The Secretary of a cooperative society bears responsibility for financial disbursements, even in cases of fraudulent activity by others, sustaining civil liability despite criminal acquittal.

ORDER :

D. BHARATHA CHAKRAVARTHY, J.

1. This civil revision petition is directed against the fair and decreetal order of the Co-operative Appellate Tribunal, dated 20.02.2003 in C.M.S(C.S)No.109 of 1999.

2. The brief facts relevant to the disposal of the civil revision petition are that the petitioner E.S.Sundaramahalingam was working as the Secretary to Valliyoor Cooperative Primary Agricultural Rural Development Bank, Panagudi, Tirunelveli District. While so, upon an enquiry conducted under Section 81 of the Co-operative Societies Act, it was found that the petitioner herein being the Secretary of the Society and Ponniah being the Supervisor of the Society and one Ayyakutti @ Manoharan as the Jewel Appraiser of the Society have conspired together and created records as if jewel loans were distributed in respect of 56 individuals who are the members of the Bank and by fictitiously creating records and arranging for fake jewels and caused loss to the Society to the tune of Rs.12,75,400/-.

3. In the background of the said finding in the enquiry under Section 81 of the Co-operative Societies Act, show cause notices were issued as against all the three employees and proceedings were initiated to recover the loss from them by way of surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act. After a detailed inquiry, an order was passed by the Deputy Registrar of Co- operative Societies on 21.06.1999 holding all the three of the employees are responsible for the loss and ordering the said sum be recovered jointly and severally from them with further interest at the rate of 21% per annum. A criminal case was also lodged against all the three persons. It is seen that even in the inquiry proceedings, the said Ayyakutti @ Manoharan, who is the Jewel Loan Appraiser has admitted that he is the person who has arranged for all the fake jewels and he is the beneficiary of the fake loans and had undertaken to repay the amount. In that backdrop, originally by a judgment in C.C.No.1 of 2002, the Criminal Court convicted the petitioner and the other employee who is the Superintendent and since the Ayyakutti @ Manoharan died pending the criminal case, the charges against him stood abated. As against the same, the petitioner as well as the other employee filed Criminal Appeal No. 119 of 2005 and 126 of 2005 and by a judgment dated, 18.01.2006, the said appeal was allowed on the ground that if at all any person who has to be held responsible, it should only be the Jewel Appraiser and the prosecution has failed to prove the conspiracy with reference to the appellants and the appeal was allowed and the conviction and sentence were set aside. In this background, when the surcharge order was passed holding all the three employees as jointly and severally responsible for the loss to the society, the petitioner herein preferred the present appeal in C.M.A(C.S)No.109 of 1999 and the same was dismissed by the tribunal by an order dated 20.022003. Originally, the petitioner filed writ petition and in the writ appeal arising out of the writ petition, the order was set aside and the matter was remanded back. However, on review, ultimately it was held that the orders could not have passed under Article 226 of the Constitution of India and therefore, once again the present civil revision petition is filed challenging the said judgment and decree, dated 20.02.2003.

4. Heard Mr.Sreedhar, learned counsel for the petitioner and the learned Additional Government Leader appearing on behalf of the 1^st respondent.

5. Mr.Sreedhar, learned counsel for the pet