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2006 DIGILAW 1022 (MAD)

P. Shanmugaraj v. The Joint Registrar/Special Officer, (Additional Incharge)

2006-04-10

P.JYOTHIMANI

body2006
Judgment :- 1. Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondents. 2. In these two writ petitions the impugned order of the first respondent dated 02.08.2004 is under challenge. The petitioner in W.P. No. 1060 of 2004 was working as sales Assistant in the first respondent Co-operative Wholesale Stores and the duties and responsibilities were fixed on the secretary, Manager and Section Assistant etc., in the bye-laws of the society. As far as the sales assistant no duties and responsibilities were fixed in the bye laws. The goods were sold on credit basis and price fixed by the Manager and the petitioner has no right in fixation of price of the commodity. 3. The petitioner in W.P. No. 1061 of 2004 was also working as Junior Assistant in the first respondent Co-operative Wholesale Stores. 4. The Special Officer in his memo dated 19.05.2004 has called for explanation from the petitioners to explain why the excess amount alleged to be the difference in the cost should not be recovered from the petitioners. The petitioners gave reply denying the allegations. It is thereafter, the impugned notice dated 02.08.2004 came to be passed calling upon the petitioner in W.P. No. 1060 of 2004 to pay a sum of Rs. 94,226/- and the petitioner in W.P. No. 1061 of 2004 to pay a sum of Rs. 56,789/-on the ground that the petitioners and other sales Assistants have sold goods at higher rates and thereby caused loss to the society. The impugned order of recovery issued by the first respondent which is challenged by the petitioners on many grounds including the ground under Article 14 of the Constitution of India apart from the averment as to how the amounts have been arrived at and has not been explained and no documents were produced to the petitioners to understand on what basis the amounts have been arrived at. 5. It is also the case of the petitioners that the petitioners being the sales Assistant and Junior Assistant respectively have nothing to do with fixation of price and inasmuch as the sales have been effected on credit basis, there is no question of loss to the society. There was absolutely no negligence or default on the part of the petitioners as per Section 10 of the Payment of Wages Act and therefore, the recovery cannot be made. There was absolutely no negligence or default on the part of the petitioners as per Section 10 of the Payment of Wages Act and therefore, the recovery cannot be made. There was no enquiry conducted according to the petitioners. Even Section 81(1) of the Tamil Nadu Co-operative Societies Act which contemplates enquiry, no enquiry was conducted. It is further stated by the petitioners that even monthly stock statement relating to the relevant period referred to in the impugned order does not show any irregularity in the statements. Even as per the calculations, the petitioners would state that the calculations arrived at are different in the prices and are not correct. There was no audit objection as per the Section 80 of the Tamil Nadu Co-operative Societies Act. 6. Mr. S. Silambanan, learned counsel for the petitioner would submit that the impugned order of recovery is arbitrary and illegal inasmuch as it has been passed without any enquiry especially in the circumstance that the petitioners have submitted their explanation for the memo given under Section 81 of the Tamil Nadu Co-operative Societies Act there should be an enquiry and even if a shortage is arrived at, it should be referred to arbitration under Section 90 of the Act and the amount has to be fixed. According to him, by applying the Payment of Wages Act, especially section 10 there should be an enquiry before fixing responsibility for the purpose of alleged loss. The learned counsel would submit that in the explanation the petitioners have submitted that being the sales assistants they have no role for the purpose of fixing the prices and therefore, in any event, no responsibility can be fixed on the petitioners at all. This aspect has not been considered at all. 7. The respondents who have filed counter affidavit would state it is only an order of recovery from the concerned persons who are responsible for misdeeds. That apart it is the case of the respondents that if at all there is any dispute it has to be referred under the Industrial Disputes Act. The respondents would also submit that the respondent being a Co-operative Society with the pre-dominant object of acting as Store, to ensure proper distribution of consumer articles. That apart it is the case of the respondents that if at all there is any dispute it has to be referred under the Industrial Disputes Act. The respondents would also submit that the respondent being a Co-operative Society with the pre-dominant object of acting as Store, to ensure proper distribution of consumer articles. Even if irregularities are committed by anybody the salesmen are expected to bring it to the notice of the management and the branch salesman is having duty to ensure proper entry is made in the stock books. While it is admitted that the branches were allowed to sell the goods on credit basis to the Government and other institutions as approved by the head office, the account were audited on inspection of various branches of stores and during verification it was found that there was grave irregularities namely, the credit sale invoices revealed higher sales price than fixed by the head office or branch office on several items and unsupplied materials were sold, that the salesmen by utilizing the funds of the stores made purchases, omitted to bring into account, sold them at a price they pleased. By the said conduct they have earned personal profit. The counter also narrates as to how the excess billing were found during the relevant period during the inspection and on the basis of the inspection report the respondents would submit that the amount of loss which has to be shared by the petitioners have been arrived at. 8. It is also stated by the respondents in the counter that impliedly the petitioners have accepted their conduct and the petitioners have connived with the other officials. There cannot be dual pricing for each sale. The issue involved is one of cheating by misusing the powers by the petitioners, the documents are self explanatory and that required no detailed enquiry. According to the respondents it is not necessary to conduct the enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act. The first respondent has no power under the said Act. The excess billing was not found by allegation but by detection. The loss is rot to the stores, but to the consumers and therefore, according to the respondents, the impugned action is taken in the interest of the society at large. 9. The first respondent has no power under the said Act. The excess billing was not found by allegation but by detection. The loss is rot to the stores, but to the consumers and therefore, according to the respondents, the impugned action is taken in the interest of the society at large. 9. The learned counsel for the petitioners would submit that inspite of various representation no inspections have been done in the presence of the petitioners at any point of time and no enquiry was conducted. Even during the said difference has not been informed to the petitioners and therefore, the entire act is vitiated by total illegality. That apart, according to the learned counsel for the petitioners there is no rule specified as to what are the duties required to be performed by Salesmen, sales Assistants. The learned counsel would submit that even the charges are not framed against the petitioners. Even the memo dated 19.05.2004 is like the second show cause notice and having arrived at conclusion as if the petitioners were responsible for the loss, a show cause notice was issued as to why the amount cannot be recovered. In fact in the explanation submitted by the petitioners they have specifically raised that even when the audit was conducted on 21.01.2004 and there was no finding about any irregularity at all. The petitioners have even called for a reports and inspite of the same without furnishing the materials the impugned order came to be passed which is arbitrary, according to the learned counsel for the petitioner. 10. On the other hand, Mr. S. Seenivasagam, learned counsel for the respondents would submit that as to whether the enquiry was conducted regarding the sale of various commodities, that required investigation of minute details. Such investigation cannot be done in a writ proceedings, for, the material facts cannot be decided in the writ petition and if the petitioners are aggrieved they can only approach the appropriate forum namely, the Labour Court by raising Industrial Disputes where the factual issue can be decided. According to the learned counsel, the writ petition is not maintainable by virtue of the Full Bench decision of this Court in M. Thanikachalam and others v. Madhuranthakam Agricultrual Producers Co-operative Marketing Society and others reported in 2000 (4) CTC 556 = 2001 1 L.W. 38. According to the learned counsel, the writ petition is not maintainable by virtue of the Full Bench decision of this Court in M. Thanikachalam and others v. Madhuranthakam Agricultrual Producers Co-operative Marketing Society and others reported in 2000 (4) CTC 556 = 2001 1 L.W. 38. He also relied upon the judgment of the Division Bench of this Court in the Commissioner, Coimbatore Corporation, Coimbatore v. A. Thangavelu and others reported in 2005 (1) CTC 481 = 2005 Writ L.R. 363 = 2005 2 L.W. 71 S.N. in which the Division Bench has held that in respect of disputed question of facts the writ petition is not a remedy and the writ petitions are decided only on the basis of affidavit and principles of natural justice are not straight jacket formula and are not inflexible. 11. According to the learned counsel the issuance of a show cause notice is not disputed by the petitioners. He would rely upon the details of various reports referring to many passages stating that while all other persons similarly situated as that of the petitioners have admitted it is not known as to how the petitioners alone can challenge the same. He also placed reliance upon another judgment in K. Krishnaveni v. The Registrar of Co-operative Societies, Natarajan Maligai, Chennai and others in W.P. No. 2565 of 2004 wherein this Court while dealing with the similar situation relating to the charge memo has held that the writ petition cannot be maintained against the co-operative society. He also contended that as against the said judgment the writ petitioner has filed a Writ Appeal in W.A. No. 285 of 2005 and the Division Bench of this Court by an order dated 27.06.2005 has held that the petitioners can be given liberty to approach appellate authority under Section 153 of the Co-operative Societies Act, confirming the order of the learned Single Judge dated 15.02.2005. 12. According to the learned counsel for the respondents, it is not the case of the petitioners that the amounts are incorrect while the excess billing is admitted. The excess amount should have been made available in the stock book. Therefore, according to him prima facie the improbity has been proved. 13. 12. According to the learned counsel for the respondents, it is not the case of the petitioners that the amounts are incorrect while the excess billing is admitted. The excess amount should have been made available in the stock book. Therefore, according to him prima facie the improbity has been proved. 13. According to the learned counsel there cannot be any enquiry under Section 81 of the Co-operative Societies Act inasmuch as it is only the power of the Registrar and not for the respondents. According to him the Cooperative Societies Act does not contemplate anything about conducting of enquiry in a disciplinary proceeding. 14. On the other hand, by way of reply the learned counsel for the petitioner would content that even if alternative remedy is available, there are cases where the writ petition is maintainable as held by the Supreme Court in Ganga Retreat and Towers Ltd and another v. State of Rajasthan and others reported in 2004 (16) AIC 138 (SC). 17. According to the learned counsel for the petitioners, it is violation of the natural justice, and even as per the judgment of the Full Bench reported 2000 (IV) CTC 556 = 2001 1 L.W. 38 in cases where the violation of natural justice is the point raised this Court has powers to interfere. The learned counsel would also submit that the respondents have proceeded as if the petitioners admitted. Even in the show cause notice it is preconcluded and documents filed by the respondents by way of typed set of papers even contain wrong totallings. 18. I have heard the learned counsel for the petitioners as also for the respondents and perused the entire records. 19. On the face of it, one has to decide as to whether this Court has jurisdiction under Article 226 of the constitution of India. In that regard, it is necessary to refer the decision of the Full Bench of this Court in M. Thanikachalam and others v. Madhuranthakam Agricultrual Producers Co-operative Marketing Society and others reported in 2000 (4) CTC 556 . The Full Bench has held that the filing of a writ petition in this case is not a matter of routine or matter of course but ultimately held that the writ petition against the orders passed in the Co-operative Societies Act may not be entertained as a matter of course. The relevant passages are as follows: “25. The Full Bench has held that the filing of a writ petition in this case is not a matter of routine or matter of course but ultimately held that the writ petition against the orders passed in the Co-operative Societies Act may not be entertained as a matter of course. The relevant passages are as follows: “25. We have considered the respective arguments advanced by the learned counsel on both sides and the case law, and have given our earnest consideration. As seen above there was legal battle that had been going on from time to time. The plank of the attack on the maintainability of the writ petition under Article 226 of the Constitution of India, may now be examined. We are not inclined to go in detail, nor it is necessary, except stating the well settled proposition of law, that the expansive and extr aordinary power of the High Court under Article 226 is as wide as the amplititude of the language used, and that the mentor of law is justice, and a potent drug should be judiciously administered, and accordingly this Court exercising the power under Article 226, in appropriate cases, can issue a writ or direction, as the need may be. It is also settled that Mandamus is a very wide remedy, which must be easily available to reach injustice, wherever it is found, however, such exercise of power cannot be made as a matter of course. If it is brought to the notice of the Court that any order under Co-operative Societies Act is passed without jurisdiction, or where principles of natural justice have been violated, in such circumstances, this Court can entertain such writ petition/s as maintainable.” The Supreme Court further states “28. When the provisions of the co-operative Societies Act give the right of appeal, revision and review, we do not find that something more power is to be added. We quite appreciate the argument, that efficacious remedy is to be made available to one and all, and even if exercise of power under Article 32 is limited, power under Article 226 can be invoked. But what we want to emphasise is that the power under Article 226 cannot be allowed to be exercised, as a matter of course. We quite appreciate the argument, that efficacious remedy is to be made available to one and all, and even if exercise of power under Article 32 is limited, power under Article 226 can be invoked. But what we want to emphasise is that the power under Article 226 cannot be allowed to be exercised, as a matter of course. Viewing in that angle, coupled with the well settled proposition of law enunciated in the judgments discussed earlier, we hold that writ petition against the orders passed under Co-operative Societies Act cannot be entertained as a matter of course.” 20. Therefore, a reference to the judgment of the Full Bench would show that it is not as if the writ petition is not maintainable in all cases. As pointed out by the Honble Full Bench, in cases where the orders passed in the Co-operatives Societies Act are without jurisdiction and where the principles of natural justice have been violated this Court can certainly entertain the writ petition as maintainable. Therefore, it is not necessary for me to go further into that by virtue of categoric finding by a Full Bench of this Court. 21. Now coming to the facts of this Case, admittedly, the recovery order was passed based on the show cause notice dated 2.08.2004. A reading of the said show cause notice would show that the show cause notice is not for the purpose of conducting any enquiry to find out as to who is responsible but only for the purpose of giving time for the payment of an amount which has been arrived at. A reference to the show cause notice would show that it is for the purpose of recovery. The petitioners have submitted their explanation. The petitioners have clearly denied their involvement in the alleged shortages and stated that even in the audit conducted on 21.01.2004 there was no objection in the meeting. Further the petitioners have stated asking for all the documents stated to be informed in various reports for the period between January 2001 to July 2002. Admittedly, as per the explanation submitted the respondents have not forwarded the documents and called for the petitioners under the impugned order directing that the amount shall be paid within seven days. This is a clear case of violation of principles of natural justice. 22. Admittedly, as per the explanation submitted the respondents have not forwarded the documents and called for the petitioners under the impugned order directing that the amount shall be paid within seven days. This is a clear case of violation of principles of natural justice. 22. It is relevant to point out that the learned counsels contention that it is not an order passed under the Tamil Nadu Co-operative Societies Act and it should be treated as a relationship of an employer and employee and the Industrial Disputes Act alone is applicable. It is not known as to how the learned counsel for the respondents has chosen to rely upon the Full Bench judgment reported 2000 (4) CTC 556 to contend that the writ petition is not maintainable against the order under the Act. The contentions of the learned counsel as if the powers under the Co-operative Societies Act vest with the Registrars and the respondents have no power under the Act has no legs to stand. The first respondent is certainly bound under the provisions of the Tamil Nadu Co-operative Societies Act which contemplates an enquiry. In fact in cases where a dispute arises in respect of the amount which has to be referred to the arbitration under Section 90 of the Act. Even leaving out of the provisions of the Tamil Nadu Co-operative Societies Act or the Payment of Wages Act especially 10, on perusal of the entire records one can understand that even the bare minimum requirement of giving opportunity to the petitioners have not been followed in this case. Shockingly, the show cause notice says that the amount has been arrived at and the petitioners should give explanation and pay the amount within 7 days. If that is not violation of natural justice, it is not known as to which is the principle of natural justice. 23. A perusal of the entire typed set of papers filed on behalf of the respondents would show that there are various reports and admittedly no one of the report, which the respondents have chosen to file before this Court has been given to the petitioners to enable them to defend their case. 24. 23. A perusal of the entire typed set of papers filed on behalf of the respondents would show that there are various reports and admittedly no one of the report, which the respondents have chosen to file before this Court has been given to the petitioners to enable them to defend their case. 24. In view of the said factual situation and the legal position, I am of the considered view that the impugned orders are liable to be quashed and accordingly it is quashed and the writ petitions are allowed, with the cost of Rs. 2,500/- to be paid by the respondents to the High Court Legal Aid Authority. Consequently, connected W.P.M.Ps. are closed.