1. The petitioner was the President of the Tahsil Weaver's Co-operative Society, Narsinghpur. On 10th September, 1962 the Assistant Registrar, Co-operative Societies issued a notice under Section 63(1) of the Madhya Pra-desh Co-operative Societies Act, 1960 calling upon the petitioner to show cause why an amount of Rs. 4,493-37 paise be not recovered from him. After the petitioner submitted his reply to the show cause notice, the Assistant Registrar by his order dated 15th June, 1964 held him liable to the extent of Rs. 1,597-01 paisa and ordered him to pay the same. The petitioner then went up on appeal to the Board of Revenue, which was dismissed as barred by limitation. The petitioner by this petition under Articles 226 and 227 of the Constitution seeks a writ in the nature of certiorari to quash the order of surcharge made by the Assistant Registrar against him.
2. In the final order, by which the Registrar held the petitioner liable, the findings are that though the loss to the Society was caused by the acts of misappropriation and misconduct committed by the employees of the Society, the petitioner was liable for his negligence in not exercising proper supervision and control over them and in not making a reference to the departmental authorities soon after the misappropriation or misconduct was brought to his notice. It will thus be seen that the petitioner was not surcharged for any act of his, which may have itself resulted in loss to the Society, but for the loss arising from acts of misappropriation and misconduct of the employees of the Society.
3. The order of surcharge is supported by the learned counsel for the respondent under Section 63d) of the Act on the ground that the petitioner 'caused deficiency or loss by gross negligence' within the meaning of these words as they occur in that section. In our opinion, however, when the petitioner himself was not directly responsible for the loss, it cannot be said that he caused any loss to the Society. The word 'caused' as it is used in Section 63(1) must be understood in the sense of 'causa causans' meaning thereby the real effective cause (see Stroud's Judicial Dictionary p. 423, Vol. I) In the instant case, on the findings, the loss to the Society was caused by the misappropriation or misconduct of its employees. Lack of supervision or control over the employees on the part of the petitioner may have facilitated misappropriation or misconduct, but it cannot be said that it was the real effective cause of the loss. The effective cause was the acts of misappropriation or misconduct. For the same reason, delay in making the report cannot be said to be the cause of the loss to the Society. On the findings of fact recorded by the Assistant Registrar, it could not have been reasonably inferred that the petitioner was liable for causing any loss to the Society by his negligence and the order against the petitioner cannot be upheld.
4. There is yet another defect in the impugned order. There is no finding that the petitioner was guilty of gross negligence; the finding merely is that the petitioner was guilty of negligence. There is a distinction between negligence and gross negligence, although the exact dividing line is difficult to demarcate. 'Gross negligence' connotes higher degree of negligence; it is negligence not arising merely from some want of foresight or mistake of judgment but from some culpable default; see Giblin v. McMullen, (1869) LR 2 PC 317 at p. 337. In Black's Law Dictionary the expression is defined as follows:
'The intentional failure to perform a manifest duty in reckless disregard off the consequences as affecting the life or property of another; such a gross want of care and regard for the rights of others as to justify the presumption of wilful-ness and wantonness.'
The liability under Section 63(1) arises when loss is caused by 'gross negligence' and not merely by ordinary negligence. In the absence of a finding that the petitioner was guilty of gross negligence, the order of surcharge cannot be sustained.
5. The petition is allowed. The order of the Assistant Registrar dated 15th June, 1964 in Surcharge Case No. 5 off 1962 in so far as it relates to the petitioner is hereby quashed. There will be no order as to costs of this petition. The amount of security deposit shall be refunded to the petitioner.