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Judgment
S. Nagamuthu, J.—Whether the time limit provided in first proviso to Section 87(1) of the Tamil Nadu Co-operative Societies Act, 1983 is imperative or only directory is the question which needs to be answered in these writ petitions. An enquiry u/s 81 of the Tamil Nadu Co-operative Societies Act, 1983 (hereinafter referred to as "the Act") was ordered in respect of monetary loss said to have been caused by the petitioners herein, who were the employees of the Fourth Respondent Society. The Enquiry Officer submitted a Report on 18.08.2006 holding that the petitioners are responsible for the loss caused to the Society. Based on the said Report, on an application filed by the fourth respondent, a proceeding u/s 87(1) of the Act was initiated by the first respondent in Penal Assessment No. 33/2008/Sa.Pa dated 01.08.2008 against the petitioners. Challenging the said proceeding on the ground that it is barred by limitation as provided in the first proviso to Section 87(1) of the Act, the petitioners are now before this Court. To the contrary, the contention of the respondents is that the time limit provided therein is not mandatory and the same is only directory and therefore, the impugned proceeding is not barred by limitation, warranting interference at the hands of this Court.
In order to appreciate the legal plea taken by either side, it would be, at the outset, useful to refer to Section 87(1) of the Act, which reads as follows:-
Surcharge:- (1) Where in the course of an audit u/s 80 or an inquiry u/s 81 or an inspection or investigation u/s 82 or inspection of books u/s 83 or the winding-up of a society, it appears that any person who is or was entrusted with the organisation or management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or been guilty of breach of trust in relation to the society or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has made any payment which is not in accordance with this Act, the Rules or the bye-laws, the Registrar himself or any person specially authorised by him in this behalf, of his own motion or on the application of the board, liquidatory or any creditor or contributory may frame charges against such person or officer or servant and after giving a reasonable opportunity to the person concerned and in the case of a deceased person, to the representative who inherits his estate, to answer the charges, make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar or the person authorised as aforesaid thinks just or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, misapplication of funds, fraudulent retainer, breach of tr5ust or willful negligence or payments which are not in accordance with this Act, the Rules or the bye-laws as the Registrar or the person authorised as aforesaid thinks just.
First Proviso to Section 87(1) of the Act reads as follows:-
Provided that no action shall be commenced under this sub-section after the expiry of seven years from the date of any act or omission referred to in this sub-section.
A plain reading of the above proviso to Section 87(1) of the Act, at the first glimpse, would give an unambiguous impression that the time limit provided therein is mandatory. But, the learned counsel for the respondents would submit that similar time limits provided in second proviso to Section 87(1) and Section 81(4) of the Act have been held to be only directory by this Court and so, applying the same yardstick, the first proviso to Section 87(1) of the Act should also be construed to be only directory and not mandatory.
To appreciate the said argument, it is necessary to refer to second proviso to Section 87(1) and Section 81 (4) of the Act, which read as follows :-
Second Proviso to Section 87(1) of the Act:-
Provided further that the action commenced under this sub-Section shall be completed within a period of six months from the date of such commencement or such further period or periods as the next higher authority may permit but such extended period or periods shall not exceed six months in the aggregate.
Inquiry :-(4) The inquiry shall be completed within a period of three months from the date of ordering the inquiry or such further period or periods not exceeding three months at a time as the next higher authority may permit, provided that such extended periods shall not exceed six months in the aggregate.
While interpreting Section 81 (4) of the Act in W.P. No. 20310 of 2007, it was contended before me that the period of limitation provided in Section 81(4) of the Act is mandatory. But, after analysing two previous judgments of this Court as well as few Judgments of the Hon''ble Supreme Court, I held that the said period provided in Section 81(4) of the Act is only directory and not mandatory. The affirmative language employed in Section 81 (4) of the Act was given due appreciation. Challenging the said order, an appeal was preferred in W.A. No. 949 of 2008 in which a Division Bench of this Court approved the view that the period of limitation provided u/s 81(4) of the Act is only directory and not mandatory. (Vide S.V.K. Sahasramam ..vs.. Deputy Registrar Of Co-operative Societies (2008 (8) M.L.J. 231)). The Division Bench further held that the period of limitation provided in second proviso to Section 87(1) of the Act is also directory and not mandatory.
It is based on the said view taken by me and the Division Bench, it is contended by the learned counsel for the fourth respondent that the period of limitation provided in the first proviso to Section 87(1) should also be construed to be only directory and not mandatory. In my considered opinion, the said contention of the learned counsel cannot be countenanced for the reasons that follow.
A cursory perusal of the first proviso to Section 87(1) of the Act on one side, Section 81(4) of the Act and second proviso to Section 87(1) of the Act on the other, would go a long way to indicate that in the former, the language employed is affirmative in nature, whereas it is negative in the later two provisions. From this, it could be understood that the Legislature had intended to draw a distinction between the first proviso to Section 87(1) of the Act and the other two provisions stated above. Had it been the intention of the Legislature that the first proviso to Section 87(1) of the Act should also be meant to be only directory, nothing would have prevented the Legislature to use similar affirmative language in the first proviso also. But, the Legislature has deliberately used negative language in the said proviso, which would go to clearly indicate the different intention of the Legislature. Therefore, the interpretation made to Section 81(4) and second proviso to Section 87(1) of the Act cannot be imported to first proviso to Section 87(1) of the Act.
At this juncture, let me analyse the Rule of Interpretation in the context of the language used in a statute. In general, the question as to whether a statute is mandatory or directory, of course, depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other. (Vide State of U.P. Vs. Manbodhan Lal Srivastava,
Thus, it is not only the language employed, but the intent of the Legislature which makes a particular provision in a Statue either imperative or directory. A mode of showing a clear intention that the provision enacted is mandatory, is by clothing the command in a negative form. Prohibitive or negative words can rarely, if ever, be directory. And this is so even though the statute provides no penalty for disobedience. (Vide Haridwar Singh Vs. Bagun Sumbrui and Others, Negative words are clearly prohibitory and are ordinarily used as a legislative device to make a statute imperative. (Vide Subbarao, J. in M. Pentiah and Others Vs. Muddala Veeramallappa and Others,
Based on the above rules of interpretation, from the negative language employed, the Hon''ble Supreme Court has held that Section 80 of the Code of Civil Procedure, 1908 (Vide AIR 1927 176 (Privy Council) Section 87B of the Code of Civil Procedure, 1908 (Vide AIR 1938 165 (Privy Council) Section 77 of the Railways Act, 1890 (Vide Governor General in Council Vs. Musaddi Lal, Section 15 of the Bombay Rent Act, 1947 (Vide Waman Shriniwas Kini Vs. Ratilal Bhagwandas and Co., Section 213 of the Succession Act, 1925 (Vide Mrs. Hem Nolini Judah (since deceased) and after her Legal Representative Mr. Marlean Wilkinson Vs. Isolyne Sarojbashini Bose and Others, Section 5A of the Prevention of Corruption Act, 1947 (Vide H.N. Rishbud and Inder Singh Vs. The State of Delhi, Section 7 of the Stamp Act, 1899(Vide AIR 1925 83 (Privy Council) Section 108 of the Companies Act, 1956 (Vide Mannalal Khetan and Others Vs. Kedar Nath Khetan and Others, Section 20(1) of the Prevention of Food Adulteration Act, 1954 (Vide A.K. Roy and Another Vs. State of Punjab and Others, and Section 55 of the State of Bihar Vs. Murad Ali Khan and Others, as mandatory. Recently, while analysing the negative language employed to the proviso to Section 33(2)(b) of the Industrial Disputes Act, 1947, the Hon''ble Supreme Court has held that it is mandatory. (Vide Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. Vs. Ram Gopal Sharma and Others,
Applying the above principle laid down by the Hon''ble Supreme Court in various judgments cited supra, if the deliberate negative language employed in the first proviso to Section 87(1) of the Act is analysed in the light of the affirmative language employed in Section 84(1) and second proviso to Section 87(1) of the Act, the intent of the Legislature could be perceived that the Legislature has prescribed the time limit only as mandatory.
In the case on hand, admittedly, the proceeding u/s 87(1) of the Act was initiated after the expiry of seven years period of limitation provided. The learned counsel for the fourth respondent would further submit that the proceeding u/s 87(1) of the Act should be construed to be a continuation of the enquiry held u/s 81 of the Act and therefore, it would be suffice if the enquiry u/s 81 of the Act is commenced within a period of seven years from the date of the commission or omission. I find it very hard to persuade myself to accept the said argument. Section 81 and 87(1) of the Act operate on different spheres in different angles. An enquiry u/s 81 of the Act is held only to find out the truth in respect of certain matters enumerated therein pertaining to the society, where there is no adjudication between the parties in respect of any disputed question. But, a proceeding u/s 87(1) of the Act is quasi Judicial in nature where there is adjudicatory process undertaken; ultimate award binds the parties to the proceeding and the award is executable. Thus, these provisions are totally dissimilar and they operate on different areas. So, a proceeding u/s 87(1) of the Act is only a follow up act and not a continuation of Section 81 of the Act.
Thus, looking at the legal issues from any angle, applying the well settled principles of interpretation as enumerated above, I hold that the first proviso to Section 87(1) of the Act prescribes a period of limitation, which is mandatory. Consequently, the impugned proceedings are liable to be quashed as barred by limitation. In the result, these writ petitions are allowed and the impugned proceedings of the first respondent dated 01.08.2008 are quashed. Connected miscellaneous petitions are closed. No costs.