Smt. Nirmla Arora vs Joint Registrar, Cooperative Societies and Others

Rajendra Saxena, J.—Heard.

The petitioner''s husband late Shri Gopikishan Arora was working as Store Keeper in the Jodhpur Sahkari Up-Bhokta Whole-Sale Bhandar Ltd., Jodhpur (hereinafter referred as Bhandar) and his services were terminated by order dated 12th June, 1987 by the Liquidator of the said Bhandar. Shri Gopikishan Arora expired on 30.7.1987. On the report of respondent No. 2, the Joint Registrar Cooperative Societies, Jodhpur Region, Jodhpur (respondent No. 1) issued notice dated 17.12.1988 (Annex. 2) u/s 74(1) of the Rajasthan Cooperative Societies Act, 1965 (briefly the Act) asking her to appear before him and to show cause as to why enquiry be not made in respect of the embezzlement of R 89,275.02 alleged to have been committed by late Shri Gopikishan Arora. The petitioner has contended that the notice Ex. 2 is clearly without jurisdiction and unauthorised and has been issued in order to harass her and prayed that the same be quashed and the respondents be restrained from taking any action against her in pursuance of the said notice.

No reply has been filed on behalf of respondent No. 1.

The respondents No. 2 in his counter has asserted that for fixing any liability the impugned notice has been issued against the petitioner in the interest of justice because she is the legal representative of late Shri Gopikishan Arora. It has been further asserted that in case it is found that Shri Gopikishan Arora had himself misappropriated the fund of the Bhandar for him benefit or had wrongly received the money or caused loss to it then the Bhandar has every right to recover that amount from the estate left by the deceased. It has been specifically admitted that the conduct of the petitioner is not under any inquiry, but it has been asserted that the impugned notice issued to her is not without jurisdiction.

I have heard the learned Counsel for the petitioner and the learned Addl. Government Advocate as well as learned Counsel for respondents No. 2 and perused the relevant record.

A perusal of Section 74 of the Act 1965 makes it abundantly apparent that if in the course of an audit, enquiry, inspection or the winding up of a cooperative society, it is found that any person, who has taken any part in the organisation or management of such society, or, who is or has at any time been an officer or an employee of the society, has made payment contrary to the Act, the rules or the bye-laws, or has caused any deficiency in the assets of the Society by breach of trust or wilful negligence, or has misappropriated or fraudulently retained any money or other property belonging to such society, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, enquire himself or direct any person authorised by him by an order in writing in this behalf to inquire into the conduct of such person. Thus, the inquiry u/s 74 of the Act can only be conducted against any person, who has taken part in the organisation or management of such society or against the present or past officer or an employee of the society. Section 74 of the Act no where stipulates that for conducting such an enquiry a show-cause notice shall be given to the legal heir of a deceased employee of the society. This is true that if after enquiry, any misconduct or liability of late Shri Gopikishan Arora, who was admittedly the ex-salesman of the Bhandar, it is found that he was liable to pay any misappropriated amount then of course such an amount can be recovered from the property or estate left by him. In such circumstances, the notice issued to petitioner u/s 74(1) of the Act is apparently unwarranted and without jurisdiction because, the petitioner has neither taken part in the organisation or management of such society or has at any time been an officer or employee of the society.

In the premises of above discussion, this writ petition is allowed and the impugned notice dated 17.12.1988 (Annex. 2) issued against the petitioner is hereby quashed. It is, however, made clear that the respondents shall be at liberty to conduct enquiry u/s 74 of the Rajasthan Cooperative Societies Act, 1965 against the alleged misconduct, act or ommission of late Shri Gopikishan Arora, Ex-salesman of the Jodhpur Sahakari Up-Bhokta Whole-sale Bhandar Ltd., Jodhpur in accordance with law. No order as to costs.