Case Note & Summary
The appeal arises from a judgment of the Bombay High Court quashing FIR No. 806 of 2019 lodged by the appellant, Dhanraj N Asawani, against the respondents, who were the CEO and former Chairperson of Seva Vikas Co-operative Bank. The FIR alleged offences under Sections 420, 406, 409, 465, 467, 468 and 471 read with Section 34 of the Indian Penal Code, based on an inspection report prepared by the Joint Registrar (Audit) under Section 81 of the Maharashtra Co-operative Societies Act, 1960. The High Court held that Section 81(5B) of the 1960 Act contains a special procedure for submission of a special report and obtaining permission of the Registrar before lodging an FIR, and that this special procedure must be followed, rendering the general provisions of the Code of Criminal Procedure inapplicable. The Supreme Court, in appeal, considered whether Section 81(5B) bars a third party from lodging an FIR based on an audit report. The Court held that Section 81(5B) only requires the Registrar to submit a special report and obtain permission before filing a complaint; it does not create a bar on the registration of FIR by individuals who are not the Registrar. The general criminal law can be set in motion by any individual, and the High Court erred in quashing the FIR. The Supreme Court allowed the appeal, set aside the impugned judgment, and restored the FIR, directing the investigating agency to proceed in accordance with law.
Headnote
A) Criminal Procedure - Quashing of FIR - Section 482 CrPC - Section 81(5B) Maharashtra Co-operative Societies Act, 1960 - The High Court quashed an FIR alleging cheating and misappropriation by bank officials, holding that the FIR was based on an audit report under Section 81 and thus the special procedure under Section 81(5B) must be followed. The Supreme Court held that Section 81(5B) does not bar a third party from lodging an FIR based on an audit report; the provision only requires the Registrar to submit a special report and obtain permission before filing a complaint. The general criminal law can be set in motion by any individual, and the High Court erred in quashing the FIR. (Paras 1-10) B) Co-operative Societies - Audit Report - Section 81 Maharashtra Co-operative Societies Act, 1960 - The audit report prepared under Section 81 can be used as a basis for a criminal complaint by a third party. The provision does not create a bar on the registration of FIR by individuals who are not the Registrar. The High Court's interpretation that the special procedure under Section 81(5B) overrides the general criminal procedure was incorrect. (Paras 7-10)
Issue of Consideration
Whether Section 81(5B) of the Maharashtra Co-operative Societies Act, 1960 bars the registration of an FIR by a third party based on an audit report conducted under Section 81 of the Act, and whether the High Court was justified in quashing the FIR on that ground.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court dated 16 November 2021, and restored FIR No. 806 of 2019. The investigating agency was directed to proceed in accordance with law.
Law Points
- Section 81(5B) of Maharashtra Co-operative Societies Act
- 1960 does not bar registration of FIR by a third party based on an audit report
- general criminal law can be set in motion by any individual
- special provisions under the 1960 Act do not override the CrPC for third-party complaints
- quashing of FIR under Section 482 CrPC requires exceptional circumstances
- audit report can be basis for FIR if it discloses commission of cognizable offences
