Legal exoneration in surcharge proceedings precludes criminal prosecution for related charges.

ORDER

This Criminal Original Petition has been filed seeking to quash the FIR in Crime No.1 of 2022, on the file of the first respondent police, registered against the petitioner and others for the offences under Sections 408, 409, 420, 465, 468, 471, and 477-A of the Indian Penal Code, 1860.

2. The petitioner is arrayed as A1. There are three accused in this case. It is the case of the prosecution that the defacto complainant, the Deputy Registrar of Co-operative Societies, Ramanathapuram, lodged a complaint stating that the Kiliyur Branch is under the administrative control of the Kodikulam Primary Agricultural Co-operative Society; that on 11.11.2021 and 12.11.2021, a jewel verification was conducted and, on such verification, it was found that out of 313 gold bags, 81 gold bags contained fake gold, the value of which was Rs.1,47,14,000/-; and that the said bags were under the control of one Murugesan, who was working as Assistant Secretary-cum-Manager, one Arivazhagan, who was working as Jewel Appraiser, and the petitioner, who was working as Secretary-cum- President of the said Society, and that they are jointly responsible for the loss caused to the Society.

3. Mr.Sricharan Rangarajan, learned Senior Counsel for the petitioner, submitted that pursuant to the report of the Enquiry Officer under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, surcharge proceedings were initiated against the petitioner under Section 87 of the Act, and the second respondent had concluded that the petitioner had neither misappropriated nor was guilty of gross negligence and, therefore, exonerated the petitioner from the surcharge proceedings; and that this Court, in several cases, has held that where the accused has been exonerated in surcharge proceedings, the prosecution cannot be sustained against the said accused, and he relied upon the orders passed by this Court.

4. The learned Additional Public Prosecutor for the respondents, per contra, submitted that the surcharge proceedings and the criminal proceedings are different; that the criminal proceedings cannot be quashed merely because the surcharge proceedings have ended in favour of the petitioner; that the scope of enquiry in surcharge proceedings is confined to assessing financial liability, and it is different from the scope of enquiry in criminal proceedings; and that since a serious fraud to the tune of Rs.1,47,14,000/- has been committed, the investigation cannot be scuttled.

5. The first respondent police have also filed a counter affidavit to that effect. This Court specifically directed the first respondent to file a better affidavit by furnishing details of the additional evidence available with them to sustain the investigation and further proceedings against the petitioner for the commission of the alleged offences. The first respondent has therefore filed an additional counter affidavit.

6. In the counter affidavit, apart from narrating the facts of the case, it is stated that several witnesses have been examined to show that they had not pledged any jewels, and that their signatures in the jewel loan records were forged; that the investigation has prima facie revealed that forged documents were used to sanction loans; and that the petitioner, who was jointly entrusted along with the second accused with the control of the jewels locker, is wholly responsible. There is nothing in the affidavit to suggest as to why the surcharge order cannot be relied upon.

7. It is not in dispute that the petitioner was the Secretary-cum- President of the Society and had overall control of the affairs of the Society. The second accused was the Assistant Secretary of the said Society, and the third accused