Madras High Court
Tamil Nadu State Transport vs The Deputy Registrar Of Cooperative ... on 30 March, 2023
Author: C.Saravanan
Bench: C.Saravanan
C.R.P(MD)Nos.856 to 858 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 13.03.2023
PRONOUNCED ON : 30.03.2023
CORAM
THE HON'BLE MR.JUSTICE C.SARAVANAN
C.R.P(MD)Nos.856 to 858 of 2019
C.R.P(MD)No.856 of 2019
Tamil Nadu State Transport
Corporation (Madurai Division - I)
Madurai Employees Cooperative Thrift
and Credit Society Limited,
Represented by its Managing Director,
94/4B, Pattukottai Kalyansundaram Street,
Bye Pass Road, Madurai - 625010. ... Third
Party/
Petitioner
Vs.
1.The Deputy Registrar of Cooperative Societies,
No.40-41, Krishna Rao Tank Street,
(Old RDCC Bank Buildings)
Madurai -01. ...Respondent/
1st Respondent
2.P.Moovendran ...Appellant/
2nd Respondent
(Cause title accepted vide Court order
dated 29.05.2019 made in
C.M.P(MD)No.4743 of 2019 in
C.R.P(MD)SR.No.19632 of 2021)
https://www.mhc.tn.gov.in/judis
1/28
C.R.P(MD)Nos.856 to 858 of 2019
PRAYER: Civil Revision Petition is filed under Article 227 of
Constitution of India, to set aside the order and decreetal order dated
28.06.2018 passed in C.M.A(CS)No.12 of 2015 by the Principal District
Judge, Madurai.
For Petitioner : Mr.D.Shanmugaraja Sethupathi
For R1 : No Appearance
For R2 : Mr.H.Arumugam
For Mr.D.Sadiq Raja
C.R.P(MD)No.857 of 2019
Tamil Nadu State Transport
Corporation (Madurai Division - I)
Madurai Employees Cooperative Thrift
and Credit Society Limited,
Represented by its Managing Director,
94/4B, Pattukottai Kalyansundaram Street,
Bye Pass Road, Madurai - 625010. ... Third
Party/
Petitioner
Vs.
1.The Deputy Registrar of Cooperative Societies,
No.40-41, Krishna Rao Tank Street,
(Old RDCC Bank Buildings)
Madurai -01. ...Respondent/
1st Respondent
2.P.Moovendran ...Appellant/
2nd Respondent
(Cause title accepted vide Court order
dated 29.05.2019 made in
C.M.P(MD)No.4744 of 2019 in
C.R.P(MD)SR.No.19641 of 2021)
https://www.mhc.tn.gov.in/judis
2/28
C.R.P(MD)Nos.856 to 858 of 2019
PRAYER: Civil Revision Petition is filed under Article 227 of
Constitution of India, to set aside the order and decreetal order dated
28.06.2018 passed in C.M.A(CS)No.13 of 2015 by the Principal District
Judge, Madurai.
For Petitioner : Mr.D.Shanmugaraja Sethupathi
For R1 : No Appearance
For R2 : Mr.H.Arumugam
For Mr.D.Sadiq Raja
C.R.P(MD)No.858 of 2019
Tamil Nadu State Transport
Corporation (Madurai Division - I)
Madurai Employees Cooperative Thrift
and Credit Society Limited,
Represented by its Managing Director,
94/4B, Pattukottai Kalyansundaram Street,
Bye Pass Road, Madurai - 625010. ... Third Party/
Petitioner
Vs.
1.The Deputy Registrar of Cooperative Societies,
No.40-41, Krishna Rao Tank Street,
(Old RDCC Bank Buildings)
Madurai -01. ...Respondent/
1st Respondent
2.P.Moovendran ...Appellant/
2nd Respondent
(Cause title accepted vide Court order
https://www.mhc.tn.gov.in/judis
3/28
C.R.P(MD)Nos.856 to 858 of 2019
dated 29.05.2019 made in
C.M.P(MD)No.4744 of 2019 in
C.R.P(MD)SR.No.19641 of 2021)
PRAYER: Civil Revision Petition is filed under Article 227 of
Constitution of India, to set aside the order and decreetal order dated
28.06.2018 passed in C.M.A(CS)No.34 of 2015 by the Principal District
Judge, Madurai.
For Petitioner : Mr.D.Shanmugaraja Sethupathi
For R1 : No Appearance
For R2 : Mr.H.Arumugam
For Mr.D.Sadiq Raja
COMMON ORDER
These three civil revision petitions have been filed against separate Orders dated 28.06.2018 passed by the Principal District Judge, Madurai in CMA(CS) Nos.12,13 and 34 of 2015.
2. These appeals were filed before the Principal District Judge, Madurai by the second respondent under Section 152(1)(a) of The Tamil Nadu Cooperative Societies Act, 1983 against two surcharge orders passed under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 and an attachment notice issued by the first respondent - Deputy Registrar of Cooperative Society as detailed below:-
https://www.mhc.tn.gov.in/judis 4/28 C.R.P(MD)Nos.856 to 858 of 2019 Order/Notice CMA S.No. CRP No. Date of first Amount (CS) respondent 856 of 13.05.2014 Na.Ka.No. 12/2015 Rs.53,98,469/-1
2019 923/2012 Sa.Pa 857 of 16.07.2014 Tha.Thi.Va.No. 13/2015 2 Rs.5,93,787/-
2019 02/2013 Sa.pa
858 of C.E.P.No. Rs.61,17,131/-
3 21.08.2015 34/2015
2019 1/15-16
3. Relevant portion of the order in C.M.A.(CS)Nos.12 and 13 of 2015 read identically. They are extracted as under-
‘’17. In the same appeal, the action of the Tamil Nadu State Transport Corporation (Madurai Division – 1) Madurai Employees Co-operative Thrift and Credit Society Ltd., who had filed arbitration proceedings against the members of the Society who had defaulted in repayment of loan under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983 which had already been decreed and execution petitions pending with the respondent. The action of the Tamil Nadu State Transport Corporation (Madurai Division-1) Madurai Employees Co-operative Thrift and Credit Society Ltd., in proceedings of the arbitration against this appellant on the same set of facts in ARC No.181/15-16 is barred by res-judicata. When the arbitration proceedings against the defaulters had been decreed and is pending for execution with the respondent, the Deputy Registrar of Co-operative Societies, Madurai, need not proceed against the appellant herein for the same defaulted amount. The Tamil Nadu State Transport Corporation (Madurai Division -1) Madurai Employees Co-
operative Thrift and Credit Society Ltd., can very well collect the overdue from the execution petition initiated against the defaulters which is pending before the respondent. Therefore, as rightly pointed out by the https://www.mhc.tn.gov.in/judis 5/28 C.R.P(MD)Nos.856 to 858 of 2019 learned counsel for the appellant it amounts to res judicata for the very same default amount. The appellant cannot be tied with the liability. Therefore, the appeal is to be allowed and the surcharge proceedings in RC.No.923/2012 SF dated 13.5.2014 passed by the 1st respondent is to be set aside. The points 1 and 2 are answered in favour of the appellant and against the respondent.’’
4. The impugned order in CMA(CS)No.34 of 2015 reads as under:-
“16. The action of the respondents herein to issue notice seeking attachment of the properties in the name of the appellant herein, two days prior to his retirement is hasty which is found to be non-application of mind by the respondents 1 and 2. Therefore, the notice issued by the 1st respondent against the appellant herein seeking security for the amount of Rs. 61,17,131/- is non-est in Law. Hence, the same is to be set aside and the impugned Notice in CEP.No.1/15-16 in ARC No.181/15-16 dated 21.8.2015 issued by the respondents is to be set aside. The points 1 and 2 are answered in favour of the appellant and against the respondent”.
5. The facts on record indicate that there were about 144 loans in respect of which there were defaults by members of the petitioner society. The General Body of the petitioner society in its meeting held on 20.10.2010, passed the following resolution:-
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6. The above resolution merely states that the request of the members to waive the interest and to appropriate the amounts of the sureties will be deliberated. The Special Officer appointed by the Government on behalf of the Board of the Petitioner Society as the Special Officer independently acceded to waive the amounts on 04.02.2011 and on 31.03.2011.
7. The specific case of the petitioner in these Civil Revision Petitions is that the above C.M.A(CS)Nos.12,13 and 34 of 2015 were filed without impleading the petitioner Society and therefore, the impugned orders passed in the respective appeals against two surcharge proceedings and attachment notice are liable to be interfered with under https://www.mhc.tn.gov.in/judis 7/28 C.R.P(MD)Nos.856 to 858 of 2019 Article 227 of the Constitution of India.
8. It is submitted that the so-called resolution passed by the General Body of members on 20.10.2010 as extracted above, has not authorized waiver of any amount that was outstanding from the defaulting members of the petitioner society, who had taken the loan from the petitioner Society and defaulted. In any event, it is submitted that even if the a Resolution was passed for such a waiver, such a resolution ought to have been passed only with the approval of the Registrar in terms of Section 178 of the Tamil Nadu Co-operative Societies Act, 1983. However, the second respondent along with the Special Officers and few staffs of the Petitioner Society waived the amount as if there was a waiver authorized.
9. It is further submitted that the second respondent, who had preferred the above appeals before the District Court along with the Special Officer appointed by the Government have unilaterally decided to waive the outstanding loans and thus, caused a loss of Rs.53,98,469/-
and Rs.5,93,787/- and further interest thereon to the petitioner Society. https://www.mhc.tn.gov.in/judis 8/28 C.R.P(MD)Nos.856 to 858 of 2019
10. It is further submitted that the decision of the learned District Judge in the respective Civil Miscellaneous Appeals filed by the second respondent was influenced by the alleged proceedings initiated to recover the loan when indeed no proceedings were initiated and the amounts were waived off purportedly pursuant to the resolution of the General Body meeting held on 20.10.2010 when indeed no such resolution was passed to waive the outstanding amounts from the defaulting members.
11. The Civil Revision Petitions filed by the petitioner is opposed by the learned counsel for the second respondent, former secretary of the petitioner society on the ground that merely because an elected Board of Members have been elected, later would not mean that the interest of the petitioner Society was not represented. The interest of the Society was represented by Mrs.Nagavalli, who was appointed as the Special Officer of the Society. It is submitted that the second respondent was the Secretary of the Petitioner's society only between 01.04.2011 and 31.12.2011, for a period of eight months and was allowed to retire on 31.05.2013. Therefore, the initiation of the surcharge proceedings were unwarranted and arbitrary.
https://www.mhc.tn.gov.in/judis 9/28 C.R.P(MD)Nos.856 to 858 of 2019
12. It is therefore submitted that the order passed by the learned District Judge in the three Civil Miscellaneous Appeals cannot be found fault with. It is further submitted that the respective orders impugned in these Civil Revision Petitions are well reasoned and require no interference.
13. That apart, it is submitted that the law in the context of Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 is well settled in the following two cases:
1. K.Ajay Kumar Gosh and Others Vs. Tribunal for Co-
operative Cases, (District of Kanyakumari) Nagercoil and Another [(2009) 4 MLJ 992)]
2. S.Subramanian Vs. The Deputy Registrar of Co-operative Societies (Housing) Cuddalore and 2 others. [2002 3 LW 185]
14. Therefore, it is submitted that the surcharge proceedings initiated against the second respondent under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 pursuant to the inquiry under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 and inspection under Section 82 of the Tamil Nadu Co-operative Societies Act, 1983, were unwarranted.
https://www.mhc.tn.gov.in/judis 10/28 C.R.P(MD)Nos.856 to 858 of 2019
15. It is further submitted that the second respondent though a Chief Executive Officer of the Petitioner Society as per the Bye-laws had acted in a bona fide manner pursuant to the decision taken by the General Body on 20.10.2010, which was approved by the Special Officer on behalf of the petitioner on 04.02.2011 and on 31.03.2011 even before the second respondent had joined the society.
16. It is further submitted that the amounts were overdue and the outstanding loan due of members were on account of resignation of few members, death and dismissal. It is submitted that outstanding of such members had become a Non-Performing Assets (NPA) of the petitioner Society. It was therefore written off. It is further submitted that the loans were not serviced in time by the defaulting members of the petitioner society as the Transport Corporation was not paying salaries to its employees in time, who are its members who borrowed money and defaulted.
17. It is further submitted that up to a point, steps were taken to recover the amount from some of the defaulting members and that the https://www.mhc.tn.gov.in/judis 11/28 C.R.P(MD)Nos.856 to 858 of 2019 amounts were also recovered partially. To mitigate the loss, the savings amount of Rs.6,35,648/- and the relief fund of Rs.3,35,845/- of the sureties were adjusted against the outstanding. The adjustments were in line with the decision taken in the General Body meeting of members held on 20.10.2010.
18. The learned counsel for the second respondent has drawn attention to paragraph Nos.4 and 6 of the counter filed before this Court. It reads as under:
"4. I specifically deny the averment made in Para 4 of the affidavit filed in support of the above civil revision petition to the effect that myself and others have caused a loss of Rs. 61,17,131/- to the society by committing various irregularities is denied as false and the petitioner is put to strict proof of the same. In fact, the enquiry officer in his cross examination has clearly stated that there is no cash embezzlement and no personal gain. Further the enquiry officer admitted himself that the secretary cannot act on his own volition, he had to act as per bye laws and as per the administrative power of the board of directors of the society. It is pertinent to mention that the General Body have decided to adjust the share capital of the defaulting members, thrift deposit of the defaulting borrowers and sureties and also made use of the surety relief fund, so that the prolonged overdue loans of the defaulting members will be cleared and the sureties will be relived from their liability. I was duty bound to implement the resolution of the congregation. Hence the same was adjusted in the loan ledger books.
6. I specifically deny the averment made in Para 6 of the https://www.mhc.tn.gov.in/judis 12/28 C.R.P(MD)Nos.856 to 858 of 2019 affidavit filed in support of the civil revision petition is denied as false and the petitioner is put to strict proof of the same. In fact, in the appeal, the Hon'ble Tribunal rightly held that the petitioner's society already filed arbitration proceedings against the default members of the society which had already been decreed and execution petition is also pending. When the arbitration proceedings against the defaulters had been decreed and the same is pending for execution, I cannot be tied with the liability for the same and the same is nothing but Res-Judicata. Further the Hon'ble Tribunal rightly held that the ingredients of the Sec.87 of the Tamil Nadu Co-operative Societies Act, 1983 has not been made out in the subject case to invoke surcharge proceedings against me."
19. I have considered the arguments advanced by the learned counsel for the petitioner and the learned counsel for the second respondent.
20. The present Civil Revision Petitions have been filed under Article 227 of the Constitution of India. Under Article 227 of the Constitution of India, the High Court exercises general power of superintendence over the Courts below it.
21. The Hon'ble Supreme Court in the case of Surya Dev Rai Vs Ram Chander Rai and others reported in (2003) 6 SCC 675 has held as under:-
https://www.mhc.tn.gov.in/judis 13/28 C.R.P(MD)Nos.856 to 858 of 2019 “22. Article 227 of the Constitution confers on every High Court the power of superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction excepting any court or tribunal constituted by or under any law relating to the armed forces. Without prejudice to the generality of such power the High Court has been conferred with certain specific powers by sub-Articles (2) and (3) of Article 227 with which we are not concerned hereat. It is well-settled that the power of superintendence so conferred on the High Court is administrative as well as judicial, and is capable of being invoked at the instance of any person aggrieved or may even be exercised suo motu. The paramount consideration behind vesting such wide power of superintendence in the High Court is paving the path of justice and removing any obstacles therein. The power under Article 227 is wider than the one conferred on the High Court by Article 226 in the sense that the power of superintendence is not subject to those technicalities of procedure or traditional fetters which are to be found in certiorari jurisdiction. Else the parameters invoking the exercise of power are almost similar.
23.The history of supervisory jurisdiction exercised by the High Court, and how the jurisdiction has culminated into its present shape under Article 227 of the Constitution, was traced in Waryam Singh & Anr. Vs. Amarnath & Anr. (1954) SCR 565. The jurisdiction can be traced back to Section 15 of High Courts Act 1861 which gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisionsal jurisdiction on the High Court.
Section 107 of the Government of India Act 1915 and then Section 224 of the Government of India Act 1935, were similarly worded and reproduced the predecessor provision. However, sub-section (2) was added in Section 224 which confined the jurisdiction of the High Court to such judgments of the inferior courts which were not otherwise subject to appeal or revision. That restriction has not been carried forward in Article 227 of the Constitution. In that sense Article 227 of the Constitution has width and https://www.mhc.tn.gov.in/judis 14/28 C.R.P(MD)Nos.856 to 858 of 2019 vigour unprecedented.
Difference between a writ of certiorari under Article 226 and supervisory jurisdiction under Article 227.
24.The difference between Articles 226 and 227 of the Constitution was well brought out in Umaji Keshao Meshram and Ors. Vs. Smt. Radhikabai and Anr., (1986) Supp. SCC 401. Proceedings under Article 226 are in exercise of the original jurisdiction of the High Court while proceedings under Article 227 of the Constitution are not original but only supervisory. Article 227 substantially reproduces the provisions of Section 107 of the Government of India Act, 1915 excepting that the power of superintendence has been extended by this Article to tribunals as well. Though the power is akin to that of an ordinary court of appeal, yet the power under Article 227 is intended to be used sparingly and only in appropriate cases for the purpose of keeping the subordinate courts and tribunals within the bounds of their authority and not for correcting mere errors. The power may be exercised in cases occasioning grave injustice or failure of justice such as when (i) the court or tribunal has assumed a jurisdiction which it does not have, (ii) has failed to exercise a jurisdiction which it does have, such failure occasioning a failure of justice, and (iii) the jurisdiction though available is being exercised in a manner which tantamounts to overstepping the limits of jurisdiction.
25. Upon a review of decided cases and a survey of the occasions wherein the High Courts have exercised jurisdiction to command a writ of certiorari or to exercise supervisory jurisdiction under Article 227 in the given facts and circumstances in a variety of cases, it seems that the distinction between the two jurisdictions stands almost obliterated in practice. Probably, this is the reason why it has become customary with the lawyers labeling their petitions as one common under Articles 226 and 227 of the Constitution, though such practice has been deprecated in some judicial pronouncement. Without entering into niceties and technicality of the subject, we venture to state the broad https://www.mhc.tn.gov.in/judis 15/28 C.R.P(MD)Nos.856 to 858 of 2019 general difference between the two jurisdictions. Firstly, the writ of certiorari is an exercise of its original jurisdiction by the High Court; exercise of supervisory jurisdiction is not an original jurisdiction and in this sense it is akin to appellate revisional or corrective jurisdiction. Secondly, in a writ of certiorari, the record of the proceedings having been certified and sent up by the inferior court or tribunal to the High Court, the High Court if inclined to exercise its jurisdiction, may simply annul or quash the proceedings and then do no more. In exercise of supervisory jurisdiction the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such directions as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute such a decision of its own in place of the impugned decision, as the inferior court or tribunal should have made. Lastly, the jurisdiction under Article 226 of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved; the supervisory jurisdiction is capable of being exercised suo motu as well.
26. In order to safeguard against a mere appellate or revisional jurisdiction being exercised in the garb of exercise of supervisory jurisdiction under Article 227 of the Constitution, the courts have devised self-imposed rules of discipline on their power. Supervisory jurisdiction may be refused to be exercised when an alternative efficacious remedy by way of appeal or revision is available to the person aggrieved. The High Court may have regard to legislative policy formulated on experience and expressed by enactments where the Legislature in exercise of its wisdom has deliberately chosen certain orders and proceedings to be kept away from exercise of appellate and revisional jurisdiction in the hope of accelerating the conclusion of the proceedings and avoiding delay and procrastination which is occasioned by subjecting every order at every stage of https://www.mhc.tn.gov.in/judis 16/28 C.R.P(MD)Nos.856 to 858 of 2019 proceedings to judicial review by way of appeal or revision. So long as an error is capable of being corrected by a superior court in exercise of appellate or revisional jurisdiction though available to be exercised only at the conclusion of the proceedings, it would be sound exercise of discretion on the part of the High Court to refuse to exercise power of superintendence during the pendency of the proceedings. However, there may be cases where but for invoking the supervisory jurisdiction, the jurisdictional error committed by the inferior court or tribunal would be incapable of being remedied once the proceedings have concluded.
27. In Chandrasekhar Singh & Ors. Vs. Siva Ram Singh & Ors., (1979) 3 SCC 118, the scope of jurisdiction under Article 227 of the Constitution came up for the consideration of this Court in the context of Sections 435 and 439 of the Criminal Procedure Code which prohibits a second revision to the High Court against decision in first revision rendered by the Sessions Judge. On a review of earlier decisions, the three-Judges Bench summed up the position of law as under :-
(i) that the powers conferred on the High Court under Article 227 of the Constitution cannot, in any way, be curtailed by the provisions of the Code of Criminal procedure;
(ii) the scope of interference by the High Court under Article 227 is restricted. The power of superintendence conferred by Article 227 is to be exercised sparingly and only in appropriate cases in order to keep the subordinate Courts within the bounds of their authority and not for correcting mere errors;
(iii) that the power of judicial interference under Article 227 of the Constitution is not greater than the power under Article 226 of the Constitution;
(iv) that the power of superintendence under Article 227 of the Constitution cannot be invoked to correct an error of fact which only a superior Court can do in exercise of its statutory power as the Court of Appeal; the High https://www.mhc.tn.gov.in/judis 17/28 C.R.P(MD)Nos.856 to 858 of 2019 Court cannot, in exercise of its jurisdiction under Article 227, convert itself into a Court of Appeal.”
22. If any proceedings are conducted in an abusive manner, wide powers are vested with this Court under Article 227 of the Constitution of India to correct the mistakes committed by the lower Court and proceedings initiated before the lower Court can be interfered with. A similar sentiment was expressed by this Court in M/s.Southern and Rajamani Transport Private Ltd., and others vs. R.Srinivasan and others [C.R.P.(PD)(MD)No.463 of 2010, decided on 30.03.2010].
23. In these cases, two separate surcharge proceedings came to be initiated under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983, pursuant to an inquiry conducted under Section 81 of the said Act against the second respondent and inspection conducted under Section 82 of the said Act. The details of which have already been set out in the beginning of the order.
24. Section 87 of the Tamil Nadu Co-operative Societies Act, 1983, reads as under:-
‘’87. Surcharge.- (1) Where in the course of an audit under section 80 or an inquiry under section 81 or an inspection or investigation under section 82 or inspection of books https://www.mhc.tn.gov.in/judis 18/28 C.R.P(MD)Nos.856 to 858 of 2019 under section 83 or the winding up of a society, it appears that any person who is or was entrusted with the organisation or management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or been guilty of breach of trust in relation to the society or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has made any payment which is not in accordance with this Act, the rules or the by – laws, the Registrar himself or any person specially authorised by him in this behalf, of his own motion or on the application of the board, Liquidator or any creditor or contributory may frame charges against such person or officer or servant and after giving a reasonable opportunity to the person concerned and in the case of a deceased person, to his representative who inherits his estate, to answer the charges, make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar or the person authorised as aforesaid thinks just or to contribute such sum to the assets of the society by way of compensation in respect to the assets of the society by way of compensation in respect of the misappropriation, misapplication of funds, fraudulent retainer, breach of trust or willful negligence or payments which are not in accordance with this Act, the rules or the by–laws as the Registrar or the person authorised as aforesaid thinks just:
Provided that no action shall be commenced under this sub section after the expiry of seven years from the date of any act or omission referred to in this sub section : Provided further that the action commenced under this sub section shall be completed within a period of six months from the date of such commencement or such further period or periods as the next higher authority may permit but such extended period or periods shall not exceed six months in the aggregate.
(2) Without prejudice to any other mode of recovery which is being taken or may be taken under this Act or any other https://www.mhc.tn.gov.in/judis 19/28 C.R.P(MD)Nos.856 to 858 of 2019 law for the time being in force, any sum ordered under this section to be repaid to a registered society or recovered as a contribution to its assets may be recovered as if it were an arrear of land revenue and for the purpose of such recovery the Registrar shall have the powers of a Collector under the Tamil Nadu Revenue Recovery Act, 1864 (Tamil Nadu Act II of 1864).
(3) This section shall apply notwithstanding that such person or officer or servant may have incurred criminal liability by this act.
(4) The Registrar or the person authorised by him shall, when acting under this section, have all the powers of a Civil Court while trying a suit under the Code of Civil Procedure, 1908 (Central Act V of 1908) in respect of the following matters, namely:__
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of any documents;
(c) reception of evidence on affidavits;
(d) requisitioning any public record from any court or office,
(e) issuing commission for examining of witnesses.’’
25. As per Section 87 of the Tamil Nadu Co-operative Societies Act, 1983, where in the course of an audit under Section 80 or an inquiry under Section 81 or an inspection or investigation under Section 82 or inspection of books under Section 83 or the winding up of a society, it appears that any person who is or was entrusted with the organization or https://www.mhc.tn.gov.in/judis 20/28 C.R.P(MD)Nos.856 to 858 of 2019 management of the society or any past or present officer or servant of the society:
a. has misappropriated or fraudulently retained i. any money; or ii. other property; or b. has been guilty of breach of trust in relation to the society; or e. has caused any deficiency in the assets of the society by i. breach of trust; or ii. willful negligence, the Officers mentioned in the above provision can frame charges against such person and in the case of a deceased person, issue notice to the legal representative of such person, who inherits his estate to answer for the charges.
26. The second respondent was working as a Secretary of the Petitioner Society between 01.11.1996 and 31.05.2013 and not between 01.04.2011 and 31.12.2011 as was projected before this Court. There is an admission to that effect in CMA(CS)Nos.12, 13 and 34 of 2015 filed before the Principal District Court, Madurai by the second respondent.
27. The second respondent has acted along with Mrs.Nagavalli, the https://www.mhc.tn.gov.in/judis 21/28 C.R.P(MD)Nos.856 to 858 of 2019 Special Officer and few staffs of the Petitioner Society purportedly pursuant to the resolution of General Body of members held on 20.10.2010, which was approved purportedly by the Special Officer on 04.02.2011 and 31.03.2011. Prima facie, the steps taken to waive the amounts attract Section 87 of the Act in absence of an approval by the Registrar of Co-operative Society.
28. In the appeals filed before the Principal District Court, Madurai in CMA(CS)Nos.12, 13 and 34 of 2015, under Section 152(1)
(a) of the Tamil Nadu Co-operative Societies Act, 1983 by the second respondent, the Petitioner Society was not a party. The Petitioner Society ought to have been made a party to the said proceedings.
29. A reading of the order impugned indicates that the learned Principal District Judge, Madurai, has allowed the appeals filed by the second respondent on the ground of res judicata, as proceedings were initiated by the first respondent against the second respondent in A.R.C.No.181/15-16, dated 21.08.2015.
30. It is noticed, that the second respondent has independently https://www.mhc.tn.gov.in/judis 22/28 C.R.P(MD)Nos.856 to 858 of 2019 challenged the notice, dated 21.08.2015 in C.M.A.(CS)No.34 of 2015. The proceedings in A.R.C.No.181/15-16 to attach the properties of the second respondent was initiated on 21.08.2015 by the first respondent two days prior to the second respondent's retirement.
31. The learned Principal District Judge, Madurai, has concluded that this was done in a hasty manner without application of mind and therefore, the proceedings initiated asking the second respondent to furnish a security for a sum of Rs.61,17,131/- to satisfy the arbitration order to be passed, failing which, the immovable properties specified in the schedule of the second respondent were to be conditionally attached.
32. The surcharge proceedings, which have been dropped by the learned Principal District Judge, Madurai and has absolved the second respondent of all the charges in view of initiation of proceedings in A.R.C.No.181/15-16. Neither the petitoner nor the second respondent has given the details of A.R.C.No.181/15-16.
33. Initiation of proceedings in A.R.C.No.181/15-16, vide notice dated 21.08.2015, issued by the first respondent was merely intended to https://www.mhc.tn.gov.in/judis 23/28 C.R.P(MD)Nos.856 to 858 of 2019 call upon the second respondent to furnish security for the alleged loss caused to the petitioner Society on account of the alleged irregularities committed by the second respondent along with other employees and the Special Officer of the Petitioner Society.
34. The initiation of proceedings on 21.08.2015 in A.R.C.No. 181/15-16 cannot be construed to be a res judicata for two surcharge proceedings initiated against the second respondent. Therefore, the dropping of the surcharge proceedings by the learned Principal District Judge, Madurai, vide order dated 28.06.2018, in C.M.A.(CS)Nos.12, 13 and 34 of 2015 was unwaraned and is liable to be interfered with.
35. A reading of the impugned order further indicates that the learned Principal District Judge, Madurai, has not applied his mind to the facts of the case in the context of Section 87 of the Tamil Nadu Co- operative Societies Act, 1983. That apart, the decision that was taken in the General Body Meeting on 20.10.2010 indicates that the request for writting off amounts due can be deliberated. There is no conclusive decision in the said meeting authorising the Board to waive off the amouts due from the defaulting members.
https://www.mhc.tn.gov.in/judis 24/28 C.R.P(MD)Nos.856 to 858 of 2019
36. That apart, waiver of any amount ought to have been made with the approval of the Registrar under Section 178 of the Tamil Nadu Co-operative Societies Act, 1983 by the General Body. Section 178 of the Tamil Nadu Co-operative Societies Act, 1983 reads as under:-
''178. Writing off non-recoverable assets.__ The general body of any registered society may, with the approval of the Registrar, write off such of its assets as are bad and cannot be recovered.''
37. The decision to waive the outstanding dues of the members, who had defaulted, may have been bona fide even if the General Body had failed to obtain necessary approval of the the Registrar provided there were extenuating circumstances and fulitity to initiate proceedings to recover the amounts. The learned Principal District Judge, Madurai, ought to have examined this aspect while passing the impugned orders in C.M.A.(CS)Nos.12, 13 and 34 of 2015.
38.In the light of the above, the impugned orders dated 28.06.2018, in C.M.A.(CS)Nos.12, 13 and 34 of 2015, passed by the https://www.mhc.tn.gov.in/judis 25/28 C.R.P(MD)Nos.856 to 858 of 2019 learned Principal District Judge, Madurai, are liable to be set aside and the cases be remitted back to the Principal District Court, Madurai, to pass a fresh order on merits and in accordance with law after hearing the petitioner. The impugned orders are therefore set aside.
39. Since the petitioner has filed these Civil Revision Petitions and has secured this order, the petitioner is directed to be suo motu impleaded in all the appeals before the Principal District Court, Madurai. The appeals are directed to be disposed on merits and in accordance with law within a period of six months from the date of receipt of a copy of this order.
40. It is made clear that the observations made herein are only meant for passing this order. The learned Principal District Judge, Madurai, shall pass a fresh order on merits and in accordance with law, uninfluenced by any of the observations made in this order touching on the merits of the case.
41. These Civil Revision Petitions stand allowed with the above observation. No costs.
https://www.mhc.tn.gov.in/judis 26/28 C.R.P(MD)Nos.856 to 858 of 2019 30.03.2023 NCC : Yes / No Index : Yes / No Internet : Yes / No To 1.The Principal District Judge, Madurai. 2.The Section Officer Vernacular Section, Madurai Bench of Madras High Court, Madurai. https://www.mhc.tn.gov.in/judis 27/28 C.R.P(MD)Nos.856 to 858 of 2019 C.SARAVANAN,J. sn/smn2 Pre-delivery common order in C.R.P(MD)Nos.856 to 858 of 2019 30.03.2023 https://www.mhc.tn.gov.in/judis 28/28