CIRCULAR MEMORANDUM OF THE REGISTRAR
OF COOPERATIVE SOCIETIES, ANDHRA PRADESH, HYDERABAD.
Present: Sri D. Sreenivasulu, I.A.S., Registrar.
Rc.No.70656/98/V.I.
Date:
3.2.1999.
Sub: Inquiry
u/s. 51 and Inspection u/s. 52, and 53 - adherence of time limits prescribed
under the sections - General guidelines - Regarding.
Ref: CC & RCS’s
Cir.Memo.Rc.No.1987/92/12.dtd.16.7.97.
The immediate attention of the Officers noted in the address entry is drawn to the subject and references cited.
Section 51 of the A.P.C.S. Act,1964 read with Rule 47, confers the power on the Registrar to order an inquiry into the constitution, working and financial condition of a Society. This, he can also do on his own motion i.e. without any request from others to do so. Under Sec.51 of the Act, not less than 1/3rd of the members of the committee or 1/5th of the total number of members of the society, can apply to the Registrar, to hold an inquiry. In such a case, he is bound to hold an inquiry and has no option.
The powers of the Registrar under Sec.51 are conferred on the District Collectors, District Cooperative Officers depending upon the types and classes of the societies. While ordering an inquiry the authorities have to examine the delegation of powers to them by the Government from time to time and order the inquiries.
Under this section, the Registrar himself can hold the enquiry or he can authorise some other person to hold inquiry. Secondly, the inquiry should be completed within such a time of 4 months. The Registrar may, for the reasons to be recorded in writing, extend the period of 4 months for a further period not exceeding 2 months.
Time limit
for completion of inquiry: -
The inquiry shall be completed within a period of 4 months from the date of commencement of the inquiry. The Officer who has been appointed an inquiry officer shall commence immediately without wasting any time and its progress should be watched carefully to ensure that it is completed within the time prescribed i.e. ordinarily within 4 months and in extraordinary cases the Registrar may extend the period for a further period not exceeding 2 months.
It does not mean that every inquiry has to be completed within a period of 4 months. If an inquiry is minor one, the Registrar can fix lesser time limits for completion of the inquiry. The inquiry officer should commence his inquiry straight away with right earnest on the receipt of orders and complete it as expeditiously as possible. If there are specific reasons for non-commencement of inquiry, the inquiry Officer should immediately bring to the notice of the Registrar the reasons for the delay, Whereupon, the Registrar will make necessary arrangements. It should be noted here that after the period of six months allowed u/s.51 for completion of the inquiry, the inquiry officer may become “Functus Officio” and the report given by him after the period is over, can be questioned to be an illegal document in a Court of law. In that eventuality, the entire exercise would become futile.
Therefore, all the inquiry officers should invariably submit their reports within the time limits prescribed by the appointing authorities or under the act as the case may be to avoid legal complications in this regard. All the Officers of the Department are hereby informed once again that if the reports are not received within the time limit prescribed, the department would initiate disciplinary action against them treating their inaction as dereliction of duty.
For successful completion of civil and criminal actions on the basis of
inquiry report, the following general guidelines are issued for strict compliance:
-
i) the inquiry
report should be submitted in Part-A and Part-B separately for civil and
criminal actions. A format containing Part-A and Part-B are herewith enclosed
for ready reference.
ii) further, the
inquiry report along with the findings of the Registrar thereon shall be placed
before the next general meeting of the society by the Registrar. Similar
provision exists in section 52 and 53 of the Act. Even though no specific time
frame for the completion of inspection is prescribed under the two sections, as
in the case of section 51, the order of appointment of the inspection officer
itself, should contain the time within which the inspection should be completed
and the inspection report should be submitted.
iii) Section 52
and 53 also provides for placing inspection report before the general body of
the Society together with the findings of the registrar thereon. Therefore, it
is the duty of the authority competent who ordered inquiry u/s.51 or inspection
u/s.52 and 53 to arrange placing of the inquiry/inspection report before the
next general body meeting of the Society concerned together with his findings.
According to the decided case laws, the competent authority is precluded from
taking further actions required under the provisions of the act i.e. both civil
and criminal actions until and unless the report together with the findings of
the registrar is placed before the next general body meeting of the Society.
The subordinate officers are, therefore, requested to arrange for the conduct
of general body meeting of the society immediately wherever the reports reveal
serious irregularities. In other cases where the results are not so grave, the
matter can be placed before the general body meeting as and when it is
conducted as pee the provisions of the bye-laws or the act, as the case may be-
iv) since section
51, 52 and 53 of the act empower the Registrar to conduct an inquiry/inspection
on which both civil and criminal action can be taken, it is needless to point
out that they are quasi-judicial in nature. The inquiry officer should follow
strictly the principles of natural justice before forming an opinion and also
to follow the rules made there under since he is answerable for his findings
before the department and the court as well.
v) instances have
come to the notice that the departmental Officers are ordering second inquiry
and sometimes successive inquiries in respect of the same matters. Such course
of action could attract the theory of double jeopardy. Proper course of action could
be entertain the inquiry report/inspection report, before initiating the
action, under section 77 of the act, and set-aside on valid grounds, and order
a fresh inquiry/inspection, if required.
vi) The inquiry/inspection report should be logical and the final order u/s.60 should be speaking in nature. Any hypothetical observations and personal bias would effect the report and final action thereon.
All the subordinate Officers are requested to acknowledge the receipt of this circular instructions and strictly comply with these instructions. They are also informed that if the inquiry/inspection is not completed within the time limits prescribed they will be severely dealt with.
Instructions have been issued to all senior Officers to examine this item critically during their office inspections and suggest disciplinary action whenever lapses are noticed.
The receipt of
this circular Memo. should be acknowledged by next post.
Encl:
Annexure.
PART-
A
1. Preliminary: State the full circumstances
relating to the detection of the fraud. The date when the fraud was first
noticed, the Officer who noticed it whether it was done in the course of his routines
duties such as audit or inspection or on information furnished by others, if
so, by whom and what kind of information, the date on which the inquiry, under
Section 51 or Inspection under section 52 was ordered, the date on which the
inquiry officer submitted his final report, whether there was any undue delay
in the submission of the report by the inquiry officer, when the Public
Prosecutor/the Assistant Public Prosecutor was consul- ted and if so the legal
opinion obtained, etc., should be furnished under this head.
2. Delinquents: Who are the delinquents? Give
their names, designations, their relationship to the Society, the period for
which they have been connected with the Society, their present position and
whereabouts, if known.
3. Items of fraud: Give all the items of
fraud, whether supported by adequate evidence or not. The date, amount and
nature of the fraud should be given briefly. The items should, however, be
grouped conveniently such as (a) fraud through short crediting: (b) fraud
through belated credit (c) falsification of counter-foil receipts, etc., and so
on.
4. Legal Offences: State the items of fraud
in respect of which prosecution can be launched, the person to be charged and
the section of the relevant enactment under which the offences are punishable.
5. Investigation: Furnish the names and
other details of the persons examined in the course of the investigation and
whether statements were recorded from all of them, if not, state the reasons
for omission. Have the delinquents, and all the necessary witnesses including
the auditors and other departmental staff, been examined and their written
statements obtained? If not, state the circumstances in which it could not be
done. State the salient points of the deposition of each party and the extent
to which it could be made use of, for the prosecution.
6. Motive for the crime: It should be shown
clearly how the moneys of the society have been misused, specifying the
particular purpose or objects for which the delinquents have used the moneys.
If evidence cannot be gathered on this point, it should atleast be shown, that
the delinquent was in need of the amounts misappropriated and could not but
have utilised the society's money as he was needy and could not have had
recourse to other monies, etc.
7. Evidence: Classify the evidence available
into (a) circumstantial, (b) documentary and (c) oral, and discuss briefly the reliability
and the weaknesses in the evidence available from the point of view of
prosecution and whether the evidence is adequate for a successful prosecution.
It should be shown whether any material witnesses are likely to turn hostile
during trial. It should be examined whether entrustment can be proved in the
case of a charge of breach of trust, whether office-bearers other than the
delinquents can be charged with the abetment of conspiracy and if so, to what
extent should be stated. Facts like, who was maintaining the cash book and
other accounts, who is the office-bearer responsible under the byelaws for the
custody of the cash balance Whether the cash book was signed by the Secretary
or the accountant, together with the treasurer or the President in respect of
the enquiries on which the charges are to be framed etc., should be stated.
State whether all the documents have been seized and kept in safe custody.
PART
- B
2. Explain, in detail, the steps taken to make sure that there are no more items of fraud than those detailed in Part-A.
3. What is the effect of the fraud on the financial condition and further interests of the society. Has the amount involved in the misappropriation been recovered? What action has been taken to ensure the recovery of the amounts lost?
The Deputy Registrars should not wait for the orders of the Registrar to instruct them in every case of misappropriation to institute surcharge proceedings. They should not also wait for the filing of arbitration claims by the society, where section 60 can be invoked straight away. They should take quick action to recover the amount misappropriated and report the action taken to the Registrar even while seeking permission for launching prosecution.
4. State if all the office-bearers and others responsible for the fraud have been removed from the Society, and if not why?
5. Furnish the names and designations of the Departmental staff, including officer, who visited the society during the periods but not detected the fraud. It should be clearly indicated with reference to the purpose of visit by each person and the duration of his stay in the society whether if it could have been possible for him to have detected the fraud and if so, how he was responsible for the non-detection of the fraud. Details of those on whom responsibility cannot be fixed for the non-detection of the fraud and the reasons therefor should also be furnished.
6. State the names of the Supervisors, Inspectors
and other Officials of the financing Bank or other central or apex society, who
have visited the society during the period and indicate how far they are
responsible for the non-detection of the fraud.
