ORAL JUDGMENT

Date : 08-02-2024 Heard learned counsel for the petitioner, learned counsel for the Sasaram Bhabua Central Co-operative Bank Ltd.

Sasaram and learned counsel for the State.

2. Learned counsel for the petitioner submits that the present writ petition has been filed for setting aside the order contained in Memo No.11958 dated 11.12.2019, by which the District Audit Officer, Co-operative Societies, Sasaram, was directed to recover the amount from the petitioner which has been given to him as his monthly salary in accordance with Section 40 of the Bihar Co-operative Societies Act, 1935, in result of illegal regularization of petitioner’s service.

3. Learned counsel for the petitioner submits that the said order has been passed by the Deputy Registrar (Cane), Department of Co-operative Societies, Government of Bihar, Patna, from the office of Registrar, Cooperative Societies, Bihar and copy of the same has been communicated to the Managing Director, District Central Co-operative Societies Limited, Sasaram. Counsel for the petitioner submits that the said order under which direction has been made under Section 40 is absolutely illegal due to two reasons. Firstly, that the said order has to be passed by the Registrar according to the Statute and secondly, the person who has been directly aggrieved by the said letter. No opportunity was granted to him to defend himself. More particularly, counsel for the petitioner submits that under Section 44AV of the Bihar Co-operative Societies (Amendment) Act, 2008, which has been inserted in the main act by virtue of Bihar Act 18 of 2008 that a cooperative society shall have autonomy in all financial and internal administrative matters including the following area, namely, personal policy, staffing, recruitment, posting and compensation to staff.

4. Learned counsel for the State submits that letter has been issued from the office of Registrar, Co-operative Societies, Bihar, Patna, and under Section 40 of the Act Registrar is competent to pass such order.

5. Learned counsel for the Sasaram Bhabhua Central Co-operative Bank Ltd. submits that regularization of the petitioner has been made completely in accordance with law and stand of the Bank is consistently in favour of the petitioner.

6. In the light of the submissions made by the parties, it transpires to this Court that only two issues involved in the present case.

The first is whether a Deputy Registrar (Cane), Department of Co-operative Societies, Bihar, Patna, is competent to pass order under Section 40 of the Bihar Cooperative Societies Act or not and, Secondly, that the person who is aggrieved by the said order has provided any opportunity to defend himself or not.

7. With a view to decide, it is necessary to quote Section 40 of the Act which states as follows:-

“40. Surcharge.-(1) Where as the result of an audit under Section 33 [and Special Audit under Section 33A] or an inquiry under Section 35, or an inspection under Section 34, Section 36, or Section 37, or the winding up of a society, it appears to the Registrar that any person who has taken part in the organization or management of the society or any past or present officer of the society has-

(a) made any payment which is contrary to law or to the rules or bye laws of the society, ¹[or against the directions or instructions of the financing bank for which the society is acting as agent under sub-section (3) of Section

16], or (b) by reason of his culpable negligence or misconduct, involved the society, [or the financing bank for which it is acting as agent under sub-section (3) of Section 16] in any loss or deficiency, or (c) failed to bring into account any sum which ought to have been brought into account, or (d) misappropriated or fraudulently retained any property of the society [or of the financing bank which it is acting as agent under sub-section (3) of Section 16]

the Registrar may inquire into the conduct of such person, or officer and after giving such person or off