skc 525-WP7909-17-ORS.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 7909 OF 2017
Tirupati Magasvargiya Industrial
Cooperative Societies Ltd. Shivnakwadi ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 7910 OF 2017
Shri Addhikarta Magasvargiya Industrial
Cooperative Society Ltd. Mangao ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 7912 OF 2017
Nav Maharashtra Magasvargiya
Kamgar Yantramag Audyogik
Sahakari Sanstha Maryadit ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 7913 OF 2017
Manav Jivan Magasvargiya
Audyogik Sahakari Sanstha Maryadit ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8003 OF 2017
Jayvantravji Awaleso Magasvargiya
Audyogik Sahakari Sanstha Maryadit ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
1/13
::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::
skc 525-WP7909-17-ORS.doc
WITH
WRIT PETITION NO. 8004 OF 2017
Yuva Shakti Industrial Cooperative
Society Ltd. Tasgaon, through
its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8005 OF 2017
Pratik Industrial Cooperative
Society Ltd. Ogalewadi, through
its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8161 OF 2017
Kalikamata Magasvargiya
Audyogik Sahakari Sanstha Maryadit,
Sindhudurg, through its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8163 OF 2017
Shardul Pharmaceuticals Industrial Cooperative
Society Ltd. Usmanabad, through
its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8164 OF 2017
Rajiv Magasvargiya
Audyogik Utpadak Sahakari Sanstha
Maryadit, Mhaswad ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
2/13
::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::
skc 525-WP7909-17-ORS.doc
WITH
WRIT PETITION NO. 8165 OF 2017
Harshawardhan Industrial Cooperative
Society Limited, Islampur ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8174 OF 2017
Laxmi Magasvargiya
Industrial Co-op. Industries Ltd.,
Minache, through its Chairman ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8175 OF 2017
Sarthak Magasvargiya
Audyogik Sahakari Sanstha Maryadit,
Kolhapur, through its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
WITH
WRIT PETITION NO. 8176 OF 2017
Bhimratna Magasvargiya
Audyogik Sahakari Sanstha Maryadit,
Sindhudurg, through its Secretary ..Petitioner
vs.
State of Maharashtra & Ors. ..Respondents
Mr. A. Y. Sakhare - Senior Advocate i/b. Mr. P. P. Kulkarni for
Petitioners in all Writ Petitions.
Mr. S. H. Kankal - AGP for State in all Writ Petitions.
3/13
::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::
skc 525-WP7909-17-ORS.doc
CORAM : M. S. SONAK, J.
DATE: 13 SEPTEMBER 2017 COMMON JUDGMENT :
1] Not on board. In view of urgency, taken on production board. 2] Heard Mr. Sakhare, learned Senior Advocate for the petitioners in all these petitions and Mr. Kankal, learned AGP for the Respondents.
3] Mr. Sakhare, learned Senior Advocate for the petitioners submits that the issues raised in all these petitions are one and the same and therefore, writ petition no. 7909 of 2017 may be treated as a lead petition.
4] In writ petition no. 7909 of 2017, the petitioners have applied for the following reliefs :
"a) That this Hon'ble Court may be pleased to issue appropriate Writ and/or direction and/or order under Article 226 of the Constitution of India, to quash & set aside an order dated 12th May 2017 passed by the Respondent No. 5 & consequential order passed therein;
b) That this Hon'ble Court may be pleased to issue appropriate Writ and/or direction and/or order under Article 226 of the Constitution of India to quash and set aside order passed by the Respondent No. 5 & 6 under section 81 of the M.C.S. Act which is not made available to the petitioner;
B(1) That this Hon'ble Court may be pleased to issue 4/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc appropriate Writ and/or direction and/or order under Article 226 of the Constitution of India directing the Respondent No. 5 & 6 to provide the petitioner society Test Audit Report and also further direct the Respondent No. 5 to provide order passed on Test Audit Report submitted by the Respondent No. 6;
B(2) By order of this Hon'ble Court the Respondent Nos. 5 & 6 and their agents be restrained from taking any actions or coercive steps pursuant to the Order passed on test audit the copy of which is not furnished till date to the Petitioner Society and its Directors."
c) That this Hon'ble Court may be pleased to issue appropriate Writ and/or direction and/or order under Article 226 of the Constitution of India, to direct the Respondents to give opportunity of hearing in respect of Audit Report submitted by the Auditor and further direct Respondent to take action as per Section 82 of the Maharashtra Cooperative Societies Act;
d) That this Hon'ble Court may be pleased to issue appropriate Writ and/or direction and/or order under Article 226 of the Constitution of India directing the Respondents to follow procedure prescribed under Section 82 of the Maharashtra Cooperative Societies Act and permit petitioner society to rectify defects if any disclosed in the Test Audit report;
e) That pending hearing and final disposal of the petition the respondents be restrained from taking any action in pursuance to the Audit Report submitted by the Respondent No. 6.
f) That the Respondents be ordered to pay the petitioners cost of the petition;
g) For such further and other reliefs as the nature and circumstances of the case may require."
5] Since, the first order in point of time is the order dated 12 th May 2017, it is necessary to appreciate challenge in respect thereof. The order dated 12th May 2017 made by the District Deputy 5/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc Registrar is in exercise of powers conferred upon him by Section 81 of the Maharashtra Co-operative Societies Act, 1960 (MCS Act). By the impugned order dated 12th May 2017, the District Deputy Registrar has appointed a Test Auditor to audit the accounts of the petitioner society.
6] Mr. Sakhare, learned Senior Advocate for the petitioners submits that the impugned order dated 12 th May 2017 is vitiated by malafides. He submits that in this case necessary audit was conducted by the petitioner society and there was nothing illegal or irregular detected. In these circumstances, Mr. Sakhare submits that the District Deputy Registrar had no jurisdiction to make the impugned order and appoint Test Auditor.
7] Learned AGP submits that the impugned order dated 12th May 2017 has already worked out itself. He submits that the Test Auditor has not only audited the accounts of the petitioner society but has further submitted his report to the Registrar in terms of the provisions of Section 81 of the MCS Act. Learned AGP further submits that from perusal of the impugned order it is quite clear that the petitioner society had failed to appoint any Auditor or audited its accounts right from its inception and in these circumstances, the District Deputy Registrar was justified in making the impugned 6/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc order.
8] The recitals in the impugned order make reference to certain financial aid provided by the State Government to the society. The recitals also makes reference to Gazette Notifications as well as notices in the matter of appointment of Auditors by the society and the submission of timely audit reports at the intervals prescribed. The operative portion of the impugned order dated 12th May 2017 states that the petitioner society, right from the date of inception, failed to appoint any auditor. The impugned order states that there has been no compliance on the part of the petitioner society of the directions for audit scheme of audit reports. There are also prima facie observations with regard to account of the aid / finances provided by the State Government to the society. 9] Section 81 of the MCS Act in the first instance, requires the societies shall cause to audit its accounts and submit such audit reports to the authorities prescribed. The proviso to section 81(1)
(a) provides that if the Registrar is satisfied that the society has failed to intimate and file returns as provided by sub section (2A) of section 75 and sub section (1B) of section 79, the Registrar may by order, for reasons to be recorded in writing, cause the accounts of the society to be audited by a auditor from the panel of auditors 7/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc approved by the State Government or an Authority authorized by it, in this behalf.
10] There is really no material on record to accept the contentions of Mr. Sakhare as regards malafides or as regards compliance by the society of its legal obligation in the matter of audit of its accounts. A charge of malafides is easier made than made out. There is no allegation against any particular person or authority. No particular person or authority have been impleaded as parties in this petition. In the absence of all this, it is not possible to interfere with the impugned order on the grounds of legal malice or mala fides.
11] There is also no reason to dispute the statements in the recitals of the impugned orders. No material has been placed on record in support of the contention that auditors were appointed and timely audit reports were submitted. The provisions of Section 81 confer ample powers upon the District Deputy Registrar to appoint test auditors in a situation of this nature. Accordingly, it cannot be said that the impugned order was in excess of jurisdiction. Further, the impugned order has already been worked out, in the sense, that the test auditors appointed in pursuance of the impugned order have already submitted their audit reports. Accordingly, there is no case made out to interfere with the impugned order. 8/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::
skc 525-WP7909-17-ORS.doc
12] The relief in terms of prayer clause B(1) proceeds on the
basis that the audit by the Test Auditor in terms of the impugned order dated 12th May 2017 is already complete. This relief is in the context of making available to the petitioner society the copy of the test audit report as well as further orders that may have been made on the test audit report.
13] A writ petition under Articles 226 and 227 of the Constitution of India to merely seek a copy of the test audit report is not required to be entertained. The petitioners, have several alternate and efficacious remedy available to them. It is for the petitioners to avail of such remedies and in pursuance of such remedies to obtain the copies, if permissible under the law.
14] The relief in terms of prayer clause B(2) is also entirely premature. In this regard, however, Mr. Sakhare submits that the provisions contained in Section 81(5B) of the MCS Act inter alia provide 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 9/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc liable for disqualification and his name should 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. 15] Mr. Sakhare submits that before the auditor proceeds to file any FIR against the society or its board of directors, principles of natural justice would require that society and its board of directors are furnished the copy of his report. Mr. Sakhare submits that in terms of section 82 of the MCS Act, the society has opportunity to rectify the defects which are pointed out. Mr. Sakhare submits that if any FIR is filed before grant of opportunity to the society or its board of directors to rectify the defects pointed out in the audit report or before the society and its board of directors are provided with the test auditors report and any consequential orders made thereon by the Registrar or any other authority, initiation of any coercive action like institutions of FIR will violate the principles of natural justice.
16] Mr. Sakhare has been unable to point out any provision or authority which requires compliance with principles of natural justice before lodging of FIR. In fact, in V. C. Shukla vs. State (Delhi Administration)1, the Supreme Court has held that the question of an accused being heard prior to the commencement of prosecution does not arise. In cases where the law requires sanction to be 1 1980 Supp. SCC 249 10/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc given by the appointing authority before a prosecution can be launched against a government servant, it has never been suggested that the accused must be heard before the sanction is accorded or before any FIR is lodged. The question of sanction arises at a point of time when there is no danger to the liberty of the subject and the accused at that stage is not in the picture at all. It is only after sanction is accorded that an accused is brought to trial or proceedings are started against him when he is to bee heard and can challenge the validity of the sanction. Similarly, when a first information report is filed before a police officer, the law does not require that the officer must hear the accused before recording it or submitting a charge-sheet to the court.
17] Similarly, in Anju Chaudhary vs. State of Uttar Pradesh & Anr.2, the Hon'ble Court after digesting several previous decisions has ruled that an accused is not entitled to a hearing pre- registration of an FIR ruled audi alteram partem is subject to exceptions. Such exceptions may be provided by law or by necessary implications where no other interpretation is possible. The principles of natural justice have application, both in civil and criminal jurisprudence. The purpose of the Criminal Procedure Code and the Penal Code is to effectively execute administration of criminal justice system and protect society from perpetrators of 2 (2013) 6 SCC 384 11/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 ::: skc 525-WP7909-17-ORS.doc crime. It has a twin purpose; firstly to adequately punish the offender in accordance with law and secondly, to ensure prevention of crime. On examination, the scheme of the Criminal Procedure Code does not provide for any right of hearing at the time of registration of the first information report. The very purpose of fair and just investigation shall stand frustrated if pre-registration hearing is required to be granted to a suspect. It is not that the liberty of an individual is being taken away or is being adversely affected, except by the due process of law. The entire scheme of the Cr.P.C. is unambiguously supports the theory of execution of audi alteram partem pre-registration of an FIR. 18] In any case, since the main challenge in the petition to the order dated 12th May 2017 fails, there is no necessity to go to other reliefs, which are, in the nature of ancillary reliefs in the petition. The petition, in a sense, is premature, because it proceeds on the basis that there will be no compliance on the part of the authorities with the provisions of MCS Act including, the provisions contained in section 82 of MCS Act.
19] There is accordingly no case made out for grant of any reliefs in this petition. This petition is dismissed. There shall however be no order as to costs.
12/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::
skc 525-WP7909-17-ORS.doc 20] Since, issue involved in the remaining petitions is the same, for the reasons as aforesaid, the remaining petitions are also hereby dismissed with no order as to costs.
21] All these petitions are dismissed. However, there shall be no order as to costs.
(M. S. SONAK, J.) Chandka 13/13 ::: Uploaded on - 19/09/2017 ::: Downloaded on - 20/09/2017 02:30:15 :::