In case of theft of material belonging to the society in the presence of the watchman and his negligence, the society is responsible for lodging a police complaint.
However, the security agency may also be liable for negligence and complicity in the theft.
Stopping payment to the security agency to compensate for the loss is not a recommended approach. Instead, the society should:
1. Lodge a police complaint against the watchman and the security agency.
2. File a formal complaint with the security agency's management.
3. Seek compensation from the security agency for the loss incurred due to their negligence.
4. Consider terminating the contract with the security agency if they are found to be complicit or grossly negligent.
It's essential to note that the society should have a comprehensive contract with the security agency that outlines their responsibilities, liabilities, and obligations.
The society should also ensure that they have adequate insurance coverage for such incidents.
Please consult with a legal expert or a lawyer specializing in cooperative housing society laws to get specific guidance on this matter.