DAMODAR DUSAD Vs. STATE

JUDGEMENT

(1.) The facts giving rise to the filing of this writ petition, briefly stated, are that the petitioner had opened a Bank-account with the Rajasthan State Industrial Co-operative Bank Ltd., Jaipur (respondent No. 2 herein) and the petitioner was given over-draft facilities by the Bank up to Rs. 40,000.00. It has been contended in the writ petition that some employees of the Bank had committed forgery and the petitioner's account was also fabricated though the said allegations have been denied by the petitioner. A report was also lodged with the police by the bank and on that basis a criminal case vide FIR No. 273 / 83 was instituted with P.S. Ashok Nagar, Jaipur in respect of offences under Sections 420/467 /468/120-B and 471, IPC. Since some of the Bank employees were also involved in the embezzlement, proceedings under Section 74 of the Rajasthan Co-operative Societies Act, 1965 (hereinafter to be referred as 'the Act') were also initiated against the Bank employees as well as against the petitioner. It has been further contended in the writ petition that before initiating proceedings under Section 74 of the Act Investigating Audit was done by the Department and Audit Report was submitted to the Bank by the 3 auditors, who were so appointed to conduct the audit. It was on the basis of the Audit Report that proceedings under Section 74 of the Act were initiated and that the petitioner was also notified to participate in the said proceedings. In pursuance of the audit proceedings the shop and house of the petitioner were attached by respondent No. 3 and the goods confiscated from the shop were sold at a very low price than the estimated cost of the goods which was worth Rs. 50,000.00-. The petitioner filed an application for release of the attachment and for handing over the possession of the shop and house in question belonging to the petitioner under Section 74 of the Act before the respondent No. 4. It was contended by the learned counsel for the petitioner that respondent No. 3 had no jurisdiction either to attach the shop as well as the house belonging to the petitioner or to have sold the goods lying therein, as he was not authorised to do so in terms of the provisions of Section 74 of the Act. It will be pertinent to refer the provisions of Section 74(1) of the Act, which provides as under :-

(2.) It is submitted by the learned counsel for the petitioner that keeping in view the aforesaid statutory provisions and the safeguard available under the said provisions to the petitioner, it was not open to the Registrar to effect the attachment of the property in question as he was having limited scope of powers under the said provision in as much as the Registrar on the basis of the Audit Report or Inquiry or Inspection Report, in respect of the remissions in question, could, at the most, on his own motion or on the application of the committee, liquidator or any creditor, could inquire either himself or direct any person authorised by him, by an order in writing in this behalf, regarding conduct of such person. It is further contended by the learned counsel for the petitioner that since the petitioner was neither a Member of the Organisation or Managing Body of the Society nor he was an officer or employee of the society, the Registrar was not competent to initiate proceedings against the petitioner by attachment of his assets, as referred to above. He has further contended that as such the entire process adopted by respondent No. 3 was without jurisdiction and the action taken in pursuance thereof was not in accordance with law and hence voidabinitio.

(3.) The aforesaid contentions advanced at the bar on behalf of the petitioner have not been specifically controverted by the respondents inasmuch as merely by opening an account with the respondent-Bank, the petitioner automatically does not become the member of the organisation as he is merely an account-holder. In para 6 of the reply, the Co-operative Bank, respondent No. 2 has admitted the attachment of the shop as well as the house of the petitioner and also the sale of goods and has further admitted that the goods were sold through public auction and that the Bank was authorised to proceed against the petitioner under Section 74 of the Act since as a member of the Bank, the petitioner took part in the management and business of the respondent-Bank.