Bombay High Court
Mahadeorao Uttamrao Rajurkar And ... vs The State Of Maharashtra Thr. Pso Ps ... on 3 December, 2020
Author: V. M. Deshpande
Bench: V. M. Deshpande, Anil S. Kilor
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
CRIMINAL APPLICATION (APL) NO. 585 OF 2017
1) Mahadeorao Uttamrao Rajurkar,
Age: 65 Yrs, Occupation : Retired Govt. Servant,
R/o Rathi Nagar, Amravati,
Dist. Amravati.
2) Sanjay Dyaneshwar Dhok,
Age: 49 Years, Occupation: Mandal Adhikari,
R/o Janardan Peth, Ekvira Mangalkaryalay,
Amravati. .... APPLICANTS
// VERSUS //
1) The State of Maharashtra,
Through PSO of PS Rajapeth,
Amravati, Dist. Amravati.
2) Kishor Ajabrao Wankhede,
Age: 55 Years, Occupation: Government Servant,
R/o New Rathinagar, Dhamangaon Railway
Dattapur, Amravati, Dist. Amravati.
3) The Registrar,
Co-operative Societies,
Amravati. .... NON-APPLICANTS
Shri Parvez Mirza, Advocate for applicants.
Shri N. S. Rao, Addl. P. P for non-applicant No.1/State.
________________________________________________________________
CORAM : V. M. DESHPANDE AND
ANIL S. KILOR, JJ.
DATE : 03rd DECEMBER, 2020.
ORAL JUDGMENT: [PER: V. M. Deshpande, J.]
Rule. Rule is made returnable forthwith. Heard finally. ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 :::
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2. This application under Section 482 of the Code of Criminal Procedure was initially filed to challenge the First Information Report, bearing FIR No.406 of 2017 registered with Police Station Rajapeth, Amravati for an offence punishable under Section 420 of the Indian Penal Code, in which the applicants were shown as accused. The offence was registered in view of the report lodged by the non-applicant No.2.
During the pendency of this application, the Police Station Officer, Rajapeth completed the entire investigation and filed final report No.599 of 2018.
3. In view of the aforesaid final report, the applicants filed an application for amendment, praying for quashing the final report. The amendment was allowed on 04.03.2019 and accordingly the pleadings as well as the prayer clause were amended suitably by the applicants. By amending the application, the applicants also challenged the final report No.599 of 2018 together with consequential proceeding registered vide Criminal Case No. 1167 of 2018 on the file of the learned Judicial Magistrate First Class, Court No.10, Amravati.
4. First Information Report was lodged by non-applicant No.2. It is dated 27.05.2017. From the First Information Report, it ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 3/14 is clear that at the time of lodging the report, he was President of Amravati District Patwari Co-operative Credit Society, Amravati (hereinafter called as "society" for brevity). In short the allegation in the First Information Report is that statutory audit of the said society was conducted during the month of May and June, 2016 and during the audit period from 1984 to 2016, the applicants were President of the society and they, in connivance with each other, have misappropriated Rs.13,65,077/-.
5. We have heard Shri P. W. Mirza, the learned counsel for the applicants and Shri N. S. Rao, the learned Additional Public Prosecutor for the State/non-applicant No.1 in extenso. Non- applicant No.2 though filed his reply, his advocate is not present.
6. Shri N. S. Rao, the learned Additional Public Prosecutor also invited our attention to the reply filed by the Investigating Officer as well as the reply of the Registrar of the Co-operative Societies, Amravati, who was added as non-applicant No.3, in view of the order dated 08.04.2019.
7. The learned counsel for the applicants strongly urged that the First Information Report, the final report and consequent registration of Criminal proceeding are liable to be struck down ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 4/14 since the First Information Report itself is not in conformity with the provisions of Maharashtra Co-operative Societies Act, 1960 (hereinafter for short the "Act") and the report on the basis of which the crime is registered is not filed by the authorized person as contemplated in the Act.
8. In order to buttress his submissions, he primarily relied upon the authority of the Hon'ble Apex Court in the case of State of U.P. Vs. Singhara Singh and others reported in AIR 1964 SC 358, in which the Hon'ble the Apex Court found that the rule adopted in Taylor V. Taylor (1876) 1 Ch D 426 is well recognized and is founded on sound principle. The Hon'ble Apex Court in paragraph No.8 of the said judgment has observed as under:
"8. The rule adopted in Taylor V. Taylor (1876) 1 Ch D 426 is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted. A magistrate, therefore, cannot in the course of investigation record a confession except in the manner laid down in S. 164. The power to record the confession had obviously been given so that the confession ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 5/14 might be proved by the record of it made in the manner laid down. If proof of the confession by other means was permissible, the whole provision of S. 164 including the safeguards contained in it for the protection of accused persons would be rendered nugatory. The section, therefore, by conferring on magistrate the power to record statements or confessions, by necessary implication, prohibited a magistrate from giving oral evidence of the statements or confessions made to him."
9. According to the learned counsel, on the touchstone of the aforesaid principle of law, the First Information Report and the consequent chargesheet must go inasmuch as at the time of registration of the First Information Report there was breach of mandate of Sub Section 5-B of Section 81 of the Act.
10. The learned Additional Public Prosecutor tries to support the registration of the First Information Report and he submits that since the chargesheet is filed, the remedy is open to the applicants to file appropriate application for discharge before the learned trial Court. He, therefore, submits that the application be dismissed.
11. We are afraid that this submission of learned Additional Public Prosecutor can not be entertained in view of law laid down by ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 6/14 Hon'ble Apex Court in Anand Kumar Mohatta Vs. State (Govt. of N.C.T. Delhi) reported in AIR 2019 SC 210.
12. We bestowed our thoughtful consideration to the various submissions advanced before us. However, we propose to decide firstly on the point of the authority of the first informant to lodge a report. That being the position, we may not address to other submissions made by the learned counsel for the applicants in the application, if it is found that First Information Report is filed by a person who was not competent to file the same.
13. It is not disputed before us that "Maharashtra Jilha Patwari Sahakari Patsanshtha" is a society within the meaning of the Act and is a duly registered society. There is no dispute from the side of non-applicants that the Maharashtra Co-operative Societies Act, 1960 and the Rules, 1961 made thereunder are applicable to the society.
14. The applicants themselves admitted that from 1984 till 2010 the applicant No.1 was President of the said society, whereas applicant No.2 was the President from 2010 to 2016. The statutory audit was conducted. As per the report, yearly audit was conducted by the Government Auditor Shri Solanke, who raised objections to ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 7/14 the exorbitant expenditure by the society in various heads. From the First Information Report there is a misappropriation on the part of the applicants to the tune of Rs.13,65,077/-.
15. The Act is a complete Code by itself. Chapter-VIII deals with audit, inquiry, inspection and supervision. Section 81 deals with audit. As per the mandate of said Section, the society shall cause to be audited its accounts at least once in each financial year and also cause it to be completed within a period of four months from close of financial year to which such audit has to be done by Auditor or auditing firm from a panel prepared by the Registrar and approved by the State Government or the authority authorized by it in this behalf. The procedure is prescribed in Section 81, as to how audit has to be made and conducted. For deciding controversy Sub- Section 5-B is to be examined. We reproduce herein below Sub- Section 5-B of Section 81 of the Act along with its first two proviso. They are as under:
"Section-81. Audit.
Sub-Section 1 to 5-A......
Sub-Section 5-B :The auditor shall submit [his audit report within a period of one month from its completion and in any case before issuance of notice of the annual general body meeting,] to the society and to the Registrar in such form as may be specified by the Registrar, on the accounts ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 8/14 examined by him and on the balance sheet and profit loss account as on the date and for the period up to which the accounts have been audited, and shall state whether in his opinion and to the best of his information and according to the explanation given to him by the society the said accounts give all information required by or under this Act and present the true and fair view of the financial transactions of the society.
Provided that, where the auditor has come to a conclusion in his audit report that any person is guilty of any offence relating to the accounts or any other offences, he shall file a specific report to the Registrar within a period of 15 days from the date of submission of his audit report. The Auditor concerned shall, after obtaining written permission of the Registrar, file a First Information Report of the offence. The Auditor who fails to file First information Report, shall be liable for disqualification and his name shall be liable to be removed from panel of auditors and he shall also be liable to any other action as the Registrar may think fit:
Provided further that, when it is brought to the notice of the Registrar that, the Auditor has failed to initiate action as specified above, the Registrar shall cause a First Information Report to be filed by a person authorized by him in that behalf:
Sub-Section(6) to (7) ....."
16. The complete reading of Section 5-B shows that the auditor is required to submit audit report within a period of one ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 9/14 month from its completion and in any case, before issuiance of notice of the annual general body meeting of the society.
17. The first proviso shows that where the auditor has come to the conclusion in his audit report that any person is guilty of any offence relating to the accounts or any other offences, he is under obligation to file specific report to the Registrar within a period of 15 days from the date of submission of his audit report. The said proviso further reads that concerned auditor after obtaining written permission from the Registrar shall file a First Information Report of the offence. If an Auditor fails to file the First Information Report, he shall be liable for disqualification and his name can be removed from the panel of the Auditors and also liable for any other action as the Registrar may think fit.
What is important is that, even before lodging the First Information Report by the Auditor himself, he has to obtain prior permission of the Registrar, though the word "prior permission" is not engrafted in the said proviso, use of words are, "The Auditor concerned shall after obtaining written permission of the Registrar, file a First Information Report of the offence". In order to give harmonious construction, "prior permission from the Registrar in ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 10/14 writing" will have to be read by applying the principles of reading down.
18. Thus, what emerges from the above discussion is that under Section 81 (5-B) of the Act, 1960, the auditor shall submit his audit report within a period of one month from its completion and in any case before issuance of notice of annual general body meeting, presenting the true and fair view of the financial transaction of the society and where he comes to a conclusion that any person is guilty of any offence relating to accounts or any other offences, he shall file a specific report to the Registrar within a period of 15 days from the date of submission of audit report and shall after written permission of the Registrar, file a First Information Report. On failure to do so, shall be liable for any action as the Registrar may think fit, including disqualification and removal from panel of auditors. Furthermore, when it is brought to the notice of the Registrar such failure on the part of the auditor, the Registrar shall cause a First Information Report to be filed by a person authorised by him in that behalf.
19. Second proviso to Sub Section 5-B takes the care of the situation wherein the Auditor has failed to initiate action. In such an event and when such position is brought to the notice of the ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 11/14 Registrar then the Registrar can cause to file a First Information Report through a person authorized by him in that behalf. In our view, either Registrar or person authorised by him can file the First Information Report.
20. The First Information Report in question clearly shows that the report is lodged because during the audit for period of 1984 to 2016 i.e. when the applicants were President of the society, it was found that they have committed misappropriation of amounts mentioned in the First Information Report. Not only that the First Information Report is accompanied by the audit report.
21. The First Information Report is not lodged by the Auditor but it is lodged by non-applicant No.2, who was the President of the Society at the time of filing of the First Information Report, as it could be seen from the First Information Report itself.
22. The written submission filed on behalf of non-applicant No.2 conspicuously is silent that there was any authorization in his favour by the Registrar, as contemplated in the second proviso of Sub-Section 5-B of Section 81 of the Act. Had the First Information Report filed by non-applicant No.2 was not an outcome of the audit report then the situation would have been different. However, since ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 12/14 the First Information Report is completely based on the audit report, in our view, the provision of Sub-Section 5-B of Section 81 of the Act will apply with its full force.
23. Even the Registrar has also filed reply on his affidavit on 30.04.2019. The said reply also does not speak about the authorization by the Registrar to non-applicant No.2. Therefore, there is no difficultiy in recording a finding that the First Information Report lodged by non-applicant No.2 which is based on the audit report and it was not filed by the authorized person, as envisaged in the second proviso of Sub-Section 5-B of Section 81 of the Act.
24. Here we would like to reproduce paragraph 8 of the reply of the non-applicant No.3:
"8. Be that as it may, it is further specifically submitted that, the office of the District Deputy Registrar is has decided to conduct the re-audit or test audit as contemplated under Section 81 of the Maharashtra Cooperative Societies Act, 1960. Once a re-audit/test audit is conducted, an inquiry under Section 83 shall be conducted by the Registrar on the basis of the report of test audit or re-audit and subsequently under Section 88 of the Maharashtra Cooperative Societies Act damages can be assessed against the delinquents."::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 :::
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25. From the aforesaid, it is clear that the office of the District Deputy Registrar has decided to conduct re-audit or test audit, as contemplated in Section 81 of the Act and once the re- audit/test audit is conducted, inquiry under Section 83 shall be conducted. In our view, when the District Deputy Registrar himself has decided to conduct the re-audit, it would naturally erase out the earlier audit and it will lose its sanctity which is the source for filing the First Information report in question.
26. We are not considering the other submissions of the learned counsel for the applicants because of the stand taken by the Registrar in paragraph No.8, since it may cause prejudice to both the sides.
27. In view of the aforesaid discussion as made, we are of the view that the First Information Report, the final report which has culminated into lodging of the criminal proceeding, need to be set aside, since the First Information Report is not filed by the authorized person. Rather it is filed by the person who is not authorized, as contemplated under the Act, 1960. Since we are quashing the First Information Report on the ground that the person who has lodged the report is not an authorized person, it shall be ::: Uploaded on - 09/12/2020 ::: Downloaded on - 09/02/2021 14:48:07 ::: 5- APL 585.2017(J) .odt 14/14 also open for the department to take necessary steps, in accordance with law. Consequently, we pass the following order:
ORDER I) The application is allowed.
ii) The First Information Report 406 of 2017 registered with Police Station Rajapeth, Amravati for an offence punishable under Section 420 of the Indian Penal Code, together with chargesheet No.599 of 2018 and consequent proceeding registered as Criminal Case No.1167 of 2018 pending on the file of Judicial Magistrate First Class, Amravati, are hereby quashed and set aside.
iii) Rule is made absolute accordingly.
JUDGE JUDGE
nd.thawre
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