Willful negligence is a prerequisite for imposing surcharge under Section 87 of the Tamil Nadu Cooperative Societies Act; mere negligence is insufficient.

O R D E R

This Civil Revision Petition has been filed against the order passed in C.M.A.(CS).No.10 of 2019 on the file of the Principal District Court, Namakkal, dated 10.06.2022, wherein the 1st respondent herein has filed an appeal under Section 152(1)(a) of the Tamil Nadu Co-Operative Societies Act, 1983, read with Rule 169 of the Tamil Nadu Co-Operative Rules, 1988, as against the Surcharge Order in Na.Ka.1734/2018 Sa.Pa. Dated 10.04.2019, passed by the Deputy Registrar of Co-Operative Societies, Tiruchengode Circle, Namakkal. The said appeal was allowed by the Principal District Judge and the Special Tribunal for Co-Operative cases, Namakal. Aggrieved by the said judgment, the present Civil Revision Petition has been filed.

Short facts necessary to dispose of the petition are as follows:

2.The 1st respondent was in-charge of the petitioner society as Branch Manager. At that time, she had adjusted eight bogus jewel loans for a sum of Rs.10,00,000/- received from one Shanmugam on 25.11.2015. The petitioner is the Society registered under the Tamil Nadu Co-Operative Societies Act, 1983. The Additional Registrar of Co-Operative Societies vide his proceedings dated 03.12.2015 had appointed one S.Kalaiselvan, Co- Operative Sub Registrar as an Enquiry Officer to enquire into the misappropriation and malpractice held in the Savings Bank account, jewel loan and deposits in the Koottapalli branch of S.8994 of Tiruchengode Co-

Operative Urban Bank Limited. The enquiry report was submitted on 09.06.2016. As per the enquiry report, the Branch Manager, Jewel Appraiser, the 1st respondent and some casual labourers and outsiders had duly indulged in malpractice of pledging spurious jewels in 180 jewel loans and thereby caused loss to the bank of Rs.1,25,81,700/-.

3.Based on the enquiry under Section 81 of the Tamil Nadu Co-

Operative Societies Act, 1983, the surcharge proceedings has been initiated under Section 87 of the Tamil Nadu Co-Operative Societies Act, 1983. Thereafter issued show cause notice under Section 87 (1) of the Tamil Nadu Co-Operative Societies Act, 1983 and received explanation from the concerned persons. The 1st respondent in her reply to the show cause notice stated that she adjusted the eight bogus jewel loans wherein she is alleged to have involved for loss of Rs.10,00,000/- and the remaining amount of Rs.4,54,113/- is kept in suspension account of the petitioner bank. The said amount was received from one Shanmugam. Similarly, an amount of Rs.5,00,000/- was received from one Balasubramaniam is also kept in the suspension account of the petitioner's bank. Challenging the said surcharge proceedings, the 1st respondent filed C.M.A.(CS).No.10 of 2019 before the Principal District Judge of Namakkal.

4.While pendency of the above CMA, the 1st respondent filed an application to receive the additional documents and the same was allowed. Based on the documents and without giving any sufficient chance to the petitioner, allowed the application and also allowed the C.M.A.(CS).No.10 of 2019 on the ground that the 1st respondent is only supervising authority and there is no wilful disobedience or wilful negligence on the part of the 1st respondent. In fact, the 1st respondent after knowing very well that the amount was paid by one Shanmugam. Therefore, as per the enquiry, the 1st respondent also liable to pay the amount and she also involved in the said malpractice. But the learned Principal District Judge, Namakkal has failed to consider the same and allowed the appeal. Hence, this revision petition is filed.

5.The learned counsel for the petitioner would contend that the 1st respondent has also misappropriated and involved in malpractice and thereby caused loss to the bank to the tune of Rs.1,25,81,700/-. Against the 1st respondent, around Rs.8,00,000/- was imposed and the said amount was received from one Shanmugam, who is also involved in this case. The 1st respondent while she was working as a Manager, she failed to verif