recovery of the amount as opined in the inquiry cannot be sustained.
12. For reasons recorded above the petitions are allowed by
passing following order :
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(i) Judgement and Order dated 6 th February 2015 passed by
the Learned Minister for Co-operation, Marketing and Textile,
Maharashtra State in Appeal bearing No.
APP/2013/Pra.Kra.256/15-S is quashed and set aside qua the
petitioners.
(ii) The inquiry report and consequential order of Respondent
No. 2 - Enquiry Officer dated 3 rd October 2013 is quashed and
set aside qua the petitioners.
(iii) Any consequential action for recovery initiated against the
petitioners also stands set aside.
(iv) Writ Petitions are allowed in the above terms.
[GAURI GODSE, J.]
