Madras High Court
Durai Munusamy vs The Deputy Registrar Of Co-Op. ... on 3 September, 2014
Author: B.Rajendran
Bench: B.Rajendran
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 03.09.2014 Coram The Honourable Mr.Justice B.RAJENDRAN W.P. Nos. 8967 of 2013, 8968 of 2013, 8969 of 2013, 8977 of 2013, 12229 of 2013, 12231 of 2013, 12234 of 2013 and 12314 of 2013 Durai Munusamy ...Petitioner in all WPs. Vs. 1.The Deputy Registrar of Co-op. Societies 4th Cross, Co-op.Colony Krishnagiri-635 001. 2.The S.495 Krishnagiri TK Agricultural Producers Co-op. Marketing Society Limited Poochampalli Post Krishnagiri-635 206 by its Special Officer. 3.The Tribunal of Co-op. Cases (Principal District Judge) Krishnagiri. ...Respondents in all WPs. Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorari, to call for the records relating to the order dated 17.11.2012 of the 3rd respondent made in C.M.A.(Co-op.Society) Nos.47, 46, 48, 50, 43, 49, 44, 45 of 2005 along with the Surcharge Order Nos.07/2000/Sa Pa, 06/2000/Sa Pa, 08/2000/Sa Pa, 10/2000/Sa Pa, 03/2000/Sa Pa, 09/2000/Sa Pa, 04/2000/Sa Pa, 05/2000/Sa Pa, dated 20.07.2004, 30.07.2004, 30.07.2004, 30.07.2004, 20.07.2004, 30.07.2004, 20.07.2004, 30.07.2004, of the 1st respondent, quash all these orders insofar as the petitioner is concerned. For Petitioners : Mr.S.Venkataraman in all WPs. For Respondents : Mr.D.Venkatachalam in all WPs. Government Advocate for R.1 Mr.P.P.Shanmugasundaram for R.2 COMMON ORDER
Since the issue involved in all these Writ Petitions is one and the same, all these Writ Petitions are taken up together and disposed of by this common order.
2. Writ Petitions are filed seeking to quash the orders passed by the third respondent on 17.11.2012 in C.M.A.(Co-op.Society) Nos.47, 46, 48, 50, 43, 49, 44, 45 of 2005 along with the Surcharge Order Nos.07/2000/Sa Pa, 06/2000/Sa Pa, 08/2000/Sa Pa, 10/2000/Sa Pa, 03/2000/Sa Pa, 09/2000/Sa Pa, 04/2000/Sa Pa, 05/2000/Sa Pa, dated 20.07.2004, 30.07.2004, 30.07.2004, 30.07.2004, 20.07.2004, 30.07.2004, 20.07.2004, 30.07.2004, of the 1st respondent, insofar as the petitioner is concerned.
3. The facts of the case in a nut-shell are as follows: The Society is dealing in sale of cotton produce in open auction conducted at Poochampalli and Krishnagiri Units. The petitioner was working as Secretary in the second respondent Society from 28.12.1995 to 12.06.1997. The petitioner was entrusted with the work of selling cotton bags to the highest bidder. While so, an enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 (for short, The Act), came to be ordered against the petitioner and others in respect of sale of cotton. Based on the Enquiry Report, surcharge proceedings was initiated by the first respondent under Section 87 of the Act and the petitioner was held liable for the loss and he was directed to compensate the loss. Aggrieved against the same, the petitioner has preferred appeals in C.M.A.(Co-op.Society) Nos.47, 46, 48, 50, 43, 49, 44, 45 of 2005 and the third respondent/Tribunal has set aside the orders of the first respondent. Aggrieved against the same, the Society preferred Writ Petitions and on 11.10.2010, this Court set aside the orders of the Tribunal and remanded the matters to dispose of on merits. Accordingly, the Tribunal passed fresh orders upholding the Surcharge Orders of the first respondent. Aggrieved against the same, the petitioner filed Writ Petition Nos.27310 to 27317 of 2011 before this Court and this Court on 13.03.2012 set aside the orders and remanded the matters back to the Tribunal to pass fresh order on merits. The Tribunal has passed fresh orders on the appeals on 17.11.2012 once again upholding the Surcharge Orders of the first respondent and holding that the petitioner is also jointly liable and responsible. Aggrieved against the same, the petitioner has filed these Writ Petitions.
4. The main ground of attack made by the learned counsel appearing for the petitioner is that an enquiry under Section 81 of the Act was conducted against the petitioner and others. Thereafter, based on the Enquiry Report, surcharge proceedings came to be initiated by the first respondent under Section 87 of the Act, treating as if the Enquiry Report under Section 81 of the Act is the gospel truth and it is the final one and no body could raise anything against the Enquiry Report under Section 81. Further, he would contend that after holding a farce enquiry, the surcharge orders have been passed by the first respondent. He would further contend that earlier, the petitioner challenged the surcharge orders and the matters twice came up before this Court and they were remanded back and finally after the last remittance on the ground that the petitioner should be given an opportunity and also report should be considered in detail, the present impugned orders came to be passed by the Tribunal/ third respondent upholding the surcharge orders passed by the first respondent. The learned counsel would submit that the impugned orders have been passed in a cryptic manner, without any discussion, and without taking into account the legal issues and only on the basis of Enquiry Report under Section 81 of the Act and by mere extraction of Bylaws and therefore, the impugned orders are vitiated and they are liable to be set aside. The learned counsel would further contend that neither charges were framed as contemplated under Section 87 of the Act nor any opportunity was given to the petitioner, therefore, the impugned orders passed by the third respondent is wrong, hence, the present Writ Petitions.
5. A counter has been filed by the second respondent in all the Writ Petitions. As per the counter, the petitioner has allowed the delivery of cotton to the highest bidder without collecting payments. As per the Auction Disciplinary Rules enumerated in Rule 6(2) of the Bylaw of the second respondent Society, the petitioner is bound to conduct the auction proceedings. Rule 6(2) of the Bylaw specifically mandates that credit should be provided only to the merchants, who had been approved by the Board of Directors of the Society. In fact, the practice of the Society at the relevant point of time is that the person entrusted with the work of selling cotton bags to the highest bidder should ensure receipt of payment to the Society by the highest bidder and only after receipt of such payment, the delivery of cotton to the highest bidder should be allowed. In fact, the petitioner, at the relevant point of time was entrusted with the work of selling cotton bags to the highest bidder, but, he has violated the Bylaw and caused loss to the Society and therefore, he is liable for the loss. According to the respondents, after enquiry under Section 81 of the Act, surcharge proceedings came to be initiated under Section 87 of the Act. The petitioner also contested and participated in the proceedings and thereafter, the first respondent found the petitioner was responsible for the loss and therefore, he directed the petitioner to compensate the loss to the second respondent Society. Aggrieved against which, the petitioner has preferred appeals and the Tribunal has set aside the orders of the first respondent. As against which, the Society preferred Writ Petitions and on 11.10.2010, this Court set aside the orders of the Tribunal and remanded the matters to dispose of on merits. Accordingly, the Tribunal passed fresh order upholding the surcharge orders of the first respondent. Aggrieved against the same, the petitioner filed Writ Petition Nos.27310 to 27317 of 2011 before this Court and this Court on 13.03.2012 set aside the orders and remanded the matters back to the Tribunal to pass order on merits. The Tribunal has passed fresh orders on 17.11.2012 once again upholding the surcharge orders of the first respondent and holding the petitioner jointly liable and responsible, against which, the present Writ Petitions were filed. In the counter, it is further averred that the present Writ Petitions were also in tune with the earlier Writ Petitions and there is nothing new. It is further stated that the third respondent/Tribunal has taken all care and diligence and ultimately has passed detailed orders and the grounds raised in appeals do not stand to scrutiny.
6. Heard both sides.
7. The main contention of the learned counsel appearing for the petitioner is that there is neither any show cause notice issued nor charges framed, further, there is also no enquiry conducted as contemplated under Section 87 of the Act, therefore, the impugned orders are vitiated, being not in consonance with letter and spirit of Section 87 of the Act. He would further submit that no reasonable opportunity was given to the petitioner and by merely extracting Bylaws and based on the Enquiry Report under Section 81 of the Act, the impugned orders came to be passed, which is not proper and therefore, the impugned orders are vitiated and liable to te set aside. The learned counsel would rely on the decision of the Andhra Pradesh High Court reported in 2003 AIHC 19, Lankala Koderu Co-operative Rural Bank Limited vs. Ungarala Pullaiah Naidu, for the proposition that the enquiry conducted without examining the witnesses, verification of records and affording an opportunity, is not proper. Then, he would rely on an unreported judgment of this Court in W.P.No.23373 of 2004, dated 13.03.2012, for the proposition that if the conclusion arrived at is found to be perverse i.e., based on no evidence, then, it is for this Court to interfere with the said award or in the alternative, if the award has been made on some evidence, this Court will not interfere with the same inasmuch as the domain of re-appreciation of evidence is not with this Court in the Writ Petition. Based on this, the Court has come to a conclusion that there is no evidence and therefore, the matter was remitted back only insofar as it relates to the petitioner therein alone is concerned. Then, he would rely on an unreported judgment of this Court in W.P.(MD) No.3615 of 2011, dated 04.08.2014, wherein this Court has held that when there is non-application of mind on the part of the Tribunal, the Court can set aside the order. Finding that the order is a non-speaking order and it is devoid of any discussion on the crucial points raised by the petitioner in the appeal, this Court has set aside the order. He would rely on yet another unreported judgment of this Court in W.P.(MD) No.14150 of 2011, dated 21.07.2014, for the proposition that when charge is dropped against the Special Officer, further order cannot be passed.
8. Per contra, Mr.D.Venkatachalam, learned Government Advocate appearing for the first respondent referring to the latest judgment of this Court reported in CDJ 2014 MHC 2475, D.Sathyamoorthy vs. The Deputy Registrar of Co-operative Societies & Others, would contend that the attack made in respect of Enquiry under Section 81 of the Act that the petitioner was not given an opportunity to cross-examine or examine the witnesses during the course of proceedings under Section 81 cannot be accepted. He would further contend that in the said judgment, the learned Single Judge has referred to the Division Bench judgment of this Court reported in 2008(8) MLJ 231, S.V.K.Sahasraman vs. The Deputy Registrar of Co-operative Societies and others, and has ultimately held that Section 81 enquiry cannot be compared to an enquiry against any individual employee. When an enquiry under Section 81 is made, no oath is administered on any witness, therefore, the question of cross-examination does not arise. It is only an enquiry which can be utilized for follow up action and on such enquiry under Section 81, various other steps may be taken, viz., surcharge proceedings can be initiated under Section 87 and steps can be also taken for initiating criminal proceedings. Relying on these decisions, the learned counsel would pray for the dismissal of these Writ Petitions.
9. Learned counsel appearing for the second respondent would point out that this is the third round of litigation. In fact, in the present impugned orders, the third respondent has taken all care and diligence and he has elaborately and detailedly dealt with the issue, by scrutinizing all the records placed on either side and has passed the impugned orders, which are correct and it needs no interference at the hands of this Court.
10. The short point for consideration in these Writ Petitions is, as to whether the impugned orders passed by the Appellate Authority is a speaking order or not.
11. On a careful reading of the impugned orders, it is seen that the third respondent has considered every aspects in detail and also framed a very specific point for consideration, as to whether proper enquiry has been conducted under Section 87 of the Act. He has clearly extracted Rule 6(2) of the Bylaw, which specifically states the duty of the Secretary. The duty of the Secretary very clearly specifies that he should ensure receipt of payment to the Society by the highest bidder and only after receipt of such payment, he should allow the delivery of cotton to the highest bidder. In fact, Bylaw 42 (6) (7) and (8) specifically states that the Secretary should not release the goods without collecting amount, but, violating the Bylaw, the petitioner allowed the delivery of cotton to the highest bidder without collecting payments. Even as per Auction Disciplinary Rule 5 of the Bylaw, the petitioner has to fix the credit limit based on the purchaser's property value and thereafter only, he has to allow the delivery of cotton only after collecting the amount. When the petitioner, who was entrusted with the work of selling cotton bags to the highest bidder, has not followed the basic duty of his employment, after conducting proper enquiry, the third respondent has clearly stated that it is nothing but violation of condition of his own employment. In fact, on a perusal of Bylaw 43, it is seen that it deals with the duties and responsibilities of Secretary. In Bylaw 43(4), it has been very specifically stated that the Secretary may issue temporary advances to the members not exceeding the limits prescribed by the Bylaws or the Board from time to time on the market value of the produce brought in for sale and recovery such advances from the sale proceeds. Such advances should be got ratified by the board at the earliest opportunity. In fact, in Bylaw 43(10), it has been very specifically stated that it shall be competent for the paid Secretary or the Ware House Officer to release the stock sold only on cash payment. When there are specific clauses in Bylaw, the petitioner, who is the Secretary, has neither chosen to collect the amount before allowing the delivery of cotton to the highest bidder nor he has taken the concurrence of the Board of Directors to fix the maximum credit limit, but, he has allowed the delivery of cotton without collecting amount and therefore, the third respondent has found that the petitioner is liable for the loss.
12. Insofar as the enquiry under Section 87 of the Act is concerned, the authority has given a clear finding that there was an enquiry initiated under Section 87 of the Act even on 23.05.2000, but, it was not completed before 22.11.2000, therefore, an extension of time was sought for and thereafter only, the final conclusion was arrived at on 22.02.2001 and hence, the enquiry itself was conducted within the time limit, therefore, the present allegation that no enquiry was conducted at all cannot be accepted. In fact, this has been very clearly spelt out in the impugned orders. In fact, the third respondent has given reasons as to how the loss amount has been arrived out and why the liability has been fixed on the petitioner. Therefore, on a very reading of the impugned orders, it is clear that the third respondent has applied his mind and passed detailed orders.
13. Now, coming to the question of law, learned counsel for the petitioner has relied upon the rulings cited supra. In fact, in the unreported judgment relied on by the petitioner in W.P.No.23373 of 2004, dated 13.03.2012, the learned Judge has very clearly pointed out that in case the Court has directed the respondents 1 to 2 therein to produce the original records under Section 87(4) of the Act, from which, it was found that there was no oral evidence recorded on the side of the second respondent therein, the matter can be remitted back. Subsequently, as it is found that it is the case of no evidence, the matter was remitted back to the lower Court. The facts in that case will not be applicable to the facts of the present cases, as it is not the case of the petitioner that no enquiry was conducted at all, whereas, in the impugned orders, a clear mention has been made as to the date when the enquiry commenced, extension of time and participation of the petitioner. Further, in the impugned orders, it is clearly mentioned that in the surcharge proceedings, the petitioner contested and participated and thereafter only, the first respondent found that the petitioner is responsible for the loss. As the petitioner was held liable for the loss, he preferred appeals and the Tribunal has set aside the orders of the first respondent. As against which, the Society preferred Writ Petitions and on 11.10.2010, this Court set aside the orders of the Tribunal and remanded the matters to dispose of on merits. Accordingly, the Tribunal passed fresh orders upholding the surcharge orders of the first respondent. Aggrieved against the same, the petitioner filed Writ Petition Nos.27310 to 27317 of 2011 before this Court and this Court on 13.03.2012 set aside the orders and remanded the matters back to the Tribunal to pass order on merits. Thereafter, the Tribunal has passed fresh orders on 17.11.2012 once again upholding the surcharge orders of the first respondent and holding the petitioner is also jointly liable and responsible for the loss.
14. As regards the unreported judgment of this Court in W.P.(MD) No.3615 of 2011, dated 04.08.2014, relied upon by the petitioner, this Court has come to a conclusion that there is non-application of mind on the part of the Tribunal. Ultimately, the Court set aside the order on the ground of non-speaking order, as it is found that the order is devoid of any discussion on the crucial points raised by the petitioner in the appeal. Whereas, in the case on hand, in the impugned orders, the third respondent has discussed in detail point by point and thereafter passed the impugned orders and therefore, that judgment will not apply to the facts of the present case.
15. Now, coming to the latest judgment relied upon by the learned Government Advocate reported in CDJ 2014 MHC 2475, D.Sathyamoorthy vs. The Deputy Registrar of Co-operative Societies & Others, wherein, a reference was made to the Division Bench judgment of this Court in 2008(8) MLJ 231, S.V.K.Sahasraman vs. The Deputy Registrar of Co-operative Societies and others, wherein it was held that of course definitely Section 81 Enquiry is only a fact finding enquiry, but, mere not giving an opportunity to cross-examine under Section 81 cannot be questioned, when the surcharge proceedings under Section 87 has been conducted properly and thereafter, the authority has come to a clear conclusion. In the case on hand also, the surcharge proceedings under Section 87 has been conducted properly and thereafter only, it is found out that the petitioner is also jointly liable for the loss and he was directed to compensate for the loss caused to the second respondent Society, which cannot be found fault with.
16. For the foregoing discussions, I do not find any reason to interfere with the impugned orders. These Writ Petitions are dismissed. No costs.
03.09.2014 paa Index: Yes/No Internet: Yes/No To
1.The Deputy Registrar of Co-op. Societies 4th Cross, Co-op.Colony Krishnagiri-635 001.
2.The Special Officer S.495 Krishnagiri TK Agricultural Producers Co-op. Marketing Society Limited Poochampalli Post Krishnagiri-635 206
3.The Tribunal of Co-op. Cases (Principal District Judge), Krishnagiri.
B.RAJENDRAN,J paa W.P. Nos. 8967 of 2013, 8968 of 2013, 8969 of 2013, 8977 of 2013, 12229 of 2013, 12231 of 2013, 12234 of 2013 and 12314 of 2013 03.09.2014