IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.10.2010 CORAM THE HONOURABLE Mr. JUSTICE N. KIRUBAKARAN W.P. No.7214 of 2009 1.V.Srinivasan (Deceased) 2.Leelavathi 3.Rajammal 4.Srivishnu (P2 to P4 proposed Legal heirs of deceased petitioner substituted in the place of original petitioner as per order dated 29.06.2010 in M.P.No.1 of 2010) .. Petitioners Vs. 1.The Registrar of Co-operative Societies, N.V. Natarajan Maligai, 170, EVR Periyar High Road, Kilpauk, Chennai – 600 010. 2.The Joint Registrar/Special Officer, The Coimbatore District Central Co-operative Bank Ltd., State Bank Road, Coimbatore – 641 018. 3.The Enquiry Officer, Special Investigation Department, (Co-operative Societies), Office of the Registrar of Co-operative Societies, Chennai – 600 010. .. Respondents PRAYER: This Writ petition filed under Article 226 of the Constitution of India for issuance of Writ of Certiorarified Mandamus, to call for the records of the 2nd respondent pertaining to his proceedings dated 13.08.1996 and the subsequent Charge Memo issued on 19.01.1999, quash the same and direct the respondents herein to provide the retiral benefits to the petitioner with interest @ 18% per annum. https://hcservices.ecourts.gov.in/hcservices/ For Petitioners : Mr.K.S.Karthik Raja for Mr.T.R.Rajaraman For R1 : Mr.P.Subramanian Additional Government Pleader For R2 : Mr.S.Saravanan ORDER The deceased 1st petitioner originally challenged the order of suspension and the charge memo issued to him. 2. It is the case of the 1st petitioner that he was appointed as Bank Inspector on 25.07.1968 and after periodical promotion he attained the age of superannuation on 31.08.1996. Before that, on 13.08.1996, the 2nd respondent\the Joint Registrar passed an order of suspension against the petitioner stating that the enquiry into certain charges against the petitioner was pending. Notice under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 was sent on 09.01.1997 and a charge memo dated 19.01.1999 was issued to the petitioner. A reply dated 30.05.2002 was given by the petitioner. Not satisfied with the reply, an enquiry was conducted and the Enquiry Officer filed the Domestic Enquiry Report dated 19.02.2003. The 1st petitioner was asked to appear before the authorities on 27.12.2004. Thereafter, there was no communication from the authorities and that was the reason why the 1st petitioner came before this Court, challenging the order of suspension as well as charge memo. Pending Writ, the 1st petitioner passed away and his legal heirs are the other petitioners. 3. The 2nd respondent filed a counter affidavit stating that there was a paper publication regarding malpractice in the 2nd respondent Co-operative Bank regarding sanctioning loans to Small Scale Industries. Based on that the District Collector issued a letter dated 26.07.1996 to the 2nd respondent to conduct an enquiry and file a report. During the enquiry it was found that the petitioner indulged in acts of abetting sanctioning of loans based on fabricated documents and that the amounts sanctioned were being misappropriated by the concerned parties. The amount misappropriated is stated to be Rs.70,69,398/- which was sanctioned to 11 Small Scale Industries. During preliminary enquiry it was found that the petitioner who was employed as Secretary failed in his duties, and therefore, he was responsible for all malpractices. In view of the above, the petitioner was suspended on 13.08.1996. Under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, an enquiry was also initiated by proceedings dated 19.08.1996. Section 81 enquiry revealed that 8 employees of the https://hcservices.ecourts.gov.in/hcservices/ Bank including the petitioner abetted the malpractices. 4. According to the 2nd respondent, after receiving a reply from the 1st petitioner pursuant to the charge memo, an enquiry was conducted and a report was submitted by the Enquiry Officer on 19.02.2003 and the petitioner was found guilty and the findings of the Enquiry Officer was concurred with. A second show cause notice was issued on 19.04.2004 enclosing a copy of the findings of the enquiry. An explanation dated 27.12.2004 was submitted by the 1st petitioner and he was given opportunity of personal hearing also. A further explanation was also submitted by the 1st petitioner. Out of 11 loan amounts, it is stated that 10 loan amounts were collected and one loan amount is yet to be collected and therefore, the respondents could not pass final orders in the matter. It is further stated in paragraph 19 of the counter affidavit that due to pendency of the Criminal proceedings, payment of retiral benefits could not be disbursed to the 1st petitioner. 5. This Court directed the 2nd respondent Officer to file an affidavit as to what action has been taken to conclude the proceedings against the petitioner pursuant to his proceedings dated 07.01.2005 and 13.01.2005. An affidavit dated 22.07.2010 was filed by the 2nd respondent Officer stating that the non completion of the disciplinary proceedings and not passing of final order was due to the pendency of loan accounts and therefore, there was a delay. 6. Mr.K.S.Karthik Raja, learned counsel appearing for the petitioners submits that the proceedings was started as early as on 1996 and the report was submitted on 2003 itself and the petitioner gave explanation on 27.12.2004 and thereafter, nothing is heard from the 1st petitioner. The 1st petitioner was suspended in 1996 and retirement benefits are not given even after 14 years. The learned counsel further submits that on the ground of delay, the proceedings are liable to be quashed and he relied upon the Division Bench Judgment of this Court in Parameswaran Vs. State of Tamil Nadu and others reported in 2006 (1) CTC 476. 7. Learned counsel appearing for the petitioners able to put forth another valid point that there is no enabling provision in the Co-operative Societies Act to keep the 1st petitioner under suspension, and continue the disciplinary proceedings even after superannuation. Further, he submits that when there is no enabling provision, the 1st petitioner is deemed to have retired and that the employer and employee relationship came to an end on 31.08.1996. He relied upon the admission made by the 2nd respondent in the Writ Petition filed by the 1st petitioner in W.P.No.38583 of 2002 which was disposed on 17.09.2003. In this regard, he relied upon the Division Bench Judgments of this Court in N.Kunnai Gowder Vs. The https://hcservices.ecourts.gov.in/hcservices/ Coimbatore District, Co-operative Milk Producers' Union Ltd., and another reported in 2007 (5) CTC 491; A.Bommusamy Vs. The Government of Tamil Nadu and others reported in 2007 (3) CTC 518 and another Judgment of this Court in G.Manoharan Vs. The Registrar of Co-operative Societies and others reported in 2007 (2) CTC 501 . 8. The learned counsel for the 2nd respondent submits that because one loan amount is not recovered till date, the proceedings could not be completed and he justified the proceedings against the officer. 9. It is an admitted fact that the 1st petitioner was suspended on 13.08.1996 before he attained the age of superannuation on 31.08.1996. A charge memo was issued on 19.01.1999 and the enquiry was concluded on 19.02.2003. The 1st petitioner appeared before the authorities and submitted his explanation on 27.12.2004. The charges against the 1st petitioner were no doubt grave, that is, misappropriation of Co-operative Society's money. The allegations though were grave that he misappropriated the money, the proceedings should be initiated and concluded as per the procedure and law at the earliest. Whereas in this case, the proceedings which was started in 1996 did not reach finality even after passage of 14 years. There is no delay on the part of the 1st petitioner by way of any proceedings which prohibited the respondents from proceeding with further. Therefore, on the ground of delay itself, the proceedings are liable to be quashed. In Parameswaran Vs. State of Tamil Nadu and others reported in 2006 (1) CTC 476 dated 23.11.2005, His Lordship Mr.P.Sathasivam (as he then was) heading a Division Bench relying upon the Judgment of Hon'ble Supreme Court in P.V.Mahadevan Vs. M.D., Tamil Nadu Housing Board reported in 2005 (4) CTC 403 quashed the disciplinary proceedings on the ground of unexplained delay in pursuing disciplinary action. Paragraphs 9 and 10 of the Judgment in Parameswaran Vs. State of Tamil Nadu and others reported in 2006 (1) CTC 476, are extracted as follows:- "9. In this regard, it is useful to refer the latest Judgment of the Supreme Court in the case of P.V.Mahadevan Vs. M.D., Tamil Nadu Housing Board, 2005 (4) CTC 403. In that case, in respect of certain commissions and omissions in 1990, which were pointed out in the Audit Report in 1994-95, a charge memo came to be issued in 2000. Pointing out that the reason for delay was unacceptable and finding that the disciplinary proceedings was prejudicial to public interest and the interest of employee and taking note of the fact that the employee reached superannuation, and also https://hcservices.ecourts.gov.in/hcservices/ considering that the mental agony and suffering of the employee due to protracted disciplinary proceedings, was more than punishment to be awarded, the Apex Court quashed the charge memo and permitted the employee to draw retrial benefits. The following observations made in para 14 of the said Judgment are relevant: "14. Under these circumstances, we are of the opinion that allowing the respondent to proceed further with the departmental proceedings at this distance of time will be very prejudicial to the appellant. Keeping a higher Government official under charges of corruption and dispute integrity would cause unbearable mental agony and distress to the officer concerned. The protracted disciplinary enquiry against a Government employee should, therefore, be avoided not only in the interests of inspiring confidence in the minds of the Government employees. At this stage, it is necessary to draw the curtain and to put an end to the enquiry. The appellant had already suffered enough and more on account of the disciplinary proceedings. As a matter of fact, the mental agony and sufferings of the appellant due to the protracted disciplinary proceedings would be much more than the punishment. For the mistakes committed by the Department in the procedure for initiating the disciplinary proceedings, the appellant should not be made to suffer." 10. In the case before us, the alleged failure to utilise the advance amount and failure to complete the work entrusted to him by utilising the funds had taken place prior to 1985. It is not a case of misappropriation or retention of Government money. On the other hand, the allegation relates to negligence in monitoring the projects and non-utilising the funds within the time prescribed. Taking note of the same and in the light of unexplained reason for not pursuing the first and second charge memos, when admittedly, the petitioner submitted his explanations denying all the allegations and https://hcservices.ecourts.gov.in/hcservices/ considering the length of time involved, viz., 20 years, we are of the view that the Judgment of the Supreme Court referred to above P.V.Mahadevan Vs. M.D., Tamil Nadu Housing Board, 2005 (4) CTC 403, is directly on the point. Further, the petitioner has already suffered enough mental agony on account of the protracted disciplinary proceedings. These material aspects have not been considered by the Tribunal, which has committed an error in dismissing the original application filed by the petitioner." The said Judgment is squarely applicable to the facts of the present case as there is inordinate delay on the part of the respondents. Therefore, the Writ Petition is liable to be allowed on the ground of delay. 10. Secondly, there is no enabling provision in the Tamil Nadu Co-operative Societies Act, 1983 to keep the petitioner under suspension and conduct disciplinary proceedings beyond the date of superannuation. This Court in G.Manoharan Vs. The Registrar of Co- operative Societies and others reported in 2007 (2) CTC 501 held that neither an employee could be kept under suspension nor his service could be extended beyond the date of superannuation for the purpose of conducting disciplinary proceedings unless there is specific enabling provision of law. In this case, there is no specific provision under the Act. In the absence of that, there is no employer-employee relationship between the 1st petitioner and respondents beyond the date of superannuation. As rightly pointed out by the learned counsel appearing for the petitioners, the 2nd respondent itself was stated to have admitted in para 3 of the order dated 17.09.2003 passed in W.P.No.38583 of 2002 filed by the 1st petitioner, it has been observed as follows:- "that the petitioner has no right to claim any relief from the respondent Bank, as his services ceased on 31.08.1996 itself." In paragraph 13, this Court passed this following order:- "No authority can stop him from retiring from service, unless a specific order is issued. Admittedly, there was no order extending the service after 31.08.1996." The above order would make it very clear that the service of the 1st petitioner was not extended beyond 31.08.1996. Therefore, no employer-employee relationship exist as his service ended on 31.08.1996. https://hcservices.ecourts.gov.in/hcservices/ 11. A Division Bench Judgment of this Court in N.Kunnai Gowder Vs. The Coimbatore District, Co-operative Milk Producers' Union Ltd., and another reported in 2007 (5) CTC 491 held that in the absence of any enabling provision in the Tamil Nadu Co- operative Societies Act, 1983 and Rules framed thereunder, action of employer reserving right to continue disciplinary proceedings after superannuation is illegal and without jurisdiction. The same dictum was also laid down by another Division Bench of this Court in A.Bommusamy Vs. The Government of Tamil Nadu and others reported in 2007 (3) CTC 518 in paragraph 13 of the said Judgment which is extracted as follows:- "13. Further, there was inordinate delay in passing the order of punishment. Though the enquiry was initiated as early as on 10.08.1987, the passing of the order of punishment was kept pending for about five years and finally the punishment was imposed on 21.01.1993. There is no explanation for such an inordinate delay in passing the final order. Time and again, the Supreme Court and this Court has deprecated the initiation of Disciplinary Proceedings against an employee or the fag end of his retirement and keeping the matter pending for a long time by keeping the matter pending for a long time by keeping the employee under suspension. Further when the petitioner had pleaded that there was official prejudice and enmity between him and the third respondent in the matter of use and maintenance of the official vehicle, the Tribunal has failed to consider this aspect of the case in proper perspective while dismissing the Original Applications. The Disciplinary Proceedings were initiated against the petitioner when there was hardly fifteen days left for his retirement. Moreover, when his date of retirement is on 11.03.1987 and the order of suspension was passed on 25.03.1987 by invoking G.O.No.173. Therefore, when once the petitioner has reached the age of superannuation on 11.03.1987, the placing the petitioner under suspension after his date of superannuation is without authority and that when the relationship of master-servant ceased to exist, no Disciplinary Proceedings could be initiated against the petitioner. On this ground also, the impugned order of the Tribunal https://hcservices.ecourts.gov.in/hcservices/ is liable to be set aside." A learned Single Judge of this Court passed an order in G.Manoharan Vs. The Registrar of Co-operative Societies and others reported in 2007 (2) CTC 501 and Paragraphs 15, 16, 17 and 18 of the order are extracted as follows:- "15. The Supreme Court in S.Pratap Singh Vs. State of Punjab, AIR 1964 SC 72, had laid down that there has to be a specific provision under the law to take action against the person, who has ceased to be in service. 16. In Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and others 1999 (3) SCC 666, the Supreme Court has held as follows:- "No specific provision exists in the Orissa Financial State Corporation Staff Regulations, 1975, for deducting any amount from the provident fund consequent to any misconduct determined in departmental enquiry, nor is there any provision for continuance of departmental enquiry after superannuation. In the absence of any such provisions, it must be held that the respondent-Corporation had no legal authority to make any reduction in the appellant's retiral benefits. There is also no provision for conducting a disciplinary enquiry after the appellant's retirement, nor is there any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.06.1995, there was no authority vested in the Corporation for continuing departmental enquiry even for the purpose of imposing any reduction in retiral benefits payable to the appelant. In the absence of such an authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits." 17. Following the above decision, a learned Single Judge of the High Court of Madhya Pradesh in Radheshyam Khichrolia and another Vs. Madhya Pradesh Co-operative Marketing Federation Ltd. and others, 2002 (3) LLJ 513, has held that continuance of the departmental enquiry after their superannuation was not valid, as there were no service rules providing for it. The High Court upheld their plea and allowed their petitions, quashing the https://hcservices.ecourts.gov.in/hcservices/ punishment in the one case and the enquiry in the other and directed their retiral benefits be paid to them. 18. Similarly, this Court had held that there has to be a specific provision of law or regulation or a by-law governing the service conditions of the person in question for continuing a departmental enquiry, initiated before the date of superannuation, even after the employee had retired from service. Without such a provision being available, there cannot be an employer-employee relationship surviving after the employee retires from service. Therefore, continuing the enquiry proceedings or conducting an action against the person after his retirement from service cannot be sustained in the eye of law. Any punishment sought to be imposed thereafter, including non-payment of retirement benefits or recovery or amounts therefrom, cannot be held to be valid. This position of law has been followed by the learned Judges of this Court in their decisions in W.P.No.30222 of 2003 dated 16.02.2004, in W.P.No.21372 of 2003 dated 24.11.2003 and in W.P.No.36027 of 2002 and W.P.No.31151 of 2003, dated 15.03.2005. Further, a Division Bench of this Court in W.A.Nos.3055 to 3058 of 2003 had confirmed the legal position as stated in the various decisions of this Court." Therefore in the absence of any specific provision to continue the departmental enquiry initiated before date of superannuation is without jurisdiction. The delay also is found to be against the continuation of proceedings. Therefore, the impugned proceedings are quashed. https://hcservices.ecourts.gov.in/hcservices/ 12. For the reasons stated above, the Writ Petition is allowed. The respondents are directed to settle the retirement benefits to the petitioners with in a period of six (6) weeks from the date of receipt of a copy of this order. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar smn To 1.The Registrar of Co-operative Societies, N.V. Natarajan Maligai, 170, EVR Periyar High Road, Kilpauk, Chennai – 600 010. 2.The Joint Registrar/Special Officer, The Coimbatore District Central Co-operative Bank Ltd., State Bank Road, Coimbatore – 641 018. 3.The Enquiry Officer, Special Investigation Department, (Co-operative Societies), Office of the Registrar of Co-operative Societies, Chennai – 600 010. +1cc to Mr.S.Saravanan, Advocate Sr 72863 +1cc to Govt. Pleader Sr 64975 SJ(CO) km/11.10. W.P.No.7214 of 2009 https://hcservices.ecourts.gov.in/hcservices/