WP/15429/2015 of M. Prasanna Lakshmi Vs Sri Laxmi Mahila Co-Operative Urban Bank Ltd., on 31 December 2015

ORDER:

Heard Sri Origala Ramesh, learned counsel for thepetitioner and the learned Government Pleader forCooperation appearing for the respondents.

2. In this Writ Petition, the petitioner hasquestioned order dt.17-01-2015 in CTA No.67 of 2012 ofthe Cooperative Tribunal, Hyderabad confirming the orderdt.30-11-2011 passed by 2[nd]respondent inRc.No.676/2010-C/SLMCUB/S.O.3.

3. On 02-03-2010, 2[nd] respondent-DeputyRegistrar/Liquidator of Sri Laxmi Mahila CooperativeUrban Bank Limited returned 43 execution petitionsstating that execution petitions could not be executedsince there are procedure lapses noticed in thesanctioning of loans to the tune of Rs.15,58,980/-, andthat the loans were sanctioned to fictitious persons by SriLaxmi Mahila Cooperative Urban Bank Limited,Hyderabad which is under liquidation etc. He requestedthem to initiate action under Section 60 of the APCooperative Societies Act, 1964 against the said Ex-Managing Committee members of the said bank whosanctioned over drafts and personal loans to the personsmentioned therein.

4. Thereafter, a show cause notice dt.06-07-2010 under Section 60 of the said Act was issued to thepetitioner who was also one of the Ex ManagingCommittee members.

5. The notice sent to the petitioner by RPADwas neither returned nor was any acknowledgmentreceived by the office of the 2[nd] respondent.

6. He gave another show cause notice dt.31-05-2011 and sought to serve it through a SpecialMessenger/the office subordinate of DLCO, but the letterwas returned stating that it could not be served on thepetitioner and other Ex Managing Committee Memberssince they were not available at their last known address,and that the Special Messenger affixed them on the lastknown addresses.

7. Thereafter, the publication was made inAndhra Bhoomi Daily Telugu Newspaper on 18-11-2011directing the petitioner and other former ManagingCommittee members to appear before 2[nd] respondent on28-11-2011 and put forth their defence to the allegationsleveled in the notice dt.31-05-2011 and indicating that thematter would be proceeded ex parte if they did not do so.

8. Since the petitioner and other Ex ManagingCommittee members did not appear before 2[nd]respondent on that day, the 2[nd] respondent passed an order on 30-11-2011 directing recovery of Rs.15,58,980/-jointly and severally from the petitioner as well as other ExManaging Committee members of the bank with 18%interest from the date of sanction till the date of realization.

9. Petitioner questioned this in C.T.A.No.67 of2012 before the Cooperative Tribunal at Hyderabadraising a specific plea that the notice alleged to have beensent by 2[nd] respondent was not received by her.

10. The said appeal was dismissed on 17-01-2015 stating that notice dt.06-07-2010 was issued to thepetitioner but she did not submit explanation and that theother show cause notice dt.31-05-2011 was sought to be served through the officesubordinate of the DLCO but the latter could not serve itsince the petitioner was not available in the last knownaddress. The Tribunal also referred to publication in theAndhra Bhoomi Daily Telugu Newspaper on 18-11-2011 and held that the plea of the petitioner that thenotice under Section 60 issued by 2[nd] respondent wasnot served on her was not correct and that the petitionerdid not adduce any evidence even though opportunitieswere given to her to defend the case.

11. Learned counsel for the petitionercontended that neither the notice dt.06-07-2010 nor thenotice dt.31-05-2011 issued by 2[nd] respondent were served on the petitioner.

12. This Court then asked the learnedGovernment Pleader for Cooperation to produce therecord relating to the service of these notices on thepetitioner.

13. The learned Government Pleader has todayproduced the record. The record does not reveal that thenotice dt.06-11-2010 was even dispatched to thepetitioner, let alone served on her. Even the notice dt.31-05-2011 bears an endorsement of the office subordinateof the office of the DLCO, Hyderabad that the notice dt.31-05-2011 could not be served on the petitioner and otherEx Managing Committee members of the bank since theywere not available in the presentknown address.

14. There is no finding even in the order of theTribunal that the notice dt.06-07-2010 was actually servedon the petitioner. As regards the notice dt.31-05-2011,the Tribunal noticed that the notice could not be served bythe office subordinate of the DLCO on the last knownaddress, whereas endorsement of the office subordinateof the DLCO on the notice dt.31-05-2011 states that thepetitioner and others were not available at their presentknown addresses and not to last known addresses. Without attempting to serve notice on the petitioner byRPAD at her present address, it is not open to 2[nd]respondent to proceed to pass an order under Section 60

of the Act against the petitioner merely on the basis ofpublication made on 18-11-2011 in Andhra Bhoomi DailyTelugu Newspaper.

15. Therefore, the order dt.30-11-2011 of 2[nd]respondent as confirmed by the order dt.17-01-2015 inCTA No.67 of 2012 of the Cooperative Tribunal,Hyderabad, are both unsustainable since the said ordersare passed in violation of principles of natural justice.

16. Accordingly the Writ Petition is allowed andboth the impugned orders are set aside insofar aspetitioner is concerned and the matter is remitted back to2[nd] respondent. The 2[nd] respondent shall issue a freshnotice by RPAD to the petitioner on the address viz., PlotNo.145/13, Trimulgherry, Greenfields, Teachers Colony,Secunderabad to show cause why proceedings underSection 60 of the Act shall not be initiated against her. Onreceipt of the said notice, the petitioner shall submit herexplanation within four weeks thereafter. After receipt ofthe explanation, the 2[nd] respondent shall fix a date forconducting enquiry into the allegations against thepetitioner. On such date or any other date fixed by 2[nd]respondent, an enquiry shall be conducted. The finalorder shall be passed by 2[nd] respondent within twomonths from the date of receipt of an explanation of thepetitioner by 2[nd] respondent. If the petitioner does not appear before 2[nd] respondent, after receiving the noticefrom the 2[nd] respondent, it is open to the 2[nd] respondentto proceed ex parte in the matter.

17. The Writ Petition is allowed with the above directions. No costs.

18. As a sequel, the miscellaneous petitionspending, if any, shall stand closed.

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JUSTICE M.S.RAMACHANDRA RAO

Date: 31-12-2015kvr