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1998 Supreme(P&H) 1021
PUNJAB & HARYANA HIGH COURT
V.K.Bali and M.L.Singhal JJ.
Jai Chand
Versus
State Of Haryana
Civil Writ Petition No. 13909 of 1997,
Decided On : AUGUST 13, 1998
Wilful negligence is a higher degree of negligence that connotes culpable default. It is not merely ordinary negligence arising from want of foresight or mistake of judgment.
Headnote:
COOPERATIVE SOCIETIES - SURCHARGE - WILFUL NEGLIGENCE - INTERPRETATION OF SECTION 54 OF THE PUNJAB COOPERATIVE SOCIETIES ACT, 1961 - DISTINCTION BETWEEN NEGLIGENCE AND WILFUL NEGLIGENCE - REQUIREMENT OF WILFUL NEGLIGENCE FOR SURCHARGE PROCEEDINGS - ABSENCE OF WILFUL NEGLIGENCE - QUASHING OF SURCHARGE ORDERS.
Fact of the Case:
Petitioner, a Branch Manager of a cooperative bank, was held liable for a surcharge for allowing the withdrawal of Rs. 17,000 from a dead account through a loose cheque. The petitioner challenged the surcharge orders, arguing that there was no wilful negligence on his part and that the proceedings under Section 54 of the Punjab Cooperative Societies Act, 1961 were not properly initiated.
Finding of the Court:
The court found that there was no wilful negligence on the part of the petitioner. The court distinguished between negligence and wilful negligence, holding that wilful negligence is a higher degree of negligence that connotes culpable default. The court found that the petitioner may have been negligent, but his negligence did not rise to the level of wilful negligence required for surcharge proceedings under Section 54 of the Act.
Issues: 1. Whether the petitioner was wilfully negligent in allowing the withdrawal of money from a dead account. 2. Whether the proceedings under Section 54 of the Punjab Cooperative Societies Act, 1961 were properly initiated.
Ratio Decidendi: The court held that the petitioner was not wilfully negligent in allowing the withdrawal of money from a dead account. The court found that the petitioner had relied on the clerk's identification of the account holder's signature and that there was no note on the ledger indicating that the account holder was deceased. The court also found that the petitioner had only worked as Branch Manager for a day and that there was no evidence of collusion between him and the cashier or the clerk.
Final Decision: The court allowed the petition and quashed the surcharge orders. The court held that the petitioner was not wilfully negligent and that the proceedings under Section 54 of the Act were not properly initiated.
M.L.Singhal, J.
1. This is a petition filed under Articles 226/227 of the Constitution of India by one Jai Chand, Development Officer, Central Co-operative Bank, Sirsa whereby he has prayed for the issuing of writ of certiorari quashing the order of the Deputy Registrar Co-operative Societies, Hisar dated 2.2.1985 (Annexure P-3), order dated 18.10.1994 passed by the Additional Registrar, Cooperative Societies, Haryana (Annexure P-4) and order dated 20.1.1997 passed by the Commissioner and Secretary to Government Cooperative Department Haryana (Annexure P-5). The case projected by him in this petition is as follows:-
On 28.3.1973, Rs. 017,000/- were withdrawn from the current account of one Bhagat Singh through Gurdarshan Singh. Said Bhagat Singh had died before 28.3.1973. Petitioner was acting as Branch Manager while Balwant Singh was acting as clerk and Om Parkash was acting as cashier. Petitioner acted as Branch . Manager in the absence of Wazir Singh, Branch Manager on 28.3.1973. He was given the charge of cash only. It was a loose cheque thumb marked by Bhagat Singh, Gurdarshan Singh and one Subhash Kumar account holder No. 382 and also signed by Balwant Singh clerk. The matter was referred to the police. Case FIR No. 81 of 1973 was registered at Police Station, Tohana in which petitioner, Balwant Singh, and Om Parkash were tried under Sections 420/468 and 471 of the Indian Penal Code. As there was no incriminating evidence against them, they all were acquitted by the Judicial Magistrate Ist Class, Hisar vide order dated 18.11.1978 Annexure P-1. Matter was referred to the arbitration of Chand Singh Yadav, Assistant Registrar, Cooperative Societies, Hisar. Vide Annexure P-2 dated 11.8.1981 Sh. Chand Singh Yadav, dismissed the reference. The case was placed before the Board of the Directors in their meeting held on 30.9.1981 for filing an appeal against the order dated 11.8.1981. The Board of Directors of the Bank took decision that surcharge case be prepared against the employees involved. The Bank failed to initiate proceedings under Section 54 of the Punjab Co-operative Societies Act, 1961 as the loss had not been detected during the course of audit inspection, inquiry or even winding up of the society. The Managing Director of the Bank wrote to Deputy Registrar in September, 1984 to enquire into the matter of surcharge or to appoint an Enquiry Officer. Since no case of surcharge had been made out in terms of Section 54 of the Punjab Cooperative Societies Act and Section 101 of the Haryana Co-operative Societies Act, 1984, petitioner filed objections against the illegal and without jurisdiction proceedings. Bank through Sh. Surjit Singh, Managing Director filed claim statement though there is no provision in Section 101 for such statement. Respondent No. 3 did not allow the petitioner to look into the enquiry report submitted by the Assistant Registrar Co-operative Societies, Fatehabad. On 2.2.1985, order Annexure P-3 was passed by the Deputy Registrar, Co-operative Societies, Hisar. It was an illegal order. Order Annexure P-3 was also without jurisdiction. His appeal to the Registrar which was heard by the Additional Registrar was dismissed vide order dated 18.10.1994 Annexure P-4. Additional Registrar dismissed the appeal without discussing the points raised before him. He dismissed the appeal through cryptic order, putting his seal on the order of the Deputy Registrar without applying his mind. His revision filed before the Commissioner and Secretary to Government, Cooperative Department also met the same fate. He too did not discuss the material points raised before him. The surcharge case is prepared under Section 54 of the Punjab Cooperative Societies Act, 1961. No case is surcharge was made out and enquired into in terms of Section 54 of the said Act. Under Section 54 of the said Act finding is requird that the act was done by an employee with wilful negligence. It was not the case of the respondent-Bank i
