High Court · 2008

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 29..08..2008C O R A MThe Honourable Mr. A.K. Ganguly, Chief JusticeandThe Honourable Mr. Justice F.M. Ibrahim KalifullaWrit Appeal No.949 of 2008S.V.K. Sahasranamam.. Appellant versus1.The Deputy Registrar of Co-op. Societies,Tiruvannamalai Circle, Tiruvannamalai,Tiruvannamalai District.2.The Inspector of Police,CCIW CID, Tiruvannamalai,Tiruvannamalai District.3.The Enquiry Officer,Arudurapattu Primay Agricultural Coop. Bank,Arudurapattu, Tiruvannamalai Taluk & District... Respondents- - - - -Prayer : Writ Appeal under Clause 15 of the Letters Patentagainst the order of a learned single Judge of this Courtdated 25.6.2008 made in W.P. No.20310 of 2007 presentedunder Article 226 of the constitution of India to issue aWrit of certiorari calling for the entire records relatingto the impugned order passed by the 3rd respondent in hisproceedings No.Nil dated 23.11.2000 and quash the same inso far as the petitioner's concerned.- - - - - For Appellant : Mr. C. PrakasamFor Respondents : Mr. J. Raja Kalifulla, Govt. Pleader- - - - -J U D G M E N T( Delivered by The Honourable the Chief Justice )Heard the learned counsel for parties. https://hcservices.ecourts.gov.in/hcservices/

2. This writ appeal has been filed challenging the order of alearned Judge of the writ court dated 25.6.2008 by which the learnedJudge declined to quash a report dated 23.11.2000 submitted by anEnquiry Officer after conducting an enquiry under Section 81 of theTamil Nadu Co-operative Societies Act, 1983 (hereinafter referred toas 'the said Act') in respect of the concerned Co-operative Society.3. The writ petitioner, who is the appellant before us, wasworking as a Co-operative Sub Registrar (Prosecution) at the Officeof the Deputy Registrar of Co-operative Socieites, Ponneri Circle,Ponneri, Tiruvallur District. It is the case of the appellant thathe was working as a Special Officer in the Arudarupattu PrimaryAgricultural Co-operative Bank in Tiruvannamalai Taluk and Districtat the time when the enquiry was directed against him under Section81 of the said Act. After completion of the enquiry and submissionof the enquiry report on 23.11.2000, surcharge proceedings have beeninitiated under Section 87 of the said Act and criminal proceedingshave also been initiated against the appellant. The writ petition wasfiled challenging the said enquiry report, inter alia, on the groundthat the enquiry report was submitted beyond the period prescribedtherefor under Section 81(4) of the said Act. 4. Section 81 of the said Act provides for holding of enquiry bythe Registrar of Co-operative Societies, of his own motion, on theapplication of a majority of the board or of not less than one-thirdof the members or on the request of the financing bank or of theDistrict Collector. In the instant case, the Registrar started theenquiry on his own motion. Sub-section (4) of Section 81 provides asfollows :"The inquiry shall be completed within aperiod of three months from the date of orderingthe inquiry or such further period or periods notexceeding three months at a time as the nexthigher authority may permit, provided that suchextended periods shall not exceed six months inthe aggregate."In the instant case, the enquiry was initiated on 10.11.1999 and thereport was submitted by the Enquiry Officer on 23.11.2000. Thelearned Judge of the writ court refused to set aside the enquiryproceedings by relying upon two judgments of the Supreme Court in thecase of State of U.P. vs. Babu Ram Upadhya reported in A.I.R. 1961S.C. 751 and in the case of State of U.P. vs. Manbodhan Lal reportedin A.I.R. 1957 S.C. 912.5. Therefore, the question which is falling for considerationbefore this Court is, whether the time limit which is provided underSection 81(4) of the said Act is mandatory or not and whether the https://hcservices.ecourts.gov.in/hcservices/ word "shall" used in Section 81(4) of the said Act has to beconstrued as mandatory or not.6. It is well settled that the question whether an expressionused in a section is mandatory or not has to be decided on variousfactors and the mere expression of the word "shall" alone is notdecisive of the matter. This question came up for considerationbefore the Privy Council in the celebrated case of Montreal StreetRailway Company vs. Normandin reported in A.I.R. 1917 Privy Council142. Sir Arthur Channel, speaking for the Judicial Committee of thePrivy Council, clarified the position at page 144 of the report asfollows :-"The question whether provisions in a statute aredirectory or imperative has very frequently arisen in thiscountry, but it has been said that no general rule can belaid down, and that in every case the object of thestatutes must be looked at."The learned Judge relied on Maxwell on "The Interpretation ofStatutes" and the portion on which reliance was placed is set outhereinbelow :-"where the prescription of a statute relate to theperformance of a public duty and where the invalidation ofacts done in neglect of them would work serious generalinconvenience or injustice to persons who have no controlover those entrusted with the duty without promoting theessential aims of the legislature, such prescriptions seemto be generally understood as mere instructions for theguidance and government of those on whom the duty isimposed, or, in other words, as directory only. The neglectof them may be penal, indeed, but it does not affect thevalidity of the act done in disregard of them."The aforesaid principles have been followed by the Constitution Benchof the Supreme Court in the case of State of U.P. vs. Manbodhan Lal(supra), wherein paragraphs 10 and 11 at pages 917 and 918 of thereport are relevant and they are extracted hereunder :-"The question may be looked at from another point ofview. Does the Constitution provide for the contingency asto what is to happen in the event of non-compliance withthe requirements of Article 320(3)(c)? It does not, eitherin express terms or by implication, provide that the resultof such a non-compliance is to invalidate the proceedingsending with the final order of the Government. https://hcservices.ecourts.gov.in/hcservices/ This aspect of the relevant provisions of Part XIV ofthe Constitution, has a direct bearing on the questionwhether Article 320 is mandatory. The question whether acertain provision in a statute imposing a duty on a publicbody or authority was mandatory or only directory, arosebefore their Lordships of the Judicial Committee of thePrivy Council in the case of Montreal Street RailwayCompany v. Normandin, 1917 A.C. 170(B). In that case the question mooted was whether theomission to revise the jury lists as directed by thestatute, had the effect of nullifying the verdict given bya jury. Their Lordships held that the irregularities in thedue revision of the jury lists, will not ipso facto avoidthe verdict of a jury. The Board made the followingobservations in the course of their judgment:“...The question whether provisions in a statute aredirectory or imperative has very frequently arisen in thiscountry, but it has been said that no general rule can belaid down, and that in every case the object of the statutemust be looked at. The cases on the subject will be foundcollected in Maxwell on Statutes, 5th Edn., p. 596 andfollowing pages. When the provisions of a statute relate tothe performance of a public duty and the case is such thatto hold null and void acts done in neglect of this dutywould work serious general inconvenience, or injustice topersons who have no control over those entrusted with theduty, and at the same time would not promote the mainobject of the legislature, it has been the practice to holdsuch provisions to be directory only, the neglect of them,though punishable, not affecting the validity of the actsdone.”The principle laid down in this case was adopted bethe Federal Court in the case of Biswanath Khemka v. King-Emperor, 1945 F.C.R. 99 : A.I.R. 1945 FC 76 (C). In thatcase, the Federal Court had to consider the effect of non-compliance with the provisions of Section 256 of theGovernment of India Act, 1935, requiring consultationbetween public authorities before the conferment ofmagisterial powers or of enhanced magisterial powers, etc. The Court repelled the contention that the provisionsof Section 256, aforesaid, were mandatory. It was furtherheld that non-compliance with that section would not renderthe appointment otherwise regularly and validly made,invalid or inoperative. That decision is particularlyimportant as the words of the section then before their https://hcservices.ecourts.gov.in/hcservices/ Lordships of the Federal Court, were very emphatic and of aprohibitory character.An examination of the terms of Article 320 shows thatthe word “shall” appears in almost every paragraph andevery clause or sub-clause of that article. If it were heldthat the provisions of Article 320(3)(c) are mandatory interms, the other clauses or sub-clauses of that article,will have to be equally held to be mandatory. If they are so held, any appointments made to thepublic services of the Union or a State, without observingstrictly, the terms of these sub-clauses in clause (3) ofArticle 320, would adversely affect the person so appointedto a public service, without any fault on his part andwithout his having any say in the matter. This result could not have been contemplated by themakers of the Constitution. Hence, the use of the word“shall” in a statute, though generally taken in a mandatorysense, does not necessarily mean that in every case itshall have that effect, that is to say, that unless thewords of the statute are punctiliously followed, theproceeding or the outcome of the proceeding, would beinvalid. On the other hand, it is not always correct to saythat where the word “may” has been used, the statute isonly permissive or directory in the sense that non-compliance with those provisions will not render theproceeding invalid. In that connection, the followingquotation from Crawford on Statutory Construction — Article261 at p. 516, is pertinent:“The question as to whether a statute is mandatory ordirectory depends upon the intent of the legislature andnot upon the language in which the intent is clothed. Themeaning and intention of the legislature must govern, andthese are to be ascertained, not only from the phraseologyof the provision, but also by considering its nature, itsdesign, and the consequences which would follow fromconstruing it the one way or the other....”The very same passage from the judgment of the Privy Council referredto above has been approvingly quoted by the Supreme Court in extenso.Similar principles have been reiterated in a subsequent ConstitutionBench judgment of the Supreme Court in the case of State of U.P. vs.Babu Ram Upadhya (supra). Justice K. Subba Rao, as His Lordship thenwas, speaking for the majority, quoting the same passage from https://hcservices.ecourts.gov.in/hcservices/ Montreal Street Railway Company (supra), has come to the sameconclusion [See page 765] :-"The relevant rules of interpretation may bebriefly stated thus: When a statute uses the word“shall”, prima facie, it is mandatory, but theCourt may ascertain the real intention of thelegislature by carefully attending to the wholescope of the statute. For ascertaining the realintention of the Legislature the Court mayconsider, inter alia, the nature and the design ofthe statute, and the consequences which wouldfollow from construing it the one way or theother, the impact of other provisions whereby thenecessity of complying with the provisions inquestion is avoided, the circumstance, namely,that the statute provides for a contingency of thenon-compliance with the provisions, the fact thatthe non-compliance with the provisions is or isnot visited by some penalty, the serious ortrivial consequences that flow therefrom, and,above all, whether the object of the legislationwill be defeated or furthered."The decision of the Supreme Court in State of U.P. vs. Manbodhan Lal(supra) was also reiterated.7. In our view, the learned Judge of the writ court, therefore,placed reliance on the correct proposition of law and the judgment ofthe Apex Court and the formulation of the principles of the PrivyCouncil. Subsequently also, in a two judge bench decision of theSupreme Court in the case of T.V. Usman vs. Food Inspector,Tellicherry Municipality reported in A.I.R. 1994 S.C. 1818, the sameprinciples have been reiterated [See paragraph 14]:-"In Maxwell on Interpretation of Statutes, EleventhEdn., at page 362 it is stated as under:“Where, indeed, the whole aim and object of thelegislature would be plainly defeated if the command to dothe thing in a particular manner did not imply aprohibition to do it in any other manner, no doubt can beentertained as to the intention; that is to say, such arequirement would be imperative.”It is further stated on page 364 that:“The general rule is, that an absolute enactment mustbe obeyed or fulfilled exactly, but it is sufficient if adirectory enactment be obeyed or fulfilled substantially. https://hcservices.ecourts.gov.in/hcservices/ ***When a public duty is imposed and the statute requiresthat it shall be performed in a certain manner, or within acertain time, or under other specified conditions, suchprescriptions may well be regarded as intended to bedirectory only in cases when injustice or inconvenience toothers who have no control over those exercising the dutywould result if such requirements were essential andimperative.”In Craies’ Statute Law, Seventh Edn., at page 62 it isstated thus:“When a statute is passed for the purpose of enablingsomething to be done, and prescribes the formalities whichare to attend its performance, those prescribed formalitieswhich are essential to the validity of the thing when doneare called imperative or absolute; but those which arenot essential and may be disregarded without invalidatingthe thing to be done, are called directory.” (emphasis inoriginal)At page 250 it is further stated thus:“The question whether the provisions in a statute aredirectory or imperative has frequently arisen in thiscountry, but it has been said that no general rule can belaid down and that in every case the object of the statutemust be looked at. ... When the provisions of a statuterelate to the performance of a public duty and the case issuch that to hold null and void acts done in respect ofthis duty would work serious general inconvenience orinjustice to persons who have no control over thoseentrusted with the duty, and at the same time would notpromote the main object of the legislature, it has been thepractice to hold such provisions to be directory only, theneglect of them, though punishable not affecting thevalidity of acts done.”In Dattatraya Moreshwar v. State of Bombay, A.I.R.1952 S.C. 181, it was held as under:“Generally speaking the provisions of a statutecreating public duties are directory and those conferringprivate rights are imperative. When the provisions of astatute relate to the performance of a public duty and thecase is such that to hold null and void acts done inneglect of this duty would work serious generalinconvenience or injustice to persons who have no controlover those entrusted with the duty and at the same timewould not promote the main object of the legislature, ithas been the practice of the Courts to hold such provisionsto be directory only, the neglect of them not affecting thevalidity of the acts done.” https://hcservices.ecourts.gov.in/hcservices/ In Rule 7(3) no doubt the expression “shall” is usedbut it must be borne in mind that the rule deals withstages prior to launching the prosecution and it is alsoclear that by the date of receipt of the report of thePublic Analyst the case is not yet instituted in the courtand it is only on the basis of this report of the PublicAnalyst that the authority concerned has to take a decisionwhether to institute a prosecution or not. There is notime-limit prescribed within which the prosecution has tobe instituted and when there is no such limit prescribedthen there is no valid reason for holding the period of 45days as mandatory. Of course that does not mean that thePublic Analyst can ignore the time-limit prescribed underthe rules. He must in all cases try to comply with thetime-limit. But if there is some delay, in a given case,there is no reason to hold that the very report is void andon that basis to hold that even prosecution cannot belaunched. May be, in a given case, if there is inordinatedelay, the court may not attach any value to the report butmerely because the time-limit is prescribed, it cannot besaid that even a slight delay would render the report voidor inadmissible in law. In this context it must be notedthat Rule 7(3) is only a procedural provision meant tospeed up the process of investigation on the basis of whichthe prosecution has to be launched. No doubt, sub-section(2) of Section 13 of the Act confers valuable right on theaccused under which provision the accused can make anapplication to the court within a period of 10 days fromthe receipt of copy of the report of Public Analyst to getthe samples of food analysed in the Central Food Laboratoryand in case the sample is found by the said Central FoodLaboratory unfit for analysis due to decomposition bypassage of time or for any other reason attributable to thelapses on the side of prosecution, that valuable rightwould stand denied. This would constitute prejudice to theaccused entitling him to acquittal but mere delay as suchwill not per se be fatal to the prosecution case even incases where the sample continues to remain fit for analysisin spite of the delay because the accused is in no wayprejudiced on the merits of the case in respect of suchdelay. Therefore it must be shown that the delay has led tothe denial of right conferred under Section 13(2) and thatdepends on the facts of each case and violation of thetime-limit given in sub-rule (3) of Rule 7 by itself cannotbe a ground for the prosecution case being thrown out."8. The learned counsel for the appellant, however, relied on arecent judgment of the Supreme Court in the case of Vidya VikasMandal vs. Education Officer reported in (2008) 1 S.C.C. (L&S) 759. https://hcservices.ecourts.gov.in/hcservices/ In that case, the learned Judges of the Supreme Court came to afinding that submission of enquiry report beyond the time limitprescribed therefor was not sustainable. This Court is of theopinion that the consideration in a departmental enquiry is totallydifferent from the consideration which weighs with the Court inanother enquiry which is of a public nature and which in the natureof a fact finding enquiry in order to find out whether the affairs ofa co-operative society are conducted properly or they are conductedin an illegal manner by way of indulging in corruption, resulting inerosion of public funds. Therefore, the judgment of the SupremeCourt given in a different fact situation in the case of Vidya VikasMandal (supra) cannot be pressed into service in the facts of thepresent case. 9. It is nobody's case that in the instant case, the proceedingunder Section 81 of the said Act amounts to an enquiry which can becalled a departmental or disciplinary enquiry. It cannot be disputedthat an enquiry under Section 81 of the said Act is an enquiry inpublic interest in order to find out whether the affairs of a co-operative society are conducted legally and whether there arefinancial improprieties in the matter of conduct of its affairs.Such an enquiry cannot be prima facie compared to an enquiry againstany individual employee. It is obviously true that as a follow upaction on such enquiry under Section 81, various other steps may betaken, viz. surcharge proceedings can be initiated under Section 87and steps can be also taken for initiating criminal proceedings. Inthe instant case, both these steps have been taken. 10. Before the learned Judge of the writ court, the appellantrelied on two learned single Bench judgments of this Courtrendered in the case of T.V. Ekambaram vs. The Co-operative Tribunal-cum-District Judge, Madurai reported in 2000 (2)C.T.C. 659 and in the case of Gabriel vs. The Deputy Registrar(Housing), Cuddalore reported in 2003 (3) C.T.C. 23. In both thesetwo judgments, the provisions of Section 87 of the said Act whichrelate to surcharge proceedings were examined and the learned Judgesin both the aforesaid judgments construed the following proviso toSection 87 :"Provided further that the action commencedunder this sub-section shall be completed within aperiod of six months from the date of suchcommencement or such further period or periods asthe next higher authority may permit but suchextended period or periods shall not exceed sixmonths in the aggregate."Considering the said time limit of six months, the learned Judgescame to the conclusion that the said period of six months ismandatory. https://hcservices.ecourts.gov.in/hcservices/

11. We are constrained to hold that even though no appeal hasbeen taken to us from the said judgments, yet having regard to thewell settled legal position which has been referred to hereinabove,the finding of the learned Judges in these two judgments that theperiod of six months in the second proviso to Section 87 of the saidAct is mandatory is not a correct finding in law. We find that eventhough before the learned Judge of the writ court those two judgmentsof the learned single Bench were cited, the learned Judge of the writcourt was not swayed by those two decisions and came to a correctfinding, relying upon the well settled proposition laid down by theSupreme Court as pointed above hereinabove. 12. We, therefore, affirm the order of the learned single Judgein this case. We are of the view that in a case where there areallegations of embezzlement and misappropriation of public funds, themembers of general public who have been cheated have no control overthose who hold the enquiry in respect of the time limit. To hold thatsuch an enquiry which has been continued beyond the time limit is badwould cause great injustice. 13. Therefore, if such enquiry is continued beyond the time limitmentioned in the relevant statute, the said time cannot be held to bemandatory in view of the principles laid down in Montreal StreetRailway Company (supra), which has been affirmed by the SupremeCourt. 14. The writ appeal is thus dismissed. There shall be no orderas to costs. Consequently, M.P. No.1 of 2008 is closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar. ab/pv To1.The Deputy Registrar of Co-op. Societies,Tiruvannamalai Circle, Tiruvannamalai,Tiruvannamalai District.2.The Inspector of Police,CCIW CID, Tiruvannamalai,Tiruvannamalai District. https://hcservices.ecourts.gov.in/hcservices/

3.The Enquiry Officer,Arudurapattu Primay Agricultural Coop. Bank,Arudurapattu, Tiruvannamalai Taluk & District.+ 1 CC to the Government Pleader SR NO 49219+ 1 CC To Mr.C.Prakasam, Advocate SR NO.49361 Writ Appeal No.949 of 2008MRD(CO)SRA(22/09/2008)