Case Note & Summary
The dispute arose from surcharge proceedings initiated against a field officer of the Tiruvannamalai District Central Co-operative Bank. The petitioner, who had been deputed to supervise 16 primary co-operative societies, faced allegations of involvement in irregularities related to jewel loan collections and auction amounts not credited properly. Following an inspection under Section 82 of the Tamil Nadu Co-operative Societies Act, 1983, an inquiry report was submitted on 21.02.2019. Based solely on that report, the Deputy Registrar issued a surcharge notice under Section 87(1) on 24.02.2020 fixing liability on the petitioner. The petitioner challenged the notice, contending that the first respondent had no jurisdiction to initiate surcharge proceedings without a separate investigation, relying on a circular issued by the Registrar of Co-operative Societies (Rc.No.38614/2009 Sa.pa(1) dated 06.04.2009) which expressly prohibited such proceedings against employees of the District Central Co-operative Bank based merely on an inquiry report under Section 81 or 82. The petitioner submitted a detailed explanation and the circular, but the first respondent proceeded to issue a summon for appearance. Aggrieved, the petitioner filed a writ petition under Article 226 of the Constitution seeking to quash the surcharge notice and summon, and to restrain penal action. In response, the first respondent filed a counter affidavit admitting procedural lapses and unconditionally apologized, assuring the Court that fresh proceedings would be initiated in accordance with the circular by ordering a separate inspection under Section 82 and strictly adhering to principles of natural justice. The Court, upon considering the submissions, found that the surcharge notice was indeed issued without jurisdiction as it was solely based on an inquiry report, contrary to the binding circular. Consequently, the Court quashed the impugned surcharge notice dated 24.04.2020 and the summon dated 29.07.2020, and remitted the matter back to the first respondent for fresh adjudication, directing that a separate inspection be ordered and due process be followed within six months. The writ petition was allowed with no costs.
Headnote
A) Co-operative Law - Surcharge Proceedings - Initiation Based on Inquiry Report - Tamil Nadu Co-operative Societies Act, 1983, Sections 81, 82, 87 - The Deputy Registrar issued a surcharge notice under Section 87(1) against a field officer of the District Central Co-operative Bank solely relying on an inquiry report under Section 82. The Registrar's circular Rc.No.38614/2009 dated 06.04.2009 prohibited such proceedings without a separate investigation. The Court held that the first respondent lacked jurisdiction to proceed solely on the inquiry report and quashed the surcharge notice, remitting the matter for fresh adjudication with due process and natural justice. (Paras 11-12).
Issue of Consideration
Whether surcharge proceedings under Section 87(1) of the Tamil Nadu Co-operative Societies Act, 1983 can be initiated against a field officer of District Central Co-operative Bank solely based on an inquiry report under Section 81 or 82 of the Act, without a separate investigation as directed by the Registrar's circular.
Final Decision
Writ petition allowed. Impugned surcharge notice dated 24.04.2020 and summon dated 29.07.2020 quashed. Matter remitted to first respondent for fresh adjudication after ordering separate inspection under Section 82, following due process and natural justice, within six months. No costs.
Law Points
- Legal points not extracted
- Surcharge proceedings under Section 87 of Tamil Nadu Co-operative Societies Act cannot be initiated solely based on inquiry report under Section 81 or 82 without separate investigation
- procedural circulars from Registrar are binding
- principles of natural justice must be followed.
