Madras High Court
Mohammed Nainar vs Special Tribunal For Co-Operative on 18 December, 2017
Author: R.Suresh Kumar
Bench: R.Suresh Kumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 18.12.2017
CORAM
THE HON'BLE MR. JUSTICE R.SURESH KUMAR
W.P.Nos.20013 & 20014 of 2002
and W.P.M.P.Nos.27622 & 27623 of 2002
Mohammed Nainar ...Petitioner
in both W.Ps.
Vs.
1.Special Tribunal for Co-operative
cases, (Principal District Judge)
Tirunelveli.
2.Deputy Registrar of Co-operative
Societies,
Tenkasi.
3.117 Senkottai Multipurpose
Co-operative Society, Senkottai. ...Respondents
Rep. by its President. in both W.Ps.
Common Prayer:- Petitions filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari, calling for the records in the impugned award S.C.2/97-98 dt. 10.05.1997 passed by the 2nd respondent as confirmed by the order in C.M.A. C.S.57/97 and C.M.A. C.S.53/97 dated 29.09.2000 passed by the 1st respondent respectively, and quash the same.
(in both Writ Petitions)
For Petitioner : Mr.D.Kanagasundaram
For Respondents : Ms.Girija (for RR1 & 2)
Ms.T.P.Savitha (for R3)
COMMON ORDER
The prayer sought for in these writ petitions are for a writ of certiorari to call for the records in the impugned award S.C.2/97-98 dt. 10.05.1997 passed by the 2nd respondent as confirmed by the order in C.M.A. C.S.57/97 and C.M.A. C.S.53/97 dated 29.09.2000 passed by the 1st respondent respectively, and quash the same.
2.Since, the issue raised in these writ petitions are common and filed by the same petitioner, these two writ petitions are disposed of by this common order and for the purpose of narration of facts, the averments stated in W.P.No.20013 of 2002 is taken into account.
3.The short facts which are required to be noticed in these writ petitions for disposal of the same are as follows:
The petitioner claimed that he was working as Secretary in the third respondent Society. While so, the second respondent initiated a Surcharge Proceeding in S.C.2/92-93 dated 06.08.1993 against the petitioner and an award was passed.
4.The petitioner preferred an appeal against the said order of Surcharge award of the second respondent before the first respondent in C.M.A. C.S.57 of 1997 and the first respondent also by an order dated 25.11.1995 set aside the order of the second respondent and consequently directed to make fresh enquiry. Subsequently, the second respondent initiated Surcharge proceedings against the petitioner and four others, who were the President and other Office bearers of the third respondent Society under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983 in S.C.2/97-98. Though Surcharge proceedings was initiated, no notice had been served on the petitioner, as the petitioner had been out of station and therefore the notice sent under Section 87, Surcharge proceedings seems to have returned and thereafter, the petitioner states that, it was claimed by the respondents that the notice had been served on the father of the petitioner.
5.Subsequently, when the surcharge proceedings enquiry was conducted, the father of the petitioner had sent a communication to the second respondent stating that since the notice had been served only to him, i.e., father of the petitioner, he had informed that the petitioner had been out of station. Therefore, if an opportunity of appearing is given to him by adjourning the proceedings for sometime, the petitioner would appear and make his defence before the second respondent. However, it was not accepted by the second respondent and he proceeded with the proceedings and concluded by giving a conclusion that the petitioner had been responsible for non-collection of the dues to an extent of Rs.13,488.34/- and therefore directed him to pay the said amount.
6.On the basis of the order passed by the second respondent dated 10.05.1997, the petitioner preferred an appeal in C.M.A.C.S.No.57 of 1997 before the first respondent. Two major grounds were raised by the petitioner before the appellate authority, that first of all, the notice as contemplated under the provisions of the Act had not been served on the petitioner, secondly, the said surcharge proceedings under Section 87 of the Act initiated against the petitioner is barred by limitation. Apart from these prime grounds, other defence had also been taken by the petitioner before the appellate authority i.e., the first respondent. However, the first respondent without considering these defence/grounds raised by the petitioner had ultimately passed an order dated 29.09.2000, wherein the order of the second respondent for surcharge proceedings had been confirmed. Therefore, as against the said orders passed by the second respondent as well as the first respondent dated 10.05.1997 and 29.09.2000, the present writ petition has been filed with the aforesaid prayer.
7.Insofar as in writ petition in W.P.No.20014 of 2002 also, similar surcharge proceedings were initiated, where also the order passed by the second respondent against which an appeal was filed before the first respondent who in turn confirmed the same by an order dated 29.09.2000. Therefore, challenging that order made in S.C.No.1/97-98 dated 10.05.1997 passed by the second respondent as confirmed by the first respondent vide his order in C.M.A. C.S.57/1997 dated 29.09.2000, this writ petition is filed with the aforesaid prayer.
8.The third respondent had filed a common counter affidavit in both writ petitions. The main averments in the counter affidavit of the third respondent is that, the petitioner is a Secretary, who is the Chief Executive of the Society and he is a paid servant. Thereafter between the years 1981-82 and 1985-86, certain amounts, which were due had not been collected by the petitioner as a Secretary and therefore surcharge proceedings under Section 87(1) of the Tamil Nadu Co-operative Societies Act,1983 (hereinafter referred to as Act) had been initiated for which notice was issued on 25.05.1997 in both proceedings on the basis of the enquiry report submitted under Section 81 of the said Act. In the counter, the third respondent has further averred that, after giving sufficient opportunity as prescribed in the said provision, the second respondent passed final order of surcharge against the writ petitioner as detailed below:
Sl.No. Surcharge Proceedings No. Surcharge Amount Rs.
Appeal against Surcharge in CMA Writ Petition No.
1.
1/97-98 Dt.10.05.1997 10619.34 along with interest @ 18% p.a. 53/1997 (Rs.8957.05) 20014 of 02
2. 2/97-98 Dt.10.05.1997 4064.38 along with interest @ 18% p.a. 57/1997 20013 of 02
9.The counter would further state that as against the surcharge proceedings, the petitioner preferred an appeal before the Co-operative Tribunal, Tirunelveli, the first respondent herein. The first respondent also after having considered the merits of the case raised by the petitioner, had ultimately confirmed the surcharge proceedings of the second respondent.
10.With regard to the contention of the petitioner that no opportunity was given to him is concerned, it is made in the counter of the third respondent that, the petitioner was given sufficient opportunity to put forth his defence as contemplated under Section 87(i) of the Act, but he only failed to avail the opportunity given to him by absenting himself in the enquiry conducted by the 2nd respondent. It is further averred in the counter that, a notice to the petitioner was served upon his father on 11.04.1997 i.e. 6 days before the date of hearing i.e.,on 17.04.1997 and it was acknowledged by the father of the petitioner duly attested by the Village Administrative Officer, Senkottai. Hence, nothing prevented the petitioner to attend the enquiry on receipt of the information given by his father well in advance.
11.The counter would further aver that, according to the evidence given by one Committee member, who deposed before the surcharge proceedings, that, the writ petitioner would have returned from abroad on 03.04.1997, since the petitioner and his father had failed to prove any document before the 2nd respondent during enquiry that the petitioner had been in abroad while the enquiry was conducted i.e. On 17.04.1997. It is further quoted by the 2nd respondent that despite an opportunity having been given to the petitioner, he did not choose to appear before the 2nd respondent and no satisfactory reason given or documents were also filed before the 2nd respondent for having absent before the 2nd respondent on the enquiry date and therefore, the second respondent proceeded to conclude the enquiry proceedings.
12.It is further averred in the counter affidavit that, after section 81-enquiry proceedings as well as Section 87-surcharge proceedings, it was concluded that the petitioner was fully responsible for the loss caused under the surcharge proceedings and the responsibility was fixed on the petitioner, who should repay the amount in both the cases. It is further stated in the counter that, the grounds raised by the petitioner before the second respondent, the appellate Court and before this Court, would not stand as due opportunity had been given to him which he only not utilized. Therefore, the said ground that, no opportunity was given to the petitioner, cannot be accepted and therefore the impugned surcharge proceedings as confirmed by the first respondent in the appeal, is liable to be confirmed and the writ petitions are to be dismissed.
13.I have heard Mr.D.Kanagasundaram, learned counsel for the petitioner and Ms.Girija, learned Additional Government Pleader for the 1st and 2nd respondents and Ms.P.Savitha, learned counsel for the 3rd respondent.
14.As has been averred in the affidavit filed in support of these writ petitions, Mr.D.Kanagasundaram, learned counsel for the petitioner would urge once again the two prime grounds viz., no opportunity was given to the petitioner to put forth his case before the second respondent and also the said surcharge proceedings initiated under Section 87 of the Act was time barred. In order to substantiate the said contention, the learned counsel for the petitioner would urge that what has been contemplated under Section 87 of the Act has not been followed by the respondents, especially, when the second respondent had completed the surcharge proceedings, has ultimately the opportunity to the petitioner was denied and only on the strength of the notice being served on the father of the petitioner, they proceeded with the enquiry and concluded the same.
15.The learned counsel for the petitioner would further urge that it is also contemplated under Section 87 of the Act that, whoever the person against whom the surcharge proceedings was initiated before they died, the legal heir have to be impleaded and to him also a notice has to be served and an opportunity of hearing be given. In this case, two out of the five persons against whom surcharge proceedings initiated, died before the enquiry concluded and admittedly the legal heirs never been impleaded. Had the legal heirs been impleaded, the direction of the surcharge proceedings would have taken a different turn and fixing of responsibility simply on the petitioner would have been avoided. However, for the reasons best known to him, the 2nd respondent have not chosen to implead the legal heirs/Committee members or President of the 3rd respondent Society, which is also a fatal to the case.
16.However, Ms.Girija, the learned Additional Government Pleader appearing for the 1st and 2nd respondents as well as the learned counsel appearing for the 3rd respondent would submit that, as per Section 87 of the Act, due opportunity had been given to the petitioner by specifically serving notice to the family member, who is none other than the father of the petitioner and the father also had admitted that he has received the notice from the second respondent. The learned counsel for the respondents would submit that, on receipt of notice, the father had also communicated to the second respondent that the petitioner had been put on knowledge about the surcharge proceedings.
17.Once the surcharge proceedings had been initiated and notice had been served on the close family member of the petitioner and the petitioner, through him had the knowledge about the proceedings, he cannot escape from the clutches of law by giving lame excuse that he cannot come for the enquiry proceedings on the pretext that he has been out of station. Moreover, the learned counsel for the respondent would further submit that, in view of the second provisio to Section 87 of the Act, the surcharge proceedings once initiated should have been completed within six months. If that being the case for these kind of lame excuses, if the proceedings is adjourned endlessly, the second respondent would have not completed the proceedings within the mandatory six months period and once the six months period is lapsed, the entire proceedings would get lapsed and inorder to avoid delay, the second respondent proceeded and concluded the surcharge proceedings as inspite of due opportunity since has been given to the petitioner, he has not chosen to appear before the second respondent. Therefore, the learned counsels for the respondents would make a submission that the grounds raised by the petitioner on the pretext that he has not been given sufficient opportunity is denied and is not acceptable.
18. Insofar as the other ground of limitation is concerned, the learned counsels pointed out that first proviso to Section 87 gives seven years period from the date of any act or omission referred to in the Subsection 1 of 87. Here in this case, the action is taken within the seven years period, the question of violation of limitation prescribed in the Act does not arise. Therefore, the ground of limitation would not be sustained.
19.By making these submissions, the learned counsel for the respondents would submit that the two grounds raised by the petitioners since were not available or not acceptable on that ground, no interference is required on the impugned proceedings of the second respondent, as confirmed by the first respondent. Hence, the writ petition is to be dismissed.
20. I have considered the rival submissions made on either side. The first contention raised by the learned counsel for the petitioner is that the petitioner has not been given an opportunity. In this regard, he has relied upon Section 87(1) of the Act, which is extracted here under:
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 under section 83 or the winding-up of a society, it appears that any person who is or was entrusted with the organization 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 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 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 he 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.
21.On careful reading of section 87(1) of the Act, it discloses the following words:
.....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......
22.Section 87 of the Act contemplates that a reasonable opportunity be given to the person concerned. Herein, in this case, no doubt, the petitioner is the person concerned. It is the case of the respondents, that notice had been served only on the father of the petitioner. Therefore, no direct notice had been served on the petitioner. Assuming that the notice served on the petitioner's father, through which the petitioner had the knowledge of the surcharge proceedings since as claimed by the petitioner, the petitioner had been out of station and it is also claimed that he had been in abroad. His father on receipt of the notice of the second respondent had made a written request to the second respondent that the petitioner had been out of station and therefore, some more time may be given to the petitioner for the Section 87 Surcharge Proceedings, so that he can appear before the second respondent and make his defence.
23.Though, such a request has come from the father of the petitioner, who alone had received the notice from the second respondent, the second respondent has proceeded to complete the enquiry by rejecting the said request made by the petitioner's father on the ground that surcharge proceedings once initiated should be completed within six months from the date of initiation and if such time is given, by diverting or adjourning the proceedings on the request of the petitioner, the six months limitation period within which it cannot be concluded would be lapsed and therefore on that ground the said request made by the father of the petitioner had been rejected.
24.In this regard, the relevant portion of the order passed by the second respondent is extracted here under:
nkw;fz;lth;fspd; thpir vz;/2 jpU/vd;/ey;iyah thpir vz;/4. jpU/tPugj;jpud; Mfpa ,UtUk; mwptpg;gpid 24/3/97 md;W neuoahfg; bgw;Wf;bfhz;ldh;/ thpir vz;/1 jpU/vk;/nf/fh$hkifjPd; ,we;Jtpl;lhh; vd;Wk;. thpir vz;/3k;. 5k;. btspa{h; brd;Wtpl;ldh; vd;Wk; bjhptpj;J mt;twptpg;g[ jghy; Jiwapduhy; jpUg;gg;gl;lJ/ vdnt. mt;twpg;g[ efy; thpir vz;/3d; tPl;Lf;fjtpy; xl;o rhh;g[ bra;ag;gl;lJld; thpir vz;/3d; tPl;Lf;fjtpy; xl;o rhh;g[ bra;ag;gl;lJld; thpir vz;.5d; je;ijahhplk; nehph; rhh;g[ bra;ag;gl;lJ/ thpir vz; 1 ,we;Jtpl;lhh; vd;w tpguk; nkw;go r';fr; brayhshpd; 19/3/97 njjpa fojk; K:ykhft[k; cWjp bra;ag;gl;lJ/ mt;twptpg;gpw;fhd vGj;JK:ykhd tpsf;fj;ij thpir vz;/2 jpU/vd;/ey;iyah. thpir vz;/4. jpU/tp/tPugj;jpud; Mfpa ,UtUk; 17/4/97 md;W rkh;gpj;Js;sdh;/ nkw;fz;l jz;l tHf;F bjhlh;ghf 17/4/97 md;W bjd;fhrp ruf Jizg;gjpthsh; mYtyfj;jpy; eilbgw;w neh;Kf tprhuizf;F thpir vz;/2 jpU/vd;/ey;iyah. thpir vz;4. jpU/tp/tPugj;jpud; Mfpa ,UtUk; nehpy; M$uhfp rhl;rpakspj;jdh;/ thir vz;/3. jpU/ v!;/vk;/$pd;dh. thpir vz;/5. jpU/v!;/Kfk;kJ eapdhh; Mfpa ,UtUk; tprhuizf;F M$uhftpy;iy/ thpir vz;/5. jpU/v!;/Kfk;kJ eapdhh; jfg;gdhh;/ jdJ 17/4/97 njjpa fojj;jpy; jdJ kfd; jpU/v!;/Kfk;kJ eapdhh; btspa{hpypUe;J jpUk;ghjjhy;. neuo tprhuizf;F M$uhf Koatpy;iy vd;Wk;. nkw;goahh; te;j gpd;g[ nehpy; tprhhpf;f kWtha;jh mspf;f ntz;Lbkd;Wk; nfl;Lf;bfhz;lhh;/ Tl;Lwt[ tHf;FfSf;Fhd rpwg;g[ jPh;g;ghak; jpUbey;ntyp tpfpj;Js;s fhyf;bfLtpw;Fs; ,t;tHf;F Kot[ fl;lg;glntz;oajd; mtrpa mtruj;ijf; fUj;jpy;bfhz;L md;dhhpd; nfhhpf;if kWf;fg;gl;lJ/ vdnt thpir vz;/3k;. 5k;. vGj;J K:ykhd tpsf;fk; vJt[k; mspf;fghkYk;. neuo tprhuizf;F M$uhfhkYk; ,Uf;ifapnyna Mtz';fspd; mog;gilapy; ,t;tHf;f Kot[ fl;lg;gl;L Miz tH';fg;gLfpwJ/
25.On perusal of the said findings given by the second respondent, it has become clear that the said request made by the father of the petitioner had been denied on the ground that since the surcharge proceedings should be completed within the time frame fixed by the second respondent i.e. Six months period, the said request of the father of the petitioner was rejected.
26.However, if we go through Section 87(1) of the Act, especially under second proviso, which had already been extracted herein above, it discloses that, action commenced under Subsection 1 of 87 should 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 extended period or periods shall not exceed six months in the aggregate. Therefore, it is very clear that, though six months period as prescribed under the second proviso of Section 87 can reasonably be contended by the next higher authority periodically or in a whole, but, that extended period shall not go beyond six months. Therefore, apart from the original six months period, further six months period can be extended for completion of the Section 87 surcharge proceedings as per second proviso of Section 87(1) of the Act. Here in the case in hand, there is no whisper to show that the second respondent had taken any attempt to seek for extension of time beyond the six months time in view of the facts and circumstances that the petitioner, who was the fifth person in the surcharge proceedings had been out of station and had been in abroad and therefore on that context when specific request had been received from the father of the petitioner, the second respondent proceeded with the enquiry and completed the proceedings. Therefore, the said reasons cited by the second respondent for continuing the enquiry on the ground that the petitioner had been out of station, is not justifiable and therefore, the reasons cited for such denial of opportunity to be given to the petitioner, in the opinion of this Court, may not give any sense either within the provisio of Section 87(1) or under the main provision of Section 87.
27.If reasonable opportunity has been given to the petitioner and inspite of such sufficient opportunity, he had not chosen to appear even in the extended six months period, under second proviso of Section 87(1), there would be every justification on the part of the second respondent to complete such proceedings. Here in the case on hand, no such attempt had been taken for showing six months extension. The main requirement of Section 87(1) i.e., giving opportunity to the concerned person is denied in this case. Therefore, it is clear that no reasonable opportunity has been given as contemplated under Section 87(1) of the Act before completing the surcharge proceedings by the second respondent. Therefore, such surcharge is vitiated on the ground that no reasonable opportunity was given under Section 87(1) of the Act and the subsequent confirmation made by the first respondent also would clearly be vitiated and such order is to be interfered with.
28.In the result, these writ petitions are allowed. The impugned order in S.C.2/97-98 dt. 10.05.1997 passed by the 2nd respondent, as confirmed by the 1st respondent by an order dated 29.09.2000 in C.M.A. C.S.57/97 and C.M.A. C.S.53/97 are quashed. However, it is open to the respondents to initiate fresh Section 87 proceedings. They can do so by serving notice to the petitioner strictly in accordance with the provisions of Section 87 of the Act. Since all these years, this issue is pending before this Court, the limitation point as contemplated under Section 87 of the Act or any other provision made under the said Act would not stand in the way. No costs. Consequently, connected miscellaneous petitions are also closed.
18.12.2017 Index :Yes/No Internet:Yes/No rm To
1.The Special Tribunal for Co-operative cases, (Principal District Judge) Tirunelveli.
2.The Deputy Registrar of Co-operative Societies, Tenkasi.
3. The President, 117 Senkottai Multipurpose Co-operative Society, Senkottai.
R.SURESH KUMAR,J.
rm W.P.Nos.20013 & 20014 of 2002 and W.P.M.P.Nos.27622 & 27623 of 2002 18.12.2017