Madras High Court
The Deputy Registrar Of ... vs S.Regupathy on 23 September, 2021
C.R.P(MD)No. 2665 of 2012
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 23.09.2021
CORAM
THE HON'BLE MR.JUSTICE A.D.JAGADISH CHANDIRA
C.R.P(NPD)(MD) No. 2665 of 2012
and
M..P(MD) No.1 of 2012
1. The Deputy Registrar of Co-operative Societies
Thanjavur
Rep.by its Deputy Registrar
2. M/s. Thanjavur Consumer Co-operative
wholesales Stores
Rep.by its Special Officer
Thanjavur ....Petitioners
Vs.
1.S.Regupathy
2.P.Adhinarayanan ...Respondents
PRAYER : Civil Revision Petition filed under Article 227 of
Constitution of India, to set aside the judgment and decree passed in
CMA No.11 of 2006 by the learned Principal District Judge, Thanjavur
dated 21.07.2011
1/10
https://www.mhc.tn.gov.in/judis/
C.R.P(MD)No. 2665 of 2012
For Petitioners : Mr.M.S.Sureshkumar
for Mr.R.Velmurugan
For Respondents : Mr.K.Vaithilingam
ORDER
The Civil Revision Petition has been filed against the order passed
by the learned Principal District judge, Tanjore in CMA No.11 of 206
dated 21.07.2011 reversing the order passed by the first petitioner in
surcharge proceedings in Na.Ka. No.9896/2005, dated 13.02.2006.
2. The brief facts of the case are as follows:
The respondents were employed at T.878 Tanjore Consumer Co-
operative WholeSale Stores during the period 1998-1999. They
committed financial irregularities and thereby investigation was referred
by the Special Investigation Team under Section 81 of the Tamil Nadu
Co-operative societies Act, 1983 and the Special Investigation Team has
filed a report stating that the respondent has caused a loss of
Rs. 2,41,734.95 and based on the report Surcharge Proceedings under
87(1) of the Act were initiated against the respondents and surcharge
order was passed 28.02.2003. Against the order, the respondent has filed
CMA Nos.32 of 2003, 33 of 2003 and 40 of 2003 and the appellate
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C.R.P(MD)No. 2665 of 2012
Court by an order dated 16.02.2002 set aside the order and remitted back
the matter for fresh enquiry and thereby a fresh enquiry was conducted
and surcharge order was passed in respect of the petitioners and two
other persons, whereby an amount of Rs.2,07,225.95 was directed to be
recovered as penalty from the present respondents, against which the
respondents had filed CMA(MD) No.11 of 2006 and the appellate Court
had set aside the order against which the present revision has been filed.
3. The learned counsel would submit that the first respondent was
working as a Manager and he was also holding additional charge of
kovilavalivanni centre and during the period the Helper and the
Movement Clerk had committed fraud and misappropriation of
Rs.2,10,077.35. He would further submit that the first respondent is
liable to detect the fraud and also liable for maintenance, finance and
accounts, stock movement of control commodities and the said
Ravichandran who was under the control of the first respondent has
misused the powers and issued cash bills striking the word credit by
himself and sent remaining copies of the bills without striking the word
credit, but the first respondent who is liable to check the fair price shop
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C.R.P(MD)No. 2665 of 2012
accounts and reconcile the account of the Centre has failed to do so
which caused a loss to the society. He would also submit that the said
Ravichandran had misappropriated a sum of Rs.5,24,522.95 and it is a
loss to the second petitioner/ society and the respondent and other had
paid a part of surcharge proceedings to the tune of Rs. 317297.05 and
had accepted the deficiency. He would further submit that though the
second petitioner had produced enough evidence before the appellate
and presented the case with facts and records the appellate Court had
erroneously allowed the appeal.
4. The learned counsel for the petitioner would submit that the first
respondent being the Manager of the Society is liable to maintain the
accounts of the Society, operating bank accounts, lifting and controlled
the commodities from Civil Supply godowns and supply them to Fair
price Shop through Primary Co-operative Agricultural Bank and
Societies and should collect the cheques from the Society and should
have deposited the same in the bank for collection of the amount and it is
the duty of the second respondent to supervise the accounts of the Rural
Consumer Scheme Centre distribution and movement of essential
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C.R.P(MD)No. 2665 of 2012
commodities, whereas he had failed to exercise due caution and thereby
allowed the said S.Ravichandran to commit misappropriation and
thereby caused loss to the society and due to the wilful and negligent act
of the respondent the Society had suffered a financial loss to the tune of
Rs.2,07,225.90 /- whereas the appellate court had erroneously allowed
the appeal.
5. The learned counsel for the respondent would submit that the
appellate Court rightly finding that the Enquiry Officer had not rendered
any finding with regard to the wilful negligence or of the deficiency
caused wilfully or deliberately had rightly allowed the appeal.
6. The allegation against the respondents it that they failed to
exercise due caution in maintenance of accounts and taking supervisory
control over the subordinates who had indulged in misappropriation of
accounts and commodities. It is well settled that mere negligence or
lack of supervisory control on the part of the employee is not enough to
initiate surcharge proceedings.
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C.R.P(MD)No. 2665 of 2012
7. It would be apt to refer here that in a similar situation in
A.Janakiraman and another v. Deputy Registrar of Cooperative
Societies and another ((2009) 6 MLJ 1051), a learned Single Judge of
this court, had referred to various earlier decisions on the point and held
as under:-
" In surcharge proceedings, the first respondent is duty
bound to prove that there was willful dereliction of duty like
criminal case. The criminal Court having found that the
petitioners are not guilty, the said findings are definitely in
favour of the petitioners. The words used under Section
87(1) are "willful negligence".
The said issue was considered in series of decisions of this
Court.
(a) In Sathyamangalam Co-Operative Urban Bank
Limited v. Deputy Registrar of Co-operative Society and
Another (1980) 2 MLJ 17, this Court considered the scope
of earlier Section viz., Section 71 of the Tamil Nadu Co-
operative Societies Act, 1961, which is analogous to
Section 87 of the Act, 1983 and held that mere negligence
is not sufficient to intimate surcharge proceedings.
(emphasis supplied)"
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C.R.P(MD)No. 2665 of 2012
8. Further, recently, a Division Bench of this court in K.Ajay
Kumar Gosh v. Tribunal for Cooperative Cases, Nagercoil ((2009) 4
MLJ 992), it has been held thus:
" ... to pass surcharge order under Section 87 of the Act,
appellants 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 those
existing circumstances. In the absence of such categorical
finding by the respondents, it is not possible to mulct the
appellants with the loss caused to the society."
9. In the case on hand no such deliberate intention or recklessness
on the part of the respondents herein is proved to initiate surcharge
proceedings against them and thereby the Enquiry Officer had not
rendered a finding on that aspect.
10. In the light of the above decisions and a catena of decision on
the issue, this court has no hesitation in holding that the order passed by
the Appellate Court holds good and accordingly, it is confirmed.
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C.R.P(MD)No. 2665 of 2012
11.In the result, the civil revision petition stands dismissed. No
costs. The connected Miscellaneous Petition is closed.
23.09.2021
Index : Yes/No
Internet: Yes/No
aav/ssk
Note : In view of the present lock down owing to COVID-19
pandemic, a web copy of the order may be utilized for
official purposes, but, ensuring that the copy of the order that
is presented is the correct copy, shall be the responsibility of
the advocate/litigant concerned.
To
Principal District Judge, Thanjavur
https://www.mhc.tn.gov.in/judis/
C.R.P(MD)No. 2665 of 2012
A.D.JAGADISH CHANDIRA, J.,
aav/ssk
C.R.P(NPD)(MD) No. 2665 of 2012
and
M..P(MD) No.1 of 2012
23.09.2021
https://www.mhc.tn.gov.in/judis/
C.R.P(MD)No. 2665 of 2012
https://www.mhc.tn.gov.in/judis/
