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IN THE HIGH COURT OF JUDICATURE AT MADRAS
L. VICTORIA GOWRI, J.
G. Nagarajan - Appellant
Versus
The Special Officer, Tiruchirapalli, Agricultural Department Officers Credit & Thrift Society, Trichy & Anr. - Respondents
C.R.P(MD). No. 1529 of 2013 & M.P(MD). No. 1 of 2013
Decided On : 08-06-2023
Section 81 and Section 87 Surcharge Enquiry - Tamil Nadu Co-operative Societies Act, 1983 - [IRREGULARITIES, MISAPPROPRIATION, DUTIES, OBLIGATIONS] - [Section 81(4), Section 87(1)] - The court discussed the provisions of Section 81 and Section 87 of the Tamil Nadu Co-operative Societies Act, 1983, highlighting the time limits for inquiries and surcharge proceedings. The court also referenced previous judgments to support its decision not to go into the question of limitation.
Fact of the Case:
The Civil Revision Petition was filed against the judgment and decree confirming the surcharge award passed against the petitioner and another individual. The petitioner, a former clerk of a society, was held jointly and severally liable for misappropriation and irregularities in the society's fund.
Finding of the Court:
The court found that the surcharge proceedings were initiated and concluded beyond the prescribed time limits, rendering them invalid. It also noted that the petitioner, being a daily wages employee, was not entrusted with specific charges or duties and acted under the instructions of the Vice President.
Issues: The issues included the validity of the surcharge proceedings, the petitioner's responsibilities as a daily wages employee, and the failure to establish the duties and obligations of the petitioner.
Ratio Decidendi: The court held that the surcharge proceedings were invalid due to exceeding time limits and that the petitioner, as a daily wages employee, should not be held jointly liable without specific duties and obligations being established.
Final Decision: The Civil Revision Petition was partly allowed, setting aside the findings against the petitioner alone.
JUDGMENT
(Prayer: Civil Revision Petition is filed under Article 227 of the Constitution of India, to allow the civil revision petition by setting aside the order passed in C.M.A(CS)No.88 of 2009 dated 08.10.2012 confirming the order passed in Na.Ka.6268/2008/saba dated 22.04.2009 by Deputy Registrar of Co-operative Societies, Tiruchirappalli dated 22.04.2009.)
1. This Civil Revision Petition has been preferred against the judgment and decree passed in C.M.A(CS)No.88 of 2009 dated 08.10.2012 confirming the order passed in Na.Ka.6268/2008/saba dated 22.04.2009 by the Deputy Registrar of Co-operative Societies, Tiruchirappalli. For the sake of convenience, the parties herein are referred to as arrayed in C.M.A(CS)No.88 of 2009.
2. Heard the learned Counsel on either side and perused the materials available on record. The learned counsel for the petitioner took me through the various grounds of this Civil Revision Petition.
3. The Petitioner / Appellant, one G.Nagarajan is the former Clerk of the first respondent Society. One K.Varadharajan is the former Vice President of the Society. On the basis of Section 81 audit report of the year 1997-1998 that there were irregularities and misappropriation of the Society’s fund, Section 87 surcharge enquiry was initiated against them in respect of five items of charges. The gravemen of charges levelled against the Petitioner / Appellant and K.Varadharajan are as follows:
(i) First item is making debit entries for Rs.3,412.30 without any receipts.
(ii) The second item is that the amount of Rs.23,204/- paid by the Assistant Director’s Office was misappropriated without giving credit into the Society’s account.
(iii) The third item is that without any details of debit, entries were made on different dates for a total amount of Rs.1,514.90.
(iv) The fourth item is that without any receipt for disbursement of the share amount, debit entries were made.
(v) The fifth item of charge is for certain items of loans for which interest was received at a lesser rate of interest.
4. A perusal of records would reveal that for the objections in the audit report of the year 1997-1998, on the basis of the proceedings of the Deputy Registrar, Tiruchirappalli, dated 19.07.2000, Section 81 inquiry report was submitted on 12.04.2001. Thereafter, surcharge proceedings under Section 87 was initiated by the notice of the Deputy Registrar, Tiruchirappalli dated 03.08.2005. On the basis of which, an enquiry was conducted and final order was passed by the Deputy Registrar, Tiruchirappalli. The Deputy Registrar passed surcharge award in the said surcharge proceedings on 20.04.2006 for 5 items of misappropriation and Ex-Vice President, K.Varadharajan and Ex-Clerk G.Nagarajan were made liable jointly and severally. Against which, the Vice President K.Varadharajan preferred C.M.A.No.33 of 2008, before the District Judge's Court at Tiruchirappalli, in which, the learned District Judge was pleased to set aside the surcharge award passed by the Deputy Registrar, Tiruchirappalli dated 20.04.2006 and thereafter remanded, the said case back to the Deputy Registrar, Tiruchirappalli, directing him to give proper opportunity to both the parties, who were found guilty. Following the said order, the Deputy Registrar, Tiruchirapalli initiated, Section 87 surcharge enquiry afresh by issuing notice dated 23.12.2018 to both the petitioner herein and K.Varadharajan. Due to the non appearance of the Petitioner / Appellant, he was set ex parte and surcharge award was passed again on 22.04.2009 by the Deputy Registrar, Tiruchirappalli following the earlier order blindly, without application of mind. Against the said award, the Petitioner / Appellant filed C.M.A(CS)No.88 of 2009 and the same was dismissed on 08.10.2012. Against which, this Civil Revision Petition is filed.
5. Be that as it may, Section 81(4) of the Tamil Nadu Co-operative Societies Act, 1983 mandates as follows:
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.
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....
Mere negligence in discharging duties does not warrant the initiation of Surcharge Proceedings under the Co-operative Societies Act.
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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