DEVI SINGH versus STATE OF HARYANA AND ORS.

Citation: [1997] SUPP. 1 S.C.R. 50 · Decided: 02-05-1997 · Supreme Court of India · Bench: K. RAMASWAMY, K.T. THOMAS · Disposal: Dismissed

Judgment (excerpt)

A 
DEVI SINGH 
j 
v. 
\ 
STATE OF HARYANA AND ORS. 
MAY 2, 1997 
B 
[K. RAMASWAMY AND K.T. THOMAS, JJ.] 
Cooperative Societies : 
Cooperative Society-President-Liability of account for funds of 
c society-Held, though under the bye-laws of the Society the responsibility is 
of the treasurer and the Secretary, the President bears the overall respon-
sibility-He owes collective responsibility with the Treasurer and the Secretary 
for its accounting and is liable, alongwith the Treasurer and the Secretary, to 
c
make good the losses caused to the Society-Omission to have proper ac-
counting done constitutes misappropriation. 
D 
CIVIL APPELLATE JURISDICTION : Review Petition (C) No. 
1344of1996 
IN 
E 
Civil Appeal No 204 of 1979. 
From the Judgment and Order of the Punjab and Haryana High 
Court dated 19.4.1978 in Civil Writ Petition No. 1674 of 1978. 
R.K. Maheshwari for the Appellant. 
F 
C.L. Sahu (NP) and Prem Malhotra for the Respondents. 
The following Order of the Court was delivered : 
Order dated 7.2.1996 is recalled. We have heard Shri Maheshwari, 
G learned counsel for the Appellant. 
The only question is; whether the appellant as President of the 
....._
Sardarajanti Kalan Cooperative Agricultural Service Society along with 
other two persons, namely, the Secretary and Treasurer, is liable to account 
for a sum of Rs. 65,726.59: It is an admitted position that Tara Chand is 
···H Ex-Secretary, the appellant, the Ex-President and Sardara Singh is the 
50 
D.SINGH v. STATE 
51 
Ex-Cashier. The dispute arose from award proceedings under the Haryana A 
\\ 
Cooperative Societies Act. On a reference made to the Registrar, the 
matter was referred to the concerned officer for ~nquiry and necessary 
action. On the basis thereof, after notice to the parties and conduct of the 
due enquiry the award came to be passed wherein it was held that the three 
officers, namely, the appellant as President, Tara Chand as Secretary and B 
Sardara Singh as Cashier were Jointly and individually responsible for the 
unaccounted sum of Rs. 65,7'}fj.59. The Secretary and the Cashier had 
allowed the award to become final. The appellant carried the matter in 
appeal, which was confirmed; the writ petition filed consequently, stood 
·--
dismissed. Thus, this appeal by special leave granted by this· Court. 
c 
Shri Maheshwari, learned counsel for the appellant, contends that 
the appellate authority proceeded on the premise that the appellant had 
admitted the misappropriation and accordingly it confirmed the award. 
This Court called for the record on perusal thereof, found that there was 
no such admission. Therefore, leave was ivanted. The appellant having not D 
admitted the misappropriation, it must be proved that the appellant was a 
party thereto. It is argued that in the absence of such a proof, he cannot 
be saddled with any liability for the unaccounted money to the members 
of the Society. We find no force in the contention. It is true that the 
• 
Registrar, who conducted the enquiry, had noted the admission. The E 
admission was only in relation to the joint purchase of a tempo by the three 
•• 
persons for use as a public carrier and the income derived therefrom was 
<) 
required to be distributed to the members of the Society. That does not 
amount to admission by the appellant and others that they misappropriated 
the amount. It is seen from the evidence that certain amount, at the rate 
of Rs. 1500 to each of the members was credited towards purchase of F 
tempo and there is an admission by the appellant and others that the tempo 
was purchased. Once it is proved that the tempo was actually purchased, 
the burden is on the said office bearers of the society to account for the 
,,. 
profits derived by its use as public carriage. The finding is that they have 
not accounted for: It is true that under the bye-laws of the Society, as G 
placed before us, the responsibility is of the Treasurer and the Secretary. 
"-/' 
But the appellant being the President bears the overall responsibility. Being 
the President of the Society, he owes the collective responsibility with the 
Treasurer and the Secretary for its accounting. In the absence of account-
ing of the funds, necessary inference is that there was improper manage-
ment of the institution and thereby they are liable for making good the loss H 
\ 
52 
SUPREME COURT REPORTS (1997] SUPP. 1 S.C.R. 
A caused to the Society and the members. The crime registered against them 
i

Excerpt shown. Read the full judgment & AI analysis in Lexace.