The limitation period for a claim under Section 90(9)(a)(ii) of the Tamil Nadu Co-operative Societies Act, 1988 begins from the date of the act or omission, not from the date of the audit report.

1. The plaintiff, Co-operative Society in A.R.C. 52 of 1989-90 and A.R.C.53 of 1989-90 is the revision petitioner in both the petition.

2. A dispute was raised by the Society before the Registrar of the Co-operative Societies under Sec.90 of the Act. First respondent in both the revisions were the defendant in the proceedings. The dispute was raised to realise amount from the defendant on the allegation that there was deficiency in the stock of materials of the Society when the defendants were in charge of the same.

3. An award was passed against the defendants by the Registrar in terms of the claim. Both the defendants preferred C.M.A. 6 and 7 of 1997 on the file of District Judge, Udhagamandalam. The lower court dismissed the claim on the ground that the same is barred by the limitation. This revision is filed under Art.227 of Constitution of India, challenging the appellate order.

4. I heard both the counsel in detail. The only point that is urged by the learned counsel for the petitioner was that the appellate authority was wrong in dismissing the claim on the ground of limitation. It is argued that till an audit report comes or is made available, no action can be taken against the concerned authorities or officers and in this case even though deficiency was found out in 1981, audit report was made available only long thereafter i.e., on 16.9.1985 and only thereafter they could proceed with the matter. Six years period will have to be computed from the date when the audit report is filed and if so the claim is not barred.

5. As against the said contention, the learned counsel for the respondent submitted that the deficiency was found out as early as in August, 1981 and as per the old Act, 1961, the Society had only a period of three years to intimate any action. On the date new Act came into force, the claim was already barred and reference to the Arbitrator in 1989 was incompetent and unsustained.

6. After hearing the counsel of both sides, I feel the point is covered by the decision of this Court reported in Muthammal v. Secretary, Kolathur B.& C.W. Ltd. Co-operative Society Muthammal v. Secretary, Kolathur B.& C.W. Ltd. Co-operative Society Muthammal v. Secretary, Kolathur B.& C.W. Ltd. Co-operative Society , (1976)2 MLJ. 157. Inthat case His Lordship was considering similar provision of Tamil Nadu Co-operative Societies Act, 1961. In para 8 of the Judgment, His Lordship held thus:

“The view of the Tribunal that the claim under Sec.73 is not barred by time in view of Rule 56, as it has been filed within 3 years from the date of audit report and that in any event, the claim is in time in view of Sec.25(1) (b) which keeps alive the liability of the deceased member for a period of two years, is in my view erroneous. On the facts there could be no doubt that the claim filed against the petitioners on 16th August, 1972 is beyond the period of 3 years provided for in Rule 56. The claim is based on the act or omission said to have taken place when the deceased Ex-President was functioning as the President, for the period 1st April, 1966 to 31st March, 1969. Therefore, the last date before which the act or omission could have taken place can only be on 31st August, 1969. Therefore, the arbitration claim having been filed more than three years before that last date before which the act or omission could have taken place, it is clearly out of time as per Rule 56(1). Both the arbitrator as well as the Co-operative Tribunal have proceeded on the basis that the limitation will begin to run under Rule 56 only from the date of the audited report from which the society came to know about the act or omission of the Ex-President. I do not see how the date of the audit report will be material for interpreting Rule 56. The rule says that the limitation will begin “from the date on which the act or omission took place”…. The date of act or omission cannot in any sense be equated to the date of the report by the auditor. Even if th