Brief facts of the case is as follows:

1. The first respondent is a former Secretary of the petitioner society. The first respondent issued false receipts to the members of the bank, which resulted in misappropriation of bank funds and not disbursed loan amount to the members/beneficiaries. An enquiry under Section 81 of the Tamil Nadu Cooperative Societies Act, 1983 was initiated against the first respondent and others for the loss sustained by the society on 28 items. On receipt of the enquiry report, surcharge proceedings has been initiated against the first respondent and others under Section 87 of the Act. The second respondent passed Surcharge award, holding that the total loss caused to the Society is Rs.5,43,292.99 with regard to item 1 to 20, 22, 23(part), 24 and 26 to 28, with regard to item 21, the loss is Rs.58,535.82. Challenging the said Surcharge award, the petitioner has preferred an appeal in CMA.No.47 of 2012 before the Principal District Court/Cooperative Tribunal. The Appellate tribunal, after considering the grounds raised by the first respondent, held that the time limit fixed for enquiry under Section 81(4) and 87 of the Act is mandatory and exceeding the time limit will nullify the proceedings. Challenging the said Judgment passed in the appeal, the petitioner Society has filed the present writ petition before this Court.

2. The learned counsel for the petitioner society would submit that the time limit fixed for completion of enquiry is not mandatory, but only directory. In support of his contention, the learned counsel for the petitioner society drew the attention of this Court to the Division Bench Judgment of this Court in the case of S.V.K. Sahasramam Vs. Deputy Registrar of Cooperative Societies, Tiruvannamalai Circle, Tiruvannamalai and others reported in (2008) 8 MLJ 231. The relevant paragraphs are extracted as follows:

“9. It is nobody's case that in the instant case, the proceeding under Section 81 of the said Act amounts to an enquiry which can be called a departmental or disciplinary enquiry. It cannot be disputed that an enquiry under Section 81 of the said Act is an enquiry in public interest in order to find out whether the affairs of a cooperative society are conducted legally and whether there are financial improprieties in the matter of conduct of its affairs. Such an enquiry cannot be prima facie compared to an enquiry against any individual employee. It is obviously true that as a follow up action on such enquiry under Section 81, various other steps may be taken, viz, surcharge proceedings can be initiated under Section 87 and steps can be also taken for initiating criminal proceedings. In the instant case, both these steps have been taken.

10. Before the learned Judge of the Writ Court, the appellant relied on two learned single Bench judgments of this Court rendered in the case of T.V. Ekambaram v. Cooperative Tribunal-cum-District Judge, Madurai 2000 (2) CTC 559 and in the case of Gabriel Vs. Deputy Registrar (Housing), Cuddalore (2003) 2 MLJ 624 : 2003 (3) CTC 23. In both these two judgments, the provisions of Section 87 of the said Act which relate to surcharge proceedings were examined and the learned Judges in both the aforesaid judgments construed the following proviso to Section 87:

“Provided further that the action commenced under this sub-section shall be completed within a period of six months from the date of such commencement or such further period or periods as the next higher authority may permit but such extended period or periods shall not exceed six months in the aggregate.''

Considering the said time limit of six months, the learned Judges came to the conclusion that the said period of six months is mandatory.

11. We are constrained to hold that even though no appeal has been taken to us from the said judgments, yet having regard to the well settled legal position which has been referred to hereinabove, the finding of the learned Judges in these two judgments