Bombay High Court
Prabhadevi Himgiri Co-Op Hsg. Society ... vs The State Of Maharashtra Throu Dept Of ... on 11 December, 2019
Author: C.V. Bhadang
Bench: C.V. Bhadang
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL WRIT PETITION NO.8142 OF 2018
Prabhadevi Himgiri Co. Op. Hsg.
Soc. Ltd. Through Secretary ..Petitioner
V/s.
The State of Maharashtra & Ors. ..Respondents
----
Mr.Pralhad D. Paranjape a/w Mr.Manish Kelkar for the
Petitioner.
Mr.S.L. Babar, AGP for the Respondent Nos.1 to 3.
----
CORAM : C.V. BHADANG, J.
DATE : 11th DECEMBER 2019 P.C.
1. By the present petition, the petitioner is challenging two orders namely (i) dated 08th August 2017 passed by the second respondent ordering re-audit of the petitioner's society and (ii) dated 16th January 2018 passed by the third respondent under Section 83 of the Maharashtra Co-operative of Societies Act, 1960 (for short 'Act') directing an enquiry to be held against the petitioner-society.
2. Brief facts are that on the basis of a complaint lodged by one Mr.Shrikant Pradhan who is ex-member of the society, the nsk page 1 of 7 ::: Uploaded on - 12/12/2019 ::: Downloaded on - 14/12/2019 04:40:44 ::: 12-wp-8142-2018 second respondent had directed re-audit of the petitioner's-society for the financial year 2008-09 under Section 81(6) of the Act.
3. It appears that on the basis of a letter dated 17.05.2017 from the auditor Mr.J.R. Hande the second respondent had cancelled the order of re-audit by an order dated 08 th July 2017. However, within a month thereof, on 08 th August 2017 the second respondent again directed re-audit of the petitioner-society being conducted for the year 2008-09. The record discloses that Mr.J.R. Hande has conducted the said audit and submitted a report noticing certain alleged irregularities, under a covering letter dated 28 th June 2018. On the basis of the said report third respondent by an order dated 11th June 2018 has directed an enquiry under Section 83 of the Act against the petitioner.
4. I have heard Mr.Pralhad Pranjape, learned counsel for the petitioner and Ms.S.L. Babar, Assistant Government Pleader for the respondent Nos.1 to 3. With the assistance of the learned counsel for the parties I have gone through the record.
5. The learned counsel for the petitioner has raised three contentions. Firstly, it is submitted that the second respondent had nsk page 2 of 7 ::: Uploaded on - 12/12/2019 ::: Downloaded on - 14/12/2019 04:40:44 ::: 12-wp-8142-2018 no authority to review its own order particularly when earlier the order directing re-audit was cancelled. It is thus submitted that the second respondent could not have again directed re-audit by the impugned order dated 08th August 2017. Secondly, reliance is placed on the circular dated 14th December 2015 in order to submit that a period of five years has been fixed from the close of the concerned financial year for conducting such re-audit. It is pointed out that in the present case the re-audit in respect of the accounting year 2008-09 has been ordered in the year 2018. Thirdly, it is submitted that no opportunity of hearing was given, neither the copy of the audit report was furnished to the petitioner, before the third respondent initiated the enquiry under Section 83 of the Act, which is in breach of the principles of natural justice. Except these there are no contentions raised.
6. The learned Assistant Government Pleader has submitted that all that is done by the impugned order is to initiate the enquiry under Section 83 of the Act and petitioners are at liberty to raise all such contentions as are available to it both in law and on facts before the Enquiry Officer. Reliance is placed on the decision of this Court in Gulabrao Sakharam Shelke V/s. The Commissioner nsk page 3 of 7 ::: Uploaded on - 12/12/2019 ::: Downloaded on - 14/12/2019 04:40:44 ::: 12-wp-8142-2018 For Co-op. & Registrar for Co.op. Societies, Maharashtra State 1, in order to submit that the compliance with the principles of the natural justice, before initiation of the inquiry under Section 83 of the Act is not necessary. It is submitted that the circular dated 14 th December 2015 in terms extends the period for holding re-audit from one years to five year and it cannot override statutory provisions, which do not provide for any such limitation. It is submitted that second respondent under Section 81(6) of the Act can always direct re-audit if it is necessary or expedient.
7. I have considered the rival circumstances and the submissions made and I do not find that any case for interference is made out at this stage. Under Sub-section 6 of Section 81 of the Act, if it appears to the Registrar, on an application by society or otherwise, that it is necessary or expedient to re-audit the accounts of the society, the Registrar may by order direct such re-audit and if such re-audit is directed, the provisions of the Act applicable to the audit of the accounts of the society, apply to such re-audit. It can thus clearly be seen that the Registrar can act on the basis of the application of the society or otherwise which would include on the basis of any information received. The contention that the Registrar 1 Writ Petition (L) No.1671 of 2015 dated 16-07-2015 nsk page 4 of 7 ::: Uploaded on - 12/12/2019 ::: Downloaded on - 14/12/2019 04:40:44 ::: 12-wp-8142-2018 had no power to review cannot be accepted for the reason that an order merely directing re-audit would be of an administrative nature, and cannot be said to be of a quise judicial nature. It is necessary to note that if the Registrar subsequently comes across certain material, which requires re-audit to be conducted, he can always direct such re-audit under Sub-section 6 of Section 81 of Act. Thus, the first contention raised on behalf of the petitioner, cannot be accepted.
8. In so far as the reliance placed on circular dated 04 th December 2014 is concerned, here again, a perusal of the circular shows that earlier the period within which re-audit could be directed was one year which has now been increased to five years. This is inter alia for the reason that the number of registered societies has increased. The act does not contain any such period or limitation for conducting re-audit. Thus, it is not possible to accept that the stipulation in the circular can override, the substantive provisions contained in the act. The contention in my considered view prima faice cannot be accepted, as the auditor has indeed found certain irregularities in his report.
9. In so far as the third ground is concerned no provision nsk page 5 of 7 ::: Uploaded on - 12/12/2019 ::: Downloaded on - 14/12/2019 04:40:44 ::: 12-wp-8142-2018 has been pointed out by the learned counsel for the petitioner to show that even before initiation of the inquiry under Section 83 of the act, there is a requirement of compliance with the principles of natural justice. This Court in case of Gulabrao Sakharam Shelke (Supra) has noted its earlier decision in the case of Shri.Vilasrao Bhauso Shinde & Ors. V/s. Sangli District Central Co-operative Bank Karmaveer Bhaurao Chowk, Sangli & Ors. 2 in which it has been held that the enquiry under Section 83 is in the nature of a fact finding inquiry and the inquiry report is recommendetory in nature, pursuant to which, the Registrar has to initiate action under Section 88 of the act, if he is of the opinion, that such an action is warranted. In any case as noticed earlier no specific provision has been brought to my notice to point out that before initiation of the enquiry under Section 83 of the Act, compliance with principles of natural justice is necessary.
9. Thus, none of the grounds on which the present challenge is based, can be sustained. Needless to mention that it will be open to the petitioner to raise all such contentions as may be available to it in law and on facts, before enquiry officer and the enquiry officer will have to consider the same on its own merits and 2 Writ Petition No.3679 of 2015 dated 18th April 2015.
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in accordance with law. It is made clear that this Court has not expressed any opinion on the allegations against the petitioner on the basis of which the holding of the inquiry is directed. Subject to this the petition is dismissed with no order as to costs.
[C.V. BHADANG, J.]
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