The civil liability under the Co-operative Societies Act persists independently from criminal proceedings, emphasizing that bail does not exempt financial obligations.

ORDER

The first petitioner is an Assistant Manager of the Central District Co-

operative Bank at Villupuram. She held the post from 22.08.2017 to 16.04.2019. During her tenure, the respondent found that she had misappropriated a sum of Rs.16,90,41,206.85. Surcharge proceedings were initiated and a surcharge order was also passed on 27.01.2025.

2. Simultaneously, the respondent lodged a complaint in Cr.No.3 of 2025 on the file of the EOW at Villupuram for the alleged acts committed by the petitioner and for the manner in which, she utilised the money and transferred the properties in favour of her husband. The police arrested and remanded her.

3. The petitioner filed a bail application in Crl.M.P.No.768 of 2025, before the Judicial Magistrate No.1, Tindivanam(FAC). The same was dismissed on 16.09.2025. Aggrieved by the said order, the petitioners preferred a bail application before the Principal District Sessions Judge at Villupuram. That too met the same fate. Thereafter, the petitioner approached this Court in Crl.O.P.No.29611 of 2025. By order dated 31.10.2025, this Court recorded that, out of the alleged misappropriated amount, a sum of Rs.14,64,00,000/-

had been recovered.

4. The petitioner has now expressed her willingness, in paragraph no.9 of the affidavit, that if sufficient time is granted, she will sell the property belonging to her and repay the balance amount of Rs.2,26,15,701.64. She has expressed utter shock and surprise that, by the impugned order, a demand has been made for Rs.4,44,16,563.53. It is her contention that before the criminal Court, the respondent had only given a figure of Rs.16,90,41,206.85 was involved and since Rs.14,64,25,505.21 has already been recovered , she would be liable only for Rs.2,26,15,701.64.

5. According to her, the impugned order passed by the respondent invoking the provisions of Section 143 of the Co-operative Societies Act, r/w Rule 119 and 126(2)b)(1) of the Co-operative Societies Rules is erroneous. She states that when the respondent had informed this Court during the bail proceedings that Rs.14,64,00,000/- had been recovered, raising a further demand of approximately Rs.4,44,00,000/- within a period of 9 months is untenable.

6. Mr.S.S.Rajesh pleads that the petitioner is willing to liquidate her assets and pay whatever dues are payable to the Society. He further states that if the property is brought for attachment and sale, as stated in the impugned order, it would result in serious prejudice, as the property may not fetch the same price as in the case of a privately negotiated sale. Hence, he pleads that sufficient time be granted to enable the petitioner to pay the amount and discharge herself from the surcharge liability.

7. Mr.E.P.Senniyangiri states that the amount of Rs.4,44,16,563.53 represents the outstanding principal together with interest. He does not dispute that approximately Rs.14,64,00,000/- has been recovered. However, he states that the interest on the principal, added to the remaining amount, is necessarily payable by the writ petitioner.

8. I have carefully considered the submissions on either side and perused the materials available on records.

9. The petitioner, while acting as an Assistant Manager of the Central District Co-operative Bank, has not covered herself with glory. She has been found responsible for defalcating the funds of the bank to the tune of several crores. The fact that this Court had granted bail to the petitioner does not mean that the civil liability of the petitioner stands exonerated. The Co-operative Societies Act contemplates threefold action on the basis of an inquiry report filed under Section 81 of the Co-operative Society Act, namely, i) Disciplinary proceedings, ii) Criminal