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Judgment
K. Chandru, J.—The petitioner is the same in both the writ petitions. In W.P. No. 10424 of 1999, the challenge is to the order of the second respondent Deputy Registrar dated 26.12.1995 and confirmed by the first respondent Co-operative Tribunal in its order in C.M.A. No. 4 of 1996 dated 11.11.1998. In W.P. No. 10425 of 1999, the challenge is to the Surcharge Proceedings of the second respondent dated 12.6.1995 and confirmed by the first respondent in its order dated 11.11.1998 made in CMA. No. 146 of 1995.
Both the writ petitions were admitted on 09.7.1999. In the miscellaneous petition, this Court granted interim stay on condition that the petitioner deposits 50% of the Award amount. Subsequently, the condition was made absolute on 27.12.2002. The petitioner also filed W.P.M.P. No. 997 of 2008 seeking to raise additional grounds, which was ordered by this Court on 05.12.2008.
Mr. K.A. Ravindran, learned Counsel for the petitioner submitted that the surcharge proceedings were taken on assumptions and presumptions. Every time when transactions were made, approval of the Deputy Registrar was obtained. In the enquiry, only xerox copies were produced and not the originals. While several others followed the similar official practice, only the petitioner alone was proceeded with, though he had acted on good faith. Even before the petitioner no tender system was followed for disposing of the forest produce, namely, the gooseberry collected by the tribals. The weighment of the laden weight of the lorry and the goods upon it varied depending upon the weighbridge in which it was taken. The petitioner cannot be held responsible for any notional loss caused on this ground. It was also argued that there was no willful negligence on the part of the petitioner.
In support of his contentions, the learned Counsel relied upon the following two decisions:
1) Karuppiah, P. v. The Deputy Registrar of Co-operative Societies reported in 1989 W.L.R.272.
2) S. Subramanian v. The Deputy Registrar of Co-operative Societies (Housing), Cuddalore and Ors. reported in 2002 3 LW 185 .
This is for the purpose of showing that unless there was willful or deliberate action with a view to cause loss and in the absence of a finding that the petitioner is guilty of such willful negligence or wantonness, the order u/s 87 of the Tamil Nadu Co-operative Societies Act, 1983 (for short, ''the Act'') cannot be sustained for the purpose of showing that only the certified copies are admissible as secondary evidence and not xerox copies even if it is attested by a notary public.
Further, the learned Counsel also submitted that Section 87 proceedings were not completed within the time limit and on that ground it is liable to be set aside. The surcharge proceedings were initiated based upon an enquiry conducted u/s 81 of the Act dated 11.2.1994. Thereafter, it started on 15.12.1994 and ended on 12.6.1995.
With reference to the willful negligence, it must be stated that in the present case, it is not as if Section 87 of the Act is only confined to certain categories of misdemeanors which require mens rea on the part of the person proceeded against. By the same provision even if any deviation from the procedure which causes loss to the society can also be recovered. Therefore, reliance placed upon the judgment of this Court referred to above has no place with reference to the delay.
It must be noted that these writ petitions are filed against the order of the Tribunal made u/s 152 of the Act. Therefore, the petitioner having failed to avail the opportunity given to him in the appeals, cannot raise all kinds of contentions before this Court. The Tribunal has recorded a clear finding that the petitioner has caused loss to the society and despite opportunities were granted, he has not submitted his explanation and was repeatedly taking adjournments. His defence was not accepted by the Tribunal. Even before this Court, the petitioner had tried to contend elaborately that he was not responsible for the loss or that the procedure followed by him was the same as the earlier procedure followed by everyone, which cannot be accepted. This Court finds that there was no violation of the principles of natural justice or any perversity of finding by the Tribunal in confirming the order of the Deputy Registrar.
With reference to the contention regarding the mandatory time limit u/s 87 of the Act, it is relevant to refer to the decision rendered by a learned Single Judge of this Court in Senthil Kumar v. Co-operative Tribunal (Principal District Judge) Madurai and Ors. reported in (2007) 7 MLJ 1048. In the said decision rendered by R. Banumathi, J. in paragraphs 14 and 15, it has been observed as follows:
Para 14: Thus the enquiry u/s 81 is for the purpose of regulating the business of the Society, rectifying the defects and enquire in the financial impropriety, misappropriation or fraudulent retention of any money etc. Enquiry u/s 81 and Enquiry Report is the basis of the Surcharge Proceedings. The Surcharge Proceedings emanates only from the enquiry u/s 81 where there appears to be misappropriation of funds of the Society or breach of trust etc.
Para 15 : The word ''''shall" is used only for completion of enquiry within the time frame, mainly for the purpose of further action and to initiate Surcharge Proceedings. In case of proved surcharge, to hold that non-completion of enquiry u/s 81(4) within the stipulated period, would vitiate the entire Surcharge Proceedings and would amount to doing violence to the section. What would be the consequences if the person is bent upon dragging on the proceedings before the Enquiry Officer or in the Surcharge Proceedings. In such cases, can it be said that the delay in completing the proceedings would vitiate the Surcharge Proceedings. Any such interpretation would not be in consonance with the object and scope of the enactment. In consideration of the object of the Section and the context in which it is used and the consequences, this Court holds that the word ''''shall" used in Section 81(4) and second proviso to Section 87 are only directory. Whether non-completion of the enquiry within the time stipulated vitiates the Surcharge Proceedings would depend upon the facts and circumstances of the case.
Very recently, a Division Bench of this Court presided by A.K. Ganguli, C.J. vide its decision in S.V.K. Sahasramam v. Deputy Registrar of Co-operative Societies, Tiruvannamalai Circle, Tiruvannamalai and Ors. reported in (2008) 8 MLJ 231 had dealt with this issue extensively. In paragraphs 10 to 13, it has been stated as follows:
Para 10.: Before the learned Judge of the writ court, the appellant relied on two learned single Bench judgments of this Court rendered in the case of T.V. Ekambaram and two others Vs. The Co-operative Tribunal cum District Judge, Madurai and 2 others, and in the case of Gabriel Vs. The Deputy Registrar (Housing) and T.No.1735, Anna Nagar Co-operative Housing Building Society Ltd., . In both these two judgments, the provisions of Section 87 of the said Act which relate to surcharge proceedings were examined and the learned Judges in both the aforesaid judgments construed the following proviso to Section 87:
Provided further that the action commenced under this sub-section shall be completed within a period of six months from the date of such commencement or such further period or periods as the next higher authority may permit but such extended period or periods shall not exceed six months in the aggregate.
Considering the said time limit of six months, the learned Judges came to the conclusion that the said period of six months is mandatory.
Para 11.: We are constrained to hold that even though no appeal has been taken to us from the said judgments, yet having regard to the well settled legal position which has been referred to hereinabove, the finding of the learned Judges in these two judgments that the period of six months in the second proviso to Section 87 of the said Act is mandatory is not a correct finding in law. We find that even though before the learned Judge of the Writ Court those two judgments of the learned Single Judge were cited, the learned Judge of the Writ Court was not swayed by those two decisions and came to a correct finding, relying upon the wellsettled proposition laid down by the Supreme Court as pointed out hereinabove.
Para 12 : We, therefore, affirm the order of the learned Single Judge in this case. We are of the view that in a case where there are allegations of embezzlement and misappropriation of public funds, the members of general public who have been cheated have no control over those who hold the enquiry in respect of the time limit. To hold that such an enquiry which has been continued beyond the time limit is bad would cause great injustice.
Para 13: Therefore, if such enquiry is continued beyond the time limit mentioned in the relevant statute, the said time cannot be held to be mandatory in view of the principles laid down in Montreal Street Railway Company v. Normandi (supra), which has been affirmed by the Supreme Court.
Under these circumstances, this Court is not inclined to go into the merits of this case as if this Court is a further appellate authority constituted under the Act.
In the light of the above, this Court has no hesitation to reject the petitioner''s contention including the one raised in the additional affidavit filed in this regard. Hence, both the writ petitions will stand dismissed. However, there will be no order as to costs. Consequently, the connected miscellaneous petition is also dismissed.