Section 83 of The Multi-State Co-operative Societies Act, 2002
- (1)If in the course of an audit, inquiry, inspection or the winding up of a multi-State co-operative society, it is found that any person, who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act, or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has misappropriated or fraudulently retained any money or other property belonging to such society, the Central Registrar may, of his own motion or on the application of the board, liquidator or any creditor inquire himself or direct any person authorised by him, by an order in writing in this behalf, to inquire into the conduct of such person within a period of two years from the date of the report of the audit, inspection or inquiry or the date of the order of winding up, as the case may be: Provided that where the Central Registrar is satisfied that such inquiry could not be commenced during the period of two years aforesaid on account of fraud or concealment of facts, he may make or direct the inquiry to be made within such period not exceeding six years from the date of the report of the audit, inspection or inquiry or the date of the order of winding up, as he thinks fit.
- (2)Where an inquiry is made under sub-section (1), the Central Registrar may, after giving the person concerned a reasonable opportunity of being heard, make an order requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Central Registrar may consider just and equitable.
Summary
- If during an audit, inquiry, inspection, or winding up, any manager, organizer, officer, or employee is found to have made illegal payments or caused assets deficiency through breach of trust or wilful negligence, the Central Registrar can investigate.
- The Central Registrar can initiate this inquiry into the person's conduct of his own motion, or based on an application from the board, liquidator, or any creditor.
- This conduct inquiry must normally be initiated within two years from the date of the audit, inspection, inquiry report, or winding up order.
- If fraud or concealment of facts prevented earlier action, the Central Registrar can extend the initiation period up to six years from the date of the report or winding up order.
- After giving the person a reasonable opportunity to be heard, the Central Registrar can order them to repay or restore the money or property with interest, or pay compensation, contribution, and costs.
Practical examples
FAQ
1. Who can apply for an inquiry into the conduct of an officer under Section 83 of The Multi-State Co-operative Societies Act, 2002?
Under Section 83 of The Multi-State Co-operative Societies Act, 2002, the board, the liquidator, or any creditor can apply to the Central Registrar, or the Registrar can act of his own motion.
2. What is the time limit to start an inquiry into mismanaged assets under Section 83 of the Multi-State Co-operative Societies Act?
Under Section 83 of the Multi-State Co-operative Societies Act, the inquiry must be started within two years of the audit, inspection, inquiry report, or winding up order, but can extend up to six years in cases of fraud or concealment.
3. What remedies can the Registrar order against a negligent officer under Section 83 of the 2002 Co-operative Act?
Under Section 83 of the 2002 Co-operative Act, the Registrar can order the officer to repay or restore the money or property with interest, or pay contributions, costs, or compensation as deemed just and equitable.
Test yourself
Q1.Under Section 83 of The Multi-State Co-operative Societies Act, 2002, what is the standard time limit to commence an inquiry into the conduct of an officer accused of misappropriating funds?
Q2.Under Section 83 of the Multi-State Co-operative Societies Act, what is the maximum extended time limit to start an inquiry if there was fraud or concealment of facts?
Q3.Who has the authority under Section 83 of the 2002 Co-operative Act to order repayment or restoration of properties from a negligent employee?
Q4.Under Section 83 of The Multi-State Co-operative Societies Act, 2002, which of the following grounds allows the Central Registrar to initiate a conduct inquiry against an employee?