Madras High Court
M.Senthilvelan vs The Deputy Registrar Of Co-Operative on 15 April, 2025
Author: C.V.Karthikeyan
Bench: C.V.Karthikeyan
2025:MHC:1045
W.P.NOS.12242 & 12244 OF 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.04.2025
CORAM
THE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN
W.P.NOS.12242 AND 12244 OF 2025
AND
WMP NOS.13810 AND 13813 OF 2025
M.Senthilvelan ... Petitioner
in both WPs'
VS.
1.The Deputy Registrar of Co-operative
Societies
Dharmapuri Circle, Dharmapuri.
2.No.1512, Dharmapuri Co-operative
Town Bank Ltd.,
Rep. By its Administrator
63/A, Duraisamy Naidu Street, Dharmapuri.
3.R.Prem
Administrator
No.1512, Dharmapuri Co-operative
Town Bank Ltd.,
63/A, Duraisamy Naidu Street, Dharmapuri. ... Respondents 1-3
in both WPs'
PRAYER IN W.P.NO.12242 / 2025: Writ Petition filed under Article
226 of the Constitution of India praying for a Writ of Certiorarified
Mandamus, to call for the records of the charge memo in Na.Ka.92/2004
Tha.Ku.Na.Va dated 25.08.2004 and consequential notice in
Na.Ka.No.92/2004 Tha.Ku.Na.Va dated 10.03.2025 and 26.03.2025 on
Page No.1 of 16
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W.P.NOS.12242 & 12244 OF 2025
the file of the 2nd respondent quash the same and direct the respondents to
settle the petitioner's service benefits at the time of retirement.
PRAYER IN W.P.NO.12244 / 2025: Writ Petition filed under Article
226 of the Constitution of India praying for a Writ of Certiorari, to call
for the records of the order of suspension passed by the 2nd respondent in
Na.Ka.No.11/2025 Pa.Tho. dated 29.03.2025 and quash the same.
For Petitioner : Mr.M.S.Palaniswamy
(in both WPs')
For Respondent-1 : Mr.A.Tamil Nidhi
(in both WPs') Additional Government Pleader
For Respondent-2 : Mrs.C.Meera Arumugam
(in both WPs') Additional Government Pleader
For Respondent-3 : Mr.P.S.Siva Shanmuga Sundaram
(in both WPs')
COMMON ORDER
Both writ petitions were filed by the same petitioner and
arguments were advanced in common by the learned counsel for the
petitioner and the learned Additional Government Pleader for the first and
second respondents and therefore, a common order is passed.
2.The writ petition in W.P.No.12242 of 2025 has been filed
in the nature of a Certiorarified Mandamus seeking records relating to the
charge memo dated 25.08.2024 and consequential notice in
Na.Ka.No.92/2004 Tha.Ku.Na.Va. dated 10.03.2025 and 26.03.2025 on
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W.P.NOS.12242 & 12244 OF 2025
the file of the second respondent and to quash the same. The petitioner
seeks that his service benefits be settled, as he will be attaining the age of
superannuation on 30.04.2025.
3.The writ petition in W.P.No.12244 of 2025 has been filed
in the nature of a Certiorari seeking records relating to an order of
suspension passed by the second respondent dated 29.03.2025 in
Na.Ka.No.11/2025 Pa.Tho and quash the same.
4.In the affidavit filed in support of these writ petitions, it
had been contended that the writ petitioner M.Senthilvelan had been
appointed as Junior Assistant in the second respondent Bank /
Dharmapuri Co-operative Town Bank Ltd., Dharmapuri on 02.01.1991.
Subsequently, he was promoted as Assistant Manager on 07.03.2024 and
later, as General Manager in-charge from 11.01.2024 to 21.01.2025. He is
now functioning as Assistant Manager in the second respondent Bank. He
is set to retire from service upon attaining the age of superannuation on
30.04.2025. In the affidavit, the writ petitioner categorized his services as
'unblemished with the satisfaction of all concerned for the past 34 years.'
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However, as the records reveal, this is not the case.
5.Charges have been levied against the petitioner for fraud
and that the second respondent Bank has suffered a loss of
Rs.2,87,48,492.30. The allegation of such a significant loss can never be
categorized as 'unblemished service with the satisfaction of all
concerned.' The petitioner must clear his records before placing the blame
on the respondents for suspending him and issuing a charge memo
against him.
6.The learned counsel for the petitioner claimed that the
charge memo, which is the subject matter in W.P.No. 12242 of 2025, was
dated 10.03.2025 and in the reference, there was a reference to a show
cause notice issued on 19.11.2005. The learned counsel for the petitioner
challenged the charge memo on the grounds that the show-cause notice
was initially issued in 2005, and after 20 years, the respondents have
suddenly taken action against the petitioner. In this connection, reliance is
placed by the learned counsel for the petitioner on an order dated
07.03.2024 passed by the former Administrator of the second respondent
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Dharmapuri Co-operative Town Bank Ltd., Dharmapuri, M.Raja, who
gave his opinion that initiation of any action against the petitioner is time
barred and therefore, the petitioner should be permitted to retire with all
pending benefits.
7.However, in the counter affidavit, an additional fact has
been stated which was not disclosed in the affidavits filed in support of
these writ petitions. It is noted that M. Raja, Deputy Registrar, who had
provided such an opinion in favour of the petitioner, has been suspended
from Government service as per G.O. (2D) No. 41, Co-operation, Food
and Consumer Protection (CD-2) Department, dated 29.04.2024. He
passed the order in favour of the petitioner on 07.03.2024, and was
subsequently suspended from service on 29.04.2024. The noting of the
Deputy Registrar M.Raja is only worth considering in that context, and it
does not constitute a finding on the matter. The second and third
respondents, against whom the petitioner has alleged malafide charges,
have every right to proceed against the petitioner. To disprove these
claims, it is appropriate that the facts be narrated in more detail.
8.While the petitioner was working as an Assistant at the
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second respondent Bank, computerization was initiated and M/s.Ahana
Computers, Dharmapuri, was appointed as the agency to carry out the
computerization. They had also been awarded the Annual Maintenance
Contract. It is stated that M/s.Ahana Computers and its owner,
Thangavel, maintained separate accounts with the bank and an additional
account was opened in the name of his brother, Selvam. The owner of
M/s.Ahana Computers, Thangavelu, developed the necessary software for
automation, had control over the database, and also possessed the
passwords and access to the ledger accounts of the bank's customers.
They are experts in the field and maintained the database, giving them
enhanced control over the actual credit. They siphoned off the differences
by transferring the funds to various other accounts in which they had a
stake. It is also alleged that several irregularities were committed by
giving credits and siphoning off the differences which were transferred to
various other accounts in which the owner Thangavelu, had a stake. It has
been contended that the employees of the bank, including the petitioner
had failed to perform their monthly duties relating to the activities of
M/s.Ahana Computers. After these irregularities were discovered, an
enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act,
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W.P.NOS.12242 & 12244 OF 2025
1983 was initiated and the report was submitted on 09.12.2003.
9.This fact was pointed out by the learned counsel for the
petitioner, who claimed that in W.P.No.12242 of 2025, the petitioner has
challenged a charge memo dated 10.03.2025, which references an earlier
show-cause notice issued in 2005. The petitioner protects the initiation of
action after twenty years. It is contended that, following the charge
memo, an enquiry was conducted and concluded, with the enquiry report
stating that the charges were proved.
10.It is also important to note that in response to various
findings, the petitioner moved the Court. One such instance is C.R.P.
(NPD) Nos.614 of 2022, etc., in which the petitioner, as the fourth
petitioner along with five others, filed separate Civil Revision Petitions
challenging the judgment and decree dated 21.09.2011 of the District Co-
operative Tribunal, Dharmapuri / Principal District Court, Dharmapuri in
CMA (CS) No.47 of 2008, etc., wherein a decree was passed against the
petitioner. A learned Single Judge of this Court, by a common order dated
21.04.2022, deemed it appropriate to allow the Revision Petition. It was
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W.P.NOS.12242 & 12244 OF 2025
observed that the petitioner had not committed any irregularities or
charges. The respondents, however have taken into account the enormous
amount of misappropriated funds involved.
11.The second respondent Bank also filed SLP before the
Hon'ble Supreme Court and an interim stay on the order of the learned
Single Judge was granted by the Hon'ble Supreme Court. Thus, this only
revives the judgment and decree passed by the Co-operative Tribunal /
Principal District Court, Dharmapuri.
12.Additionally, it appears that a criminal case has also been
initiated against the petitioner. After the completion of the investigation, a
final report was submitted, and cognizance was taken in C.C.No.234 of
2020, by the Judicial Magistrate – II, Dharmapuri.
13.The petitioner, along with two others, filed
Crl.O.P.No.22561 of 2022 seeking to quash the Calendar Case. A learned
Single Judge of this Court, by order dated 30.08.2023, held that the
petitioner was categorized as A14, and that the entire operation of
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computerization was carried out only by A1, and therefore, the charges
against the petitioner were deemed not applicable, and the learned Single
Judge deemed it appropriate to quash the Calendar Case against the
petitioner and the two others.
14.The learned counsel for the petitioner placed strong
reliance on the order of the learned Single Judge. However, this does not
absolve the petitioner from facing an enquiry regarding misappropriation.
15.When there is an allegation of misappropriation by an
employee of the Co-operative Society, the respondent/Co-operative
Society has a right to file a criminal complaint and also initiate
proceedings under Section 81 of the Tamil Nadu Co-operative Societies
Act, 1983. They also have the right to initiate disciplinary proceedings
against the petitioner. However, while the facts and evidence may be the
same, they should still be properly evaluated. The evidence have to be
evaluated from different viewpoints for all three courses, each examining
a distinct aspect.
16.In a criminal case, it is the responsibility of the Magistrate
overseeing the trial to determine whether the charges have been proved
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beyond reasonable doubt. In proceedings under Section 81 of the Tamil
Nadu Co-operative Societies Act, 1983, which is a fact-finding enquiry, it
must be examined whether further proceedings under Section 87 of the
Tamil Nadu Co-operative Societies Act, 1983, which involve surcharge
proceedings, are necessary to determine liability. In disciplinary
proceedings, the Bank has every right to initiate action against an
employee for misconduct and for violation of rules, including failure to
uphold proper conduct and involvement in misappropriation. While the
investigation and the evidence may be the same across different
proceedings and the nature of the evidence tendered by the witnesses
would also remain the same and the documents relied upon may be the
same, but they can still serve distinct and separate purposes in each
proceeding. In other words, disciplinary proceedings and criminal
proceedings are independent and do not operate simultaneously.
Disciplinary proceedings may be kept in abeyance but cannot be set aside
merely because criminal case is pending.
17.In the present case, the criminal trial has not moved
through its full course. Witnesses have not been examined and there has
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been no opportunity to adduce oral or documentary evidence, nor have
such evidence been subjected to scrutiny or proof. In fact, no substantial
evidence has been advanced at all. The Calendar Case was quashed solely
on a narrow ground—namely, that A1 alone was said to be responsible
for the core operations and that there was only a remote possibility of the
petitioner having knowledge of the misappropriation.
18.However, in the disciplinary proceedings now initiated,
the focus is on whether the petitioner had discharged his duties
responsibly. This aspect must be examined independently, regardless of
the criminal proceedings.
19.It is contended on behalf of the third respondent that
separate disciplinary proceedings have been initiated against the
petitioner, necessitating issuance of a charge memo and placing the
petitioner under suspension. The respondents have every right to proceed
against the petitioner in order to examine the nature of the allegations,
investigate the cause of the loss exceeding Rs.2/- crores, and determine
whether any fraud or misappropriation of funds occurred, including
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tracing the flow of the misappropriated money. Whether the actions taken
are proper or not must be assessed in light of the fact that the Hon'ble
Supreme Court has granted a stay of the order of the learned Single
Judge, thereby reviving the judgment and decree passed against the
petitioner by the Co-operative Tribunal / Principal District Court.
20.These are all matters that require thorough examination.
It cannot be accepted that the enquiry notice issued in 2005 and the
subsequent proceedings initiated in 2025 are disconnected, as they form
part of a continuous series of actions stemming from the initial discovery
of the misappropriation. Whether the petitioner was involved in the
misappropriation, and whether his involvement continued thereafter, are
matters that require examination. The respondents must be given an
opportunity to determine these facts through proper proceedings. The
petitioner will have to abide by the proceedings initiated against him.
Although the petitioner has the benefit of two separate orders in his
favour, that does not mean this Court must absolve him of all the
allegations made against him. The respondents have every right to
proceed against the petitioner, particularly considering the substantial
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amount involved and the fact that the petitioner was in service at the
relevant time.
21.The order passed by the former Deputy
Registrar/Administrator of the second respondent Bank, absolving the
petitioner of the charges, cannot be taken at its face value. It holds no
legal validity and in fact, by favouring the petitioner, the official himself
is now facing an order of suspension. The petitioner cannot rely on that
order to claim exoneration. It does not absolve him of the allegations, nor
does it prevent the respondents from proceeding with the disciplinary
action. It is for the appropriate authority, following due process, to
determine the petitioner’s liability.
22.The learned counsel for the petitioner relied on the order
of the learned Single Judge in W.P.No.29334 of 2012 [P. Karunagaran
vs. The Secretary to Government, Highways Department, Chennai, and
others] dated 17.03.2022, wherein the learned Single Judge had
examined a charge memo dated 14.03.2005 and proceedings dated
18.09.2012, and quashed the same on the ground of delay. The learned
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Single Judge had placed reliance on the Hon'ble Supreme Court's rulings,
wherein it was observed that an explanation for the delay in moving
forward after the charge memo had been issued was not provided. In the
present case, the delay has been explained. The date of issuance of the
show cause notice has been stated. The petitioner has avoided providing
an effective reply to the show cause notice and had instead moved from
Court to Court seeking orders on the allegations. The order of the learned
Single Judge in the cited case is based on specific facts. The petitioner is
entitled an explanation, but that does not absolve him of his obligations.
23. I do not find any merits in the writ petitions and
therefore, the writ petitions are dismissed. No costs. Consequently,
connected miscellaneous petitions are closed.
15.04.2025
Index : Yes
Neutral Citation : Yes
Speaking Order : Yes
TK
To
1.The Deputy Registrar of Co-operative
Societies
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Dharmapuri Circle,
Dharmapuri.
2.The Administrator
No.1512, Dharmapuri Co-operative
Town Bank Ltd.,
63/A, Duraisamy Naidu Street,
Dharmapuri.
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W.P.NOS.12242 & 12244 OF 2025
C.V.KARTHIKEYAN, J.
TK
W.P.NOS.12242 AND 12244 OF 2025
15.04.2025
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