JUDGMENT : SAURABH SHYAM SHAMSHERY, J. 1. Petitioner was Deputy General Manager (Collection) at District Cooperative Bank, Fatehpur. In the year 2011 an inspection was conducted at Kishunpur Branch and Khakhreru Branch of said Bank under the provisions of Section 66 of U.P. Cooperative Societies Act, 1965 (hereinafter referred to as “Act, 1965”) and a report was submitted where in Financial Years 2006-07, 2007-08, 2008-09 and 2009-10 at Kishunpur Branch and in Financial Years 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 at Khakhreru Branch various financial irregularities were came into light and embezzlement was running to the tune of Rs. 1757.58 lacs and Rs. 3007.43 lacs respectively. By a detail inquiry Cashier and Branch Manager of said Branches were found guilty and since petitioner and other Officers at Headquarter were also found guilty of omission of work, they were also held responsible. Relevant part of inquiry reports dated 03.09.2014 (in Writ-C No. 23458 of 2017) and 30.09.2014 (in Writ-C No. 23460 of 2017) submitted under Section 68(1) of Act, 1965 are reproduced hereinafter: 2. In aforesaid circumstances, the proceedings were initiated under Section 68 of Act, 1965 and notices were issued to erring Officers including petitioner on 19.09.2014 (in Writ-C No. 23458 of 2017) and 20.12.2014 (in Writ-C No. 23460 of 2017) as required under Section 68(2) of Act, 1965. Petitioner submitted his reply and denied the charges and relevant part of replies dated 16.10.2014 and 06.01.2015 respectively in both writ petitions are mentioned hereinafter: 3. In aforesaid circumstances, Joint Commissioner and Joint Registrar, Cooperative, Allahabad Mandal, Allahabad vide order dated 22.12.2015 considering the replies filed by erring Officers including petitioner found them guilty and fixed liability for recovery in terms of concerned applicable provisions. Liability of petitioner was fixed around Rs. 33 lacs. Relevant part of order order dated 22.12.2015 is reproduced hereinafter : 4. Petitioner thereafter filed an appeal before U.P. Cooperative Tribunal, Lucknow which was dismissed vide order dated 27.04.2017 and relevant part thereof is reproduced hereinafter: 5. Above referred both orders dated 22.12.2015 and 27.04.2017 were challenged in above referred two writ petitions, i.e., Writ-C Nos. 33 lacs. Relevant part of order order dated 22.12.2015 is reproduced hereinafter : 4. Petitioner thereafter filed an appeal before U.P. Cooperative Tribunal, Lucknow which was dismissed vide order dated 27.04.2017 and relevant part thereof is reproduced hereinafter: 5. Above referred both orders dated 22.12.2015 and 27.04.2017 were challenged in above referred two writ petitions, i.e., Writ-C Nos. 23458 of 2017 and 23460 of 2017 wherein following interim orders were passed in both writ petitions on 25.05.2017: “This writ petition has been filed to challenge the orders dated 27.04.2017 passed by the Co-operative Tribunal, U.P. Lucknow arising from the order passed by the Joint Commissioner/Joint Registrar, Allahabad dated 22.12.2015 under Section 68 of the U.P. Co-operative Act, 1965. Heard Sri Ashok Khare, learned Senior Counsel assisted by Sri Siddharth Khare, learned counsel for the petitioner, Sri Bal Mukund Singh, learned counsel appearing on behalf of the respondent no.4 and learned Standing Counsel, who has accepted notice on behalf of the State-respondents no. 1 to 3. In brief, it is the case of the respondents that the petitioner while he was posted as Deputy General Manager (Collection) at Fatehpur District Co-operative Bank, certain embezzlement took place at Kishunpur Branch of the said Bank. The enquiry report names the employees of the Branch namely Mahavir Prasad Upadhyay, Bhola Singh, Santosh Kumar Singh, Vijay Shankar Tiwari and Abhay Singh Chauhan, who indulged in such misappropriation or embezzlement. Occasioned by the aforesaid enquiry, the Registrar has drawn up the proceedings under Section 68 of the U.P.Act No. 1 of 1966, wherein he had directed for recovery of the embezzled amount from the guilty. However, while making such direction he has held supervisory staff to be liable for 20% of the recovery is to be so made. On this amount of 20% a portion has been required to be deposited by the petitioner because he had served as Deputy General Manager at Fatehpur for some time. This amount comes to 33 lacs and odd. No exercise had been carried out either in the enquiry or in the order passed by the Registrar and no finding has been recorded to the effect that the petitioner had indulged in misappropriation or embezzlement of any particular amount. It has then been submitted that in absence of such finding, the direction to compensate the Bank to the extent as directed by the Registrar is wholly illegal and premature. It has then been submitted that in absence of such finding, the direction to compensate the Bank to the extent as directed by the Registrar is wholly illegal and premature. In this regard it has been submitted that disciplinary proceedings are pending against the petitioner who is serving suspension from service and no conclusion has yet been drawn against the petitioner. Matter requires consideration. The respondents may file counter affidavit within four weeks. Petitioner will have two weeks thereafter to file rejoinder affidavit. List on 26.07.2017. Till the next date of listing, operation and effect of the impugned order dated 22.12.2015 shall remain stayed insofar as it relates to the petitioner. However, it is made clear that this order shall not affect in the disciplinary proceedings in any manner. It is left open to the petitioner to challenge the order dated 15.01.2016, if that stage arises.” 6. Meanwhile, disciplinary proceedings were initiated against petitioner and he was put under suspension. Subsequently disciplinary proceedings were concluded and petitioner was awarded minor punishment of warning vide order dated 05.10.2020 and relevant part thereof is mentioned hereinafter: 7. During pendency of above referred two writ petitions an order dated 25.01.2023 was passed whereby retiral dues were not released since above referred two writ petitions were pending. Said order was challenged in third writ petition, i.e., Writ-A No. 2895 of 2023. 8. During hearing it is informed that now retiral dues of petitioner have been cleared. 9. In aforesaid circumstances, only issue for consideration is whether the order of surcharge passed under Section 68 of Act, 1965 was correct or not, i.e., whether petitioner was guilty of omission of duties etc. or not and whether determination of surcharge was correct or not? For reference Sections 66 and 68 of Act, 1965 are reproduced hereinafter: “66. Inspection of books and property of a co-operative society.-(1) The Registrar may of his own motion, or on the application of a creditor of a co-operative society, inspect or direct any person authorized by him by order in writing in this behalf, to inspect books, cash and other property of the society: Provided that no such inspection shall be made on the application of a creditor unless the applicant satisfies the Registrar that a debt is still due to him and that he has demanded payment thereof and has not received satisfaction within a reasonable time. (2). (2). The Registrar shall communicate the results of any such inspection- (a) where the inspection is made of his own motion, to the society; and (b) where the inspection is made on the application of a creditor; to the creditor and the society.” “68. Surcharge.--(1) If in the course of an audit, inquiry, inspection or the winding up of a co-operative society it is found that any person, who is or was entrusted with the organization or management of such society or who is or has at any time been an officer or an employee of the society, has made or caused to be made any payment contrary to this Act, the rules or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has misappropriated or fraudulently retained any money or other property belonging to such society, the Registrar may of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorized by him by an order in writing in this behalf to inquire into the conduct of such person ; Provided that no such inquiry shall be commenced after the expiry of twelve years from the date of any act or omission referred to in this sub-section. (2) Where an inquiry is made under sub-section (1), the Registrar may, after affording the person concerned a reasonable opportunity of being heard, make an order of surcharge requiring him to restore the property or repay the money or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such an extent as the Registrar may consider just and equitable. (3) Where an order of surcharge has been passed against any person under sub-section (2) for having caused any deficiency in the assets of the society by breach of trust or willful negligence, or for having misappropriated or fraudulently retained any money or other property belonging to such society, such person shall, subject to the result of appeal, if any, filed against such order, be disqualified from continuing in or being elected or appointed to an office in any co- operative society for a period of five years from the date of the order of surcharge.” 10. Sri Ashok Khare, learned Senior Advocate assisted by Sri Ram Chandra Srivastava, learned counsel for petitioner has essentially reiterated the arguments which are part of interim order dated 25.05.2017 that:- (a) Petitioner was not associated with the inquiry conducted under Section 66 of Act, 1965 and the report under Section 68(1) of Act, 1965 was submitted at his back. (b) The liability fixed upon petitioner in the inquiry report dated 03.09.2014 was without any finding whatsoever against the petitioner and liability of not conducting of audit or responsibility for embezzlement cannot be imposed on him. (c) On similar allegations in a disciplinary proceedings only a warning was issued. (d) Manner of tracing huge financial liability was contrary to prescribed procedure. (e) The reply submitted by petitioner in show cause notice, issued in the proceedings under Section 68(2) of Act, 1965 was not properly considered and was rejected without assigning any reasonable reason. (f) Determination of surcharge on petitioner was unreasonable and without any basis. 11. Per contra Sri Bal Mukund Singh, learned counsel for the Bank has referred Sections 66 and 68 of Act, 1965, that under the provision of Section 68 of Act, 1965, an inspection of books and property of the branch of concerned Co-operative Bank was undertaken, and between 2005-06 and 2009-10 huge financial irregularities were detected. Petitioner has not denied factum of such huge irregularities, therefore, said findings have attained finality. Petitioner was granted a reasonable opportunity to submit his case in inquiry and a reasonable order was passed under Section 68(2) of Act, 1965. His reply was considered but was found unsatisfactory. His reply was also considered and the appeal was also rejected by the Tribunal. There is no reason for interference. Disciplinary proceedings was a different procedure, though there also charges were found serious and proved, though a minor punishment of warning was awarded. 12. Heard learned counsel for parties and perused the record. 13. Relevant part of consideration of the reply and statement submitted by petitioner in the order passed under Section 68(2) of Act, 1965 is reproduced hereinafter:- 14. The relevant part of order passed by Tribunal is reproduced hereinafter:- 15. 12. Heard learned counsel for parties and perused the record. 13. Relevant part of consideration of the reply and statement submitted by petitioner in the order passed under Section 68(2) of Act, 1965 is reproduced hereinafter:- 14. The relevant part of order passed by Tribunal is reproduced hereinafter:- 15. As referred above, Section 66 of Act, 1965 provides that Registrar may inspect the books and property of a Cooperative Society as well as can make an order of surcharge under Section 68(2) of Act, 1965 after affording the person concerned an opportunity of being heard if conditions prescribed therein are fulfilled. 16. Undisputedly in the present case proceedings under Section 68 of Act, 1965 were commenced. Registrar has provided reasonable opportunity to petitioner and other concerned parties and their reply and respective statements were also considered while passing the order imposing surcharge. 17. Section 68 of Act, 1965 provides that if the willful negligence is proved, the Registrar can make an order to pay contribution or cost or compensation to the extent he may consider just and equitable. 18. Petitioner before this Court has submitted his reply to the notice issued under Section 68(2) of Act, 1965 and has recorded his statement also and has not denied that being DGM, he was under duty to conduct inspection of concerned Branch of Bank, however, an explanation that petitioner was not able to discharge duties for certain reasons, such as he was over burdened of other works such as Baidyanathan Committee, NABARD etc. was rightly rejected by Registrar being not a ground to become negligent and failed to discharge his basic duties, such as regulation inspection of Branches. A further explanation that from 2006-07 to 2009-10 the financial record does not have any variance, was contrary to factual findings and petitioner has not submitted explanation on other issues. Therefore, there is no illegality in impugned order, whereby petitioner was found willful negligent. A submission that omission of duties could be ‘negligence’ but not ‘willful negligence’ was also rightly rejected by Registrar and the Tribunal. 19. An argument of learned Senior Advocate appearing for petitioner that in disciplinary proceedings on same allegation petitioner was awarded a minor punishment would not be helpful since both proceedings have different nature. Otherwise, in disciplinary proceedings charges were found proved being serious. 19. An argument of learned Senior Advocate appearing for petitioner that in disciplinary proceedings on same allegation petitioner was awarded a minor punishment would not be helpful since both proceedings have different nature. Otherwise, in disciplinary proceedings charges were found proved being serious. Petitioner was held irresponsible since he has not discharged his duties diligently so much as no steps were taken to detect embezzlement in time. The findings returned by Tribunal are also justified on facts and petitioner has not submitted any substantive argument that impugned order be interfered. 20. Now the question left, is, the extent of surcharge. In this regard the Court takes note of paragraph no. 18 of the order passed by Tribunal, which is again reproduced hereinafter: 21. Despite Tribunal finds that there was no justification to pass an order of surcharge to the extent of 20% and despite it being passed without any reason still it was not interfered which appears to be an incorrect approach. 22. In view of above, the impugned order, to the extent of quantum of surcharge only, is interfered and the matter is remitted back to pass a fresh order so far as extent of surcharge is concerned. This exercise shall be concluded within a period of six months from today. The factom of retirement of petitioner will not come in way to undertake the above exercise. The finding that petitioner was ‘willful negligent’ is upheld. 23. With aforesaid observations/ directions, all three writ petitions are disposed of. Retiral dues of petitioner shall be subject to outcome of above exercise.