S. Palanivelu, J.
ORDER
1. The petitioner was working as a Supervisor in Kanyakumari District Central Co-operative Bank at Nagercoil which is the second respondent herein. It is the Financing Bank (Creditor Bank) for the third respondent. As a Supervisor, he has to scrutinise the correctness of the loan applications in the third respondent bank and recommend the eligible names to the Branch Manager of the second respondent for loans. One C.P.Kamalan was the then Secretary of the third respondent, who on receipt of the loan applications from as many as 38 borrowers, forwarded them to the staff of the third respondent. They scrutinised and sent them for approval of this petitioner. The responsibility and duty of this petitioner is to further scrutinise the applications and place them for sanction. Accordingly, he verified the particulars available in the loan application and recommended for grant of loan. On 04.07.2000, a notice u/s 87 of the Tamil Nadu Co-operative Societies Act 1983 (for short ''the Act'') was issued stating that the said C.P.Kamalan forged signatures of the applicants and their sureties, thereby cheating the third respondent and misappropriated amount to the tune of Rs. 2,49,910/-. Thereupon, the first respondent ordered an enquiry u/s 81 of the Act to hold an enquiry into the affairs pertaining to the misappropriation.
2. On 10.03.1997 the Co-operative Extension Officer of Killiyur, was appointed as enquiry Officer who made an enquiry and submitted findings before the first respondent indicating the guilty of this petitioner and another Supervisor by name one Paulraj and C.P.Kamalan. As the enquiry officer found them guilty, the first respondent issued the impugned proceedings on 09.03.2001 fixing the responsibility on this petitioner and one Sundararaj jointly and severally for a sum of Rs. 1,68,100/-. It is stated that the said Kamalan committed suicide and further proceedings are initiated against his wife by name one Paul Nesam. In the impugned proceedings, it is stated that the surcharge proceedings initiated against three personnel stand proved and hence, they are liable as mentioned therein.
3. Aggrieved against the afore-said order, this petitioner preferred appeal before the Co-operative Tribunal (District Judge), Kanyakumari District in CMA.(CS). No. 26 of 2001. After hearing both the parties, the learned District Judge dismissed the appeal with regard to the claim of the petitioner, but modified the rate of interest alone to the effect that instead of payment of interest at the rate of 18%, it shall be at 12%.
4. Even though the first respondent was served with notice from this Court, he has not made any appearance. The second and third respondents are being represented by their counsel.
5. The learned counsel for the petitioner Mr.S.Stanley John would submit that the petitioner is only a deputed staff from the Financing Bank and under no circumstance, neither disciplinary proceedings nor surcharge proceedings can be instituted against him in violation of the provisions of the Act. His definite contention is that if the Society in which the petitioner was deputed as Supervisor, they shall refer the matter to the Financing Bank. In case, if any irregularity is found in him, the Financing Bank alone can initiate the proceedings against him. Any proceedings taken by the Society itself is not valid under law and the entire proceedings have to be declared as vitiated.
6. As far as the second and third respondents are concerned, it is their submissions that they would abide by the orders passed by this Court. The contention of the learned counsel for the petitioner is three folded.
7. Firstly, the appellate Court has not discussed all the grounds raised by this appellant. As per settled law, the appellate Court has to go through the materials available on the grounds adduced in the memorandum of appeal and then, to render finding. In support of his contention, he garners support from a decision of this Court reported in
8. The next limb of the contention of the learned counsel far the petitioner is that the enquiry report given by the enquiry officer was not furnished to him and hence, his valuable rights are prejudiced and that in spite of various repeats made by this petitioner, it was not made available to him and hence, it is the Violation of principles of natural justice. The learned counsel for the petitioner also draws attention of this Court to certain portions Of the impugned order, wherein the first respondent has observed that he applied for copies of certain documents. However, neither he made his final observation nor finding as to what happen to the request of this petitioner. The cumulative effect of the above said circumstances would go to show that the copy of the enquiry report was not furnished to him. In this juncture, the very settled principles laid down by this Court are worth reference.
9. In a decision reported in
"10. It is stated that the petitioner, was furnished only the show cause notice but not the claim made by the Deputy Registrar and the copy of the Enquiry report. If any surcharge proceeding is initiated u/s 71, the same has to be done in accordance with the said provision. The said provision makes it clear that if any proceeding is initiated u/s 71, before passing final order, the person concerned must be given an opportunity to put forth his claim. In the light of second proviso to Section 71 (1) in the absence of proof of furnishing of copy of enquiry report to the petitioner, further action taken by the first respondent, in pursuance of the enquiry report cannot be sustained on the principles of violation of statutory provision and natural justice."
10. In another decision also reported in
"Further, a duty is cast on the second respondent before relying on a particular document or instance, the copy of that document or the particulars therein have to be furnished to the person aggrieved. In this case, even though the petitioners have made proper request for supply of those particulars, it is not clear as to why the same were not furnished to them. In this regard, a reliance is placed on the decision reported in
"undoubtedly if a liability was sought to be fastened to the petitioner on the basis of certain statements, he should be given an opportunity to cross-examine those witnesses. But no such opportunity was ever afforded to the petitioner. Merely because the petitioner did not specify the documents which he wanted to peruse, it would not mean that it would cure the failure to afford an opportunity, So also, the fact that he had a remedy by way of appeal to the Co-operative Tribunal was not a substitute for not affording an opportunity since the same handicap which was prevailing before the original authority would continue to prevail. In the result, on the simple ground of violation of the principles of natural justice, the writ petition was liable to be allowed and the impugned order quashed."
11. In view of the above said consistent opinion expressed by this Court, in the absence of supply of the copies of including the enquiry report, it has to be held that the entire proceedings got vitiated. In the case on hand also, since the enquiry report was not furnished to the petitioner, it has to be held that the proceedings are vitiated in view of the violation of principles of natural justice.
12. In yet another leaf of contention for the petitioner is that the authorities concerned have flagrantly violated the provisions contained in Rule 104 of the Act and hence, the proceedings culminated in the final order and the surcharge proceedings challenged as well, are not sustainable in the eye of law. Under Rule 104 of the Act, when the matter is referred to the Deputy Registrar by an application by the personnel who are in charge of the affairs of the society, it shall bear the necessary fee as prescribed and the order of the Registrar shall be communicated to the Society and the Financing Bank. Even though there so many requirements set out in this provision, the relevant provisions, as stated above and the procedure laid down in Rule 104 respecting them are as follows:-
"104. Procedure regarding inquiry, inspection or investigation.- (1) (a) The application made under sub-section (1) of section 81 or of section 82 shall state whether the inquiry or inspection or investigation is required into any specified alleged misappropriation, fraudulent retention of any money or property, breach of trust, corrupt practice, or mismanagement in relation to the society or into any particular aspect of the working of that society or whether the inquiry or inspection or investigation is required into the affairs of the society in general.
(b) the application shall state the reason for requesting the inquiry or inspection or investigation.
(c) the application shall be accompanied by a receipted challan or record to evidence payment towards the fees specified in Schedule III.
.... omitted
3(c) The order of the Registrar ordering an inquiry or inspection or investigation shall be communicated to the society, the Financing Bank, the federal society concerned and to the applicant."
13. At the first instance, the non-payment of prescribed fee is discernible from a communication of the first respondent office itself dated 17.07.2008. The other Supervisor by name one T.Paulraj applied for certain particulars under the Right to Information Act from the first respondent, for which a reply has been sent, in which it is stated that as per the Tamil Nadu Co-operative Rules 104 (1), no fee was paid on the application. It is responded to a query whether the particulars with regard to the copy of challan, voucher no, day book and the application were given by the President of the Society.
14. This Communication is self-evident showing that fee as prescribed by the Rule 104 (1) (c) was not paid on the application forwarded by the Society for initiating action against this petitioner. As regards the communications required to be forwarded to the Financing Bank as per procedure from which this petitioner has been deputed, it is also lacking. It is unambiguously provided in Rule 104 (3) (c) that the order of the Registrar ordering an enquiry or inspection of investigation shall be communicated to the Society and the Financing Bank. As far as this matter is concerned, there is no material to show that either the fact of initiating the enquiry at the initial stage was made known to the Financing Bank, namely, the creditor bank nor the final report given by the enquiry officer was forwarded to the said Bank. In the absence of communications as above mentioned, the entire surcharge proceedings are vitiated.
15. In the light of the discussions made above on scrutinising the materials and in view of the relevant provisions of the Act and Rules framed therefor and the well settled principles of this Court, it is held that the surcharge proceedings impugned in the civil revision petition is vitiated and it is not sustainable and the same is set aside. The order passed in C.M.A by the Tribunal below is also set aside. In case, if the procedure and the Rules permit, it is always open to the respondents to initiate any proceedings against the petitioner in accordance with law. In the result, this civil revision petition is allowed. Consequently, connected M.P, is closed. No costs.
