Criminal Original Petitions under Section 482 of the Code of Criminal Procedure, to call for the records relating to the proceedings in C.C.Nos.2, 4, 3, 5, 1 of 2006 respectively on the file of the learned Judicial Magistrate No.II, Tirunelveli and quash the same.
In view of the fact that the petitioner and the respondent, in all the petitions, are one and the same and as all the cases are with similar issues, both factual and legal, they have been taken up together for disposal.
2. The petitioner is arrayed as A3, A3, A2, A3 and A2 in C.C.Nos.2, 4, 3, 5 and 1 of 2006 respectively. He joined as a Junior Assistant in Treasuries and Accounts Department in the year 1964 and he retired from his service on 31.07.2001 and he is drawing pension for the past 8 years. While he was in service, he was a member in Tirunelveli District Public Servants Co-operative Thrift Society and he was elected as a Board of Directors in the year 1996 for a tenure of 5 years and he was selected by the Board to function as its President. The Secretary of the said Society, namely one A.Kartheesan, in collusion with one H.Ganesan, working in the Co-operative Central Bank, misappropriated the funds of the said Society to the tune of Rs.1,15,31,600/- and hence, the respondent-Police registered a case in crime No.8 of 2003 on 11.12.2003 against them for the commission of offences under
Sections 408 and 477-A read with 120-B, I.P.C. After investigation, the charge sheet has been filed, which were taken on file in C.C.Nos.2, 4, 3, 5 and 1 of 2006 respectively by the learned Judicial Magistrate No.II, Tirunelveli, wherein the petitioner and other Executive Committee members were arraigned on the allegations that they failed in their duty to administer and supervise the functions of the society as provided under the Bye-Laws of the said Society.
3. It is stated by the learned counsel for the petitioner that the petitioner is totally innocent and had nothing to do with the said offences and even by the wordings in the charge sheet, they only failed to comply with the Bye-Laws of the said Society and hence, the other accused filed petitions in Crl.O.P.Nos.1187 and 1188 of 2006 and Crl.O.P.Nos.4513, 4569, 4570 and 4576 of 2008 and Crl.O.P.No.10148 of 2009 to discharge them from the charges levelled against them and the same were allowed, quashing the complaints against them. Since, the present petitioner is also placed in similar footing with such circumstances, the petitioner has come forward with the present Crl.O.Ps. for quashing the complaints in C.C.Nos.2, 4, 3, 5, 1 of 2006 respectively on the file of the Judicial Magistrate No.II, Tirunelveli. To substantiate his contentions, learned counsel for the petitioner relied upon various orders of this Court.
4. The learned Government Advocate (Criminal Side) appearing for the respondent-Police, would submit that the petitioner was a President of the Society and his duty is to supervise the work of the staff, but he was negligent in performing his duty; only due to his negligence, the offences had been committed; the amount of misappropriation is more than one crore of rupees; but, he has fairly conceded that similarly placed accused were either discharged or charges against them are quashed and hence, he prayed for the dismissal of the Crl.O.Ps.
5. Heard the learned counsel appearing for the petitioner as well as the learned Government Advocate (Criminal Side) and perused the entire materials available on record.
6. The petitioner was a President of the Tirunelveli District Public Servants Co-operative Thrift Society and he was arrayed as A3, A3, A2, A3 and A2 in C.C.Nos.2, 4, 3, 5 and 1 of 2006 respectively, on the file of the learned Judicial Magistrate No.II, Tirunelveli. The case of the prosecution is that a loan obtained from the Central Co-operative Bank was distributed to the members of the Tirunelveli District Public Servants Co-operative Thrift Society, that the Society collected money towards repayment of loans from the members concerned, but in remitting such loan amounts in the Central Co- operative Bank, the Secretary of the Society viz., A.Kartheesan/A1, tampered with the challans so that the counter-foils thereto reflected the position of remittances with the Central Co-operative Bank in a higher sum while the actual remittance was of a lesser sum. A.1, who was the Secretary of the Tirunelveli District Public Servants Co-operative Thrift Society is said to have indulged in such action with the collusion of A.2, who was the assistant. The differential sums are said to have been misappropriated by A.1 and A.2. The other accused are the Directors of the Tirunelveli District Public Servants Co-operative Thrift Society. The allegations against the petitioner and others, is that they failed to maintain the accounts of the society as Directors and that they failed to take action against the Secretary who indulged in malpractice and thereby instigated and abetted the Secretary in the misappropriation committed by him.
7. As per Section 84 of the Tamil Nadu Co-operative Societies Act, for maintenance of accounts and books of the Registered Society, the Chief Executive i.e. the Principal Paid Officer or the President of the Society is the responsible person. It is appropriate to extract Section 84 of the Tamil Nadu Co-operative Societies Act and Clause 26 of the Bye-Laws of the Tirunelveli District Public Servants Co-operative Thrift Society, as follows: "Section 84 of the Tamil Nadu Co-operative Societies Act: Maintenance of accounts and books by registered society --The Chief Executive that is, the Principal Paid Officer of every registered Society by whatsoever designation he is called, or the president of that society, if there is no such chief executive in that society, shall be bound to keep and maintain such accounts and books relating to that society in such manner as may be prescribed. He shall be responsible for the correct and up to date maintenance of such accounts and books and for producing them when called for in connection with audit under
Section 80 or inquiry under
Section 81 or inspection or investigation under
section 82 or Inspection of books under
Section 83."
"Clause 26 of the bye-laws of the Society: It shall be the duty of the Board of Directors to maintain such accounts and registers are prescribed by Rule 13 of the rules under the Act and by the Registrar from time to time, to place before a general body meeting of the member the Registrar's notes of audit or inspection within one month from the date of receipt to correspond with the Registrar and to do all other business relating to the Society."
Thus, it is seen that Bye-Law 26 of the Society deals that the Board of Directors to maintain the accounts and registers as are prescribed by Rule 13 of the rules under the Act.
8. At this juncture, it is appropriate to quote the observations of the Supreme Court made in paragraph 15 of the decision reported in Babaji Kondaji Garad v. Nasik Merchants Co-operative Bank Ltd.,Nasik, (1984) 2 SCC 50: "15. Section 73-B provides a legislative mandate. Rule 61 has a status of subsidiary legislation or delegated legislation. By-law of a co-operative society can at best have the status of an article of association of a company governed by the Companies Act, 1956 and as held by this Court in Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh (1969 (2) SCC 43 : 1970 (1) SCR 205) the by-laws of a co-operative society framed in pursuance of the provision of the relevant Act cannot be held to be law or to have the force of law. They are neither statutory in character nor they have statutory flavour so as to be raised to the status of law. Now if there is any conflict between the statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the by-law if not in conformity with the statute in order to give effect to the statutory provision the rule or by-law has to be ignored. The statutory provision has precedence and must be complied with. Further the opinion of the Deputy Registrar as expressed in his circular dated February 1, 1979 and his letter dated June 4, 1979 has no relevance because his lack of knowledge or misunderstanding of law as expressed in his opinion has no relevance. The High Court relying upon the aforementioned two documents observed as under:
"There is no inconsistency between Section 73-B and the by-laws because even Government has construed Section 73-B in such manner that even though the by-laws are not amended and reserved seats remained unfilled by election the same can be filled up by co-option."
With respect, we find it difficult to subscribe to this untenable approach that a view of law or a legal provision expressed by a Government officer can afford reliable basis or even guidance in the matter of construction of a legislative measure. It is the function of the court to construe legislative measures and in reaching the correct meaning of statutory provision, opinion of executive branch is hardly relevant. Nor can the court abdicate in favour of such opinion."
9. A perusal of the order of the lower Court in the connected proceedings, reflects that it has arrived at the finding, on consideration of Clause 26 of the Bye-Laws, informing that all the Board members were responsible for the day-to-day activities of the Society, that such Directors being aware of the misappropriation done by the Secretary, had not taken any action against him, despite passing a resolution to suspend him and that it was the illegal omission in taking action against the Secretary that had permitted the continuance of offences till the year 2002. The contention made that the petitioners in the connected cases, have not been included in the original First Information Report, was also negated on the ground that those petitioners stand implicated after investigation in the case. The lower Court also has distinguished the quashing of proceedings against the Supervisor of the Society on the ground that in her case, no mens-rea in sharing the common purpose in swindling the amount was made out, nor was there anything to show that she had colluded with others in the perpetration of the crime.
10. Following the abovesaid decision of the Apex Court in Babaji Kondaji Garad v. Nasik Merchants Co-operative Bank Ltd., Nasik, (1984) 2 SCC 50, this Court is of the considered opinion that where the Tamil Nadu Co-operative Societies Act did not hold the Director responsible for the day-to-day affairs of the Society, such persons could not be held so liable on the basis of the Bye-Laws of the Society. The Bye-Laws in this case, i.e. Clause 26 cannot over- ride
Section 84 of the parent Act, i.e. Tamil Nadu Co-operative Societies Act. The contention that it was for the Registrar to suspend or take action against the Secretary for the misappropriation committed and that the petitioner and other Directors could only recommend the same, deserves acceptance. When once it is seen that the Directors and the present petitioner as President, have nothing to do with the day-to-day affairs of the Society, the allegations of tampering with the records and misappropriation of funds would, in the facts of the case, stand scrutiny, if at all, only against the A.1 and A.2. This court in allowing the petitions for quash, under orders in Crl. O.P. Nos.4513, 4569, 4570 and 4576 of 2008 dated 04.11.2009, filed by persons similarly placed as the petitioner, has reasoned as follows:
"8. The specific case of the prosecution is that at the time of registering F.I.R., the Secretary, who corrected the challans and deposited a lesser amount and who informed the Sangam as if that he deposited the actual money collected from the members of the Society, for which the second accused, who is working as a Clerk in the Central Co-operative Bank aided the first accused. The records produced on behalf of the prosecution and the statements does not disclose any involvement of the present petitioners. As far as the offence under
Sections 408 and
477(A) are concerned,
Section 408 I.P.C. deals with criminal breach of trust and no stretch of imagination, the petitioner was entrusted with the money and
Section 477 (A) I.P.C is concerned, he is not having any direct access to the records which were altered by the first and second accused concerned. As far as the offence under
Section 109 I.P.C is concerned, the prosecution also has miserably failed to prove that there is an inducement by the present petitioner to commit the above said offences by the first and second accused concerned. 9. It is further stated that only due to the report given by the present petitioner, the case is registered and investigation conducted by the officers concerned.
10. Considering the above said facts and circumstances, this Court is of the opinion that the lack of supervision, the present petitioners cannot be roped into a criminal prosecution for the said offence concerned and accordingly, the charge sheets filed against the petitioner are liable to be quashed."
11. Considering the above said orders of this Court and for the above said reasons, I am of the considered view that for the lack of supervision, the present petitioner cannot be roped into a criminal prosecution for the offences concerned and accordingly, the charge sheets filed against the petitioner, are liable to be quashed.
12. Accordingly, these criminal original petitions are allowed and the proceedings in C.C.Nos.1 to 5 of 2006 on the file of the learned Judicial Magistrate No.II, Tirunelveli, shall stand quashed, insofar as the petitioner is concerned. Consequently, connected miscellaneous petitions are closed.
Arul To
1.The Deputy Superintendent of Police, Economic Offences Wing of Police, Tirunelveli.
2.The Judicial Magistrate No.II, Tirunelveli.
3.The Additional Public Prosecutor, Madurai Bench of Madras High Court at Madurai.