Madras High Court
K.Murugan vs The Deputy Registrar Of Co-Operative ... on 18 March, 2010
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:18.03.2010
CORAM:
The Hon'ble Mr.Justice T.S.Sivagnanam
W.P.Nos.9017 and 9018 of 2001
K.Murugan ... Petitioner in both the W.Ps
Vs.
1.The Deputy Registrar of Co-operative Societies
Erode Circle, Veerappan Chattram, Erode 4.
2.The Special Officer, K1114 Dharapuram
Agricultural Producers Co-operative Society,
Dharapuram. ... 1st and 2nd Respondent in both the W.Ps
3.P.Muthusamy, Ex-Special Officer,
K-1114 Dharapuram Agricultural Producers Co-operative
Marketing Society, 119 Padmavathipuram,
Avinashi Road, Gandhi Nagar Post,
Tiruppur 3. ... 3rd Respondent in W.P.No.9017 of 2001
4 S.Ramasamy, Ex-Accountant
K-1114 Dharapuram Agricultural Producers Co-operative
Marketing Society, now residing at
21/20 VOC Lane, Chinnakadai Street,
Dharapuram 638 656,
Erode District. ... 3rd Respondent in W.P.No.9018 of 2001
5.The Principle District Judge
and Special Tribunal for Co-operative Cases,
Erode District, Erode 11. ... 4th Respondent in both the W.Ps
Prayer in both the Writ Petitions:-
Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari to call for the entire records relating to the impugned decree and judgment dated 13.06.2000, passed by the Principle District Judge and Special Tribunal for Co-operative Cases, Erode, in C.M.A.Nos.68 and 11 of 1998, respectively, confirming the orders of the surcharge passed by the first respondent in Na.Ka.No.16052/95-J, dated 30.11.1996 and to quash the same.
For Petitioner : Mr.K.Premkumar
For Respondents 1 and 2 : Ms.M.Sneha
Government Advocate
C O M M ON O R D E R
As both the Writ Petitions have been filed by the same petitioner arising out of two surcharge proceedings, they were heard together and disposed off by a Common Order.
2. In W. P.No.9017 of 2001, the petitioner has sought for the issuance of Writ of Certiorari to quash the order dated 13.06.2000, passed by the Special Tribunal for Co-operative cases, Erode, in E.P.No.68 of 1998, confirming the order of the surcharge passed by the first respondent dated 30.11.1996 in Na.Ka.No.16052/95-J.
3. In W.P.No.9018 of 2001, prayer has been made for the issuance of Writ of Certiorari to quash the order dated 13.06.2000, passed by the Special Tribunal for Co-operative cases (Principal District Judge) Erode, in E.P.No.11 of 1998, confirming the orders of the surcharge passed by the first respondent dated 30.11.1996 in Na.Ka.No.16052/95-J.
4. The petitioner was working as a Special Officer in the third respondent-Society. While so, a show cause notice was issued by the first respondent on 01.12.1995, calling upon the petitioner to explain as to why the order of surcharge should not be issued against him for alleged loss of Rs.99,609.19 along with the previous Special Officer based on the enquiry report submitted by the Enquiry Officer, under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 ( hereinafter referred to as the said 'Act').
5. The petitioner was also issued with another show cause notice by the first respondent under Section 87 (1) of the said Act, calling upon the petitioner to show cause as to why the loss of Rs.12,000/- along with Accountant of the Society should not be recovered.
6. According to the petitioner, he was not given an opportunity to defend the charge and a copy of the enquiry report was not furnished to him and without following the Principles of Natural Justice, ex parte final order was passed by the first respondent, directing the petitioner to remit the amounts, claimed in the show cause notices. Against such orders, the petitioner filed Appeals before the Special Tribunal for Co-operative cases, (Principal District Judge). The Special Tribunal by the impugned orders in the Writ Petition, confirmed the order passed by the first respondent. Challenging the said orders, the petitioner has filed the present Writ Petitions.
7. The learned counsel appearing for the petitioner raised three contentions. Firstly, that the order passed by the Special Tribunal is a non-speaking order and without assigning any reason for rejecting the Appeals and therefore, the impugned orders call for interference.
8. The second contention raised by the learned counsel appearing for the petitioner is that entire surcharge proceedings is barred by limitation, since the allegation pertains to the order passed in the year 1988 -89 and the notice was issued only in the year 1995 and therefore, it is beyond the period of limitation. In support of his contention, the learned counsel placed reliance on the decision of this Court reported in (2009) 6 M.L.J. 1066 in the case of [ R.Ganapathy Vs. Deputy Registrar of Co-operative Societies ( Housing)]
9. The third and last contention raised by the learned counsel appearing for the petitioner is that the allegation against the petitioner does not amount to an actionable wrong in a deliberate and reprehensible manner for resorting to surcharge proceedings. In support of the said contention, the learned counsel placed reliance on the decision of the Division Bench judgment of this Court reported in (2009) 4 M.L.J. 992 in the case of (K.Ajay Kumar Gosh and other Vs. Tribunal for Co-operative Societies).
10. Heard, the learned Government Advocate appearing for the respondents 1 and 2, on the above submission. The files from the office of the respondents were called for and perused.
11. Before this Court goes into the legal issues raised by the petitioner, it is first relevant to note the conduct of the petitioner. The allegation against the petitioner is that while he was working as Special Officer, excessive quantities of raw materials meant for Public Distribution have been supplied to various Stores, as a result of which those commodities were not supplied to the deserving and remained in stock and were spoiled on account of long storage, resulting in loss to the Government Exchequer. Therefore, surcharge proceedings were initiated on him.
12. Though the first respondent granted sufficient time to the petitioner to submit his explanation, the petitioner appears to have been seeking adjournment on a flimsy grounds. It appears that the petitioner wanted to peruse the documents to enable him to submit his explanation and this was also granted by the first respondent and in spite of that, the petitioner took several adjournments and did not avail the opportunity and did not peruse the documents.
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13. Therefore, the first respondent proceeded ex parte and passed the orders of surcharge, holding that the petitioner is liable to pay a sum of Rs.99,609.19 and Rs.12,000/- respectively. The first respondent considered the materials available on record and passed orders. Hence, it cannot be termed as a non-speaking order.
14. It is evident that the petitioner failed to avail the opportunity granted to him by the Statutory Authority, and therefore, is precluded from complaining that the orders passed by the first respondent is in violation of Principles of Natural Justice. Hence, the first contention raised by leaned counsel appearing for the petitioner does not merit consideration.
15. The second contention is as to whether the surcharge proceedings itself was barred by limitation. This Court in [ R.Ganapathy Vs. Deputy Registrar of Co-operative Societies ( Housing)] (supra) held that in terms of the first Proviso to Section 87 of the said Act, no surcharge action shall be commenced under sub-section (1) and Section 87, after the expiry of 7 years, from the date of any act or omission referred to, in the said subsection.
16. However, to apply the said decision to the facts of the present case on hand, it has to be seen as to whether the surcharge proceedings have been initiated, after the time prescribed by the Statutory Authority. The petitioner has not produced the copies of the notices issued by the first respondent, prior to the issuance of the notice dated 1.12.1995. Yet from the preamble of the order passed by the first respondent, it is clear that though the proceedings were initiated well within time and it is the petitioner, who has been prolonging the matter by seeking time to submit his explanation.
17. Eventhough, the petitioner's request for perusal of the documents was granted by the first respondent, the same was not utilized by the petitioner to defend the charge. That apart, the plea that the proceedings are barred by limitation was never the contention of the petitioner and appears to be factually incorrect. Perusal of the file produced by the Government Advocate reveals that the report of the enquiry conducted under Section 81 of the Act is well within the period of limitation prescribed under the statute. Further, such contention has not been raised by the petitioner at any earlier point of time and from a perusal of the order passed by the first respondent, it is clear that the plea raised by the petitioner is factually incorrect and that surcharge proceedings were initiated well within time stipulated under the Statute.
18. Further, before the Special Tribunal of Tamil Nadu Co-operatvie Cases, this point was not canvassed by the petitioner and such contention is raised in the Writ Petition for the first time. Therefore, unless and until the petitioner is able to factually establish that the proceedings are beyond time, the question of applying the decision of this Court rendered in [R.Ganapathy Vs. Deputy Registrar of Co-operative Societies ( Housing)] (supra) does not arise. In the case of R.Ganapathy, referred supra, the petitioner therein was a Special Officer of a Co-operative Society and he retired from service on 30.06.1993 and during his service, he has sanctioned loans for construction of houses by its members. During 1993, inspection was ordered under Section 82 of the Act and certain omissions and commissions were found. However, the petitioner therein was allowed to retire on 30.06.1993 on attaining the age of superannuation. After his retirement, based on the inspection, surcharge notice under Section 87 of the Act was issued. Though, reply was submitted to the said notice, authority confirmed the demand and the appeal filed by the petitioner therein before the Special Tribunal was also dismissed. Thereafter, the petitioner therein approached this Court. Considering the facts of the said case, this Court held that the petitioner retired from service on 30.06.1993 and prior to his retirement, the last loan sanctioned by the petitioner was on 29.12.1990 and though, the inspection under Section 82 of the Act was conducted in the year 1993, proceedings under Section 87(1) of the Act was initiated only on 06.03.1998. Therefore, this Court held that the proviso to Section 87 is attracted and proceedings initiated after the expiry of seven years is without jurisdiction. However, the facts of the present case are couched differently.
19. As noticed above, the petitioner has not filed the copies of the earlier notices sent to the petitioner, but has only filed the order passed by the first respondent. Perusal of the said order, reveals that the allegation against the petitioner is stated to have been committed during 1989 and the surcharge proceedings have been commenced in 1995, surcharge notice was also issued on 01.12.1995, which is well within the period of seven years. Therefore, the decision in the case of R.Ganapathy, relied on by the learned counsel appearing for the petitioner is of no assistance to the case of the petitioner.
20. In S.V.K.Sahasramam vs. Deputy Registrar of Co-op. Societies, [(2008) 8 MLJ 231], a Hon'ble Division Bench of this Court considered the question whether the time limit, which is provided under Section 81(4) of the Act is mandatory or not and whether the word "shall" used in 81(4) of the Act has to be construed as mandatory or not. Though impugned proceedings in the present case is under Section 87, yet, the law laid down by the Hon'ble Division Bench could be applied to the present case, since, the proviso to Section 87 was also examined, wherein the Hon'ble Division Bench held as follows:-
10.Before the learned Judge of the writ Court, the appellant relied on two learned single Bench judgments of this Court rendered in the case of T.V.Ekambaram v. Co-operative Tribunal-cum-District Judge, Madurai 2000 (2) CTC 659 and in the case of Gabriel v. Deputy Registrar (Housing), Cuddalore (2003) 2 MLJ 624: 2003(3)CTC 23. In both these two judgments, the provisions of Section 87 of the said Act which relate to surcharge proceedings were examined and the learned Judges in both the aforesaid judgments construed the following proviso to Section 87:
"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."
Considering the said time limit of six months, the learned Judges came to the conclusion that the said period of six months is mandatory.
11. We are constrained to hold that even though no appeal has been taken to us from the said judgments, yet having regard to the well settled legal position which has been referred to hereinabove, the finding of the learned Judges in these two judgments that the period of six months in the second proviso to Section 87 of the said Act is mandatory is not a correct finding in law. We find that even though before the learned Judge of the writ Court those two judgments of the learned Judge of the writ Court those two judgments of the learned single Bench were cited, the learned Judge of the writ Court was not swayed by those two decisions and came to a correct finding, relying upon the well settled proposition laid down by the Supreme Court as pointed above hereinabove."
21. As noticed above, the Hon'ble Division Bench held that the finding in the Judgments referred to that the proviso to Section 87, is mandatory is not a correct finding. Therefore, a question would arise as to why such reasoning should not be extended to the first proviso to Section 87 of the Act. However, on facts of the present case, as it has been established that the action has been initiated well within the period of seven years.
22. It is seen that the first proviso to Section 87 of the Act states that, provided that no action shall be commenced under Sub-Section (1) of Section 87, after the expiry of seven years from the date of any act or omission referred to in the Sub-Section. The expression used in the first proviso is that no action shall be "commenced". The OXFORD Concise English dictionary defines the word "commenced" to mean to "begin". The other expression, which is commonly used in legal parlance is "institute" which also means to "begin" or "set in motion". Therefore, the larger question involved is whether a show cause notice issued much earlier to the actual Audit report under Section 80 or enquiry report under Section 81 could be considered as a starting point for computation period of seven years.
23. In this regard, it would be useful to refer to the decision of the Hon'ble Supreme Court in State of U.P. vs. R.C.Misra, 2007(9) SCC 698, wherein, the Hon'ble Supreme Court interpreted the word "institute" wherein the Hon'ble Supreme Court held as follows:-
11. The word used in Proviso (a) is "institute". The dictionary meaning of the word "institute" is: set up; cause to come into existence; to originate and get established; to commence. It obviously refers to the initial action or the commencement of the action. It is entirely different from continuance of an action already initiated. If the intention of the rule-making authority had been that an enquiry instituted against an officer while in service should not proceed after his retirement, save with the sanction of the Governor, then Proviso(a) would have been differently worded and instead of the word "instituted", the words "continue" or "proceed" or "go on" would have been used. This being not the language of the proviso, there is absolutely no warrant for holding that an enquiry validly instituted against an officer while he was in service would, after retirement of the officer, require sanction of the Governor for its continuance and culmination."
24. Therefore, this Court is of the prima facia view that to fix the date of commencement, an order under Section 80 or an enquiry report under Section 81 cannot be construed as a starting point, since Section 87(1) states that where in the course of an audit under Section 80 or an inquiry under Section 81 or an inspection or under Section 82 or inspection of books under Section 83 or the winding-up of the society, it appears that the servant of the society has acted in willful negligence, he could be proceeded against. Therefore, if this interpretation, which according to this Court is the only reasonable interpretation, is given, then the petitioner has absolutely no case on merits.
25. The third and the last ground raised by the petitioner is that Section 87 of the said Act, cannot be invoked against the petitioner for the allegation, as contained in the impugned orders. It is stated that the petitioner has not done any actionable wrong with a deliberate and reprehensible manner with reckless callousness and with a supine indifference without taking due care and caution ordinarily expected from a reasonable and prudent manner.
26. The petitioner was a Special Officer of the Co-operative Society. The said Society is an Agricultural Producers Co-operative Marketing. Society which has various retail Stores and each Store has sufficient number of members attached to it. The nature of activity carried on by each Store attached to the second respondent-Society is unlike normal business activity such as provision stores, departmental stores etc., The Society is fully aware, as to the requirements of each retail store, as the list of members are already in their possession. Therefore, for requisitioning raw materials or stocks, the Society shall do so in the manner that would be sufficient to cater to the need of all the retail outlets, attached to the Society. Therefore, the Special Officer, the Chief Officer of a Society, has been conferred with the power to exercise the functions of the Board of Directors and is specifically empowered to take such action as may be required in the interest of a co-operative society under Rule 4(2) of the Tamil Nadu Co-operative Societies (Appointment of Special Officers) Act 1976. Therefore, such Special Officer cannot plead ignorance of the actual quantity, which is required by every retail Store that are under the control of the Society. The Tribunal recorded a specific finding that the records show that the petitioner and one Muthusamy had distributed excess essential commodities to the shops under their control and the excess stock were spoilt, further the petitioner and others did not supervise the stock position of essential commodities in the shops resulting in financial loss to the society. Thus, the action of the petitioner in stocking excessive commodities in the Store far and above the requirement is definitely an actionable wrong and displays reckless, callousness, warranting action under the provisions of the said Act. The second allegation against the petitioner is that he was guilty of taking a decision to run a IMFL shop by securing a licence, in this process he caused a loss to the society. As discussed, the petitioner being a Special Officer of the Agricultural Producers Co-operative Marketing Society, he could not have taken such a decision, which would be detrimental to the interest of the society, apart from being contrary to the object for which, the society has been established and without due permission. Therefore, on this ground also, the respondents were justified in passing the order of surcharge proceedings. In the case before the Division Bench of this Court in (K.Ajay Kumar Gosh and other Vs. Tribunal for Co-operative Societies) (supra), the allegation was that the employees have enforced the settlement arrived at between the Management and the Employees under Section 12 (3) of the Industrial Disputes Act, 1947 and in such factual background the Hon'ble Division Bench of this Court has laid down the legal proposition, which in my view, is of no assistance to the case on hand, as the case of the petitioner is factually different and the Special Officer of the Society is bound to know the requirements of the Society and its retail outlets and it is definitely an action not expected from a reasonable and prudent Special Officer. Therefore, the third and the last contention raised by the learned counsel appearing for the petitioner also does not merit for consideration.
27. In the result, both the Writ Petition fails and the same are dismissed. However, there shall be no order as to costs. Consequently, connected Miscellaneous Petition is also dismissed.
sd/pbn To
1)The Deputy Registrar of Co-operative Societies Erode Circle, Veerappan Chattram, Erode 4.
2)The Special Officer, K1114 Dharapuram Agricultural Producers Co-operative Society, Dharapuram.
3)P.Muthusamy, Ex-Special Officer, K-1114 Dharapuram Agricultural Producers Co-operative Marketing Society, 119 Padmavathipuram, Avinashi Road, Gandhi Nagar Post, Tiruppur 3.
4) S.Ramasamy, Ex-Accountant K-1114 Dharapuram Agricultural Producers Co-operative Marketing Society, now residing at 21/20 VOC Lane, Chinnakadai Street, Dharapuram 638 656, Erode District.
5)The Principle District Judge and Special Tribunal for Co-operative Cases, Erode District, Erode 11