Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(Mad) 53643

IN THE HIGH COURT OF JUDICATURE AT MADRAS
SATHI KUMAR SUKUMARA KURUP, J
The President, 9841, Karadivavi PACB Ltd., Karadivavi. – Appellant
Versus
The Deputy Registrar of Co-operative, Societies (Housing), Palladam Road, Tiruppur. – Respondent
Civil Revision Petition No.639 of 2021|C.M.P.No.5461 of 2021|Co-op. C.M.A.No.53 of 2012

Advocates:
For the Appellants/Petitioners: Mr.K.Sudhakar
For the Respondents: Mr.V.Jeevagiridharan, Mr.P.Balamurali

Legal heirs are liable for deceased debts only to the extent of inherited assets; personal liability requires proof of asset inheritance.

Headnote:(A) Tamil Nadu Co-operative Societies Act, 1983 - Section 87 - Surcharge proceedings initiated against legal heirs of deceased Secretary for loan defaults - The Principal District Judge found that the legal heirs have no personal liability and can only be liable to the extent of assets inherited - Surcharge proceedings were improperly imposed without adequate evidence of personal liability. (Para 9)

(B) Legal principle - Legal heirs of a deceased are liable for unpaid debts only to the extent of inherited assets, and cannot be held personally liable without proof of asset inheritance. (Para 19)

(C) Findings - The inspection by the Deputy Registrar concluded no personal liability of legal heirs; the judgment of the Principal District Judge is a well-reasoned upholding of this principle. (Para 20)

(D) Result - Civil Revision Petition dismissed; costs imposed on the Revision Petitioner for pursuing non-meritorious claims. (Para 22)

Table of Content
1. overview of the surcharge proceedings and background. (Para 1 , 2 , 3)
2. discussion of the financial implications on legal heirs. (Para 4 , 5)
3. arguments of the revision petitioner regarding the surcharge proceedings. (Para 6 , 10 , 11 , 14 , 16)
4. legal interpretation on surcharge under the co-operative societies act. (Para 7 , 8 , 12 , 19 , 20)
5. final decision and confirmation of the lower court's judgment. (Para 9 , 18 , 22)

ORDER

This Civil Revision Petition had been filed seeking to set aside the judgment and decree made in Co-op.C.M.A.No.53 of 2012, dated 10.02.2020 on the file of the learned Principal Sessions Judge, Tiruppur.

2. The husband of the 2^nd Respondent and father of the 3^rd Respondent [late Dandapani] in this Civil Revision Petition was serving as Secretary of Karadivavi Primary Agricultural Co-operative Bank Limited, Tiruppur District from 01.11.1996 to 24.05.2001. While he was serving as Secretary of Karadivavi Primary Agricultural Co-operative Bank Limited, Tiruppur District, he had granted loans to eight members of the same Karadivavi Primary Agricultural Co-operative Bank, Tiruppur District, as per the details given below:-

Sl. No.	Oo.No.	Name	No.	Amount	Decreetal amount
1	2319	Shabarjanpaul	179	25,000	49,614
2	2351	Flori paul	232	25,000	52,865
3	2403	P.Thavasulingam	254	25,000	46,728
4	2436	K.Jeyaraj	278	25,000	49,168
5	2437	P.Prakash	279	25,000	39,484
6	2438	M.Sridar	280	25,000	53,410
7	2439	P.Jain	281	25,000	53,878
8	2440	Senthil Kumar	295	25,000	48,172
				Total	3,93,322

In the meanwhile, the Secretary-Dhandapani, died on 15.10.2003. Since the loans were not repaid by the borrowers on time, the Deputy Registrar had conducted inspection and found that the said Secretary had committed loss to the Bank. As the Secretary-Dhandapani died, surcharge proceedings were initiated against the legal heirs of deceased Dhandapani viz., the Respondents 2 and 3 herein. After conducting enquiry, the Deputy Registrar of Co- operative Societies (Housing) as Surcharge Officer, imposed surcharge proceedings against the wife and daughter of deceased Dhandapani against the properties left behind them by the deceased Dhandapani as the legal heirs succeeded to the estate/properties of the deceased Dhandapani.

3. Aggrieved by the surcharge proceeding initiated by the first Respondent against the wife and daughter of the deceased Dhandapani, they filed Appeal in Co-op. C.M.A.No.53 of 2012 before the Statutory Officer/learned Principal District Judge, Tiruppur under the Tamil Nadu Co- operative Societies Act, 1956. After hearing the arguments of the learned Counsel for the Appellants, the legal heirs of deceased Dhandapani and the learned Counsel appearing for the Deputy Registrar, Co-operative Societies (Housing), Tiruppur and the President of Karadivavi Primary Agricultural Co- operative Bank Limitd as Respondents, the learned Principal District Judge as Appellate Authority had set aside the surcharge proceeding initiated by the first Respondent, Deputy Registrar Co-operative Societies. Aggrieved by the Judgment of the learned Principal District Judge as Appellate Authority under the Co-operative Societies Act, this Civil Revision Petition had been filed by the second Respondent before the learned Principal District Judge in Co-op. C.M.A.No.53 of 2012 as Revision Petitioner under Article 227 of Constitution of India.

4. The learned Counsel for the Revision Petitioner, Thiru.K.Sudhakar submitted that the President of 9481, Karadivavi Primary Agricultural Co-operative Bank is the Revision Petitioner herein who is the second Respondent in CMA.No.53 of 2012 before the learned Principal District Judge, Tiruppur. The learned Counsel for the Revision Petitioner invited the attention of this Court to the proceedings of the first Respondent dated 30.06.2005 under Section 87 of the Tamil Nadu Co-operative Societies j/jP/ r/g Act, 1983 in Case No. 6/05. in which there are 12 Respondents.

5. After enquiry, the Surcharge Officer, as per the proceedings, dated 30.06.2005 had a

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