- (1.) AGGRIEVED against the order of the third respondent dated 31.8.1989 the petitioner has approached this Court for quashing the said order on various grounds.
(2.) ACCORDING to the petitioner, he was a President of the second respondent-Society in the year 1980 and continued the same position till April, 1988 when the second respondent superseded the Board and appointed a Special Officer. The second respondent Society alleged that during the tenure as a President of the said Society certain irregularities have taken place, consequently an enquiry under Sec.65 of the Tamil Nadu Act 53 of 1961 was conducted by the Special Investigation Squard of the Registrar of Co-operative Societies Office. A show-cause notice was issued to him and other members under Sec.71 on 11.11.1987. He gave a reply in person in the form of written explanation with 12 documents to substantiate the defence claim. No enquiry report was sent to him either along with the show-cause notice or later at any point of time. The first respondent has passed an order in his proceedings Na.Ka.6414/87 holding the petitioner ex parteand directed the petitioner and four other members to pay the surcharge of Rs.2,67,071.15 either jointly or severally. Against the order of the first respondent he preferred an appeal before the Special Tribunal for Co-operative Societies in S.T.C.A.No.94 of 1988, the third respondent herein. Before the tribunal the petitioner explained to the fact that he was not responsible for any of the commission or omission and also pointed out that there was no negligence on his part. It is also brought to the notice of the tribunal, the failure to supply enquiry report. Without considering all the material aspects, the third respondent by order dated 31.8.1989 confirmed the order of the first respondent and dismissed the appeal. Against which the petitioner filed the present writ petition. The second respondent has filed a counter affidavit wherein it is stated that the petitioner was the Ex-President of the Society from July, 1980 to April, 1988. During the tenure of the office of the petitioner as President of the Society certain irregularities in the accounts and funds were noticed by the Department and an enquiry under Sec.65 of the Act was ordered. The enquiry revealed that a sum of Rs.2,67,017.15 was caused as loss to the Society. Based on the enquiry report, a notice under Sec.71 of the Act was issued to all the Directors of the Society including the petitioner as to why they should not be surcharged to that extent. None of them have submitted their representation, accordingly the third respondent in his order dated 17.3.1988 has passed final orders directing them to make good the amount mentioned. Aggrieved by the surcharge proceedings the petitioner preferred an appeal before the third respondent tribunal and the same has been rightly confirmed. It is also stated that copy of the enquiry report was not furnished to the petitioner, since he has not demanded the same. It is also contended that, in as much as the surcharge order was passed by the Deputy Registrar on the basis of the records and confirmed by the tribunal the third respondent herein, there is no merit in the writ petition and prayed for dismissal of the same. In the light of the above factual position, I have heard the learned counsel appearing for the petitioner as well as the learned Government Advocate for respondent 1 and 3. Mrs.N.Mala, learned counsel appearing for the petitioner after taking me through the orders passed by the respondent 1 and 3 has raised the following contentions: (i) The first respondent fails to furnish a copy of the claim petition and enquiry report, accordingly the ultimate order passed by the first respondent dated 17.3.1988 is vitiated; (ii) In the absence of any allegation or breach of trust or misappropriation of the funds of the Society, mere negligence would not attract Sec.71 of the Tamil Nadu Co-operative Societies Act (Tamil Act 53 of 1961). On the other hand, the learned counsel appearing for the respondent 1 and 3 submitted that both the first respondent as well as the third respondent on the basis of the materials came to the conclusion that the petitioner was also responsible for the loss sustained by the Society along with the others, accordingly interference by this Court in this proceeding is not warranted. I have carefully considered the rival submissions.
(3.) THERE is no dispute that the petitioner worked as a President of the second respondent Society from July, 1980 to April, 1988. Since the performance of the petitioner and others were not satisfactory an enquiry under Sec.65 of the Tamil Nadu Co-operative Societies Act, 1961 (hereinafter referred to as "the Act") was initiated by the Registrar of the Co-operative Societies. In pursuance of the direction of the Registrar one Sub-Registrar enquired the matter and submitted his report. The Enquiry Officer found that the petitioner and other five Directors were responsible for the loss caused to the Society, accordingly found that necessary action may be taken against them. In pursuance of the said report the petitioner was asked to submit his explanation on 11.11.1987 by the Deputy Registrar. According to the first respondent, after receipt of the show-cause notice none of the Directors, nor the petitioner submitted any explanation for the show-cause notice. Accordingly, on the basis of the documents the first respondent passed an order dated 17.3.1988 and directed the petitioner as well as other directors to compensate the second respondent-Society to the extent of Rs.2,67,071.15 with interest at the rate of 18 per cent per annum, jointly or severally. Against the said order, the petitioner alone preferred an appeal before the third respondent. It is the definite case of the petitioner that on receipt of the show-cause notice he gave a reply in person in the form of written explanation with 12 documents in order to substantiate his defence. It is also stated that the clerk of the first respondent's office has affixed the seal of the first respondent's office on the papers given in reply by the petitioner, thereby acknowledging the receipt of the same. This aspect was considered by the third respondent. Before the third respondent, apart from reiterating the said contention the petitioner has also produced the acknowledgement given by the staff of the first respondent's office to show that apart from submitting his explanation also enclosed 12 documents in support of his claim. The tribunal after stating that there is no such initial or signature by the Officer concerned, in the notes paper refuse to accept the said contention. When the petitioner able to show the acknowledgement of the staff of the first respondent, it is but, proper before passing any order, the explanation and the document said to have been furnished by the petitioner to be considered. The said procedure has not been followed. On the other hand, the authority suspected the acknowledgement made by the staff of the first respondent's office and erroneously rejected the claim made by the petitioner. The contrary conclusion made by the third respondent in para 5 of the order cannot be accepted. Coming to the next aspect, it is stated that except the show-cause notice the petitioner was not provided with the claim made by the first respondent and the report of the enquiry Officer. In this regard, it is relevant to mention that if any surcharge proceeding is initiated under Sec.71 of the Act the same has to be done in accordance with the said provision. The second proviso of Sec.71(1) makes it clear that, "No order shall be passed against any person referred to in this sub-section unless the person concerned has been given an opportunity of making his representations." The said provision makes it clear that if any proceeding is initiated under Sec.71, before passing final order, the person concerned must be given an opportunity to put forth his claim. In our case, even though an enquiry was conducted under Sec.65 of the Act, at the instance of the Registrar of Co-operative Societies the copy of the said enquiry report has not been furnished to the petitioner. The said position is clear even from the order of the third respondent. In the light of second proviso to Sec.71(1) in the absence of proof for furnishing copy of the enquiry report further action taken by the first respondent, in pursuance of the enquiry report cannot be sustained on the principles of violation of statutory provision as well as natural justice. Accordingly, I sustain the contention made by the learned counsel appearing for the petitioner. ;