A report under Section 81 of the Tamil Nadu Cooperative Societies Act is merely for internal review and does not necessitate formal issuance; non-issuance does not violate principles of natural justice.

ORDER :

1. This civil revision petition challenges the order passed by the learned Principal District Judge at Salem in CMA(CS) No.10 of 2010 dated 25.02.2019 in upholding the surcharge order passed by the Joint Registrar of Salem District Primary Agricultural Cooperative Societies, Salem Region, in Na.Ka.No.5050/2007/Sa.Pa/dated 11.10.2010.

2. The petitioner and the fourth respondent were in control of the affairs of S411, Sooramangalam Primary Agricultural Cooperative Bank Limited situated at Sooramangalam, Salem. Finding that certain irregularities had taken place in the cooperative society, the Registrar had directed initiation of proceedings under Section 81 of the Tamil Nadu Cooperative Societies Act. 1983. The enquiry officer conducted an enquiry and submitted a report in terms of Section 81 . As per the report, he found that there had been a misappropriation to the extent of Rs.17,00,684/-. He found 11 persons were responsible for the loss suffered by the society. Apart from these 11 persons, 8 other persons had been charged, who the enquiry officer did not find responsible and therefore exonerated them. As per the report under Section 81 , he fixed the responsibility on the civil revision petitioner Arulanandham, who was originally appointed as a clerk, and later promoted to cashier, and during the relevant time was working as Manager, and one Selvaraj and Arjunan who were the cashiers of the Cooperative Society.

3. The stand of Arulanandham who was the manager was that he had relied upon Selvaraj and Arjunan for the performance of duty and it is those persons who had misappropriated the amounts. Curiously enough, the two cashiers viz., Selvaraj and Arjunan would plead that the manager Arulanandham will give them some work and ask them to go away from the bank and taking advantage of their absence, he used it to disburse the amounts. In other words, the civil revision petitioner shifted the blame onto the cashiers and the cashiers shifted the blame onto the civil revision petitioner.

4. Be that as it may. Pursuant to the report that had been submitted under Section 81 , Surcharge proceedings were initiated under Section 87 of the Tamil Nadu Cooperative Societies Act. Sufficient opportunity was granted to the petitioner, Arjunan and Selvaraj and it resulted in passing of an award by the Registrar/ second respondent in Award No.1192/2006-07. Challenging the award, a statutory appeal was preferred before the Cooperative Tribunal–cum–District Judge at Salem wherein the Tribunal upheld the award passed by the second respondent.

5. As the proceedings were common, the following CMAs in CMA(CS)Nos.17/2007, 1/2008, 2/2008 and 10/2008 were heard together.

6. Two fold argument was placed before me. The first argument being that the report under Section 81 of the Tamil Nadu Cooperative Societies Act had not been served on the petitioner and therefore there is a violation of principles of natural justice. This argument does not stand a moment's scrutiny for the simple reason that a report under Section 81 is only a fact-finding report for the purpose of satisfying the registrar. It is for the the internal consumption of the registrar and a report under Section 81 itself is not final nor does it have civil consequence on the parties. As stated supra, all that the authority does is to go through the records of the Society, hear the persons who are alleged to have committed the misdemeanors and thereafter submit his fact-finding report to the Registrar. The non-issuance of the report does not vitiate the peti