The main legal point established in the judgment is the requirement of proving wilful negligence for surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983.

1. The petitioner has filed these writ petitions challenging the order of the third espondent dated 30.6.2001, insofar as it relates to withholding the petitioner's terminal benefits and also the order of the Deputy Registrar of Co-operatives, Vellore dated 29.5.2003, as confirmed by the order of the Co-operative Appellate Tribunal, Vellore by order dated 11.10.2004, by which the petitioner and others were made jointly and severally liable to the third respondent/Bank to the extent of ` 11,07,050/- with interest at the rate of 18% from 27.2.2003 in surcharge proceedings initiated against them under the Tamil Nadu Co-operative Societies Act, 1983 (for brevity, "the Act").

2.1. The petitioner was working as an Assistant Administrative Officer (Non Agricultural Loan) between 3.11.1994 and 23.7.1995 in the third respondent/Bank. On an application made by one Om Sakthi Brick Works on 8.5.1995 to the Special Officer of the third respondent/Bank, the petitioner was directed to conduct personal interview of the loan applicant and find out the value of the land given as collateral security for the loan sought. The petitioner was directed to find out the guideline value by the Special Officer of the third respondent/Bank in the order dated 16.5.1995.

2.2. It is stated that the petitioner has called for an interview of the applicant and verified the guideline value from the Sub Registrar Office, Ambur in respect of the land sought to be given as collateral security by the loan applicant. As per the guideline value, the value of the collateral security was arrived at ` 8,11,440/- and it is stated that the petitioner has submitted his report to the Special Officer of the third respondent/Bank on 24.5.1995. The loan was sanctioned to the applicant by the Special Officer on 21.6.1995 and disbursed in three instalments, viz., on 20.7.1995 a sum of ` 1,89,215/-, on 14.9.1995 a sum of ` 2,09,225/- and on 4.11.1995 a sum of ` 62,000/- and according to the petitioner, he had no role to play in the sanction of the loan and he has only valued the property based on the guideline value.

2.3. It is stated that when the third party failed to repay the amount, instead of making recovery an enquiry was directed in respect of disbursement of loan. It was on 23.2.2001 a show cause notice was issued to the petitioner and 8 others seeking explanation as to why disciplinary proceedings should not be initiated for irregularity in disbursement of loan. Out of nine persons, in respect of four persons, viz., K.Periyasamy, Sriram, M.Varadhan and D.J.Ambikapathy, show cause notice was issued for surcharge proceedings, and in respect of the petitioner and the other four persons, the show cause notice was as to why disciplinary proceedings should not be initiated.

2.4. The petitioner gave a reply on 22.3.2001 and thereafter, the third respondent has issued a charge memo on 11.4.2001 and the petitioner has given his reply on 5.5.2001. In the meantime, the petitioner has attained the age of superannuation on 30.6.2001 and his terminal benefits were not settled. It is in respect of the said terminal benefits which were withheld, the petitioner has filed W.P.No.38410 of 2003.

2.5. An enquiry under Section 81 of the Act was ordered, in which the petitioner has participated and thereafter, the second respondent in W.P.No.38603 of 2004 has issued a notice on 16.6.2002 for surcharge proceedings under Section 87 of the Act. Since the petitioner was away from India, after his return, by letter dated 20.10.2002, he requested the second respondent in W.P.No.38603 of 2004 to furnish the copy of the report of enquiry conducted under Section 81 of the Act to enable him to give his reply to the surcharge proceedings. The complaint of the petitioner is that such report was not furnished. However, the petitioner had to give his reply. The petitioner has also given deposition that he has nothing to do with the granting of loan. However, the second respondent in W.P.No.38603 of