IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.8.2011 CORAM: THE HONOURABLE MR.JUSTICE T.RAJA Writ Petition No.20861 of 2008 and WPMP.No.2 of 2008 V.Solaimuthu .. Petitioner -Vs- The Deputy Registrar of Co-operative Societies, Ariyalur Circle, Ariyalur, Ariyalur District. .. Respondent Writ petition filed under Article 226 of the Constitution of India praying this Honourable Court to issue a writ of certiorari to call for the entire records relating to the impugned order passed by the respondent in his proceedings Na.Ka.4741/2004 Sa.Pa (3), dated 19.10.2007 and to quash the same in so far relates to petitioner is concerned. For petitioner : Mr.C.Prakasam For respondent : Mrs.Lita Srinivasan Government Advocate ORDER The present writ petition is directed against an order passed by the respondent viz. Deputy Registrar of Co-operative Societies, Ariyalur Circle, Ariyalur in his proceedings in Na.Ka.4741/2004 Sa.Pa(3), dated 19.10.2007 and to quash the same in so far as it relates to the petitioner. 2. The learned counsel for the petitioner submits that as per the impugned order, even though enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act (30 of 1983) (hereinafter referred to as "the Act") was ordered after receiving the report on 10.10.2005, surcharge proceedings under Section 87(1) was initiated on 19.10.2007 i.e., admittedly after a lapse of two years. Hence, it was assailed that the entire surcharge proceedings initiated under Section 87(1) of the Act by the respondent is to be held as illegal and arbitrary. https://hcservices.ecourts.gov.in/hcservices/ 3. The learned counsel appearing for the petitioner further submits that when the petitioner was discharging his duties as clerk in Maruthur Primary Agricultural Co-operative Bank Limited, the Special officer of the said bank asked the petitioner to do the work of cashier in the bank temporarily as a stop-gap arrangement. Accordingly, the petitioner accepting the orders of the special officer, worked as cashier incharge. Unfortunately, when the petitioner was posted as cashier of the said bank, the Secretary of the said bank committed some irregularities. In this connection, the respondent has ordered for an enquiry under Section 81 of the on 30.11.2004 by appointing an enquiry officer and the Enquiry Officer submitted his report on 10.10.2005. He further submits that since the submission of the report by the Enquiry Officer before the respondent on 10.10.2005 is beyond the period of limitation as stipulated under Section 81(4) of the Tamil Nadu Co- operative Societies Act, 1983, the petitioner prays for quashing the impugned proceedings passed by the respondent for initiation of surcharge proceedings under Section 87 of the Act. In his further submission, the learned counsel for the petitioner contended that the respondent failed to consider the mandatory conditions mentioned under Section 81 of the Act, inasmuch as when the enquiry under Section 81 of the Act was ordered by the respondent on 30.11.2004 and the Enquiry Officer has not completed the enquiry within the stipulated time under Section 81 (4) of the Act i.e. within nine months and he completed the enquiry on 10.10.2005 and submitted his report on the same day before the respondent, the extra time taken by the Enquiry Officer for completing the enquiry vitiates the purpose for which the surcharge proceedings are designed by the Act. 4. The learned counsel for the petitioner also further contended that the respondent failed to consider one another aspect that as per Rule 104(9)(a) of the Tamilnadu Co-operative Societies Act, the Deputy Registrar should initiate surcharge proceedings within two months from the date of receipt of the report from the Enquiry Officer. But in the instant case, even though the respondent received report on 10.10.2005, the respondent initiated surcharge proceedings only on 19.10.2007 i.e. after a lapse of two years, by which the respondent has failed to follow the procedure laid down by law under Section 81(4) read with Rule 104(9)(a) of the Act. With this background, the petitioner has prayed for setting aside the impugned order. 5. No counter has been filed by the respondent. Per contra, the learned Government Advocate appearing for the respondent by heavily relying upon a decision of the learned Division Bench of this Court in S.V.K.SAHASRAMAM VS. DEPUTY REGISTRAR OF CO-OP. SOCIETIES, TIRUVANNAMALAI CIRCLE, TIRUVANNAMALAI AND OTHERS (2008) 8 MLJ 231) has contended that the https://hcservices.ecourts.gov.in/hcservices/ period of six months in the second proviso of Section 87 of the Act is not mandatory for the reason that in the case of embezzlement or misappropriation of public funds and members of public who have no control over those who hold the enquiry beyond the time limit, to hold that such an enquiry that has been continued beyond the time limit is bad I find full force in her submission. Hence if any such enquiry is continued beyond the time limit mentioned in the statute, such enquiry cannot be held to be mandatory in view of the principle laid down in Montreat Street Railway Company v. Normandin (AIR 1917 PRIVY COUNCIL 142). Further, elaborating her argument, it was submitted that in the present case, the Enquiry Officer submitted his report on 10.10.2005 and thereafter the Deputy Registrar of Co-operative Societies has initiated surcharge proceedings under Section 87(1) of the Act on 19.10.2007 i.e. after a lapse of two years. Since the respondent has initiated the surcharge proceedings under Section 87(1) of the Act as the follow- up action on the enquiry report submitted by the enquiry officer after completion of enquiry initiated under Section 87(1) of the Act, if there is an allegation of embezzlement and misappropriation of public funds, holding the action taken by the respondent beyond the time limit as bad would definitely cause grave prejudice to the public and alo to the co-operative societies. 6. In the present case, the petitioner while serving as clerk in Maruthur Primary Agricultural Co-operative Bank Limited was asked to do the work of cashier temporarily. Thereafter, some irregularities causing financial loss to the respondent bank were noticed. Therefore a preliminary enquiry was ordered under Section 81 of the Act. To find out whether any financial loss has been caused to the respondent bank, the enquiry officer on conducting an enquiry under Section 81 of the Act, submitted a report indicating that one T.Ramalingam, Secretary of the bank has caused financial loss to a sum of Rs.98,180/-. By accepting the said report, the respondent as a follow-up action has initiated surcharge proceedings under Section 87 of the Act to recover the amount from Ramalingam. Though the name of the petitioner Solaimuthu is mentioned in the report of the Enquiry Officer, nowhere his involvement in causing loss of the said amount has been found against him by the enquiry officer. 7. Therefore, I am of the considered view that as per the ratio laid down by the learned Division Bench of this Court in the decision reported in (2008)8 MLJ 231 (supra) that the submission of the enquiry report by the enquiry officer beyond the time limit prescribed under Section 81 of the Tamil Nadu Cooperative Societies Act cannot be held to be mndatory or sustainable. However, in respect of the petitioner's involvement in causing loss to the Society since the enquiry report submitted by the Enquiry Officer has not held the petitioner guilty of any charge, the enquiry report dated 10.10.2005 is quashed only to the https://hcservices.ecourts.gov.in/hcservices/ extent it implicates the petitioner alone. 8. It is also to be made clear that the impugned proceedings passed by the respondent Deputy Registrar dated 19.10.2007 will hold good in so far as the Secretary Ramalingam is concerned. As there is no finding by the enquiry officer holding that the petitioner was also responsible for any financial irregularity, the enquiry report dated 10.10.2005 cannot be applied against the petitioner alone. 9. With this limited extent, the writ petition is allowed. No costs. Connected WPMP.No.2 of 2008 is closed. vks Sd/- Asst. Registrar //True Copy// Sub Asst. Registrar To:- The Deputy Registrar of Co-operative Societies, Ariyalur Circle, Ariyalur, Ariyalur District. + 1 cc to Mr. C. Praksam, Advocate SR No.51648 Order in W.P.No.20861 of 2008 GGK(CO) SR/26.8.2011 https://hcservices.ecourts.gov.in/hcservices/