Vijay Grih Nirman Shahkari Samiti Maryadit Raipur, A Society v. Bilaspur, 1- State Of Chhattisgarh

: Mr. Rajeev Shrivastava, Senior Advocate Mr. Malay Shrivastava, Advocate : Mr. Vedang Shadangi, Panel Lawyer For Respondent(s) Hon’ble Shri Justice Rakesh Mohan Pandey Order on Board 30/01/2025

1. The petitioner has challenged the order dated 27.04.2016 2 passed by respondent No.2/Chhattisgarh State Cooperative Tribunal, Bilaspur, in Appeal Case No. 86/2014, affirming the order dated 03.05.2011 passed by respondent No.3 in Appeal Case No. 77(1)/769 s(R)/10 affirming the order dated

30.10.2009 passed by respondent No.5 in Case Order No. Grih Nirman/09/932/Raipur thereby appointing respondent No.6 as the Liquidator of the petitioner society.

2. Brief facts of the present case are as under:- A. The petitioner is a society registered under the Chhattisgarh Co-operative Societies Act, 1960 (for short, the Act, 1960). B. One Ramesh Varlayani and Yogesh Varlayani made a complaint against the petition/society with regard to financial irregularities. The co-operative inspector was appointed as the enquiry officer. The petitioner society was directed to appear before the enquiry officer vide notice dated 24.04.2008. The petitioner/society appeared before the enquiry officer and submitted its reply and denied the allegations. C. The enquiry officer submitted its enquiry report on

24.12.2008. Based on the enquiry report, a show cause notice was issued to the petitioner on 08.05.2009. Thereafter, the petitioner filed its reply to the show cause notice on 31.8.2009. 3 D. Respondent No.5/Deputy Registrar, Cooperative Societies vide order dated 30.10.2009 appointed respondent No.6 as the Liquidator. E. The petitioner-Society preferred an appeal before respondent No. 4 and it was dismissed vide order dated

03.05.2011. Consequently, a second appeal was preferred by the petitioner society against the order dated

03.05.2011 and the same was also dismissed.

3. Mr. Rajeev Shrivastava, learned Senior Advocate appearing for petitioner-Society would submit that the petitioner society is a housing co-operative Society and it is not affiliated with any other society therefore, according to provisions of Section 59 of the Act, 1960, the enquiry could have been initiated on an application of not less than 1/3rd members of the Committee or 1/10th of the total member of the society whereas the complaint made by Ramesh Varlayani and Vinod Varlayani was not maintainable at all. He would further argue that enquiry was conducted against the petitioner society according to Section 59 of the Act, 1960; therefore, no action could have been taken against the society under Section 69 of the Act, 1960. He would also submit that the appointment of Liquidator was also bad in law; thus, he would pray to quash the order impugned.

4. On the other hand, learned counsel appearing for the State would oppose the submissions made by learned counsel for the appellant and support the decision taken by the respondent authorities. Mr. Shadangi would submit that 4 according to provisions of Section 8 of the Act, 1960, the Registrar may decide certain questions with regard to the formation, registration or continuance of the society or admission of a person as a member of the society, and the question whether a person is agriculturist or not. He would also contend that according to provisions of Section 60 of the Act, 1960, the Registrar may inspect books of the society and communicate the results, if inspection is made on his own motion. He would contend that under Section 69 of the Act, 1960, the Registrar may take a decision with regard to the winding up of the society. Mr. Shadangi would further contend that the Registrar while exercising the power conferred under Section 60 of the Act, 1960, may suo moto inspect the society to achieve the object of the Act. He would also contend that the Registrar vide Order dated 30.10.2009, appointed a Liquidator. He would further argue that there are concurrent findings recorded by the Cooperative Courts against the petitioner; thus, he would state that the instant petition deserves to be dismissed.

5. I have heard learned counsel for the parties and perused the documents.

6. Sections 6, 59, 59A and 60 of the Act, 1960 are relevant and are reproduced as under:- “6. Conditions of registration. (1)No society, other than a society of which another society is a member, shall be registered under this Act unless it consists of at least twenty persons competent to contract under Section 11 of 5 the Indian Contract Act, 1872 (IX of 1872) and belonging to twenty different families, not being near relations and, where the objects of the society include the creation of funds to be lent to its members, unless such persons, save where the Registrar by general or special order otherwise directs, reside in the same town or village or in a compact group of villages:Provided that a society formed exclusively for the benefit of students may be registered, notwithstanding that the members of such society may not have attained the age of majority according to the law to which they are subject :Provided further that the Registrar may relax the condition of minimum membership to that society which is organized for the welfare of the employees of any organisation/establishment. Provided also that in case of a primary society, there shall be atleast 33 per cent women members at the time of registration:Provided also that the Registrar may, for sufficient reasons, relax the conditions of the prescribed percentage of women members.(2)The word "limited" or its equivalent in any Indian language shall be the last word in the name of every society registered with limited liability under this Act. * * * 59. Inquiry. (1)The [The Registrar may on his own motion or on the application of] [Substituted 'Registrar may on the application of' by C.G. Act No. 8 of 2015, dated 26.3.2015.] - (i)a society to which the society is affiliated; or (ii)a creditor to whom the society is indebted; or (iii)not less than one third of the members of the committee; or (iv)not less than one-tenth of the total number of members of the society hold an inquiry or cause an inquiry to be made into the specific matters raised in the application relating to the constitution, working and financial condition of the society. (2)The Registrar shall order an inquiry only after the receipt of a fee as may be prescribed, from the applicant or applicants, deemed sufficient to meet the costs of the inquiry to be conducted. (3)The inquiry shall be completed with in a period of four months from the date of ordering the inquiry. (4)The Registrar shall, within a period of one month from the date of completion of inquiry, communicate the report of the inquiry- (i)to the society concerned; 6 (ii)to the applicants or the person designated by the applicants to receive such a report; (iii)to any member of a society; (iv)to a federation of which the society is a member; (v)to a creditor;as the case may be.

59. A Duty of certain persons to assist enquiry. (1) All officers, members and past members of the society in respect of whom an inquiry is held, and any other person who, in the opinion of the officer holding the inquiry is in possession of the information, books and papers relating to the society, shall furnish such information as is in their possession and produce all books and papers relating to the society which are in their custody or power, and otherwise give to the officer holding an inquiry all assistance in connection with the enquiry which they can reasonably give. (2) If any such person refuses to produce before the Registrar or any person authorised by him under sub- section (1) of Section 59 any book or papers which it is his duty under sub-section (1) to produce or to answer any question which is put to him by the Registrar or the person authorised by the Registrar in pursuance of sub-section (1), the Registrar or the person authorised by the Registrar may certify the refusal and the Registrar may, after hearing, any statement which may be offered in defence punish the defaulter with a penalty not exceeding one thousand rupees. Any sum imposed as penalty under this section shall, on the application by the Registrar or the person authorised by him, to a Magistrate, having jurisdiction, be recoverable by the Magistrate as if it were a fine imposed by himself.

60. Inspection of books of society. (1) The Registrar may on his own motion, or on the application of creditor of a society inspect or direct any person authorised by him by general or special order in writing in this behalf, to inspect the books of the society : Provided that no such inspection shall be made on the application of a creditor unless the applicant- (a) satisfies the Registrar that the debt is a sum then due and that he has demanded payment thereof and has not received satisfaction within a reasonable time; (b) deposits with the Registrar such sum as security for the costs of the proposed inspection as the Registrar may require. 7 (2) The Registrar shall communicate the results of any such inspection- (a) where the inspection is made of his own motion, to the society; and (b) where the inspection is made on the application of a creditor, to the creditor and the society.”

7. Section 8 of the Act, 1960, specifically deals with the power of the Registrar to decide certain questions, while exercising power under Section 8, the Registrar, in connection with the formation, registration, or continuation of the society, may decide certain questions. Section 60 confers power on the Registrar to inspect the society. It is also provided that such an inspection cannot be conducted based on an application by the liquidator. After the inspection, the Registrar will communicate the results of such inspection. According to the provisions of Section 69 of the Act, 1960, if the Registrar, after conducting an inquiry under Section 59 or an inspection under Section 60, or upon receiving an application or information, determines that the society ought to be wound up, he may issue such an order.

8. In the present case, the allegations against the petitioner society was that it failed to allot plots to its members rather plots were allotted to non-members of the society and no permission was obtained from the department. Enquiry was conducted by Mr. R.K. Sahu, co-operative inspector, Raipur and a report was submitted; a show cause notice was issued against the petitioner according to Section 69(3) of the Act, 1960 on 08.05.2009; the petitioner failed to file a reply within the given time and sought 30 days to file a reply. On 8

31.08.2009, the President of the Society filed its reply and the Registrar as well as the Tribunal in their orders have categorically recorded findings that contention of petitioner that plots were offered to the members of the society, but they refused to accept it, is an afterthought; the learned Registrar and Tribunal further held that 34,000 ft.² land was allotted to 11 non-members without sanction and layout. The findings recorded by the Registrar and the cooperative tribunal are findings of the fact.

9. In the enquiry report, the allegations made against the petitioner-Society were found proved. A show cause notice was issued to the petitioner and on 30.10.2009, the Liquidator was appointed by the Deputy Registrar, Cooperative Societies, Raipur. The petitioner preferred an appeal against that order before the Registrar, Cooperative Societies and it was dismissed on 03.05.2011 and the learned Tribunal vide order dated 27.04.2016 affirmed the findings.

10. Taking into consideration the findings recorded by the Registrar and and Tribunal; the order passed by the Deputy Registrar, Cooperative Societies dated 30.10.2009; the enquiry report submitted by the Enquiry Officer i.e. Cooperative Inspector and the provisions of Sections 8, 59, 60 and 69 of the Act, 1960, in the considered opinion of this Court, no case is made out for interference by this Court.

11. Accordingly, this petition fails and is hereby dismissed. No cost(s). 9 Sd/- Rakesh Mohan Pandey JUDGE Nadim