Point of law: it is clear that, to pass surcharge order under Section 87 of the Act, appellants should have done an actionable wrong either by commission or omission in a deliberate and reprehensible manner with reckless callousness and with a supine indifference, without taking due care and caution ordinarily expected from a reasonable and prudent man under those existing circumstances. In the absence of such categorical finding by the respondents, it is not possible to mulct the appellants with the loss caused to the society

JUDGMENT :

(Prayer: Civil Revision Petitions are filed under Article 227 of the Constitution of India, to set aside the judgment and decree dated 21.06.2016 passed in C.M.A.(CS)No.39 of 2010 on the file of the learned Principal District Judge, Namakkal.)

1. This Civil Revision Petitions is directed as against the fair and decreetal order dated 21.06.2016 passed by the learned Principal District Judge, Namakkal, in C.M.A.(CS)No.39 of 2010, thereby dismissing the appeal filed as against the surcharge proceedings initiated by the second respondent herein.

2. The learned counsel appearing for the petitioner would submit that the second respondent passed surcharge order relates to the act of misappropriation of the sale amount by the labour contractor of the petrol bunk run by the first respondent herein. Therefore, it is no way connected with the management or touched the business of the second respondent and it completely outside the scope of the surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act. The second respondent passed impugned surcharge order without even conducting detailed enquiry as contemplated under Section 87 of the Tamil Nadu Co-operative Societies Act and simply accepting the enquiry report submitted by the first respondent and without applying his mind passed the impugned order.

2.1. She further submitted that even assuming that there is loss to the society, it has to be proved that it happened only because of the deliberate wrong committed by the petitioner herein. There is no findings in respect of the dereliction of duty and the surcharge proceedings cannot be sustained as against the petitioner and it is liable to be set aside. There is no finding in respect of the willful dereliction of duty on the part of the petitioner and mere alleged the carelessness and dereliction of duty are not sufficient to issue surcharge order under Section 87 of the Tamil Nadu Cooperative Societies Act, as against the petitioner.

2.2. Admittedly, the labour contractor of the petrol bunk had misappropriation the amount and caused loss to the society. When it being so, the surcharge proceedings itself is vitiated as against the petitioner, since he is working as Chief Accountant of the society. In fact, the first respondent already filed suit in O.S.No.5509 of 2009 on the file of the City Civil Court, Chennai as against the labour contractor and his partnership firm, in respect of the loss caused to the society and for recovery of loss. Therefore, the surcharge proceedings initiated as against the petitioner cannot be sustained, when there is no findings as against the petitioner that the loss caused only due to the dereliction of duty by the petitioner. In support of her contention, she relied upon the following judgments:

(i) 2018(3)LW 22 - S.Selvaraj and ors Vs. The Deputy Registrar of Co-op Societies and anr.

(ii) The judgment dated 04.04.2014 passed by this Court in W.A.No.1686 of 2013 - P.Elango Vs. The Administrator, M.R.K.Co-op Sugar Mill and ors.

3. Per contra, the learned counsel appearing for the respondent would submit that the petitioner was working as Chief Accountant of the Society and he along with others misappropriated amount to the tune of Rs.12,82,770/- There was a special note to the petitioner as Chief Accountant that the petrol and diesel stock available with the bunk was taken on charge from the labour contractor viz., Kuppannan and the first respondent have been purchasing diesel, petrol, oils etc., with effect from that date onwards. Further, it directs to verify the stock of petrol at the level of Senior Manager and Accounts Officer. G5 Assistant is responsible for the preparation of MIS report and also physically ensuring the stock and also in getting the petrol and diesel load in time thereby avoiding driage of the pumps.

3.1. It is also directed by the Special Officer in his office note as the statement of accounts submitted by the labour contractor should be thoroughly checked