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.

ORDER :

Prayer : Civil Revision Petition under Article 227 of the Constitution of India to set aside Judgment and Decree passed by the Cooperative Tribunal cum Principal District Judge Tiruvannamalai dated 29-01-2019 in CMA-CS No.07/2019.

1. This Civil Revision Petition arises against the order passed in C.M.A.(CS) No.7 of 2018 on the file of the Cooperative Appellate Tribunal-cum-Principal District Judge at Tiruvannamalai dated 29.01.2019 in confirming the order of the Deputy Registrar of Cooperative Societies, Tiruvannamalai in Tha.Thi.No.5/2005/2006 (Na.Ka.No.4464/2004) dated 28.08.2006.

2. The facts leading to this revision are, the second respondent before me was formed for the purpose of welfare of the employees of the Police Department in the District of Tiruvannamalai. It was serving employees by giving loans with or without security in the form of jewels, purchase of consumer items etc. The civil revision petitioner was working as a writer/clerk in the second respondent society. He was initially appointed with effect from 31.12.1997. During the relevant time ie., between 1999 to 2001, the Society was in the management and control of one G.Ravichandran, the President of the Society and one Mr.A.K.Ravi, the Secretary.

3. Section 81 proceedings were undertaken by the Deputy Registrar of Cooperative Societies and a report was received stating that due to malversation of funds in the management of the Society, loss had occasioned to the same. Taking note of the report, the Secretary viz., A.K.Ravi was suspended on 08.02.2001. During the course of the inquiry, it was found that the accounts had not been updated and payments had been made without the same being entered in the books of accounts. As the Society was then under the control of the Special Officer and since it required updating of the books, he appointed the civil revision petitioner as the Secretary on a temporary basis. This was on the basis of the resolution passed by the Society in Resolution No.1 dated 10.06.2001. A clarification notification was also passed in resolution No.1 on the very next day ie., 11.06.2001 directing that Clerk Moorthy shall hold the additional charge of Secretary.

4. Thereafter, the report having been received under Section 81 of the Tamil Nadu Cooperative Societies Act (hereinafter referred to as 'the Act') and being satisfied that the loss had been occasioned to the Society on account of the mismanagement by those who had the control of the Society, proceedings were initiated under Section 87 for surcharge. Show cause notice was issued not only to Ravichandran and Ravi, but also to the civil revision petitioner. During the course of Section 87 proceedings, all three who have been charged in the surcharge proceedings were served with the inquiry report on 19.06.2006. On that date, the civil revision petitioner sought permission to peruse the records and the first respondent Deputy Registrar also granted the said permission. He submitted a report stating the following:

(a) That he is a mere clerk and does not have any entrustment or dominion over the assets of the Society.

(b) That he had not acted in willful or negligent manner and the persons responsible for issuance of the cheque and the accounts during the relevant time ie., from 1999 to 2001 were Ravichandran and Ravi, the President and Secretary of the Society respectively.

5. Subsequently, after the inquiry the first respondent came to a conclusion that all three were responsible for the loss caused to the Society and therefore passed an order directing recovery of a sum of Rs.9,95,427.65/- from all three. This was apart from the sum of Rs.11,58,900/- with respect to the payments made under the cheques said to have been issued by the Society. A report of the Section 87 inquiry shows that as many as 31 charges had been framed. Charge Nos.4 to 26 of Charge 1 and Charge Nos.30 and 31 of Charge 3 were held against the civil revision petitioner and two others. Insofar as Charge Nos.27 to 3