Back
2008 Supreme(Mad) 257
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. MANIKUMAR
J. Selvaretnam
Versus
The Additional Commissioner of Industries Commerce/The Registrar, Directorate of Industries and Commerce, Chepauk, Chennai5 & Others
W.P.No.36817 of 2005
Decided on : 25-01-2008
For the Petitioner:R. Sivakumar, Advocate.
For the Respondents:R1, A. Arumugam, Addl. Govt. Pleader, R2, R. Narendran, Advocate.
The mere fact that an inspection officer is a regular staff of the complainant bank does not establish bias or a reasonable likelihood of bias, where the officer has expressed that he will act independently and has no personal interest in the outcome of the investigation.
Headnote:
INSPECTION OF CO-OPERATIVE SOCIETY - APPOINTMENT OF INSPECTION OFFICER - BIAS - LIKELIHOOD OF BIAS - PRINCIPLES - INSPECTION REPORT - SUBMISSION - TIME EXTENSION.
Fact of the Case:
Petitioner, a Deputy Director in the Department of Industry and Commerce, challenged the order of the first respondent appointing the third respondent as the Inspection Officer under Section 82 of the Tamil Nadu Co-operative Societies Act (TNCS Act) to investigate alleged irregularities in the sanction of personal loans and regular overdraft facilities during his tenure as Branch Manager of the second respondent bank. The petitioner contended that the third respondent, being a regular staff of the second respondent bank, was biased and had a reasonable likelihood of bias against him.
Finding of the Court:
The court held that there was no evidence of bias or likelihood of bias on the part of the third respondent. The court noted that the third respondent had been appointed as an Official Liquidator in the cadre post in the establishment of the second respondent-Bank, but that he had expressed that in the capacity of an Official Liquidator, his duty was to act independently notwithstanding the fact that he had been paid from the Financing Bank. The court also noted that the third respondent had categorically informed the petitioner that it was the Special Officer, TAICO Bank, representing the Bank Management, had complained about the irregularities committed and therefore, he is free to conduct inspection in a manner, which is provided under Section 138 of the Act, which only proves the outwardness of the Officer concerned.
Issues: 1. Whether the appointment of the third respondent as the Inspection Officer was biased or had a reasonable likelihood of bias. 2. Whether the third respondent had exhibited any improper conduct of ill will against the petitioner.
Ratio Decidendi: The court held that the mere fact that the third respondent was a regular staff of the second respondent bank was not sufficient to establish bias or a reasonable likelihood of bias. The court noted that the third respondent had been appointed as an Official Liquidator in the cadre post in the establishment of the second respondent-Bank, but that he had expressed that in the capacity of an Official Liquidator, his duty was to act independently notwithstanding the fact that he had been paid from the Financing Bank. The court also noted that the third respondent had categorically informed the petitioner that it was the Special Officer, TAICO Bank, representing the Bank Management, had complained about the irregularities committed and therefore, he is free to conduct inspection in a manner, which is provided under Section 138 of the Act, which only proves the outwardness of the Officer concerned.
Final Decision: The court dismissed the petition and directed the third respondent to complete the investigation and submit the report forthwith. The court also extended the time for completion of inspection by three months.
The petitioner has sought a Writ of Certiorari to quash the order of the first respondent in R.C.No.28059/ICBI/2005, dated 09.05.2005 and order of the third respondent in Lr.No.Sec.82 Inspection/2005-06, dated 20.10.2005, in appointing the third respondent as the Inspection officer and for further orders.
2. Brief facts leading to the Writ Petition are as follows:
The petitioner is working as a Deputy Director in the Department of Industry and Commerce and presently working as a General Manager, Indcoserve, Coonor, Nilgiris District. Earlier, he was working as Branch Manager, Madurai Branch of the second respondent bank. During his tenure, he was discharging his duties strictly in accordance with the rules and regulations of the bank without any blemish. The petitioner has further submitted that the second respondent Bank was established with a view to accelerate the growth of Industrial Co-operatives in the State of Tamil nadu. The main object of the bank is to prove a comprehensive range of financial assistance to the Industrial Co-operative Societies. The said Bank is managed by a Special officer, who is in the cadre of Joint Director of Industries and Commerce. Below him, there is a post of Official Liquidator at the Head Office and a Branch Manager for Madurai Branch in the cadre of Assistant Director of the Industries and Commerce.
3. The petitioner has further submitted that after his transfer to some other place, the second respondent-bank had requested the first respondent to order for an inspection under Section 82 of the Tamil Nadu Co-operative Societies Act (hereinafter after referred to as "the TNCS Act") and on that basis, the first respondent has appointed the third respondent, P.Subramanian, as an Inspection Officer. He is presently working as Official Liquidator of the second respondent-bank. Earlier to this, between 11.05.2005 to 31.08.2005, he was a General Manager of the second respondent-bank. The third respondent is a part of regular establishment of the second respondent-Bank. Being a staff of the second respondent-bank, the third respondent is a person interested in the affairs of the Bank.
4. The petitioner has further submitted that any report to be submitted by the Inspection Officer under Section 82 of the Act would be the foundation for further action, which includes surcharge proceedings under Section 87 of the Act. Further, under Rule 104 of the Tamil Nadu Co-operatives Society Rules, 1988, the Inspection Officer along with his Inspection report, shall also submit a separate report, pointing out the lapses on the part of any officer and also suggest suitable action against that officer. Thus, the inspection to be conducted by the third respondent will have a larger implication and it may greatly prejudice the petitioners service and life as well, if it is not conducted in a fair and proper manner.
5. The petitioner has further submitted that when the petitioner was served with a summon dated 17.09.2005 from the third respondent, directing him to appear for an inspection to be held on 010. 2005, he had submitted a detailed representation dated 010. 2005, requesting the third respondent not to proceed with the inspection, as he was a regular staff of the second respondent-Bank, who is the complainant. In the said representation, the petitioner has further stated that as the inspection was ordered on the basis of the complaint submitted by the second respondent, the third respondent being a regular staff of the second respondent-Bank cannot be expected to act impartially without any bias. The petitioner has further stated that he has a reasonable apprehension that if the third respondent, being an officer of the second respondent-bank, is allowed to continue the inspection, there is every possibility that he may force the staff of the second respondent-Bank and the loanees to obtain statements from them to suit their case. In the said representation, the petitioner has further stated t
