@JUDGMENTTAG-ORDER
K. Chandru, J.@mdashThe Petitioner in these writ petitions is the Administrator of M.R.K. Co-operative Sugar Mills, Sethiayathope, Chidambaram Taluk. In these three writ petitions, the Petitioner Co-operative Sugar Millschallenges the order passed by the first Respondent Co-operative Tribunal in C.M.A. Nos. 33, 39 and 34 of 2001respectively. While C.M.A. Nos. 33 and 34 of 2001 were disposed of by a common order dated 20.09.2007, C.M.A. No. 39 of 2001 was disposed by an order dated 01.11.2007.
2. All the three writ petitions were admitted on15.04.2009. Pending the writ petitions, an interim stay was granted by this Court. On notice from this Court, the contesting 4th Respondent in W.P. No. 6362 of 2009 has filed a counter affidavit dated 08.06.2009. In the other writ petitions, the third Respondent Commissioner of Sugar has filed three separate counter affidavits dated 18.11.2009.
3. In W.P. No. 6361 of 2009, the contesting 4th Respondent G. Sundaramurthy filed M.P. No. 2 of 2009together with supporting affidavit for vacating the interim order. This Court by an order dated 20.10.2009made the interim stay absolute and closed the vacate stayapplication. However, this Court observed that the Sugar Mill will not proceed with the surcharge order till the disposal of the writ petitions.
4. It is seen from the records that an enquiry u/s 81 of the Tamil Nadu Cooperative Societies Act, 1983 (for short Act) was initiated into the working of the Sugar Mill including the irregularities and mismanagement of funds of the Mills. The said enquiry was ordered vide order dated 08.01.1997. Accordingly, reports were submitted in that regard by the Enquiry Officer dated 30.07.1997 and 15.04.1998. On the basis of the report, the Registrar of Cooperative Societies viz., the third Respondent authorised the Administrator, the writ Petitioner to pass necessary orders after due enquiry on the basis of the report. Surcharge proceedings were initiated u/s 87(1) of the Act vide notice dated 30.03.2001. Notice was given to the contesting Respondents and thereafter, the surcharge order was confirmed on 30.03.2001.
5. A charge memo was given to the contesting Respondents dated 01.06.1998 and surcharge proceedings were initiated on the basis of five different heads.
5(1) The first charge related to irregular appointment of persons on the basis that they were land loosers and they were also paid salary. The loss to the sugar mill was at Rs. 12,82,085.65. In respect of that charge, the former Administrator P. Ilango, former Office Manager, Sundaramurthy and Ors. were made responsible.
5(2). The second charge related to procurement of fire wood. In respect of that charge, the former Administrator P. Ilango and former Office Manager Sundaramurthy were made responsible along with one Clerk.
5(3). The third charge related to engagement of tractors on hire basis for removal of bagasse from the Mill. In respect of that charge, former Administrator and the Chief Engineer Pandurangan and Office Manager Sundaramurthy, along with the Chief Accountant were made responsible.
5(4) The 4th charge related to retrospective fixation of wages for the mill workers in which only the Administrator and former Labour Welfare officer were made responsible.
5(5) The 5th charge relates to unnecessary procurement of vessels for the mill canteen in which the former administrator and the Labour Welfare Officer were made responsible.
6. The Surcharge Officer, who is the Deputy Registrar by an order dated 30.03.2000 found that the contesting Respondents were wilfully negligent and with aview to have pecuniary gain, they have created such loss. As against the said order, the three appeals were filed before the first Respondent Cooperative Tribunal u/s 152 of the Tamil Nadu Cooperative Societies Act.
7. The appeal filed by Sundaramurthy, former Office Manager was taken on file as C.M.A. No. 33 of 2001. The appeal filed by Pandurangan, former Chief Engineer was taken on file as C.M.A. No. 34 of 2001. Subsequently, P. Ilango, the then Administrator filed an appeal and it was taken on file as C.M.A. No. 39 of 2001.
8. The grounds raised by the contesting Respondents before the Cooperative Tribunal was that the surcharge order was passed beyond the limitation period. While the surcharge proceedings were started on 30.03.2000, the order came to be passed on 31.03.2001, which was beyond the limitation period of one year as prescribed u/s 87(1) of the Act. The second contention was that the Enquiry Report u/s 81 of the Act was not established before the Court. Therefore, it was contended that the surcharge order was ab initio void.
9. The Tribunal held that since the surchargeorder came to be passed beyond the limitation u/s 87(1), the same is liable to be set aside in the light of the judgment of this Court in Gabriel v. The Deputy Registrar (Housing), Cuddalore reported in 2003 (3) CTC 23.
10. Countering the said finding, Ms. G. Thilakavathi, learned Counsel for the Petitioner referred to a judgment of a Division Bench of this Court in S.V.K. Sahasramam v. Deputy Registrar of Co-op. Soceities, Tiruvannamalai Circle and Ors. reported in (2008) 3 MLJ 231 for contending that the limitation prescribed u/s 81 of the Act is only directory and not mandatory. The view taken by the Division Bench in respect of Section 81 of the Act was also applied in aproceeding u/s 87 of the Tamil Nadu Cooperative Societies Act by a learned Judge of this Court in G. Panneerselvam and Ors. v. Deputy Registrar of Co-operative Societies reported in (2009) 2 MLJ 901, where in this Court held that if proceedings are initiated within a reasonable time, it is amounting to substantial compliance under the said Act.
11. However, the Petitioner Mill had produced a letter dated 15.11.2000 and 01.03.2001 granting extension of time by the Additional Director of Sugars. Therefore, the Tribunal had failed to note all these facts while deciding the question of limitation. Therefore, in the light of the legal precedent as well as the factual aspect that the Mill had already obtained extension, the order of the Tribunal is liable to be set aside on this ground.
12. With reference to the merits of the contention, though the contesting Respondents had stated that during the year 1994-95 the Mill had crushed highest quantity of sugar namely 6.71 lakh tons, there by unprecedented stock of bagasse being dumped in the yard of sugar Mill. The Bagasse had to be shifted by the Tamil Nadu Paper Mills Ltd. The Chief Engineer addressed a letter dated 21.06.1995 to the Administrator that there was accumulation of 9000 tons of Bagasse. Since there was No. requisite time to give publication and call for tenders, only notice was put up in the notice Board in the Circle Offices. 6 persons had participated and it was only one Kandasamy, who offered the lowest at Rs. 260/- per hour. In a meeting held subsequently on 14.07.1995, this matter was reviewed and since the TNPL had not removed the Bagasse, it had accumulated into 9900tons. Hence, two additional tractors were engaged to avoid any serious events. If the Bagasse was not removed, it will also hamper the operation of the factory which loss will be more than the amount incurred for removal. Therefore, the engagement of additional tractors in the year 1995 was done due to the exigency of the situation.
13. The Tribunal held that the Joint Registrar did not deal with this issue carefully and there was no contradiction in the minutes dated 14.07.1995 and15.07.1995. Simply because it exceeded the budgetary allotment of Rs. 5 lakhs, Respondents cannot be fastened with the liability. But authority found that during the year 1995-96, the Contractors were hired during the crushing season was only Rs. 55 per hour whereas for the year 1994-95, it was Rs. 250/- per hour. For the subsequent year, if the contractors can be hired at Rs. 55/- for the previous year expense incurred at the rate of Rs. 250/ is a clear loss to the Mill and infact excess amount of Rs. 195/- was paid per hour for the contractors and in this background there was a loss of Rs. 4,96,665/-. The Tribunal did not appreciate these facts.
14. It was contended by the Mill that the Sugar Mill has got a huge landed area and the Bagasse could have been shifted to that place and the findings rendered in this aspect ought not to have been lightly dealt with by the appellate authority. In respect of the other commissions and omissions regarding purchase of wood, fixation of increment for the staff, purchase of unwanted vessel for the canteen, there was hardly any challenge and they were based upon the facts. Even on the question of giving employment to the land loosers, it was done deliberately. But the surcharge officer had dropped the charges relating to omission and commission in the matter of employment of person and the purchase of firewood. Even on the question of engagement of tractors, the loss was heavy. Due credit was given to outer limit for the budget expenditure was provided by the Commissioner at Rs. 5 lakhs. After giving credit to the same, only lesser amount was fixed as liability. Therefore, the Tribunal ought not to have entertained the appeal against the surcharge order.
15. The contentions raised by the learned Counsel for the Petitioner merits acceptance. The tribunal largely carried away by the fact that the surcharge order was hit by limitation. The findings regarding the merits of the case was only incidental and Tribunal did not take note of all relevant facts.
16. In the light of the same, there being now arrant for interfering with the surcharge order. Theorder of the Tribunal is clearly erroneous. Hence, all the three writ petitions will stand allowed. The order passed by the surcharge officer stands restored. However, there will be No. order as to costs.
