Section 40(1) in The Bihar Co-operative Societies Act, 1935
(1)Where as the result of an audit under Section 33 or an ipquiry under Section 35, or an inspection under Section 34, Section 36, or Section 37, or the winding up of a society, it appears to the Registrar that any person who has taken part in the organisation or management of the society or any past or present officer of the society has-(a)made any payment which is contrary to law or to the rules or bye laws of the society, [or against the directions or instructions of the financing bank for which the society is acting as agent under sub-section (3) of Section 16] [Inserted by Act 16 of 1948.], or(b)by reason of his culpable negligence or misconduct, involved the society, [or the financing bank for which it is acting as agent under sub-section (3) of Section 16] [Inserted by Act 16 of 1948.] in any loss or deficiency, or(c)failed to bring into account any sum which ought to have been brought into account, or 5(d)misappropriated or fraudulently retained any property of the society [or of the financing bank which it is acting as agent under sub-section (3) of Section 16] [Substituted by Act 29 of 1956.]the Registrar may inquire, into the conduct of such person, or officer and after giving such person or officer an opportunity of being heard make an order requiring him to contribute such sum to the assets of the society [or of the financing bank, as the case may be, by way of compensation in respect of such payment or loss of sum, or to restore such property as the Registrar thinks fit, together with such sum as the Registrar may fix to meet the cost of the proceedings under this section:] [Substituted by Act 29 of 1956.]Provided that, before any order requiring such person or officer or contribute is passed in respect of a payment referred to in clause (q) reasonable time shall be given to such person or officer to recover the amount of such payment from the payee and credit it to the funds of the society, [or as the, case may be, of the financing bank] [Substituted by Act 29 of 1956.]Provided further that no Order shall be passed under this sub-section' in respect of any of omission mentioned in clauses (a), (b), (c) or (d) except within [six years of the date on which such act or omission occurred.] [Substituted by Act 29 of 1956.]
