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1990 Supreme(Mad) 981
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE KANAKARAJ
B.P.Agraharam Co-operative Agricultural Bank Ltd., B.P.Agraharam, Erode
Versus
Veerappa Thevar and Others
W.P.No.181 of 1987
Decided On : 09-11-1990
V.Narayanaswamy, for Petitioner. M.Govindarajan, Additional Government Pleader, for Respondents.
A claim under Sec. 73 of the Tamil Nadu Co-operative Societies Act, 1961, must be filed within three years from the date of commission or omission, as required by Rule 56(2) of the Tamil Nadu Co-operative Societies Rules.
Headnote:
CO-OPERATIVE SOCIETIES - SURCHARGE PROCEEDINGS - LIMITATION - CLAIM UNDER SEC.73 OF THE TAMIL NADU CO-OPERATIVE SOCIETIES ACT, 1961 - WHETHER BARRED BY LIMITATION - YES - CLAIM FILED AFTER A LAPSE OF SIX YEARS FROM THE DATE OF COMMISSION OR OMISSION - NOT MAINTAINABLE.
Fact of the Case:
The petitioner, a co-operative bank, initiated surcharge proceedings against the first respondent, its former treasurer, and the heirs of a deceased secretary for a deficiency in assets. The proceedings were initiated under Sec. 71 of the Tamil Nadu Co-operative Societies Act, 1961. The Special Tribunal for Cooperative Cases allowed the appeals filed by the first respondent and the heirs of the deceased secretary, holding that the ingredients necessary for surcharging the first respondent were not available. The petitioner then filed an arbitration claim under Sec. 73 of the Act, claiming a total sum of Rs. 42,981.46, including the amount of deficiency, interest, and expenses. The first respondent and the heirs disputed the claim on several grounds, including the plea of limitation. The arbitrator passed an award in favor of the society, but the tribunal reversed the award, holding that the claim was barred by res judicata, could not be maintained under Sec. 73 of the Act, and was barred by limitation.
Finding of the Court:
The court held that the claim under Sec. 73 of the Act was barred by limitation. The court found that the cause of action for the misappropriation took place between 211. 1968 and 211. 1969, and that the claim was filed only on 111. 1978, after a lapse of six years. The court held that the claim was not maintainable under Sec. 73 of the Act because it was not filed within three years from the date of commission or omission, as required by Rule 56(2) of the Tamil Nadu Co-operative Societies Rules.
Issues: 1. Whether the claim under Sec. 73 of the Tamil Nadu Co-operative Societies Act, 1961, was barred by res judicata? 2. Whether the claim could be maintained under Sec. 73 of the Act? 3. Whether the claim was barred by limitation?
Ratio Decidendi: 1. The court held that the claim under Sec. 73 of the Act was not barred by res judicata because the proceedings under Sec. 71 are totally different from the proceedings under Sec. 73 of the Act. 2. The court held that the claim could be maintained under Sec. 73 of the Act because it relates to disputes touching the constitution of the committee, or touching the management or business of the bank or disputes between the members of the petitioner co-operative bank. 3. The court held that the claim was barred by limitation because it was not filed within three years from the date of commission or omission, as required by Rule 56(2) of the Tamil Nadu Co-operative Societies Rules.
Final Decision: The court dismissed the writ petition, upholding the order of the tribunal on the question of limitation.
The first respondent was treasurer in the petitioner-co-operative bank from the year 1966 to 1972. One Dharmaraj was the paid-Secretary of the Co-operative Bank from 20.11.1968 to 111. 1969. The petitioner, Co-operative bank is a society registered under the Tamil Nadu Co-operative Societies Act, 1961. During an inspection under Sec.66 of the Act, it was noticed that there was a deficiency in the assets of the Bank to the tune of Rs.14,0391. Surcharge proceedings were initiated under Sec.71 of the Act by the third respondent against the legal heirs of Dharmaraj who had passed away on 211. 1969 and against the first respondent, treasurer. By an order dated 23. 1975, the third respondent held that the first respondent as well as the heirs of the deceased Dharmaraj were liable for the said amount of Rs.14,0391. Two appeals were filed by the first respondent and the heirs of Dharmaraj before the Special Tribunal for cooperative cases. Both the appeals were allowed. So far as the appeal of the first respondent is concerned, it was observed that the ingredients necessary for surcharging the first respondent were not available. There was, no doubt, an’ observation that it was open to the petitioner-bank to proceed against the first respondent under Sec.73 of the Act. Thereupon, the petitioner filed an arbitration claim under Sec.73 of the Act claiming a total sum of Rs.42,981.46 comprising of Rs.14,032.91 being the amount said to have been misappropriated, interest thereon amounting to Rs.28,943 and expenses. The claim was made against the first respondent as well as heirs of Dharmaraj. The first respondent and the heirs disputed the claim on several grounds including the plea of limitation. An award was passed in favour of the society by the second respondent, the first respondent filed appeal C.M.A.No.210 of 1983. The tribunal by order dated 23. 1986 held that the first respondent was not wilfully negligent that the claim was barred by res judicata under Sec.11, C.P.C. that the claim cannot be maintained under Sec.73 of the Act and that, in any event, the claim was barred by limitation. It is the said judgment of the fourth respondent-Tribunal that is challenged in this writ petition.
2. The first contention is that the finding of the Tribunal that the claim is barred by res judicata is totally unsustainable. I am not inclined to accept this argument because the proceedings under Sec.71 are totally different from the proceedings under Sec.73 of the Act. Surcharge under Sec.71 arises on account of wilful negligence or inaction resulting in loss to the petitioner-bank. A proceeding under Sec.73 is totally different and relates to disputes touching the constitution of the committee, or touching the management or business of the bank or disputes between the members of the petitioner co-operative bank.
3. Similarly, the finding of the tribunal that the claim cannot be maintained under Sec.73 of the Act is not well founded. Sec.73 of the Act provides for determination of any dispute between the members of the petitioner-bank. It is the contention of the petitioner-bank that the first respondent has caused loss to the tune of Rs.14,0391. The claim for Rs.14,032.91 is made on the ground that the Secretary and the first respondent signed the cash chitta on 111. 1969. But it was found that the said amount had not been brought into account in the Day Book. Therefore, there is no reason why such a claim should not be made as a dispute under Scc.73 of the Act. The Arbitrator can take evidence and decide the question whether the first respondent and the Secretary are liable for the said amount or not. The reasons given by the tribunal that the claim is not maintainable because there is no dispute touching the Committee or the Management, is based on a superficial understanding of the said section. The reasons given by the tribunal for holding that the amount, if at all, can be claimed under surcharge proceedings are totally uncalle
