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2023 Supreme(Mad) 2895

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

Advocates:
Advocate Appeared:
For the Petitioner: D. Shanmugaraja Sethupathi.
For the Respondents: H. Arumugam, D. Sadiq Raja.

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 Constitution of India.

Headnote:

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:

    “17. In the same appeal, the action of the Tamil Nadu State Transport Corporation (Madurai Division-1) Madurai Employees Co-operative Thrift and Credit Society Ltd., who had filed arbitration proceedings against the members of the Society who had defaulted in repayment of loan under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983 which had already been decreed and execution petitions pending with the respondent. The action of the Tamil Nadu State Transport Corporation (Madurai Division-1) Madurai Employees Co-operative Thrift and Credit Society Ltd. in proceedings of the arbitration against this appellant on the same set of facts in ARC No. 181/15-16 is barred by res-judicata. When the arbitration proceedings against the defaulters had been decreed and is pending for execution with the respondent, the Deputy Registrar of Co-operative Societies, Madurai, need not proceed against the appellant herein for the same defaulted amount. The Tamil Nadu State Transport Corporation (Madurai Division-1) Madurai Employees Cooperative Thrift and Credit Society Ltd., can very well collect the overdue from the execution petition initiated against the defaulters which is pending before the respondent. Therefore, as rightly pointed out by the learned counsel for the appellant it amounts to res judicata for the very same default amount. The appellant cannot be tied with the liability. Therefore, the appeal is to be allowed and the surcharge proceedings in R.C. No. 923/2012 SF dated 13.5.2014 passed by the 1st respondent is to be set aside. The points 1 and 2 are answered in favour of the appellant and against the respondent.”

4. The impugned order in CMA (CS) No. 34 of 2015 reads as under:

    “16. The action of the respondents herein to issue notice seeking attachment of the properties in the name of the appellant herein, two days prior to his retirement is hasty which is found to be non-application of mind by the respondents 1 and 2. Therefore, the notice issued by the 1st respondent against the appellant herein seeking security for the amount of Rs. 61,17,131/- is non-est in Law. Hence, the same is to be set aside and the impu

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