IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.02.2010 CORAM: THE HON’BLE MR. JUSTICE K.CHANDRU W.P.No.5273 of 2009 & M.P.No.1 of 2009 1. THE SPECIAL OFFICER THE AMBUR COOP. SUGAR MILLS LTD VADAPUDUPET - 635 812 2 THE SPECIAL OFFICER M/S.AMARAVATHI COOP.SUGAR MILLS LTD KRISHNAPURAM. 3 THE SPECIAL OFFICER TIRUPATHUR COOP. SUGAR MILLS LTD KETHANDAPATTI-635 815 4 THE CHIEF EXECUTIVE M/S.PERAMBALUR COOP. SUGAR MILLS LTD VADAPUDUPET-635 812 5 THE CHIEF EXECUTIVE ARIGNAR ANNA SUGAR MILLS KURUNGULAM -613 303 THANJAVUR TK AND DT. [ PETITIONERS ] Vs 1 THE APPELLATE AUTHORITY COOPERATIVE TRIBUNAL, CHIEF JUDGE SMALL CAUSES COURT, CHENNAI 104. 2 JOINT COMMISSIONER OF SUGAR SURCHARGE OFFICER OFFICE OF THE COMMISSIONER OF SUGAR CHENNAI 35. 3 V.PANDIAN [ RESPONDENTS ] Prayer : Petition under Article 226 of the Constitution of India praying for a Writ of Certiorari calling for the records of the 1st respondent culminating in the passing of the order dated 14.3.2008 in C.A. 11 of 2005 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Petitioners :: Ms.G.Thilakavathi For Respondents :: Mrs.C.K.Vishnu Priya, AGP for R2 Mr.P.Anbarasan for R3 O R D E R Heard both sides. 2. The Special Officers of five Cooperative Sugar Mills are the petitioners herein. They have come forward to challenge the order passed by the Tribunal in Cooperative Appeal Case No.11 of 2005 dated 14.3.2008. 3. The Writ Petition was admitted on 1.4.2009. Pending the Writ Petition, an Interim Stay was granted. 4. On notice from this Court, the contesting third respondent had filed a counter affidavit dated 31.7.2009, supporting the order impugned in this Writ Petition. 5. It is seen from the records that the surcharge proceedings were initiated under section 87 of the Tamil Nadu Cooperative Societies Act. The 2nd respondent, who was appointed as Surcharge Officer by his proceedings in Surcharge No.1/2005-2006 dated 25.4.2005 surcharged the third respondent as well as one R.Mohanasundaram, a Senior Manager in the Tamil Nadu Cooperative Sugar Federation Limited. 6. The issue raised in the surcharge proceedings related to exorbitant rates in respect of 5 Sugar Mills, which were indicated in page 26 of the surcharge order. Though the third respondent pleaded that Tamil Nadu Cooperative Sugar Federation has no control over the Cooperative Sugar Mills as they are autonomous bodies, the Surcharge Officer rejected the same. He referred the By-law Nos.2, 10, 11 and 20 of the Tamil Nadu Coopertive Sugar Federation. In terms of those by-laws, the Federation has a power to direct the Sugar Mills in respect of rate contract and they communicate it to the Mills for their execution. By making them to go through their direction, the Mills were made to suffer and the third respondent was surcharged. https://hcservices.ecourts.gov.in/hcservices/ 7. As against the order dated 25.4.2005, the third respondent preferred an appeal before the Cooperative Tribunal (Chief Judge of the Court of Small Causes, Chennai) under section 152 of the Tamil Nadu Cooperative Societies Act. 8. The Tribunal took up the case as C.A.No.11 of 2005. In that appeal, the third respondent raised grounds in his memorandum of grounds of appeal. The memorandum of grounds ranged from A to Z and AA. The principal attack made by the third respondent was that surcharge proceedings preceded by Section 81 enquiry was barred by limitation and therefore the surcharge order against the third respondent was illegal. Though it was indicated before the Tribunal that the Government had exempted the Tamil Nadu Cooperative Sugar Federation from the Second Proviso to Section 81 by granting time for completing the proceedings from 4.12.2001 to 30.6.2005, the Tribunal rejected the said action. In fact, the impugned order was largely based upon the arguments relating to limitation under the said provision. 9. Before the Tribunal, the third respondent did not make the Sugar Mills as a necessary party, which forced them to file applications to get themselves impleaded before the Tribunal. The Tribunal held that the Commissioner of Sugars is the authority to give directions and he having approved the rates cannot shift the entire responsibility or major responsibility for finalising the rates. The Tribunal held that he cannot be permitted to complain against the correctness of his own order and to shift the responsibility to other officers, such as the third respondent herein. The Tribunal also stated that as to how the Commissioner of Sugar can be exempted from the proceedings. The rates were, after approval by the Commissioner of Sugars, were intimated to the individual Sugar Mills by the Federation. One such Mill, namely Cheyyar Sugar Mills had adopted its own rates. This would clearly establish that the individual sugar mills are not bound to follow the rates fixed by the Commissioner of Sugar. In that view of the matter, the Tribunal set aside the surcharge order and allowed the appeal. 10. This finding of the Tribunal is totally based on misconception. The 2nd respondent Surcharge Officer has held that the Federation gave directions only to Ambur, Amaravathy, Titupattur, A.Anna and Perambalur Sugar Mills, i.e., the petitioners herein. Cheyyar Cooperative Sugar Mill was exempted and was permitted to adopt their own rates. It is not clear how the Tribunal can twist this fact by stating that Cheyyar Cooperative Sugar Mill had adopted its own rate and hold that the individual https://hcservices.ecourts.gov.in/hcservices/ Mills are not bound to follow the rates as fixed by the Commissioner of Sugars. In doing so, the Tribunal did not even take note of the By-Law Nos.2, 10, 11 and 20 of the Tamil Nadu Cooperative Sugar Federation. The Tribunal curiously recorded by going through the grounds raised by the third respondent that loss was arrived notionally and the Cooperative Sugar Mills did not produce the necessary papers. If the Tribunal wanted to go into a larger issue about the actual loss suffered, it should have impleaded the individual Cooperative Sugar Mills and directed them to produce records before recording such a finding. 11. Then the third respondent in his counter affidavit tried to contend that the bar of limitation is a valid ground and that order of the Tribunal order does not suffer from any perversity did not suffer from legal scrutiny. In paragraph 15 of the counter filed by the third respondent, it is stated that individual Sugar Mills have failed to produce particulars and necessary papers to establish the loss purportedly suffered by them. Even on the teeth of such fact, the third respondent never made all the Cooperative Sugar Mills as parties to the appeal before the Tribunal. No summons were issued to them to produce the records. 12. Though the third respondent raised so many grounds (as many as 27 grounds), the Tribunal did not deal with those points specifically. A perusal of the impugned order did not reveal that the attention of the Tribunal was shown on those submissions. As stated already, the Tribunal was clouded by the fact of bar of limitation under section 87 of the Tamil Nadu Cooperative Societies Act as well as the alleged invalidity of the exemption from the Government. This issue is no longer res integra. 13. This Court in G.Paneerselvam vs. Deputy Registrar of Cooperative Society, Tirupur reported in 2009 (2) MLJ 901 has held that the limitation is only directory and not mandatory. The view of the learned Judge was confirmed by a Division Bench of this Court in A.Balaraman vs. Deputy Registrar of Cooperative Society, Cheyyar, Tiruvannamalai reported in (2009) 3 MLJ 1032. 14. If that is the legal position, the order of the Tribunal with reference to the finding of limitation has to be set aside. Further, the Tribunal has no justification to reject the order of the Government in granting exemption because under the provisions of the Act, the Government is empowered to grant such exemption or time extension. If the finding of the Tribunal on this issue is removed, then it must be seen that the Tribunal did not even address https://hcservices.ecourts.gov.in/hcservices/ the other issues on the basis of materials, but made sweeping conclusions based upon the memorandum of appeal and oral submissions. The Tribunal, which is clothed with the power under section 152 of the Tamil Nadu Cooperative Societies Act is entitled to go into the question both on facts and law ought not to have rendered superficial findings without reference to materials. 15. In the light of the above, the impugned order dated 14.3.2008 does not stand legal scrutiny and it is hereby set aside. The matter in C.A.No.11 of 2005 stands remitted to the 1st respondent Tribunal for fresh disposal in accordance with law. After due notice to the parties, the Tribunal taking note of the observations made herein will pass appropriate orders on merits. 16. The Writ Petition stands allowed to the extent indicated above. No costs. The connected Miscellaneous Petition stands closed as unnecessary. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar ajr To 1 THE APPELLATE AUTHORITY COOPERATIVE TRIBUNAL CHIEF JUDGE SMALL CAUSES COURT CHENNAI 104. 2 JOINT COMMISSIONER OF SUGAR SURCHARGE OFFICER OFFICE OF THE COMMISSIONER OF SUGAR CHENNAI 35. +1cc to Mr.P.Anbarasan, Advocate Sr 9059 +1cc to Govt. Pleader SR 9301 GS(CO) km/24.2. W.P.No.5273 of 2009 https://hcservices.ecourts.gov.in/hcservices/