Madras High Court· 23 September 2026

Can a finding of misappropriation be faulted where the delinquent admitted the shortage of funds and the transactions were carried out under his signatures?

V.VARADHARAJAN v. THE STATE OF TAMIL NADU

WP.26722/2024 · 2026:MHC:3973 · WP No. 26722 of 2024
Coram: Justice C.Kumarappan

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Answer

A finding of misappropriation cannot be faulted where the delinquent admitted the shortage of funds and the transactions were carried out under his signatures.

No. A finding of misappropriation cannot be faulted where the delinquent admitted the shortage of funds and the transactions were carried out under his signatures. Making good the loss, or calling the shortage an inadvertent mistake of entrusting work to subordinates, does not alter the character of the conduct, which vouchers signed by him showed he had participated in.

Headnote

Disciplinary Authority — Charge memorandum — Secretary of Society — Misappropriation — Compulsory retirement — Judicial review — Scope of interference — Disciplinary proceedings — Secretary of Society — Misconduct through subordinates — Held: A Secretary at the helm of affairs of a Society cannot absolve his responsibility by attributing the entire misconduct to his subordinates; faced with a shortage of staff, he ought to have brought it to the notice of the higher authorities. (¶6, 9) Disciplinary proceedings — Misappropriation — Admitted shortage of funds — Held further: Where the delinquent admitted the shortage of funds and the transactions were carried out under his signatures, the finding of misappropriation cannot be faulted, even though he made good the loss. (¶7, 8) Judicial review — Findings of Disciplinary Authority — Limited scope — Held further: The scope of interference in judicial review is limited, and findings based on the materials on record that are not perverse cannot be interfered with. Writ Petition dismissed. (¶9, 10, 11)

Headnote

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In the Court's own words

Paragraph 7It is also relevant to mention that, notwithstanding the misappropriation allegedly committed by the co-delinquents, the petitioner himself had misappropriated a substantial amount, approximately Rs.10,00,000/-, and had also recommended for the sanction of a loan of Rs.1,00,000/- in violation of the Society’s Rules. There is sufficient material to establish that the aforesaid transactions were carried out under the petitioner’s signatures. Therefore, notwithstanding the fact that misappropriation was committed through his subordinates, the petitioner himself had participated in the misappropriation, as evidenced through voucher signed by the petitioner.

Paragraph 8It is also relevant to mention that there is no dispute with regard to the shortage of funds in the Society. When the Society issued the charge memorandum alleging misappropriation, the petitioner having admitted the shortage of funds and made good the loss. Though the petitioner contends that the shortage of amount was due to an inadvertent mistake of entrusting the work with his subordinates and the fact remains that there was a shortage of funds and that the records disclose that the subject transactions were supported by the petitioner’s signatures. Such conduct can only be construed as misappropriation. Therefore, when the petitioner himself has admitted the shortage of funds and when the records establishes that the fact that, the transactions were carried out under his signatures, the finding of the Disciplinary Authority that the petitioner was responsible for the misappropriation cannot be faulted with.

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Also decided in this judgment

Can a Secretary at the helm of affairs of a Society absolve his responsibility by attributing the entire misconduct to his subordinates?Can disciplinary findings be interfered with in judicial review unless perverse, rendered by an incompetent authority, or contrary to the materials on record?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections