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MADHYA PRADESH HIGH COURT BENCH AT INDORE
Virender Singh, J.
Suresh Tanted And Others - Appellants
Versus
State Of M.P. - Respondent
Miscellaneous Criminal Case No. 41268 of 2019, 41279 of 2019
Decided On : 04-02-2020
Abuse of Authority - M.P. Cooperative Societies Act, 1960 - Section 409, 420/34 of the IPC - Section 60, 59, 76(2) of the Act of 1960 - The court discussed the abuse of authority under the M.P. Cooperative Societies Act, 1960 and the allegations of financial irregularities, illegal investments, and misappropriation of funds. The court also highlighted the legal provisions of the Act of 1960 and their interpretations in relation to the allegations made against the petitioners.
Fact of the Case:
The petitioners invoked inherent power of the Court under Section 482 of the Cr.P.C. for quashing FIR No. 391/2019 registered under Sections 409, 420/34 of the IPC at Police Station Rajgarh Distt. Dhar. The petitioners argued that the irregularities alleged by the prosecution were committed prior to their election as President and Members of Board of Directors of the Society. They also claimed to have made efforts to recover the amount of the Society. The prosecution alleged financial irregularities, illegal investments, and misappropriation of funds by the petitioners.
Finding of the Court:
The court found that the evidence collected till date was prima facie sufficient to show that the elements necessary to constitute the offence as defined in Section 405 and 415 of IPC were well available on record. Therefore, the court dismissed the petitions, stating that no case of quashing the FIR at this stage was made out.
Issues: The main issues revolved around the abuse of authority under the M.P. Cooperative Societies Act, 1960, financial irregularities, illegal investments, and misappropriation of funds by the petitioners.
Ratio Decidendi: The court held that the evidence and the act attributed to the petitioners were discussed in detail in the inquiry report submitted by the officer. The investigation was at an initial stage, and several documents had to be collected and analyzed to find out the specific act of each person involved in the alleged offence. The evidence collected till date was prima facie sufficient to show that the elements necessary to constitute the offence as defined in Section 405 and 415 of IPC were well available on record.
Final Decision: The petitions preferred by the petitioners were dismissed as they were found to be sans merits.
JUDGMENT
Virender Singh, J. - All the petitioners of both these petitions have invoked inherent power of this Court conferred under Section 482 of the Cr.P.C. for quashing FIR No. 391/2019 registered under Sections 409, 420/34 of the IPC at Police Station Rajgarh Distt. Dhar, therefore, they are heard together and are being decided by this common order.
2. The petitioners of MCRC No. 41268/2019 are President (petitioner Suresh Tanted) and Members of Board of Directors of the Shri Rajendra Suri Sakh Sahkari Sanstha Maryadit, Rajgargh (hereinafter referred to as the 'Society'), while the petitioners of MCRC No.41279/2019 are Managers/Branch Managers (BM) of the different branches of the Society.
3. Learned senior counsel for the petitioners argued that the petitioners of petition No. 41268/19 were elected President and Members of Board of Directors of the Society only on 17.3.2018. All the irregularities alleged by the prosecution have been committed prior to this period. After the election, the petitioners have made adroit efforts to recover the amount of the Society. Taking stern action, they have lodged total 93 cases involving Rs.55,00,00,000/- crores and have recovered total Rs.36,11,41,883/- from the defaulters.
4. The Report, which is the basis of the prosecution case is prepared by an unauthorized person and is against the provisions of the M.P. Cooperative Societies Act, 1960 (for short hereinafter referred to as "Act of 1960") as the complainant Rajesh Victor was authorized under Section 60 of the Act only to inspect the record of the Society, while he has conducted full fledged inquiry. Such inquiry can be conducted under Section 59 of the Act of 1960 by the Registrar or the authorities mentioned therein.
5. The act of the department is malafide as record reflects that the report was submitted by auditor Rajesh Victor on 28.8.2019 and on the very next day on 29.8.2019, the department got the FIR registered. The action is being taken against the petitioners under pressure of highly influential persons with the ulterior motive to defame and to debar them from holding the office of the Society or to dismiss them from the service, so that their minion or favorite persons can be benefited.
6. Principles of natural justice and the law laid down in the Act of 1960 to take action against erring officials for committing irregularities or illegalities have not been followed. No notice before lodging FIR was issued and no opportunity of hearing was granted to them. As per section 76(2) of the Act of 1960, to lodge FIR; sanction from the Registrar, Co-operative Societies is necessary, but in this case, no such sanction has been obtained, therefore, FIR lodged by the Deputy Registrar, Co-operative Societies is contrary to the law.
7. There is no evidence to show that any amount was misappropriated or converted into their own use by the petitioners. No one has made complaint that any kind of cheating was committed by them. The members have invested their money in the schemes of the Society. They all were granted proper receipt/FDRs for their investment/deposits and they all have right to get it back as per their investment plan. In the FIR itself, not a single word is been alleged about fraudulent inducement or mensrea, which is essential ingredient to constitute the offence under Section 415 of IPC.
8. The petitioners have not committed any offence of cheating with the members of the Society nor was they ever entrusted with a single rupee from the account of the Society or from the account of any member of the Society, which is necessary to constitute the offence under Section 405 of the IPC. Only omnibus allegations regarding irregularities in disbursement, recovery of loans and non payment of FDRs on maturity have been made against them, but such allegations does not constitute offence under Section 409 or 420 of the IPC.
9. The allegation that an unsigned cheque dated 31.3.2014 was issued by one of the branch of the Society and
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