M. KUNJITHAPATHAM AND ORS. Vs. THE THIRUVILAIYATTAM VILLAGE CO-OPERATIVE AGRICULTURAL CREDIT SOCIETY BY ITS SECRETARY AND ANR.

JUDGEMENT

(1.) THE interesting question raised in this civil revision petition is whether the proceedings initiated against the petitioners, amongst others, under Section 71 of the Tamil Nadu Co -operative Societies Act, is maintainable at all, in view of certain factors and events which preceded the filing of what are usually called surcharge proceedings under Section 71 of the Act. It appears that the petitioners, who were ex -officers of Thiruvilaiyattam Village Co -operative Agricultural Credit Society, found, on an audit report, there was misappropriation and wilful negligence on the part of the Secretary of the Society, one Deenadayalu Naidu. Based on such audit report, proceedings were initiated by the petitioners as Board of Directors under Section 73 of the Act. It is not in dispute that such proceedings were initiated under Section 73 of the Act at the instance of the petitioners herein as against the said Deenadayalu Naidu, and the Registrar of Co -operative Societies, on receipt of such a reference, decided the dispute and held that the said Deenadayalu Naidu was liable to account to the society in large sums of money and gave an award accordingly. I am not setting out in detail the merits, as the question raised before me is purely a legal one. After the award was passed by the Registrar under Section 73, the Deputy Registrar, apparently as the person authorised by the Registrar within the meaning of Section 71 of the Act, on his own motion, initiated fresh proceedings under Section 71 of the Act and impleaded the petitioners as well as Deenadayalu Naidu and called upon them to explain why they should not be directed to repay the moneys or property alleged to have been misappropriated by them or fraudulently retained by them or by reason of the loss sustained by the society on account of such branch of trust or wilful negligence on their part. The Co -operative Tribunal, to whom the matter went up in appeal, found that the petitioners as well as Deenadayalu Naidu were guilty of breach of trust and held that the petitioners, who were the Board of Directors of the Society, were liable to make good the deficiency and pay the requisite compensation as quantified by the Deputy Registrar, and accordingly dismissed the appeal which came before it against the order of the Deputy Registrar. The present civil revision petition is filed under Article 227 of the Constitution of India.

(2.) THE main legal contention of Mr. Alagiriswamy, learned Counsel for the revision petitioner, is that, as proceedings under Section 73 have already been initiated by the Board of the Society and as the Registrar of Cooperative Societies on such a reference has decided the dispute and found that Deenadayalu Naidu is the person who should make good the loss sustained by the society during the period when the petitioners were in charge of the affairs of the society, there cannot be a resurrection of the matter once again under Section 71 of the Act, as if the fresh surcharge proceedings can again be laid against the petitioners on the ground that the award passed by the Registrar under Section 73 of the Act could not realise any money at all or that Deenadayalu Naidu could not make good the loss sustained by the society due to his acts of misfeasance or wilful negligence. Mr. R.G. Rajan, learned Counsel for the respondent -society, would contend that, though Sections 71 and 73 are independent provisions and act in their own respective fields, any proceedings or the resultant decision rendered under Section 73 by the appropriate statutory authority cannot be a bar to an independent proceeding by the society under Section 71 of the Act, as against, those who are responsible for the loss sustained by the society. It is in this context that the question of law has arisen.

(3.) THE civil revision petition is accordingly allowed, There will be no order as to costs.