Section 167 TN Co-op Act does not permit attachment of third-party properties without evidence of acquisition from misappropriated funds.

ORDER :

Hemant Chandangoudar, J.

Since the issues involved in all these writ petitions are interconnected, they are taken up together, heard, and disposed of by this common order.

2. In all these writ petitions, the petitioners challenge the orders passed under Section 167 of the Tamil Nadu Co-operative Societies Act, 1983 , the consequential auction notices, and the orders passed under Rule 135 of the Tamil Nadu Co-operative Societies Rules, 1988 . By the impugned proceedings, the properties standing in the name of the petitioner have been provisionally attached and brought to sale through public auction.

3. The petitioner’s husband, while serving as Secretary of the Kurumbur Primary Agricultural Co-operative Credit Society, along with two others, was issued a notice calling upon him to show cause as to why surcharge proceedings should not be initiated against him for alleged misappropriation of a sum of Rs.2,03,92,700/-. The surcharge proceedings culminated in the passing of an award, whereby the petitioner’s husband, along with the other delinquents, was held liable to repay the said amount along with interest.

4. In order to recover the said amount, the impugned order under Section 167 of the Act, 1983 was passed, whereby two properties belonging to the petitioner were provisionally attached. The description of the said immovable properties is as follows:

5. The immovable properties bearing Survey Nos. 272/1B, 272/1B22 and 272/1B23, measuring an extent of 16.05 cents, are stated to include a residential house constructed in a portion thereof. It is not in dispute that the aforesaid properties were purchased by the petitioner under registered sale deeds dated 21.07.2000 and 18.04.2012 respectively, and the same stand in the name of the petitioner in the revenue records. The impugned order of provisional attachment under Section 167 of the Act was addressed to the petitioner’s husband and two others. Subsequently, sale notices were issued for bringing the said properties to public auction for recovery of the amount due from the petitioner’s husband.

6. The petitioner challenges the impugned proceedings primarily on the ground that the liability arises out of acts attributable to her husband and that she cannot be held jointly or severally liable for the same. It is further contended that there is no provision under Section 167 of the Act enabling provisional attachment of immovable properties belonging to a person who is not a party to the reference under Section87 of the Act.

7. The learned counsel for the petitioner further contended that the petitioner had filed objections under Rule 135 of the Tamil Nadu Co-operative Societies Rules, 1988 , opposing the sale of the subject properties. However, the said claim petition was rejected without assigning any reasons and without conducting a proper enquiry. It is therefore contended that the impugned proceedings lack statutory authority and are liable to be quashed for want of jurisdiction. In support of his submissions, reliance was placed on the following decisions:

1. S.R.Rathinam v. The Deputy Registrar of Co-operative Societies [2016 SCC OnLine Mad 9775]

2. Lathis Mary v. Deputy Registrar of Co-operative Societies [W.P. (MD) No. 2687 of 2022, dated 26.06.2024]

8. Per contra, Mr. Veerakathiravan, learned Additional Advocate General appearing for respondents 1 to 3, and Mr. D.Shanmugaraja Sethupathy, learned counsel appearing for the fourth respondent in W.P. (MD) N