The directors of a cooperative society are guilty of wilful negligence if they fail to discharge their duties with due care and diligence.

KANAKARAJ, J.

1. The Tamil Nadu Agricultural land is a Society registered under the Tamil Nadu Cooperative Societies Act, 1961 (herein after called as “the Act”). Its bye-laws illustrate the point that the people who hanker for or aspire to occupy positions of prominence in any field should realise the duties and responsibilities of the office and that a Damocles sword always hangs over such officers of importance. It is common knowledge that people aspire for an office of the President of a Panchayat or the President of a Co-operative Society in rural areas, because such officer did command some respect in the village and a certain amount of status and prestige are also attached to such officer. But a very few people realise the risk involved in discharging the duties of such responsible officers.

2. On the basis of a Special Audit Enquiry report submitted under Sec. 65 of the Act, action was-initiated under Sec. 71 of the Act against the ex-President, seven Directors, one ex-Secretary and two other employees of the society for having caused loss to the tune of Rs. 1.69.386-95 ps. Against the order dated 7.5.80 of the Deputy Registrar an appeal was filed to the Special Tribunal and the matter was remitted for fresh disposal by giving adequate opportunity to the persons involved. Thereafter, meticulous care was persons to furnish copies of documents and an opportunity was given to all the persons involved to submit their explanations. Most of them had engaged lawyers. After hearing all the parties and after persuing the documents, the Deputy Registrar by his order dated 7.5.80 held that all the persons were liable to make good the deficiency caused to the society to the tune of Rs. 1,39,238.50 ps. On account of their wilful negligence. The Deputy Registrar proceeded to hold that the Ex-secretary and some of the employees of the society were specifically responsible for certain stated amounts. So far as the Ex-president. Ex. Vice President, Ex-Treasurer and Ex-Director were concerned, they were found jointly and severally liable for a sum of Rs. 76.897.50 ps in respect of certain items. Certain other items in respect of which a show cause notice was issued to them were, however found to be not substantiated and accordingly dropped. Against the said order, a statutory appeal was filed before the Special Tribunal by the appellants herein and certain others. The appeals filed by the appellants were registered as CMA Nos. 227 and 223of 1980. The said appeals along with the connected appeals were dismissed by the Special Tribunal on

21.3.83. The appellants challenged the findings of the Tribunal in W.P. No. 1641 of 1984. Raju, J. by his order dated 18.12.1991 dismissed the said writ petition. The present writ appeal is directed against the said order of the learned Single Judge.

3. Mr. N.S. Sivam, learned counsel for the appellants contended that the authorities below as well as the learned Single Judge had not kept in mind the significant question that the mere negligence on the part of the Ex-Directors would not make them liable under a surcharge order and what is required is wilful negligence. It support of his arguments learned counsel for the appellants relied on the decision in Subbammai v. President, Tenkasi Co-operative Urban Bank (1976 11 MLJ 460 = 89 L.W. 641) and in Sathyamangalam Cooperative Urban Bank Ltd. v. Dy. Regr. of Coop. Society (1980 11 MLJ 17). In the latter judgment, the degree of negligence as contemplated under Sec. 71 of the Act is explained in the following words:

“The degree of negligence that is contemplated under Sec. 7(1) of the Act is not a mere negligence, but wilful negligence. The word “Wilful has not been defined in the Act. The word ‘wilfulness’ or ‘wantonness’ imports pre-meditation or knowledge and consciousness that an injury or loss is likely to result from the act done or from the omission to act. Thus, the term unports a constructive intention as to the consequences which, entering