{1} IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD CRIMINAL APPLICATION NO.1797 OF 2010 WITH CRIMINAL APPLICATION NO. 1879 OF 2010 WITH CRIMINAL APPLICATION NO.1946 0F 2010 WITH CRIMINAL APPLICATION NO.1993 OF 2010 WITH CRIMINAL APPLICATION NO.1995 OF 2010 x-x-x-x CRIMINAL APPLICATION NO.1797 OF 2010 1. Mandakini Vitthal Agale Age-55 years, Occ-Household R/o Kolhar, Tq-Rahata, Dist-Ahmednagar. 2. Hemlata Harshad Abad Age-52 years, Occ-Household R/o Kolhar, Tq-Rahata, Dist-Ahmednagar. 3. Jayshree Devendra Bhandekar Age-47 years, Occ-Household R/o Kolhar, Tq-Rahata, Dist-Ahmednagar. APPLICANTS VERSUS 1. The State of Maharashtra Through Police Inspector, Loni Police Station, Tq-Rahata, Dist-Ahmednagar {2} 2. The District Superintendent of police, Ahmednagar, RESPONDENTS ....... Mr. R.N.Dhorde h/f Mr.P.S.Dighe, Advocate for the applicants Mr. P.P.More, APP for respondents State ....... WITH CRIMINAL APPLICATION NO.1879 OF 2010 1. Vishwas s/o Annasaheb Ohol Age-28 years, Occ-Agril 2. Suresh s/o Madhav Saskar Age-42 years, Occ-Agril 3. Rahul s/o Vijay Lende Age-28 years, Occ-Agril. Respondents No.1 to 3 R/o Kolhar (Bk), Tq-Rahata Dist-Ahmednagar 4. Pravin s/o Eknath Kanade Age-38 years, Occ-Agril 5. Vijay s/o Dattatraya Vikhe, Age-38 years, Occ-Agril R/o Kolhar (Kh), Tq-Rahata Dist-Ahmednagar APPLICANTS VERSUS 1. The State of Maharashtra Through Police Inspector, Loni Police Station, Tq-Rahata, Dist-Ahmednagar {3} 2. The District Superintendent of police, Ahmednagar, RESPONDENTS ....... Mr. R.N.Dhorde h/f Mr.P.S.Dighe, Advocate for the applicants Mr. P.P.More, APP for respondents State ....... WITH CRIMINAL APPLICATION NO.1946 OF 2010 1. Vijay s/o Changdeo Nibe Age-32 years, Occ-Service R/o Kolhar, Rahata, Dist-Ahmednagar 2. Amol s/o Shrikant Mohadkar Age-33 years, Occ-Service R/o Kolhar, Rahata, Dist-Ahmednagar APPLICANTS VERSUS 1. The State of Maharashtra Through Police Inspector, Loni Police Station, Tq-Rahata, Dist-Ahmednagar 2. The District Superintendent of police, Ahmednagar, RESPONDENTS ....... Mr. R.N.Dhorde h/f Mr.P.S.Dighe, Advocate for the applicants Mr. P.P.More, APP for respondents State ....... WITH CRIMINAL APPLICATION NO.1993 OF 2010 {4} Bhaskar s/o Tukaram Borhade Age-62 years, Occ-Agril R/o Kolhar (Bk) Tq-Rahata, Dist-Ahmednagar APPLICANT VERSUS 1. The State of Maharashtra Through Police Inspector, Loni Police Station, Tq-Rahata, Dist-Ahmednagar 2. The District Superintendent of police, Ahmednagar, RESPONDENTS ....... Mr. R.N.Dhorde h/f Mr.Sunil B.Jadhav, Advocate for the applicant Mr. P.P.More, APP for respondents State ....... WITH CRIMINAL APPLICATION NO.1995 OF 2010 Shekhar s/o Bhaskar Borhade Age-32 years, Occ-Social Work R/o Kolhar (Bk) Tq-Rahata Dist-Ahmednagar APPLICANT VERSUS 1. The State of Maharashtra Through Police Inspector, Loni Police Station, Tq-Rahata, Dist-Ahmednagar 2. The District Superintendent of police, Ahmednagar, RESPONDENTS ....... {5} Mr. R.N.Dhorde h/f Mr.Sunil B.Jadhav, Advocate for the applicant Mr. P.P.More, APP for respondents State ....... [CORAM : A.V.POTDAR, J.] RESERVED ON : 30.06.2010 PRONOUNCED ON : 06.07.2010 ORDER: 1. By preferring the above criminal applications, the respective applicants have prayed to release them on anticipatory bail in the event of their arrest in connection with CR No.144/2009 registered with Loni Police Station, Dist-Ahmednagar for an offence punishable u/s 406, 408, 409, 420 r/w 120B of the Indian Penal Code. 2. As all these applications arise out of same crime, the same are being disposed of by this common order. 3. The applicants are Directors, Chairman, Ex-Manager and Manager, including female directors, of the “Vivek Gramin Bigarsheti Sahakari Patsanstha, Maryadit, Kolhar, Tq-Rahata, Dist-Ahmednagar. It appears that all the applicants are granted interim protection by this Court vide respective orders. 4. Heard learned counsel for the applicants followed by learned APP. Also perused the papers of investigation carried out {6} till today, which are made available for my perusal. 5. “Vivek Gramin Bigar Sheti Sahakari Patsanstha Maryadit” is a cooperative society, registered as per the provisions of the Maharashtra Cooperative Societies Act in the year 2001. The last elections of the said Patsanstha, were conducted in the year 2007. During the said elections, 13 members are elected as director, including 3 female members. It is contended that audit of the said Patsanstha was conducted during 20.07.2009 to 10.08.2009 for the period 01.04.2008 to 31.03.2009. The said audit was conducted by 3rd Additional Auditor, Cooperative Societies, Shrirampur, Mr.S.B.Rokade. It is contended that after the audit was over, Audit Report was submitted to the Chairman of the said Patsanstha on 12.10.2009 as per the provisions of section 82 of the Maharashtra Cooperative Societies Act. It was directed that as per Rule 73 of the Cooperative Societies Rules, the rectification report be submitted in Form “O” within a period of 3 months without waiting for further reminder. According to learned counsel for the applicants the compliance report was submitted to the Auditor on 11.01.2010 along with rectifications. It is contended by learned counsel for the applicants that, without waiting for the statutory period of 3 months, an offence came to be lodged at CR No. 144/2009 on the complaint of Auditor on 25.11.2009. It is alleged in the complaint that during the audit period certain irregularities / illegalities, like distribution of loan without securing proper mortgage, excess and unnecessary expenses from {7} the funds of the society and that there is no transparency in the transactions of the society, were noticed. It is also alleged that due to the said irregularities / illegalities there is every possibility of the society to go into liquidation and will not be in a position to repay the deposits of the depositors. It is further alleged in the complaint that the funds of the society are not properly invested. It is alleged that due to the policies adopted by the society, the capital of the society may be freezed. For all the irregularities and illegalities allegedly noticed by the auditor, the board of directors including chairman so also the manager are held responsible. It is also alleged that no proper provision is made by the society for NPA. The Auditor has also noticed from the balance sheet that rebate was given to some borrowers towards fine and interest to be charged on the loan advanced to them. It is further allegations that Vijay Londhe, though is a defaulter, yet he was not removed from the post of Director of the said Patsanstha. 6. During the course of submissions it is contended by the learned counsel for the applicants that so far as the Board of Directors are concerned, what is their individual role or liability, is not mentioned in the complaint in and audit report. Learned counsel for the applicants asserted that so far as the allegations that loan advanced to Oriental Inforcare Solutions (P) Ltd., wherein it is alleged that the Chairman has personal interest, is granted without obtaining proper security, is concerned, the entire loan advanced to the said borrower is repaid by the said borrower. Even {8} photo copy of the bank statement of the loan account of the said borrower is also produced by the learned counsel for the applicants. Obviously, this amount is repaid by the said borrower before filing of the present applications. Therefore, according to learned counsel for the applicants, it cannot be said that the Chairman of the said Patsanstha, who has alleged personal interest in the said borrower, is liable for the alleged offence. It is also contended that when the notice was given on 12.10.2009, then the Auditor should have waited till 12th January 2010 in case the deficiencies are not rectified by the said Patsanstha, before lodging the complaint. It is asserted that even without waiting for the statutory period of 3 months, with malafide political motive, at the instance of rival political group, the present offence is registered against the applicants. 7. To belie the allegation that the Patsanstha has lost the capacity of repayment of deposits, a chart is produced by the applicants. This chart shows that during the period 01.10.2009 to 18.06.2010, the Kolhar branch has repaid an amount of Rs. 1,12,98,567/- of the depositors including interest, the Rajuri branch has repaid an amount of Rs.4,25,021/-, including interest and the Tisgaon branch has repaid Rs.3,91,884/- including interest to the depositors. Thus, it is clear that the said Patsanstha has repaid the amount of Rs.1,21,15,472/- to the depositors during period 01.10.2009 to 18.06.2010. Hence, it is contended that there is no substance in the allegation that the society has lost the {9} capacity to repay the amount of the depositors and there was and is no intention of the applicants that the Patsanstha may go into liquidation. It is also contended that as per the provisions of the Maharashtra Cooperative Societies Act, the board of directors of the societies, which are doing the financial business, may exercise discretion to give rebate in the amount to be paid towards fine or interest. In case the discretion is exercised arbitrarily then only the borrowers are to be blamed, however the same would not constitute a criminal offence. 8. Learned counsel for the applicant contended that so far as the allegation in respect of excess expenditure by the board of directors is concerned, if there is any dispute to that effect and if it is proved that excess amount is spent by the Board of Directors, then that amount can be recovered from the Board of Directors, however, the same would not constitute a criminal offence. 9. It is asserted by the learned counsel for the applicant that, in the reply filed to the Audit Report, by way of Rectification, it is contended that because of the Government policy to waive loans of the farmers / agriculturists, some of the borrowers have not repaid their loans. Had the loans been not sanctioned to these small agriculturists then the Government would have blamed the Patsanstha. Thus, it is contended that the said offence is registered with a political motive and the applicants have not committed the alleged offence and hence they be released on anticipatory bail as {10} they have not even misused the interim protection granted to them coupled with the fact that all the documents are with the investigating agency and hence custodial interrogation of the applicants would not be necessary. 10. While opposing the applications, learned APP has submitted that before forwarding the Audit Report to the Chairman on 12.10.2009, a report was given to him on 14.09.2009, which was replied by the Manager of the Patsanstha on 26.10.2009 and hence it cannot be said that for the first time notice was given on 12.10.2009 and the Auditor should have waited for the statutory period of 3 months till 12.01.2010. To substantiate this submission learned APP placed reliance on the Government Circular dated 13.06.1972, which states that after giving 15 days notice to the office bearers of a cooperative society, the penal action can be initiated against them. Learned APP has also submitted the original documents relating to the finance sanctioned to Oriental Infocare Solutions (P) Ltd. The said documents are blank and not duly filled in by the Chairman and even then finance of Rs.20 lacs was advanced to the said borrower in connivance with the board of directors. It is contended that as it prima facie appears that the applicants are involved in the said offence, for which their custodial interrogation is necessary and hence it is requested to reject the applications. 11. Before considering the rival submissions, it is {11} necessary to peruse the provisions of section 82 read with Rule 73 and section 87 (2) (3) of the Maharashtra Cooperative Societies Act and Rules, which reads thus - S. 82. Rectification of defects in accounts If the result of the audit held under the last preceding section discloses any defects in the working of a society the society shall within three months from the date of audit report, explain to the Registrar the defects, or the irregularities, pointed out by the auditor, and take steps to rectify the defects and remedy irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order directing the society or its officers to take such action, as may be specified in the order to remedy the defects within the time specified therein. Where the society concerned is a member of a federal society, such order shall be made after consulting the federal society. Rule 73 Form of Rectification Report - On receipt of an order, directing a society or its officers to rectify the defects and remedy the irregularities, issued by the Registrar under section 82 and on receipt of an order issued by the Register under section 87, the society shall, subject to the provisions of sub-section (2) and (3) of section 87, submit to the Registrar a rectification report in Form O. The society shall continue to submit such rectification reports to the Registrar till all the defects are rectified or the irregularities are remedied to the satisfaction of the Registrar.” S. 87, Registrar to bring defects disclosed in inquiry or inspector to notice of society. {12} (1) ....... (2) The society concerned may within sixty days from the date of any order made by the Registrar under the foregoing sub-section appeal against it to the State Government. (3) The State Government may, in deciding the appeal, annul, reverse, modify or confirm, the order of the Registrar. 12. Perusal of the above sections and rule, indicates that so far as alleged notice dated 14.09.2009 is concerned, the same cannot be termed as notice contemplated u/s 82 of the Maharashtra Cooperative Societies Act. At the same time, in the notice dated 12.10.2009 all the requisite ingredients of section 82 are found and established. Thus, it is clear that the complaint which is lodged on 25.11.2009 is lodged without waiting for the completion of the statutory period of 3 months. Apart form it the main allegation that loan was advanced to Oriental Infocare Solutions (P) Ltd., in which the Chairman has person interest, without security proper security. However documents on record indicate that the loan advanced to the said borrower is repaid before filing of these applications. Similarly, the chart submitted by the learned counsel of the applicants, discloses that the Patsanstha has the capacity to repay the deposits. So far as allegations in respect of rebate given to the borrowers are concerned, the same is given under the discretionary powers of the {13} Board of Directors and the same would not constitute a criminal offence. Similarly, the allegations in respect of non maintaining NPA and excess expenses are concerned these are administrative irregularities which can be cured, however, obviously for the said irregularities no criminal offence would constitute. In the premise and considering the fact that now all the documents are in custody of the investigating officer, case is made out to enlarge the applicants on anticipatory bail in exercise of the discretionary powers vested in this Court. 13. In the result, all the applications are allowed. The interim protection granted to the respective applicants is hereby confirmed and to remain in force till filing of the charge sheet. The applicants are directed to attend the concerned police station as and when required by the Investigating Officer, on written requisition well in advance. The applicants are also directed to cooperate with the Investigating Officer. Accordingly, all the applications sand disposed of. [A.V.POTDAR, J.] drp/B10/criapln1797-10