Ram Badal Verma vs State of Uttarakhand and Others

Servesh Kumar Gupta, J.—Heard learned Counsel for the parties and perused the papers on record. The matter pertains to the Kashipur Cooperative Cane Development and Sale Society (for short, the Society), which is governed by a board, but the board never came in existence ever since the inception of new State of Uttarakhand because the elections of its members could not be held till date. In that eventuality, overall administration of all the cane cooperative societies remained in the hands of Cane Commissioner. In the hierarchy, in descending order, next was Assistant Cane Commissioner, who was designated as District Cane Officer at the time of undivided state of Uttar Pradesh and used to run the administration of a particular society of a place as of the society which is in controversy before this Court.

Mr. B.N. Mishra was the Assistant Cane Commissioner, who occupied his office for a good number of years up to January, 2010 and was succeeded by Ram Badal Verma (one of the petitioners) with effect from the beginning of February, 2010. Mr. Ashok Kumar Srivastava (A.K. Srivastava) was working as the Secretary of the Society for almost two decades at the same place Kashipur (now retired) and petitioners Krishan Lal and Manohar Dutt Upadhyay were the accountants at different times. Another petitioner A.M. Srivastava was the LIC agent hailing from Lucknow (UP), who somehow could be successful in motivating Mr. A.K. Srivastava (who also probably comes from Lucknow itself) for diversion of the funds of Society in the form of investments in the mutual funds of LIC. Mr. A.K. Srivastava, in turn, also successfully persuaded Mr. B.N. Mishra, the then Assistant Cane Commissioner, to invest the fund of the Society in the said scheme. Accordingly, a huge fund of the Society was invested, and a good chunk of that amount sometimes got invested in the personal name of Mr. A.K. Srivastava and even in the individual name of Mr. A.M. Srivastava, the LIC agent. Many a times, this amount came back to the Society and at certain other times, it was re-invested and one of the re-investment, to the tune of Rs. 23,16,000/-, was also made in the time of Ram Badal Verma in March, 2010.

It has been argued on behalf of the accountants petitioners that they are bound to release the money as per the decision taken by the Administrator of the Society, who was none other than Mr. B.N. Mishra and his successor Mr. Ram Badal Verma. Proposal of investment was placed in the meeting by the Secretary of the Society Mr. A.K. Srivastava and that was, in usual course, got approval of the Administrator of the Society, who was the Assistant Cane Commissioner. However, all these investments were never got approval of Registrar of the Society, who was the overall in-charge, and as per Section 59 of the Uttaranchal Cooperative Societies Act, 2003 (hereinafter referred to as the ''Act''), it was indispensable for the Administrator to secure the approval of the Registrar for every investment.

It has been argued on behalf of the petitioners that UP Cooperative Societies Act, 1965, which was adopted by the State of Uttaranchal by way of Act No. 5 of 2003, is not applicable in the present controversy and instead the Multi-State Cooperative Societies Act, 2002 (Act No. 39 of 2002) is applicable in this case. This argument does not help the petitioners for the reason that the objects and reasons of Act No. 39 of 2002 adumbrate that this Act is not in conflict with the provisions of State Act No. 5 of 2003. Rather, the Central Act has been enacted by the Parliament to facilitate and serve the interests of the members in more than one State. So, the provision contained u/s 59 of the Act, in any manner, is not in con tradition with the said Central Act. This way the mandate of Section 59 of the Act, as adopted by Uttarakhand in the year 2003, cannot be dispensed with by the authorities.

So far as the role of the accountants are concerned, it appears that they were also hands in glove in the aforesaid investments of crores of rupees of the Society. Some of the investment amount were returned by the LIC when the air of embezzlement started doing round the corners and the accused persons sensed that they are soon going to be under the grip of clutches of law.

Furthermore, it is also pertinent to mention here that Additional District Magistrate, Udham Singh Nagar has conducted a through and extensive enquiry in all these matters and thereafter submitted his detailed report dated 16.11.2012 to the District Magistrate, Udham Singh Nagar describing each and every facet of the controversy in detail as to how Rs. 1,51,00000/- of the Society were siphoned off with the active connivance and conspiracy of the accused persons including the present petitioners. In the circumstances, this Court is not inclined to scrupulously examine the minute details of each and every investment and return thereof by the LIC. Prima facie, it appears that fund of a Society, based at Kashipur, were siphoned off by the accused petitioners and some of the investment was even in the personal names of Mr. A.K. Srivastava and Mr. A.M. Srivastava, both residents of Lucknow. For the reasons recorded above, none of the petitions has substance. Consequently, both the petitions are hereby dismissed. Stay order dated 24.12.2010 passed in WPCRL No. 1210/2012 stands vacated.