The main legal point established in the judgment is the absence of concrete evidence to establish negligence or connivance on the part of the Petitioners, leading to the setting aside of the Arbitration award imposing liability on them.

The Petitioners in these three Revision Petitions suffered an Arbitration Award in A.R.C. No. 310/1989-90 dated 20.1.1995, under Section 90 of The Tamil Nadu Cooperative Societies Act, 1983. The Petitioners filed Statutory Appeals in Cooperative Tribunal Appeal Nos. 129, 140 and 141 of 1995 under Section 152(1)(a) of the Act, before the Principal District Judge, Coimbatore (Special Tribunal for Cooperative Cases). The Appeals were dismissed by the Tribunal, by an order dated 31.1.2008 passed in common along with several such Appeals, Aggrieved by the common order of dismissal of their Statutory Appeals, by the Tribunal, the Petitioners have come up with the present Civil Revision Petitions.

2. I have heard Mr. V. Raghavachari and Mr. G. Nagarajan, learned counsel appearing for the Petitioners in these Revision Petitions and Mr. P. Anbarasan, learned counsel appearing for the Second Respondent-Cooperative Society.

3. The Petitioners in these Revision Petitions were Cooperative Sub-Registrars. They worked in the Coimbatore District Consumer Cooperative Wholesale Stores Ltd., during the period from 1984 to 1989. There were certain allegations of misappropriation of the funds of the said stores, which led to an inquiry under Section 81 of the Tamil Nadu Cooperative Societies Act, 1983, hereinafter called the ‘Act’. On the basis of the report of the inquiry submitted on 5.10.1989, the Deputy Registrar of Cooperative Societies initiated surcharge proceedings under Section 87, by a notice dated 8.6.1990 against 1 former President and I Secretary of a retail cooperative stores known as “Educated Unemployed Youth Cooperative Stores”,

5. Cooperative Sub-Registrars (including the Petitioners herein),

9. Assistant Superintendents,

2. Depot Managers, 1 Assistant Secretary and 1 Clerk. The allegation in the notice dated 8.6.1990 was (i) that the Cooperative Sub-Registrars, Assistant Superintendents and Assistant Secretary signed in the Sales Bills, without verifying the receipt of cheques, thereby causing loss to the Society (ii) that the Depot managers prepared the Sales Bills, signed as Clerk and allowed the stock to go out, without receiving acknowledgement of receipt of cheque and (iii) that the former Presidents of the Retail Cooperative Stores, cheated the Society by signing in the sales bills as Clerk. The notice quantified the loss as follows:

Year Loss

Rs. Ps.

1984-85 6,24,010.82

1985-86 12,79,320.13

1986-87 16,83,109.87

1987-88 18,64,488.90

1988-89 17,78,094.00

Total 72,29,023.72

4. Since the notice did not evoke any response, the Cooperative Society raised a dispute and the same was referred to Arbitration under Section 90 of the Act, before the Deputy Registrar of Cooperative Societies, in ARC No,.310/89-90. All the 20 persons named in the notice dated 8.6.1990, including the Petitioners herein, were cited as Defendants in the Arbitration Claim. While the Petitioner in C.R.P. (NPD) No.3210 of 2008 was cited as fourth Defendant, the Petitioners in C.R.P. (NPD Nos.3590 and 3591 of 2008 were cited as Defendants 5 and 3 respectively. The President and the representative of the Retail Cooperative Stores were impleaded as Defendants 1 and 2 respectively.

5. In brief, the averments contained in the Claim Petition filed by the Society before the Arbitrator, were as follows:

(a) that the Society was supplying, under the Public Distribution System, essential commodities such as Wheat, Palmolein, Maida and Rava to Fair Price Shops and other Retail Cooperative Stores, one of which was the Educated Unemployed Youth Cooperative Stores;

(b) that during the period from September 1984 to June 1989, the President and the representative of that Retail Store (cited as Defendants 1 and 2 in the Arbitration Claim), raised indents for the purchase of the essential commodities and took delivery of the items, without issuing Bills, but creating records as though cheques were issued and thereby caused loss to the Wholesale Stores, to the tune o