According to the petitioner, the first respondent Senthil Kumar was employed as Secretary in the petitioner society. During the relevant period, he has committed serious irregularities and lapses causing huge loss to the society. An enquiry under section 81 of the Tamilnadu Cooperative Societies Act was conducted and found that the first respondent misappropriated a sum of Rs.35,57,533/- and he was suspended from service. On the basis of the enquiry report, Surcharge proceedings was initiated against the first respondent under Section 87(1) of the Act and an order was passed on 31.5.2004 holding that the first respondent was solely responsible for the loss incurred by the society to the tune of Rs.28,48,551/-. Aggrieved by the order passed by the second respondent, dated 31.5.2004, the first respondent has preferred an appeal under Section 152 of the Act before the Co-operative Tribunal in C.M.A. No.5 of 2005 to quash the Surcharge order. The tribunal remitted the matter back to the second respondent to conduct a fresh enquiry after giving the copy of the enquiry report under section 81 of the Act to the first respondent and by giving sufficient opportunity to him.
2 The first ground raised by the learned counsel for the petitioner is that the period prescribed for concluding enquiry under section 87(1) of the Act is not mandatory, it is only a directory. The other ground raised by the petitioner is that the tribunal has not properly appreciated the facts and there is no discussion about the contention raised by the petitioner in the judgment passed by the tribunal. Therefore, the judgment passed by the tribunal is liable to be set aside.
3 In support of his contention, he relied on the decision of the Division Bench of this Court in the case of S.V.K.Sahasramam Vs. Deputy Registrar of Cooperative Societies, Tiruvannamalai Circle, Tiruvannamalai and others (2008) 8 MLJ 231) and S.Ramadevi vs The Special Officer (2016-4 L.W. 452).
4. The learned counsel for the first respondent would submit that the tribunal has considered the appeal on merits and held that no witness was examined and no documents were marked. The tribunal further held that that first respondent/second respondent herein has not given reasonable opportunity to the appellant/first respondent herein to adduce oral and documentary evidence on his side and the said order has been passed mechanically by the second respondent herein/first respondent before the tribunal. The learned counsel for the first respondent further contended that the tribunal has held that there is no discussion or reason in the judgment passed by the tribunal, as to how the huge amount of Rs.12,84,463/- has been arrived by the second respondent herein. The second respondent herein has simply recorded the statements and without properly explaining the difference occurred, passed the impugned Surcharge order. Therefore, the tribunal has rightly allowed the appeal.
5. In so far as the first limb of the contention of the petitioner, in the light of the decision of this Court in S.V.K.Sahasramam Vs. Deputy Registrar of Cooperative Societies, Tiruvannamalai Circle, Tiruvannamalai and others (supra) and S.Ramadevi vs The Special Officer (supra), it is settled legal position that under section 87(1) of the Act, period prescribed in the Statute is not mandatory, it is only directory. Therefore, the finding of the tribunal is liable to be set aside. The second limb of the contention of the petitioner is that the tribunal has not properly appreciated the case of the petitioner that there is loss sustained to the Society. Without any discussion of the documents or materials placed, the tribunal has set aside the order passed by the second respondent herein. Further, finding of the tribunal that there is huge difference between the amount quoted in the earlier order and the present Surcharge order is unsustainable.
6. The tribunal while setting aside the Surcharge order passed by the second respondent herein, dated 21.11.2008, has held that there is no explanation as to how the first respondent/second respondent herein has arrived such huge amount of Rs.12,84,463/- and mechanically passed the impugned order.
7. The Deputy Registrar, Second respondent herein by considering the statement of the Secretary (Incharge) of the Society and the explanation submitted by one Senthil kumar and also considering the documents placed before him, found that total loss of Rs.12,84,463/- caused to the petitioner society. Even there is discussion in para 10 and 11 of the judgment rendered by the tribunal, but the tribunal has not considered the statement of the Secretary (Incharge) and other witnesses, documents and the enquiry report submitted on the side of petitioner society. Even though documents have been considered by the second respondent, there is no discussion about such documents while setting aside the impugned order passed by the second respondent. In the interest of justice, accepting the contention of the petitioner, this Court is inclined to interfere with the judgment and decree passed by the tribunal.
8 In view of the above, the impugned judgment, dated 14.2.2011 passed by the tribunal is set aside and the appeal is remanded to the tribunal to consider the appeal afresh and pass judgment in accordance with law, as expeditiously as possible, preferably, within a period of three months from the date of receipt of a copy of this order. However, liberty is granted to the parties concerned to file appropriate application if so advised before the tribunal. Both the parties undertaken that they will cooperate before the tribunal to dispose of the appeal within the period fixed by this Court.
D.KRISHNAKUMAR, J.
vaan The writ petition is allowed on the above terms. No costs.
9. It is nobody's case that in the instant case, the proceeding under Section 81 of the said Act amounts to an enquiry which can be called a departmental or disciplinary enquiry. It cannot be disputed that an enquiry under Section 81 of the said Act is an enquiry in public interest in order to find out whether the affairs of a cooperative society are conducted legally and whether there are financial improprieties in the matter of conduct of its affairs. Such an enquiry cannot be prima facie compared to an enquiry against any individual employee. It is obviously true that as a follow up action on such enquiry under Section 81, various other steps may be taken, viz, surcharge proceedings can be initiated under Section 87 and steps can be also taken for initiating criminal proceedings. In the instant case, both these steps have been taken.
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 v. Cooperative Tribunal-cum-District Judge, Madurai 2000 (2) CTC 559 and in the case of Gabriel Vs.Deputy Registrar (Housing), Cuddalore (2003) 2 MLJ 624 - 2003 (3) CTC 23. 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.
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 Bench 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 well settled proposition laid down by the Supreme Court as pointed above hereinabove.
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."
13. Therefore, if such enquiry is continued beyond the time limit mentioned in the relevant statute, the said time limit 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. S.Ramadevi vs The Special Officer (2016-4 L.W. 452) has held as under:
"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.''