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Poosapati Madhava Varma and anr. Vs. District Collector, Visakhapatnam and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. Nos. 530 and 1535 of 1978
Judge
Reported inAIR1979AP3
ActsAndhra Pradesh Co-operative Societies Act, 1964 - Sections 60(1)
AppellantPoosapati Madhava Varma and anr.
RespondentDistrict Collector, Visakhapatnam and anr.
Appellant AdvocateM. Adinarayana Raju, Adv.
Respondent AdvocateK. Ramaswamy, Govt. Pleader
Excerpt:
.....that could not be recovered - president and director were removed from service being guilty of willful negligence resulting to loss to society - writ petition filed against such removal - contended that it was duty of office manager to recover amount and hence president and director not liable for making the loss good - when president and director were expressly told by government and additional joint registrar that they should seek to recover amount and when they failed to follow such instructions they were both held to be guilty of willful negligence on their respective parts - held, order of removal sustained. - - the president as well as the other directors submitted their explanation. the learned subordinate judge held that in the circumstances of the case, the petitioners..........to all the directors stating that they had caused deficiency in the assets of the society by their willful negligence in not recovering the amount from the assistant procurement officer and requiring them to re-pay the amount. the president as well as the other directors submitted their explanation. they contended that it was the responsibility of the business manager of the society to collect the amount an; the directors could not be made liable the district collector did not accept their explanation and held that the deficiency of rs, 10000/- was caused on ac count of willful negligence on the par of the directors. as against the said order, the petitioners in both the writ petitions preferred appeals to the sub ordinate judge visakhapatnam under sec. 76 of the act. the learned.....
Judgment:
ORDER

1. The petitioner in W P. No 530 of 1978 was the President of the Visakhapatnam District Co-operative Marketing Society Limited Visakhapatnam (referred to in this judgment as the Society) between the years 1946 and 1972 and the petitioner in W,P. No. 1533 of 19'i8 was one of the Directors of the Committee during the period 11-2-1962 to 1-6-1-72 The Society paid a sum of RS 10.000/- to the Assistant Procurement Officer of the Society of food grains for the Society through purchasing agents. The purchasing agents presented a bill for RS. 15,764.27 and this was settled on 31-7-1947. Later on it was found that when the bill was settled, the amount. of RS. 10.000/- was not deducted from the bill. Thereupon the Society filed a claim No. 51/48-49 before the Deputy Registrar. Visakhapatnam claiming the sum of RS. 10.000/-- from the purchasing agents The claim was allowed. The purchasing agents preferred a revision petition to the Joint Registrar of the Co-operative Society who held that the Assistant Procurement Officer himself was responsible for the amount and he had to make the same. Against the judgment the Society preferred a provision petition to the Government of Andhra Pradesh who observed in their Memorandum D/- 26-5-1965 that Society should have proceeded against the Assistant Procurement Officer for his negligence and dereliction of his duty resulting in loss to the Society. After receipt of one memo the Assistant Procurement officer was kept under suspension and subsequently by a resolution dated 9-12-1968 or the Board of Directors he was ordered to be removed and an order of removal was passed. No steps were however taken to recover the amount from the Assistant Procurement Officer. Thereupon, the District Collector issued a notice under S. 60 (1) of the Act to all the Directors stating that they had caused deficiency in the assets of the Society by their willful negligence in not recovering the amount from the Assistant Procurement Officer and requiring them to re-pay the amount. The President as well as the other Directors submitted their explanation. They contended that it was the responsibility of the Business manager of the Society to collect the amount an; the Directors could not be made liable The district Collector did not accept their explanation and held that the deficiency of RS, 10000/- was caused on ac count of willful negligence on the par of the Directors. As against the said order, the petitioners in both the Writ Petitions preferred appeals to the Sub ordinate Judge Visakhapatnam under Sec. 76 of the Act. The learned Subordinate Judge held that in the circumstances of the case, the petitioners were guilty of willful negligence resulting loss to the society and hence the president and other directors were both jointly and severally liable to make good to the society in a sum of RS 10,000/- with interest at 12% from 25-5-1965. Challenging the validity of the said order the President of the society has file W. P, No. 530/78 and one of the Director has filed W. P, No, 1533/78.

2. The common question for consideration is whether the President an Directors can be said to be guilty willful negligence in not recovering the amount from the Assistant Procurement officer.

3. The main contention before the District Collector as well as the Subordinate Judge in appeal was that was the duty of the office Manager to recover the amount and hence the President Find the Directors are not. liable This contention is obviously untenable as under the Co-operative Societies Act the entire management of the society vested in the committee.

4. Sri Adinarayana Raju. learn counsel for the petitioner then drew my attention to by-law 20 (1) (a) which provides that the business manager shall be responsible for the Executive administration of the society. But in that very clause however it is stated that he is subject to the control of the President. By-law 20 (1) (a) says the President shall have a general control over all the affairs of the society and by-law 14 provides that the executive management vests in the Board of Directors. Thus it is clear that it is the Board of Directors that is the ultimate authority and is liable for all acts of management and mismanagement.

5. The next contention of Sri Adi narayana Raju is that there is no willful negligence on the part of the President or the Board of Directors. Under Sec. 60 (1) of the Act it must appear that the person concerned has misappropriated ' fraudulently retained any money or other property or has been guilty of breach of trust in relation the society or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has made any payment contrary to the pro visions of the Act, the rules or the by laws, In this case, the complaint is that President and the Board of Directors have caused deficiency in the assets of the Society to the extent of RS, 10,000/- by their willful negligence, The question is whether in the circumstances of the case the omission to recover the sum of RS, 10,000/-- from the Assistant Procurement Officer would constitute willful negligence. It is argued by Sri Adinarayana Raju that the President and the Board of Directors first Preferred a claim against the Purchasing Agents bona fide believing that they mere Liable and as matter of fact the claim was allowed, It was only in a revision to the Joint Registrar it was held that they should recover from the Assistant Procurement Officer and the same view was upheld by the Government. Later on. they removed the Assistant procurement officer from service by their resolution dated 9-12-1966 It is no doubt true that they did not recover the amount of Rupees 10,000/- from him, At the worst this omission to do so may constitute negligence But it does not constitute willful negligence on the part of the President or the Board of Directors. No motive has been alleged or proved against the president or the Beard of Directors for not recovering the amount due from the Assistant procurement Officer. It is not suggested that there were any mall fides on their part In the circumstances he argued that it cannot be said that there was any willful negligence To willfully neglect to ho a thing is intentionally or purposely to omit to do it. Vide R.v. Dnwnes (1875) QBD 25. Dealing with the expression 'willful negligence in section 71 of the Madras Co-operative Societies Act it was held in Subbammal v. Tenkash Co. Op. Urban Bank, : AIR1977Mad92 that it would mean intentional and purposeful omission. Mere negligence however may not be sufficient to attract the section. In that particular case, the Secretary was negligent is not supervising the work of the clerk and it was held that the failure of the President and the Vice President of the Society to check the accounts or to detect the misappropriations made by the clerk could not be said to be due to the willful negligence on their part. Bearing these principles in mind it is to be seen whether the petitioners can be said to be guilty of willful negligence in this case. It is no doubt true that the President and the Board of Directors sought to recover the amount from the purchasing agents in the first instance but the Additional Joint Registrar and on revision the Government held that it was the Assistant Procurement Officer that was liable and they should recover the amount from him and not from the purchasing Agents, in spite of this order no were taken to recover the amount from the Assistant Procurement Officer. The President and the Board of Directors rested content with merely removing him from service. When they were ex prissily told by the Government and the Additional Joint Registrar that they should seek to recover the amount from the Assistant Procurement officer and when they failed to do so I am of and view that they should be held to be guilty of willful negligence, as there was a deliberate omission on their part to recover the amount from him. It may be that there may not be motive in not proceeding against him It may eves be that there are no mala fides on their part. But they were made aware of their duty to recover the amount from him and in spite of it they refrained from doing so. It was therefore a case of deliberate omission to recover the amount which would according to the authorities cited above constitute 'willful negligence' on their part.

6. Sri Adinarayena Raju submitted under by-law No. 19 it was the duty of the Business Manager to convene the meetings of the Board of Directors and Air the agenda for that meeting. He submitted that in this case it was not brought to the notice of the Board of Directors in their meeting that they should initiate proceedings for the recovery of the amount. The agenda fixed for the meeting was only with respect to the removal of the officer from service It cannot therefore be said that there was any willful negligence on their part in not passing a resolution for recovering the amount. This explanation is not convincing. Firstly the actual agenda of the meeting of the Board al Director is not before me. Even assuming that one of the items of the agenda merely related to the removal of the officer, it is submitted that the Board of Directors were aware of the order of the Additional Joint Registrar and the Government holding that the Assistant Procurement Officer was liable and that the society should take steps to recover the amount from him .

Even while considering the question of removal of the Officer from service, the Board of Directors could have considered the question recovering the amounts from him. It was their duty to consider that in view of the directions of the Additional Joint Registrar and the Government. In as much as they failed to do so. it was 'willful negligence' on their part. In any event it cannot be said that the judgment of the learned Subordinate Judge is vitiated by an error of law on the face of the record requiring interference in a writ petition under Art. 226 of the Constitution.

7. The Writ petitions are dismissed, but in the circumstances without costs.

8. Advocate's fee RS. 100/- in each.

9. Writ petitions dismissed.


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