Judgment:
ORDER
K. Gnanaprakasam, J.
1. This civil revision petition is directed against the decree and judgment of the Principal District Judge, Thanjavur passed in C.M.A.No.18/95 dated 20.11.1997 confirming the order of the Deputy Registrar, Housing, Cuddalore, passed in Rc.No.752/92/Sa.Pa dated 2.7.1993.
2. The first respondent initiated action against the revision petitioner under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983,(hereinafter called as 'Act') wherein the charges were framed against him stating, while he was working as a Senior Inspector/Special Officer in Anna Cooperative House Building Society at Thanjavur, had misappropriated amount to a sum of Rs.35,840/- for laying road and for constructing culvert and no prior permission was obtained from the Registrar (Housing) and also falsified the records to that extent and thereby he had caused loss of Rs.35,840/- to the society. The petitioner was called upon to give his reply and he in his reply had stated that only after passing of the resolution in the General Body of the Society, the works were undertaken and the amounts were also disbursed on three instalments by inspecting the progress of the work and thereby, he denied the charges leveled against him. But however, the first respondent found that the explanation offered by the petitioner was not satisfactory, came to the conclusion that the petitioner had caused loss to the extent of Rs.35,840/- and passed an order for the recovery of the amount together with interest at 15% per annum. The said order was challenged by the petitioner before the Cooperative Tribunal i.e., The Principal District Judge at Thanjavur in C.M.A.No.18/1995 and the Tribunal accepted the finding of the first respondent and confirmed the said order and dismissed the appeal. Aggrieved by the same, this revision has been filed.
Heard, learned counsel for the petitioner and the respondent.
3. Learned counsel for the petitioner has submitted that the order passed against the petitioner is vitiated on two grounds i.e.,(1) the order passed by the first respondent on 2.7.93 is not legal on the ground that the enquiry initiated against the petitioner under Section 87 of the Act dated 7.2.1992 was not concluded within the time as stipulated in second proviso under Section 87 and (2) the respondents have not made out that the petitioner had caused loss to the society.
4. As far as the first submission is concerned, learned counsel for the petitioner would submit that the report filed by the Co-operative Sub-Registrar (Housing) Kumbakonam dated 29.11.1990 was not at all properly considered by the first respondent which resulted in passing an order against the petitioner and the same is vitiated.
5. Had the first respondent taken into consideration, the report dated 29.11.90 wherein it was found that road has actually been laid and the culvert was also constructed and the persons who are four in number reported, were not at all members of the society and they are only purchases of the plots, which were allotted to the members and their purchases were not yet regularised and therefore, the complaint given by them is biased. It is also pointed out that if the said report dated 29.11.90 was properly scrutinised by the first respondent, no action could have been taken. Incidentally, learned counsel for the petitioner has also submitted that the criminal action initiated against the petitioner was also dropped as no case has been made out.
6. Learned counsel for the petitioner also submitted that the charges were framed under Section 87 of the Act under reference No.72/92/Sa.Pa. dated 7.2.1992 and the second proviso to Section 87 states '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' Pointing out this, it is submitted that admittedly the charges were framed on 7.2.1992 and it should have been completed within a period of six months. But the said period could be extended, not exceeding six months, that too by an order of the next higher authority concerned.
7. Learned counsel would contend that there is nothing on record to show that the statutory period of six months was further extended by any next higher authority for the period, not exceeding six months. In any event total period stipulated under the second proviso to Section 87 could not extend beyond one year (i.e., six months + six months) whereas it is seen that the enquiry was completed only on 2.7.93 and it is beyond the stipulated period and therefore, the order passed by the first respondent on 2.7.93 is beyond the time and the same is liable to be set aside.
8. Learned counsel for the respondents are not in a position to contradict the submission made by the learned counsel for the petitioner as far as the dropping of the criminal case against the petitioner is concerned, but however, it is submitted that the first respondent had properly considered the report of the Co-operative Sub-Registrar(Housing) Kumbakonam dated 29.11.90 and only after going through the said report, proceedings were initiated by the first respondent under Na.Ka.752/92/Sa.Pa. dated 7.2.1992.
9. Learned counsel for the respondent also was not in a position to dispute that the charges were framed under Section 87 of the Act under Na.Ka.753/92 Sa.Pa. dated 7.2.92 and it was concluded only on 2.7.93. The respondents are not able to offer any explanation for the time fixed under the second proviso to Section 87 of the Act, and also the delay in completing the enquiry. I have to necessarily accept the submission made on behalf of the petitioner that the order so passed on 2.7.93 for the charges framed under Section 87 of the Act, is beyond the stipulated period and therefore the same is time barred one. Learned counsel for the petitioner also relied upon the Judgment reported in (Ekambaram v. Cooperative Tribunal-cum-District Judge Madurai) wherein also surcharge proceedings were initiated and the same was not completed within six months from the date of commencement of action and there was no materials to show that the second respondent in that case sought for extension of time by the higher authority after the expiry of six months time and in the said circumstances, the Court followed the observations made in the unreported Judgment of this Court in N. Ranganathan v. the Principal District Judge, V.R.P. District made in W.P.No.4724 and 17955 of 1997 dated 15.12.98 wherein it was held that ...'obtaining of permission under Ssection 173 of the old Act and now Section 876 is mandatory'. It was further held ' that the action has to be completed within a period as stipulated under the proviso of Section 87. Under the circumstances it is to be held that the second proviso to Section 87 of the present Act of 1983 is mandatory in nature and the proviso also stated that the action 'shall be' completed within a period of six months and if exceeds beyond the period of six months, there must be an extension from the higher authority. As the second respondent has not obtained the extension from the higher authority, the action initiated has to be held as non-est in the eye of law'. The said observation is squarely applicable to our case. In fact in our case, it is still worse, as the action was completed only on 2.7.93 which is beyond one year and therefore the order passed by the first respondent barred by time and liable to be set aside.
10. As far as the second submission is concerned, the learned counsel for the petitioner relied upon para 14 of the order passed by the Tribunal, wherein it is stated that though the works undertaken have been completed, no orders have been obtained from the higher authorities and therefore, the petitioner is liable for the surcharge for the amounts spent. It is pointed out that even the Tribunal has not given the finding that the petitioner has caused any loss to the Socieity. Usually, surcharge proceedings are taken only when any loss is made to the department.
11. Learned counsel for the petitioner also relied upon the case of R. Sethumadhavan v. The Deputy commissioner, H.R. & C.E. Administration Department, Coimbatore 1987 TLNJ 244. This case arose out of Section 33(3) of the Tamil Nadu H.R. & C.E. Act, but the principles laid down in the said case can be usefully referred to in this case also. It was held in the said case 'The order of surcharge could be passed only if loss is made out, but if the delinquent is able to show that there were justifiable circumstances, as found in this case, then there could be no liability to surcharge him'.
12. In our case also the respondents had not made out that the petitioner had caused any loss to the society. The petitioner has also given reasons for carrying out the work and the same cannot be rejected on the ground that they are not convincing but on the other hand, the explanation offered by the petitioner appears to be that he had acted only pursuant to the resolution passed in the General body and if there is any further latches in observing certain procedure, it would not amount to mis-appropriation of the amount. When there is no misappropriation of amount, then it would only amounts to mis- application and when the mis-application not having caused any loss to the society, a surcharge proceeding is not justifiable. If any irregularity committed by the petitioner in failing to secure permission from the authorities concerned, it would not result in being surcharged but may result in any disciplinary action being taken as against him.
13. Therefore, it is left open to the authorities, if they consider that it is necessary, to take disciplinary action against the petitioner for failure on his part in not having followed certain procedures, but the order of surcharge is not legal and the same is liable to be set aside, accordingly, it is set aside.
14. In the result, the civil revision petition is allowed. No costs.