Bawa Dass vs Registrar Co-operative Societies and ors.

S. D. Bajaj, J.

The sole point for consideration in Regular Second Appeal No. 2312 of 1987 is if the stock verification resulting in initiation of proceedings against plaintiffappellant Bawa Dass could be termed as `audit'', enquiry or inspection as envisaged in section 54 of the Punjab Cooperative Societies Act, 1961. The query was answered in the negative by the learned District Judge, Gurdaspur, vide his assailed appellate judgment of April 28, 1987.

For coming to this conclusion the learned District Judge, Gurdaspur (who has since been elevated to the Bench of this Court) relied upon the observations made by the Supreme Court in Pentakota Sriramulu v. Cooperative Marketing Society Ltd. Anakapalli and another, AIR 1965 Supreme Court 621 and the observations made by our own High Court in Angoori Lal Sharma v. State of Haryana and others, 1980 Punjab Law Journal 86. Relevant factual and legal position obtaining in the case is set out in paragraph 4 of the judgment of the learned Court of first appeal which reads

"Provision of section 54 of the Punjab Cooperative Societies Act is not attracted to the case in hand and the trial Court wrongly held so. There is force in this contention. Exhibit P.1 is the notice which was issued on January 20, 1973. Some physical stock verification was done on June 30, 1972 and it came to light that the plaintiff had concealed the sale proceeds worth Rs. 29072.18 paise. The plaintiff had misappropriated the aforesaid amount and thus caused loss to the store. He was asked to explain as to why legal action should not be taken against him, failing which it was also mentioned that a case should be registered against him. Exhibit P. 2 is the order dated February 7, 1979 appointing Pyare Lal as arbitrator under section 55 of the Cooperative Societies Act, for the recovery of different amounts, as mentioned therein. P. W. I is Bawa Dasi the plaintiff. He referred to the facts, which are given in the plaint, briefly. He also referred to Exhibit P.1 and Exhibit P. 2. At no stage he stated that any amount was found to have been due from him in any audit, enquiry, inspection or the winding up proceedings of the society. Merely because some amount was mentioned in Exhibit P.1 to be due from Bawa Dass, it cannot be said that this amount was found in any audit, enquiry, inspection to attract the provisions of section 54 of the Act. Such a matter was under consideration of the Division Bench of Punjab and Haryana High Court in Anggoori Lal Sharma v. State of Haryana, 1980 Punjab Law Journal 86. The observation of the Supreme Court in Pentakota Sriramulu v. Cooperative Marketing Society, AIR 1965 S.C. 621 were referred to as under :

"Where a claim is one "against a person in management of the Society" and "for the fraudulent retention of money or other property of the Society" the case does not completely fall under section 49 and consequently the order of Registrar proceeding under section 51 is not open to objection. Besides these two essential requisitises the facts giving rise to the charge have to be disclosed in the course of an audit under section 37 or an enquiry under section 38 or an inspection under Sec. 39 or on the winding up of the Society. Unless this condition also is satisfied section 49 would not be attracted " The above position of law laid down by the Supreme Court in the Madras case was also applicable in Punjab as was held in Civil Writ Petition No. 258 of 1978, Sucha Singh v. State of Punjab decided on August 2, 1979. This case was also referred to in the case of Angoori Lal Sharma. The contention that the section 54 of the Act was applicable and not section 55 was repelled."

I entirely agree with these findings and affirm them. There is no merit is the Regular Second Appeal and the same is, therefore, dismissed with costs.