The entire Managing Committee is responsible for loan disbursement, and due diligence in loan processing is crucial to determine liability.

JUDGMENT :

1. By the present Petition, Petitioner has prayed for the following relief:

“b) By a suitable writ, order or direction, this Hon’ble Court be pleased to quash and set aside the impugned order dated 14.01.2016 passed by the Hon’ble Minister, Cooperation Department-Respondent No.1 in Revision Application No.459 of 2015 and accordingly the said Revision Application filed by the Respondent No.6 may kindly be dismissed with costs.”

2. This Petition challenges the legality and validity of order dated 14.01.2016 passed by Respondent No.1 - State in Revision Application No. RVA/2013/459/15-S dated 14.01.2016 under Section 154 of The Maharashtra Co-operative Societies, Act 1960 (for short “the said Act”)

3. Petitioner is a Co-operative Society registered under the said Act. Employees of the Police Department of the Government of Maharashtra serving within Greater Mumbai are its members. It has more than 33,000 members.

4. Impugned Judgment in Revision proceedings exonerates the culpability and liability of Respondent No.6. He was a member of the Managing Committee of the Society holding the post of Joint Secretary from December, 2000 onwards. Admittedly, his tenure was for five years. Apart from Respondent No.6 another member of the Managing Committee also held the post of Joint Secretary. These are undisputed facts.

5. Petitioner - Society advances loan to its members who are employees of the Police Department. EMI against loan advanced by Society is deducted from the monthly salary of members and remitted to the Society. Procedure for loan application begins by submitting a certificate issued by the Head of Department certifying that Applicant is employee of the Police Department alongwith completed loan application form. According to Petitioner, this is a sine qua non for seeking loan from the Society.

6. During 2004-2005 it came to the knowledge to the Society that eight Applicants/persons who availed loan from the Society were not employees of the Police Department and they had procured the loan by playing a fraud on the Society. Criminal complaint was filed against these eight persons and offences under Sections 406, 408, 170, 419, 465, 467, 468, 471 read with 34 of Indian Penal Code, 1860 (for short ‘IPC’) were registered against them. The criminal case is still pending.

7. In the meanwhile, Petitioner initiated inquiry under Section 83 of the said Act. Respondent No.5, appointed as a Enquiry Officer in his report, recommended action to be taken under Section 88 of the said Act. Respondent No.4 - Authorized Officer cum Assistant Registrar conducted the statutory inquiry and submitted Enquiry Report dated 11.05.2009 under Section 88 of the said Act.

8. Perusal of the Enquiry Report submitted by Enquiry Officer under Section 88 of the said Act reveals indictment of six persons/ members of the Society having committed serious discrepancies in recommending and disbursement of funds of the Society without adhering to the laid down procedure. The names of the six employees are contained in a tabular column in the Report wherein the name of the Respondent No.6 appears in respect of disbursement of loan to four alleged members. Admittedly, Respondent No.6 was Joint Secretary of the Society at the then time. Enquiry Report states that in respect of disbursement of loan to four alleged members, Respondent No.6 has appended his signature as Joint Secretary along side the signature of R.R. Bhogale (President of the Society) and the Respondent No.6 is alleged to have erased the crossing on the loan disbursement cheque to make it appear as a bearer cheque. That the acts attributed to the Respondent No.6 have been done on two dates namely 13.01.2005 (disbursement to two members) and 18.03.2005 (disbursement to the remaining two members). Perusal of Report indicates that at the time of inquiry R.R. Bhogale, President of the Society did not file his reply nor did he submit any documentary evidence. Perusal of the Report further levies a serio