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2012 Supreme(Mad) 833
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K.N. BASHA
A.S. Dhanapal
Versus
The Deputy Registrar of Co-operative Societies, Tirupattur Circle, Tirupattur, Vellore District & Another
W.P.No.30657 of 2006
Decided On : 16-02-2012
For the Petitioner:G. Sankaran for R.N. Amarnath, Advocates.
For the Respondents:Mrs. P. Rajalakshmi, Government Advocate.
Headnote:TAMILNADU CO-OPERATIVE SOCIETIES ACT, 1983 - SECTIONS 81 AND 87 - Initiation of Surcharge proceedings - Whether barred by provision under sec 87 of Act by limitation or not - Whether time limit fixed as per first proviso to Sec 87(1) of Act is mandatory or directory - petitioner was working in co-operative department as Attender and he was promoted as secretary and retired from service on 31.3.1996 - with all retirement benefits - Later, in an enquiry conducted on 13.4.2006, first respondent ordered for initiation of surcharge proceedings against employees of co-op society first respondent included petitioner also in enquiry proceedings in respect of loan disbursed in year 1995-96 maintainability - Held question as to whether a statue is mandatory or directory, of course, depends upon intent of legislature and not upon language in which intent is clothed - meaning and intention of legislature must govern, and these are to be ascertained, not only for phraseology of provision, but also by considery its nature, its design, and consequences which would follow from consting in one was or to her - provisos I and to sec S7(1) of Act coupled with principles of interpretation of statutes - Provision of Sec 87(1) of Act as mandatory as per decisions of Apex Court - holding that proviso of Sec 87(1) is mandatory and any surcharge proceeding initialed beyond period of 7 years from date of translation is liable to be quashed, as bared by limitation. (Paras 8, 9, 10 and 14)
1. The challenge in this writ petition is to the order passed by the second respondent dated 17.08.2006 in proceedings Tha.Thee.3/2006-07, with a prayer to quash the same.
2. The petitioner was working in the Cooperative Department as Attender and he was promoted as Secretary (In-charge) of Ambur Co-op. Land Development Bank Ltd. He reached the age of superannuation on 31.3.1997 and he was allowed to retire from service on the same day. He has also been disbursed with all retirement benefits.
3. An enquiy was conducted under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 [hereinafter referred to as 'Act'] in respect of the affairs of Ambur Cooperative Primary Agricultural and Rural Development Bank and a report was also furnished by the Enquiry Officer on 13.04.2006. The first respondent ordered for initiation of surcharge proceedings against the employees of the Cooperative Society. As far as the petitioner is concerned, he was working as Secretary in the said Society and he was also directed to be included in the enquiry proceedings in respect of the loan disbursed in the year 1995-96. The petitioner has been served with a notice of the second respondent dated 17.08.2006 for initiating surcharge proceedings under Section 87 of the Act. Being aggrieved against the same, the present writ petition is filed with the above said prayer.
4. Mr.G.Sankaran, learned counsel appearing for the petitioner put forward twofold contentions, namely, (1) Surcharge proceedings have been initiated after a lapse of seven years as the alleged transaction said to have been taken place during 1995-1996 and the enquiry under Section 81 of the Act was conducted and a report was submitted only on 13.04.2006 and even the petitioner was allowed to retire on reaching the age of superannuation on 31.03.1997 and as per First Proviso to Section 87(1) of the Act, the Department is entitled to initiate surcharge proceedings within a period of 7 years and the said time limit provided in the said proviso is a mandatory one and therefore, the proposed surcharge proceedings sought to be initiated against the petitioner is liable to be quashed.
(2) The petitioner was not served with the enquiry report and as such, the impugned show cause notice was issued against the petitioner in violation of the principles of natural justice and on this ground also, the impugned notice is liable to be quashed.
The learned counsel for the petitioner, in support of such contentions, would place reliance on the following decisions:
(1) H.Rajasekar & Others v. The Deputy Registrar of Cooperative Societies, Krishnagiri & Others reported in 2009-4-L.W.427, referring the earlier decisions including the decision of the Division Bench of this Court in S.V.K.Sahasramam v. Deputy Registrar of Coop. Societies, Thiruvannamalai and Others reported in (2008) 8 MLJ 231.
(2) K.Murugan v. The Deputy Registrar of Cooperative Societies reported in 2011 (3) CTC 689
(3) R.Ganapathy v. Deputy Registrar of Coop. Societies (Housing) reported in (2009) 6 MLJ 1066
5. Per contra, Mrs.P.Rajalakshmi, learned Government Advocate appearing for the respondents 1 and 2 contended that Section 87(1) First Proviso is only directory and not mandatory and as such, the proposal to initiate surcharge proceedings under Section 87 of the Act on the basis of the impugned show cause notice is not liable to be quashed. It is further contended that the contents of the enquiry report was also stated in the notice itself and as such, the petitioner would not have suffered any prejudice.
6. This Court carefully considered the rival contentions put forward by either side and scrutinized the entire materials available on record including the affidavit filed by the petitioner, counter filed by the respondents 1 and 2 and the impugned show cause notice dated 17.08.2006.
7. The core question involved in this matter is to the effect that whether initiation of surcharge proceedings as per the provision
