Bombay High Court
M/S Ishika Logistics vs Rajesh U. Jadhavkar And Ors on 14 September, 2021
Bench: K.K. Tated, P. K. Chavan
8-WP-ST-16956-2021.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION [STAMP] NO.16956 OF 2021
M/s. Ishika Logistics ] Petitioner
Vs.
Rajesh U Jadhavar and others ] Respondents
....
Mr. R. A. Thorat, Senior Advocate a/w Mr. Sandeep Salunkhe, for
Petitioner.
Mr. R.P. Kadam, A.G.P, for Respondent-State.
.....
CORAM : K.K. TATED &
PRITHVIRAJ K. CHAVAN, JJ.
DATE : 14 th SEPTEMBER, 2021.
P.C.
1. Heard learned Counsel for the parties.
2. By this petition under Articles 226 and 227 of the
Constitution of India, the petitioner is seeking to quash and set
aside the order dated 10th August, 2021 passed by respondent
No.2-Commissioner Co-operation and Registrar of Co-operative
Societies, Pune directing respondent No.1 to file First Information
Report against the petitioner.
3. Mr. Thorat, learned Senior Counsel appearing on behalf of
the petitioner submits that bare reading of the report submitted by
Digitally signed by SHAILAJA
SHAILAJA SHRIKANT SHRIKANT HALKUDE
HALKUDE Date: 2021.09.16 16:14:42 +0530
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the auditor clearly shows that there is no fraud committed by the
petitioner at the time of taking loan. He submits that just because
Covid-19 situation, it remained on the part of the petitioner to
repay the same. He submits that even there is no provision under
section 81 (5) of the Maharashtra Co-operative Societies Act, 1960
to file criminal complaint for recovery of the amount. He submits
that in the present proceedings, the respondents have already filed
proceeding under section 101 of the Maharashtra Co-operative
Societies Act, 1960 for recovery of the loan amount.
4. Mr. Thorat, learned Senior Counsel appearing on behalf of
the petitioner in support of his submission relied on the judgment
of the Hon'ble Apex Court in the case of Satishchandra Ratanlal
Shah Vs. State of Gujarat and another, 2019 (3) Supreme Court
Cases, 204. Paragraphs 14 and 15 read thus;
"14. Now coming to the charge under
Section 415 punishable under Section 420 of
IPC. In the context of contracts, the
distinction between mere breach of contract
and cheating would depend upon the
fraudulent inducement and mens rea (See
Hridaya Ranjan Prasad Verma v. State of
Bihar, (2000) 4 SCC 168). In the case before
us, admittedly the appellant was trapped in
economic crisis and therefore, he had
approached the respondent no.2 to
ameliorate the situation of crisis. Further, in
order to recover the aforesaid amount, the
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respondent no.2 had instituted a summary
civil suit seeking recovery of the loan amount
which is still pending adjudication. The mere
inability of the appellant to return the loan
amount cannot give rise to a criminal
prosecution for cheating unless fraudulent or
dishonest intention is shown right at the
beginning of the transaction, as it is this mens
rea which is the crux of the offence. Even if
all the facts in the complaint and material are
taken on their face value, no such dishonest
representation or inducement could be found
or inferred.
15. Moreover, this Court in a number of
cases has usually cautioned against
criminalizing civil disputes, such as breach of
contractual obligations [refer to Gian Singh v.
State of Punjab, (2012) 10 SCC 303]. The
legislature intended to criminalize only those
breaches which are accompanied by
fraudulent, dishonest or deceptive
inducements, which resulted in involuntary
and in-efficient transfers, under Section 415
of IPC".
On the basis of these facts, Mr. Thorat, learned Senior Counsel
appearing on behalf of the petitioner submits that pending the
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hearing and final disposal of the present writ petition, this Court
be pleased to stay the operation and implementation of the letter-
cum-order dated 10th August, 2021 issued by respondent No.2.
5. It is to be noted that in the present proceedings, letter dated
10th August, 2021 was issued by respondent No.2 by taking
recourse to section 81 (5B) of the Maharashtra Co-operative
Societies Act, 1960 which reads thus;
81. Audit
"(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
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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 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 a Special Report and submit the same
to the 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".
6. Whether any irregularity is committed by the petitioner at
the time of taking loan or not is required to be considered and for
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that purpose, we direct respondents No.2 to 4 to file their reply.
7. In view of this fact, following order is passed;
:ORDER:
(a) Respondents No.2 to 4 to file their reply on or before 29 th
September, 2021 with copy to the other side;
(b) Matter to appear on board on 4th October, 2021.
[PRITHVIRAJ K. CHAVAN, J.] [K. K. TATED, J.]
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