Judgment : 1. The petitioners seek to quash the order dated 27.03.2014 of the first respondent, by which, the first respondent initiated proceedings under Section 87 (1) of the Tamil Nadu Cooperative Societies Act, 1983 (hereinafter called as The Act) on the basis of the report under Section 81 of the Act, and called upon the petitioners to submit their explanation to such proceedings within a period of seven days. 2. The petitioners are employees of the second respondent bank, except the second petitioner in this writ petition, who has already retired from his service. According to the petitioners, the second respondent bank has its own Board of Directors, Officers, Staff, Employees and Members and they are governed by their own Rules and Regulations, including service rules. Similarly, the third respondent society is also a separate and independent cooperative society having its own Board of Directors, Officers, Staff and Members. Further, the members of the third respondent society are teachers and non-teaching staff of the Government and aided High Schools and Higher Secondary Schools in the Nilgiris District. The third respondent has its own method of selecting members and procedure for giving loan facility to their members. Therefore, according to the petitioners, the second respondent bank and the third respondent society are different entities and they have no nexus or connection with each other, whatsoever. Merely because the petitioners are working in the second respondent bank and had sanctioned medium term loan to the third respondent society, it cannot be said that there is an administrative relationship between the second respondent bank and third respondent society. While so, during July 2013, in connection with the enquiry contemplated under Section 81 of the Act in connection with the affairs of the third respondent society, the petitioners were called upon by the enquiry officer as witnesses. The petitioners also appeared before the enquiry officer, gave evidence stating that they had no knowledge on the day to day administrative functioning of the third respondent society. In other words, the petitioners have deposed regarding the circumstances under which few of the cheques and withdrawal slips relating to the third respondent society has been entertained and the payments made thereof. The petitioners have deposed that they have no other personal knowledge relating to the day to day transaction or administrative affairs of the third respondent society. In other words, the petitioners have deposed regarding the circumstances under which few of the cheques and withdrawal slips relating to the third respondent society has been entertained and the payments made thereof. The petitioners have deposed that they have no other personal knowledge relating to the day to day transaction or administrative affairs of the third respondent society. While so, by the impugned proceedings dated 27.03.2014, the petitioners were called upon to submit their explanations as to why surcharge proceedings should not be initiated against them under Section 87 of the Act for recovery of a sum of Rs.47,63,743/-jointly and severally along with one Mr. D. Sathyamoorthy. 3. The learned counsel for the petitioners would mainly contend that a perusal of the impugned notice would indicate that there was no allegation against any of the petitioners, rather, it was specifically stated that it is D. Sathyamoorthy who had indulged in misappropriation of the amount. According to the counsel for the petitioners, the enquiry conducted under Section 81 of the Act in connection with the affairs of the third respondent society cannot be a basis to proceed against the petitioners with the surcharge proceedings. According to the counsel for the petitioners, under Section 87 of the Act, surcharge proceedings can be initiated only against those persons who are entrusted with the organisation or management or against any past or present officer or servant of the society in relation to which the enquiry under Section 81 of the Act has been ordered by the Registrar. Therefore, the proposed action to be initiated against the petitioners, who are not in any way connected with the affairs of the third respondent society, is unsustainable in law. The first respondent, knowing fully well about the fact that there is no relationship between the second respondent bank and the third respondent society has deliberately and with a malafide intention issued the impugned proceedings to the petitioners. The first respondent, knowing fully well about the fact that there is no relationship between the second respondent bank and the third respondent society has deliberately and with a malafide intention issued the impugned proceedings to the petitioners. The learned counsel for the petitioner also brought to the notice of this Court that the Secretary of the third rspondent society has already filed W.P. No. 16657 of 2013 before this Court contending that the inquiry under Section 81 of the Act is on the basis of a wrong audit report submitted by some of the officers belonging to the Department of Cooperative Audit and sought for re-auditing of the accounts of the third respondent society pertaining to the financial year 2011-2012 afresh. The said writ petition was admitted by this Court and it is pending. Therefore, the learned counsel for the petitioner would contend that the verdict that will be rendered in the said writ petition will have a bearing on the validity of the inquiry under Section 81 of the Act initiated by the first respondent. It is further brought to the notice of this Court by the learned counsel for the petitioners that the third respondent society also filed WP No. 25633 of 2013 challenging the notice issued by the Joint Registrar of Cooperative Societies, Nilgiris Region on 29.08.2013 under Section 36 of the Act and the said writ petition was admitted and interim stay was granted. Further, the Secretary of the third respondent society also filed WP No. 8266 of 2014 alleging grave irregularities against the Joint Registrar of Cooperative Societies as well as the first respondent herein in ordering the inquiry under Section 81 of the Act and the said writ petition was also admitted and pending. Therefore, according to the learned counsel for the petitioners, the impugned proceedings of the first respondent is legally unsustainable, unwarranted and it is liable to be set aside. 4. On the other hand, the learned Special Government Pleader appearing for the respondents, relying on the counter affidavit filed by the first respondent, would vehemently opposed of the maintainability writ petition especially when the proceedings impugned in this writ petition is only in the nature of a show cause notice calling upon the petitioners to submit their explanation. 4. On the other hand, the learned Special Government Pleader appearing for the respondents, relying on the counter affidavit filed by the first respondent, would vehemently opposed of the maintainability writ petition especially when the proceedings impugned in this writ petition is only in the nature of a show cause notice calling upon the petitioners to submit their explanation. According to the learned Special Government Pleader for the respondents, the second respondent bank caters to the various financial needs of the banks affiliated to it, including the third respondent society. As regards the third respondent society, whenever loan applications are received from it's members, they would submit a consolidated loan application to the second respondent bank, which in turn scrutinises the loan applications of the members of the third respondent society through its field supervisors, Managers etc., and credits the loan amount to the savings bank account of the third respondent society held with the Head Office or the Branches of the second respondent bank as the case may be. When once the amount of loan sanctioned by the second respondent bank is credited to the savings bank account of the third respondent society, the proceeds of the loan become the property of the third respondent society and is indebted to the second respondent bank. Therefore, the second respondent bank has administrative control over the affairs and also has a direct involvement with the day to day functioning of the third respondent society. 5. The learned Special Government Pleader would specifically contend that the first petitioner was working as a Manager of the third respondent society and during his tenure as Branch Manager, he has passed withdrawal slips for payment of cash to the tune of Rs.18.60 lakhs to the Secretary of the third respondent society, who in turn had forged the signature of the loanees and also affixed his signature in the withdrawal slips concerned. Thus, the first petitioner had violated the banking procedure, caused deficiency to the property of the third respondent society by intentionally aiding and abetting the secretary of the third respondent society in misappropriating the sum of Rs.18.60 lakhs and therefore the proceedings impugned in this writ petition is valid and justified. 6. Thus, the first petitioner had violated the banking procedure, caused deficiency to the property of the third respondent society by intentionally aiding and abetting the secretary of the third respondent society in misappropriating the sum of Rs.18.60 lakhs and therefore the proceedings impugned in this writ petition is valid and justified. 6. As regards the second petitioner, the learned Special Government Pleader brought to the notice of this Court that while he was wroking as Manager of the third respondent society, he has aided and abetted the Secretary of the third respondent society in misappropriating Rs.3,49,743/-by passing withdrawal slips alleged to have been presented by the members of the third respondent society thereby caused deficiency to the assets of the third respondent society. 7. In so far as the third petitioner is concerned, according to the learned Special Government Pleader, while he was holding the post of Assistant General Manager (Full Additional charge) in the head office of the second respondent bank, he had allowed the passing officers to pass three cheques issued to the loanees presented by the Secretary of the third respondent society thereby caused loss of Rs.3,49,743/- and also deficiency to the assets of the third respondent society. The third petitioner had since retired from service. 8. According to the learned Special Government Pleader, in similar fashion, the fourth petitioner aided and permitted the Secretary of the third respondent society to withdraw Rs.3 lakhs from the savings bank account of a loanee, whose signature was forged by the third respondent society to withdraw amount to the extent of Rs.14,25,000/-. 9. As regards the fifth petitioner, she had passed the withdrawal slips to three members with an intention to aid the Secretary of the third respondent society to misappropriate the funds of the society and thereby caused deficiency to the assets of the third respondent society to the tune of Rs.14,25,000/-. 10. Therefore, according to the learned Special Government Pleader, all the petitioners have violated the norms of the bank, failed to discharge their lawful duties and abatted and aided the secretary of the third respondent society thereby causing colossal deficiency to the assets of the third respondent society. In fact, during the course of reviewing the performance of the cooperative societies, including the third respondent society, the misappropriation came to light. In fact, during the course of reviewing the performance of the cooperative societies, including the third respondent society, the misappropriation came to light. The petitioners also admitted in the inquiry under Section 81 of the Act that the loan amount were paid to the Secretary of the third respondent society, which are payable to the loanees. The petitioners, in the capacity of Manager/Assistant Manager/Passing Officer have deliberately abatted the secretary of the third respondent society by passing 16 cheques which resulted in the huge loss of Rs.47,63,743/-. 11. As regards the writ petitions pending before this Court, the learned Special Government Pleader would contend that the outcome of those writ petitions have nothing to do with the proceedings impugned in this writ petition. The proceedings impugned in this writ petition is only in the nature of a show cause calling upon the petitioners to submit their explanation and no adverse or final order has been passed against them. Therefore, according to the learned Special Government Pleader, the relief sought for in this writ petition is premature. In this context, the learned Special Government Pleader relied on the decision of the Division Bench of this Court in the case of (Digvision Electronic Limited vs. Indian Bank) reported in 2005 (3) CTC 513 and prayed for dismissal of the writ petition. 12. I heard the counsel for the petitioners as well as the learned Special Government Pleader appearing for the respondents. The main grievance of the petitioners in this writ petition appears to be that they are employees of the second respondent bank and they have no administrative control or direct involvement with the affairs of the third respondent society, while so, the impugned proceedings issued by the first respondent is legally not sustainable. 13. The first respondent has commenced an inquiry under Section 87 (1) of the Act in connection with the affairs of the third respondent society on the basis of the report submitted under Section 81 of the Act by the inquiry officer. A perusal of the rival pleadings would indicate that the second respondent is a central cooperative bank. 13. The first respondent has commenced an inquiry under Section 87 (1) of the Act in connection with the affairs of the third respondent society on the basis of the report submitted under Section 81 of the Act by the inquiry officer. A perusal of the rival pleadings would indicate that the second respondent is a central cooperative bank. The third respondent society, after receiving loan applications from it's members, would submit a consolidated loan application to the second respondent bank, which in turn scrutinises those loan applications of through its field supervisors, Managers etc., and credits the loan amount to the savings bank account of the third respondent society. The petitioners are holding various posts in the second respondent bank and it is the petitioners who process such applications received from the loanees of the third respondent society. It is alleged that the Secretary of the third respondent society had withdrawn the funds in the names of the loanees without any authority of law in the absence of obtaining the signature of the loanees and caused misfeasance and malfeaseance. Thus, it is alleged that the Secretary of the third respondent resorted to fraud and embezzelled the funds of the third respondent society and in those transactions the petitioners have deliberately aided and abetted the Secretary of the third respondent society. 14. Be that as it may, in the proceedings dated 27.03.2014, which is impugned in this writ petition, the first respondent only initiated proceedings as contemplated under Section 87 (1) of the Act on the basis of an enquiry report submitted under Section 81 of the Act. The petitioners were also enquired in the said inquiry under Section 81 of the Act and their statements have been recorded. According to the first respondent, the petitioners have, in the course of such inquiry, themselves admitted to the amount directly paid to the Secretary of the third respondent society pursuant to the loan application submitted by the members of the third respondent society. In any view of the matter, there is a clear inter-linking between the functioning and affairs of the third respondent society and the second respondent bank and the petitioners cannot plead that there is no such affairs between the second respondent bank and the third respondent society. In any event, this Court is not inclined to express any opinion on merits. In any event, this Court is not inclined to express any opinion on merits. Now, this Court is concerned with the validity of the impugned proceedings of the first respondent, which was in the nature of a show cause notice. As rightly pointed out by the learned Special Government Pleader for the respondents, so far, no final or adverse order has been passed against the petitioners and the petitioners were only called upon to submit their explanation. However, the petitioners, without submitting their explanation, have rushed to this Court and filed the present writ petitions. 15. It is well settled that this Court, in exercise of its power under Article 226 of The Constitution of India, normally will not interfere with a proceeding of this nature unless it is shown that the impugned proceedings are without jurisdiction. It is not the case of the petitioners that the impugned proceedings of the first respondent is without jurisdiction. The first respondent only initiated proceedings under Section 87 (1) of the Act on the basis of the report received under Section 81 of the Act. Further, in the present case, in the inquiry conducted under Section 81 of the Act, the petitioners have participated and deposed. A perusal of the impugned proceedings would clearly portray that the funds of the third respondent society have been embezzelled, for which the impugned proceedings have been initiated. 16. In the decision relied on the by the learned Special Government Pleader for the respondents in the case of (Digvision Electronic Limited vs. Indian Bank) reported in 2005 (3) CTC 513 the Division Bench of this Court, while dealing with a case under SARFAESI Act, has held in para No.16 as follows:- “16. In a sense the notice under Section 13(2) of the Securitisation Act is really a show-cause notice, and ordinarily this Court does not interfere with show-cause notices, vide Special Director Vs. Mohd. Ghulam Ghouse, AIR 2004 SC 1467 , Ulagappa Vs. Divisional Commissioner, Mysore, (2001) 10 SCC 639 , Executive Engineer, Bihar State Housing Board Vs. Ramesh K.Singh & Others, JT 1995 (8) SC 331. The notice under Section 13(2) of the Securitisation Act really does not give any rise to a cause of action because by itself the notice does not affect any right or liability of the borrower. Divisional Commissioner, Mysore, (2001) 10 SCC 639 , Executive Engineer, Bihar State Housing Board Vs. Ramesh K.Singh & Others, JT 1995 (8) SC 331. The notice under Section 13(2) of the Securitisation Act really does not give any rise to a cause of action because by itself the notice does not affect any right or liability of the borrower. Hence, challenge to the notice under Section 13(2) of the Securitisation Act is premature, since it is possible that the secured creditor may be satisfied with the reply of the borrower to the aforesaid notice and may drop the proceedings. Hence, all the writ petitions challenging notice under Section 13(2) of the Securitisation Act are dismissed on the ground that the writ petitions are premature, and the petitioners have an alternative remedy of raising all the points which they are raising in these writ petitions in their reply to the notice under Section 13(2) of the Securitisation Act. As already stated above, the secured creditor must decide the objection of the borrower to the notice under Section 13(2) of the Securitisation Act by a reasoned order, and if the objection is rejected the rejection order must be communicated to the borrower. 17. In the present case, even before submitting their explanation, as called for, the petitioners ought not to have filed the present writ petitions. Therefore, following the decision of the Division Bench of this Court mentioned supra, I hold that the writ petitions cannot be entertained at this stage and the relief sought for in this writ petition is premature. 18. In the result, the writ petition is dismissed. No costs. It is open to the petitioners to submit their explanations, as called for by the first respondent, by raising all the points which are raised in this writ petition, within a period of ten days from the date of receipt of a copy of this order and on receipt of such explanations from the petitioners, the first respondent shall proceed further in accordance with law. It is also made clear that the observations, if any, made in this writ petition, need not be considered by the first respondent during the course of the proceedings under the Act as against the petitioners. Connected M.P.s are closed.