{"id":271403,"date":"2010-06-08T00:00:00","date_gmt":"2010-06-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-tejas-constructions-vs-mr-vandan-kohade-on-8-june-2010-2"},"modified":"2016-09-10T06:21:19","modified_gmt":"2016-09-10T00:51:19","slug":"ms-tejas-constructions-vs-mr-vandan-kohade-on-8-june-2010-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-tejas-constructions-vs-mr-vandan-kohade-on-8-june-2010-2","title":{"rendered":"M\/S. Tejas Constructions vs Mr. Vandan Kohade on 8 June, 2010"},"content":{"rendered":"
Bombay High Court<\/div>\n
M\/S. Tejas Constructions vs Mr. Vandan Kohade on 8 June, 2010<\/div>\n
Bench: R. M. Borde<\/div>\n
     wp183.00.odt                                                     \n                                                                                                                                  \n                                                                                                                                   1  \/  7 \n\n\n\n                             IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n                                      NAGPUR BENCH AT NAGPUR.\n\n\n\n\n                                                                                                                         \n                                            WRIT PETITION NO. 183 OF 2000\n                                                        WITH\n                                            WRIT PETITION NO. 815 OF 2000\n\n\n\n\n                                                                                         \n    W. P. NO. 183 OF 2000:\n\n\n\n\n                                                                                        \n               M\/s. Tejas Constructions,\n               a registered partnership firm carrying\n               on the business as Contractor at Chalisgaon,\n               Tq. Chalisgaon, Distt. Jalgaon\n               through partner Ramesh Mangilalji Agrawal,\n               aged 57 yrs., Occp. Business, R\/o Chalisgaon,\n\n\n\n\n                                                                   \n               Tq. Chalisgaon, Distt. Jalgaon.              ::                                           PETITIONER\n\n                        -: Versus :-\n                                         \n          1. Mr. Vandan Kohade, \n             Advocate & Authorised Enquiry Officer\n                                        \n             appointed under Sec. 88 of Mah. State\n             Co-op. Societies Act<\/a>, 1960 in the matter\n             of Akola Zilla Sahkari Sakhar Karkhana Ltd.,\n             Akola, R\/o Gupta Marg, Jatharpeth,\n             Akola.\n      \n\n\n          2. The Akola Zilla Sahkari Sakhar Karkhana Ltd.,\n   \n\n\n\n             Civil Lines, Akola.                        ::                                               RESPONDENTS\n\n    W. P. NO. 815 OF 2000:\n\n               ATV Projects India Ltd.,\n\n\n\n\n\n               D-8, M. I. D. C. Street No. 16,\n               Marol Andheri (East),\n               Mumbai - 400 093\n               By Umashankar R. Pande,\n               Adult, Occp. Service                                                 ::                   PETITIONER \n\n\n\n\n\n                        -: Versus :-\n\n         1. Authorised Enquiry Officer,\n            Advocate Mr. Vandan Kohade\n            Adult, Legal Practitioner,\n            R\/o Gupte Marg, Jatharpeth\n            Akola, Tq. & Distt. Akola.\n\n         2. Akola Zilla Sahakari Sakhar Karkhana \n            Maryadit, at post Vizora, Tq. Barshitakli,\n            Distt. Akola.\n\n\n\n\n                                                                                         ::: Downloaded on - 09\/06\/2013 15:59:25 :::\n      wp183.00.odt                                                     \n                                                                                                                                  \n                                                                                                                                   2  \/  7 \n\n\n\n         3. Sugar Commissioner,\n            Office of Sugar Commissioner,\n            Maharashtra State,\n\n\n\n\n                                                                                                                         \n            Pune - 42.                                                              ::           RESPONDENTS\n\n         ------------------------------------------------------------------------------------------------------------\n\n\n\n\n                                                                                        \n                              Shri R. S. Agrawal,  Advocate for the petitioner.\n                                Mr. D. B. Patel, A. G. P. for respondent No. 1.\n         Smt. I. L. Bodade, Adv. with Mr. Gopal Mishra, Advocate for respondent No. 2.\n         ------------------------------------------------------------------------------------------------------------\n\n\n\n\n                                                                                       \n                                                                    CORAM:  R. M. BORDE, J.\n<\/pre>\n
                                                                    DATE   :   8th  June, 2010.\n<\/p>\n
    Oral Judgment <\/p>\n
    1.<\/p>\n
                        Heard the respective Counsel appearing for the parties.\n<\/p>\n
    2.                  The petitioners  herein are challenging the order passed by Authorised <\/p>\n
    Enquiry   Officer   dated   25\/12\/1999   thereby   directing   to   conduct   enquiry   as <\/p>\n
    contemplated   by   Section   88   of   the   Maharashtra   Cooperative   Societies   Act,   1960 <\/p>\n
    (hereinafter referred to as “the Act”).  The Enquiry Officer by rendering the impugned <\/p>\n
    order   has   turned   down   the   application   presented   by   the   petitioners   objecting   for <\/p>\n
    continuing   with   an   enquiry   as   contemplated   under   Section   88<\/a>   of   the   Act.       The <\/p>\n
    petitioner in writ petition No. 183 of 2000 is a firm entrusted with the contract of <\/p>\n
    erection of the sugar factory whereas the petitioner in writ petition No. 815 of 2000 is <\/p>\n
    a Company dealing with supply of machinery and equipments to respondent No. 2.  It <\/p>\n
    is needless to go into the factual aspects of the matter in this case, however, it will be <\/p>\n
    suffice to note that the authorities of the Cooperative Department thought it fit   to <\/p>\n
    initiate an enquiry as contemplated under Section 88<\/a> of the Act against the office <\/p>\n
    bearers of the sugar factory. The Enquiry Officer  was also of the opinion that the <\/p>\n
    petitioners herein who were entrusted with the contract in respect of erection of the <\/p>\n
    factory   or   supply   of   necessary   plant   and     equipments   to   the   factory   were   also <\/p>\n
    responsible   for   certain   misdeeds.     The   enquiry   initiated   by   the   authorities   of   the <\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span>
\n      wp183.00.odt                                                     <\/p>\n
                                                                                                                                   3  \/  7 <\/p>\n
    Cooperative Department by taking recourse to Section 88<\/a> of the Act is on the basis of <\/p>\n
    preliminary enquiry conducted under Section 83<\/a> of the Act.  The report submitted by <\/p>\n
    the authorities of the Department after holding an enquiry under Section 83<\/a> of the <\/p>\n
    Act is stated to be a basis for initiation of the enquiry proceedings under Section 88<\/a> of <\/p>\n
    the Act.    The petitioners  herein  have  objected  for   continuation  of  enquiry  against <\/p>\n
    them on the ground that they cannot  be proceeded with and also cannot  be held <\/p>\n
    responsible for any act or omission alleged against them in an enquiry initiated under <\/p>\n
    Section 88<\/a> of the Act.   The petitioners contend that they are either the contractors <\/p>\n
    appointed   by   the   office   bearers   of   the   factory   or   the   supplier   of   machinery   in <\/p>\n
    pursuance of the order placed on behalf of the society.   The petitioners herein have <\/p>\n
    no role to play the management or the conduct of business of the specified society.  It <\/p>\n
    is contended that the scope of enquiry under Section 88<\/a> of the Act is totally different <\/p>\n
    and the enquiry can be initiated only as against the past or present office bearers of <\/p>\n
    the   society   or   against   the   persons   who   have   taken   part   in   the   organization   or <\/p>\n
    management of the society.  It is the contention of the petitioners that they are not <\/p>\n
    the persons who have taken any part in the organization or the management of the <\/p>\n
    society  and as such they cannot  be  held responsible  to answer  the charges  in the <\/p>\n
    enquiry initiated under Section 88<\/a> of the Act.\n<\/p>\n
    3.                  It would be appropriate to refer to the provisions of Section 88 of the <\/p>\n
    Maharashtra Co-operative Societies Act, 1960 and the same is quoted as under:\n<\/p>\n
                        “88.  Power   of   Registrar   to   assess   damages   against   delinquent
\n                        promoters, etc.
\n                                       (1)   Where, in the course of or as a result of an audit under
\n                        section 81<\/a> or an inquiry under section 83<\/a> or an inspection under section
\n                        84<\/a> or the winding up of a society, the Registrar is satisfied on the basis
\n                        of the  report made  by the  auditor  or  the person authorised  to make
\n                        inquiry under section 83<\/a> or the person authorised to inspect the books
\n                        under section 84<\/a> or or the Liquidator under section 105<\/a> or otherwise  <\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span>
\n      wp183.00.odt                                                     <\/p>\n
                                                                                                                                   4  \/  7 <\/p>\n
                        that   any   person   who   has   taken   any   part   in   the   organization   or
\n                        management of the society or any deceased, or past or present officer of  <\/p>\n
                        the   society   has,   within   a   period   of   five   years   prior   to   the   date   of
\n                        commencement of such audit or date of order for inquiry, inspection or  <\/p>\n
                        winding up, misapplied or retained, or become liable or accountable for,
\n                        any money or property of the society, or has been guilty of misfeasance
\n                        or breach of trust in relation to the society, the Registrar or a person  <\/p>\n
                        authorised by him in that behalf may frame charges against such person
\n                        or   persons,   and   after   giving   a   reasonable   opportunity   to   the   person
\n                        concerned and in the case of a deceased person to his representative who  <\/p>\n
                        inherits his estate, to answer the charge, make an order requiring him
\n                        to repay  or  restore  the   money  or  property  or  any   part   thereof,  with  <\/p>\n
                        interest at such rate as the Registrar or the person authorised under this
\n                        section may determine, or to contribute such sum to the assets of the <\/p>\n
                        society   by   way   of   compensation   in   regard   to   the   misapplication,
\n                        retention, misfeasance or breach of trust, as he may determine.\n<\/p><\/blockquote>\n
                                (2)   The Registrar or the person authorised under sub-section (1)
\n                        in making  any order  under this section,  may provide therein for   the  <\/p>\n
                        payment of the cost or any part thereof, as he thinks just, and he may  <\/p>\n
                        direct that such costs or any part thereof shall be recovered from the
\n                        person against whom the order has been issued.\n<\/p><\/blockquote>\n
                             (3) This section shall apply, notwithstanding that the act is one for  <\/p>\n
                                   which the person concerned my be criminally responsible.”<\/p><\/blockquote>\n
                        The enquiry under Section 88<\/a> can be initiated on the basis of audit under <\/p>\n
    Section 81<\/a> or an enquiry under section 83<\/a> or an inspection under section 84<\/a> or the <\/p>\n
    winding up of a society.  Section 83<\/a> of the Act contemplates preliminary enquiry by <\/p>\n
    the Registrar in respect of constitution, working and financial conditions of a society.\n<\/p>\n
    An enquiry under Section 83<\/a> of the Act is essentially directed against the persons who <\/p>\n
    are in-charge of the management of the society.   So also, audit under Section 81<\/a> of <\/p>\n
    the   Act   or   an   inspection   of   accounts   under   Section   84<\/a>   of   the   Act   is   essential   for <\/p>\n
    determining   the   legality   or   otherwise   of   the   transaction   of   the   society   or   the <\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span>
\n      wp183.00.odt                                                     <\/p>\n
                                                                                                                                   5  \/  7 <\/p>\n
    constitution and functioning of the society.  Thus, on perusal of relevant provisions of <\/p>\n
    the   Act,   it   can   be   said   that   the   powers   invested   with   the   Registrar   to   assess   the <\/p>\n
    damages   against   the   delinquents\/promoters   conferred   by   Section   88<\/a>   is   essentially <\/p>\n
    required to be invoked as against the persons who have taken part in the organization <\/p>\n
    or   management   of   the   society   and   not   against   the   strangers   or   the   contractors, <\/p>\n
    architects   or   others     who   are   entrusted   certain   job   work   or   contract   work   by   the <\/p>\n
    society.  On bare perusal of Section 88<\/a> of the Act it reveals that the petitioners, who <\/p>\n
    are   not   concerned   with   the   management   or   who   have   not   taken   any   part   in   the <\/p>\n
    society, cannot be held responsible in an enquiry under Section 88<\/a> of the Act.\n<\/p>\n
    4.<\/p>\n
                        Reliance can be placed on reported judgment in the matter of  Shriram <\/p>\n
    Dhonduji Raut Vs. Bahu Uddesiya Sahakari Sanstha, Virsi & others reported in 2003 <\/p>\n
    (4) ALL MR 1121.     In the reported matter some financial liability was determined <\/p>\n
    against   the  petitioner   by   the   Cooperative   Appellate   Court   dealing   with   the   appeal <\/p>\n
    raising exception to the order passed under Section 91<\/a> of the Act by the Cooperative <\/p>\n
    Court.  The petitioner in the reported matter was Manager of the society and in the <\/p>\n
    audit conducted by the officials of the Department some discrepancy in the stock was <\/p>\n
    revealed   and   the   management,     therefore,   proceeded   against   the   Manager.   The <\/p>\n
    Cooperative   Court   came   to   the   conclusion   that   the   petitioner   was   not   responsible <\/p>\n
    whereas   the   Appellate   Court   on   consideration   of   the   appeal   presented   by   the <\/p>\n
    Management held that the petitioner was   responsible for the shortage and thereby <\/p>\n
    allowed the appeal.   The argument was advanced by the petitioner in the reported <\/p>\n
    matter that the provisions of Section 91<\/a> of the Act would not have applicability and <\/p>\n
    the dispute could not have been entertained and the proper remedy available to the <\/p>\n
    society  was to proceed against the Manager by taking recourse to Section 88<\/a> of the <\/p>\n
    Act.  While dealing with the challenge raised in the petition this Court has held that <\/p>\n
    the provisions of Section 88<\/a> of the Act cannot be invoked against the Manager and the <\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span>
\n      wp183.00.odt                                                     <\/p>\n
                                                                                                                                   6  \/  7 <\/p>\n
    same   are   required   to   be   invoked   essentially   against   the   office   bearers   who   are <\/p>\n
    entrusted with the task of administering the management of the society.  This Court <\/p>\n
    has observed in paragraph 8 of the reported Judgment as under:\n<\/p>\n
                        “…….Therefore,   applying   the   above   observations   to   the   facts   of   the
\n                        present case, I am of view that the petitioner who was placed in charge
\n                        of one   of  the   cloth   shops   of  the  society  was   not  a  person  who  was  <\/p>\n
                        empowered to give directions in regard to the business of such society.
\n                        Directions in regard to the business of such society normally emanate
\n                        from the Managing Committee of the society or an officer empowered  <\/p>\n
                        to give such direction.   The directions contemplated are directions in
\n                        regard   to   the   business   of   the   “society”   and   not   merely   directions,  <\/p>\n
                        therefore,   would   be   in   regard   to   the   manner   in   which   the   society
\n                        should do its business, etcetera and not merely the selling of cloth in  <\/p>\n
                        one of the shops of the society.  In fact, the petitioner in his deposition
\n                        stated that he was  appointed as a salesman and was working  as a
\n                        salesman in the branch at Shenduwafa.   That the goods in his shop
\n                        were purchased by the President and Manager of the head office and  <\/p>\n
                        salesman   of   the   head   office.     From   the   above,   it   is   clear   that   the  <\/p>\n
                        petitioner   had   nothing   to   do   with   giving   directions   regarding   the
\n                        business of the society.  The submission on behalf of the petitioner that
\n                        the subject matter was capable of being inquired into under section 88<\/a>  <\/p>\n
                        is not tenable.  Section  88<\/a>, in my view, is not attracted to the facts of
\n                        the preset case at all….”\n<\/p><\/blockquote>\n
    5.                  In  the instant   matter  also the petitioners  were  not  entrusted  with the <\/p>\n
    functions either of the organization or management  of the society.    The nature  of <\/p>\n
    function carried out by the petitioners gives rise to contractual relationship.  If at all, <\/p>\n
    there is any breach of the terms of the contract,  the petitioners  can be proceeded <\/p>\n
    against by the Management and claim in the nature of recovery of damages can be <\/p>\n
    lodged   against   them.     However,   the   petitioners   who   have   nothing   to  do   with   the <\/p>\n
    management   of   the   society,   cannot   be   proceeded   in   any   enquiry   by   invoking <\/p>\n
    provisions of Section 88<\/a> of the Act.\n<\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span><\/p>\n
      wp183.00.odt                                                     <\/p>\n
                                                                                                                                   7  \/  7 <\/p>\n
    6.                  For the reasons stated above, I am of the view that the impugned order <\/p>\n
    dated 25\/12\/1999 passed by the Authorised Enquiry Officer is illegal and liable to be <\/p>\n
    quashed and set aside and the same is accordingly quashed and set aside.  It is hereby <\/p>\n
    declared that the petitioners cannot be proceeded against in an enquiry under Section <\/p>\n
    88<\/a> of the Act. Both the petitions  are allowed.    Rule is accordingly  made absolute.\n<\/p>\n
    However, in the facts and circumstances  of the case, there shall be no order  as to <\/p>\n
    costs.\n<\/p>\n
                                                                                                          JUDGE<\/p>\n
    wwl<\/p>\n
                                                                                         ::: Downloaded on – 09\/06\/2013 15:59:25 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court M\/S. Tejas Constructions vs Mr. Vandan Kohade on 8 June, 2010 Bench: R. M. Borde wp183.00.odt 1 \/ 7 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH AT NAGPUR. WRIT PETITION NO. 183 OF 2000 WITH WRIT PETITION NO. 815 OF 2000 W. P. NO. 183 OF 2000: M\/s. Tejas […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-271403","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nM\/S. 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