IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.05.2010 CORAM: THE HON'BLE MRS.JUSTICE R.BANUMATHI AND THE HON'BLE MR.JUSTICE M.VENUGOPAL W.A.Nos.717, 718 of 2009 and M.P.Nos.1, 1 of 2009 and 2/2009 K.R.Palaniswami .... Appellant in both W.As. Vs. 1.The Cooperative Societies Special Tribunal, Periyar District, Erode (The Principal District Judge-Periyar District, Erode). 2.The Deputy Registrar of Cooperative Societies, Gopichettipalayam, Erode District. 3.The Special Officer, Hills Living People 'Lamp' Cooperative Society, Sathyamangalam, Erode District. .....Respondents in both W.As. 4.A.Balasubramaniam, Co-operative Sub-Registrar, (Package), Sathyamangalam, Erode District. ...R4 in W.A.717/2009 Writ Appeals filed under Clause 15 of the Letters Patent against the orders passed by the Learned Single Judge in W.P.Nos.10424 and 10425 of 1999 dated 11.12.2008. For Appellant : Mr.V.Bharathidasan in both W.As. For Respondents : Mr.A.Arumugham for R1 and R2 in both W.As. Special Government Pleader Mr.S.Kamadevan for R3 JUDGMENT
M.VENUGOPAL,J.
The Appellant/Petitioner has filed these Writ Appeals as against the orders dated 11.12.2008 passed in W.P.Nos.10424 and 10425 of 2009.
2. The Learned single Judge while passing orders in W.P.Nos.10424 and 10425 of 1999 had among other things observed that ‘The Tribunal recorded a clear finding that the Petitioner has caused loss to the Society and despite opportunities were granted, he has not submitted his explanation and was repeatedly taking adjournments and his defence was not accepted by the Tribunal. Even before this Court, the Petitioner had tried to contend elaborately that he was not responsible for the loss or that the procedure followed by him was the same as the earlier procedure followed by everyone, which cannot be accepted and found that there was no violation of the principles of natural justice or any perversity of finding by the Tribunal in confirming the order of the Deputy Registrar, etc., and further was not inclined to go into the merits of the case as if this Court was a further Appellate Authority constituted under the Act and resultantly, dismissed the writ petitions.’
3. According to the Learned counsel for the Appellant/Writ Petitioner, the Learned single Judge had not considered the case of the Appellant in a proper perspective and in fact, he had not considered the grounds raised by him in a proper perspective. Moreover, the Original Authority as well as the Appellate Tribunal had not appreciated the defence of the Appellant properly, when in the enquiry proceedings none of the original documents were supplied to substantiate the charge levelled against the petitioner but only xerox copies were produced and not acceptable reasons were adduced for non production of the original documents.
4. It is the further contention of the Learned counsel for the Appellant that the Learned single Judge had failed to take into account of the fact that the Appellant was alone discriminated and singled out leaving others and indeed, the Appellant was punished in violation of Article 14 of the Constitution of India.
5. That apart, it is the stand of the Appellant/Writ Petitioner that the Learned single Judge committed an error in coming to the conclusion that the time limit prescribed under the Tamil Nadu Cooperative Societies Act for completion of enquiry as per Section 81 is not mandatory, when the Act prescribed certain time limit which is mandatory in nature, which has to be followed by the Authority scrupulously.
6. Also, a plea is projected on the side of the Appellant that in the Audit Report, there was nothing to show that the Appellant had caused loss to the Society and no amount was mentioned as Sundry Debtor against him, but he was shown as a Sundry Creditor and therefore, it is quite clear that he had not caused any loss to the Society.
7. On the side of the Appellant, the Learned counsel submits that the Fourth Respondent (Deceased) worked as a Special Officer of the Sathy LAMP Society till 06.12.1991 and thereafter the Appellant/Writ Petitioner joined as a Special Officer of the said Society on 07.12.1991 till 24.08.1993 and he was transferred from the Society and further that the Appellant/Writ Petitioner submitted a special Report to the Deputy Registrar that the Fourth Respondent (Deceased) paid wages advance of Rs.3.50 lakhs when there was no collection of minor forest produces and on the basis of the Appellant/Writ Petitioner’s Special Report, Enquiry under Section 81 of the T.N. Cooperative Societies Act was ordered and the Enquiry Officer submitted an Enquiry Report recommending to collect the illegal payment of wage advance and before ever the said amount was collected, the Fourth Respondent was appointed as an Inspection Officer under the Act and therefore, it is a clear case of bias and indeed, the Fourth Respondent ought not to have been appointed as an Inspection Officer to submit a Report against the Appellant. However such a thing was not resorted to and as such, the Enquiry Report of the Fourth Respondent dated 21.05.1993 against the Appellant is vitiated in Law and the same is not legally sustainable.
8. In view of the aforesaid factual and legal pleas raised by the Appellant/Writ Petitioner, the Learned counsel for the Appellant prays for allowing the writ appeals to promote substantial cause of justice.
9. In the writ petitions W.P.Nos.10424 and 10425 of 1999, the Appellant/Writ Petitioner had prayed for issuance of a writ of Certiorari in calling for the records of the Second Respondent’s Surcharge Order made in Na.Ka.No.8242/93 A dated 26.12.1995 and Na.Ka.No.15972 of 1994 A dated 12.06.1995 respectively as confirmed by the order of the First Respondent/Cooperative Tribunal, made in C.M.A.Nos.4 of 1996 dated 11.11.1998 and 146 of 1995 dated 11.11.1998 respectively and to quash the same.
10. In W.P.Nos.10424 of 1999 arising out of C.M.A.No.4 of 1996, in the Enquiry Report of the Fourth Respondent (Since deceased) dated 21.05.1983 under Section 82 of the Tamil Nadu Cooperative Societies Act, it was mentioned that the Loss was caused to the Society as hereunder:
i)The Society has failed to publish the sale of Goose Berry (Nellikai) in an eminent Daily Papers and this publication is hided from may leading businessmen.
ii)The Society failed to adopt the procedure of grading but accounted the grading has as per procedure.
iii)It is failed to collect deposit and agreement has sale from merchants who purchased them from the Societies.
iv)The Special Officer himself gives permits to being the forest products from collection centre to the Society and the entire collection products has not been accounted for in the Society.
v)The Special Officer appointed Agents against department instructions and paid less wages besides to increase the expenditure for collection and then caused loss to the Society.
vi)He not only paid Lorry freight to bring the collected Nelligai from Centre to Society and paid freight to lorries third various places with Nelligai and thus caused loss to the Society.
vii)He failed to adopt the procedure as laid down by the Registrar besides above failed to maintain appropriate registers and thus caused loss to the Society.
viii)He failed to adopt the procedures of collection and sales and caused loss to the Society.
Further, the Appellant/Special Officer was found to be responsible for the loss caused and for the deficiency thereto. Moreover, T.Mohanraj, Clerk, N.Mohan, K.N.Subramanigounder, N.Mahadevan and K.Abeem Collection Managers were also responsible for the loss sustained by the Society. The Appellant/Cooperative Sub Registrar/Special Officer was found to be responsible for the entire collection and sales of the entire small forest produces and as such, there were all responsible jointly and severally in regard to the loss of Rs.13,34,975.20/- suffered by the Society. Therefore, to recover the Loss, surcharge proceedings was directed to be initiated as per Section 87 of the Tamil Nadu Cooperative Societies Act 1983.
11. The Fourth Respondent (since deceased) submitted his Enquiry Report in regard to the irregularity in collection and sales of goose berry during the year 1992 on the basis of the order of the Deputy Registrar dated 20.02.1993 in ordering for inspection under Section 82 of the Tamil Nadu Cooperative Societies Act in respect of the Society in which the Appellant was the Special Officer.
12. The Second Respondent on 26.12.1995 passed an order under Section 87 of the Tamil Nadu Cooperative Societies Act in regard to the deficiency caused to the Society to an extent of Rs.13,34,975.20/- by the Appellant/Former Special Officer and the employees of the Society.
13. In W.P.No.10425/1999 arising out of C.M.A.No.146 of 1995, the affairs of Sathyamangalam LAMP Cooperative Society were found to be not satisfactory and therefore, an Enquiry was ordered by the Registrar of Cooperative Society one C.V.Mohana Ranganathan, Cooperative Sub-Registrar/Superintendents, Special Investigation Squad was authorised to conduct an Enquiry and submit his Report.
14. On 12.06.1995, the Deputy Registrar of Gopichettypalayam passed an order under Section 87(1) of the Tamil Nadu Cooperative Societies Act in regard to the functioning of Sathyamangalam Range Hill Tribes Large Sized Multi purpose Cooperative Society Ltd which was found to be not satisfactory and enquiry under Section 81 of the Tamil Nadu Cooperative Societies Act was ordered by the Registrar of the Cooperative Societies and an amount of Rs.2,73,843.50/- was found out to be the loss caused to the Society as per Enquiry Report dated 11.02.1994 and as mentioned hereunder:-
SI.NO.
Details
Rs.Ps.
The Persons who committed the deficiency to the asset of the Society.
1
Focus credit bill prepared in favour of CMS vegetables suppliers Puliampatty and caused loss.
71587.5
a) N.P.Krishnamoorthy, Asst. Of the said Society.
b)R.Rathinam, Godown Keeper of the said Society.
c) K.R.Palanisamy, Ex-Special Officer
2
Incentive paid for M.Mani of a member of the Society raising focus bills for the collection of Nelligai and minor forest produces.
a) Incentive to Nelligai for collection Rs.1056/-
b)Incentive to minor forest produce Rs.2104/-
3,160/-
a) N.P.Krishnamoorthy, Asst. Of the said Society.
b)M.Sampathkumar Driver of the said Society.
c) K.R.Palanisamy, Ex-Special Officer and CSR of the said Society.
3
When the practice of the payment of incentive had not been paid since the Society’s inception amount paid without departmental permission during the year 1992-93.
a)2164.00
b)25810.25
c)67,794.75(1993-94)
95769/-
K.R.Palanisamy, Ex-Special Officer and CSR of the said Society.
4
Lorry freight paid by increasing it.
1992-93 33139/-
1992-94 2534/-
34673/-
K.R.Palanisamy, Ex-Special Officer and CSR of the said Society.
5
During the year 1993-94 minor forest products accounted as damaged and disposed for a reducing rates.
68654/-
R.Rathinam, Godown Keeper and K.R.Palanisamy, Ex-Special Officer and CSR of the said Society.
According to Section 81 Report, responsibility was fixed on the Appellant and the Appellant/Ex-Special Officer of the Society and Others.
15. In the said order of the Deputy Registrar of the Cooperative Societies, Gobi Circle, the Appellant and the employees were made responsible jointly and severally to recoupe the loss caused to the Society at the rate of 21% interest till its realisation and the same is extracted as below:-
SI.NO.
Details
Amount
Rs.Ps.
Details of the order
1
During the year 1992-93 bogus bills created as suppliers were made to CMS vegetable suppliers at P.Puliampatty and caused loss.
71587
The amount had been realized to the Society and hence surcharge action is dropped on K.R.Palanisamy and R.Rathinam Godown Keeper.
2
By creation of bogus bills in the name of M.Marimuthu, a member of the Society, at Mavanatham of the Society as he was paid incentive for the collection of Nelligai and minor forest product.
3160
N.P.Krishnamoorthy, Clerk, M.Sampathkumar Driver, K.N.Subramaniagounder, Asst.Maistry and K.R.Palanisamy, Ex Special Officer of the Society had remitted the amount. Hence the order of surcharge is dropped.
A
Incentive to the collection of Nelligai
1056
AA
Incentive to the minor forest produce
2104
Total
74747.5
3A)
Incentives paid during the year 1992-93 exlcuding the amount of Rs.43,188/- paid from 05.10.1992 to 16.02.1993 and included in the surcharge proceedings vide Na.Ka.No.8293/93 A dated 07.07.1993
a)
Incentive paid to the Collections of Nelligai on 03.01.1993
Incentive paid to the collection of minor forest produces during 1992-93
Incentive paid to the collection of minor forest produce during the year 1993-94
2164
25,810.25
67,794.75
TheEx Special Officer K.R.Palanisamy, C.S.R. with interest at 21% p.a. till CA realisation to the Society.
Total 95769 4 Lorry hire paid by increasing them and caused loss to the Society 1992-93 32139.00 1993-94 2534.00 34673 Total 1,30,442.00 5 During the year 1993-94 sales by a reduced rate as the Seevamarpulls damaged and caused loss to the Society 68654
R.Rathinam, Godown Keeper of the Society and K.R.Palanisamy the Ex Special Officer have to recoupe the loss to Society jointly and severally at the rate of 21% p.a. till its realisation.
16. Since Items 1 and 2 referred to above was realised to the Society, the action under Section 87(1) of the Tamil Nadu Cooperative Socities Act was dropped for Rs.74,747.50. In regard to the items 3(A) (a,b,c and 4) and consists of loss of Rs.1,30,442/-. The Appellant was made responsible for the recoupement and in regard to the Item No.5 a sum of Rs.68,654/- one K.Rathinam Godown Keeper of the Society and the Appellant/Ex-Special Officer of the Society were made jointly and individually responsible for recoupement at the rate of 21% interest till its realisation of the Society.
17. According to the Learned counsel for the Appellant, the Appellant followed the procedure and called for tender and there was no finding rendered by the competent Authority that the Appellant had not called for tenders and as a matter of fact, the procedure followed by the Appellant was approved by the Deputy Registrar and in fact, the Appellant had given incentive to the members only. But the incentive was given without authorisation and the Appellant gave an incentive of one rupee and also during the year 1992-93, there was no loss to the Society.
18. Continuing further, it is the contention on the side of the Appellant/Writ Petitioner that he purchased small forest produces from the members and to say that the Appellant had violated the circular was not correct and in fact, there were no intermediary brokers.
19. Advancing his arguments, the Learned counsel for the Appellant submits that the objections of the Appellant were not taken into account and therefore a perverse finding was rendered by the competent Authority. In regard to the gunny bags explanations were given and there was no finding that the Appellant sold the Goose berry wilfully for a lower amount and being a Hill area, there was no other option but to pay a higher rate to the Hiring of Lorry. Also, it is to be seen that there was no charge of misappropriation against the Appellant/Society.
20. A plea is also taken on behalf of the Appellant that on none of the occasions the committee was convened and fixed the price and in fact, the Committee was not functioning. At no point of time, the price was fixed by the Committee and also the elected members of the Society were dissolved and the Appellant’s actions were bonafide and performed only in the interest of Society and he had not wrongfully gained from his actions.
21. It is the contention on the side of the Appellant that on a mere assumption, the liability could not be fastened on the appellant.
22. According to the Learned counsel for the appellant, against the Enquiry Officer, an enquiry was pending on a complaint given by the Appellant and therefore the Appellant alleged malafide against the Enquiry Officer but this aspect of the matter was not appreciated by the concern, which had resulted in an erroneous orders have been passed against the Appellant.
23. The next limb of the argument put forward on the side of the Appellant is that the enquiry commenced on 07.07.1993 and it went on for a period of one year viz., 06.07.1994 and the extension for time was obtained, and in fact a ratification was obtained only on 11.02.1995 viz., the time extended upto 31.12.1995 which against the time fixed under the Act.
24. The Learned counsel for the Appellant brings it to the notice of this Court that when the writ petitions were pending the fourth respondent (since deceased) was alive and since as against the fourth respondent, the Appellant had preferred a complaint and enquiry was pending against him, he could not be the Enquiry Officer and therefore, the entire proceedings were initiated in the eye of Law.
25. The Learned Special Government Pleader appearing for the respondents 1 and 2 supported the orders passed by the Authorities and the Judgment rendered in C.M.A.Nos.4 of 1996 and 146 of 1995 by the Cooperative Tribunal and also, the orders passed by the Learned Single Judge in W.P.Nos.10424 and 10425 of 1999 and submits that the same need not be interfered by this Court.
26. In response, the Learned counsel for the Third Respondent submits that the Appellant was the Special Officer of the Society from 07.12.1991 to 21.04.1993 and during 1992-93, many irregularities were committed in the collection and sale of Goose berry and the Appellant had to call for tenders and he must ascertain the market price of goose berry and in fact, he loaded the goose berry in a lorry and sold it at Coimbatore. Thus, he failed to discharge his duties in terms of the Bye Laws and Circulars of the Society and by his conduct, the Society had sustained loss.
27. Further, it is the argument of the Learned counsel for the third respondent that the Board of the Society was dissolved and in short, a clear finding had been rendered by the Authorities concerned in their orders and even C.M.A.Nos.4 of 1996 dated 11.11.1998 and 146 of 1995 filed by the Appellant were dismissed by the Cooperative Tribunal and as such, the Appellant cannot establish from the predicament that he is presently inn and therefore prays for dismissal of the writ appeals.
28. The Learned counsel for the Appellant cites the decision of this Court M.SAMBANDAM V. THE DEPUTY REGISTRAR (CREDIT) CO-OPERATIVE SOCIETIES, MYLAPORE, MADRAS AND OTHERS, 1999(3) MLJ 310, wherein it is held as follows:-
“It is stated that the petitioner, was furnished only the show cause notice but not the claim made by the Deputy Registrar and the copy of the Enquiry Report. If any surcharge proceeding is initiated under Section 71, the same has to be done in accordance with the said provision. The said provision makes it clear that if any proceeding is initiated under Section 71, before passing final order, the person concerned must be given an opportunity toputforth his claim. In the light of second proviso to Sec.71(1) in the absence of proof of furnishing of copy of enquiry report to the petitioner, further action taken by the first respondents, in pursuance of the enquiry report cannot be sustained on the principles of violation of statutory provision and natural justice.”
29. He also cites the Division Bench decision of this Court S.SUBRAMANIAN V. THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES (HOUSING) CUDDALORE AND OTHERS, (2002) 3 LW 185, wherein it is laid down as follows:
“In the present case it has to be pointed out that no finding has been recorded by the first respondent or by the third respondent to establish that the deficiency had been caused wilfully or deliberately or with a view to cause loss to the assets of the Society. Nowhere a finding has been rendered either by the first respondent or by the third respondent or with a view to cause loss to the assets of the Society. Nowhere a finding has been rendered either by the first respondent or by the third respondent in their proceedings that the petitioner is guilty of wilful negligence or wantonness, nor it has been recorded that omission or commission on the part of the petitioner is deliberate, reckless or callous or loss has been caused deliberately to the assets of the Society.
In the absence of such a finding, as has been consistently held by this Court, that the petitioner is guilty of wilful or deliberate negligence or there is intention to cause loss to the assets of the Society, it follows that the impugned surcharge proceedings in so far as the petitioner is concerned are liable to be quashed.”
30. The Learned counsel for the Appellant draws the attention to the Division Bench decision of this Court K.AJAY KUMAR GOSH AND OTHERS V. TRIBUNAL FOR COOPERATIVE CASES, (DISTRICT JUDGE OF KANYAKUMARI DISTRICT) NAGERCOIL AND ANOTHER, (2009) 4 MLJ 992, wherein it is observed as follows:
“To pass surcharge order under Section 87 of the Tamil Nadu Cooperative Societies Act, the employees of the Cooperative Society should have done an actionable wrong either by commission or omission in 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 man under the existing circumstances. In the absence of such categorical finding, it is not possible to mulct the employees with the loss caused to the Society.”
31. The Learned counsel for the third respondent cites the Division Bench decision of this Court S.V.K.SAHASRAMAM V. DEPUTY REGISTRAR OF COOPERATIVE SOCIETIES, TIRUVANNAMALAI CIRCLE, TIRUVANNAMALA AND OTHERS, (2008) 8 MLJ 231, at page 232, wherein it is observed as follows:
“Where there are allegations of embezzlement and misappropriation of public funds, the members of general public who have been cheated have no control over those who hold the enquiry in respect of the time limit. To hold that such an enquiry that has been continued beyond the time limit is bad would cause great injustice. Therefore, enquiry continued beyond the time limit mentioned in the relevant statute, the said time cannot be held to be mandatory in view of principles laid down in Montreal Street Railway Company v. Normandin AIR 1917 PC 142 which has been affirmed by Supreme Court.”
32. At this stage, we aptly point out the decision of this Court GABRIEL V. THE DEPUTY REGISTRAR (HOUSING), CUDDALORE AND ANOTHER (2003) 2 MLJ 624, wherein it is held as follows:
“The respondents had not made out that the petitioner had caused any loss to the Society. The petitioner has also given reasons for carrying out the work and the same cannot be rejected on the ground that they are not convincing but on the other hand, the explanation offered by the petitioner appears to be that he had acted only pursuant to the resolution passed in the General body and if there is any further latches in observing certain procedure, it would not amount to misappropriation of the amount. When there is no misappropriation of amount, then it would only amounts to mis-application and when the mis-application not having caused any loss to the Society, a surcharge proceeding is not justifiable. If any irregularity committed by the petitioner in failing to secure permission from the authorities concerned, it would not result in being surcharged but may result in any disciplinary action being taken as against him.
It is left open to the authorities, if they consider that it is necessary, to take disciplinary action against the petitioner for failure on his part in not having followed certain procedures, but the order of surcharge is not legal and the same is liable to be set aside, accordingly, it is set aside.”
33. Yet another decision of this Court P. KARUPPIAH V. THE DEPUTY REGISTRAR OF COOPERATIVE SOCIETIES, PERIYAKULAM AND ANOTHER, 1989 W.L.R at page 272, it is observed thus:
“The appellant has been mulcted with the liability only on the basis that he has by acts and omissions of wilful negligence caused loss to the bank. For this action, it must be first established that there were duties and obligations specifically cast upon the appellant, of which he committed breach. If there is no clarity as to the specific duties and obligations cast upon the appellant with regard to remittances and withdrawals, then the very basis of the charges must be held to be lacking. That is the position here.
Negligence in this context presupposes existence of specific duties and obligations and breach thereof. If the duties and obligations are not specifically defined and delineated, one could not pin down the culpability of breach thereof on the person concerned. This aspect could not be a matter of presumptions and assumptions but necessarily must be a matter of concrete materials.
We find that the probable nexus between any act of omission on the part of the appellant and the resultant loss to the bank has not been made out at all, for the simple reason there is no material exposed in the case, making out the casting of specific duties and obligations upon the appellant in this behalf.”
34. A perusal of the Enquiry Report of the fourth respondent dated 21.05.1993 under Section 82 of the Tamil Nadu Co-operative Societies Act shows that the Appellant was the Special Officer of the Society from 07.12.1991 till date. The object of the Society as per Bye Law No.2 was to i) increase job opportunities for the economic development of the hill trade people; ii) to supply the consumer articles, for collecting the small forest produce, the members will have to be provided with guidance and the collected forest small produces will have to be sold in the manner of deriving higher profits through sale; iii) grant of crops loss to members. Also, it is mentioned in the Inspection Report dated 21.05.1993 that during 1992-93, in the Forest Range of Thukanayagampalayam 2) Asalur 3) Sathy 4) Kothamangalam 5)Thalavadi 6) Sirumugai and 7) Mettupalayam for collection of Goose berry, the lease was allotted.
35. The Enquiry Report of the fourth respondent dated 21.05.1993 points out that the sales were not published in daily newspaper and that the Appellant failed to collect deposit from six persons who furnished quotation to the Society and procedures adopted by the Appellant could not be accepted since they are against the Tamil Nadu Cooperative Societies Act and Rules and therefore a loss was caused to the Society.
36. The Society sustained the following loss because of direct sale of Goose berry without calling for the tender and the same is described hereunder:-
Date
Total Collection Kgs
Total Sales per Kg
Rs.Ps.
Value
Rs.
21092
7500
1.60
12000
41092
3398
2.10
7135
51090
2660
3.00
7930
Total
13558
27115
37. If the Society had sold the Goose berry at an over and above the permitted price of tender at a higher value of Rs.3 per kg. then the sale proceeds would have fetched to Rs.40,674/-. But, the same quantity of Goose berry since it was sold at a price of Rs.27,115/-, the Society had sustained a Financial Loss of Rs.13,559/-.
38. That apart, the Society failed to maintain the Register for payment of coolies to its members and there was no evidence to establish that the entire collection were brought to the Society and the Special Officer had failed to supervise whether for the collected forest produces permission was granted and also whether the permitted quantity of produces in entirety was brought to the accounts of the Society.
39. Added further, in the Enquiry Report of the Fourth Respondent dated 21.05.1993, it is mentioned that for example on 11.11.1992, the weigh Receipt No.349 of Mani Weigh Bridge, Sathy showed the following:-
“The Weighment of lorry 1993
With materials 9325
The weighment of lorry 5300
—————–
4025
——————
Lorry No.TNV 2932. The Government weigh Bridge shows as below and accounted for the Society.
The weighment of lorry with materials 8820 The weighment of lorry 5300 ------------------ Net weight of the materials 3520 ------------------ Difference of the transaction 505 Kgs. 2. Further on 13.11.1992, Lorry TNV 2932-difference accrued as detailed below. Mani Weigh Bridge Receipt No.371 dated 13.11.1992 The weighment of lorry including materials 10360 The weighment of the lorry 5300 ------------ Net weight of the materials 5060 ------------ But the forest department of Government weigh Bridge as accounted for shows as follows:- The weighment of lorry including materials 9835 The weighment of the lorry 5300 ------------ Net weight of the materials 4535 ------------ The total difference 525 Kgs."
40. According to the Enquiry Report, the aforesaid details would go to prove that the entire collection of the small forest produces were not brought into the accounts of the Society being confirmed and in this way, the materials gathered in the less weight of gunny bags were included in the list based on average weight.
41. Significantly, the Enquiry Report also refers to the Sales Bills as per which the Goose berry collection from 24.04.1992 to 07.10.1992 through 1218 cement bags and other weight were 31183kg. One cement bag weight is 25600 Kg. But the Society failed to account them as mentioned supra and brought out a lesser quantity to the tune of 157295 Kgs into the accounts. As per the Forest permits, the collection were not brought through empty bags but brought Goose berry without packing at Kuttupur. Moreover, as per the Stock Register, the weighment of the empty bags were reduced in stocks in various dates but they were not evidenced for its reduction. Therefore without justification, the weighment of 13961 kg of Goose berry ought to be taken as stock deficit.
42. Besides the above, the Enquiry Report dated 21.05.1993 also speaks of the Resolution No.6 of the Special Officer dated 07.10.1992 and Resolution No.8 dated 30.12.1992 in and by which C.M.S Vegetables Supplier, P.Puliyampatty, Thiru Chinna Mani, P.Puliyampatty and Palanisamy, Senbagapudur were persons to whom the sales would have to be effected and the above sales are against the procedures adopted by the Society for the past 3 years without advertising the sale and collection of deficit amount and the Sale Agreement and therefore, the Resolutions were passed in negation of the principles of Natural Justice and since the sales were effected as per the Resolutions, there had occasioned a Loss to the Society. The sales were effected without grading for the previous years. The low grade Goose berries ought not to have been collected and only after reaching the proper grade, they should have been collected but the same would not done. Therefore, the low grade Goose berries were brought to the Society’s accounts and through sale, the Society had sustained a Loss from 07.10.1992 to 18.03.1993, 10,24,965 kg of Goose berries were sold. If it had been sold at price of Rs.3/- per kg the Society would have been received an amount of Rs.30,74,895/- but through an irregular sale, the Society received only a sum of Rs.24,15,972.80p. Therefore, the Society had sustained a Financial Loss of Rs.6,58,922.80p.
43. The Enquiry Report goes to add that during the last year, Buyers Agreement were entered into in regard to the sale of Goose Berry collected during the current season and sold without any delay. But during the current season, 390352 Kgs of Goose Berries were damaged and sold only 14639 Kgs and consequently, the Society suffered a Loss of Rs.1,03,417/-.
44. As a matter of fact, the Appellant/Special Tahsildar himself fixed the Coolie (Wage) at his own risk improperly. As per the instructions of the Registrar and the terms of the Agreement with the Forest Department, no Agents or Brokers were to be appointed for the collection of minor forest produces.
45. The Special Officer (Appellant) through his Resolution No.3 dated 19.09.1992 increased the collection of forest produces of Hilly Tracts and offered incentives to members viz., Rs.3/- per cement bag for collection of forest produces and in fact, the Society had not paid any incentives during the last years. The Special Officer/Appellant in respect of paying the incentives would have increased the wages to the members. Thus, the Society had suffered a Loss to the tune of Rs.43,168/- from 05.10.1992 to 16.02.1993 as per the Enquiry Report of the Fourth Respondent/Cooperative Sub Registrar.
46. It transpires from the Inspection/Enquiry Report of the Fourth Respondent dated 21.05.1993 that Mani of Mavanatham had received a sum of Rs.1056/- as incentive to Goose Berry collection vide voucher No.1894 dated 05.11.1992. But a sum of Rs.306/- was paid for the same collection on 04.11.1992 at Thekkumara Depot (Lorry No.T.S.C.7395). Again, he received a sum of Rs.594/- on 05.11.1992 and also, this payment was for the Thekkumara Depot collection through the Lorry No.T.S.C.7395. Therefore, the amount was paid twice for one collection for a same person in two various vouchers on 04.11.1992 and that the amount was misappropriated.
47. Continuing further, the entire collection was stocked in the Society’s Godown and thereafter, it was sold by the Society. But they were accounted for and Lorry Freight was paid since the sales were effected and transported upto Coimbatore. In this regard, the Society had sustained a loss of Rs.2,141/- which runs as follows:-
Date
Lorry Freight upto Society Godown
Rs.
Freight Received
Rs.
Difference
Rs.
Lorry Nos.
26.09.92
30.09.92
16.10.92
605.00
605.00
699.00
1400.00
1400.00
1250.00
795.00
795.00
551.00
7890
6679
8566
Total Rs.
2141
48. In short, the Inspection Report/Enquiry Report of the Fourth Respondent (Deceased) dated 21.05.1993 unerringly point out that the Appellant/Writ Petitioner (Cooperative Sub Registrar) was mainly responsible for the deficiency stock and four others were found responsible for the loss sustained by the Society. Also, the Appellant/Writ petitioner was found responsible for the entire collection and the sale of the entire minor forest produces and the four others/Collection Managers were jointly and severally responsible in regard to the loss of Rs.13,34,975.20p and therefore a Surcharge Proceedings under Section 87 of the T.N. Cooperative Societies Act for recovery of the loss incurred by the Society was suggested by the Fourth Respondent/Deceased.
49. In the Surcharge Notice dated 07.07.1993 under Section 87 of Tamil Nadu Cooperative Societies Act issued to the Appellant/Writ Petitioner and five others, it was among other things mentioned that the Sathyamangalam Range Hill Tribes, Multipurpose Cooperative Society Ltd., had sustained loss to an extent of Rs.13,34,970.20p and the same was to be recovered by the Society in an action initiated as per Section 87 of the Tamil Nadu Cooperative Societies Act and therefore, the Appellant and others were directed to explain within 15 days as to why action should not be initiated against them for recovering the loss by passing an order as per Section 87 of the Tamil Nadu Cooperative Societies Act. They were also duly informed that if they desire to have personal enquiry, they may inform their willingness in writing within the period prescribed for the explanation, etc., Along with the show cause notice dated 07.07.1993, a copy of the Inspection Report under Section 82 of the Tamil Nadu Cooperative Societies Act was also enclosed.
50. In regard to the Loss of Rs.2,73,843.50 to the Sathy Hilly Tribes Large Scale Multipurpose Cooperative Society, an Enquiry as per Section 81 of the Coooperative Society was ordered by the Registrar of the Cooperative Society, Madras in his proceedings Na.Ka.72463/93 Tha.Pu.Kub Dt(1) dated 28.07.1993 and the Registrar’s Officer Inspection Squad enquired him and submitted the matter to the Society and one N.P.Krishnamoorthy, Assistant and R.Rathinam, Godown Keeper were issued with the notices to recoupe the sum of Rs.71,587.50/-, etc.,
51. In the said Notice issued under Section 87 of the Tamil Nadu cooperative Societies Act 1983 dated 15.12.1994, it was mentioned that C.M.S. Vegetable Supplier denied that they purchased the Goose Berry (Nellika) to the value of Rs.71,587.50/- and they had not acknowledged the credit bill for having purchased the Goose berry.
52. The said Notice dated 15.12.1994 issued by the Deputy Registrar, Gobichettypalayam goes on to add that Krishnamoorthy and R.Rathinam were responsible for day to day affairs and assets of the Society and they along with the Special Officer of the Society viz., the Appellant/Writ Petitioner (K.R.Palanisamy) prepared the fictitious credit basis to C.M.S. Vegetable Supplier without obtaining C.M.S. signature and thus, a sum of Rs.72,587.50p was misappropriated by them and caused a loss.
53. It is to be pointed out that the Section 87 Notice dated 15.12.1994 issued by the Deputy Registrar, Gobichettipalayam refers to Bye Law 26(3)(e) in and by which Krishnamoorthy and Rathinam were responsible for the cash balance and assets of the Society and further, as per Bye Law 26(3)(AO-(b)(d), the Special Officer viz., the Appellant/Writ Petitioner was responsible for the Executive and day to day affairs of the Society and therefore, all the three were individually and collectively responsible for the loss of Rs.71,587.50p.
54. In regard to the misappropriation relating to the payment of incentive bonus to an extent of Rs.3,160/- to Mani M.No.1301 through four false vouchers obtained by getting forged signature of the said Mari on 05.01.1992, 06.11.1992, 12.11.1992 and 18.01.1993 respectively. The said Mari had denied the signature and the receipt of money is shown hereunder:
S.No.
Receipt No.
Amount Rs.
1
/05.11.1992
1056.00
2
1910/06.11.1992
594.00
3
2620/18.1.1993
979.00
4
1996/12.11.1992
531.00
These four vouchers were prepared by N.Subramania Gounder and Sempatti Kumar, Driver and paid by Krishnamoorthy. The Appellant/Writ Petitioner (Special Officer) knowing fully well about fictitious voucher passed the vouchers and signed the day book and therefore, he was found to be responsible in regard to the aforesaid misappropriation of Rs.531/- and resultantly, the Society had sustained a loss in this regard, etc., Inasmuch as the Appellant/Writ Petitioner as per the Bye Law 26(3)(a)(b) was responsible for the Executive affairs and also in regard to the day to day affairs of the Society. He was also liable for the misappropriated amount and the loss caused to the Society and as such, the aforesaid persons were jointly and severally liable for the loss of the amount.
55. It is the stand of the third respondent that the Registrar of Cooperative Societies Madras in his Ref.No.Na.Ka.141725/90 dated 13.02.1991 formed a Sub Committee comprising of Joint Registrar, Circle Deputy Registrar, President/Special Officer of the Society, Forest Officer and 3 Hilly Tribe members of the Society to determine reasonable wages to the Hill Tribe Members and the Committee should meet every month and two times during harvest sessions and that the Joint Registrar, Erode in his proceedings Pdl.122/91 A3 dated 05.03.1991 and 08.04.1991 formed a Sub Committee consisting of Joint Registrar, Deputy Registrar, Special Officer, Range Officer and 3 Hill Tribe Members 1) Karuppanaraj, President (M.No.3157 2) Vellai (M.No.,326) and 3) Marimuthu (M.No.992) and the Appellant/Writ petitioner had disobeyed the instructions of the Registrar and the Joint Registrar.
56. It is also represented on behalf of the third respondent that as per Board Resolution dated 11.11.1992, it was decided to pay incentive wages to the members for the year 1992-93 and 1993-94, so as to increase collection of minor forest produces Rs.1.00 per kg of Goose berry and 0.25p per one ‘pidi’ of Broom Sticks in addition to the wages paid without getting approval of the Sub Committee and when the Managers and the Assistant Manager were appointed in the Society to increase the collection of minor forest produces to prevent theft and loading the forest produces in Lorries, the Appellant had paid incentive to non members and caused loss to the Society.
57. The Learned counsel for the third respondent submits that from the beginning of starting the Society, no incentives were paid but the Appellant/Writ Petitioner (the Special Officer) paid incentive to certain members and the payment of incentives were not at all necessary and this had caused loss to the Society, etc.,
58. Notwithstanding the fact that the Special Officer of the Society had the powers of the Society as per Bye Law No.31 and 23(1)(a)(d), the Appellant/Special Officer should have paid the incentive to the members only after framing the regulation and obtaining the approval but the Appellant/Writ petitioner had not followed the instructions issued by the Registrar and the Joint Registrar and thereby caused loss to the Society.
59. The Appellant/Writ Petitioner is a Representative of the Joint Registrar, Periyar Region as per Tamil Nadu Government Special Ordinance 5/91 dated 28.07.1991. He had failed to convene the Sub Committee Meeting and ought to have obtained the approval. But the Appellant paid the incentive to the members without obtaining the permission from the Joint Registrar and thereby caused the loss of Rs.95,769/- and in this fashion, he caused Loss of Rs.10.30 lakhs for the year 1991-92 and Rs.15.44 Lakhs during 1992-93.
60. In regard to the payment of excess Lorry Hiring charges, it is to be pointed out pertinently that during 1992-93, 1993-94, the Society got lease for the minor forest produce and it was the Society’s duty to bring the collected minor forest produce to its godown and the Society should have obtained the tenders from the Lorry owners and fixed the charges for the Lorry Hiring and in this regard, the Appellant/Writ Petitioner had not taken steps when he served as the Special Officer from 07.12.1991 to 13.08.1993.
61. In 1992-93, as per Resolution N0o.1 dated 12.10.1992, the Appellant/Writ Petitioner paid the Lorry Hiring charges of Rs.32,139/-. In fact, the Appellant paid the Lorry charges without obtaining the tenders and contrary to the Bye Law No.26(3)(a) and (d) of the Society and thus, caused a Loss of Rs.34,647/- with interest thereto.
62. As regards the damage of Broom Sticks during 1993-94, the Society Godown Keeper failed to store the forest produce in the Society’s godown and because of his carelessness, the Broom Sticks got damaged and the Appellant/Writ Petitioner as per Bye Law No.26(3)(e) of the Society was responsible for the assets of the Society and as such, he was responsible for the day to day running of the Society and in this regard, caused a loss to the Society to an extent of Rs.68,654/- and therefore, the Appellant/Writ Petitioner and R.Rathinam were found to be jointly and severally responsible for the loss of Rs.68,654/- with interest thereon.
63. By virtue of the Show Cause Notice dated 15.12.1993 issued under Section 87 of the Tamil Nadu Cooperative Societies Act 1983, the Appellant/Writ Petitioner was individually found to be responsible for the loss amount of Rs.95,769/- with interest thereto and Rs.34,637/- with interest thereto and Rathinam, Godown Keeper and the Appellant/Special Officer were found to be responsible jointly and severally for the loss of Rs.68,654/- with interest and they were required to explain in writing within 15 days from the date of receipt of notice as to why such an amount should not be recovered, etc.,
64. The Cooperative Tribunal (Principal District Judge, Erode) in C.M.A.(CS) 4/1996 filed by the Appellant had come to the conclusion that he had i) caused a loss of Rs.13,550/- in the sale of Goose berry, ii) caused a loss to the Society in regard to the sale of Goose berry to an extent of 4,71,885/- iii) caused loss for 13965Kgs of stock deficit of Goose berry amounting to Rs.41,833/- iv)caused a loss to the Society in regard to the sale of Goose berry to an extent of Rs.6,58,922.20p v) by writing the false account that the Goose berries were spoiled had caused a loss to the Society to a sum of Rs.1,03,417/-, vi) by paying incentive to brokers caused a loss to a sum of Rs.43,168/- and also vii) caused a loss of Rs.21,41/- by wrongly wring as Lorry Hiring charges.
65. The Tribunal had also observed in its judgment in C.M.A.No.4/1996 that the Appellant was permitted to inspect the records as per Letter Na Ka 8242/93 A dated 09.02.1994 in the Society’s office and also the Appellant in his Statement on 28.04.1995 and Letter dated 22.09.1994 had executed the grant of permission to him for inspecting the records and thereafter, after a lapse of one year and two months, the Appellant had submitted his explanation.
66. Significantly, the Tribunal had also opined that on different dates, the Appellant was directed to appear for personal enquiry but he had not appeared and furnished his statement and therefore, concluded that he was provided with a reasonable opportunity to give reply to the charges levelled against him.
67. In C.M.A.No.146 of 1995, the Cooperative Tribunal by Judgment dated 11.11.1998 at paragraph No.12 had among other things observed that no details were provided in regard to the period during which the cost of Petrol, Diesel to what extent increased and equally, there were no details as to the previous rate of Lorry Hiring charges and also subsequently, to what extent the price of Lorry Hiring charges went high, etc., and resultantly, it had not accepted the stand of the Appellant that because of increase in Petrol, Diesel charges to an extent of 20% again at 12%, the increased payment was made and moreover, it had also not accepted the plea of the Appellant that the small forest produces like Broom Sticks were forced to be kept outside the godown and consequently, dismissed the Appeal thereby confirming the surcharge proceedings passed by the Deputy Registrar concerned.
68. It is not out of place for this Court to point out that in G.O.(D) No.140, Adi Dravidar and Tribal Welfare Department dated 11.12.1995, the time extension for completing the enquiry was granted for a period from 07.07.1994 to 31.12.1995.
69. It is to be borne in mind that the Rules of Natural Justice supplement the enacted Law and do not supplant it. What the rules of natural justice must apply to a give case must depend to a great extent on the facts and circumstances of each case.
70. The Appellant as per Deputy Registrar Notice dated 09.01.1993 was required to submit his written explanation on or before 22.11.1993 and he was granted the permission to personally appear in regard to the surcharge proceedings personal enquiry on 24.11.1993. On 09.02.1994, as per the Deputy Registrar Notice in Na Ka 8242/93A, the Appellant was granted permission to peruse the documents at the Sathyamangalam Hill Tribe Multipurpose Large Scale Cooperative Society during the office time and also to take notes and copies thereto.
71. Added further, on 25.02.1994, he was directed to peruse the documents at Society’s Office and to offer his explanation on 27.02.1994 and also to appear personally on 02.03.1994 to give a statement. Further on 02.03.1994, the Appellant was not present for the personal enquiry and also, he had not given his explanation in writing. Therefore, by means of a Letter dated 23.05.1994 of the Deputy Registrar, Gobichettipalayam, he was directed to appear on 10.06.1994 for the personal enquiry and he was also advised to offer his explanation in writing on 09.06.1994.
72. The Appellant/Writ Petitioner had inspected the Records and the Registers in the Sathyamangalam Hill Tribe Multipurpose Large Scale Society in the presence of the Special Officer on 28.01.1995. All these would clearly point out that the Appellant was provided with reasonable opportunity of perusing the records and to obtain the necessary documents thereto and there had been no negation of the principles of Natural Justice.
73. Inasmuch as the Government by its G.O.(D) No.140, Adi Dravidar and Tribal Welfare Department dated 11.12.1995 had extended the completion of enquiry from 07.07.1994 to 31.12.1995, it could not be said that the enquiry was conducted by the competent Authority beyond the prescribed time limit and in this regard, we are of the considered view that the time limit as per Section 81(4) of the Act that the enquiry shall be completed within the period of three months from the date of ordering the enquiry or further period not existing three months at a time and shall not exist six months in the aggregate, etc., is only directory in nature and not a mandatory one and therefore, the contra contention put forward on the side of the Appellant is negatived.
74. On going through the orders passed by the concerned Authorities including the judgments of the Tribunal passed in C.M.A.Nos.4 of 1996 and 146 of 1995, we are of the considered view that the acts of omissions and commissions committed by the Appellant could not be construed by no stretch of imagination that they would amount to misapplication but on the other hand, this Court is of the considered view that the Appellant/Petitioner had not discharged his duties and obligations in a proper manner and he is squarely responsible for the culpability of breach thereof and in the instant case on hand, there are overwhelming and available concrete materials go to show that the Appellant/Writ Petitioner had not acted honestly, while discharging his functions as the Special Officer of the Society and therefore, by his actions, he had caused a wilful loss to the Society and suffice it for us to make a mention that he had not taken due care and caution ordinarily expected of a sensible and prudent person and consequently, he had committed the Actionable wrongs in a callousness manner exhibiting his wilful negligence and supine indifference and therefore, the Appellant cannot escape from the purview of the surcharge proceedings dated 07.07.1993 and 15.12.1994 initiated against him by the Authority concerned, which are perfectly valid in the eye of law.
75. In regard to the plea of bias made by the Appellant/Writ Petitioner against the Fourth Respondent (Deceased), it is to be pointed out that the Fourth Respondent (Deceased) has submitted his Enquiry Report against the Appellant on 21.05.1993 and in another matter, one C.V.Mohana Ranganathan/Superintendent of Special Investigation Squad was authorised to conduct an Enquiry and submit a Report on 28.07.1993. Also the plea of Bias or Malice or Malafide will have to be stated in precise terms and the manner of prejudice must be established in a proper manner. In short, the term ‘Bias’, Malice or Malafide cannot be based on a mere allegation just because the Appellant had made a complaint against the Fourth Respondent (Deceased) in regard to the wage advance of Rs.3.50 Lakhs paid by him when there was no collection of minor forest produce, etc., It could not be said that the Fourth Respondent (Deceased) had acted against the Appellant in a biased manner, in our considered view. In fact, the Bias or Malice or Malafide must be so strong in a cavalier fashion By going through the Enquiry Report of the Fourth Respondent (Deceased) dated 21.05.1993, it could not be said that he was in a position to influence the decision making but on the other hand, he had conducted the enquiry and submitted his report on the basis of records and therefore, the allegation of Bias, Malice or Malafide made against the Fourth Respondent (Deceased) could not stand a moment scrutiny in the eye of Law. As far as the present case is concerned, because of the facts and circumstances of the case which are quite against the Appellant/Writ Petitioner and therefore, the plea of bias, etc., is outrightly not acceded to by this Court.
76. Be that as it may, on a careful consideration of respective contentions and on taking note of the facts and circumstances of the cases on hand, we are of the considered view that this Court does not act as a Court of Fact or as a Court of First Appeal and interference could be made by this Court only when appreciation of evidence by the Authority concerned suffer from illegality or perversity, etc., But after going through the orders of the Learned Single Judge and also the orders passed by the Authorities concerned, we come to an inevitable conclusion that the view taken by the Learned Single Judge and the Authorities concerned do not suffer from any serious infirmity or patent illegality in the eye of Law and resultantly, the writ appeals fail.
76. In the result, the writ appeals are dismissed leaving the parties to bear their own costs. The connected miscellaneous petitions are closed .
vri
To
1.The Cooperative Societies Special Tribunal,
Periyar District, Erode
(The Principal District Judge-Periyar District, Erode).
2.The Deputy Registrar of Cooperative Societies,
Gopichettipalayam,
Erode District.
3.The Special Officer,
Hills Living People ‘Lamp’ Cooperative Society,
Sathyamangalam, Erode District. 4.A.Balasubramaniam,
Co-operative Sub-Registrar, (Package),
Sathyamangalam,
Erode District