ANANT v. STATE — 1985 DIGILAW 468 (MP)

P. D. MULYE, J. ( 1 ) THE petitioner, who is a socio-political worker, a freedom fighter, an ex-member of the Indore Municipal Corporation, a person highly interested in the Co-operative Movement and in various other social and cultural activities as also a member shareholder of respondent No. 9, Indore Parasper Sahakari Bank Ltd. Indore, has filed this petition under Art. 226 of the Constitution of India seeking a writ of mandamus commanding respondent No. 1 the State of M. P. to launch immediate prosecution of respondents No. 3, Shri C. P. Arora (then) Joint Registrar, Co-operative Societies Indore, respondent No. 6 Shri R, G. Nikkan (then) Assistant Registrar, Co-operative Societies, Indore, respondent No. 7 the Manager, Indore Parasper Sahakari Bank, Indore and respondent No. 11 Shri D. Y. Munnawar (then) Revenue Commissioner, Indore and to initiate departmental enquiry against them to impose appropriate penalties. He has also prayed that a writ of mandamus ordering respondents Nos. 1, 2, 4 and 10 to pay to respondent No. 9 the entire money spent by it on intercom, water cooler and other equipment for their offices together with interest at the rate of commercial advances and also seeking a further writ of mandamus ordering the respondent No, 1 to make investigation of similar alleged misappropriations in other Cooperative Banks in charge of respondents Nos. 3, 4, and 6 to refund the same to them, and to withdraw notices of supersession dismembership for doing away with their inherent threats and with a further direction to the State Government to make adequate financial arrangements for equipping its own offices, be issued, as according to the petitioner there has been misappropriation of Societies, funds for illegal, unauthorised and wrongful purchase of property for offices of respondents Nos. 1,2, 4 and 10. ( 2 ) THE facts of this case are not in dispute. According to the petitioner the respondent No. 2 by a notice dated 2-8-82 called upon respondent No. 9 to show cause as to why the body be not superseded under S. 53 (1) of the M. P. Co-operative Societies Act. 1,2, 4 and 10. ( 2 ) THE facts of this case are not in dispute. According to the petitioner the respondent No. 2 by a notice dated 2-8-82 called upon respondent No. 9 to show cause as to why the body be not superseded under S. 53 (1) of the M. P. Co-operative Societies Act. However, before a reply could be filed, on 13-8-82 the Board of Directors of respondent No, 9 was dissolved under S. 49 (a) of the M. P. Co-operative Societies Act, Consequently respondent No. 2 assumed charge of respondent No. 9 through respondents Nos, 5 and 6 who thus continued to hold that charge till 15-3-84 when the newly elected Board of Directors replaced him. ( 3 ) THAT while respondents Nos. 2 and 3 through respondents Nos. 5 and 6 were fully in charge, control and management of respondent. No. 9 respondent No. 2 ordered the respondent No. 6 to obtain an eight-line intercom from M/s Data Machines to be fitted in the office of respondents Nos. 2 and 4 for an amount of Rs. 7530. 25 P. in the month of July, 1983 as per annexures-B/1, B/2, B/3, B/4 and B/5. Similarly the respondents Nos. 3 and 4, at the cost of respondent No. 9 got a desert cooler fitted in the office of respondent No. 10 the Revenue Commissioner, Indore for a sum of Rs. 2525. 00 as per Annexures C/1, C/2, C/3, C/4and C/5. All these expenses incurred for the installation of the intercom as also for the parchase of desert cooler were spent from the funds of the Bank. ( 4 ) THE grievance of the petitioner has been that respondents Nos. 2 and 3 through respondents Nos. 5 and 6 were only entrusted and enjoined with the statutory duty and obligation under the provisions of the M. P. Co-operative Societes Act and were not authorised to undertake acts and works involving financial burdens and investment during the limited authority to administer the Bank in the transitory period. Therefore, the respondents had no business to get the intercom fitted in their office at the cost of the Bank's funds which in fact was installed for their enjoyment. Further according to the petitioner the desert cooler which was purchased with the funds of respondent No. 9 was kept at the office of respondent No. 11 just to please and flatter him. Further according to the petitioner the desert cooler which was purchased with the funds of respondent No. 9 was kept at the office of respondent No. 11 just to please and flatter him. It is also the grievance of the petitioner that all these purchases were made in a hasty and surreptitious manner though the amounts spent on these items have been entered in the account books of the Bank. He also submitted that the desert cooler which was purchased as ordered by respondent No. 3 Shri C. P. Arora, vide resolution No. 1020 deted 19-5-83 was in fact purchased for installing the same in the office of Shri Munnawar, the then Revenue Commissioner, Indore and that the same was to be obtained back from the office of the Revenue Commissioner after the summer reason was over as is clear from Annexure C/5 which is signed by respondent No. 6 Shri R. G. Nikkan. . ( 5 ) THUS, in short according to the petitioner the respondents Nos. 3 and 6 have committed offences of public servant receiving illegal gratification, criminal misappropriation of property by public servant, criminal breach of trust, conspiracy and other serious crimes. Further according to the petitioner, the respondents Nos. 1, 2, 4, 10 and 11 have knowingly desired, received and retained benefits from the crimes and are guilty of conspiracy, abetment and connivance together with the Offence of knowingly receiving stolen property. Further according to the petitioner the respondents Nos. 7 and 8 have been parties to the crimes and have not done their duty towards respondent No. 9 who, in turn, is guilty of sitting tight, refusing to take action and thereby endangering the members' funds. ( 6 ) THE petitioner, therefore, sent a letter dated 21st June, 1984 Annexure-D to respondents No, 1 demanding justice and appropriate action, but the same was not replied. Hence this petition. ( 7 ) THE respondents Nos. 1 to 6, 10 and 11 in their returns have contended that under S. 49 (8) of the Act the Registrar, or the person nominated by him has all the powers and the authority which the Board of Directors in the Society concerned had. Further according to these respondents, the respondent No. 6 obtained on behalf of the societies 8 lined intercom from M/s Data Machines to be fitted in the office of respondents No. 2, 4, 5 and 6. Further according to these respondents, the respondent No. 6 obtained on behalf of the societies 8 lined intercom from M/s Data Machines to be fitted in the office of respondents No. 2, 4, 5 and 6. Further according to them, they were having their offices in a common building located in Shram Shivir, Devi Ahilya Marg, Indore. This building was provided with a single telepnone and it was not possible for respondent No. 6 who at the material time was Assistant Registrar of Co-operative Societies, to have effective consultation with his superior officers with regard to the control and management of the society, respondent No. 9. Under these circumstances and in order to facilitate the smooth management of the society respondent No. 9 it was decided by the respondent No. 6 to instal a multi-channel intercom in the office of the Joint Registrar at Indore who for the societies in question is also a Registrar under S. 3 of the Act, Thus, according to these respondents, the intercom was installed in the office only for the management and promotion of the business of the society. Further according to them, so far as the internal working of the office of respondent No. 2 is concerned, the intercom was neither necessary nor useful for the office and that the intercom was not for the personal use by any officer in the office of respondent No. 2 but only for the use in connection with the affairs of the society, namely respondent No. 9 in particular and many other societies similarly placed at the relevant time, in general. Further the Assistant Registrar of Co-operative Societies being an ex-officio director of respondent No. 9 and any facility extended to him by the Bank, respondent No. 9 or to his office is only with a view to promote the business of respondent No. 9 and for efficient management of its affairs. The cost involved for the installation of the intercom was much less compared to the waste of time and money as its absence would have entitled in managing the business and other affairs of the society. Thus according to these respondents, intercom was a facility in the interest of respondent No. 9. The cost involved for the installation of the intercom was much less compared to the waste of time and money as its absence would have entitled in managing the business and other affairs of the society. Thus according to these respondents, intercom was a facility in the interest of respondent No. 9. ( 8 ) SO far as the purchase of the desert cooler at the cost and expense of respondent No. 9 and its installation in the office of the Revenue Commissioner is concerned, the contention of these respondents in their returns has been that apart from its futility as desert cooler it served as an advertisement to the Bank, as on the desert cooler it was written deposit with the Indore Paraspar Sahakari Bank's. Thus the desert cooler served as an effective advertisement of the Bank and generally served in the promotion of its business. Further according to these respondents the desert cooler has been returned by respondent No. 10 and is with the Bank respondent No. 9 though they have deliberately not mentioned the date of its return nor any documentary evidence has been filed in support there of. Similarly, so far as the installation of intercom is concerned, admittedly it is even now installed in the office of the Joint Registrar of Co-operative Societies. In short, these respondents have justified these purchases at the cost of the society. ( 9 ) SURPRISINGLY respondents Nos. 7, 8 and 9 have fully supported the stand taken by the other respondents, though they have contended that these 8 line intercom and the desert cooler are in de jure possession of respondent No. 9. Further according to them the desert cooler was given for temporary use as there was a conference at that time and that thereafter it was returned back to respondent No. 9, even though the return is also silent as and when it was returned. Further so far as the petitioner is concerned, it is contended that the averments made by the petitioner are not. in public interest but are made only in self praise. ( 10 ) ADMITTEDLY the respondents have not submitted any record regarding these purchases. None of these responsible respondents who were then in charge of the Society have filed their own affidavits in support of their contentions raised in their returns. in public interest but are made only in self praise. ( 10 ) ADMITTEDLY the respondents have not submitted any record regarding these purchases. None of these responsible respondents who were then in charge of the Society have filed their own affidavits in support of their contentions raised in their returns. The Officer-in charge who has filed the returns admittedly was not there at the relevant time and has no personal knowledge. ( 11 ) FROM a bare reading of Annexures B/1 to B/5 and C/1 to C/5 it would appear that all these purchases were made in a hurried manner. It is also clear that the intercom was installed as per the order of the Joint Registrar of Co-operative Societies. Similarly from Annexure C/1 it is clear that according to the orders of the Joint Registrar of Co-operative Societies the desert cooler was purchased specifically for installing the same in the office of the Revenue Commissioner immediately and from Annexure C/5 which is signed by respondent No. 6 it is clear that the said desert cooler which was purchased on 19-5-1983 was to be received back from the office of the Revenue Commissioner after the summer season was over. It is no doubt true that so far as these purchases are concerned there is an entry in the account books of the society. But the respondents have not filed any documentary evidence or correspondence in support of their contentions raised in the returns regarding the immediate necessity of installation of the intercom in the office of the Joint Registrar of Co-operative Societies where the offices of the Asstt. Registrar of Cooperative Societies are also situated. ( 12 ) TO justify these purchases, the learned Government Advocate, during the course of his arguments, had contended that at the relevant time many other societies were put under the control, charge and management of the Assistant Registrar of Co-operative Societies by virtue of S. 49 (8) or S. 53 of the Co-operative Societies Act and consequently in order to manage the affairs of all these societies the installation of the intercom was an absolutely must. So far as the purchase and installation of the desert cooler at the office of the Revenue Commissioner is concerned the learned Government Advocate contended that desert cooler was installed therein in connection with a conference and it served as an advertisement also. So far as the purchase and installation of the desert cooler at the office of the Revenue Commissioner is concerned the learned Government Advocate contended that desert cooler was installed therein in connection with a conference and it served as an advertisement also. This stance taken by these respondents, in our opinion, is not only funny but it is ridiculous and it is unfortunate that respondents Nos. 7,8 and 9 have supported and justified the stand taken by the other respondents in connection with the purchase and installation of the desert cooler as also. that of the intercom. ( 13 ) ONE can understand if the intercom had been installed in the office of respondents No. 9 itself in order to facilitate its efficient working. Similarly if the desert cooler had been purchased for the use of the employees of respondents No. 9 during the summer season it would have been beneficial to all of them including the customers coming to the society in connection with their business. During arguments the learned Government Advocate submitted that though the respondents are ready and willing to remove the intercom installation from the office of the Assistant Registrar of Co-operative Societies, the respondents No. 9 namely the Bank has not removed the same. This explanation is hardly convincing especially when the fresh election has taken place long back i. e. on 15-3-84 and if the intercom was purchased at the cost of respondent No. 9 it was the duty of these respondents not to retain the intercom with them till this date. Similarly in absence of any documents having been filed by the respondents regarding the return of the desert cooler to the Society, it has to be presumed that the desert cooler must be still lying in the office of the Revenue Commissioner. ( 14 ) THUS, after hearing the learned counsel we are constrained to observe that the installation of the intercom as also the purchase of the desert cooler was not to facilitate the working of the Society vis-a-vis the Assistant Registrar, but these luxurious items were purchased for the enjoyment of the officials of the State Government at the cost of the Society, which in our opinion, amounts to misuse of power and authority and abuse of the utilisation of the funds of the society. If the Joint Registrar needed the installation of the intercom to facilitate their working with several societies, all these expenses should have been incurred and borne by the State Government and no liability could be fastened, on the Bank. Similarly, in our opinion, there was absolutely no justification to purchase the desert cooler at the cost of the society for installing the same in the office of the Revenue Commissioner, which apparently was to please the highly placed officials. The stand taken by the respondents that the said desert cooler was kept at the office of the Revenue Commissioner in connection with a conference, which served as an advertisement also, is devoid of any substance and not at all convincing. It does not stand to reason as to why such a course was adopted by the responsible officials of the Co-operative Department. Besides, there is not the slightest averment as to when any conference of all the co-operative Societies had taken place, for what period and by whom it was convenced and what was the necessity of the conference at the office of the Revenue Commissioner. Therefore, in absence of any positive material having been placed on record it is apparent that the stand taken by the respondents in this connection cannot be easily believed and the conduct of the responsible officials, in this manner, deserves condemnation when for all these expenses the society has been burdened unnecessarily by taking undue advantage of the fact that the management of the Society was taken over under S. 49 (8) of the said Act after which those officials were whole and sole so far as the management of the affairs of the society is concerned. These officials therefore, have no business to make these purchases during that interim period in which they had to act as the custodian and trustee on behalf of the society. ( 15 ) RULE 31 of the M. P. Co-operative Societies Rules, which deals with investment and use of funds other than reserve fund specifically provides that purchases mentioned therein could be made which may be necessary to conduct the business of the society. But the provisions of the Act or the Rules made thereunder nowhere provide for such a pruchase as has been done in the present case. But the provisions of the Act or the Rules made thereunder nowhere provide for such a pruchase as has been done in the present case. Besides, no sanction of the Registrar for purchase of these items has been placed on record by the learned Government Advocate or by the learned Advocate appearing for the bank. Therefore, it is clear that this is a case of misuse of the funds of the society especially when it is not the case of the Bank that at any point of time earlier the society ever felt the necessity of installing the intercom or purchase of a desert cooler. Therefore, it is also clear that the respondent Bank under pressure and influence of the officials of the Co-operative Department has tried to support the stand taken by the officials of the Co-operative Department as they dare not displease the officials as is clear from their conduct that so far the Bank has not taken any steps for removing the intercom installation from the office of the Joint Registrar where the Assistant Registrar has also his office. ( 16 ) IT is, no doubt, true that as held by a Full Bench decision of this Court reported in 1976 MPLJ 376 (Ramswarup Raracharan Gupta v. M. P. Co-operative Marketing Federation Ltd.) a Co-operative Society being not a statutory body cannot fall under Art. 12 not being creation of a Statute, However this authority further states that whenever it is pointed out that any statutory provision requiring the society to act in a particular manner creates a right or interest in favour of the person concerned it will be permissible for such person to approach the High Court for seeking writ of mandamus commanding compliance of the statutory requirements. Thus a Co-operative Society would be amenable to a writ jurisdiction only in cases relating to performance of legal obligations and duties imposed by statute creating a corresponding legal right in one. Therefore, the petitioner as a Member of the society has every right to bring to the notice of the Court the high-handed action of the State Government officials as the facts of the present case narrated above would indicate. Therefore, the petitioner as a Member of the society has every right to bring to the notice of the Court the high-handed action of the State Government officials as the facts of the present case narrated above would indicate. However, we are not persuaded to agree with the submission made by the learned counsel for the petitioner that a case of criminal prosecution should be launched against these officials for the alleged offence as mentioned in the petition. The majority decision in the Supreme Court decision reported in AIR 1982 SC 149 (S. P. Gupta v. President of India) rules that any member of the public having sufficient interest can maintain an action for judicial redress for public injury arising from breach of public duty or from violation of some provision of the Constitution or the law and seeks enforcement of such public duty and observance of such constitutional or legal provisions. ( 17 ) IN 1967 MPLJ 337 (Kamta Prasad Baijnath Prasad v. The Registrar, Co-operative Societies) it has been held that -"the co-operative movement is both a theory of life and a system of business. It is a form of voluntary association where individuals unite for mutual aid in the production and distribution of wealth upon principles of equity, reason and common good. It stands for distributive justice and asserts the principles of eqvality and equity ensuring to all those engaged in the production of wealth a share proportionately commensurate with the degree of their contribution. It provides as a substitute for material assets, honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. The movement is thus a great moral movement. Such being the nature of the co-operative movement there is no place in any Cooperative Society for any member who is not honest and who is a 'liar' 'trickster',. . ". This decision has been relied upon by a Division Bench of this Court in the case reported in 1979 MPLJ 695 (Brij Gopal Denga v. State of M. P.) in which it has further been held that : -"the co-operative movement is both a theory of life and system of business. . . . . It provides as a substitute for material assets, honesty and sense of moral obligation and keeps in view the moral rather than the material sanction. . . . . It provides as a substitute for material assets, honesty and sense of moral obligation and keeps in view the moral rather than the material sanction. " ( 18 ) IN such a situation the funds of the Society are expected to be used for the welfare of the society and its members which is not the case here, and, in our opinion, there was no justification for the installation of the intercom in the office of the Joint Registrar of Co-operative Societies and installation of the desert cooler in the office of the Revenue Commissioner at the expense of the society because it has never been the case of the Revenue Commissioner that the desert cooler was required by him temporarily for a specific purpose. We are, therefore, of opinion that considering the facts and circumstances of the case, though the petitioner has failed to make out a case for criminal prosecution, this is a fit case in which the State Government should make Departmental Enquiry relating to the conduct of these responsible officials in the manner in which they have acted in putting the society to these expenses during the interim period. ( 19 ) IT appears that the respondents Bank has supported the Government officials of the Co-operative Department for fear of being superseded or for fear of penal action being taken against the Society under the said provisions of the Act under some pretext or the other as normally they would not have allowed to make "such purchases out of the funds of the society during that interim period or at least they would have raised their protest after the new Board of Directors of the elected body came into existence especially when the intercom was not installed in the Bank premises aad even now continues to be installed in the office of the Joint Registrar coupled with the fact that even the desert cooler was not purchased for the requirement of the Bank, but was specifically purchased for the comfort and picasure of the Revenue Commissioner in whose office it was installed throughout the summer season at the behest of the Joint Registrar who ordered purchase of these items in haste as is apparent from the material placed on record. It cannot be lost sight of that the co-operative Societies have been making hue and cry against the Co-operative Department for its constant interferance in the internal day-to-day affairs of the Societies for which they have been raising protests in some form or the other even from public platform, it is also the grievance of the petitioner that during that interim period the Joint Registrar had made some such other purchases at the cost of some other co-operative societies during that interim period and those articles purchased were also used not for the requirement of the society but for the Department. Therefore, an enquiry for such purchases at the cost of the Co-operative Societies is necessary in order to see that the funds of the Societies are not wasted in future in this manner (or the pleasure of the Government officials. ( 20 ) WITH these observations this petition is disposed of. The cost of this petition amounting to Rs. 500/- including counsel's fee, shall be paid to the petitioner by the respondents. A copy of this order be sent to the Chief Secretary to the Government of Madhya Pradesh Bhopal for necessary action. The amount of security deposit, if any, on verification be returned to the petitioner in person. Petition allowed. .