BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
C. SARAVANAN, J.
Tamil Nadu State Transport Corporation – Petitioner
Versus
The Deputy Registrar of Cooperative Societies, Madurai – Respondent
C.R.P. (MD) Nos. 856, 857, 858 of 2019
Decided On : 30-03-2023
Article 227 - Civil Revision Petition - The Tamil Nadu Cooperative Societies Act, 1983, Section 152(1)(a), Section 87 - The court discussed the surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 and the authority of the Registrar to write off non-recoverable assets under Section 178. The court also highlighted the power of superintendence of the High Court under Article 227 of the Constitution of India.
Fact of the Case:
The Civil Revision Petitions were filed under Article 227 of the Constitution of India to set aside the orders and decreetal orders passed by the Principal District Judge, Madurai in C.M.A. (CS) Nos. 12, 13 and 34 of 2015. The appeals were filed against surcharge orders and an attachment notice issued by the Deputy Registrar of Cooperative Society under Section 87 of The Tamil Nadu Cooperative Societies Act, 1983.
Finding of the Court:
The court found that the surcharge proceedings initiated against the second respondent were unwarranted and that the impugned orders passed in the respective appeals were influenced by the alleged proceedings initiated to recover the loan when no such proceedings were initiated and the amounts were waived off purportedly pursuant to a resolution that did not authorize the waiver. The court also found that the Petitioner Society should have been made a party to the proceedings.
Issues: The issues included the authority to waive outstanding loans, the necessity of approval from the Registrar for such waiver, and the initiation of surcharge proceedings against the second respondent.
Ratio Decidendi: The court held that the surcharge proceedings were unwarranted and that the impugned orders were influenced by alleged proceedings that did not actually take place. The court also emphasized the need for the Petitioner Society to be made a party to the proceedings.
Final Decision: The Civil Revision Petitions were allowed, the impugned orders were set aside, and the cases were remitted back to the Principal District Court, Madurai, to pass a fresh order on merits and in accordance with the law after hearing the petitioner. The petitioner was directed to be suo motu impleaded in all the appeals before the Principal District Court, Madurai, and the appeals were directed to be disposed of within six months.
ORDER :
PRAYER: Civil Revision Petition is filed under Article 227 of Constitution of India, to set aside the order and decreetal order dated 28.06.2018 passed in C.M.A. (CS) No. 12 of 2015 by the Principal District Judge, Madurai.
PRAYER: Civil Revision Petition is filed under Article 227 of Constitution of India, to set aside the order and decreetal order dated 28.06.2018 passed in C.M.A. (CS) No. 13 of 2015 by the Principal District Judge, Madurai.
PRAYER: Civil Revision Petition is filed under Article 227 of Constitution of India, to set aside the order and decreetal order dated 28.06.2018 passed in C.M.A. (CS) No. 34 of 2015 by the Principal District Judge, Madurai.
1. These three civil revision petitions have been filed against separate Orders dated 28.06.2018 passed by the Principal District Judge, Madurai in C.M.A. (CS) Nos. 12, 13 and 34 of 2015.
2. These appeals were filed before the Principal District Judge, Madurai by the second respondent under Section 152(1)(a) of The Tamil Nadu Cooperative Societies Act, 1983 against two surcharge orders passed under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 and an attachment notice issued by the first respondent-Deputy Registrar of Cooperative Society as detailed below:
| S. No. | CRP No. | Date | Order/Notice of first respondent | CMA (CS) | Amount |
| 1 | 856 of 2019 | 13.05.2014 | Na.Ka.No. 923/2012 Sa.Pa | 12/2015 | Rs. 53,98,469/- |
| 2 | 857 of 2019 | 16.07.2014 | Tha.Thi.Va.No. 02/2013 Sa.pa | 13/2015 | Rs. 5,93,787/- |
| 3 | 858 of 2019 | 21.08.2015 | C.E.P. No. 1/15-16 | 34/2015 | Rs. 61,17,131/- |
3. Relevant portion of the order in C.M.A. (CS) Nos. 12 and 13 of 2015 read identically. They are extracted as under:
4. The impugned order in CMA (CS) No. 34 of 2015 reads as under:
Chandrasekhar Singh and Others vs. Siva Ram Singh and Others
S. Subramanian vs. The Deputy Registrar of Co-operative Societies (Housing) Cuddalore and Others
The court emphasized the need for proper authorization and approval for the waiver of outstanding loans and highlighted the power of superintendence of the High Court under Article 227 of the Constit....
The court has the discretion to allow the revision and set aside an order, considering the circumstances and the need for timely disposal of proceedings.
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....
The main legal point established in the judgment is that surcharge proceedings must adhere to prescribed time limits, and liability cannot be imposed on an employee without establishing specific duti....
Liability under Section 87 of the Tamil Nadu Cooperative Societies Act requires evidence of wilful negligence, which was not established for the clerk in this case.
Surcharge proceedings under the Tamil Nadu Co-operative Societies Act must adhere to principles of natural justice, ensuring fair enquiry and opportunity for cross-examination.
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