Madras High Court

A.Jayakodi vs The Deputy Registrar Of Cooperative ... on 28 January, 2025

Author: C.V.Karthikeyan

Bench: C.V.Karthikeyan

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 28.01.2025

CORAM

THE HON'BLE Mr. JUSTICE C.V.KARTHIKEYAN

W.P.No.2502 of 2025
and
W.M.P.No.2825 of 2025

1.A.Jayakodi
2.A.Sakthi
3.A.Chandiravadivu
.. Petitioners
Vs.

1.The Deputy Registrar of Cooperative Societies,
Ariyalur Circle,
Ariyalur,
Ariyalur District.

2.The Management,
Ty. Spl. 105,
Azhagapuram Primary Agricultural Cooperative Credit Society,
Azhagapuram Village,
Kavarappalayam Via,
Ariyalur District. .. Respondents

Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorarified Mandamas, calling for the records
of the Surcharge Award No. Na.Ka.3262/2008 Sa.Pa. passed on 15.05.2023
on the file of the 1st respondent and to quash the same as arbitrary, against
the principles of natural justice and total inconformity with the provisions of

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2

the Tamil Nadu Cooperative Societies Act, 1983 and consequently, remove
attachment over the immovable properties of the petitioners.

For Petitioner .. Mr.K.Vasanthanayagan
For Respondents .. Mr.S.Ravikumar, Spl. Govt. Pleader

ORDER

This Writ Petition has been filed in the nature of a Certiorarified

Mandamus seeking records relating to Surcharge Award No.

Na.Ka.3262/2008.Sa.Pa passed on 15.05.2023 on the file of the 1st

respondent and to quash the same. The petitioners claim that the order had

been passed violating the principles of natural justice against the provisions

of Tamil Nadu Cooperative Societies Act, 1983. The petitioners seek

removal of attachment over the immovable properties of the petitioners.

2.In the affidavit filed in support of the writ petition, the petitioners

who are the legal heirs of Annadurai who was the Secretary of the 2nd

respondent, Cooperative Society, have claimed that a report had been filed

under Section 81 of the Tamil Nadu Cooperative Societies Act 1983,

whereby, it had been found that the husband of the 1st petitioner / father of

the 2nd and 3rd petitioners and another individual one Ramasamy had been

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involved in misappropriation of the funds of the society. Surcharge

proceedings under Section 87(1) of the Act was recommended to be

initiated. Apart from that, criminal proceedings were also initiated against

the said Annadurai / husband of the 1st petitioner, father of the 2nd and 3rd

petitioners. It is therefore contended that Surcharge Proceedings under

Section 87(1) of the Act had commenced by issuing notice.

3.The grievance raised by the learned counsel for the petitioners is

that no sufficient opportunity had been granted to the petitioners. It had also

been stated that witnesses whose statements had been relied in the enquiry

were not examined during the Surcharge Proceedings. It is also contended

that therefore, the petitioners did not have an opportunity to cross-examine

the witnesses. It is therefore contended that, if opportunity is granted, the

petitioners would be able to make out a case during the Surcharge

Proceedings.

4.In this connection, the learned counsel for the petitioners placed

reliance on the order of a learned Single reported in 2014 (2) CWC 615,

D.Sathyamoorthy Vs. The Deputy Registrar of Cooperative Societies,

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Uthakamandalam and 2 others, wherein, the learned Single Judge had held

as follows:

“8. Now comes the crucial provision contained in Section 87 of the Act. A plain reading of Section 87 would make it abundantly clear that a surcharge proceeding under Section 87 shall be initiated on the basis of audit under Section 80 or inquiry under Section 81, or inspection or investigation under Section 82, or inspection of books under Section 83 or winding up of the society. Therefore, it is crystal clear that for initiation of a surcharge proceeding under Section 87 of the Act, a report submitted under Section 80 or under Section 81 or under Section 82 or under Section 83 is the foundation. The actual adjudication happens only in the surcharge proceeding under Section 87 of the Act. That is the reason why, Section 87 makes it mandatory that before making an order in the surcharge proceeding a reasonable opportunity should be given to the persons concerned. It is only at this stage, witnesses are examined and documentary evidences are tendered and the persons against whom surcharge proceeding has been initiated is allowed to cross examine the witnesses if he so wishes and also to lead evidence on his side, both oral and documentary. Section 87(4) of the Act also makes it clear that the officer who conducts surcharge proceeding shall have all the powers of the civil court in respect of matters enumerated therein such as, summoning and enforcing attendance of any

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person and examine him on oath; requiring the discovery and production of any document; reception of evidence on affidavits;

requisitioning any public record from any court or office; and issuing commission for examining of witnesses. Any award passed under Section 87 of the Act is appealable to the Cooperative Tribunal under Section 152 of the Act. The award could be executed like a civil court decree under Chapter XVI of the Act.

9.From the above provisions of the Act, there can be no dispute that no adjudication takes place during an audit under Section 80, or inquiry under Section 81, or inspection or investigation under Section 82, and inspection of books by financing Bank under Section 83 of the Act. In other words, these proceedings are aimed to find out the facts and to submit a report to the Authority concerned for initiation of proceedings. Mere Report under any of these provisions will not result in any Civil consequence.”

5.It had been contended that in any proceedings under Section 87 of

the Tamil Nadu Cooperative Societies Act, 1983, opportunity must be

granted which would also include examination of the witnesses and cross-

examining the witnesses and summoning of witnesses and also discovery of

production of documents. In effect, it had been stated that procedures as

enunciated under the Code of Civil Procedure should be followed.

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6.Written instructions had been forwarded on behalf of the

respondents wherein, it had been stated that the proceedings under Section

87 of the Act had been completed and orders had been passed and Execution

Petition has been filed.

7.Once Execution Petition has been filed, the petitioners will have to

file their claims before the appropriate authority with respect to the property

which had been attached. It had also been contended on behalf of the

respondents that the legal heirs of the co-delinquent had paid a sum of

Rs.4,46,954.46/- which included the principle amount of Rs.1,34,035.98/-

and interest of Rs.3,12,918.48. It had been stated that since the petitioners

herein had not satisfied the decree which had already been passed

consequent to the completion of the enquiry under Section 87 of the Act,

Execution Petition has also been filed. It had been very categorically stated

that notices had been issued on 13.12.2022, 18.04.2023 and again on

02.05.2023. The onus was then on the petitioners to participate in the

enquiry and file an application to summon the witnesses and seek

permission to cross-examine the said witnesses.

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8.The learned counsel for the petitioners claimed that the petitioners

had participated on one hearing date during the Surcharge proceedings and

thereafter, sent representations. But that will not take the petitioners

anywhere. The petitioners must participate in the enquiry proceedings and

file application seeking witnesses to be examined and permission to cross-

examine the witnesses. Having failed to take up that particular opportunity

and waited for orders to be passed, the petitioners cannot turn around and

claim that they have been prejudiced by non-examination of witnesses or by

not affording opportunity of cross-examination. This is one significant factor

distinguishing the facts relied on by the learned counsel in

D.Sathyamoorthy, 2014 (2) CWC 615, referred supra.

9.Here the petitioners participated once in the enquiry and thereafter

they avoided appearance before the enquiry officer.

10.In the judgment referred, it had been stated that the petitioners had

participated and on the particular date when he participated 30 witnesses

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were in attendance, since the petitioners were not prepared for cross-

examining the witnesses, the matter was adjourned and there were further 23

witnesses who were present. The petitioners had refused to cross-examine

them. Thereafter, the enquiry officer had proceeded to enquire with the

proceedings.

11.It is thus seen that in the case referred by the learned counsel for

the petitioners, there were as many as 30 witnesses who were present on one

day and 23 witnesses who were present on the other day and it can be very

clearly seen that cross-examination of all these witnesses would be an

impossible task. It was under those grounds that the learned Single Judge

had stated that principles of natural justice had been violated by the

respondents.

12.In the instant case, the petitioners had participated only once for

the enquiry and thereafter, they had only sent representation. They should

physically be present during enquiry. Now, much water has flowed by. The

order had been passed and Execution Petition had also been filed. The

petitioners may therefore, participate at least in the Execution Petition and

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put forth their case with respect to why the decree should be set aside.

13.It must the kept in mind that the legal heirs of the co-delinquent

had paid up the amount which had been charged as against the said co-

delinquent. The petitioners seek that the properties which are subject matter

of attachment must be released from attachment. Then, they must make out a

case as to why the said attachment should be released and not put into effect.

14.These are issues which the petitioners can always adjudiate in the

Execution Petition, but the relief claimed in the writ petition can never be

granted as the Surcharge proceedings have attained finality. The petitioners

also have an opportunity to file an appeal provided, if they are within the

period of limitation. These are all avenues available for the petitioners, but

certainly under Section 226 of the Constitution of India, the scope is

extremely narrow since the Tamil Nadu Cooperative Societies Act, 1983 is

an inbuilt Act providing representations to be made within the provisions of

the Act and appeals to be filed in provisions within the Act.

15.The reliance placed on the order in D.Sathyamoorthy, 2014 (2)

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CWC 615 referred supra is misplaced since the facts therein are totally

distinguishable from the facts of this case. I am not inclined to grant the

relief sought in this Writ Petition.

16.With the above reasonings, this Writ Petition stands dismissed with

liberty to participate in the Execution Petition in manner known to law. No

costs. Consequently, connected Miscellaneous Petition is closed.

28.01.2025 Index:Yes/No Internet:Yes/No smv

1.The Deputy Registrar of Cooperative Societies, Ariyalur Circle, Ariyalur, Ariyalur District.

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2.The Management, Ty. Spl. 105, Azhagapuram Primary Agricultural Cooperative Credit Society, Azhagapuram Village, Kavarappalayam Via, Ariyalur District.

C.V.KARTHIKEYAN,J.

smv

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28.01.2025

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