Interim attachment of property under the Tamil Nadu Cooperative Societies Act is permissible when the statutory requirements regarding potential property disposal are satisfied, and the petitioner is found not to be a third party to the proceedings.

ORDER :

V. LAKSHMINARAYANAN, J.

This court had entertained the writ petition and granted an interim order. The respondents filed a vacate stay petition. When the matter was listed before this Court, by consent of the counsel, the main writ petition itself was taken up for hearing.

2. I heard Mr.S.Sathiaseelan for the petitioner and Mr.M.Muthusamy, learned Government Advocate for the respondents.

3. The first respondent passed an order of interim attachment of the property of the petitioner on 14.05.2024. Subsequently, the interim attachment was made absolute on 23.05.2024. Challenging the same, the present writ petition.

4. The case of the petitioner is that he had purchased the petition mentioned property from one S.Kavitha. The said Kavitha is the wife of one Rajendran, the Secretary (currently under suspension), of the second respondent Society. Kavitha had originally purchased the property by way of two registered sale deeds dated 22.04.2015 and 22.07.2016. On 08.09.2023, the petitioner purchased the said properties from Kavitha. The purchase of the property is evidenced by a sale deed bearing Document No.4693 of 2023.

5. Alleging misappropriation of funds by Mr.Rajendran, the second respondent presented a petition under Section 90 of the Tamil Nadu Cooperative Societies Act , 1983 (hereinafter referred to as the ‘TNCS Act’) read with Rule 107 of the Tamil Nadu Cooperative Societies Rules (hereinafter referred to as the ‘TNCS Rules or TNCSR’, as the case may be). This application was taken on file by the first respondent as ARC.No.3 of 2024. In the said ARC, the petitioner herein has been arrayed as the second respondent. While the ARC is pending consideration before the first respondent, fearing that the respondents in the ARC, might alienate their property, the second respondent took out an application invoking Section 167 of the TNCS Act read with Rule 140 of the TNCS Rules of 1988.

6. By the first of the impugned order dated 14.05.2024, the first respondent issued a notice to the respondents 1 to 5 therein, which included the writ petitioner, and passed an order of interim attachment. Since the security directed by this order had not been furnished, the first respondent made the provisional attachment absolute by the second impugned order dated 23.05.2024.

7. It is the plea of Mr.S.Sathiaseelan that, the orders are untenable and liable to be quashed. After narrating the facts, he submitted as follows:

(i) Prior to the initiation of proceedings under Section 90 of the TNCS Act, the Deputy Registrar of Co-operative Societies, Krishnagiri, had ordered an enquiry under Section 81 of the TNCS Act. This enquiry was based on a report submitted by the Co-operative Sub Registrar, Krishnagiri. The Co-operative Sub Registrar was appointed as the enquiry officer by an order dated 15.04.2024. The said appointment order was put to challenge in W.P.No.31589 of 2024. By an order dated 23.10.2024, this Court quashed the appointment order on the ground that the person, who conducted the preliminary enquiry, ought not to have been appointed as the enquiry officer under Section 81 . The consequence of this is that, the proceedings of attachment have to fail.

(ii) His second submission being that the proceedings initiated under Section 90 of the TNCS Act is barred by limitation as would be evident from a perusal of Section 90 (9)(a)(ii) of the TNCS Act. Referring me to a paragraph 11 of I.A.No.1 of 2024 in ARC.No.3 of 2024, he states that, on the face of the petition, it becomes clear that it is barred by Section 90 of the Act. In furtherance of this submission, he points out that a reference to a Full Bench is pending in W.