Judgment Mrs. Aruna Jagadeesan, J. 1. This writ appeal is directed against the order passed by the learned single Judge in W.P.No.21158 of 2004 dated 19. 2007, declining to quash the surcharge proceedings dated 111. 2001 passed in E.P.No.1 of 2001-2002 Sa.Pa. on the file of the second respondent, Deputy Registrar of Cooperative Societies, Nagercoil, confirmed by the first respondent, Joint Registrar of Cooperative Societies, Nagercoil, pursuant to the enquiry conducted under Section 82 of the Tamil Nadu Cooperative Societies Act, 1983 (for short, the Act). 2. Surcharge proceedings were initiated under Section 87 of the Act in and by which, the second respondent passed an order dated 111. 2001 directing the Appellants to pay a sum of Rs.1,41,825,20 holding that a financial loss to the said extent has been caused by them jointly and severally. Aggrieved over the said order, the Appellants preferred an appeal before the Cooperative Tribunal/District Judge, the second respondent herein and the same was dismissed. Aggrieved against the said order, Appellants filed W.P.No.21158 of 2034 and the learned single Judge rejected the plea of the Appellants and held that the appellants have failed to obtain approval of the Registrar of Cooperative Societies/Government before effecting promotion, consequential revision of salary, appointment etc., and have committed wilful negligence and caused loss to the society and therefore, the learned single Judge declined to interfere with the concurrent findings of the respondents. 3. The main contention of the appellants in assailing the surcharge proceeding is that they have neither misappropriated or fraudulently retained any money or other property or been guilty of breach of trust nor caused "any deficiency in the assets of the cooperative society. They have only enforced the settlement arrived at between the Management (society) and the employees under Section 12(3) of the Industrial Disputes Act. Therefore, such acts cannot be termed as a wilful act of negligence, warranting surcharge proceedings. It was pointed out that no prior approval is required from the Registrar of the Cooperative Societies or the Government under Rule 149 of the Tamil Nadu Cooperative Societies Rules (for short, the Rules) and as such, there was no violation of the said provision. 4. The learned counsel for the Appellants Mr. It was pointed out that no prior approval is required from the Registrar of the Cooperative Societies or the Government under Rule 149 of the Tamil Nadu Cooperative Societies Rules (for short, the Rules) and as such, there was no violation of the said provision. 4. The learned counsel for the Appellants Mr. S. Subbiah submitted that in the course of carrying on business and the affairs of the Society, the appellants have entered into an agreement with the employees under Section 12(3) of the Industrial Disputes Act and neither the State Act nor the Rules nor the Bye-laws of the Society make it obligatory to get prior permission or ratification to enter into such settlement. 5. Per contra, the learned Special Government Pleader Mr. R. Thirugnanam submitted that Rule 149 provided specific instructions regarding recruitment of the employees and fixation of cadre strength in cooperative Societies, requiring sanction to be obtained from the Registrar of Cooperative Societies now, after amendment, the words "with the prior approval of the Registrar of Cooperative Societies" has been substituted with the expression "prior approval of the Government" vide G.O.Ms.No.373, Cooperation Food and Consumers Protection Department dated 10. 2003. Thus, according to him, the Appellant in not getting such approval have wilfully neglected the instructions laid down in Rule 149. 6. Rule 149 prevents societies from making any recruitment until compliance of the mandate of the above said rule. Taking into account the cadre strength, classification of various categories of posts and the qualification required thereto for each post, recruitment can be made by adopting a special bye law in that regard. In this case, admittedly, no permanent recruitment has been made by the appellants. It is the categoric submission of the appellants that the appointment made by them is only temporary and in fact, there is reference to the status of the workmen appointed as Sales Assistant on daily wages (emphasis supplied) in the order dated 111. 2001 passed by the second respondent herein. Other instances relate to the promotion given to the staff and consequential revision of pay. It is submitted that even now the concerned staff are drawing the increased salary and no action has been taken either by the Registrar or any other authority to recover the amount from the concerned staff. 2001 passed by the second respondent herein. Other instances relate to the promotion given to the staff and consequential revision of pay. It is submitted that even now the concerned staff are drawing the increased salary and no action has been taken either by the Registrar or any other authority to recover the amount from the concerned staff. According to the appellants, to safeguard the Bank from anti social elements and as a preventive measure, further in order to give opportunity to a handicapped person, appointment was made on daily wages, purely on temporary basis. The factum is not denied by the respondents. 7. The order passed by the respondents do not indicate that there was any want of fixation of cadre strength or appointment made in excess of the cadre strength fixed, or lack of educational and other qualification in the appointment made, so as to say that they have wilfully neglected the instructions laid down in Rule 149. In this context, it is worthwhile to refer to the contention of the appellants that promotions, revision of salaries and appointments were given based on the settlement arrived at under Section 12(3) of the I.D. Act between the Management and the employees and therefore, there was no wilful or deliberate misconduct or negligence on the part of the appellants. 8. Mr. S. Subbiah learned counsel for the Appellant contended that no initiate action under Section 87 of the Act, a partaken intention or wilful negligence must be the basic requirement and in the present case, promotion and consequential revision of pay were made by the appellants not on their own accord but only to give effect to the lawful settlement arrived at between the society and the employees under Section 12(3) of the I.D. Act. 9. Incidentally, the learned counsel drew the attention of this Court to Section 29 of the I.D. Act which imposes penalty for breach of settlement or award on any person who commits a breach of any terms of settlement or award which is binding on him in the said Act. 10. An attempt was made by the learned Government Pleader questioning the very application of I.D. Act to the staff of the Cooperative Society and he argued that it is not open to the Appellants to contend that the impugned acts were done based upon the settlement under Section 12(3) of the I.D. Act. 10. An attempt was made by the learned Government Pleader questioning the very application of I.D. Act to the staff of the Cooperative Society and he argued that it is not open to the Appellants to contend that the impugned acts were done based upon the settlement under Section 12(3) of the I.D. Act. The said argument cannot be countenanced, as the said position of law has been settled by the Honble Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa AIR 1978 SC 548 : (1978) 2 SCC 213 : 1978-I-LLJ-349: 1978 LIC 467 (SC) relying on the decision of the Australian High Court in Queen v. Marshall and Ex.P. Federated Clerks Union of Australia, 1975 132 CLR 595. The Supreme Court has held that the Cooperative Societies, ordinarily, cannot fall outside the definition of Industry because a Society is the employer and the members or others are the employees and the activity partakes the nature of a trade. Merely because cooperative enterprises deserve State encouragement, they do not qualify for an exemption. Even if a cooperative society is worked by the members only, the entity is an industry because the member-workers are paid wages and there can be disputes about rates and the different scales of wages among the categories i.e. workers and workers or between the workers and employer. This proposition of law has been reiterated by the Honble Supreme Court in Agricultural Produce Market Committee v. Ashok Harakuni, 2000-II-LLJ-1382 (SC). 11. A Division Bench of this Court in Justine and Another v. Registrar of Cooperative Societies, 2002 (4) CTC 385 : 2003-I-LLJ-284 has made it clear that word "industry" defined under Section 2(j)(q) under the I.D. Act, 1947, makes the Cooperative Societies susceptible to the I.D. Act, 1947. Therefore, there can be no doubt about the applicability of the Industrial Disputes Act to the employees of the Cooperative Societies". 12. At this juncture, it has to be pointed out to the submission made by the learned Special Government Pleader referring to the judgment of the Division Bench of this Court in Justine and Another v. Registrar of Cooperative Societies (supra) that a settlement entered in Section 12 or 18 of the I.D. Act have got no statutory force and are unenforceable inasmuch as the appointments made were illegal and unauthorized. In the said case, unauthorized appointments made in several cooperative societies across Tamil Nadu were sought to be regularized before the High Court and in that context, the Division Bench held that the appointments made contrary to prescribed qualification beyond sanctioned strength in violation of Rule 149 of the Rules cannot be regularized and negatived the plea holding even if there is any settlement entered into under Section 12 or 18 of the I.D. Act, they have no statutory force and are unenforceable. 13. But in the present case, the appellants have referred to 12(3). Settlement arrived at by the society only to stress that there was no willful negligence or deliberate misconduct on their part. It is pertinent to point out that the appellants do not justify the appointments made by them but only stress their bona fide in making those appointments, promotion and revision of pay, just to implement the settlement arrived at between the parties and thus they plead that there was no negligence or deliberate misconduct on their part. Therefore, the above Judgment of the Division Bench cannot be applied to the facts of this case. 14. A strong reliance was placed on the Judgment of this Court by the appellant reported in S. Jina Chandran and Others v. Registrar of Cooperative Societies, Madras and Others 1999 (1) MLJ 431 , wherein it is held that the settlement arrived at between the Society and "its employees are not liable to be unilaterally set aside by the respondents nor can they initiate proceedings under Section 153 of the Cooperative Societies Act nor any proceeding under Section 81 of the Act can be initiated for recovering the amount from the persons in management for allegedly paying excess amount to the employees on the basis of the settlement. 15. Reliance has also been placed on a judgment rendered by one of us (P. Jyothimani, J.) reported in S. Marimuthu and Another v. Deputy Registrar of Cooperative Societies (Housing) Madurai Circle and Another 2006 (4) MLJ 86 wherein it has been held that in surcharge proceedings, the condition precedent is that liability can be fixed on the employees of the cooperative societies only when it is found that they were intentionally committing the same mistake and negligence. More so, when there is nothing to show that appointment was made by the petitioners on their own accord but were only implementing the orders of the Registrar of Cooperative Societies, responsibility cannot be fixed on the Appellants for such appointments. In the present case, it is not in dispute that the impugned acts were done by the appellants only in order to implement the settlement arrived at between the society and the employees under Section 12(3) of the Act to avoid any penalty being imposed upon them for non-implementing the settlement. 16. As regards the main contention put forth by Mr. S. Subbiah, the learned counsel for the Appellants that there was no wilful or deliberate misconduct on the part of the Appellants, catena of decisions referred by the learned counsel has to be gone into. 17. In B.S. Somasundram v. Thanjavur District Cooperative Supply Market Society Ltd. rep. by the Liquidator, Thiruvarur and Others, (1983) 2 MLJ 523 , this Court by making a reference to the corresponding Section 71 of the old Act of the Tamil Nadu Cooperative Societies Act, 1961 which is equivalent to the present Section 87 of the Act, it was held that mere negligence or callousness would not attract surcharge proceedings but it has to be proved to be wilful or deliberate carelessness which would bring about the surcharge order. 18. Reliance was also placed on P.N. Chockappan and Others v. Special Tribunal for Cooperative Cases, High Court Campus, Madras and Others (1999) 1 MLJ 587 wherein it is held thus at p.593 of MLJ: "13. .... In order to pass a surcharge order under Section 71(1) of the Act against a person entrusted with management of a cooperative society or an officer or a servant thereof, such person should have done an actionable wrong either by commission or omission in a deliberate and reprehensible manner with reckless callousness and with a supine indifference, without taking due care and caution ordinarily expected from a reasonable and prudent man under those existing circumstances. In the absence of such categorical finding by the second Respondent, it is not possible to mulct the petitioners with the loss caused to the society". 19. In the absence of such categorical finding by the second Respondent, it is not possible to mulct the petitioners with the loss caused to the society". 19. A detailed discussion has been made by making reference to various judgments on this aspect in another judgment reported in Sathyamangalam Cooperative Urban Bank Ltd. v. Deputy Registrar of Cooperative Society and Another, (1980) 2 MLJ 17, it is held thus:- "The degree of negligence that is contemplated under Section 71(1) of the Tamil Nadu Cooperative Societies Act is not mere negligence, but wilful negligence. The word wilful has not been defined in the Act. Wilfulness or wantonness imports pre-mediation or knowledge and consciousness that an injury or loss is likely to result from the act done or from the omission to act. It imports a constructive intention as to the consequences which, entering into the wilful act, the law imputes to the offender and in this way a charge, which otherwise would be mere negligence, becomes by reason of a reckless disregard of probable consequences, a wilful wrong. The act done or omitted to be done must be intended or must involve such reckless disregard of security and right as to imply bad faith. In examining whether there is wilful negligence, it has to be seen first whether the person concerned is guilty of negligence and if so, whether the said wilful negligence is the proximate cause of the injury or loss sustained". 20. In the light of the decisions referred to above, it is clear that to pass surcharge order under Section 87 of the Act, appellants should have done an actionable wrong either by commission or omission in a deliberate and reprehensible manner with reckless callousness and with a supine indifference, without taking due care and caution ordinarily expected from a reasonable and prudent man under those existing circumstances. In the absence of such categorical finding by the Respondents, it is not possible to mulct the appellants with the loss caused to the society. 21. This aspect has not been gone into by the learned single Judge. Therefore, it requires interference by this Court. 22. In the result, the order passed by the learned single Judge is set aside and the writ appeal is allowed. No costs.