Granting prosecution sanction requires careful consideration of evidence, not merely formal compliance; relevant findings from prior inquiries can substantively justify the decision.

JUDGMENT

Vipin Sanghi, J. (ORAL)--The petitioner has preferred the present writ petition to assail the order dated 24.09.2019, passed by the Registrar of Cooperative Societies, New Delhi (F. No. AR/BKG/CD NO./107487/RCS/2018/6248-6254).

2. The petitioner also seeks a stay for proceedings resulting from the said impugned order dated 06.12.2019 passed by the Financial Commissioner, Delhi in Revision Petition No. 256/2019 titled Jitender Gupta v. The Registrar, Cooperative Societies, Delhi & Anr., and also seeks stay of further proceedings in the said Revision Petition. General direction is sought that the Registrar of Co-operative Societies (ROCS) should perform and discharge his duty in accordance with the provisions of the Delhi Cooperative Societies Act, 2003 (the Act), and not to violate the provisions thereof, or any violation of the Principles of Natural Justice.

3. The brief background and the relevant facts are that the petitioner, at the relevant time, was the head of the Internal Audit Committee of a Cooperative Bank, namely, Delhi Sahkari Cooperative Bank. Respondent No. 3 herein, Mr. Anil Kumar Gaur made complaints about rampant malpractices being indulged in by the management of the bank in the matter of grant of loans and facilities, which were resulting in losses and accounts becoming NPAs. On the basis of the said complaint of respondent No. 3, the ROCS invoked Section 61 of the Act and directed inspection. An auditor's report was prepared on 26.07.2016 under Section 61 of the said Act which was submitted to the ROCS. Founded upon the said inspection report, the ROCS instituted an enquiry under Section 62 of the said Act.

4. The Enquiry Officer submitted his report on 01.12.2017, returning findings of serious malpractices being practiced by the management of the said bank. This report specifically referred to several acts and omissions of the petitioner in relation to particular accounts/ transaction. It is pertinent to note that this Enquiry Report has not been filed by the petitioner on record, and has been filed by respondent No.1, the ROCS.

5. After the Enquiry Report under Section 62 of the Act was received, the ROCS proceeded under Section 66 of the Act - the purport whereof is to enable recovery of the losses suffered by the Cooperative Society due to breach of trust, wilful negligence, misappropriation or fraudulent retention of money or other property belonging to cooperative society. This proceeding under Section 66 was entrusted to one Shri. M.C. Jha on 16.10.2018. Shri. M.C. Jha submitted his report dated 13.12.2018.

6. On 31.12.2018, the ROCS simultaneously issued a show cause notice to the petitioner under Section 121 of the Act, requiring him to show cause as to why the ROCS should not grant sanction for the petitioner's prosecution for offences under Section 118 (1) and 118(6) of the said Act, and also issued a communication to Shri. M.C. Jha stating that the report submitted by him under Section 66 of the Act was incomplete - requiring him to submit further report with particulars of the persons involved in wrong doings and the role played by them.

7. The petitioner raised an objection to the maintainability of the show cause notice itself on 14.03.2019. He also responded to the show cause notice, whereafter the impugned order was passed by the ROCS on 24.09.2019, rejecting the petitioner's objections and disposing of the show cause notice. The ROCS p