IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 05.03.2010 CORAM: THE HONOURABLE MR. JUSTICE M.JEYAPAUL W.P.No.17784 of 2000 P.D.Natarajan ... Petitioner Vs 1.The Assistant Director of Handloom and Textiles, O/o. The Assistant Director of Handloom and Textiles, 60, Thiruvenkatasamy Street, Erode. 2.The Liquidator, Assistant Director of Handloom and Textiles, E.N.1, Kavundapadi Amarar Anna Weavers Co-op. Society Limited, 60, Thiruvenkatasamy Street, Erode. ... Respondents Prayer:- Writ petition filed under Article 226 of the Constitution of India praying for a Writ of Certiorari to call for the records of the Principal District Judge, Erode in C.M.A.No.21 of 1998 dated 14.08.2000 confirming the order of the first respondent dated 08.04.1998 made in Na.Ka.No.2650/90/E and quash the same. For petitioner : Mr.S.Umapathy For R - 1 : Mr.D.Srinivasan, AGP For R – 2 : No appearance O R D E R Heard the submissions made by the learned counsel appearing for the writ petitioner and the learned Additional Government Pleader appearing for the first respondent. No representation for the second respondent. https://hcservices.ecourts.gov.in/hcservices/ 2. The writ petition has been filed praying to quash the order passed by the Principal District Judge, Erode in C.M.A.No.21 of 1998 dated 14.08.2000, confirming the order of the first respondent made in Na.Ka.No.2650/90/E dated 08.04.1998. 3. The petitioner P.D.Natarajan was functioning as nominated President of Kavundapadi Amarar Anna Weavers Co-op. Society Limited in the year 1989. There was an audit conducted by the first respondent under Section 80 of the Tamil Nadu Co-operative Societies Act (Herein after referred to as 'the Act'). It has been alleged in the audit report that the petitioner supplied Yarn and Thiri to the members of the Society by preparing Bogus Bills to the tune of Rs.51,422.50. 4. An enquiry under Section 81 of the Act based on the audit report submitted under Section 80 of the Act, was conducted by the enquiry officer, (Handloom Inspector) appointed by the first respondent. The enquiry officer conducted the enquiry and submitted his report on 22.03.1994. Thereafter, based on the enquiry report submitted by the enquiry officer under Section 81 of the Act, surcharge proceedings were initiated against the petitioner by the first respondent under Section 87 of the Act. Notice dated 03.05.1994 was issued to the petitioner in the surcharge proceedings initiated under Section 87 of the Act. The petitioner participated in the surcharge proceedings but having raised his objections that the other officials of the Society were also responsible for the alleged loss occasioned to the society and that he alone cannot be proceeded under Section 87 of the Act, he walked out of the surcharge proceedings, which prompted the first respondent to pass the impugned order, directing the continuance of the surcharge proceedings under Section 87 of the Act. 5. The petitioner took up the matter in appeal before the Principal District Judge, Erode but the plea raised by the petitioner stood rejected and consequently, the Civil Miscellaneous Appeal filed by him was dismissed. Therefore, the petitioner is before this Court seeking quashment of the order passed by the Principal District Judge Erode, confirming the impugned order passed by the first respondent. 6. The learned counsel appearing for the petitioner would submit that as per the second proviso to Section 87(1) of the Act, the surcharge proceedings commenced by the first respondent should have been completed within a period of six months from the date of such commencement or atleast within the extended period of another six month granted by the next higher authority. But quite unfortunately, the surcharge proceedings initiated originally under https://hcservices.ecourts.gov.in/hcservices/ Section 87 of the Act wayback on 03.05.1994 was kept pending without any orders thereon and all of a sudden, the present proceedings for the second time under Section 87 of the Act was issued by the first respondent on 18.02.1998. Therefore, it is submitted that the first surcharge proceedings initiated was not completed within the maximum period of 12 months as contemplated under the proviso referred to above. 7. The learned counsel appearing for the first respondent would submit that the petitioner rendered a reply dated 14.05.1994 responding to the surcharge notice originally issued on 03.05.1994 by the first respondent, wherein he unambiguously admitted the entire liability and undertook to reimburse the loss occasioned to the Society and therefore, the original proceedings initiated under Section 87 could not be further proceeded with. 8. There is no dispute to the fact that the petitioner issued a reply dated 14.05.1994 to the surcharge proceedings initiated as against him on 03.05.1994. As the petitioner admitted his liability and promised to make good the loss, it appears that the first respondent could not further pursue the surcharge proceedings originally initiated as against the petitioner. It is not as if the proceedings initiated was not completed within the time frame fixed under the proviso to Section 81(1) of the Act due to the lapses on the part of the first respondent. Therefore, the petitioner cannot take advantage of the stoppage of the original surcharge proceedings initiated as against him on account of his own admission of the liability and the promise made by him to make good the loss occasioned to the Society. The proviso to Section 87(1) would not apply to a case where the proceedings could not be completed on account of the developments emerged due to the admission of the liability and promise to reimburse the loss occasioned by the official concerned. 9. It is further submitted by the learned counsel appearing for the petitioner that the enquiry under Section 81 of the Act was not properly conducted by giving sufficient opportunity to the petitioner to participate in the enquiry proceedings. 10. Per contra, the learned Additional Government Pleader appearing for the first respondent would submit that the question of giving further opportunity to the petitioner did not arise as the petitioner himself admitted his liability even during the course of enquiry conducted under Section 81 of the Act. The enquiry under Section 81 of the Act had to be concluded immediately after the admission of the liability by the petitioner herein. https://hcservices.ecourts.gov.in/hcservices/ 11. Of course, it is contended that due to coercion and force exerted by the employer the petitioner had to admit his liability in the enquiry proceedings under Section 81 of the Act. As rightly pointed out by the learned Additional Government Pleader appearing for the first respondent, the petitioner who is not a layman, but an educated person, chose not to give any complaint either to the higher officials of the Co-operative Society or to the Police Station concerned. The silence on the part of the petitioner for about four long years without whispering anything about the coercion or force exerted by the first respondent to admit the liability speaks volumes of the weak defence set up by the petitioner that he had to admit his liability due to the coercion and force applied. 12. It is submitted by the learned counsel appearing for the petitioner that even assuming for the sake of argument that the petitioner has to shoulder some responsibility for the loss occasioned to the Society, the entire liability cannot be fastened on the petitioner, as other officials also participated in the transaction of the Society. 13. Per contra, the learned Additional Government Pleader would submit that the question of apportioning the liability would not arise in a case where the President of the Society unambiguously admitted his total liability. 14. It is a case where the proceedings under Section 87 of the Act were initiated based on the enquiry report submitted by the enquiry officer under Section 81 of the Act on the admission of entire liability by the petitioner. Therefore, the petitioner at this distance of time, cannot agitate that the surcharge proceedings should be initiated as against the other officials also in order to apportion the liability. 15. While deprecating the attempt of the petitioner to wriggle out of the proceedings by not signing the minutes of proceedings conducted by the first respondent as per the statute, the Court finds that the petitioner has not made out a case to interfere with the impugned order passed by the first respondent. 16. If at all, the petitioner was not served with the copy of the report submitted by the enquiry officer appointed by the first respondent under Section 81 of the Act, the first respondent shall forthwith furnish a copy of the report submitted by the enquiry officer under Section 81 of the Act and thereafter proceed with https://hcservices.ecourts.gov.in/hcservices/ surcharge proceedings under Section 87 of the Act initiated by him. The writ petition stands dismissed. There is no order as to costs. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar To 1. The Assistant Director of Handloom and Textiles, O/o. The Assistant Director of Handloom and Textiles, 60, Thiruvenkatasamy Street, Erode. 2. The Liquidator, Assistant Director of Handloom and Textiles, E.N.1, Kavundapadi Amarar Anna Weavers Co-op. Society Limited, 60, Thiruvenkatasamy Street, Erode. + 1 C.C.to to the Govt., Pleader S.R.No.15490 W.P.NO.17784 of 2000 SJ(CO) https://hcservices.ecourts.gov.in/hcservices/