A spouse's property cannot be attached in surcharge proceedings against the other spouse unless it is proven that the property was purchased with misappropriated funds.

ORDER :

(L.VICTORIA GOWRI, J.)

Heard the learned counsels on either sides and carefully perused the materials available on record.

2. Challenging the attachment order dated 04.10.2018 passed by the Deputy Registrar / second respondent attaching the property of the petitioner, this writ petition is filed. 

3. The claim of the petitioner is that she married one Mohan, S/o. Chinnan. She purchased a land from one Velu Konar in the year 2008 vide sale deed bearing Document No.1507 of 2008 dated 09.04.2008 and the same is the flat bearing Nos.40 and 40 A situated in survey No.197-1 of Nallamani Nagar, K.Pudur, Thallakulam Taluk, Madurai district. The said property is the self acquired property of the petitioner. The petitioner's husband, Mohan served as the president of the 3^rd respondent Society. A surcharge proceeding was initiated as against him and pursuant to the same, an attachment before judgment vide impugned order came to be passed by the 2^nd respondent on 31.10.2018 and the petitioner on availing an encumbrance certificate for some other purpose pertaining to the said property, she came to know that her property is attached. Hence, challenging the same, this writ petition is filed.

4. The learned counsel for the petitioner insisted that for the surcharge proceedings initiated as against her husband, her absolute property should not be attached even if she is the wife of the said Mohan in a surcharge proceeding which is proceeded against him and pressed for setting aside the impugned order as far as the attachment of her property alone.

5. Per contra, the learned Government Advocate Mr.S.Kameshwaran, appearing for the 2^nd respondent based on the counter affidavit submitted that in the presence of an efficacious alternative remedy which is available for the petitioner under Rule 135 of the Tamil Nadu Cooperative Societies Rules, 1988, to ventilate her objection by filing an objection before the 2^nd respondent, the petitioner ought not to have approached this Court by filing this writ petition. That apart, her husband had diverted huge funds of the 3^rd respondent society causing a financial deficiency to a tune of Rs. 45,98,621.28/-. As a result of which, the entire business activity and administration of the 3^rd respondent society has come to a serious halt, causing irreparable loss and injury to the 3^rd respondent society and only on that background, a surcharge proceeding came to be initiated under Section 81 as against the petitioner's husband and as a part of the said proceedings, attachment before judgment was effected as far as the property of the petitioner as well as her husband is concerned and hence they both are equally liable for the losses suffered by the 3^rd respondent and pressed for dismissal of the writ petition.

6. The matter in hand is no more res integra. This Court in a writ petition in W.P.No.22855 of 2023 dated 08.09.2023 has dealt with the case of a wife whose property was attached in relation to the surcharge proceedings as against her husband and this Court heavily came down against the respondent authorities and had set aside the impugned order therein and the relevant portion of the same is extracted as follows:

8. In this regard, it would be appropriate to refer to the judgment of the Division Bench of this Court in The Management, R.A.No.18, Thiruvengadapuram Primary Agricultural Cooperative Credit Society vs. S.Rathinam (W.A.(MD).No.1511 of 2018 dated 11.12.2018). The relevant observation of the Division Bench in the above said case law reads as follows:-

“9. So long as the provision of Co-operative Societies Act or Rules framed therein do not contemplate a statutory fiction or presumption in favour of the Society to proceed against the property of a stranger, this Court is of the view that the order impugned in the Writ Petition cannot be sustained. However, it is open to the Registrar or the person authorised by him acting under Section 87 of the Act to initiate action to proceed against the property