Judgment : The prayer in this writ petition is to quash the order made in C.M.A. No. 26 of 1998 dated 37. 2000 on the file of the second respondent, confirming the order of the first respondent dated 2. 1998, initiating surcharge proceedings against the petitioners under Section 87 of the Tamil Nadu Co-operative Societies Act, 1983. 2. The case of the petitioners is that they are working as Junior Assistants in the Cooperative Stores of Cholan Roadways Corporation Employees Co-Operative Society, which is a Consumer Co-operative Society, in the said society, one Manager, three Assistants, four Junior Assistants, five Salesmen and two Security Guards are employed. The Manager and three Assistants are Higher cadre officers than the petitioners. There is one Assistant in-charge of the Godown, who is called the Godown Keeper. The sale transactions in the Society are made mostly on credit basis. The sale amount will be recovered from the monthly salary of the employees concerned by the Transport Corporation Officials and debited from the employees’ account. According to the petitioners, there was no resolution passed by the Board that the petitioners should manage the Godown. The petitioners are only Junior Assistants and they were not entrusted with the stocks of the Godown. 3. Petitioners and eight others were issued a show cause notice by the first respondent on 8. 1997 asking as to why a sum of Rs.3,90,463.80 shall not be recovered from the Manager, the petitioners, two Assistants and five Salesmen. According to the petitioners, the said notice was issued based on the report of enquiry, conducted under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983. The Godown Keeper was not issued with any such notice. The petitioners sent their reply to the said show cause notice on 8. 1991 and stated that they are employed only as Junior Assistants in the office and they are not connected with the sales or Godown or stock in-charge and therefore, they are not responsible for the stock deficiency as per the bye-laws. They have also pointed out that no resolution or office order was passed entrusting the stock of the society of the petitioners and only the Godown Keeper is in-charge of the whole stock. Criminal cases were also registered against the petitioners and eight others and in the said criminal cases, the petitioners were acquitted. On 28. They have also pointed out that no resolution or office order was passed entrusting the stock of the society of the petitioners and only the Godown Keeper is in-charge of the whole stock. Criminal cases were also registered against the petitioners and eight others and in the said criminal cases, the petitioners were acquitted. On 28. 1997, the petitioners met the first respondent and requested to furnish a copy of the enquiry report made under Section 81 of the Act, which was referred to and relied on in the show cause notice, dated 8. 1997. However, the said report was not furnished to the petitioners. The first respondent on 2. 1998 passed the order of surcharge against the petitioners and three other salesmen and ordered to pay a sum of Rs. 48,541.38 each, for the stock deficiency. Petitioners filed appeal under Section 152 of the Tamil Nadu Co-Operative Societies Act, 1983, before the District Court in C.M.A.No.29 of 1998 and the said CMA was also dismissed on 37. 2000, as against which this writ petition is filed. 4. The first respondent filed counter affidavit by stating that even though the petitioner were designated as Junior Assistants, their works were related to sales and during the occurrence of stock deficit, they were authorised to work as salesmen. The Board of management had given office orders to the petitioners to work as salesmen. The surcharge notices have been sent to the petitioners since the Enquiry Officer, who conducted enquiry under Section 81 of the Act, recommended to initiate surcharge action against them and consequently the surcharge notice was served to the petitioners. It is also stated in the counter affidavit that Section 81 enquiry report was supplied to the petitioners by the Domestic Enquiry Officer. The CCIW Police, Thanjavur, charge sheeted the petitioners and the cases are under trial on the file of the Additional Chief Judicial Magistrate Court, Kumbakonam, in C.C. No. 13 and 14 2002. Section 81 enquiry report was furnished to the petitioners along with the charge sheet filed before the criminal Court. The surcharge order was passed by following all the procedures in law and there is no illegality in the surcharge order passed by the first respondent and the same is confirmed by the second respondent. 5. Section 81 enquiry report was furnished to the petitioners along with the charge sheet filed before the criminal Court. The surcharge order was passed by following all the procedures in law and there is no illegality in the surcharge order passed by the first respondent and the same is confirmed by the second respondent. 5. The learned counsel for the petitioners submitted that Section 81 enquiry report was not furnished to the petitioners either prior to or after the notice issued under Section 87 of the Act. Insofar as the criminal Chief Judicial Magistrate, Kumbakonam, acquitted the petitioners by judgment dated 212. 2008 and the copy of the said judgment is also filed in the additional typed set of papers. The learned counsel further submitted that even assuming the petitioners were entrusted with the work of sales, there is no willful negligence proved against the petitioners to order recovery under Section 87 of the Act, and the second respondent failed to consider the said aspect viz., willfulness of the petitioners in committing loss and therefore, the order passed by the respondents are unsustainable. 6. The learned counsel for the fist respondent on the other hand submitted that the petitioners having been entrusted with the sale of the items in the Godown during stock verification, it was found that there was stock deficit worth Rs. 3,90,463.80, and all the persons, who were responsible during the relevant time were held liable proportionately. The surcharge proceedings were initiated on the basis of the report submitted under Section 81 and the enquiry report was also furnished to the petitioners along with the charge sheet filed in the criminal case and therefore, there is no violation of any procedure while passing the surcharge order, which was rightly confirmed by the second respondent. 7. I have considered the rival submissions made by the learned counsel for the petitioners as well as the learned Additional Government Pleader appearing for the first respondent. 8. The first respondent initiated surcharge proceedings under Section 87 of the Tamil Nadu Co-Operative Societies Act, 1983, against the petitioners and eight others on the ground that there was stock deficiency worth Rs. 3,90,463.80 in Cholan Transport Corporation Employees Co-Operative Stores, during 1994-1995. 8. The first respondent initiated surcharge proceedings under Section 87 of the Tamil Nadu Co-Operative Societies Act, 1983, against the petitioners and eight others on the ground that there was stock deficiency worth Rs. 3,90,463.80 in Cholan Transport Corporation Employees Co-Operative Stores, during 1994-1995. Prior to the initiation of surcharge proceedings, enquiry was ordered under Section 81 of the Tamil Nadu Co-Operative Societies Act 1983, and according to the first respondent, during the enquiry conducted under Section 81, the said deficit of stock was found and consequently surcharge proceedings were initiated. 9. The case of the petitioners is that along with the notice issued under Section 87 i.e. at the time of initiating surcharge proceedings, the enquiry report submitted under Section 81 was not furnished to the petitioners, which is the basis for initiation of the surcharge proceedings. In the counter affidavit filed by the first respondent, a vague averment is made with regard to the supply of Section 81 enquiry report, without mentioning the date on which it was served to the petitioners. Further, it is stated that the said enquiry report was furnished to the petitioners with the charge sheet tiled in the criminal case viz. C.C. Nos. 13 and 14 of 2002. The surcharge order was passed by the first respondent on 2. 1998 and the charge sheet was filed in the criminal case, admittedly in the year 2002. Therefore, furnishing of Section 81 enquiry report along with the charge sheet filed in the criminal case will not have any relevance for initiating proceedings under Section 87 of the Act. 10. It is the specific case of the petitioners that they were not assigned the work of sales or they were put-in-charge of the Godown. Even in the surcharge order passed by the first respondent, it is not stated that the petitioners willfully committed dereliction of duties. For ordering recovery under Section 87 of the Tamil Nadu Co-Operative Societies Act, 1983, the first respondent must establish that there is willful dereliction of duty on the part of the petitioners. Mere carelessness or dereliction of duty is not sufficient to initiate surcharge proceedings as per Section 87(1) of the Tamil Nadu Co-Operative Societies Act. 1983. The second respondent also failed to consider this aspect while dismissing the appeal filed by the petitioners under Section 152 of the Act. 11. Mere carelessness or dereliction of duty is not sufficient to initiate surcharge proceedings as per Section 87(1) of the Tamil Nadu Co-Operative Societies Act. 1983. The second respondent also failed to consider this aspect while dismissing the appeal filed by the petitioners under Section 152 of the Act. 11. The action of the first respondent in initiating surcharge proceedings under Section 87 without furnishing copy of the enquiry report submitted under Section 81 of the Act is in violation of the principles of natural justice. In the criminal proceedings, initiated against the petitioners, the learned Additional Chief Judicial Magistrate, Kumbakonam, acquitted the petitioners. The petitioners, who were accused Nos. 9 and 10, were acquitted from the criminal charges and only accused Nos. 3 and 4 viz. Chellaperumal and Azhagiyanambi were found guilty for the charge under Section 408 IPC and when they were asked on the question of sentence, the said accused viz., Chellaperumal and Azhagiyanambi replied that they repaid the amount and they may be pardoned. Considering the said plea made by the said accused persons, the learned Additional Chief Judicial Magistrate, Kumbakonam, released the said two accused persons viz., A3 and A-4 under Section 4(1) of the Probation of Offenders Act 1958, by executing personal bond for Rs. 10,000/- each and to keep good behavior for one year. Thus, it is evident from the criminal Court judgment that the petitioners were not held responsible for the loss. 12. This Court in the decision M. Sambandam v. Deputy Registrar (Credit)Co-operative Societies, Mylarpore, Madras (1999) 3 MLJ 310 : (1999) 4 LLN 483 considered the very same issued and in paragraph 9 held as follows at p.313 of MLJ: “9. …..In this regard it is relevant to mention that if any surcharge proceeding is initiated under Section 71 of the Act the same has to be done in accordance with the said provisions. The second proviso of Section 71(1) makes it clear that: “No order shall he passed against any person referred to in this sub-section unless the person concerned has been given an opportunity of making his representations.” The said provision makes it clear that if any proceeding is initiated under Section 71, before passing final order, the person concerned must be given an opportunity to put forth his claim. In our case, even though an enquiry was conducted under Section 65 of the Act at the instance of the Registrar of Co-Operative Societies, the copy of the said enquiry report has not been furnished to he petitioner. The said position is clear even from the order of the third respondent. In the light of second proviso to Section 71(1) in the absence of proof for furnishing copy of the enquiry report further action taken by the first respondent, in pursuance of the enquiry report cannot be sustained on the principles of violation of statutory provisions as well as natural justice. Accordingly, I sustain the contention made by the learned counsel appearing for the petitioner.” 13. In surcharge proceedings, the first respondent is duty bound to prove that there was willful dereliction of duty like criminal case. The criminal Court having found that the petitioners are not guilty, the said findings are definitely in favour of the petitioners. The words used under Section 87(1) are “willful negligence”. The said issue was considered in series of decisions of this Court. (a) In Sathyamangalam Co-Operative Urban Bank Limited v. Deputy Registrar of Cooperative Society and Another (1980) 2 MLJ 17, this Court considered the scope of earlier Section viz., Section 71 of the Tamil Nadu Co-operative Societies Act, 1961, which is analogous to Societies Act, 1961, which is analogous to Section 87 of the Act, 1983 and held that mere negligence is not sufficient to intimate surcharge proceedings. (b) A Division Bench of this Court in P. Karuppiah v. Deputy Registrar of Co-operative Societies (1989) WLR 272 considered the very same aspect and in paragraph 3 held as follows: “3. The second aspect canvassed by the learned counsel for the appellant is that assuming that the petitioner was cast with specific responsibility or obligation or duty with reference to the remittance and withdrawals yet, the alleged acts and omissions with which the appellant was charged could not be said to have been trained with ‘wilful negligence’. Which has been construed by pronouncements of the Court as meaning something done either by commission or omission, in a deliberate and reprehensible manner, with reckless callousness and with a supine indifference, and not by accident or inadvertence without talking due care and precaution ordinarily expected from a reasonable and prudent man under the existing circumstances. Which has been construed by pronouncements of the Court as meaning something done either by commission or omission, in a deliberate and reprehensible manner, with reckless callousness and with a supine indifference, and not by accident or inadvertence without talking due care and precaution ordinarily expected from a reasonable and prudent man under the existing circumstances. Learned counsel for the appellant took the trouble of citing before us pronouncements of a number of single Judges of this Court. Learned counsel for the appellant took the trouble of citing before us pronouncements of a number of single Judges of this Court. Learned counsel for the appellant would submit that even in the field of inference, there is no possibility of characterizing the alleged acts and omissions on the part of the appellant as tainted with ‘wilful negligence’ We would have gone into this question, but we find that the answer given by us with regard to the first contention in favour of the appellant has served his purpose and we are of the view that for the present case we need not trouble ourselves with regard to this aspect. The learned single Judge, we find, has omitted to take note of the crucial aspect with regard to the casting of specific responsibility or duty or obligation on the appellant with regard to remittances and withdrawals. As we have already pointed out, there is no material evidence exposed in this case, showing that position. In the absence of the said position being made out against the appellant it is not possible to sustain the proceedings which culminated in the mulcting of the liability on the appellant. Taking note of this feature, we are obliged to interfere in writ appeal and accordingly the writ appeal is allowed, the order of the learned single Judge is set aside and the writ petition W.P. 1955 of 1978 is allowed. We make no order as to costs both in the writ petition and in the writ appeal.” (c) The above decision was followed in the decisions Chockappan v. Special Tribunal for Co-operative Cases (1999) 1 MLJ 587 and M. Sambandam v. Deputy Registrar (Credit) Co-operative Societies, Mylapore, Madras (supra). (d) In M. Chella Nadar v. Deputy Registrar of Co-operative Societies, Thuckalai and post, K.K. District (2002) WLR 198, the very same issue of scope of Section 87(1) was considered and similar surcharge proceeding was quashed. (d) In M. Chella Nadar v. Deputy Registrar of Co-operative Societies, Thuckalai and post, K.K. District (2002) WLR 198, the very same issue of scope of Section 87(1) was considered and similar surcharge proceeding was quashed. (e) The above decisions are followed in the decision in S. Marimuthu v. Deputy Registrar of Co-operative Societies (Housing), Madurai Circle (2006) 4 MLJ 86 . (f) Recently, a Division Bench of this Court in the decision in K. Ajay Kumar Gosh v. Tribunal for Co-operative Cases, Nagercoil (2009) 4 MLJ 992 set aside the order of surcharge and in paragraph 20 held thus at p. 996 of MLJ: “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.” 14. In the light of the above decisions of this Court and having regard to the fact that the first respondent failed to establish the furnishing of copy of Section 81 Enquiry report before initiating surcharge proceedings and the willful dereliction of duty having not been established, I hold that the recovery proceedings initiated against the petitioners cannot be sustained. The writ petition is allowed and the impugned orders are set aside No Costs.