IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :10.09.2008
CORAM:
THE HONOURABLE MR.JUSTICE S.TAMILVANAN
Civil Revision Petition (NPD) No.1457 of 2002
Udumalpet Marketing Co-operative Society
Represented by Special Officer
Dharapuram Road,
Udumalpet 642 126. .. Petitioner
Vs.
1. S.Natarajan
Co-operative Sub-Registrar
Extension Officer (Co-operation)
Panchayat Union Office,
Anaimalai, Pollachi Taluk.
2. Deputy Registrar of Co-operative Societies
Pollachi. .. Respondents
Civil Revision Petition filed against the Judgment and Decree, dated 09.07.2001 made in Co-operative C.M.A.No.82 of 1998 on the file of the Co-operative Tribunal / Principal District Court, Coimbatore, whereby reversing the order passed by the Deputy Registrar of Co-operative Societies, Pollachi in Na.Ka.No.16785 of 1989/Sa.Pa, dated 13.07.1990.
For petitioner : Mr.N.Manokaran
For respondents : Mr.K.Premkumar for R1
Mr.V.Srikanth, Spl.G.P for R2
O R D E R
This Civil Revision Petition has been preferred against the Judgment and Decree, dated 09.07.2001 made in Co-operative C.M.A.No.82 of 1998 on the file of the Principal District Court, Coimbatore, reversing the order passed by the Deputy Registrar of Co-operative Societies, Pollachi in Na.Ka.No.16785 of 1989/Sa.Pa, dated 13.07.1990.
2. The second respondent herein, Deputy Registrar of Co-operative Societies, Pollachi, passed an order in Na.Ka.No.16785 of 1989/Sa.Pa, dated 13.07.1990 under Section 87 (1) of the Tamil Nadu Co-operative Societies Act, 1983, hereinafter referred to as ” the Act “. In the said order, the first respondent has been stated as respondent, wherein the second respondent, by order, dated 13.07.1990 directed the first respondent, S.Natarajan, Co-operative Sub-Registrar, Extension Officer (Co-operation), Pollachi to pay a sum of Rs.4,73,420.53/- within 15 days to Udumalpet Marketing Co-operative Society, the revision petitioner herein, based on the enquiry and finding of the proceedings of the second respondent. Aggrieved by which, the first respondent filed appeal in Co-operative C.M.A.No.82/98 before the Principal District Judge (Co-operative Tribunal), Coimbatore. The Principal District Judge of Coimbatore, by Judgment and Decree, dated 09.07.2001 allowed the appeal in favour of the first respondent herein and set aside the impugned order, dated 13.07.1990 passed by the second respondent herein. This Civil Revision Petition has been filed by the Udumalpet Marketing Co-operative Society, the employer, second respondent in the Civil Miscellaneous Appeal.
3. In the grounds of appeal, the revision petitioner herein has stated that the Co-operative Tribunal has failed to note that the first respondent herein has caused a heavy financial loss to the petitioner society to the tune of Rs.4,73,420.53/-. Mr.N.Manokaran, learned counsel appearing for the revision petitioner submitted that the said loss was caused only due to the wilful and neglected attitude of the first respondent, who had been the Special Officer of the Society. The main allegation raised by the revision petitioner is that the first respondent has purposely failed to take legal action against the persons, in respect of huge amount due and payable to the society and thereby he allowed them to become time-barred debts, however, that was not considered by the Co-operative Tribunal.
4. Per contra, Mr.K.Premkumar, learned counsel appearing for the first respondent submitted that there was no negligence on the part of the first respondent, so as to direct him to pay compensation or make good the loss incurred by the society. Learned counsel appearing for the first respondent drew the attention of this Court to the impugned Judgment delivered by the court below and submitted that there is no infirmity or material irregularity in the impugned Judgment rendered by the court below, in order to maintain the revision petition.
5. In the order, dated 13.07.1990, the second respondent herein has classified four items of loss incurred by the Udumalpet Marketing Co-operative Society, the revision petitioner herein. The first item is towards damaged stock of six items of the society to the value of Rs.79,932.77/-. The second item is the alleged spoiled seeds not being sold, without obtaining administrative sanction to the tune of Rs.37,393.45/-, however, the shortage and damage have not been separately stated. The third item is that the first respondent allegedly failed to recover the dues from various persons to the tune of Rs.18,618/-, due to which, according to the revision petitioner, the society incurred the said loss. The fourth item is that under the scheme of seed development of the society, there was shortage to the tune of Rs.3,37,434.97/-. The main allegation is that the Special Officer, first respondent has not taken any steps to recover the aforesaid amount from various persons. On the above charges, a Memorandum, dated 14.07.1989 was issued to the first respondent to submit his explanation within 15 days from the date of receipt of the Memorandum.
6. As per the order, dated 13.07.1990, the first respondent submitted his reply that he had been the Special Officer of Udumalpet Marketing Co-operative Society from 21.08.1985 to 20.08.1989 and according to him, during the four year period, there was no stock of the material without sale, he has also denied the shortage of stock, alleged in the Memorandum and his liability. As per the order, the second respondent directed the first respondent to pay Rs.4,73,420.53/- to the revision petitioner within 15 days and 60 days time was granted for preferring an appeal.
7. The Co-operative Tribunal, considering the oral and documentary evidence and the arguments of both sides has held that the first respondent / appellant was not at all liable to pay Rs.79,932.77/- towards the first item stated is the Memorandum. As far as the second item is concerned, it relates to no-selling of seeds being spoiled without obtaining administrative sanction to the tune of Rs.37,393.45/-. The Tribunal has found that there is no classification either in the charge or in the order, as to what was the actual loss caused to the society on each count and it was not known for what period the action was taken. In the absence of evidence to decide the same, the Tribunal held that the finding of the second respondent herein, fixing the liability on the first respondent could not be affirmed.
8. As per the findings of the Tribunal, item 3 and 4 in the Memorandum are not supported by any documentary evidence and the order passed by the second respondent herein was also vague. The Tribunal has further held that the mandatory provision under Section 87 (1) has not been complied with and held that the first respondent / appellant was not responsible for the loss, said to have been sustained by the revision petitioner herein by his wilful and negligent act and accordingly, the appeal preferred by the first respondent was allowed and the order, dated 13.07.1990 passed by the second respondent was set aside.
9. Mr.N.Manokaran, learned counsel appearing for the revision petitioner submitted that the Tribunal has failed to note that as per the Co-operative Societies Act, the first respondent is responsible for the loss sustained by the society, hence, such a proceedings were rightly initiated against him. He has further contended that the first respondent herein has caused financial loss to the society for a total sum of Rs.4,73,420.53/-. According to him, the first respondent has purposely failed to take legal action in respect of huge amount due from various parties to the society and thereby he has allowed them to become time-barred debts. With the above grounds, learned counsel for the petitioner pleaded for allowing this Civil Revision Petition.
10. In this revision, this Court has to consider whether the first respondent herein is liable to pay the amount, as held by the second respondent, on account of the loss caused to the revision petitioner / Co-operative Society, due to the wilful negligence of the first respondent herein. The relevant period for fixing the liability on the first respondent is between 21.08.1985 and 20.08.1989.
11. It was contended by the revision petitioner that based on the irregularity pointed out in the audit report, action was taken against the first respondent to recover a sum of Rs.4,73,420.53/-, under Section 87 (1) of the Tamil Nadu Co-operative Societies Act, 1983. Section 87 (1) of the said Act reads as follows :
“87(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 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 wilful negligence or has made any payment which is not in accordance with this Act, the Rules or the bye-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, liquidatory 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 the 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, mis-application of funds, fraudulent retainer, breach of trust or wilful negligence or payments which are not in accordance with this Act, the Rules or the bye-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.”
12. It is clear that there is no direct allegation of misappropriation against the first respondent herein. As per the order passed by the second respondent, certain irregularities were noticed, hence, enquiry was ordered under Section 81 of the Co-operative Societies Act. As per the finding of the second respondent, there was wilful negligence on the part of the Special Officer, the first respondent herein, due to which the petitioner society incurred loss, hence, as contemplated under Section 87 of the Tamil Nadu Co-operative Societies Act, the first respondent is liable to pay the amount.
13. The Tribunal, considering the evidence available on record and arguments advanced by both sides, held that there was no proper enquiry for fixing the liability, in order to hold that the first respondent alone was responsible for the loss sustained by the society by his negligence. As per the findings of the court below, the negligence committed by the predecessors in office of the first respondent has not been considered by the second respondent. On a perusal of the materials available on record, I am of the view to concur the finding of the Tribunal, with regard to the first item of the charge available in the order of the second respondent.
14. As held by the Tribunal, there is no supporting evidence or document to fix the liability on the first respondent. The enquiry had commenced against the first respondent by issuing show-cause notice on 15.07.1989, however, the deficiency in the assets of the society is said to have caused in the year 1976-77, 1977-78 and therefore, so far as the sum of Rs.24,681.82/-, specified in the order of second respondent is concerned, it is hit by the first proviso of Section 87 of the Act. Similarly, the second respondent has held that the first respondent is responsible for the loss in procuring seeds to an extent of Rs.9868.75/- for which, the Tribunal has held that from the order of the second respondent, it could not see for which period, the loss occurred to the society is stated. In the absence of relevant materials, only on assumption, the enquiry officer fixed the liability on the first respondent. In the revision, the learned counsel appearing for the revision petitioner could not convince the court, in order to establish anything to fix the liability on the first respondent, based on evidence and materials.
15. The second respondent held that the first respondent is responsible for not taking action against the persons for the loss, said to have incurred by the petitioner-society, however, as held by the Tribunal, the period has not been specifically mentioned and there is no evidence to show that there was any wilful negligence on the part of the first respondent, so as to make him liable and recover the amount from the first respondent.
16. The Co-operative Tribunal has discussed all relevant aspects, relating to the appeal in detail and passed a comprehensive Judgment, whereby held that the second respondent has not conducted the enquiry properly, as contemplated under Section 87 second proviso of the Act. The alleged liability on the first respondent has not been established by way of acceptable evidence, under Section 87 (1) of the Tamil Nadu Co-operative Societies Act, 1983.
17. Considering the impugned Judgment, based on the materials available on record and the arguments advanced by both the learned counsel, I am of the view that the order, dated 13.07.1990 passed by the second respondent against the first respondent is not based on any acceptable evidence, as per Section 87 (1) of the Act, which is not legally sustainable. I could find no error or infirmity in the impugned Judmgent, so as to warrant any interference of this Court.
18. In the result, confirming the Judgment and Decree passed by the Co-operative Tribunal / Principal District Judge, Coimbatore, this Civil Revision Petition is dismissed. However, there is no order as to costs.
10.09.2008
Index : Yes
Internet : Yes
tsvn
To
1. The Principal District Court,
Coimbatore.
2. The Deputy Registrar of Co-operative Societies
Pollachi.
S.TAMILVANAN, J.
tsvn
C.R.P. (NPD) No.1457 of 2002
10.09.2008