The prayer in the writ petition is for a Writ of Certiorari, calling for the records relating to the order passed by the 2nd respondent in his proceedings S.C.No.19/2001 F.e. dated 04.02.2002 as confirmed by the 1st respondent in his order dated 05.10.2009, passed in C.M.A.No.(CS) No.85/2002.
2.The case of the petitioner is that the petitioner was working as Assistant Secretary of Srinayakkanpatti Primary Co-operative Bank and on attaining the age of superannuation, he retired from service on 30.06.2007. On the basis of the allegation that there was loss to the Society, an enquiry under Section 81 of the Tamilnadu Co-operative Societies Act, 1983 (hereinafter referred to as Act) was initiated against the Secretary of the Society and as against the petitioner. There were alleged loss under 9 heads. Pursuant to the enquiry, Surcharge proceedings under Section 87 of the Act were initiated against the petitioner and others and after completing the surcharge proceedings it was found that, out of 9 heads the petitioner and the Secretary of the Bank/Society were responsible to the loss sustained by the Society in respect of items 1, 5 and 8. Insofar as the individual liability is concerned, it was found against the petitioner in item No.2. As against the said surcharge proceedings, the petitioner had preferred appeal in C.M.A.(CS) No.85 of 2002 before the first respondent and the first respondent in the final order dated 05.10.2009, has confirmed the said surcharge proceedings. Therefore, the challenge is made in the Writ Petition against the order passed in the surcharge proceedings and order passed in Appeal.
3.Heard both sides.
4.The learned counsel appearing for the petitioner would make a two fold submissions. According to him, the petitioner was not served with the copy of the enquiry report, conducted under Section 81 of the Act, which, according to the learned counsel appearing for the petitioner, vitiated the entire proceedings. He would further submit that assuming that some loss occurred to the society and that should have been occurred only due to the willful negligence on the part of the petitioner, in the absence of any such finding and proof to show that such loss has occurred only due to the willful negligence on the part of the petitioner, no surcharge proceedings can be made against the petitioner and recovery can be effected against the petitioner.
5.In this regard, the learned counsel appearing for the petitioner heavily relied upon the Division Bench Judgment of this Court made in W.A.No.1213 of 2008 in the matter of S.Ramadevi v. The Special Officer Ambur Co-operative Sugar Mills, Vadapudupt and another. The learned counsel for the petitioner on the issue of willful negligence, which was considered as issue No.3 in the said judgment, had relied upon paragraphs 24 and 25 of the Division Bench judgment and has submitted that in view of the said findings given by the Division Bench of this Court as to the effect that for conclusion of Section 87 proceedings mere negligence is not enough and based on which the liability cannot be fastened on the erring personal, but such negligence should be willful one and unless and until such willful negligence is found against the erring person Section 87 proceedings cannot be concluded fastening the liability on the shoulders of the employees. In this regard, the learned counsel for the petitioner would heavily rely upon paragraph 26 of the said judgment, which reads thus:
?26.We are, thus, of the view that as the legal principles are quite settled, we have to only look into the application of the same in the facts of the present case. We are of the view that the appellate authority was right in coming to the conclusion that there is no willful negligence in the case of the appellant and this aspect has really not even been seriously touched upon by the learned Single Judge. Merely because loss is caused would not suffice. The appellant is not the beneficiary. There is no such willful negligence attributed to her. This is apparent from even the enquiry report, which we have referred to aforesaid. Mere use of the words ?negligence and careless with selfish motive for gain? would not suffice when actually the facts do not make out such a case. Thus, the surcharge officer certainly fell into an error in imposing the liability on the appellant. The enquiry report discussed aforesaid itself shows that it is the third respondent who is found to have taken advantage of the situation in seeking to obtain illegal gain for himself. The pay bill was prepared by the third respondent in the computer and the abstract of the department wise pay bill alone used to be furnished to the Accountant and the Chief Accountant (appellant) and signatures obtained. Thus, both of them had been signing on the department wise pay bill abstract without seeing the pay bills. The third respondent/Mr.A.Kabali, thus, took advantage of the fact that it was not possible for others to verify the cheques and test the salary list which was running into 300 pages. It is in these circumstances that the fourth respondent has been exonerated of the liability even though the abstract pay bill was required to be verified by him as an Accountant and he alone was supervising each and every matter. The cheques signed by the appellant are actually in the nature of counter-signature and the Accountant himself had been exonerated. Merely because the appellant was the head of the department, the liability could not be fastened on her as no case of willful negligence is made out.?
6.The learned counsel for the petitioner would also submit that the impugned surcharge proceedings has been concluded merely on the basis of the alleged admission said to have been made that if any loss in each of the head is really occurred to the Society, the petitioner would reimburse the same by paying back the said loss to the Society. The said admission said to have given by the petitioner cannot be a ground to conclude that the petitioner was the reason for such loss under various heads and therefore, challenging the correctness of the surcharge proceedings the petitioner has rightly approached the first respondent by filing appeal, where even though all the grounds raised herein had been raised, the first respondent Tribunal without having considered the same in proper perspective has dismissed the appeal of the petitioner and therefore, the learned counsel appearing for the petitioner would submit that the surcharge proceedings of the second respondent as well as order of the first respondent Tribunal in the above proceedings are liable to be interfered with, for these two reasons, namely, principles of natural justice as well as non-availability of the ground of willful negligence. Therefore, the learned counsel appearing for the petitioner would submit that the impugned orders are liable to be quashed.
7.Per contra, the learned Government Advocate for the second respondent would submit that in each of the heads, out of the total 9 heads under the surcharge proceedings, there is a specific finding by the second respondent, where the petitioner has given his own admission for the loss occurred to the society in each of the head. Since the petitioner himself has accepted the loss and he has also assured that he would pay for and reimburse such loss especially the interest portion in respect of many heads personally. Further, the ground that he has not been given proper opportunity of being heard and principles of natural justice cannot be countenanced.
8.The learned Government Advocate appearing for the second respondent would also submit that the very plea of principles of natural justice in the present context, has infact also been dealt with by the Division Bench of this Court in the judgment cited supra, wherein as issue No.2 the said plea has been considered and was negatived. In this regard, the learned counsel for the second respondent would rely upon paragraph 24 of the judgment (supra) which reads thus:
?24.In so far as furnishing of copies of certain documents and giving adequate opportunities to put forth the case is concerned, the proceedings do show that the appellant was permitted inspection of the material records. Depositions were given to her. She was given repeated opportunities to cross- examine the witnesses, which she earlier declined on account of absence of documents and thereafter also refused to cross-examine the witnesses. It cannot be said, there was inadequacy of opportunity violating the principles of natural justice as applicable to such proceedings. The judgment sought to be relied upon by the learned counsel for the appellant of the learned single Judge of this Court in Sambandam vs. The Deputy Registrar (Credit) Co-op. Societies, Mylapore, Madras, 1999 (3) MLJ 310, would not really apply, as in the facts of that case, the enquiry report had not been furnished, while the protest in the present case is apparently on an incomplete enquiry report. It does appear from the conduct of the appellant that excuses were sought to be made, despite sufficient opportunities to defend her case, of violation of principles of natural justice, rather there being actually any such absence. The second plea is also, thus, rejected.?
Therefore, on both the grounds as has been raised by the petitioner, the impugned orders cannot be assailed and therefore for the loss caused to the Society for which the petitioner and other officers concerned were responsible and in respect of item No.2, the petitioner alone is liable, as has been found by the second respondent in the surcharge proceedings. There is no infirmity in the surcharge proceedings as has been confirmed by the first respondent in the appeal.
9.This Court has considered the rival submissions made by the learned counsel appearing for the respective parties.
10.Insofar as the first plea raised by the petitioner's counsel is concerned, whether an opportunity of being heard or furnishing the report out of the enquiry under Section 81 of the Act has to be furnished to the petitioner or not is concerned, it may be useful to refer to the language used in the said Section 81 of the Act. If Section 81(1) is taken into account, its power vested with the Registrar by which either on his own motion or on the application of a majority of the Board or on the request of the Financing Bank or of the District Collector concerned, he can hold an inquiry or he may direct some persons authorised by him, by order in writing in this behalf, to hold an inquiry into the constitution, working and financial conditions of a registered Society or any alleged misappropriation, fraudulent retention of any money or property, breach of trust, corrupt practice, or mis-management in relation to that Society or into any particular aspect of the working on that Society. Therefore, this Section 81 of the Act is a primary aspect which could be done by the Registrar either on his own motion or by way of request either by the Board of Management or from the Financing Bank or Collector concerned.
11.Like that if the language used in Section 87 Surcharge Proceedings is looked into, it would also give a meaning that it is on the basis of an audit under Section 80 of the Act or inquiry under Section 81 of the Act or an inspection or Investigation under Section 82 of the Act or inspection of books under Section 83 of the Act, the Registrar may, or any person specially authorised by him on his behalf, of his own motion or on the application of the Board, Liquidator or any creditor or contributor, may frame charges against such person or officer or servant, who has misappropriated or fraudulently retained any money or other property or 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 willful negligence or has made any payment which is not in accordance with Act, the Rule or the Bylaws. After framing such charges the Registrar himself or authorised officer after, giving a reasonable opportunity to the person concerned, make 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. If we notice that the language used in Section 87, it can be easily ascertained that Section 80(1) of the Act inquiry is only a prelude for the subsequent Section 87 Surcharge proceedings. If a surcharge proceedings is initiated in the course of inquiry with the preliminary inquiry under Section 81 of the Act, they certainly give a reasonable opportunity to the person concerned and after ascertaining his view or explanation, the Registrar or authorised person can make an order to repay the amount with interest. Here in this case on hand, as has been rightly contended by the learned Government Advocate appearing for the second respondent that, almost in the surcharge proceedings petitioner has given his admission that the loss incurred by the Society will be reimbursed and repaid by the petitioner. Therefore, it cannot be said that the petitioner was not given any opportunity to disprove the said proceedings.
12.Insofar as the plea raised by the petitioner that Section 80(1) Report should have been given to the petitioner before Section 87 of the Act, it does not merit acceptance because, there is no such procedure contemplated under Section 81 of the Act. As has been held supra, Section 81 proceedings is only a preliminary preluded exercise to primarily satisfy to proceed further under Section 87 of the Act and whatever prima-facie satisfaction on the part of Registrar or his authorised person cannot be a sole basis to arrive at a conclusion under Section 87 proceedings, because, during the course of enquiry, opportunity of hearing would be there, as the same has been granted at Section 87 of the Act itself. Therefore, the opportunity given to the person concerned under Section 87 itself is naturally a safety mechanism in order to meet the principles of natural justice and in this regard by applying the ratio of the Division Bench of this Court cited supra especially paragraph 24 therein, this Court is of the considered view that the plea raised by the petitioner, that the principles of natural justice has been violated by the second respondent before concluding Section 87 Surcharge proceedings, cannot be accepted and therefore, the same is rejected.
13.Insofar as the other plea, namely, there must be presence of willful negligence on the part of erring employee and in this regard there must be definite finding of the officer concerned and because of the willful negligence on the part of the employee such loss was occurred to the Society and the responsibility cannot be fastened on the employee insofar as the present facts of the case is concerned, as rightly contended by the learned counsel for the second respondent, that it is his own admission on the part of the petitioner that in each of the head, out of the 9 heads for which 87 surcharge proceedings were initiated. In fact the learned Government Advocate for the second respondent has produced written instruction obtained from the concerned Registrar, which is in fact reiterated what has been submitted by the learned counsel for the second respondent that the petitioner insofar as item No.2 is concerned, for which individual liability was fixed against him, paid Rs.3,617/- on 31.12.2001 itself and only the interest portion Rs.3,744/- is due from the petitioner. Like that in respect of item Nos.1, 5, 8, wherein also joint responsibility has been fixed against the petitioner, the petitioner had paid some amount and only the remaining part of the principal amount as well as interest are payable, out of which the petitioner has to pay 50% as it has been joint liability.
14.If at all the petitioner was very firm that there is no willful negligence on his part, and therefore, the very surcharge proceedings made thereunder fastening the liability on the petitioner is not correct, definitely the petitioner should have resisted the surcharge proceedings on the petitioner in tooth and nail on the basis of its own merit. Since the petitioner himself has accepted the liability under various heads, under which responsibility has been fixed by the petitioner either individually or jointly, these would show that the petitioner is not definite whether the loss occurred to the Society was due to his willful negligence or otherwise. In view of all these factors, we could find the petitioner himself has come forward to accept his liability and has paid some amount to show his bonafide in making good of the Society by accepting his liability on the Society, he cannot now plead and say that there must be finding of willful negligence on the part of the petitioner and in the absence of same, the responsibility cannot be fastened on the shoulder of the petitioner. Therefore, when the law is very well settled as has been answered in paragraph 26 of the said Division Bench judgment cited supra, such principle cannot be made applicable to the present facts of the case and therefore, the said plea raised by the petitioner on the ground of willful negligence, is also liable to be rejected. Accordingly is rejected.
15.Since the responsibility both joint and individual in respect of item Nos.1, 5, 8, 2 raised on the shoulders of the petitioner, it is for the petitioner to clear the dues. However, what has been brought to the notice of this Court by the learned Government Advocate for the second respondent that, the petitioner to show his bonafide has paid some amount even in the year 2001 itself. Moreover in respect of other three heads namely, 1, 5 and 8 is concerned, it is only a joint liability against both erstwhile Secretary as well as the petitioner and assuming that in those heads the petitioner is liable, he would be liable for the 50% of the dues. Most of the dues pending with the petitioner jointly under the head interest, as the principal except in one head is very minimal. Therefore, in the interest of justice, this Court is of the view that the petitioner, if he come forward to pay the remaining principal as well as 25% of the amount on the accrued interest of the principal that would meet the ends of justice.
15.Accordingly, the following orders are passed in this Writ Petition:
(i) The impugned orders are sustainable. Therefore, the same are not interfered with.
(ii) Since the petitioner in order to show his bonafide has already paid the principal towards item No.2, wherein personal liability has been fixed on the petitioner and the petitioner also paid some other amount, where joint liability has been fixed against the petitioner in respect of item Nos.1, 5 and 8, to meet the ends of justice, the petitioner shall pay the entire principal amount in respect of item No.2 and 50% principal amount for the item Nos.1, 5 and 8, less the principal amount already paid and also to pay 25% of the accrued interest in respect of his principal portion.
(iii) The aforesaid amount shall be paid by the petitioner within the period of three months from the date of receipt of a copy of this order.
16.With these directions, this writ Petition is dismissed. No costs. Consequently, connected Miscellaneous Petition also stands dismissed.
To
1.The Presiding Officer, Tribunal for Co-operative Societies, (Principal District Court), Dindigul District, Dindigul.
2.The Deputy Registrar of Co-operative Societies, Dindigul District, Dindigul..