For surcharge proceedings under Section 87 of the Cooperative Societies Act, there must be a finding of wilful negligence or deliberate intention to cause loss to the society's assets. Mere negligence is not sufficient for surcharge.

E. PADMANABHAN, J.

1. This Writ Appeal has been preferred against the order of the Learned Single Judge dated 31.3.1994.

2. Heard Mr. B.M. Swami, learned counsel for Mr. R.P. Kapilan, appearing for the petitioner, and Mrs. M.G. Kalaiselvi, Special Government Pleader appearing for the respondents.

3. The first respondent herein issued a notice under Section 87 of the Cooperative Societies Act, 1983 calling upon the appellant to show cause as to why the order of surcharge for a sum of Rs. 38,332/- with 13% interest should not be passed against the appellant, while enumerating that the petitioner has caused loss to the assets of the second respondent-society. The appellant submitted his objections in detail and contended that he is not liable to be surcharged. The appellant further contended that he has not acted in any manner prejudicial to the interest of the society, much less, willfully, deliberately or intentionally, that he had acted as per the resolution passed by the society as well as the bye laws and that on the very face of the show cause notice surcharge proceedings is not maintainable, nor surcharge could be levied. The appellant had also set out his defense in detail. However, the first respondent ultimately passed orders of surcharge to the tune of Rs. 4230/- in respect of items 3, 5, 6 and 7 alone while accepting the explanation offered in respect of the other items by proceedings dated 14th of February, 1990.

4. Being aggrieved, the appellant preferred an appeal before the third respondent, appellate authority, Special Tribunal for Cooperative Cases and challenged the entire findings as well as raised the question of jurisdiction of the first respondent. The third respondent-Tribunal by judgment and decree dated 19th of October 1993, dismissed the appeal and confirmed the surcharge proceedings. Being aggrieved the petitioner moved this Court by filing Writ Petition No. 4428 of 1994. The learned Single Judge at the stage of admission by order dated 31.3.1994 dismissed the writ petition in limine while holding thus: —

“4. A perusal of the order impugned does not appear to suffer from any infirmity whatever. The third respondent Special Tribunal for Cooperative Cases, took into consideration the relevant materials, in the best of fashion possible, to arrive at the conclusion which is the subject matter of challenge. It is not as if such a conclusion suffers from lack of materials or evidence, calling for interference. The appreciation of the materials available on record cannot also be stated to be perverse and this Court, sitting in the extraordinary jurisdiction under Article 226 of the Constitution of India cannot at all be expected to appreciate the evidence as an appellate court and come to a conclusion, different from the one arrived at by the third respondent Tribunal.

5. In this view of the matter, I feel that the writ petition deserves dismissal even at the admission stage and the same is accordingly dismissed. Consequently, WMP is also dismissed.

5. Being aggrieved, the present appeal has been preferred for various grounds set out in the appeal. The learned counsel for the appellant rightly contended that the proceedings of the first respondent as confirmed by the third respondent is in excess of jurisdiction and runs counter to the pronouncements of this Court as well as the statutory provisions of Section 83 of the Cooperative Societies Act. The learned counsel also contended that even in respect of surcharge sum of Rs. 4230/- no order of surcharge could be passed in respect of items 3, 5, 6 and 7.

6. The learned counsel also contended that nowhere in the show cause notice or in the proceedings the petitioner had been implicated with misappropriation or fraudulent intention or breach of trust or causing deficiency to the assets of the society or acted wilfully or made payments not in accordance with the rules and willfully also. In the absence of such allegations, no action could be taken under sec