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Bhawani Shanker Vs. the State of Rajasthan and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Writ Petition No. 433 of 1976
Judge
Reported in1984WLN510
AppellantBhawani Shanker
RespondentThe State of Rajasthan and ors.
Excerpt:
.....have further imposed penalty by way of compensation on the petitioner.;writ partly allowed - - shri bhawani shanker again filed an appeal against this order, whish was dismissed by the learned registrar, co-operative societies by his order dated 24-l-72 still not satisfied, shri bhawani shanker filed a revision to the hon'ble minister for cooperative societies government of rajasthan, jaipur, but this revision was also dismissed on 5-5-76, shri bhawani shanker has challenged these orders by this writ application. i have allowed the learned counsel to agitate the same despite the objection of the learned counsel for the non-petitioners who had contended that the payment of interest as well as compensation was permissible under section 74. 3. i have given my careful consideration to..........pratapgarh. during the audit for the year 1966-67, it came to the notice of the department that shri bhawani shanker had mis-appropriated and mis-used the funds of the society to the tune of rs. 7581.21. thereupon a notice under section 74 of the rajasthan co-operative societies act, 1966 (hereinafter called 'the act') was issued to the petitioner by the assistant registrar. cooperative societies chittorgarh to show cause why this amount may not be recovered from him. shri bhawani shanker filed a reply to this notice but thereafter he did not produce any evidence in support of the objections raised by him and the assistant registrar passed a decree for the recovery of rs. 7581.21 along with interest from 30-6-60 to 31-12-69 amounting to rs. 2274.30 total amounting to rs. 9255.51 with.....
Judgment:

K.S. Lodha, J.

1. The petitioner Bhawani Shanker was employed as a Manager of the Mahlaxmi Araya Vikrya Shakari Samiti Ltd, Pratapgarh. During the audit for the year 1966-67, it came to the notice of the department that Shri Bhawani Shanker had mis-appropriated and mis-used the funds of the Society to the tune of Rs. 7581.21. Thereupon a notice under Section 74 of the Rajasthan Co-operative Societies Act, 1966 (hereinafter called 'the Act') was issued to the petitioner by the Assistant Registrar. Cooperative Societies Chittorgarh to show cause why this amount may not be recovered from him. Shri Bhawani Shanker filed a reply to this notice but thereafter he did not produce any evidence in support of the objections raised by him and the Assistant Registrar passed a decree for the recovery of Rs. 7581.21 along with interest from 30-6-60 to 31-12-69 amounting to Rs. 2274.30 total amounting to Rs. 9255.51 with further interest (@12%) from 1-1-70 to the date of realisation. Aggrieved of this order, Bhawani Shanker filed an appeal to the Registrar, Co-operative Societies who by his order dated 22-8-70, remanded the matter for fresh enquiry. Thereupon again the Assistant Registrar issued another notice under Section 74 of the Act to show cause why this amount may not be recovered. Shri Bhawani Shanker again filed his reply reiterating the reply filed by him earner. This time alter hearing Shri Bhawani Shanker, the learned Assistant Registrar found him guilty of mis-appropriating a sum of Rs. 7581.21 and passed a decree for recovery of he same along with interest from 30-6-60 to 31-12-69 amounting to Rs. 2274.30, further interest from 1-1-70 to 31-5-71 @ 12% p(sic) a amounting to Rs. 1288.77 total Rs. 11,144.29 along with surcharge or compensation of Rs. 2000/- the grand total being Rs. 13,144.28. It was further directed that he shall pay this amount within one week and shall further pay interest @ 12% p.a, on the sum of Rs. 7581.21 from 1-6-71 upto the date of the payment. Shri Bhawani Shanker again filed an appeal against this order, whish was dismissed by the learned Registrar, Co-operative Societies by his order dated 24-l-72 Still not satisfied, Shri Bhawani Shanker filed a revision to the Hon'ble Minister for Cooperative Societies Government of Rajasthan, Jaipur, but this revision was also dismissed on 5-5-76, Shri Bhawani Shanker has challenged these orders by this writ application.

2 The main contentions of the learned Counsel for the petitioner are that the recovery of the aforesaid amount was barred by time as the action under Section 74 could have been initiated only within six months from the date of any act or omission referred to in Sub-section (1) of that section but in the present case, the act or omission is alleged to have taken place on 30-6-60 whereas the first notice under Section 74 of the Act was issued on 22-4-71 i.e. much, beyond the period of six years and, therefore, the Registrar or the Assistant Registrar, for the matter of that had no jurisdiction to initiate proceedings under Section 74 of the Article His second contention was that the petitioners did not get proper opportunity of defending himself as he had not been given the copies of the accounts nor was ha explained the accounts and his third contention was that the Registrar could not have directed payment of compensation or surcharge when he had already directed payment of interest on the amount said to have been misappropriated. The non-petitioners, the State of Rajasthan the Registrar Co-operative Societies and the Assistant Registrar Co-operative Societies, Chittorgarh, have not filed any reply but have contested the writ application Non petitioner No. 4 Shri Mahalaxmi Kraya Vikraya Shakari Samiti Ltd. Pratapgarh, had filed a reply controverting the allegations of the petitioner and alleging that the proceedings under Section 74 of the Act were not barred by time that the petitioner had been afforded full opportunity of being heard but he himself did not participate in the proceedings after filing the reply. So far as the last contention of the petitioner is concerned, it does not appear to have been raised in the memo of the writ petition but as the matter is purely a question of law. I have allowed the learned Counsel to agitate the same despite the objection of the learned Counsel for the non-petitioners who had contended that the payment of interest as well as compensation was permissible under Section 74.

3. I have given my careful consideration to the rival contentions. So far as the first contention of the learned Counsel for the petitioner is con-corned, I am of the option that it deserves to be partly accepted inasmuch as although the initiation of the proceedings under Section 74 was not barred by time the charging of interest from 30-6-60 to 15-6-67 of course, appears to be clearly barred. The claim of non-petitioner No. 4 is based on a running account. The debit and credit entries have been going on since long and the balances have been carried forward every year. In the accounting year 1957 the past balance of Rs. 7577.59 has been brought forward and thereafter taking into account the debits and credits during the year, a balance of Rs 7581.29 has been struck on 16-6-67. Shri Bhawani Shanker, who bad been examined in the course of the enquiry has not denied this running account but had only alleged that he could not have verified the whole account as some of the entries were made in his absence on leave due to illness. It was when this account of the year 1966-67 was audited that the authorities found that the petitioner Bhawani Shanker had misappropriated this amount and had nor paid back the same to the Society. Therefore when the account was taken and the balance was struck on 16-6-67 during the years 1966-67, the act or omission referred to in Section 74 of the Act must be deemed to have taken place and the initiation of the proceedings under Section 74 by notice dated 25-4-71 were well within six years of that act or omission and therefore, cannot be said to be barred by time.

4. However, when the decree was being passed the learned Deputy Registrar while directing the recovery of the sum of Rs. 7581.21 found due on 15-6-76 directed that interest shall be charged from 30-6-60. This part of the decree, therefore, is clearly in contravention of Section 74 for two reasons. In the first place, when the account was a running account and the balance had been struck on 15-6-76, the charging, of interest from a date prior to if with out there being any stipulation to that effect or any other law entitling the Society for charging interest from before this date was illegal. The learned Assistant Registrar could not have imposed this interest. In the second place the recovery of any amount beyond the period of six years prior to the initiation of the proceedings under Section 74 could not be possible. Therefore this part of the order requires modification. The learned Registrar and the learned authority which disposed of the revision against this order did not consider this aspect of the matter and therefore, their orders up-hold the decree passed by the learned Assistant Registrar also cannot be maintained and deserve to be modified.

5. So far as the second contention goes, it may at once be stated that I do not find any substance in it inasmuch as the only requirement Under Sub-section (2) of Section 17 of the Act is that the person concerned should be given an opportunity of being heard before any order under that section is passed against him. There is no denial of the fact that the petitioner was given notice to show cause under Section 74 and he had filed his objections or reply to the notice. The orders of the learned Assistant Registrar clearly show that even thereafter opportunities were given to him adduce evidence in respect of his objections but the petitioner did not avail of those opportunities and therefore, he cannot now be heard to say that he did not have a proper opportunity of being heard. In this connection, it was contended at one stage by the learned Counsel for the petitioner that the audit report was not made available to the petitioner despite his application dated 9-3-1971 which is Ex. 9 on the record but in my opinion, the petitioner was not entitle to get a copy of the audit report either under Section 74 or the rule framed under the Rajasthan Co-operative Societies Act.

6. So far as the third contention is concerned, I find considerable force in it. The provisions for making an order for payment of interest or compensation Under Sub-section (2) of Section 74 of the Act are alternative and not cumulative. The words are '...make an order requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable.' When the provisions for payment of interest has been separated from the provision for payment of contribution or compensation by a 'comma' and word 'or' the two must be held to be held to be alternative. In these circumstances, when the learned Assistant Registrar had already directed payment of interest on the sum of Rs. 7581.21, he could not have further imposed penalty by way of compensation on the petitioner and therefore, this award of sur-charge of compensation also deserves to be quashed.

7. I therefore, partly allow this writ application. The order of the Assistant Registrar, Co-operative Societies, Chittorgarh, dated 22-6-71 Annexure 12 and the orders of the Registrar, Co-operative Societies dated 24-1-72 Annexure 14 and that of the Government dated 5-5-75 Annexure 16 are modified to the extent that the interest on the sum of Rs. 7581.21 shall be chargeable only from 15-9-67 and the sur-charge of Rs. 2000/- levied by the learned Deputy Registrar is set aside. The rest of the orders are maintained Looking to all the circumstances of the case, the parties are directed to bear their own costs of this writ application.


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