By Legal Bureau
Statutory Inquiry:
The Registrar may on his own motion or on receiving application from one third member of the society, hold an inquiry into the Constitution, working and financial conditions of the society.
Procedure of Holding inquiry:
An order authorising inquiry for the abovementioned purpose shall contain the following :-
(1) the name of the person authorise to conducts the inquiry or inspection ;
(2) the name of the society whose affairs are to be inquired into or whose books are to be inspected;
(3) the specific point or points on which the inquiry or inspection is to be made, the period within which the inquiry or inspection is to be completed and report submitted to the Registrar.
(4) Cost of inquiry;
(5) Any other matter relating to the inquiry or inspection.
Before holding any inquiry on an application on the Registrar shall, order the applicant to deposit Rs.100/- towards cost of inquiry. If the allegation are proved to be false, vexations or malicious, the Registrar may direct that cost shall be recovered from the applicant. But if allegation are proved substantially than the cost of Inquiry shall be refunded to the applicant. Where result of the inquiry show that allegations were not false, malicious or vexations but cannot be proved the cost inquiry shall be borne by the State Government.
Member, past or present of the society and office bearers of the society are bound to give full co-operation to the person authorised to hold inquiry.
Any member or officer of the society refuses to give co-operation in supplying information to the Registration or person authorised by him to inquire into the affairs of the society, the member or officer shall be liable to a penalty of Rs. 500/-.
The Inquiry Report shall be communicated to the society whose affairs were inquired. The Report may contain the findings of the person authorised to inquire into with any documentary evidence.
The Registrar is empowered to change any person entrusted for the work of inquiry and he has a right to appoint any other person instead of the person already entrusted with that work.
The Registrar is empowered to conduct inspection of books of accounts of indebted society. On receiving application from the creditor that the society has not paid his due within a reasonable time. The Registrar or a person authorised by his due within a reasonable time. The Registrar or a person authorised by him shall conduct inspection of books of accounts of the Society. The cost of such an inspection shall be attributed to the Society and creditor in a such and equitable manner by the Registrar.
Auditor is what watchdog of the Registrar to keep a control over working of the societies. But Auditor Report by itself is no evidence unless the auditor is called for and examined to prove his report. (P.S. Mhaskar vs. Dep. Registrar, 1967 C.T.D. 314).
The auditor is not a mere arithmetical machine to check figures in the book. He should satisfy himself not merely that the accounts are correct, but the books represented the true state of affairs of the society. He must take reasonable care to ascertain that they do so. Unless he does this, his audit would be worse than ideal farce. In re : The Union Bank of Allahabad, A.I.R. 1925 All. 519 : 47 All. 669.
In case of disputes under section 91 of the Maharashtra Co-operative Societies Act, 1960 the audit report if relied upon has to be proved by examining the auditor. (Dhulia M.E.C.H. Society Vs. Ramaram, 1965 C.T.D. 128 ; Vishnu Daga Patil Vs. Chairman V.K.S. Society, 1965 C.T.D. 142 ; Pandurang V.S. Eknath, 1964 C.T.D. 220.
Section 83 – Reinquiry –Section 83 of the Maharashtra Co-operative Societies Act, 1960, invests ample power in the Registrar, on his own motion or upon the application of 1/3rd members of the society, tom hold an inquiry either by himself or by a person duly authorised by him in writing in that behalf, into the Constitution, working and the financial condition of the society. The power is obviously to root out the mal practice and mal-functioning and also provisions of section 84 to 88 clearly show that it is also with a view to fastening financial responsibility on individuals, guilty of lapses. Section 83(5) provides that it shall be competent for the Registrar to withdraw any inquiry from the officer whom it is entrusted and to hold inquiry himself or entrust it to any other person as he deems fit. On proper reading of these provisions the Bombay High Court had no manner of doubt that it is always open to the Registrar to order re-inquiry, if for any valid grounds he is not satisfied either with the manner in which the inquiry is conducted by the Enquiry Officer. Court is therefore unable to accept the submission of the Petitioner that the Registrar had no power to order re-inquiry as has been done under the impugned order. (Yeshwant Sahakari Soot Girni Niayamit and another Vs. The Director, Handlooms, Powerlooms and Co-operative Textiles and Addl. Registrar, Co-operative Societies, Nagpur and others, 1995 CTJ 847).
Re-Audit
If it appears to the Registrar on an application by a society or otherwise, that it is necessary or expedient to re-audit any accounts and the provisions of the Maharashtra Co-operative Societies Act 1960 which apply to audit of accounts of the society shall apply to such re-audit.
