The main legal point established in the judgment is the application of the principles of natural justice in a disciplinary enquiry under the Tamil Nadu Co-operative Societies Act, 1983.

Heard the learned counsel appearing for the parties concerned.

The brief facts of the case are as follows:

2. The petitioner had been appointed as a clerk in the third respondent Bank. While so, he was kept under suspension, along with some other employees of the third respondent Bank, based on the charge of creating false documents, with regard to the jewels pledged in the third respondent Bank and for causing a loss of Rs.67,000/-to the third respondent Bank.

3. It had been alleged that the petitioner had committed theft of the jewels pledged with the third respondent Bank, by replacing the original jewels with jewels with gold covering thereby, causing a loss of Rs.2,30,880/-. Penal action had been initiated against the petitioner and three others on the basis of the enquiry report submitted, under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, (hereinafter referred to as "the Act").

4. It has also been stated that when the Secretary of the third respondent Bank was on leave, the second key of the jewel locker with No.3205 had been handed over to the petitioner during the period from 6. 1993 to 8. 1993. The Secretary, P.Murugesan, had the key of the jewel locker and the locker was under the double lock system. The petitioner had told the authorities that he had no personal knowledge about the quality and standard of gold used for making the jewels pledged with the third respondent Bank and that he had nothing to do with the transactions.

5. It has also been stated that by a plain reading of the surcharge order passed by the second respondent in S.C.No.4 of 1995, dated 210. 1996, it would be clear that the petitioner was in no way concerned with the transactions, except for the fact that the second key of the jewel locker was with him between 6. 1993 and 8. 1993.

.6. The petitioner has further stated that the surcharge proceedings, under Section 87 of the Act had been initiated on the basis of the report submitted, under Section 81 of the Act. The petitioner had not been informed about the enquiry, under Section 81 of the Act and he was not allowed to participate therein. The second respondent had not conducted the enquiry, properly, even though the petitioner had attended all the hearings before him. The second respondent, had not recorded the statements of the petitioner nor had he accepted the documentary evidence filed by the petitioner in support of his case. The second respondent had passed the impugned proceedings, under Section 87 of the Act, without conducting a full-fledged enquiry and without furnishing the report of the enquiry conducted under Section 81 of the Act.

7. It has been further stated that the criminal proceedings initiated against the petitioner had ended in his favour, as sufficient evidence was not available to prove the charges against him. Aggrieved by the order of the second respondent, issued under Section 87 of the Act, the petitioner had preferred an appeal before the first respondent Tribunal, in C.M.A.No.38 of 1998. The first respondent Tribunal had dismissed the appeal filed by the petitioner without considering the merits of the case.

8. In the counter affidavit filed on behalf of the second respondent, it has been stated that the petitioner was working as a clerk on daily wages at the time of the passing of the surcharge order. The petitioner was jointly responsible, along with three other persons, as the petitioner was having one of the keys for the jewel loan locker. Spurious gold jewels had been kept in the locker, with the knowledge of the petitioner, replacing the original gold jewels. The Jewel Locker could not have been opened without using the jewel locker key. The petitioner had conspired with the others in creating loss to the assets of the Bank.

.9. It has also been stated that the surcharge order had been passed only on the findings of the enquiry report conducted in accordance with Section 81 of the Act. The petitioner had been issued a show