To impose surcharge under Section 87, there must be a finding of wilful negligence characterized by reckless disregard for consequences, not merely inadvertent acts.

ORDER :

D.BHARATHA CHAKRAVARTHY, J.

The Civil Revision Petition is filed challenging the judgment and decree of the Principal District Judge, Cuddalore, made in C.C.M.A No. 1 of 2021, dated 20.09.2023. By the said order, the Co-operative Tribunal confirmed the order of surcharge passed against the petitioner on 02.11.2020. By the said order of surcharge, the petitioner, being the Secretary of the Co-operative Society, was charged with wilful negligence for not taking any action with reference to 24 loans mentioned in the surcharge order. By the said surcharge order, three sets of charges were levelled against the petitioner.

2. The charge against the petitioner is that, with reference to Charge No.1, 24 loans disbursed to the farmers became time-barred, totalling Rs.20,01,076/-. Charge No.2 relates to five loans amounting to Rs.3,99,014/-, and Charge No.3 relates to 28 medium-term loans amounting to Rs.6,62,007/-. In all, the amounts total Rs.30,62,097/-. Therefore, the surcharge order was passed, directing the petitioner to pay the said sum of Rs.30,62,097/- along with further interest at the rate of 18% per annum.

3. Aggrieved thereby, the petitioner filed the appeal. It is the contention of the petitioner that there was no wilful negligence on the part of the petitioner. From the year 2013, the petitioner was made in-charge as Secretary and, while discharging his duties, periodically issued demand notices to the farmers. By a circular of the Registrar of Co-operative Societies dated 24.01.2017, the Societies were directed not to take any steps against the farmers who had defaulted in payment of loans, considering the circumstances of drought, etc. Accordingly, when the ban was in force from 2017 up to the year 2018 and the petitioner retired in the year 2019, it cannot be said that the petitioner acted with any negligence, much less with wilful negligence.

4. The petitioner also relied upon the Division Bench judgment of this Court in S.Ramadevi vs. The Special Officer, Ambur Co-operative Sugar Mills, Vadapudupet, Vellore District (2016) 4 LW 452 , placing specific reliance on paragraphs 25 and 26 of the said judgment. However, the Tribunal considered that, as the Secretary, the petitioner had not filed the civil suits in time and had not taken any steps even to initiate action under the Act. Therefore, the Tribunal held that the action amounted to wilful negligence and upheld the surcharge order, against which the present Civil Revision Petition is filed. The Learned Counsel appearing on behalf of the petitioner would reiterate the submissions made before the Appellate Court and submit that this Court should interfere in the matter.

5. Per contra, the Learned Additional Government Pleader appearing on behalf of the respondents would submit that when the last dates for the various loans were expiring, wilfully and wontedly, the petitioner, being the Secretary, did not take any action whatsoever, and no steps were taken to file any suit. Issuing demand notices even after the expiry of the limitation period only adds up to wilful misconduct and cannot be said to be any proper action on the part of the Secretary. Had the petitioner taken steps, and even if the suits were pending, these loans should have been subsequently included by the Government, with reference to small farmers, if applicable, under the waiver scheme. On account of the lapse, the loans could not be included in the waiver scheme, resulting in a loss to the Society. Therefore, no exception whatsoever can be taken to the surcharge order passed and the further order that is passed by the tribunal