Bombay High Court
Natthu Kashiba Ranmale vs State Of Maharashtra Thr. Police ... on 24 March, 2026
2026:BHC-NAG:4808
5.apl.140 & 141.2017.Judgments.odt
(1)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
CRIMINAL REVISION APPLICATION NO.140 OF 2017
1. Pavankumar Keshaorao Narwade,
Aged About 39 Years,
R/o. Patil Nagar, Umarkhed. ..... APPLICANT
// VERSUS //
1. State of Maharashtra, through
Police Station Darati, Taluka Umarkhed,
District Yavatmal. .... RESPONDENT
-------------------------------------------
Mr. G. M. Kubade, Advocate for applicant.
Mr. N. B. Jawade, APP for the State.
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WITH
CRIMINAL REVISION APPLICATION NO.141 OF 2017
1. Natthu Kashiba Ranmale,
Aged about 52 Years,
Occupation : Service,
R/o. Chichali, Taluka Umarkhed,
District Yavatmal,
P.S. Darati. ..... APPLICANT
// VERSUS //
1. State of Maharashtra, through
Police Station Darati, Taluka Umarkhed,
District Yavatmal. .... RESPONDENT
-------------------------------------------
Mr. G. M. Kubade, Advocate for applicant.
Mr. N. B. Jawade, APP for the State.
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CORAM : URMILA JOSHI-PHALKE, J.
RESERVED ON : 05.03.2026
PRONOUNCED ON : 24.03.2026
JUDGMENT :
1. Heard.
5.apl.140 & 141.2017.Judgments.odt (2)
2. Admit.
3. Heard finally with the consent of the learned Counsel for the applicants and learned APP for the State.
4. In both the revision applications, the judgment and order of sentence passed in RCC No.24/1999 by the learned Judicial Magistrate First Class, Umarkhed, District Yavatmal dated 05.01.2013, by which the present applicants are convicted of the offences punishable under Sections 408, 420 and 468 read with Section 34 of the Indian Penal Code (for short 'IPC') and sentenced to suffer rigorous imprisonment for one year and to pay fine of Rs.1,000/- each, in default to suffer imprisonment for one month, in RCC No.24/1999 which came to be confirmed in Criminal Appeal No.6/2013 dated 28.07.2017 by the learned Additional Sessions Judge, Pusad.
5. Criminal Revision Application No.140/2017 preferred by original accused No.8 Pavankumar Keshaorao Narwade, who was Secretary of Jangal Kamgar Sahakari Society Limited, Chikhali, Taluka Umarkhed, District Yavatmal, whereas Criminal Revision Application No.141/2017 by Nathu Kashiba Ranmale, President of the said Society. Hereinafter, the parties are referred to as per their original nomenclature.
5.apl.140 & 141.2017.Judgments.odt (3)
6. Brief facts which are necessary for the disposal of the revision application are as under:
Accused No.1 Natthu Kashiba Ranmale was the Chairman and accused No.8 Pavankumar Keshaorao Narwade was the Secretary of Forest Labours Cooperative Society Limited, Chikhali, Taluka Umarkhed, District Yavatmal. The informant Gulabrao Krushnarao Khasade was Auditor conducted the audit of the Society for the period of 01.04.1995 to 31.06.1997.
During audit, he found that the accused No.8 in the capacity of the Secretary entrusted with the amount and record of Society and he dishonestly and in violation of directions of law obtained the signatures of PW.2 and PW.3 in cash book by misleading them in order to misappropriate the amount of Society in collusion with the President, Vice President and other Directors of the said Society. It was further alleged that all the accused in furtherance of their common intention, manipulated the record of the Society and forged the signatures for the purpose of cheating. The accused No.1 being the President of the Society failed to deposit the amount of Rs.19,546.10 and the amount of Rs.39,250/- received from the sale of the property of the Society. It revealed to the complainant while conducting the audit that though vouchers are prepared in the name of Mahadeo Kotnake showing that he is working as a clerk and six months salary was paid to him, but no salary was paid to him and the
5.apl.140 & 141.2017.Judgments.odt (4) amount was misappropriated. Similarly, by other vouchers salary of Rs.22,800/- was shown to be given to Watchman Shri Vitthal Pawar, but he has not received the said salary. Thus, the President and the Secretary in collusion with the other Directors of the Society committed an offence punishable under Sections 420, 408, 468 read with Section 34 of the Indian Penal Code.
After registration of the crime, the Investigating Officer has recorded the relevant statements of the witnesses collected the documents and after completion of investigation, submitted charge sheet against the present applicants and other co-accused.
7. The learned Magistrate has framed the charge vide Exh.41. As the accused pleaded not guilty to prove the charge, the prosecution has examined in all five witnesses PW.1 Gulabrao Krushnarao Khasale Exh.72, PW.2 Mahadeo Deu Kotnake Exh.176, PW.3 Vitthal Dhanu Pawar Exh.177, PW.4 Mohan Tukaram Naik Exh.178, who acted as panch on seizure of the documents and PW.5 Diwan Veersingh Wasave Exh.189, Investigating Officer. Besides the oral evidence, prosecution placed reliance on Audit Report Exh.73, Voucher No.55 Exh.74, Voucher 121/7 Exh.75, Voucher No.122/2 Exh.76, Voucher No.131/1 Exh.77, Voucher No.131/2 Exh.78, Cash register Exh.79, entries regarding payment under the Voucher Nos.122/1
5.apl.140 & 141.2017.Judgments.odt (5) and 122/2 Exh.80, extract of cashbook Exh.81, Report Exh.82, Special Report Exh.83, requisition to handwriting expert Exh.192 and report of the handwriting expert Exh.193.
8. After appreciating the evidence the learned trial Court comes to the conclusion that the prosecution has proved its case beyond reasonable doubt, as the evidence on record sufficiently shows that the accused No.1 and accused No.8 are involved in forgery of the document as well as misappropriation of the amount and thereby duped the Society members and therefore, they are convicted of the offence punishable under Sections 420, 408, 468 read with Section 34 of the IPC. The said judgment and order was challenged in the criminal Appeal No.6/2013. Wherein also the learned Sessions Judge, after reappreciating the evidence come to the conclusion that the evidence of the Auditor substantiated by the evidence of PW.2 and PW.3 discloses that the applicants accused Nos.1 and 8 committed the offence of criminal breach of trust defined under Section 405 of IPC and thereby committed an offence as well as the evidence on record also shows that there was intention since inception and thereby the accused persons especially the accused Nos.1 and 8 cheated and duped the members of the Society and thereby the appeal was dismissed.
5.apl.140 & 141.2017.Judgments.odt (6)
9. Being aggrieved and dissatisfied with the same, the present revision application is preferred by the applicants, who are the original accused Nos.1 and 8.
10. While exercising the revisional powers cardinal principles to be kept in mind is that the scope of revision is very limited only to see as to correctness, legality or propriety of any finding and sentence or order. In view of Section 397 of Cr.P.C., this Court or the Sessions Court is empowered to call for and examine the record of any proceeding before any inferior Criminal Court situate within its or his local jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding. Sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior Court, and may, when calling, for such record, direct that the execution of any sentence or order be suspended, and if the accused is in confinement, that he be released on bail or on his own bond pending the examination of the record.
11. Learned APP placed reliance on the decision of Bindeshwari Prasad Singh @ B.P. Singh and others Vs. State of Bihar (Now Jharkhand) and another reported in (2002) 6 SCC 650, wherein the Hon'ble Apex Court held that the High Court was not justified in reappreciating the evidence on record and coming to the different conclusion in a revision
5.apl.140 & 141.2017.Judgments.odt (7) preferred by the informant under Section 401 of the Code of Criminal Procedure. Sub-section (3) of Section 401 in terms provides that nothing in Section 401 shall be deemed to authorize a High Court to convert a finding of acquittal into one of conviction. The aforesaid sub-section, which places a limitation on the powers of the revisional court, prohibiting it from converting a finding of acquittal into one of conviction, is itself indicative of the nature and extent of the revisional power conferred by Section 401 of the Code of Criminal Procedure. If the High Court could not convert a finding of acquittal into one of conviction directly, it could not do so indirectly by the method of ordering a retrial. It is well settled by a catena of decisions of this Court that the High Court will ordinarily not interfere in revision with an order of acquittal except in exceptional cases where the interest of public justice requires interference for the correction of a manifest illegality or the prevention of gross miscarriage of justice. The High Court will not be justified in interfering with an order of acquittal merely because the trial court has taken a wrong view of the law or has erred in appreciation of evidence. It is neither possible nor advisable to make an exhaustive list of circumstances in which exercise of revisional jurisdiction may be justified, but decisions of this Court have laid down the parameters of exercise of revisional jurisdiction by the High Court under Section 401 of the Code of
5.apl.140 & 141.2017.Judgments.odt (8) Criminal Procedure in an appeal against acquittal by a private party.
12. In the case of State of Kerala vs Puttumanaillath Jathavedan Namboodiri with Managing Director, Western India Plywoods Vs. Puthumanaillath Jathavedan Namboodiri reported in (1999) 2 SCC 452 relied upon by the learned APP wherein also it is held that in its revisional jurisdiction, the High Court can call for and examine the record of any proceedings for the purpose of satisfying itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of Supervisory Jurisdiction exercised by the High Court for correcting miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court nor it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to be reappreciate the evidence and come to its own conclusion on the same when the evidence has already been appreciated by the Magistrate as well as the Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise tantamount to gross miscarriage of justice.
13. In the case of Ashish Chadha v. Asha Kumari and another reported (2012) 1 SCC 680 wherein also the Hon'ble
5.apl.140 & 141.2017.Judgments.odt (9) Apex Court observed that the High Court has in its revisional jurisdiction appraised the evidence which it could not have done. It is the trial court which has to decide whether evidence on record is sufficient to make out a prima facie case against the accused so as to frame charge against him. Pertinently, even the trial court cannot conduct roving and fishing inquiry into the evidence. It has only to consider whether evidence collected by the prosecution discloses prima facie case against the accused or not.
14. In the light of the above well settled principles, the present revision application is to be decided. Learned counsel for the applicants vehemently submitted that the present applicants are convicted of the offence punishable under Section 408, 420, 468 read with Section 34 of IPC. The charges under Section 408 read with Section 34 of IPC framed against the present applicants on an allegation that on 10.10.1998 the accused No.8, a Secretary in collusion with the other accused was entrusted with the amount and record of Society and dishonestly obtained the signatures of PW.2 and PW.3 in the cash book to misappropriate the amount of the Society. It further reveals that that the charge under Section 420 read with Section 34 of IPC was framed on an allegation that the accused in furtherance of common intention, induced PW.2 and PW.3 to sign the cash book
5.apl.140 & 141.2017.Judgments.odt (10) and vouchers in order to deceive them dishonestly and they have manipulated the record of the Society and forged the signatures and thereby committed and offence punishable under Sections 420 and 468 of IPC. He submitted that the prosecution examined Auditor PW.1 Shri Gulabrao Khasale, who referred his Audit Report Exh.73. He also referred relevant vouchers of payments Exh.74 to 71 and his report to the Police Station.
15. The prosecution also examined Mahadeo Kotnake and Vitthal Dhanu Pawar to prove the misappropriation as well as the forgery and on the basis of the evidence the accused Nos.1 and 8 are convicted. He submitted that the learned Judicial Magistrate First Class was not justified to record the conviction of all the accused by ignoring the provisions of the Maharashtra Co-operative Societies Act, 1960 (for short 'the said Act'). He submitted that learned Sessions Judge, Pusad also ignored the said provisions in view of Section 81(1) of the said Act a procedure for audit is drawn. In the background of Section 81(1) and Section 148, the Auditor is not the authorized person to lodge the FIR against the present applicants. The Chapter VIII deals with Audit, Inquiry, Inspection and Supervision. The provision of Section 82 permits the rectification of defects in accounts, whereas the Section 83 a Registrar may direct or authorize an inquiry into the working and financial conditions of
5.apl.140 & 141.2017.Judgments.odt (11) the Society. Section 146 defines offences, whereas Section 147 deals with punishment and Section 148 deals with the cognizance of the offences. It is the only Registrar of the Society or the person authorized by the Registrar can file FIR. FIR not lodged by the authorized person as contemplated in (2) Proviso of Section 81(5-B) of the said Act, liable to be quashed and set aside.
16. He also invited my attention towards the evidence recorded and submitted that the evidence on which the prosecution relied upon and the learned Magistrate as well as the learned Sessions Court has believed is not sufficient to prove the charges against the present applicants. In view of that, the revision application deserves to be allowed. In support of his contention he placed on the decision of Shri Manoranjan s/o Ramdas Rathod Vs. State of Maharashtra and another [2016 ALL MR (Cri.) 997] and Mahadeorao Uttamrao Rajurkar Vs. State of Maharashtra and others reported in 2021 (3) Mh.LJ.485.
17. Per contra, learned APP strongly opposed the said contention and submitted that the issue regarding the application of the Cooperative Societies Act is raised first time in the said revision. The said issues were neither raised before the learned Magistrate nor before the first Appellate Court. Therefore, first
5.apl.140 & 141.2017.Judgments.odt (12) time this Court cannot entertain the said submissions. He submitted that the evidence on record sufficiently shows that the applicant/accused No.1 and applicant/accused No.8 being the President and Secretary of the Society, obtained the signatures of PW.2 and PW.3 on various documents and shown that the salary was paid to them. However, no salary was paid to them and misappropriated the amount. They have also prepared the false record like vouchers, entries in the cash book which sufficiently proves the involvement of the present accused in the alleged offence. He submitted that in view of the scope of the revision, this Court cannot reappreciate the evidence. There is a concurrent finding of the trial Court as well as the first Appellate Court and there is no reason for this Court to interfere into the said findings. In view of that, the revision application deserves to be dismissed.
18. On perusal of the evidence on record it reveals that PW.1 Gulabrao Khasale was appointed as Special Auditor Class - I at village Chikhali the Jungle Kamgar Sahakari Society was constituted vide registration No.117. He has conducted the audit of the said Society for the period 01.05.1995 to 31.03.1997. He has conducted the audit at village Chikhali, as per the record placed before him by the Society. Audit Report is at Exh.73. His evidence shows that on conducting the audit report it reveals to
5.apl.140 & 141.2017.Judgments.odt (13) him that he found misappropriation from cash box and from sale department. During the period of 01.04.1995 to 31.03.1996, as per the voucher No.55 dated 05.12.1995 an amount of Rs.11,799.60 was shown to be given to Mahadeo Deu Kotnake towards his salary, but in fact the said amount was not given to him. His signatures on receipt were only obtained. He was shown to be a depot clerk, in fact he was never working for the said period and he has not received the salary also. Similarly, Vitthal Dhanu Pawar was shown as Watchman and salary was shown to be given to him, but only his signatures were obtained. No salary was given to him. The cash book maintained by the said Forest Kamgar Sahakari Sanstha was produced from which also PW.1 has shown the misappropriation by the present applicant/accused No.1 and applicant/accused No.8. His evidence further shows that the total sum of Rs.22,800/- is shown in cash book on the debit side. During course of audit, he has not received the above amount under voucher No.122/1 and 122/2. On verification of the cash book, it reveals to him that amount of Rs.79,546.10 was shown in the possession of the President and Rs.60.63 was shown in the possession of the Secretary. The said amount was withdrawn by the bank and it was not deposited again. Thus, on completion on audit, he submitted his report.
5.apl.140 & 141.2017.Judgments.odt (14)
19. Despite his lengthy cross-examination, nothing incriminating is brought on record. On the contrary, it shows that annual audit of the Cooperative Society was also conducted. He admits that at the time of audit accused No.8 was not employee of the Society. The entire cross-examination is in respect of the right of the audit or to conduct the audit. As far as the involvement of the present applicants accused is concerned nothing is brought on record. Thus, the evidence of PW.1 remained unshattered during the cross-examination. Evidence of PW.2 and PW.3 shows that they never worked as a clerk or watchman only their signatures were obtained. They were getting monthly wages at rate of Rs.300/-. Thus, the evidence of PW.2 and PW.3 also shows that no salary was given to them, but the vouchers are prepared in their names. Evidence of PW.4 panch is formal in nature in whose presence specimen signatures and handwriting of the accused were obtained. PW.5 is the Investigating Officer, who has investigated the crime. He admitted during his cross-examination that he did not investigate whether one month of notice to the accused to deposit the misappropriated amount was issued by the Auditor prior to the registration of the offence or not. He also admits that he did not verify the bank pass books of the Society and did not obtain any record. On the basis of the said cross-
5.apl.140 & 141.2017.Judgments.odt (15) examination, learned counsel for the applicant submitted that the evidence on record is not sufficient to warrant the conviction.
20. Section 405 of IPC deals with criminal breach of trust. In view of definition, "whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
21. Section 408 of IPC is the exhaustive form of Section 405 which deals with criminal breach of trust by clerk or servant. Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, and shall be punished with imprisonment of either description for a term which may be extend to seven years, and shall also be liable to fine.
22. Admittedly, the applicant/accused No.8 was serving in the said Society as the Secretary at the relevant time. Admittedly, accused No.1 is not coming within the definition of either clerk or servant given under Section 408. The charge was
5.apl.140 & 141.2017.Judgments.odt (16) framed against the accused No.1 is under Section 420 of IPC. The definition of cheating is given under Section 415 which reads as under:
"Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
23. To hold a person guilty of cheating as defined under Section 415 of the I.P.C., it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise with an intention to retain the property. In other words, Section 415 of I.P.C which defines cheating, requires deception of any person (a) inducing that person to deliver any property to any person, or to consent that any person shall retain any property, or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person, anybody's mind, reputation or property.
24. Admittedly, the present Society i.e. Forest Kamgar Sahakari Sanstha Chikhli was constituted for the labours, who
5.apl.140 & 141.2017.Judgments.odt (17) are working as labour in the Forest. The audit was conducted of the said Society for the period 01.04.1995 to 31.03.1996. During the audit, the Auditor found the voucher No.55 dated 05.12.1995 by which amount of Rs.11,799.60 was shown to be given to Mahadeo Deu Kotnake i.e. PW.2, but in fact as per his evidence, the said amount was not given to him, but he was only paid of Rs.300/- per month. As per his evidence only his signatures were obtained on receipt voucher by showing him as a Depot clerk. His evidence further shows that he was not working for the above said period and he has not received the salary from the Society. Thus, the amount of Rs.11,799.60 though shown in the name of the PW.2 which he has not received and that amount was misappropriated. Similarly, the payment was shown to be paid to the PW.2 Mahadeo for the period June 1995 to November 1995 of Rs.1,966.60/-, in fact, he has not received the said amount. Similarly, Vitthal Dhanu Pawar was shown as Watchman of the Society and salary was shown to be paid to him, whereas evidence of PW.3 shows that he has not received any salary and his only signatures were obtained. The voucher number 131/1 was shown to him in respect of salary given to the Vitthal Dhanu Pawar which he has not received. The Cash book maintained by the Society shows that amount of Rs.16,650/- was shown to be debited under the head of salary of the servant, for a period of January 1995 to December 1995 a total sum of
5.apl.140 & 141.2017.Judgments.odt (18) Rs.11,400/- and Rs.5,250/- was shown for the period January 1996 to May 1996 and payment was shown to be made under the voucher Nos.122/1 and 122/2. Total sum of Rs.22,800/- was shown in cash book on the debit side. On recording the statements of PW.2 and PW.3, it revealed to the Auditor that they have not received any salary. On verification of the cash book on page 38 an amount of Rs.79,546.10 was shown in the possession of the President which was not deposited by the President. Similarly, the amount of Rs.60.33/- was shown in the possession of the Secretary, he has also not deposited the said amount. During the audit, he found that an amount of Rs. 1,70,045.70 was misappropriated. An amount of Rs.39,450/- belongs to the Society by sale of teak wood which was also kept by the accused No.1 President with him which sufficiently shows misappropriation. Thus, the evidence of PW.1 substantiated by the evidence PW.2 and PW.3 and the documentary evidence i.e. Exhs. 74 to 80 substantiates the evidence of PW.1.
25. Learned counsel for the applicants raised the issue as to the non-observations of the provision under Sections 81, 82 and 146 of the said Act. In support of his contentions, he placed reliance on the decision of this Court in the case of Mahadeorao Uttamrao Rajurkar (supra) wherein this Court has observed that charges of misappropriation of amount of Society by
5.apl.140 & 141.2017.Judgments.odt (19) President of Society either Registrar or person authorised by him can file FIR. FIR was not lodged by authorised person as contemplated in second proviso of Section 82 (5B) of Act. FIR and consequent proceedings quashed and set aside.
26. The said Act, is a special law enacted to govern cooperative Societies in Maharashtra. It was enacted to provide orderly development of the cooperative movement in Maharashtra. Chapter VIII of the 1960 Act provides for 'audit, inquiry, inspection and supervision'. Section 81 mandates the society to cause its accounts to be audited at least once every financial year by an auditor from a panel prepared by the Registrar and approved by the State government. The first proviso to Section 81(1)(a) empowers the Registrar to audit or cause to be audited the accounts of a society by a panel of auditors approved by the State government. Section 81(3) stipulates that the Registrar or the person authorized shall for the purpose of audit at all times have access to books, accounts, documents, papers, securities, cash and other properties belonging to or in the custody of the co-operative society. Section 81(3)(c) empowers the Registrar or any person authorized to carry out or cause to be carried out a test audit of the accounts of the co-operative society. Section 81(5B) details
5.apl.140 & 141.2017.Judgments.odt (20) the subsequent actions required to be taken by the auditor or the Registrar after the preparation of the audit report:
"81(5B) 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 examined by him and on the balance sheet and profit and 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 transaction 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 fifteen 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 the 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 authorised by him in that behalf:
Provided also that, on conclusion of his audit, if the auditor finds that there are apparent instances of financial irregularities resulting into losses to the society caused by any member of the committee or officers of the society or by any other person, then he shall prepare Special Report and submit the same to the
5.apl.140 & 141.2017.Judgments.odt (21) Registrar alongwith his audit report. Failure to file such Special Report, would amount to negligence in the duties of the auditor and he shall be liable for disqualification for appointment as an auditor or any other action, as the Registrar may think fit."
27. Thus, under Section 81 (5B), the auditor is under an obligation to submit an audit memorandum duly signed by them to the society and to the Registrar on the accounts examined by them and on the balance sheet and profit and loss account as on the date and for the period up to which the accounts have been audited. The auditor has to state whether in their opinion the accounts give all the information by or under the 1960 Act and present a true and fair view the financial transactions of the society. In terms of the first proviso to Section 81(5B), when the auditor has come to the conclusion in the audit report that any person is guilty of any offence relating to the accounts or any other offences, they are obligated to file a specific report to the Registrar. The auditor is then required, after obtaining the written permission of the Registrar, to file an FIR. The second proviso stipulates that when it is brought to the notice of the Registrar that the auditor has failed to initiate action as specified in the first proviso, the Registrar shall cause an FIR to be filed by a person authorized by them in that behalf. In terms of the third proviso, if the Registrar finds apparent instances of financial irregularities resulting into losses to the society at the behest of
5.apl.140 & 141.2017.Judgments.odt (22) a member of the committee or officers or by any other person, he has to prepare a special report and submit it to the Registrar together with his audit report.
28. In view of the above provisions, it has to be seen whether non-following of the said provision would be sufficient to quash the conviction which is imposed upon the present applicants on the basis of the evidence. There is no doubt that Section 81(5B) of the Act casts a positive obligation on the auditor or the Registrar to file an FIR when they discover a financial irregularity in a cooperative society. Section 81(5B) demands accountability and vigilance from the auditor and the Registrar in performance of their public duty. Moreover, a plain reading of the said provision does not lead to the conclusion that the legislature intends to debar any person other than the auditor or the Registrar from registering an FIR.
29. This aspect is considered by the Hon'ble Apex Court in the case of Dhanraj N. Asawani vs Amarjeetsingh Mohindersingh Basi reported in (2023) 20 SCC 136, wherein three Judge Bench of the Hon'ble Apex Court observed that:
Section 81(5B) cannot be interpreted to mean that any other person who comes to know about the financial irregularity on the basis of the audit report is debarred from reporting the irregularity to the police. In the absence of any specific provision or necessary intendment, such an inference will be against the
5.apl.140 & 141.2017.Judgments.odt (23) interests of the society. The interests of the society will be safeguarded if financial irregularities in co-operative banks are reported to the police, who can subsequently take effective actions to investigate crimes and protect the commercial interests of the members of the society.
30. The observation of the Hon'ble Apex Court in the above referred judgment in Para No.15, 16, 17 and 18 and 19 are reproduced as under:
"15. Section 4 of the Code of Criminal Procedure provides that all offences under the Indian Penal Code shall be investigated, inquired, and tried according to the provisions of the Code of Crimninal Procedure. Section 4(2) structures the application of the Code of Criminal Procedure in situations where a special procedure is prescribed under any special enactment. Section 4 is extracted below:
4. Trial of offences under the Indian Penal Code and other laws.
-- (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.
16. Section 4(2) lays down that the provisions of the Code of Criminal Procedure shall apply to all offences under any other law apart from the Indian Penal Code.
5.apl.140 & 141.2017.Judgments.odt (24) However, the application of the Code of Criminal Procedure will be excluded only where a special law prescribes special procedures to deal with the investigation, inquiry, or the trial of the special offence. For instance, in Mirza Iqbal Hussain Vs. State of Uttar Pradesh MANU/SC/0088/1982 : (1992) 3 SCC 516, this Court was called upon to determine whether the trial court had jurisdiction to pass an order of confiscation under the Prevention of Corruption Act, 1947. This Court held that the provisions of the Code of Criminal Procedure would apply in full force because the Prevention of Corruption Act, 1947 did not provide for confiscation or prescribed any mode by which an order of confiscation could be made. Therefore, it was held that a court trying an offence under the Prevention of Corruption Act, 1947 was empowered to pass an order of confiscation in view of Section 452 of the Code of Criminal Procedure. In determining whether a special procedure will override the general procedure laid down under the Code of Criminal Procedure, the courts have to ascertain whether the special law excludes, either specifically or by necessary implication, the application of the provisions of the Code of Criminal Procedure.
17. The Code of Criminal Procedure provides the method for conducting investigation, inquiry, and trial with the ultimate objective of determining the guilt of the Accused in terms of the substantive law. The criminal proceedings kick in when the information of the commission of an offence is provided to the police or the magistrate. Section 154 of the Code of Criminal Procedure details the procedure for recording the first information in relation to the commission of a cognizable offence. It provides that any information relating to the commission of a cognizable offence if given orally to an officer in charge of a police station shall be reduced into writing by them or under their direction. The information provided by the informant is known as the FIR.
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18. In Lalita Kumari Vs. Government of U.P. MANU/SC/1166/2013 : (2014) 2 SCC 1 a Constitution Bench of this Court held that the main object of an FIR from the point of the view of the informant is to set the criminal law in motion and from the point of view of the investigating authorities is to obtain information about the alleged criminal activity to take suitable steps to trace and punish the guilty. The criminal proceedings are initiated in the interests of the public to apprehend and punish the guilty. It is a well settled principle of law that absent a specific bar or exception contained in a statutory provision, the criminal law can be set into motion by any individual.
19. In A. R. Antulay V. Ramdas Sriniwas Nayak, MANU/SC/0082/1984 : (1984) 2 SCC 500 a Constitution Bench of this Court held that the concept of locus standi of the complainant is not recognized in the criminal jurisprudence, except in situations where the statute creating an offence provides for the eligibility of the complainant. The Court observed that the right to initiate criminal proceedings cannot be whittled down because punishing an offender is in the interests of the society:
This general principle of nearly universal application is founded on a policy that an offence i.e. an act or omission made punishable by any law for the time being in force [See Section 2(n) Code of Criminal Procedure] is not merely an offence committed in relation to the person who suffers harm but is also an offence against society. The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the State representing the people which would exclude any element of private vendetta or vengeance. If such is the public policy underlying penal statutes, who brings an act or omission made punishable by law to the notice of the authority competent to deal
5.apl.140 & 141.2017.Judgments.odt (26) with it, is immaterial and irrelevant unless the statute indicates to the contrary. Punishment of the offender in the interest of the society being one of the objects behind penal statutes enacted for larger good of the society, right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a strait-jacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception."
31. By referring the provisions as well as the judgment in Lalita Kumari Vs. Government of U.P.. and A. R. Antulay V. Ramdas Sriniwas Nayak. The Hon'ble Apex Court in Para No.20 observes as follows:
"20. The 1960 Act is a special law enacted to govern co-operative societies in Maharashtra. Section 81 of the 1960 Act casts a public duty on the auditor and the Registrar to audit co-operative societies. In pursuance of this objective, Section 81(5B) obligates them to register an FIR in case they discover any financial irregularities in the audit reports of a co-operative society. According to said provision, when the auditor comes to the conclusion in the audit report that any person is guilty of an offence relating to the accounts or of any other offences, they are mandated to file a specific report to the Registrar. Where the auditor has failed to do so, the Registrar is empowered to cause an FIR to be filed by a person authorized by them in that behalf. The statutory obligation is cast on the auditor and the Registrar because they are the first persons to acquire knowledge about the financial irregularities in a co-operative society in the course of conducting an audit. Since only the auditor and the Registrar are privy to such irregularity, the 1960 Act obligates them to bring the information about the financial irregularity to the knowledge of the police."
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32. Finally the Hon'ble Apex Court observed in para No.24 are as under:
"24. Section 81(5B) of the Act casts a positive obligation on the auditor or the Registrar to file an FIR. It does not use any negative expression to prohibit persons other than the auditor or the Registrar from registering an FIR. Therefore, it would be contrary to basic principles of statutory construction to conclude that Section 81(5B) debars persons other than the auditor or the Registrar from filing an FIR. The ratio of the decision of this Court in Jamiruddin Ansariv. CBI (2009) 6 SCC 316 is predicated on a provision of law distinct from the statutory provision applicable to the present case."
33. Thus, in view of the interpretation of Section 81(5B) a plain reading of the said provision does not lead to the conclusion that the legislature intends to debar any person other than the auditor or the Registrar from registering an FIR. Section 81(5B) cannot be interpreted to mean that any other person who comes to know about the financial irregularity on the basis of the audit report is debarred from reporting the irregularity to the police. In the absence of any specific provision or necessary intendment, such an inference will be against the interests of the society. The interests of the society will be safeguarded if financial irregularities in cooperative banks are reported to the police, who can subsequently take effective actions to investigate crimes and protect the commercial interests of the members of the society.
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34. In view of the above interpretation by the Hon'ble Apex Court of the provision, the submission of the learned counsel for the applicants that in view of Section 81(5B) the Auditor is not the person, who can lodge the report is not sustainable.
35. In the circumstances, I am of the view of that, the submission made by the learned counsel for the applicants that the provisions of the Maharashtra Cooperative Societies Act are ignored and the Auditor is not the person authorized to lodge the report. The report is lodged by ignoring the provision under Section 81(5B) is not sustainable. The FIR adverted to the audit which was conducted by PW.1 in respect of the affairs of the cooperative society and thereafter the criminal law was set in motion. The investigating agency has carried out the investigation and after investigation the charge sheet was filed. The prosecution has adduced the evidence and on the basis of the evidence the charges are proved against the present applicants. As observed earlier that in view of the scope of the revision reappreciation of the evidence is not permissible. The only thing this Court has to see whether any illegality or error is committed by the Court while dismissing the appeal. After considering the record, the view taken by the learned trial Court as well as the learned first Appellate Court on the basis of the evidence is reasonable, it is not a case that there was no
5.apl.140 & 141.2017.Judgments.odt (29) evidence at all or the evidence was wrongly appreciated by the learned trial Court or the first Appellate Court. In view of that, both the revision applications being devoid of merits and liable to be dismissed. Therefore, both the revision applications are dismissed.
35. Both applicants shall surrender before the Superintendent, Yavatmal District Prison to undergo the sentence on 06.04.2026.
(URMILA JOSHI-PHALKE, J.) Sarkate.
Signed by: Mr. A.R. Sarkate Designation: PA To Honourable Judge Date: 25/03/2026 20:00:01