Madras High Court
The Managing Director/ Joint Registrar vs M.Narayanasamy on 27 June, 2025
Author: S.M. Subramaniam
Bench: S.M. Subramaniam
W.A.(MD) No.262 of 2020
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 23.06.2025
PRONOUNCED ON : 27.06.2025
CORAM:
THE HONOURABLE MR.JUSTICE S.M. SUBRAMANIAM
and
THE HONOURABLE DR.JUSTICE A.D.MARIA CLETE
W.A.(MD) No. 262 of 2020
and
C.M.P.(MD) No.1828 of 2020
The Managing Director/ Joint Registrar,
[Formerly the Special Officer]
Virudhunagar District Central Co-operative
Bank Ltd, Virudhunagar. ... Appellant
Vs.
1.M.Narayanasamy, S/o. N.Muthukrishnan,
1 /2084. Muthal Nagar, Pandian Nagar,
Virudhunagar.
2.The Additional Registrar of Co-operative
Societies, [Sales, Scheme and Development]
Chennai - 625 010. ... Respondents
1/14
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W.A.(MD) No.262 of 2020
PRAYER: Writ Appeal filed under Clause 15 of the Letters Patent praying to
allow this Writ Appeal by setting aside the orders passed by the Learned Judge in
W.P.(MD) No. 10166 of 2011 dated 29.11.2018.
For Appellant : Mr. S. Seenivasagam.
For Respondents : Mr. T. Ravichandran for R1.
No appearance for R2.
JUDGMENT
(Delivered by Dr. A.D. Maria clete, J)
Heard.
2.This writ appeal has been preferred by the appellant, namely, the District
Central Cooperative Bank at Virudhunagar, represented by its Managing Director,
who was functioning earlier as the Special Officer. The appeal challenges the order
passed by the learned Single Judge in W.P.(MD) No.10166 of 2011 dated
29.11.2018, whereby the learned Judge interfered with the dismissal of the 1st
respondent and directed payment with all attendant benefits. The learned Judge
quashed the order passed by the Revisional Authority in Na.Ka.No.
49717/2009/Se/Pa/1 dated 08.01.2010 as well as the dismissal order passed by the
appellant Bank dated 06.04.2009.
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3.Notice was ordered in this writ appeal on 20.02.2020, and the contesting
respondents have entered appearance through their respective counsel. The brief
facts that led to the filing of the writ appeal are as follows: The 1st respondent was
employed as an Assistant in the appellant Bank. He was posted as Assistant-cum-
Manager in-charge of the Coronation Colony Branch at Virudhunagar from
21.08.2003 to 06.08.2006. During his tenure at that branch, the Bank found that
the 1st respondent had committed certain irregularities while sanctioning loans
under the “Revamped Micro Loan Scheme” to women beneficiaries.
4.The nature of charges framed against the 1st respondent were grave. As
seen from the charge memo dated 26.03.2007, the following irregularities were
alleged:
(i) That 38 loan applications were sanctioned without obtaining the signature of
the guarantor/surety, to the tune of Rs.1,51,175/-;
(ii) That 28 loans were sanctioned without any pass order from the Branch
Manager, amounting to Rs.1,02,556/-;
(iii) That 8 loans were sanctioned without securing the applicant’s photograph and
photocopy of their Family Card, involving Rs.23,900/-;
(iv) That 104 loans were sanctioned without receiving any loan applications,
totaling Rs.4,38,192/-.
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Thus, a total of 178 loans had been granted in violation of the circulars and
guidelines issued by the Management, amounting in total to Rs.7,15,823/-.
Further, it was alleged that the 1st respondent had failed to follow the procedure
prescribed by the Bank while sanctioning these loans.
5.The 1st respondent submitted his explanation on 25.04.2007. As the
explanation was found unsatisfactory, a domestic enquiry was ordered. After
detailed proceedings, the Enquiry Officer submitted his findings on 29.03.2008
and held that the 1st respondent was guilty of the first and third charges levelled
against him. In respect of the first charge, the Enquiry Officer rendered the
following finding:
“4/ Fw;wr;rhl;L vz;/1
rptfhrp fhh;ndrd; fhydp fpisapy; fpisnkyhsh; (bghWg;g)[ Mf
21/08/2003 Kjy; 06/08/2006 Koa Fw;wk; rhl;lg;gl;Ls;s
jpU/M/ehuhazrhkp gzpg[hpeJ ; s;shh;/ mtuJ gzpf;fhyj;jpy; t';fp
eilKiwfis gpd;gw;whky; gyFiwfSld; kfsph; rpWtzpf fld;fs;
gl;Lthlh bra;Js;shh;/ epht ; hfj;jug;g[ rhl;rpajpy;. fld;jhuh; kw;Wk;
$kPd;jhuh; ifbahg;gk; ,y;yhky; 38 egh;fSf;F bkhj;jk; U:/1.51.175-?
kl;Lk;. nkyhsh; cj;jput[ ifbahg;gk; ,y;yhky; 29 fld;fs; K:yk;
U:/1.02.556-?k;. fld;jhuh;fspd; g[ifg;glk;. kw;Wk;. FLk;g ml;il efy;fs;
bgwhky; 8 egh;fSf;F U:/4.38.192-? kl;Lk;. kfsph; rpWtzpf jpll; j;jpd;
fPH; fld;fs; jpU/M/ehuhazrhkp tH';fpa[ss ; hh; vdf; Twpa[ss ; hh;/
fld;jhuu; kw;Wk; $hkPd;jhuh;fs; ifbahg;gk; ,y;yhj nfhg;g[fs; 31
vz;zk; M$h; gLj;jg;gl;L. epht ; hfj;jug;g[ Mtzk; EXA2 thf
Fwpf;fg;gl;lJ/ ic& EXA2 Mtz';fis ghh;itapLk; nghJ. gy
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kDf;ffspy;. fld;jhuh; ifbahg;gk; bgwg;gltpy;iy vd;gJk;. gy
kDf;fspy; $hkPd;jhuh; ifbahg;gk; ,y;iy vd;gJk; bjhpa tUfpwJ/
EXA2 nfhg;g[fis ghh;itapLk; nghJ flDWjp rPl;oy; fld;jhuh;
ifbahg;gk; bgwg;gltpy;iy vd;gJ bjspthfpwJ/ fld; cWr;rPl;oy;
ifbahg;gk; ,y;iy vd;why;. rl;lg{h;t eltof;if vLf;f ,ayhky;
ngha;tpLk;/ EXA3 Mtz';fs; vz;zk; 28I ghh;itapLk; nghJ fld;
mDkjpf;Fk; cj;jput[fspy; nkyhsh; ifbahg;gk; ,y;iy vd;gJ bjhpa
tUfpwJ/ EXA4 Mtz';fis vz;zk; 8I ghh;itapLk; nghJ fld;
kDf;fspy; nghl;nlh xl;lg;gltpy;iy vd;gJ bjhpfpwJ/ nkYk; fld;
gl;Lthlh nrkpg;g[ fzf;fpwF ; <L bra;tjd; K:yk; gl;Lthlh
bra;ag;glhky; tt[rr; h; K:yk; bra;ag;gl;Ls;sJ vd;gJk; bjhpa tUfpwJ/
epht
; hfj;jpd; rhh;gpy; 26/03/2007y; Fw;wr;rhl;L Fwpgg; hiz
tH';fg;gl;Ls;sJ/ Fw;wr;rhl;L Fwpgg; hiz EXA1 Mf
xg;g[fb; fhs;sg;gLfpwJ/ Fw;wr;rhl;L Fwpgg; hizf;F gjpy; vJt[k;
mDg;gltpy;iy vd;gJk; xg;g[f;bfhs;sg;gLfpwJ/ Fw;wk; rhl;lg;gl;lthpd;
rhh;gpy; jhf;fy; bra;Js;s thf;F K:yj;jpy; cz;ikahd fld; kDf;fis
kiwj;J tpll; hh;fs; vd;w thjk; Vw;Wf;bfhs;s Toajhf ,y;iy/ fld;
kDf;fis kiwj;J tpl;ljhf kj;jpa t';fpfF ; jfty; vJt[k; mtuhy;
bjhptpf;fg;gltpy;iy/ kfsph; rpWtzpff; fld;fs; tH';Ftjpy; t';fpapd;
eilKiwfis gpd;gw;whky; jpU/M/ehuhazrhkp elj;Js;shh; vd;w
Fw;wr;rhl;L eph;thfj;jhy; epU:gpf;fg;gl;Ls;sJ/ 1tJ Fw;wr;rhl;L
jpU/M/ehuhazrhkp mth;fSf;F vjpuhf epU:gpf;fg;gl;Ls;sJ vd
Kot[ bra;fpnwd;/”
6.Similarly, in respect of the third charge, the Enquiry Officer recorded the
following finding:
“6/ Fw;wr;rhl;L vz;/3
kfspu; rpWtzpff; fld; tH';Ftjpy; t';fpapd; eilKiwfis
gpd;gw;whky; jpU/M.ehuhazrhkp bray;gl;Ls;shu; vd;gJ Fw;wr;rhl;L/
kfspu; rpW tzpff;fld; tH';FtJ rk;ke;jkhf 25/03/1999y; t';fp
fpisfSf;F. kj;jpa t';fp xU Rw;wwpf;if mDg;gg;gl;Ls;sJ/ me;j
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Rw;wwpf;ifapd; efy; EXA6 Mf Fwpf;fg;gl;Ls;sJ/ nkyhsu;fs; fld;
tH';Fk; nghJ filgpof;fntz;oa tpjpKiwfs; gw;w bjspthf ic&
Rw;wwpf;ifapy; Fwpf;fg;gl;Ls;sJ/ ic& Rw;wwpf;ifapy; fld; kDtpy;
gh!;nghu;l; ir!; nghl;nlh xl;l ntz;Lk;. $hkPd;jhuuplk; $hkPd;
fld;gj;jpuj;jpy; ifbahg;gk; bgw ntz;Lk; vd bjspthf
Fwpg;gplg;gl;Ls;sJ/ Mtz';fis ghu;itapLk; nghJ jpU/M.ehuhazrhkp
mtu;fs; t';fpapd; eilKiwfis gpd;gw;whky; ftdf;Fiwthf
bray;gl;Ls;shu; vd;w Fw;wr;rhl;L eput
; hfj;jhy; epU:gpf;fg;gl;Ls;sJ/ 3tJ
Fw;wr;rhl;L jpU/ehuhazrhkp mtu;fSf;F vjpuhf epUg: pf;fg;gl;Ls;sJ
vd;W Kot[ bra;fpnwd;/”
7.The 1st respondent was furnished with a copy of the enquiry report and
was given an opportunity to submit his remarks, which he did on 28.10.2008. A
final show-cause notice dated 19.02.2009 was then issued, affording him another
opportunity to offer further explanation, which he submitted on 05.03.2009. As the
explanation was still not found satisfactory, the 1st respondent was dismissed from
service by order dated 06.04.2009. Simultaneously, surcharge proceedings were
initiated against him by the jurisdictional Deputy Registrar.
8.Aggrieved by the dismissal, the 1st respondent preferred a revision
petition dated 06.05.2009 under Section 153 of the Tamil Nadu Cooperative
Societies Act before the 2nd respondent—Revisional Authority. Notice was issued
to the appellant Bank, which filed a counter statement in August 2009. After
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providing an opportunity of hearing, the 2nd respondent dismissed the revision by
order dated 08.01.2010. In the said order, the Revisional Authority declined to
interfere with the action taken by the Bank. It is against this revisional order that
the 1st respondent filed W.P.(MD) No.10166 of 2011 before the learned Single
Judge.
9.Upon hearing both parties, the learned Single Judge allowed the writ
petition by order dated 29.11.2018. The learned Judge set aside both the revisional
order dated 08.01.2010 and the dismissal order dated 06.04.2009, and directed that
attendant benefits to be extended to the 1st respondent within six weeks.
10.The learned Judge did not find any violation of principles of natural
justice in the conduct of the enquiry. However, it was held that since the
punishment imposed was a major penalty, the competent authority ought to have
granted the 1st respondent a personal hearing. In support of this conclusion,
reliance was placed on the decision of the Punjab and Haryana High Court in Ram
Niwas Bansal v. State Bank of Patiala, reported in 1999 (2) LLJ 126 (P&H).
Paragraphs 30, 31, 32, and 36 of the said judgment were extracted to hold that
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personal hearing forms part of the principles of natural justice when a major
penalty is contemplated.
11.However, it is to be noted that the appellant Bank had conducted a full-
fledged domestic enquiry. The report of the Enquiry Officer was furnished to the
1st respondent and his remarks were obtained. Even after the final show-cause
notice, another opportunity was given, and further explanation was submitted by
the 1st respondent. The learned Judge having recorded that there was no
procedural infirmity in the enquiry, the question of requiring a personal hearing
before passing the dismissal order does not logically arise.
12.Though the appellant raised a jurisdictional objection, contending that a
revision under Section 153 of the Tamil Nadu Cooperative Societies Act would not
lie against an order of dismissal, we are not inclined to accept that submission. A
Division Bench of this Court in P. Eswaramoorthy v. R.J.B. Leoraj, reported in
2008 (6) CTC 770, has held that Section 153 of the Act is wide in its scope and
that employees of Cooperative Societies can invoke revisional jurisdiction under
Section 153 for redressal of grievances arising out of disciplinary actions, denial
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of promotion, or fixation of seniority, etc. The relevant paragraph is extracted
hereunder:
“24. In the light of the above legal journey through various decisions
of this Court as well as of the Supreme Court, the following
propositions will emerge: —
(a) Section 90 of the 1983 Act providing for settlement of disputes
will not include a dispute between a servant of a Co-operative
Society and its Management. Therefore, no dispute can be referred to
the Registrar or his nominee under Section 90 and consequently, no
appeal will lie to the Tribunal under Section 152.
(b) Section 153 of 1983 Act is a departure from Section 97 of the
1961 Act and it is wider in nature. Power has been specifically
conferred on the revisional authority under Section 153 to call for
and examine the record of any proceeding under the Act or the Rules
or the bye-laws of any officer subordinate to the Registrar or of the
Board of Director or any officer of a registered society or of the
competent authority constituted under Section 75(3) of the 1983
Act. Therefore, the employees of a Co-operative Society can
approach the Registrar or any competent authority under Section 153
to revise any order passed by the Co-operative Society relating to
disciplinary action taken against him or denial of promotion or wrong
fixation of seniority, etc.
(c) There is no implied ouster of the jurisdiction of the power of the
Labour Court/Industrial Tribunal to deal with similar matters if
disputes are raised before them by workmen or employees covered by
those provisions. Both remedies are available.
(d) The decision in Somasundaram v. Liyakat Ali [1997 (1) CTC 4 = 1998
(2) LLJ 719] may not be a good law. The employees therein filed a
Civil Suit regarding promotion issue. As remedy for the aggrieved
parties in that case are available either under Section 153 or by an
industrial dispute under Section 2(k) of the Industrial Disputes Act,
1947, they could not have gone before the Civil Court. Therefore, the
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bar under Section 156 of the Co-operative Societies Act as well as the
implied ouster of jurisdiction of the Civil Court by the provisions of
the I.D Act will directly apply and the suit is barred.
(e) The decision of P. Sathasivam, J. (as he then was) in K.
Radhakrishnan v. Additional Registrar [2000 (ii) CTC 147] upholding the
right of revision under Section 153 has laid the correct position of
law. Likewise, the judgment of P. Sathasivam, J. (as he then was) in
The Management of Madras Atomic Power Project Employees'
Consumers (Co-operative Stores Limited, Kalpakkam rep. by its
Special Officer v. The Deputy Commissioner of Labour (Appeal)
Madras - 6 and 2 others [2000 (III) CTC 738 = 2000 (2) LLJ 1451] holding
that Section 90 of the 1983 Act is not available for employees of Co-
operative Societies against the orders of termination has been
correctly decided.”
13.The 2nd respondent, being the competent statutory revisional authority
under the Act and the Rules framed thereunder, had acted within his powers. From
a reading of the order, it is evident that both parties were heard before the final
decision was rendered. The relevant portion of the order confirming this position
reads as follows:
“1983 Mk; Mz;L jkpH; ehL Tl;Lwt[r; r';f';fspd; rl;lg;gpupt[ 153d; fPH;
gjpthsupd; mjpfhuk; bgw;w gjpthsu; mYtyf TLjy; gjpthsuhy; (tpw;gid
jpl;lk; kw;Wk; tsu;r;rp) ,r;rPuha;t[ kD tprhuizf;F Vw;fg;gl;L ,r;rPuha;t[ kD
bjhlu;ghf gjpYiu kw;Wk; Mtz';fis jhf;fy; bra;jpl vjpu; kDjhuUf;F
mwptpgg; [ tH';fg;gl;lJ/ vjpu; kDjhuuplkpUe;J gjpYiu kw;Wk; Mtz';fs;
tug;bgw;wt[ld; 7/12/09y; ,k;kD tprhuizf;F vLj;Jf; bfhs;sg;gLk; vd ,U
jug;gpdUf;F cupa mwptpg;g[ tH';fg;gl;lJ/ rpy eput
; hf fhuz';fshy;
7/12/09y; tprhuiz elj;jg;gltpy;iy/ vdnt. tprhuiz 18/12/09f;F xj;jp
itf;fg;gl;lJ/ 18/12/09 njrpa tprhuizapy; ,U jug;gpdUk; fye;J bfhz;L
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mtutu; jug;g[ thj';fis Kd; itj;jdu;/ 18/12/09 njjpapnyna tprhuiz
Kof;fg;gl;L ,k;kD kPJ ,d;W jPug; ;g[f;F vLj;Jf; bfhs;sg;gl;lJ/”
14.In such circumstances, the reliance placed by the learned Single Judge on
the judgment of the Punjab and Haryana High Court regarding the requirement of
personal hearing appears misplaced. That judgment pertained to disciplinary
proceedings involving an employee of a nationalised bank, where a statutory
appellate authority was held to be bound to grant a personal hearing. The factual
and legal contexts are entirely different and cannot be mechanically applied to
disciplinary proceedings within the cooperative sector governed by a distinct
statutory scheme.
15.The learned Judge also referred to the judgment of the Hon’ble Supreme
Court in B.C. Chaturvedi v. Union of India, reported in (1995) 6 SCC 749,
specifically to paragraph 18. However, that judgment restricts the power of courts
and tribunals to interfere with the penalty imposed by the employer unless the
punishment shocks the conscience of the Court. Similarly, reliance on Director
General, RPF v. Saibabu, reported in (2003) 4 SCC 331, is also not apposite,
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since that judgment deals with rare situations where the punishment is shockingly
disproportionate.
16.In the present case, we are unable to find any element of
disproportionality in the punishment imposed. The charges proved are grave in
nature. The employee was entrusted with public funds in a banking institution and
had processed and sanctioned a large number of loans in utter disregard of the
rules and norms. In the banking sector, procedural irregularities resulting in
financial loss are treated with utmost seriousness, and employees are expected to
act as trustees of public money.
17.In light of the foregoing discussion, we are of the considered view that
there is no justification to interfere either with the disciplinary action taken by the
appellant Bank or with the revisional order passed by the 2nd respondent. The
judgment of the learned Single Judge is therefore liable to be set aside.
Accordingly, the writ appeal stands allowed. The order passed in W.P.(MD) No.
10166 of 2011 dated 29.11.2018 is set aside, and the writ petition is dismissed. No
order as to costs. Consequently, the connected miscellaenous petition is closed.
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(S.M.S., J) (A.D.M.C., J)
27.06.2025
ay
Index : Yes/No
Neutral Citation: Yes / No
Speaking Order / Non-speaking Order
To
1.The Managing Director/ Joint Registrar,
[Formerly the Special Officer]
Virudhunagar District Central Co-operative
Bank Ltd, Virudhunagar.
2.The Additional Registrar of Co-operative
Societies, [Sales, Scheme and Development]
Chennai - 625 010.
3.The Section Officer,
V.R. Section,
Madurai Bench of Madras High Court,
Madurai.
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S.M. SUBRAMANIAM, J
and
DR. A.D. MARIA CLETE, J
ay
[Judgment made in
and
27.06.2025
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