Under Section 87 of the Co-operative Societies Act, 1983, wilful negligence for surcharge is established when a Special Officer signs cheques on reverse side, enabling unauthorized encashment, and fails to mark them account payee.

ORDER

This revision petition has been filed challenging the order passed by the Additional District Judge, Mayiladuthurai, confirming the order of the first respondent/Deputy Registrar of Co-operative Societies, under Section 87 of the Co-operative Societies Act, 1983 (in short 'Act').

2. I have heard Mr.C.Prakasam, learned counsel for the revision petitioner and Mr.N.Muthuvel, learned Government Advocate, appearing for the first respondent and Mr.J.Daniel, learned Government Advocate appearing for the second respondent.

3. Mr.C.Prakasam, learned counsel for the revision petitioner would submit that the petitioner was appointed as the Special Officer of several Co-operative Societies and in respect of one of such Co-operative Society where the petitioner was in charge viz., Local Fund Audit Department Employees Cooperative Thrift and Credit Society, the first respondent ordered an enquiry under Section 81, for alleged irregularity committed by the petitioner. Mr.Prakasam, learned counsel for the petitioner would submit that it was one Baskar who was working as the employee in the said Society and it was he who had misappropriated the funds of the Society, by issuing irregular loans to members. Mr.C.Prakasam, learned counsel for the revision petitioner would further point out that it was only the petitioner who found out the said irregularities being committed by the said Baskar and sent reports to the respondent on 17.03.2014 and 07.03.2014. The learned counsel would therefore state that without taking any action against the said Baskar, the first respondent has initiated proceedings against the revision petitioner.

4. The learned counsel would further state that the petitioner had to discharge duties as Special Officer in respect of many other Cooperative Societies, apart from and in addition to his routine work of a Senior Inspector of the respondent. The learned counsel would therefore state that the petitioner was not in a position to look after minute and day to day transaction of each and every Society and contends that when a proper resolution had been passed with regard to the decision to advance loans to various members and the cheques had already been countersigned, merely because the petitioner has signed the cheques, for issuing the loans to the members and had admitted to his signature during the enquiry proceedings, it would not be sufficient to saddle liability on the petitioner.

5. Mr.Prakasam, learned counsel for the petitioner, would rely on the following decisions in support of his contentions:

(i) P.Ilango, I.A.S., retired Vs. Administrator MRK Cooperative Sugar Mills , Sethiyathoppu, reported in 2014 (3) MLJ (M) 575:

(ii) K.Rathinam Vs. The Deputy Registrar of Co-operative Societies , (Housing) Vellore and others, in C.R.P. (NPD). No.654 of 2012 dated 20.11.2017;

(iii) V.Janarthanan Vs. The Deputy Registrar of Co-op Societies and others, in CRP (NPD) No.3673 of 2012 dated 23.10.2017;

(iv) S.Saranyadevi Vs. The Special Officer, Pallappatti Town Coperative Housing Society , in CRP.(MD) No.1214 of 2013 dated 18.11.2019; and

(v) T.Rengarajan Vs. V.Ramachandran, Enquiry Officer , in CRP. (MD). No.609 of 2017 dated 11.10.2018.

6. Relying on the said decisions, Mr.C.Prakasam, learned counsel for the petitioner would submit that unless there is wilfull negligence established, the proceedings cannot be initiated against the delinquent and in the present case, the respondents have not been able to demonstrate that the petitioner has been beneficiary of the misappropriated funds or that he has been the root cause for the loans being irregularly disbursed and would therefore, contend that mere dereliction of duty would not be sufficient to initiate surcharge proceedings against the revision petitioner. He would therefore pray for the revision being allowed.

7. Per contra, the learned Government Advocates, Mr.J.Daniel and Mr.N.Muthuvel, would submit that the petitioner has not given crossed account payee cheques to the membe