Thanjavur Public Servants Cooperative Bank vs S. Periyamarudhu and Others

Aruna Jagadeesan, J.—This Civil Revision Petition is filed against the judgement and decree passed by the learned Principal District Judge,

Thanjavur in CMA(CS) No. 20/2004 dated 28.9.2005, setting aside the order of the Deputy Registrar of Cooperative Societies, Thanjavur in

Na.Ka. No. 7323/2001 Sa.Pa. Dated 15.11.2003.

The learned Principal District Judge has set aside the surcharge proceedings initiated against the respondents 1 to 11 on the ground that they

have not violated any rules and regulations and thus held that the charges levelled against them have not been proved. As against the same, this

Civil Revision Petition has been filed by the Thanjavur Public Servants Cooperative Bank, Thanjavur represented by its Special Officer.

Mr. R. Manoharan, the learned Counsel for the petitioner would contend that the Appellate Authority failed to see the permission given by the

Registrar in Na.Ka. No. 151824/99/Na.Va.1 dated 17.4.1997, directing the respondents 1 to 11 to follow the Rules and Regulations while fixing

the salary by the Management Committee and they have no right to fix the salary by giving retrospective effect and the directions given in GO.Ms.

No. 89 Cooperation, Food and Consumer Protection Department dated 16.5.2000 have not been complied with.

On a perusal of the impugned order passed by the Appellate Authority, it is seen that he has analysed the entire aspects including the circulars

issued by the Registrar of Cooperative Societies relating to the establishment of Staff of the Bank, in which permission had been granted to fix the

salary on the ground that the Secretary has been elected and assumed charge and the only condition is that the establishment charges should not

exceed 3% of the working capital.

It is the case of the respondents 1 to 11 that they have not contravened the circulars as well as the rules and regulations and in fact they have

adhered to it as the fixation of the salary by the employees were less than 3% of the working capital. The Appellate Authority has held that there is

no wilful negligence or breach of trust.

In the instant case, the salary has been fixed based on the directions of the Registrar and is in consonance with the 6th Pay Commission.

According to the learned Counsel for the respondents 1 to 11, there is no wilful or deliberate misconduct or negligence. Admittedly, there is no

misappropriation of any amount.

In the case of B.S. Somasundaram Vs. The Thanjavur District Co-operative Supply Market Society Ltd. and Others, , this Court has held that

u/s 71 of the old Act [The Tamil Nadu Cooperative Societies Act, 1961] which is corresponding to the present Section 87 of the new Act [The

Tamil Nadu Cooperative Societies Act, 1983], it is not merely negligence that attracts surcharge proceedings, but it must be proved to be a wilful

or deliberate conduct. The same view is reiterated in the case of Sathyamangalam Co-operative Urban Bank, Limited Vs. The Deputy Registrar of

Co-operative Society and Another, .

Likewise the Division Bench of this Court by referring to the said Act particularly Section 71 in the case of P. Karuppamal v. Deputy Registrar

of Cooperative Societies and Anr. 1989 WLR 272 and P.N. Chockappan and Others Vs. The Special Tribunal for Co-operative Cases, High

Court Campus and Others, and M. Sambandam Vs. The Deputy Registrar (Credit) Co-operative Societies and Others, has reiterated that mere

negligence is not sufficient and there should be wilful and deliberate negligence to cause such a loss.

In view of the aforesaid catena of decisions, the law is well settled that in any of the surcharge proceedings the condition precedent is that the

liability can be fixed on the employees of the Cooperative Societies only when it is found that they have intentionally committed those acts. The

judgements referred to above which relate to Section 71 of the Tamil Nadu Cooperative Societies Act, 1961, which is in pari materia, the same as

that of Section 87 of the present Tamil Nadu Cooperative Societies Act, 1983 show categorically that in all these proceedings of surcharge, the

condition precedent is that there must be a wilful negligence on the part of the employees of the Cooperative Society/Bank.

In view of the facts and circumstances of the case, which shows that the respondents have acted in accordance with the directions given by the

Registrar, it cannot be said that they have acted with deliberate and reprehensible manner, even if it is held that they have contravened certain rules

and regulations in that regard. There is no material to indicate that the respondents have acted with reckless callousness and supine indifference

without taking due care and caution ordinarily expected from a prudent man. Therefore, I am of the considered view that the Appellate Authority

had analysed the entire material and evidence placed before him in a proper and perspective manner and rightly set aside the surcharge

proceedings as against the respondents 1 to 11 and there is no illegality or infirmity in the impugned order.

In the result, this Civil Revision Petition is dismissed. No costs.