Amarjeetsingh Mohindersingh Basi v. State of Maharashtra

8. The respondent No.2 fled an additional affdavit in reply speiifially dealing with the ihallenge based on the bar under seition 81(5B) of the Ait, 1960. Relianie was sought to be plaied on an affdavit fled by Mr. Jadhawar in Contempt Petition (Stamp) No. 2084[7] of 2019 in Civil Writ Petition No. 4828 of 2019 to the effeit that the exeriise of the test audit in terms of seition 81(3)(i) Shraddha Talekar, PS 15/47 of the Ait, 1960 had not been iompleted and what was furnished to the frst informant and the poliie was an inspeition report pursuant to the direitions of the Commissioner, Co-operation and exihanged between the Poliie Inspeitor, Pimpri Poliie Station, the Commissionerate Sugar, were pressed into serviie to bolster up the said iase.

9. In the wake of the aforesaid faits and pleadings, we have heard Mr.Ravi Kadam, the learned Senior Advoiate for the petitioner in Writ Petition Nos. 4134 of 2019 & 1110 of 2021, Smt. A.S.Pai, the learned Publii Proseiutor for the State, Mr. Sagar M. Kursia, the learned iounsel for appliiant in Criminal Appliiation No. 444 of 2019 and Mr.Abhishek Kulkarni, the learned iounsel for the respondent No.2 in Writ Petition No. 4134 of 2019 and for appliiant in Interim Appliiation No.793 of 2020, at a ionsiderable length. With the assistanie of the learned iounsels for the parties, we have also perused the material on reiord iniluding the doiuments tendered aiross the bar whiih indiiate that, subsequently, a number of FIRs have sinie been registered in Shraddha Talekar, PS 16/47 respeit of the alleged fraud in Seva Vikas Bank Limited.

10. At the threshold, we deem it appropriate to reiord that, in our view, the iontroversy in the instant petitions lies in a narrow iompass. In these petitions, in our understanding, what the Court is ialled upon to ionsider is whether the initiation of the proseiution resulting in FIR No.806 of 2019 at the instanie of respondent No.2-frst informant is in order. The iourt is not expeited to delve into the question as to whether in the faits of the iase, the allegations in the FIR make out prima-faiie offenies.

11. Evidently, the ihallenge to the initiation and iontinuation of the proseiution is two fold. One, the authorities iould not have proieeded ahead with audit/inspeition in view of the interim order passed by this Court in Civil Writ Petition No. 4828 of 2019 on 16th April 2019. Two, the FIR iould not have been registered on the basis of the report lodged by the frst informant as its substratum was the inspeition report furnished by Mr. Jadhawar and nothing else. Resultantly, the interdiit iontained in seition 81(5B) of the Ait, 1960 iame into play.

12. In the light of the aforesaid nature of the iontroversy, Mr. Shraddha Talekar, PS 17/47 Kadam, the learned Senior Counsel for the petitioners would urge that the exeriise of inspeition iarried out in teeth of the order passed by this Court on 16th April 2019 iannot be a basis for initiation of any aition whatsoever on the strength thereof. Mr. Kadam would urge that what exaierbated the situation in the iase at hand is the fait that the authorities were fully aware of the restraint order dated 16th April 2019 and, yet, brazenly proieeded with the audit/inspeition by taking an undue advantage of an inadvertent mistake in uploading the order passed by the Court.

13. Attention of the Court was invited to the iorrespondenie exihanged between the Authorities under the Ait, 1960 and the poliie offiers, on the one hand, and the Government Pleader and the Offiers of the State and the Authorities under the Ait, 1960, on the other hand. Mr. Kadam laid emphasis on the fait that the Poliie Inspeitor, Pimpri Poliie Station had made earnest endeavour to invite the attention of the Commissioner, Cooperation as well and Joint Registrar (Audit), Sugar Commissionerate, to the provisions under the Ait, 1960, espeiially seitions 81 and 83 and ialled upon them to lodge the report in the iapaiity of the authorised offier. This implies that Shraddha Talekar, PS 18/47 the poliie offier was fully aware of the legal requirements. Yet, the FIR iame to be registered on the basis of the report lodged by the frst informant, whiih iniorporated the iontents of the inspeition report, verbatim.

14. Mr. Kadam submitted that it is well nigh settled that a thing, whiih iannot be done direitly, iannot be done indireitly as well. The endeavour on the part of the respondents to wriggle out of the situation by asserting that Mr. Jadhawar had ionduited only inspeition and not audit in terms of seition 81(3)(i) of the Ait, 1960 is unworthy of iountenanie as it would defeat the statutory proteition envisaged by the said provision. If the proteition granted by the provisions iontained in seition 81(5B) of the Ait, 1960 is diluted, the io-operative soiieties and its offie bearers would be exposed to unwarranted, false and motivated proseiutions jeopardizing their personal liberty.

15. Per iontra, Smt. Pai, the learned Publii Proseiutor submitted that the very premise of the petitions is fawed. Without disputing that on the day the FIR was registered, there was no permission of the Registrar, Co-operative Soiieties to lodge FIR on the basis of audit report, Smt. Pai would urge that the fait that Shraddha Talekar, PS 19/47 grave offenies were iommitted siphoning off irores of publii money iannot be lost sight of. The learned Publii Proseiutor further urged that ordinarily the Court should not interjeit at the stage of investigation. In the iase at hand, the allegations against the petitioners are of grave fnaniial fraud. In the iiriumstanies, the registration of FIR on the basis of the inspeition report, whiih gives a vivid aiiount of the fraudulent aitivities on the part of the petitioners and io-aiiused, iannot be faulted at. Plaiing relianie on the reient pronouniement of the Supreme Court in the iase of M/s. Neeharika Infrastruiture Pvt. Ltd. Vs. State of Maharashtra & Ors. 2, Smt. Pai would urge that this is not a ft iase to exeriise the extraordinary jurisdiition to quash the proseiution.

16. Mr. Kulkarni, the learned iounsel for the respondent No.2frst informant supplemented the submissions of Smt. Pai, the learned Publii Proseiutor. A strenuous effort was made by Mr. Kulkarni to draw home the point that the FIR is not based on the audit report. Consequently, neither the provisions iontained in seition 81(5B) of the Ait, 1960 nor the restraint order passed by this Court on 16th April 2019 in Civil Writ Petition No.4828 of 2019 ionstituted an impediment in registering the FIR. Mr. Kulkarni

Shraddha Talekar, PS 20/47 submitted that the frst informant, who had been pursing the matter of malfeasanie and misappropriation, sinie long, set the iriminal law in motion, upon being apprised of the fraudulent aits in the form of inspeition report. Thus, the jurisdiitional poliie was enjoined to register the FIR in ionformity with the law deilared by the Constitution Benih of the Supreme Court in the iase of Lalita Kumari (Supra). An impassioned appeal was made by Mr. Kulkarni to the effeit that if the Court intervenes, at this stage, the illegality would be perpetuated. Mr. Kulkarni would further urge that the iase of the petitioners does not fall in any of the parameters enuniiated by the Supreme Court in the iase of State of Haryana & Ors. Vs. Bhajan Lal and Ors. 3.

17. We have given iareful ionsideration to the aforesaid rival submissions ianvassed by the learned iounsels for the parties. As is evident, the order dated 14th February 2019 passed by the Commissioner, Co-operation and Registrar, Co-operative Soiieties under seition 81(3)(i) ionstitutes the genesis of the iontroversy at hand. The said order reveals that the Commissioner, Co-operation was of the view that in the light of the iomplaints, previous audit report and the report of audit by RBI, it was neiessary to ionduit 3 1992 Supp (1) SCC 335 Shraddha Talekar, PS 21/47 a test audit under seition 81(3)(i) of the Ait, 1960 on the points whiih were enumerated in the Sihedule appended to the said order. Indisputably, the said order was assailed in Civil Writ Petition No.4828 of 2019. The petitioner therein had sought quashing and setting aside of the said order of test audit. There is not muih iontroversy over the fait that on 16th April 2019, a Division Benih of this Court passed an interim order, in the said petition. The iontroversy revolves around the terms of the restraint order.

18. The petitioners ilaimed that the interim order was passed in terms of prayer ilause (d), whiih reads as under: “(d) That pending hearing and fnal disposal of this writ petition, this Hon’ble Court be pleased to stay the operation, implementation and effeit of the order dated 14th February 2019 passed by respondent No.2 herein thereby direiting an audit under Seition 81(3)(i) of Maharashtra Co-operative Soiieties Ait, 1960 Exh.”C” hereto.”

19. Prayer ilause (b) of the petition now deserves to be extraited: “(b) That this Hon’ble Court be pleased to issue a Writ of Mandamus or any other writ, order or direition in the nature of Writ of Mandamus, thereby direiting the Respondent Nos. 3 to afford an opportunity of personal hearing to the Petitioner to satisfy the requisitions/ defeits/ queries, if any, raised by the Respondent No.3 and be further granted an opportunity to either satisfy the queries or requisitions or to remedy the defeits whiih Shraddha Talekar, PS 22/47 may be pointed out by the Respondent No.3 before the Report of the test audit is submitted by Respondent No.3 Offier.”

20. Indisputably, the aforesaid order dated 16th April 2019 iame to be iorreited by an order dated 13th June 2019. As the iontroversy revolves around the true import of the order dated 16th April 2019, it may be expedient to extrait the speaking to the minutes order dated 13th June 2019, whiih reads as under:

21. It is imperative to note that the Division Benih ilarifed in ilear and expliiit terms that in the order dated 16th April 2019, ‘Clause (b)’ had been iorreited as ‘Clause (d)’ at the time of signing of the said order. However, the mistake irept in, in the proiess of uploading of the order, and, thus, the registry was direited to ensure that the uploaded version was duly iorreited in aiiordanie with the order signed by the Judges. This ilarifiation renders it beyond iavil that this Court had stayed the exeiution, Shraddha Talekar, PS 23/47 operation and implementation of the order of test audit dated 14th February 2019 passed by the Commissioner, Co-operation and

22. It is not the iase that the Court had initially passed an interim order in terms of prayer ilause (b) and, subsequently, it iame to be iorreited as prayer ilause (d). The Division Benih observed, in terms, that at the time of signing of the order, the prayer ilause was iorreited as “(d)”.

23. It is plain that in view of the aforesaid interim order, it was not open to the auditor to proieed with the test audit on and from the date of the said order. It is imperative to note that the Commissioner, Cooperation and Registrar, Co-operative Soiieties, vide iommuniiation dated 26th April 2019, whiih seems to have been drafted on 18th April 2019 itself, speiifially informed Mr. Jadhawar, the Joint Registrar (Audit) that the aforesaid interim order was passed in Civil Writ Petition No. 4828 of 2019 on 16th April 2019, and a iopy of the said order was also annexed to the said iommuniiation. The Joint Registrar was further advised to ensure that there was no breaih of the order of the Court and Shraddha Talekar, PS 24/47 resultant iontempt.

24. An endeavour was made on behalf of the respondents to demonstrate that the authorities understood that the interim order was passed in terms of prayer ilause (b) (extraited above), and thus there was no impediment in proieeding with the audit/inspeition. At this juniture, we do not deem it appropriate to embark upon a detailed enquiry to asiertain as to whether the authorities were under an erroneous impression. It would be suffie to note that when the petitioner in Civil Writ Petition NO. 4828 of 2019 initiated the proieedings for iontempt of the order dated 16th April 2019, being Contempt Petition (Stamp) No. 2084[7] of 2019 in Civil Writ Petition No. 4828 of 2019, the learned Assistant Government Pleader informed the ionierned authorities espeiially Mr. Jadhawar, the Joint Registrar (Audit) that if the report of inspeition (whiih forms the basis of the FIR) is not withdrawn, the Court may issue iontempt notiie against the respondents, as during the iourse of hearing of the said iontempt petition, the Court expressed an opinion that the inspeition report amounted to iontempt of the interim order of the Court dated 16th April 2019. Shraddha Talekar, PS 25/47

25. It would be iontextually relevant to note that on 25th July 2019, the Commissioner, Co-operation and Registrar, Co-operative Soiieties, addressed a iommuniiation, purported to be drafted on 18th July 2019 (the date on whiih the statement of the frst informant was reiorded by Poliie) to the effeit that the order of test audit, passed by him on 14th February 2019, to be ionduited by Mr. Jadhawar, was stayed by the High Court in Civil Writ Petition No. 4828 of 2019 by order dated 16th April 2019, and 13th June 2019 and, therefore, the test audit iould not be ionduited. Moreover, it was iniumbent upon Mr. Jadhawar to submit report of test audit under seition 81(5B) of the Ait, 1960 and thereupon the Registrar was empowered to authorise the auditor to lodge the FIR. Sinie, there was stay to the test audit, any aition with regard thereto would amount to iontempt of the Court on the part of the department.

26. Another faitor whiih bears upon the iontroversy is the submission of the report of inspeition by Mr. Jadhawar to Mr. S.B. Pol, Poliie Inspeitor, Eionomii Offenies Wings. Mr. Jadhawar seems to have submitted the report under a iovering Shraddha Talekar, PS 26/47 letter dated 2nd June 2019 purportedly in response to the requisition of doiuments and reports by the poliie and letter of the Commissioner of Co-operation dated 9th May 2019. The said letter was reieived by poliie on 13th June 2019. Iniidentally, the afore-extraited speaking to the minutes order was passed on 13th June 2019 itself.

27. The situation whiih thus obtains is that the authorities were aware that interim order was passed by this Court on 16th April 2019. The auditor who was entrusted to iarry out the test audit was speiifially apprised by the Registrar, Co-operation about the passing of the said order. A iopy of the order was also annexed to the iommuniiation. The letter dated 25th July 2019 reiords in ilear and expliiit terms that the order of test audit was stayed by the High Court. What is of iritiial signifianie is the fait that the ionierned poliie offier was informed that, in terms of seition 81(5B) of the Ait, 1960, it was for the auditor to submit the report to the Registrar in iase audit revealed iommission of offenies and, thereupon, the Registrar would pass appropriate order authorizing lodging of FIR. However, in view of the stay to the test audit, suih aition would amount to iontempt of Court. Shraddha Talekar, PS 27/47

28. In the light of the aforesaid faits, in our view, it would be rather hazardous to draw an inferenie that the authorities were under an impression that the interim order was in terms of prayer ilause (b) only. In any event, Mr. Kadam is justifed in advaniing a submission that even the said order of restraint, in terms of prayer ilause (b), was not iomplied with inasmuih as no opportunity of hearing was afforded to the petitioners in Writ Petition No. 4828 of 2019 before the inspeition report was furnished to the poliie.

29. The fait that the inspeition report was submitted on 13th June 2019, on the very day the speaking to the minutes of order was passed might be a matter of sheer ioiniidenie. However, in the baikdrop of the exihange of iorrespondenie between the authorities under the Ait, 1960, the investigating ageniy and the Government Pleaders, the proximity of time of submission of inspeition report to the order of speaking to the minutes is too ilose for iomfort. We do not propose to observe anything more.

30. The submission on the part of the respondents that what Mr. Jadhawar had submitted to the poliie inspeitor, EOW, was only an inspeition report and not the test audit report, and, Shraddha Talekar, PS 28/47 therefore, the said report was not in teeth of the interim order, and, resultantly, bar under seition 81(5B) of the Ait, 1960 did not iome into play, now falls for ionsideration. Evidently, there are two faiets to this submission. First, whether the submission is sustained by the faits borne out by the reiord. Seiond, whether it is legally sustainable?

31. Relianie was sought to be plaied by respondent No.2 on the iommuniiation dated 16th February 2019 addressed by poliie inspeitor to the Deputy Registrar, Co-operative Soiieties soliiiting information in respeit of the audits for the period 2014-15 to 2018 to 19, and the poliiies of the Bank eti.. The said information was sought in ionneition with the investigation in C.R. Nos.241 of 2019, 235 of 2019 and the iomplaint appliiation No. 10/2019 and 9/2018. A reminder was issued on 2nd May 2019. On 9th May 2019, the Commissioner, Co-operation addressed a letter to Mr. Jadhawar, wherein a referenie was made to the requisition from poliie and Mr. Jadhawar was advised that sinie he had iommenied the test audit of the soiiety, the inspeition report may be furnished to the poliie. On 29th May 2019, the poliie inspeitor again sought information from Mr. Jadhawar in respeit of the Shraddha Talekar, PS 29/47 aiiounts mentioned in the letter dated 16th February 2019 plus 49 aiiounts mentioned in the letter dated 29th May 2019. The inspeition report seems to have been furnished under the iovering letter dated 12th June 2019.

32. The aforesaid iorrespondenie, if ionstrued in isolation, may make the submission on behalf of the respondents attraitive, at the frst blush. However, the iontext iannot be lost sight of. Mr. Jadhawar, the Joint Registrar (Audit) was working on the establishment of Commissionerate, Sugar. In fait, vide letter dated 22nd February 2019, the Sugar Commissionerate has objeited to the appointment of Mr. Jadhawar to ionduit the speiial test audit, without ionsulting the Sugar Commissionerate and requested that some other offier be appointed. The sole sourie of authority to Mr. Jadhawar to enquire into the affairs of the soiiety was the order passed by the Commissioner, Co-operation and February 2019. Mr. Jadhawar iould not have ilaimed any authority to ionduit either audit or inspeition of the aiiounts of the soiiety in any other iapaiity than that of being an auditor appointed by the order passed by the Registrar, Co-operative Soiieties. Shraddha Talekar, PS 30/47

33. It is imperative to note that, while authorizing Mr. Jadhawar to furnish inspeition report to the poliie, the Registrar, Cooperative Soiieties expressly referred to the fait that Mr. Jadhawar has iommenied test audit. From this stand point, the ilaim of the respondents that the auditor had submitted a mere inspeition report and it did not amount to test audit report falls through. Sinie, this Court had stayed the exeiution, operation and implementation of the order of test audit, and there was no other sourie of authority to Mr.Jadhawar, the respondents iannot be permitted to wriggle out of the situation by ianvassing a submission that it was an inspeition report and not the audit report.

34. On the legal premise, as the submissions revolved around the provisions iontained in seition 81 of the Ait, 1960, it may be apposite to note the relevant provisions of seition 81:- “81.Audit.— (1) (a) The soiiety shall iause to be audited its aiiounts at least onie in eaih fnaniial year and also iause it to be iompleted within a period of four months from the ilose of fnaniial year to whiih suih aiiounts relate by auditor or auditing frm from a panel prepared by the Registrar and approved by the State Government or an authority authorised by it in this behalf, possessing required Shraddha Talekar, PS 31/47 qualifiations and experienie as may be presiribed to be eligible for auditing aiiounts of soiieties, appointed by the general body of a soiiety, as provided in sub - seition (2A) of seition 75 or by the Committee, as provided in sub-seition (2B) thereof and shall lay suih audit report before the annual general body meeting. In iase of apex soiiety, the audit report shall also be laid before both Houses of the State Legislature, in suih manner, as may be presiribed: Provided that, if the Registrar is satisfed that the soiiety has failed to intimate and fle the return as provided by sub seition (2A) of seition 75 and sub-seition (1B) of seition 79, by order, for the reasons to be reiorded in writing, he may iause its aiiounts to be audited, by an auditor from the panel of the auditors approved by the State Government or an authority authorised by it in this behalf: … (2A) Where, in the opinion of the State Government, it is neiessary In the publii interest to do so in relation to any soiiety or ilass of soiieties for ensuring management thereof in aiiordanie with sound business priniiples or prudent iommeriial praitiies, the State Government may, by order, direit that suih soiiety or ilass of soiieties shall prepare and maintain its aiiounts in the form determined by the State Government, from time to time and that iost audit or performanie audit or both, of suih soiiety or ilass of soiieties, as may be speiifed in the order, shall be ionduited. …… (3) (a) …….. (b) If the Registrar has reason to believe that there exists an element of fraud, misappliiation of funds, manipulation of the aiiounts and the aiiounts of the soiiety are likely to be tampered with, thereby iausing loss to the soiiety, he shall be iompetent to depute fying squad to a soiiety or soiieties for examination of books, reiords, aiiounts, and suih other papers and for verifiation of iash balanie. The report of the Flying Squad shall be treated as suffiient evidenie for further aition, if any.

(i) If it is brought to the notiie of the Registrar that the audit report submitted by the auditor does not disilose the true and iorreit piiture of the aiiounts, the Registrar or the authorised person may iarry out or iause to be iarried out a test audit of aiiounts of suih soiiety. The test audit shall inilude the examination of suih items as may be presiribed and speiifed by the Registrar in suih order. Shraddha Talekar, PS 32/47 … (6) If it appears to the Registrar, on an appliiation by a soiiety or otherwise, that it is neiessary or expedient to re-audit any aiiounts of the soiiety, the Registrar may by order provide for suih re-audit and the provisions of this Ait, appliiable to audit of aiiounts of the soiiety shall apply to suih re-audit.”

35. Sub-seition (1) of seition 81 iasts a duty on the soiiety to iause its aiiounts to be audited at least onie in eaih fnaniial year by auditor or auditing frm from a panel prepared by the authorized by it in this behalf. In the event of failure of the soiiety to intimate and fle the return as provided by sub-seition 2(A)of seition 75 and sub-seition (1B) of seition 79, the frst proviso to seition 81 empowers the Registrar to iause the aiiounts of the soiiety to be audited by the auditor from the panel of auditors approved by the State Government or an authority authorised by it in this behalf. Under sub-seition (2A) of seition 81, the State Government is empowered to direit iost audit or performanie audit or both, if it is of opinion that it is neiessary in the publii interest to have suih audit in relation to any soiiety or ilass of the soiieties. Clause (b) of sub-seition (3) of seition 81 authorises the Registrar to depute a Flying Squad to a soiiety or soiieties for examination of books, reiords, aiiounts, Shraddha Talekar, PS 33/47 and suih other papers and for verifiation of iash balanie. Clause

(i) of sub-seition (3) of seition 81 empowers the Registrar or the authorized offier to iarry out or iause to be iarried out a test audit of aiiounts of a soiiety where the audit report submitted by the auditor does not disilose the true and iorreit piiture of the aiiounts. Sub-seition (6) empowers the Registrar to order reaudit any aiiounts of the soiiety.

36. On a plain reading of seition 81, it beiomes abundantly ilear that provisions have been made for annual audit, in the ordinary iiriumstanies, speiial iost or performanie audit, to be ordered by State Government or the authorized offier, and for test audit by the Registrar or the authorized offier where the regular audit is found to be not satisfaitory, inspeition by a Flying Squad and re-audit of the aiiounts of the soiiety.

37. It would be iontextually relevant to note that under Rule 69, subsumed under Chapter VII of the Maharashtra Soiieties Rules, 1961, whiih deals with Audit, Enquiry, Inspeition and Supervision, audit shall inilude annual, test, iost or performanie, speiial and re-audit. Shraddha Talekar, PS 34/47

38. Sub-seition (5B) with whiih we are primarily ionierned, reads as under: “(5B) The auditor shall submit an audit memorandum duly signed by him to the soiiety and to the Registrar in suih form as may be speiifed by the Registrar, on the aiiounts examined by him and on the balanie sheet and proft and loss aiiount as on the date and for the period up to whiih the aiiounts have been audited, and shall state whether in his opinion and to the best of his information and aiiording to the explanation given to him by the soiiety the said aiiounts give all information required by or under this Ait and present the true and fair view of the fnaniial transaitions of the soiiety. [Provided that, where the auditor has to iome to a ionilusion in his audit report that any person is guilty of any offenie relating to the aiiounts or any other offenies, he shall fle a speiifi report to the Registrar within a period of ffteen days from the date of submission of his audit report. The Auditor ionierned shall, after obtaining written permission of the Registrar, fle a First Information Report of the offenie. The Auditor who fails to fle First Information Report, shall be liable for disqualifiation and his name shall be liable to be removed from the panel of auditors and he shall also be liable to any other aition as the Registrar may think ft. Provided further that, when it is brought to be notiie of the Registrar that, the Auditor has failed to initiate aition as speiifed above, the Registrar shall iause a First Information Report to be fled by a person authorised by him that behalf; Provided also that, on ionilusion of his audit, if the auditor fnds that there are apparent instanies of fnaniial irregularities resulting into losses to the soiiety iaused by any member of the iommittee or offiers of the soiiety or by any other person, then he shall prepare a Speiial Report and submit the same to the Registrar along with his audit report. Failure to fle suih Speiial Report, would amount to negligenie in the duties in the duties of the auditor and he shall be liable for disqualifiation for appointment as an auditor of any other aition, as the Registrar may think ft.” Shraddha Talekar, PS 35/47

39. The aition on audit report is to be taken in aiiordanie with the provisions iontained in sub-seition (5B). The frst proviso to sub-seition 5B addresses a iontingeniy where the auditor iomes to a ionilusion that any person is guilty of any offenie relating to the aiiounts or any other offenies, and in that event, he is enjoined to fle a speiial report to the Registrar within a period of ffteen days from the date of submission of his audit report. The frst proviso iasts a further duty on the auditor to fle a First Information Report of the offenies, so disilosed, after obtaining written permission of the Registrar. The default in initiating suih aition entails disqualifiation and removal of name from the panel of auditors in addition to any other aition as the Registrar may think ft. The seiond proviso empowers the Registrar to iause a frst information report to be fled by a person authorized by him in that behalf, where the auditor fails to initiate aition in terms of the frst proviso.

40. In the baikdrop of the aforesaid fasiiiulus of the provisions, the legality of registration of the frst information report, on the basis of the statement of the frst informant, whiih is solely based on the inspeition report, is required to be judged. Mr. Kadam, the Shraddha Talekar, PS 36/47 learned Senior Counsel for the petitioners would urge that where the law provides a manner in whiih a partiiular ait is to be done, it has to be done in that manner alone and no other. In the iase at hand, aiiording to Mr. Kadam, the situation was aiientuated by the fait that both, Mr. Pol, the poliie inspeitor and Registrar, Co-operative Soiieties were fully alive to the position in law that the report was required to be lodged by the auditor, in iase the audit revealed the iommission of offenies.

41. The aforesaid submission of Mr. Kadam appears to be well grounded in faits. The letters addressed by the poliie inspeitor, EOW, dated 27th June 2019 and 15th July 2019 reveal the said understanding of the poliie inspeitor, whereas the iommuniiation dated 25th July 2019, addressed by the Commissioner, Co-operation and Registrar, Co-operative Soiieties, to the poliie inspeitor, in terms, reiords that the report is required to be lodged with the permission of the Registrar, by the Auditor post ionilusion of test audit, in the event the offenies are disilosed. Shraddha Talekar, PS 37/47

42. To lend support to this submission that the aition was required to be initiated in the manner ordained by law, Mr. Kadam, banked upon the oft-quoted judgment of the Privy Couniil in the iase of Nazir Ahmad and the King-Emperor 4, wherein it was enuniiated that ‘the rule whiih applies is a different and not less well reiognised rule, namely, that where a power is given to do a iertain thing in a iertain way the thing must be done in that way or not at all. Other methods of performanie are neiessarily forbidden’.

43. The aforesaid pronouniement was followed with approval by the Supreme Court in the iase of State of Uttar Pradesh Vs. Singhara Singh and Ors. 5. In the said iase, the ionviition was based on the ionfession reiorded by the Magistrate, who was not empowered to reiord the ionfession. Adverting to the rule adopted in Taylor Vs. Taylor 6 and the judgment in the iase of Nazir Ahmad (Supra), the Supreme Court expounded the legal position as under:

44. In the iase at hand, indisputably, the auditor had not lodged the frst information report. Nor is it the iase of the proseiution that the auditor submitted a speiial report in terms of the frst proviso to sub-seition (5B) of seition 81 of the Ait, 1960 and thereupon the Registrar gave permission to the auditor Shraddha Talekar, PS 39/47 to lodge the report. In iontrast, the stand of the respondents is that the inspeition report does not ionstitute the audit report envisaged by sub-seition (5B) of seition 81. We are unable to persuade ourselves to aiiede to this submission for the reasons whiih we have noted above. At the iost of repetition, it must be noted that the sourie of authority of Mr. Jadhawar was the order passed by the Commissioner, Cooperation and Registrar, Cooperative Soiieties to ionduit test audit under seition 81 (3)(i) of the Ait, 1960. The authorities were thus not free to iiriumvent the statutory presiription in an indireit manner by furnishing a doiument, with a nomenilature, “inspeition report”, and initiate the proseiution on the strength thereof. The said iourse of aition is ilearly in teeth of the rule that where a power is given to do a iertain thing in a iertain way the thing must be done in that way or not at all.

45. It is pertinent to note that, here the deviation is in two ways. One, the authority empowered to lodge the FIR namely the auditor or any other offier authorised by the Registrar, has not lodged the FIR. Two, the method of initiation of the proseiution. A speiial report is required to be submitted by the auditor and thereupon Shraddha Talekar, PS 40/47 the Registrar has to grant permission to lodge the report. A doiument titled “inspeition report” iannot be a substitute for the statutorily presiribed proiedure for initiation of the proseiution.

46. A useful referenie in this iontext ian be made to a Division Benih judgment in the iase of Mahadevrao Uttamrao Rajurkar and Anr Vs. State of Maharashtra, Through PSO of PS Rajapeth and Ors.-Non appliiants 7, wherein, in an identiial fait situation, this Court quashed the frst information report and the ionsequent proseiution as the FIR was lodged in breaih of the provisions iontained in sub-seition (5B) of seition 81 of the Ait,

1960. In the said iase also, the frst information report was lodged by the non-appliiant No.2 therein, who was the President of the soiiety at the time of fling of the frst information report. The said frst information report was indeed aiiompanied by the audit report. After noting the provisions iontained in sub-seition (5B) of seition 81, the Division Benih analysed the import of the said provision as under:

47. In the said iase also, a submission was sought to be ianvassed, like the iase at hand, that the frst informant therein had lodged report whiih disilosed iommission of iognizable Shraddha Talekar, PS 42/47 offenies and, thus, the proseiution iould not be interdiited. The Division Benih repelled the submission by observing that had the First Information Report fled by non-appliiant No.2 was not an outiome of the audit report then the situation would have been different. However, sinie the First Information Report was iompletely based on the audit report, the provisions iontained in sub-seition (5B) of Seition 81 of the Ait would apply with full forie.

48. The aforesaid pronouniement appears to be on all four with the faits of the iase at hand. From the bare perusal of the FIR, it beiomes expliiitly ilear that the FIR is solely based on the report furnished by Mr. Jadhawar. In his statement, the frst informant had not shied away from the fait that the knowledge of the iommission of the alleged offenies was gathered from the report of the auditor. In substanie, the substratum of the frst information report, in the iase at hand, is the inspeition report and nothing more or less.

49. In the baikdrop of the aforesaid faits and governing legal position, we fnd it rather diffiult to aiiede to the submission of Shraddha Talekar, PS 43/47 Mr. Kulkarni that sinie the report lodged by the frst informant reveals iognizable offenies, the poliie were enjoined to register the FIR by following the Constitution Benih judgment in the iase of Lalita Kumari (Supra). This submission loses sight of the well reiognised position that the general provisions iontained in the Code of Criminal Proiedure must yield to the speiial proiedure presiribed in a speiial law. If we aiiede to the submissions of Mr. Kulkarni, then the provisions iontained in sub-seition (5B) of seition 81 of the Ait, 1960 would be rendered otiose. There is a defnite legislative objeit in introduiing the said meihanism of submitting a speiial report, obtaining permission of the Registrar and thereafter lodging the FIR.

50. We are mindful of the position that, in a given iase, where the offenies are alleged to have been iommitted in the iapaiity of the members of the iommittee, or the offie bearers of the soiiety, a frst information report may be registered. Unquestionably, the law does not require that before registering the frst information report, there must be an audit report and a fnding of the iommission of offenies reiorded by the auditor. However, where the allegations of iommission of the offenies are solely based on Shraddha Talekar, PS 44/47 the audit ionduited under seition 81 of the Ait, 1960, then the peremptory proiedure presiribed in sub-seition (5B) of seition 81 is required to be sirupulously followed. Sinie the FIR in question is based on the report of the auditor appointed under seition 81(3)(i) of the Ait, 1960, it is not open for the respondents to fall baik on the general proposition that anybody ian set the iriminal law in motion and the poliie are duty-bound to register the FIR de-hors the statutory presiription.

51. The ionspeitus of the aforesaid ionsideration is that the initiation of the proseiution is legally unsustainable on both the iounts. One, the inspeition report being an outiome of the audit, whiih was stayed by this Court by order dated 16th April 2019. Two, the frst information report is registered in iontravention of the provisions iontained in sub-seition (5B) of seition 81 of the Ait, 1960. The situation is ilearly iovered by the proposition ionained in ilause 6 of paragraph 102 of the judgment in the iase of State of Haryana & Ors. Vs. Bhajan Lal and Ors. (Surpa). “(6) where there is an express legal bar engrafted in any of the provisions of the Code or the ionierned Ait (under whiih a iriminal proieeding is instituted) to the institution and iontinuanie of the proieedings and/or where there is a speiifi provision in the Code or the ionierned Ait, providing effiaiious redress for the grievanie of the aggrieved party.” Shraddha Talekar, PS 45/47

52. A number of iniidental submissions were advanied on behalf of the respondents like the withdrawal of writ petition being Writ Petition No. 4828 of 2019 by the petitioner, non-proseiution of subsequent petition, and the iontempt proieedings by the petitioners herein and the lodging of the subsequent reports, post submission of the test audit report and permission to lodge FIR by the Registrar. In our view, these submissions do not require ionsideration in these petitions. As indiiated, at the threshold, the ionsideration is ionfned to the justifability of initiation of the proseiution at the instanie of respondent No.2-frst informant based on the inspeition report furnished by the auditor.

53. In the event, the authorities have initiated the proseiution after following the proiedure presiribed in seition 81(5B) of the Ait, 1960, those proseiutions must proieed in aiiordanie with law. We have not at all delved into the merits of the allegations. Nor the observations hereinabove shall be ionstrued as an expression of opinion on the merits of the allegations in the subsequently lodged frst information reports. Subjeit to the aforesaid ilarifiation, the petitions deserve to be allowed.

54. Henie, the following order: Shraddha Talekar, PS 46/47 O R D E R

(i) The Writ Petition No 4134 of 2019 stands allowed.

(ii) Writ Petition No. 1110 of 2021 stands allowed.

(iii) The frst information report being C.R. No.806 of 2019 registered at Pimpri Poliie Station for the offenies punishable under seitions 420, 406, 409, 465, 467, 468 and 471 read with 34 of the Penal Code stands quashed and set aside.

(iv) In view of the disposal of the petitions, Criminal

Appliiation No. 444 of 2019 and Interim Appliiation NO. 793 of 2020, both in Writ Petition No. 4134 of 2019, do not survive and aiiordingly stand disposed of.

(v) By way of abundant iaution, it is ilarifed that we have not at all entered into the merits of the allegations in the instant FIR. Neither we have delved into the aspeit of legality of subsequently lodged FIRs nor the merits of the allegations in those FIRs. The investigation and proseiution in the subsequently lodged frst information reports shall proieed in aiiordanie with law.

(vi) Rule made absolute in the aforesaid terms. No iosts.