Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
P. Krishnan – Petitioner
Versus
The Deputy Director of Industries and Commerce (Industrial Co-operatives) – Respondent
Writ Petition No. 13358 of 2018, W.M.P. No. 13473 of 2019
Decided On : 05-08-2019
Surcharge Order - Co-operative Society - Tamil Nadu Co-operative Society Act - Section 81, Section 87 - The court discussed the irregularities in the formation of the co-operative society and the distribution of auto rickshaws, the role of the bank officials, and the surcharge proceedings initiated under Section 87 of the Act. The court also considered the principles of natural justice and the power of the Registrar to initiate multiple enquiries under Section 81 of the Act.
Fact of the Case:
The petitioner, a former Managing Director of a bank, challenged a surcharge order initiated under Section 87 of the Tamil Nadu Co-operative Society Act. The case involved irregularities in the disbursal of auto rickshaw loans to a minority community co-operative society and subsequent surcharge proceedings against the petitioner.
Finding of the Court:
The court found that the surcharge order was based on the power conferred under Section 87 of the Act and was passed after examining witnesses and affording opportunity to the petitioner. The court held that the writ petition challenging the order was not maintainable and dismissed it.
Issues: The issues involved the irregularities in the formation of the co-operative society, the distribution of auto rickshaws, the role of the bank officials, the initiation of multiple enquiries under Section 81 of the Act, and the principles of natural justice.
Ratio Decidendi: The court clarified that there is no limitation to initiate Section 81 enquiry and the Registrar is empowered to initiate multiple enquiries to probe irregularities. The court also emphasized that an enquiry under Section 81 is a fact-finding enquiry and is not equivalent to a departmental disciplinary enquiry.
Final Decision: The court dismissed the writ petition challenging the surcharge order and held that the petitioner had the right of appeal under the statute and should work out remedies as per the statute.
JUDGMENT :
G. JAYACHANDRAN, J.
Prayer: This Writ Petition is filed under Article 226 of the Constitution of India for a writ of certiorari calling for the records of the Surcharge Order No. 2/Rahumania/2019 dated 11.03.2019 on the file of the second respondent quash the same.
1. The case of the petitioner is that, he served as Managing Director of TAICO Bank between 06.11.2011 and 31.05.2016. 266 Primary level Co-operative Societies were under his supervision through its Branch Managers. Rahumania Auto Drivers Industrial Co-operative Society Ltd. (4th respondent) is one among such primary level society falling under his control. One of the object of the fourth respondent is to improve the economic condition of the minority community. The members of the fourth respondent society belong to minority community. 87 members of the fourth respondent society were advanced loan for purchase of Auto rickshaws.
2. The THAICO Bank released Rs. 19,42,500/- to M/s. Khivraj & Company and Rs. 90,00,000/- to M/s. Ramkay TVS on 03.03.2011, much before the petitioner’s joined as Managing Director of THAICO Bank. Since, there was default in repayment, enquiry under Section 81 of the Tamil Nadu Co-operative Society Act (hereinafter referred to as “the Act”) was initiated. Based on the enquiry report dated 20.03.2015, surcharge proceeding was initiated under Section 87 of the Act. While so, pending surcharge proceedings, another enquiry under Section 81 of the Act was initiated. The third respondent was appointed as the Enquiry Officer. Based on her report dated 16.05.2018, surcharge proceeding under Section 87 of the Act has been initiated against the petitioner by the first respondent vide proceeding No. 1385/IC2/2017 dated 22.05.2018. The surcharge proceeding is also been proceeded by the very same officer who conducted the enquiry under Section 81 of the Act and submitted report. Hence, she has been arrayed as third respondent.
3. The contention of the petitioner is that, no opportunity was given to him during the enquiry under Section 81 of the Act. The same officer who has conducted enquiry under Section 81 of the Act is also the officer for the surcharge proceeding under Section 87 of the Act. The same person cannot be a prosecutor as well as a Judge which is against all canons of law.
4. The petitioner is no way connected with the fourth respondent society for the default of loan amount. Arbitration proceeding has already been initiated against the defaulters and the same is pending. For non recovery of the said loan amount, the petitioner cannot be proceeded under Section 87 of the Act. The respondents have already initiated Section 81 enquiry for the default committed by the members of the fourth respondent society and that has culminated in surcharge proceedings as early as on 19.05.2016. While so, the second enquiry under Section 81 of the Act and implicating the petitioner herein in the surcharge proceeding is bad in law.
5. The prime contention of the learned counsel for the petitioner is that no opportunity was given to him during Section 81 of the Act enquiry. The person who has submitted the report under Section 81 of the Act and the person who is now presiding the surcharge proceeding under Section 87 of the Act are one and the same. This is against the cardinal principle of jurisprudence that, no person who is a complainant shall be the Judge. In this regard, the learned counsel for the petitioner would rely on the following two judgments:-
(i) In P. Venkatachalam (deceased) vs. Special Tribunal for Co-operative, 1996 (2) MLJ 69
(ii) In Arjun Chaubey vs. Union of India, 1984 (2) SCC 578
6. Per contra, the learned counsel for the respondents has filed a counter affidavit wherein, he has stated that the writ petition is not maintainable since, the petitioner under Section 152A of the Act, has a statutory alternate remedy against the impugned surcharge order dated 11.03.2019. The erstwhile Board of Directors of the fourth respondent society a
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
