KIRUBAKARANW.P. No.7214 of 20091.V.Srinivasan (Deceased)2.Leelavathi3.Rajammal4.Srivishnu(P2 to P4 proposed Legal heirs of deceased v. The Registrar of Co-operative Societies

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 04.10.2010CORAMTHE HONOURABLE Mr. JUSTICE N. KIRUBAKARANW.P. No.7214 of 20091.V.Srinivasan (Deceased)2.Leelavathi3.Rajammal4.Srivishnu(P2 to P4 proposed Legal heirs of deceased petitioner substitutedin the place of original petitioner as per order dated 29.06.2010in M.P.No.1 of 2010).. PetitionersVs.1.The Registrar of Co-operative Societies, N.V. Natarajan Maligai, 170, EVR Periyar High Road, Kilpauk, Chennai – 600 010.2.The Joint Registrar/Special Officer, The Coimbatore District Central Co-operative Bank Ltd., State Bank Road, Coimbatore – 641 018.3.The Enquiry Officer, Special Investigation Department, (Co-operative Societies), Office of the Registrar of Co-operative Societies, Chennai – 600 010... RespondentsPRAYER:This Writ petition filed under Article 226 of theConstitution of India for issuance of Writ of CertiorarifiedMandamus, to call for the records of the 2nd respondent pertainingto his proceedings dated 13.08.1996 and the subsequent Charge Memoissued on 19.01.1999, quash the same and direct the respondentsherein to provide the retiral benefits to the petitioner withinterest @ 18% per annum. https://hcservices.ecourts.gov.in/hcservices/ For Petitioners : Mr.K.S.Karthik Raja for Mr.T.R.RajaramanFor R1: Mr.P.Subramanian Additional Government PleaderFor R2: Mr.S.SaravananORDERThe deceased 1st petitioner originally challenged the order ofsuspension and the charge memo issued to him.2.It is the case of the 1st petitioner that he was appointedas Bank Inspector on 25.07.1968 and after periodical promotion heattained the age of superannuation on 31.08.1996. Before that, on13.08.1996, the 2nd respondent\the Joint Registrar passed an orderof suspension against the petitioner stating that the enquiry intocertain charges against the petitioner was pending. Notice underSection 81 of the Tamil Nadu Co-operative Societies Act, 1983 wassent on 09.01.1997 and a charge memo dated 19.01.1999 was issued tothe petitioner. A reply dated 30.05.2002 was given by thepetitioner. Not satisfied with the reply, an enquiry was conductedand the Enquiry Officer filed the Domestic Enquiry Report dated19.02.2003. The 1st petitioner was asked to appear before theauthorities on 27.12.2004. Thereafter, there was no communicationfrom the authorities and that was the reason why the 1st petitionercame before this Court, challenging the order of suspension as wellas charge memo. Pending Writ, the 1st petitioner passed away andhis legal heirs are the other petitioners.3.The 2nd respondent filed a counter affidavit stating thatthere was a paper publication regarding malpractice in the 2ndrespondent Co-operative Bank regarding sanctioning loans to SmallScale Industries. Based on that the District Collector issued aletter dated 26.07.1996 to the 2nd respondent to conduct an enquiryand file a report. During the enquiry it was found that thepetitioner indulged in acts of abetting sanctioning of loans basedon fabricated documents and that the amounts sanctioned were beingmisappropriated by the concerned parties. The amountmisappropriated is stated to be Rs.70,69,398/- which was sanctionedto 11 Small Scale Industries. During preliminary enquiry it wasfound that the petitioner who was employed as Secretary failed inhis duties, and therefore, he was responsible for all malpractices.In view of the above, the petitioner was suspended on 13.08.1996.Under Section 81 of the Tamil Nadu Co-operative Societies Act,1983, an enquiry was also initiated by proceedings dated19.08.1996. Section 81 enquiry revealed that 8 employees of the https://hcservices.ecourts.gov.in/hcservices/ Bank including the petitioner abetted the malpractices. 4.According to the 2nd respondent, after receiving a replyfrom the 1st petitioner pursuant to the charge memo, an enquiry wasconducted and a report was submitted by the Enquiry Officer on19.02.2003 and the petitioner was found guilty and the findings ofthe Enquiry Officer was concurred with. A second show cause noticewas issued on 19.04.2004 enclosing a copy of the findings of theenquiry. An explanation dated 27.12.2004 was submitted by the 1stpetitioner and he was given opportunity of personal hearing also.A further explanation was also submitted by the 1st petitioner. Outof 11 loan amounts, it is stated that 10 loan amounts werecollected and one loan amount is yet to be collected and therefore,the respondents could not pass final orders in the matter. It isfurther stated in paragraph 19 of the counter affidavit that due topendency of the Criminal proceedings, payment of retiral benefitscould not be disbursed to the 1st petitioner. 5.This Court directed the 2nd respondent Officer to file anaffidavit as to what action has been taken to conclude theproceedings against the petitioner pursuant to his proceedingsdated 07.01.2005 and 13.01.2005. An affidavit dated 22.07.2010 wasfiled by the 2nd respondent Officer stating that the non completionof the disciplinary proceedings and not passing of final order wasdue to the pendency of loan accounts and therefore, there was adelay.6.Mr.K.S.Karthik Raja, learned counsel appearing for thepetitioners submits that the proceedings was started as early as on1996 and the report was submitted on 2003 itself and the petitionergave explanation on 27.12.2004 and thereafter, nothing is heardfrom the 1st petitioner. The 1st petitioner was suspended in 1996and retirement benefits are not given even after 14 years. Thelearned counsel further submits that on the ground of delay, theproceedings are liable to be quashed and he relied upon theDivision Bench Judgment of this Court in Parameswaran Vs. State ofTamil Nadu and others reported in 2006 (1) CTC 476. 7.Learned counsel appearing for the petitioners able to putforth another valid point that there is no enabling provision inthe Co-operative Societies Act to keep the 1st petitioner undersuspension, and continue the disciplinary proceedings even aftersuperannuation. Further, he submits that when there is no enablingprovision, the 1st petitioner is deemed to have retired and that theemployer and employee relationship came to an end on 31.08.1996.He relied upon the admission made by the 2nd respondent in the WritPetition filed by the 1st petitioner in W.P.No.38583 of 2002 whichwas disposed on 17.09.2003. In this regard, he relied upon theDivision Bench Judgments of this Court in N.Kunnai Gowder Vs. The https://hcservices.ecourts.gov.in/hcservices/ Coimbatore District, Co-operative Milk Producers' Union Ltd., andanother reported in 2007 (5) CTC 491; A.Bommusamy Vs. TheGovernment of Tamil Nadu and others reported in 2007 (3) CTC 518and another Judgment of this Court in G.Manoharan Vs. The Registrarof Co-operative Societies and others reported in 2007 (2) CTC 501 .8.The learned counsel for the 2nd respondent submits thatbecause one loan amount is not recovered till date, the proceedingscould not be completed and he justified the proceedings against theofficer.9.It is an admitted fact that the 1st petitioner wassuspended on 13.08.1996 before he attained the age ofsuperannuation on 31.08.1996. A charge memo was issued on19.01.1999 and the enquiry was concluded on 19.02.2003. The 1stpetitioner appeared before the authorities and submitted hisexplanation on 27.12.2004. The charges against the 1st petitionerwere no doubt grave, that is, misappropriation of Co-operativeSociety's money. The allegations though were grave that hemisappropriated the money, the proceedings should be initiated andconcluded as per the procedure and law at the earliest. Whereas inthis case, the proceedings which was started in 1996 did not reachfinality even after passage of 14 years. There is no delay on thepart of the 1st petitioner by way of any proceedings whichprohibited the respondents from proceeding with further.Therefore, on the ground of delay itself, the proceedings areliable to be quashed. In Parameswaran Vs. State of Tamil Nadu andothers reported in 2006 (1) CTC 476 dated 23.11.2005, His LordshipMr.P.Sathasivam (as he then was) heading a Division Bench relyingupon the Judgment of Hon'ble Supreme Court in P.V.Mahadevan Vs.M.D., Tamil Nadu Housing Board reported in 2005 (4) CTC 403 quashedthe disciplinary proceedings on the ground of unexplained delay inpursuing disciplinary action. Paragraphs 9 and 10 of the Judgmentin Parameswaran Vs. State of Tamil Nadu and others reported in 2006(1) CTC 476, are extracted as follows:-"9. In this regard, it is useful torefer the latest Judgment of the Supreme Courtin the case of P.V.Mahadevan Vs. M.D., TamilNadu Housing Board, 2005 (4) CTC 403. In thatcase, in respect of certain commissions andomissions in 1990, which were pointed out inthe Audit Report in 1994-95, a charge memo cameto be issued in 2000. Pointing out that thereason for delay was unacceptable and findingthat the disciplinary proceedings wasprejudicial to public interest and the interestof employee and taking note of the fact thatthe employee reached superannuation, and also https://hcservices.ecourts.gov.in/hcservices/ considering that the mental agony and sufferingof the employee due to protracted disciplinaryproceedings, was more than punishment to beawarded, the Apex Court quashed the charge memoand permitted the employee to draw retrialbenefits. The following observations made inpara 14 of the said Judgment are relevant:"14. Under thesecircumstances, we are of the opinion thatallowing the respondent to proceed furtherwith the departmental proceedings at thisdistance of time will be very prejudicialto the appellant. Keeping a higherGovernment official under charges ofcorruption and dispute integrity wouldcause unbearable mental agony and distressto the officer concerned. The protracteddisciplinary enquiry against a Governmentemployee should, therefore, be avoided notonly in the interests of inspiringconfidence in the minds of the Governmentemployees. At this stage, it is necessaryto draw the curtain and to put an end tothe enquiry. The appellant had alreadysuffered enough and more on account of thedisciplinary proceedings. As a matter offact, the mental agony and sufferings ofthe appellant due to the protracteddisciplinary proceedings would be much morethan the punishment. For the mistakescommitted by the Department in theprocedure for initiating the disciplinaryproceedings, the appellant should not bemade to suffer."10. In the case before us, thealleged failure to utilise the advance amountand failure to complete the work entrusted tohim by utilising the funds had taken placeprior to 1985. It is not a case ofmisappropriation or retention of Governmentmoney. On the other hand, the allegationrelates to negligence in monitoring theprojects and non-utilising the funds within thetime prescribed. Taking note of the same andin the light of unexplained reason for notpursuing the first and second charge memos,when admittedly, the petitioner submitted hisexplanations denying all the allegations and https://hcservices.ecourts.gov.in/hcservices/ considering the length of time involved, viz.,20 years, we are of the view that the Judgmentof the Supreme Court referred to aboveP.V.Mahadevan Vs. M.D., Tamil Nadu HousingBoard, 2005 (4) CTC 403, is directly on thepoint. Further, the petitioner has alreadysuffered enough mental agony on account of theprotracted disciplinary proceedings. Thesematerial aspects have not been considered bythe Tribunal, which has committed an error indismissing the original application filed bythe petitioner." The said Judgment is squarely applicable to the facts of thepresent case as there is inordinate delay on the part of therespondents. Therefore, the Writ Petition is liable to be allowedon the ground of delay.10.Secondly, there is no enabling provision in the TamilNadu Co-operative Societies Act, 1983 to keep the petitioner undersuspension and conduct disciplinary proceedings beyond the date ofsuperannuation. This Court in G.Manoharan Vs. The Registrar of Co-operative Societies and others reported in 2007 (2) CTC 501 heldthat neither an employee could be kept under suspension nor hisservice could be extended beyond the date of superannuation for thepurpose of conducting disciplinary proceedings unless there isspecific enabling provision of law. In this case, there is nospecific provision under the Act. In the absence of that, there isno employer-employee relationship between the 1st petitioner andrespondents beyond the date of superannuation. As rightly pointedout by the learned counsel appearing for the petitioners, the 2ndrespondent itself was stated to have admitted in para 3 of theorder dated 17.09.2003 passed in W.P.No.38583 of 2002 filed by the1st petitioner, it has been observed as follows:-"that the petitioner has no right toclaim any relief from the respondent Bank, ashis services ceased on 31.08.1996 itself."In paragraph 13, this Court passed this following order:-"No authority can stop him fromretiring from service, unless a specific orderis issued. Admittedly, there was no orderextending the service after 31.08.1996."The above order would make it very clear that the service of the 1stpetitioner was not extended beyond 31.08.1996. Therefore, noemployer-employee relationship exist as his service ended on31.08.1996. https://hcservices.ecourts.gov.in/hcservices/

11.A Division Bench Judgment of this Court in N.KunnaiGowder Vs. The Coimbatore District, Co-operative Milk Producers'Union Ltd., and another reported in 2007 (5) CTC 491 held that inthe absence of any enabling provision in the Tamil Nadu Co-operative Societies Act, 1983 and Rules framed thereunder, actionof employer reserving right to continue disciplinary proceedingsafter superannuation is illegal and without jurisdiction. The samedictum was also laid down by another Division Bench of this Courtin A.Bommusamy Vs. The Government of Tamil Nadu and others reportedin 2007 (3) CTC 518 in paragraph 13 of the said Judgment which isextracted as follows:-"13. Further, there was inordinatedelay in passing the order of punishment.Though the enquiry was initiated as early as on10.08.1987, the passing of the order ofpunishment was kept pending for about fiveyears and finally the punishment was imposed on21.01.1993. There is no explanation for suchan inordinate delay in passing the final order.Time and again, the Supreme Court and thisCourt has deprecated the initiation ofDisciplinary Proceedings against an employee orthe fag end of his retirement and keeping thematter pending for a long time by keeping thematter pending for a long time by keeping theemployee under suspension. Further when thepetitioner had pleaded that there was officialprejudice and enmity between him and the thirdrespondent in the matter of use and maintenanceof the official vehicle, the Tribunal hasfailed to consider this aspect of the case inproper perspective while dismissing theOriginal Applications. The DisciplinaryProceedings were initiated against thepetitioner when there was hardly fifteen daysleft for his retirement. Moreover, when hisdate of retirement is on 11.03.1987 and theorder of suspension was passed on 25.03.1987 byinvoking G.O.No.173. Therefore, when once thepetitioner has reached the age ofsuperannuation on 11.03.1987, the placing thepetitioner under suspension after his date ofsuperannuation is without authority and thatwhen the relationship of master-servant ceasedto exist, no Disciplinary Proceedings could beinitiated against the petitioner. On thisground also, the impugned order of the Tribunal https://hcservices.ecourts.gov.in/hcservices/ is liable to be set aside."A learned Single Judge of this Court passed an order in G.ManoharanVs. The Registrar of Co-operative Societies and others reported in2007 (2) CTC 501 and Paragraphs 15, 16, 17 and 18 of the order areextracted as follows:- "15. The Supreme Court in S.PratapSingh Vs. State of Punjab, AIR 1964 SC 72, hadlaid down that there has to be a specificprovision under the law to take action againstthe person, who has ceased to be in service.16. In Bhagirathi Jena Vs. Board ofDirectors, O.S.F.C. and others 1999 (3) SCC666, the Supreme Court has held as follows:-"No specific provision exists inthe Orissa Financial State Corporation StaffRegulations, 1975, for deducting any amountfrom the provident fund consequent to anymisconduct determined in departmental enquiry,nor is there any provision for continuance ofdepartmental enquiry after superannuation. Inthe absence of any such provisions, it must beheld that the respondent-Corporation had nolegal authority to make any reduction in theappellant's retiral benefits. There is also noprovision for conducting a disciplinary enquiryafter the appellant's retirement, nor is thereany provision stating that in case misconductis established, a deduction could be made fromretiral benefits. Once the appellant hadretired from service on 30.06.1995, there wasno authority vested in the Corporation forcontinuing departmental enquiry even for thepurpose of imposing any reduction in retiralbenefits payable to the appelant. In theabsence of such an authority, it must be heldthat the enquiry had lapsed and the appellantwas entitled to full retiral benefits."17. Following the above decision, alearned Single Judge of the High Court ofMadhya Pradesh in Radheshyam Khichrolia andanother Vs. Madhya Pradesh Co-operativeMarketing Federation Ltd. and others, 2002 (3)LLJ 513, has held that continuance of thedepartmental enquiry after their superannuationwas not valid, as there were no service rulesproviding for it. The High Court upheld theirplea and allowed their petitions, quashing the https://hcservices.ecourts.gov.in/hcservices/ punishment in the one case and the enquiry inthe other and directed their retiral benefitsbe paid to them.18. Similarly, this Court had heldthat there has to be a specific provision oflaw or regulation or a by-law governing theservice conditions of the person in questionfor continuing a departmental enquiry,initiated before the date of superannuation,even after the employee had retired fromservice. Without such a provision beingavailable, there cannot be an employer-employeerelationship surviving after the employeeretires from service. Therefore, continuingthe enquiry proceedings or conducting an actionagainst the person after his retirement fromservice cannot be sustained in the eye of law.Any punishment sought to be imposed thereafter,including non-payment of retirement benefits orrecovery or amounts therefrom, cannot be heldto be valid. This position of law has beenfollowed by the learned Judges of this Court intheir decisions in W.P.No.30222 of 2003 dated16.02.2004, in W.P.No.21372 of 2003 dated24.11.2003 and in W.P.No.36027 of 2002 andW.P.No.31151 of 2003, dated 15.03.2005.Further, a Division Bench of this Court inW.A.Nos.3055 to 3058 of 2003 had confirmed thelegal position as stated in the variousdecisions of this Court." Therefore in the absence of any specific provision to continue thedepartmental enquiry initiated before date of superannuation iswithout jurisdiction. The delay also is found to be against thecontinuation of proceedings. Therefore, the impugned proceedingsare quashed. https://hcservices.ecourts.gov.in/hcservices/

12.For the reasons stated above, the Writ Petition isallowed. The respondents are directed to settle the retirementbenefits to the petitioners with in a period of six (6) weeks fromthe date of receipt of a copy of this order. No costs. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarsmnTo1.The Registrar of Co-operative Societies, N.V. Natarajan Maligai, 170, EVR Periyar High Road, Kilpauk, Chennai – 600 010.2.The Joint Registrar/Special Officer, The Coimbatore District Central Co-operative Bank Ltd., State Bank Road, Coimbatore – 641 018.3.The Enquiry Officer, Special Investigation Department, (Co-operative Societies), Office of the Registrar of Co-operative Societies, Chennai – 600 010.+1cc to Mr.S.Saravanan, Advocate Sr 72863+1cc to Govt. Pleader Sr 64975SJ(CO)km/11.10.W.P.No.7214 of 2009