Pavankumar Keshaorao Narwade vs State Of Maharashtra - Criminal Revision

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Pavankumar Keshaorao Narwade vs State Of Maharashtra Thr. Police ... on 24 March, 2026

2026:BHC-NAG:4808

                                                                 5.apl.140 & 141.2017.Judgments.odt
                                                       (1)

                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                NAGPUR BENCH : NAGPUR

                     CRIMINAL REVISION APPLICATION NO.140 OF 2017

                1.    Pavankumar Keshaorao Narwade,
                      Aged About 39 Years,
                      R/o. Patil Nagar, Umarkhed.                     ..... APPLICANT

                                               // VERSUS //

                1.    State of Maharashtra, through
                      Police Station Darati, Taluka Umarkhed,
                      District Yavatmal.                              .... RESPONDENT

                -------------------------------------------
                          Mr. G. M. Kubade, Advocate for applicant.
                          Mr. N. B. Jawade, APP for the State.
                -------------------------------------------
                                        WITH
                     CRIMINAL REVISION APPLICATION NO.141 OF 2017

                1.    Natthu Kashiba Ranmale,
                      Aged about 52 Years,
                      Occupation : Service,
                      R/o. Chichali, Taluka Umarkhed,
                      District Yavatmal,
                      P.S. Darati.                                    ..... APPLICANT

                                               // VERSUS //

                1.    State of Maharashtra, through
                      Police Station Darati, Taluka Umarkhed,
                      District Yavatmal.                      .... RESPONDENT

                -------------------------------------------
                          Mr. G. M. Kubade, Advocate for applicant.
                          Mr. N. B. Jawade, APP for the State.
                -------------------------------------------
                            CORAM : URMILA JOSHI-PHALKE, J.
                            RESERVED ON   : 05.03.2026
                            PRONOUNCED ON : 24.03.2026

                JUDGMENT : 1.       Heard.

5.apl.140 & 141.2017.Judgments.odt (2)

1. Admit.
   

2. Heard finally with the consent of the learned Counsel for
   

the applicants and learned APP for the State.

1. In both the revision applications, the judgment and order

of sentence passed in RCC No.24/1999 by the learned Judicial

Magistrate First Class, Umarkhed, District Yavatmal dated

05.01.2013, by which the present applicants are convicted of the

offences punishable under Sections 408, 420 and 468 read with Section 34 of the Indian Penal Code (for short ' IPC ') and

sentenced to suffer rigorous imprisonment for one year and to

pay fine of Rs.1,000/- each, in default to suffer imprisonment for

one month, in RCC No.24/1999 which came to be confirmed in

Criminal Appeal No.6/2013 dated 28.07.2017 by the learned

Additional Sessions Judge, Pusad.

1. Criminal Revision Application No.140/2017 preferred by

original accused No.8 Pavankumar Keshaorao Narwade, who was

Secretary of Jangal Kamgar Sahakari Society Limited, Chikhali,

Taluka Umarkhed, District Yavatmal, whereas Criminal Revision

Application No.141/2017 by Nathu Kashiba Ranmale, President of

the said Society. Hereinafter, the parties are referred to as per

their original nomenclature.

5.apl.140 & 141.2017.Judgments.odt (3)

1. Brief facts which are necessary for the disposal of the

revision application are as under:

Accused No.1 Natthu Kashiba Ranmale was the Chairman

and accused No.8 Pavankumar Keshaorao Narwade was the

Secretary of Forest Labours Cooperative Society Limited,

Chikhali, Taluka Umarkhed, District Yavatmal. The informant

Gulabrao Krushnarao Khasade was Auditor conducted the audit

of the Society for the period of 01.04.1995 to 31.06.1997.

During audit, he found that the accused No.8 in the capacity of

the Secretary entrusted with the amount and record of Society

and he dishonestly and in violation of directions of law obtained

the signatures of PW.2 and PW.3 in cash book by misleading

them in order to misappropriate the amount of Society in

collusion with the President, Vice President and other Directors of

the said Society. It was further alleged that all the accused in

furtherance of their common intention, manipulated the record of

the Society and forged the signatures for the purpose of

cheating. The accused No.1 being the President of the Society

failed to deposit the amount of Rs.19,546.10 and the amount of

Rs.39,250/- received from the sale of the property of the

Society. It revealed to the complainant while conducting the

audit that though vouchers are prepared in the name of Mahadeo

Kotnake showing that he is working as a clerk and six months

salary was paid to him, but no salary was paid to him and the

5.apl.140 & 141.2017.Judgments.odt (4) amount was misappropriated. Similarly, by other vouchers

salary of Rs.22,800/- was shown to be given to Watchman Shri

Vitthal Pawar, but he has not received the said salary. Thus, the

President and the Secretary in collusion with the other Directors

of the Society committed an offence punishable under [Sections

420](https://indiankanoon.org/doc/1436241/), 408, 468 read with Section 34 of the Indian Penal Code.
After registration of the crime, the Investigating Officer has

recorded the relevant statements of the witnesses collected the

documents and after completion of investigation, submitted

charge sheet against the present applicants and other

co-accused.

1. The learned Magistrate has framed the charge vide

Exh.41. As the accused pleaded not guilty to prove the charge,

the prosecution has examined in all five witnesses PW.1

Gulabrao Krushnarao Khasale Exh.72, PW.2 Mahadeo Deu

Kotnake Exh.176, PW.3 Vitthal Dhanu Pawar Exh.177, PW.4

Mohan Tukaram Naik Exh.178, who acted as panch on seizure of

the documents and PW.5 Diwan Veersingh Wasave Exh.189,

Investigating Officer. Besides the oral evidence, prosecution

placed reliance on Audit Report Exh.73, Voucher No.55 Exh.74,

Voucher 121/7 Exh.75, Voucher No.122/2 Exh.76, Voucher

No.131/1 Exh.77, Voucher No.131/2 Exh.78, Cash register

Exh.79, entries regarding payment under the Voucher Nos.122/1

5.apl.140 & 141.2017.Judgments.odt (5) and 122/2 Exh.80, extract of cashbook Exh.81, Report Exh.82,

Special Report Exh.83, requisition to handwriting expert Exh.192

and report of the handwriting expert Exh.193.

1. After appreciating the evidence the learned trial Court

comes to the conclusion that the prosecution has proved its case

beyond reasonable doubt, as the evidence on record sufficiently

shows that the accused No.1 and accused No.8 are involved in

forgery of the document as well as misappropriation of the

amount and thereby duped the Society members and therefore,

they are convicted of the offence punishable under Sections 420, 408, 468 read with Section 34 of the IPC. The said judgment

and order was challenged in the criminal Appeal No.6/2013.

Wherein also the learned Sessions Judge, after reappreciating

the evidence come to the conclusion that the evidence of the

Auditor substantiated by the evidence of PW.2 and PW.3

discloses that the applicants accused Nos.1 and 8 committed the

offence of criminal breach of trust defined under Section 405 of

IPC and thereby committed an offence as well as the evidence on

record also shows that there was intention since inception and

thereby the accused persons especially the accused Nos.1 and 8

cheated and duped the members of the Society and thereby the

appeal was dismissed.

5.apl.140 & 141.2017.Judgments.odt (6)

1. Being aggrieved and dissatisfied with the same, the

present revision application is preferred by the applicants, who

are the original accused Nos.1 and 8.

1. While exercising the revisional powers cardinal principles

to be kept in mind is that the scope of revision is very limited

only to see as to correctness, legality or propriety of any finding

and sentence or order. In view of Section 397 of Cr.P.C., this

Court or the Sessions Court is empowered to call for and

examine the record of any proceeding before any inferior

Criminal Court situate within its or his local jurisdiction for the

purpose of satisfying itself or himself as to the correctness,

legality or propriety of any finding. Sentence or order, recorded

or passed, and as to the regularity of any proceedings of such

inferior Court, and may, when calling, for such record, direct that

the execution of any sentence or order be suspended, and if the

accused is in confinement, that he be released on bail or on his

own bond pending the examination of the record.

1. Learned APP placed reliance on the decision of [Bindeshwari Prasad Singh @ B.P. Singh and others Vs.

State of Bihar (Now Jharkhand) and another](https://indiankanoon.org/doc/1761214/) reported in

(2002) 6 SCC 650, wherein the Hon'ble Apex Court held that

the High Court was not justified in reappreciating the evidence

on record and coming to the different conclusion in a revision

5.apl.140 & 141.2017.Judgments.odt (7) preferred by the informant under Section 401 of the Code of

Criminal Procedure. Sub-section (3) of Section 401 in terms

provides that nothing in Section 401 shall be deemed to

authorize a High Court to convert a finding of acquittal into one

of conviction. The aforesaid sub-section, which places a limitation

on the powers of the revisional court, prohibiting it from

converting a finding of acquittal into one of conviction, is itself

indicative of the nature and extent of the revisional power

conferred by Section 401 of the Code of Criminal Procedure. If

the High Court could not convert a finding of acquittal into one of

conviction directly, it could not do so indirectly by the method of

ordering a retrial. It is well settled by a catena of decisions of

this Court that the High Court will ordinarily not interfere in

revision with an order of acquittal except in exceptional cases

where the interest of public justice requires interference for the

correction of a manifest illegality or the prevention of gross

miscarriage of justice. The High Court will not be justified in

interfering with an order of acquittal merely because the trial

court has taken a wrong view of the law or has erred in

appreciation of evidence. It is neither possible nor advisable to

make an exhaustive list of circumstances in which exercise of

revisional jurisdiction may be justified, but decisions of this Court

have laid down the parameters of exercise of revisional

jurisdiction by the High Court under Section 401 of the Code of

5.apl.140 & 141.2017.Judgments.odt (8) Criminal Procedure in an appeal against acquittal by a private

party.

1. In the case of [State of Kerala vs Puttumanaillath

Jathavedan Namboodiri](https://indiankanoon.org/doc/655566/) with [Managing Director, Western

India Plywoods Vs. Puthumanaillath Jathavedan

Namboodiri](https://indiankanoon.org/doc/655566/) reported in (1999) 2 SCC 452 relied upon by the

learned APP wherein also it is held that in its revisional

jurisdiction, the High Court can call for and examine the record of

any proceedings for the purpose of satisfying itself as to the

correctness, legality or propriety of any finding, sentence or

order. In other words, the jurisdiction is one of Supervisory

Jurisdiction exercised by the High Court for correcting

miscarriage of justice. But the said revisional power cannot be

equated with the power of an appellate court nor it be treated

even as a second appellate jurisdiction. Ordinarily, therefore, it

would not be appropriate for the High Court to be reappreciate

the evidence and come to its own conclusion on the same when

the evidence has already been appreciated by the Magistrate as

well as the Sessions Judge in appeal, unless any glaring feature

is brought to the notice of the High Court which would otherwise

tantamount to gross miscarriage of justice.

1. In the case of [Ashish Chadha v. Asha Kumari and

another](https://indiankanoon.org/doc/1211167335/) reported (2012) 1 SCC 680 wherein also the Hon'ble

5.apl.140 & 141.2017.Judgments.odt (9) Apex Court observed that the High Court has in its revisional

jurisdiction appraised the evidence which it could not have done.

It is the trial court which has to decide whether evidence on

record is sufficient to make out a prima facie case against the

accused so as to frame charge against him. Pertinently, even the

trial court cannot conduct roving and fishing inquiry into the

evidence. It has only to consider whether evidence collected by

the prosecution discloses prima facie case against the accused or

not.

1. In the light of the above well settled principles, the

present revision application is to be decided. Learned counsel for

the applicants vehemently submitted that the present applicants

are convicted of the offence punishable under Section 408, 420, 468 read with Section 34 of IPC. The charges under Section 408 read with Section 34 of IPC framed against the present

applicants on an allegation that on 10.10.1998 the accused No.8,

a Secretary in collusion with the other accused was entrusted

with the amount and record of Society and dishonestly obtained

the signatures of PW.2 and PW.3 in the cash book to

misappropriate the amount of the Society. It further reveals that

that the charge under Section 420 read with Section 34 of IPC

was framed on an allegation that the accused in furtherance of

common intention, induced PW.2 and PW.3 to sign the cash book

5.apl.140 & 141.2017.Judgments.odt (10) and vouchers in order to deceive them dishonestly and they have

manipulated the record of the Society and forged the signatures

and thereby committed and offence punishable under [Sections

420](https://indiankanoon.org/doc/1436241/) and 468 of IPC. He submitted that the prosecution

examined Auditor PW.1 Shri Gulabrao Khasale, who referred his

Audit Report Exh.73. He also referred relevant vouchers of

payments Exh.74 to 71 and his report to the Police Station.

1. The prosecution also examined Mahadeo Kotnake and

Vitthal Dhanu Pawar to prove the misappropriation as well as the

forgery and on the basis of the evidence the accused Nos.1 and 8

are convicted. He submitted that the learned Judicial Magistrate

First Class was not justified to record the conviction of all the

accused by ignoring the provisions of the [Maharashtra

Co-operative Societies Act, 1960](https://indiankanoon.org/doc/34627769/) (for short 'the said Act'). He

submitted that learned Sessions Judge, Pusad also ignored the

said provisions in view of Section 81(1) of the said Act a

procedure for audit is drawn. In the background of Section 81(1) and Section 148, the Auditor is not the authorized person to

lodge the FIR against the present applicants. The Chapter VIII

deals with Audit, Inquiry, Inspection and Supervision. The

provision of Section 82 permits the rectification of defects in

accounts, whereas the Section 83 a Registrar may direct or

authorize an inquiry into the working and financial conditions of

5.apl.140 & 141.2017.Judgments.odt (11) the Society. Section 146 defines offences, whereas Section 147 deals with punishment and Section 148 deals with the

cognizance of the offences. It is the only Registrar of the Society

or the person authorized by the Registrar can file FIR. FIR not

lodged by the authorized person as contemplated in (2) Proviso

of Section 81 (5-B) of the said Act, liable to be quashed and set

aside.

1. He also invited my attention towards the evidence

recorded and submitted that the evidence on which the

prosecution relied upon and the learned Magistrate as well as the

learned Sessions Court has believed is not sufficient to prove the

charges against the present applicants. In view of that, the

revision application deserves to be allowed. In support of his

contention he placed on the decision of Shri Manoranjan s/o Ramdas Rathod Vs. State of Maharashtra and another [2016 ALL MR (Cri.) 997] and [Mahadeorao Uttamrao

Rajurkar Vs. State of Maharashtra and others](https://indiankanoon.org/doc/4821459/) reported in

2021 (3) Mh.LJ.485.

1. Per contra, learned APP strongly opposed the said

contention and submitted that the issue regarding the application

of the Cooperative Societies Act is raised first time in the said

revision. The said issues were neither raised before the learned

Magistrate nor before the first Appellate Court. Therefore, first

5.apl.140 & 141.2017.Judgments.odt (12) time this Court cannot entertain the said submissions. He

submitted that the evidence on record sufficiently shows that the

applicant/accused No.1 and applicant/accused No.8 being the

President and Secretary of the Society, obtained the signatures

of PW.2 and PW.3 on various documents and shown that the

salary was paid to them. However, no salary was paid to them

and misappropriated the amount. They have also prepared the

false record like vouchers, entries in the cash book which

sufficiently proves the involvement of the present accused in the

alleged offence. He submitted that in view of the scope of the

revision, this Court cannot reappreciate the evidence. There is a

concurrent finding of the trial Court as well as the first Appellate

Court and there is no reason for this Court to interfere into the

said findings. In view of that, the revision application deserves

to be dismissed.

1. On perusal of the evidence on record it reveals that PW.1

Gulabrao Khasale was appointed as Special Auditor Class - I at

village Chikhali the Jungle Kamgar Sahakari Society was

constituted vide registration No.117. He has conducted the audit

of the said Society for the period 01.05.1995 to 31.03.1997. He

has conducted the audit at village Chikhali, as per the record

placed before him by the Society. Audit Report is at Exh.73. His

evidence shows that on conducting the audit report it reveals to

5.apl.140 & 141.2017.Judgments.odt (13) him that he found misappropriation from cash box and from sale

department. During the period of 01.04.1995 to 31.03.1996, as

per the voucher No.55 dated 05.12.1995 an amount of

Rs.11,799.60 was shown to be given to Mahadeo Deu Kotnake

towards his salary, but in fact the said amount was not given to

him. His signatures on receipt were only obtained. He was

shown to be a depot clerk, in fact he was never working for the

said period and he has not received the salary also. Similarly,

Vitthal Dhanu Pawar was shown as Watchman and salary was

shown to be given to him, but only his signatures were obtained.

No salary was given to him. The cash book maintained by the

said Forest Kamgar Sahakari Sanstha was produced from which

also PW.1 has shown the misappropriation by the present

applicant/accused No.1 and applicant/accused No.8. His

evidence further shows that the total sum of Rs.22,800/- is

shown in cash book on the debit side. During course of audit, he

has not received the above amount under voucher No.122/1 and

122/2. On verification of the cash book, it reveals to him that

amount of Rs.79,546.10 was shown in the possession of the

President and Rs.60.63 was shown in the possession of the

Secretary. The said amount was withdrawn by the bank and it

was not deposited again. Thus, on completion on audit, he

submitted his report.

5.apl.140 & 141.2017.Judgments.odt (14)

1. Despite his lengthy cross-examination, nothing

incriminating is brought on record. On the contrary, it shows

that annual audit of the Cooperative Society was also conducted.

He admits that at the time of audit accused No.8 was not

employee of the Society. The entire cross-examination is in

respect of the right of the audit or to conduct the audit. As far

as the involvement of the present applicants accused is

concerned nothing is brought on record. Thus, the evidence of

PW.1 remained unshattered during the cross-examination.

Evidence of PW.2 and PW.3 shows that they never worked as a

clerk or watchman only their signatures were obtained. They

were getting monthly wages at rate of Rs.300/-. Thus, the

evidence of PW.2 and PW.3 also shows that no salary was given

to them, but the vouchers are prepared in their names.

Evidence of PW.4 panch is formal in nature in whose presence

specimen signatures and handwriting of the accused were

obtained. PW.5 is the Investigating Officer, who has investigated

the crime. He admitted during his cross-examination that he did

not investigate whether one month of notice to the accused to

deposit the misappropriated amount was issued by the Auditor

prior to the registration of the offence or not. He also admits

that he did not verify the bank pass books of the Society and did

not obtain any record. On the basis of the said cross-

5.apl.140 & 141.2017.Judgments.odt (15) examination, learned counsel for the applicant submitted that the

evidence on record is not sufficient to warrant the conviction.

1. Section 405 of IPC deals with criminal breach of trust. In

view of definition, "whoever, being in any manner entrusted with

property, or with any dominion over property, dishonestly

misappropriates or converts to his own use that property, or

dishonestly uses or disposes of that property in violation of any

direction of law prescribing the mode in which such trust is to be

discharged, or of any legal contract, express or implied, which he

has made touching the discharge of such trust, or wilfully suffers

any other person so to do, commits "criminal breach of trust".

1. Section 408 of IPC is the exhaustive form of Section 405

which deals with criminal breach of trust by clerk or servant.

Whoever, being a clerk or servant or employed as a clerk or

servant, and being in any manner entrusted in such capacity with

property, or with any dominion over property, commits criminal

breach of trust in respect of that property, and shall be punished

with imprisonment of either description for a term which may be

extend to seven years, and shall also be liable to fine.

1. Admittedly, the applicant/accused No.8 was serving in

the said Society as the Secretary at the relevant time.

Admittedly, accused No.1 is not coming within the definition of

either clerk or servant given under Section 408. The charge was

5.apl.140 & 141.2017.Judgments.odt (16) framed against the accused No.1 is under Section 420 of IPC.

The definition of cheating is given under Section 415 which reads

as under:

"Whoever, by deceiving any person, fraudulently or
dishonestly induces the person so deceived to deliver any
property to any person, or to consent that any person
shall retain any property, or intentionally induces the
person so deceived to do or omit to do anything which he
would not do or omit if he were not so deceived, and
which act or omission causes or is likely to cause damage
or harm to that person in body, mind, reputation or
property, is said to "cheat".
23. To hold a person guilty of cheating as defined under Section 415 of the I.P.C., it is necessary to show that he had

fraudulent or dishonest intention at the time of making the

promise with an intention to retain the property. In other words, Section 415 of I.P.C which defines cheating, requires deception

of any person (a) inducing that person to deliver any property to

any person, or to consent that any person shall retain any

property, or (b) intentionally inducing that person to do or omit

to do anything which he would not do or omit if he were not so

deceived and which act or omission causes or is likely to cause

damage or harm to that person, anybody's mind, reputation or

property.

1. Admittedly, the present Society i.e. Forest Kamgar

Sahakari Sanstha Chikhli was constituted for the labours, who

5.apl.140 & 141.2017.Judgments.odt (17) are working as labour in the Forest. The audit was conducted of

the said Society for the period 01.04.1995 to 31.03.1996.

During the audit, the Auditor found the voucher No.55 dated

05.12.1995 by which amount of Rs.11,799.60 was shown to be

given to Mahadeo Deu Kotnake i.e. PW.2, but in fact as per his

evidence, the said amount was not given to him, but he was only

paid of Rs.300/- per month. As per his evidence only his

signatures were obtained on receipt voucher by showing him as a

Depot clerk. His evidence further shows that he was not working

for the above said period and he has not received the salary from

the Society. Thus, the amount of Rs.11,799.60 though shown in

the name of the PW.2 which he has not received and that

amount was misappropriated. Similarly, the payment was shown

to be paid to the PW.2 Mahadeo for the period June 1995 to

November 1995 of Rs.1,966.60/-, in fact, he has not received

the said amount. Similarly, Vitthal Dhanu Pawar was shown as

Watchman of the Society and salary was shown to be paid to

him, whereas evidence of PW.3 shows that he has not received

any salary and his only signatures were obtained. The voucher

number 131/1 was shown to him in respect of salary given to the

Vitthal Dhanu Pawar which he has not received. The Cash book

maintained by the Society shows that amount of Rs.16,650/-

was shown to be debited under the head of salary of the servant,

for a period of January 1995 to December 1995 a total sum of

5.apl.140 & 141.2017.Judgments.odt (18) Rs.11,400/- and Rs.5,250/- was shown for the period January

1996 to May 1996 and payment was shown to be made under

the voucher Nos.122/1 and 122/2. Total sum of Rs.22,800/-

was shown in cash book on the debit side. On recording the

statements of PW.2 and PW.3, it revealed to the Auditor that

they have not received any salary. On verification of the cash

book on page 38 an amount of Rs.79,546.10 was shown in the

possession of the President which was not deposited by the

President. Similarly, the amount of Rs.60.33/- was shown in the

possession of the Secretary, he has also not deposited the said

amount. During the audit, he found that an amount of

Rs. 1,70,045.70 was misappropriated. An amount of

Rs.39,450/- belongs to the Society by sale of teak wood which

was also kept by the accused No.1 President with him which

sufficiently shows misappropriation. Thus, the evidence of PW.1

substantiated by the evidence PW.2 and PW.3 and the

documentary evidence i.e. Exhs. 74 to 80 substantiates the

evidence of PW.1.

1. Learned counsel for the applicants raised the issue as to

the non-observations of the provision under Sections 81, 82 and 146 of the said Act. In support of his contentions, he placed

reliance on the decision of this Court in the case of [Mahadeorao

Uttamrao Rajurkar](https://indiankanoon.org/doc/4821459/) (supra) wherein this Court has observed

that charges of misappropriation of amount of Society by

5.apl.140 & 141.2017.Judgments.odt (19) President of Society either Registrar or person authorised by him

can file FIR. FIR was not lodged by authorised person as

contemplated in second proviso of Section 82 (5B) of Act. FIR

and consequent proceedings quashed and set aside.

1. The said Act, is a special law enacted to govern

cooperative Societies in Maharashtra. It was enacted to provide

orderly development of the cooperative movement in

Maharashtra. Chapter VIII of the 1960 Act provides for 'audit,

inquiry, inspection and supervision'. Section 81 mandates the

society to cause its accounts to be audited at least once every

financial year by an auditor from a panel prepared by the

Registrar and approved by the State government. The first

proviso to Section 81(1)(a) empowers the Registrar to audit or

cause to be audited the accounts of a society by a panel of

auditors approved by the State government. Section 81(3) stipulates that the Registrar or the person authorized shall for

the purpose of audit at all times have access to books, accounts,

documents, papers, securities, cash and other properties

belonging to or in the custody of the co-operative society. Section 81(3)(c) empowers the Registrar or any person

authorized to carry out or cause to be carried out a test audit of

the accounts of the co-operative society. Section 81(5B) details

5.apl.140 & 141.2017.Judgments.odt (20) the subsequent actions required to be taken by the auditor or the

Registrar after the preparation of the audit report:

"81(5B) The auditor shall submit his audit report within a
period of one month from its completion and in any case
before issuance of notice of the annual general body
meeting to the society and to the Registrar in such form
as may be specified by the Registrar, on the accounts
examined by him and on the balance sheet and profit and
loss account as on the date and for the period up to which
the accounts have been audited, and shall state whether
in his opinion and to the best of his information and
according to the Explanation given to him by the society,
the said accounts give all information required by or under
this Act and present the true and fair view of the financial
transaction of the society."
Provided that, where the auditor has come to a conclusion in his
audit report that any person, is guilty of any offence relating to
the accounts or any other offences, he shall file a specific report
to the Registrar within a period of fifteen days from the date of
submission of his audit report. The auditor concerned shall, after
obtaining written permission of the Registrar, file a First
Information Report of the offence. The auditor, who fails to file
First Information Report, shall be liable for disqualification and
his name shall be liable to be removed from the panel of auditors
and he shall also be liable to any other action as the Registrar
may think fit:

Provided further that, when it is brought to the notice of the
Registrar that, the auditor has failed to initiate action as
specified above, the Registrar shall cause a First Information
Report to be filed by a person authorised by him in that behalf:

Provided also that, on conclusion of his audit, if the auditor finds
that there are apparent instances of financial irregularities
resulting into losses to the society caused by any member of the
committee or officers of the society or by any other person, then
he shall prepare Special Report and submit the same to the

5.apl.140 & 141.2017.Judgments.odt (21) Registrar alongwith his audit report. Failure to file such Special
Report, would amount to negligence in the duties of the auditor
and he shall be liable for disqualification for appointment as an
auditor or any other action, as the Registrar may think fit."

1. Thus, under Section 81 (5B), the auditor is under an

obligation to submit an audit memorandum duly signed by them

to the society and to the Registrar on the accounts examined by

them and on the balance sheet and profit and loss account as on

the date and for the period up to which the accounts have been

audited. The auditor has to state whether in their opinion the

accounts give all the information by or under the 1960 Act and

present a true and fair view the financial transactions of the

society. In terms of the first proviso to Section 81(5B), when the

auditor has come to the conclusion in the audit report that any

person is guilty of any offence relating to the accounts or any

other offences, they are obligated to file a specific report to the

Registrar. The auditor is then required, after obtaining the

written permission of the Registrar, to file an FIR. The second

proviso stipulates that when it is brought to the notice of the

Registrar that the auditor has failed to initiate action as specified

in the first proviso, the Registrar shall cause an FIR to be filed by

a person authorized by them in that behalf. In terms of the third

proviso, if the Registrar finds apparent instances of financial

irregularities resulting into losses to the society at the behest of

5.apl.140 & 141.2017.Judgments.odt (22) a member of the committee or officers or by any other person,

he has to prepare a special report and submit it to the Registrar

together with his audit report.

1. In view of the above provisions, it has to be seen whether

non-following of the said provision would be sufficient to quash

the conviction which is imposed upon the present applicants on

the basis of the evidence. There is no doubt that Section 81(5B) of the Act casts a positive obligation on the auditor or the

Registrar to file an FIR when they discover a financial irregularity

in a cooperative society. Section 81(5B) demands accountability

and vigilance from the auditor and the Registrar in performance

of their public duty. Moreover, a plain reading of the said

provision does not lead to the conclusion that the legislature

intends to debar any person other than the auditor or the

Registrar from registering an FIR.

1. This aspect is considered by the Hon'ble Apex Court in

the case of [Dhanraj N. Asawani vs Amarjeetsingh

Mohindersingh Basi](https://indiankanoon.org/doc/61712122/) reported in (2023) 20 SCC 136, wherein

three Judge Bench of the Hon'ble Apex Court observed that:

Section 81(5B) cannot be interpreted to mean that any
other person who comes to know about the financial
irregularity on the basis of the audit report is debarred
from reporting the irregularity to the police. In the
absence of any specific provision or necessary
intendment, such an inference will be against the

5.apl.140 & 141.2017.Judgments.odt (23) interests of the society. The interests of the society will
be safeguarded if financial irregularities in co-operative
banks are reported to the police, who can subsequently
take effective actions to investigate crimes and protect
the commercial interests of the members of the society.

1. The observation of the Hon'ble Apex Court in the above

referred judgment in Para No.15, 16, 17 and 18 and 19 are

reproduced as under:

"15. Section 4 of the Code of Criminal Procedure provides
that all offences under the Indian Penal Code shall be
investigated, inquired, and tried according to the
provisions of the Code of Crimninal Procedure. Section
4(2) structures the application of the Code of Criminal
Procedure in situations where a special procedure is
prescribed under any special enactment. Section 4 is
extracted below:

1. Trial of offences under the Indian Penal Code and other laws.

-- (1) All offences under the Indian Penal Code (45
of 1860) shall be investigated, inquired into, tried,
and otherwise dealt with according to the provisions
hereinafter contained.

(2) All offences under any other law shall be
investigated, inquired into, tried, and otherwise
dealt with according to the same provisions, but
subject to any enactment for the time being in force
regulating the manner or place of investigating,
inquiring into, trying or otherwise dealing with such
offences.

1. Section 4(2) lays down that the provisions of the Code of Criminal Procedure shall apply to all offences under any other law apart from the Indian Penal Code.

5.apl.140 & 141.2017.Judgments.odt (24) However, the application of the Code of Criminal
Procedure will be excluded only where a special law
prescribes special procedures to deal with the
investigation, inquiry, or the trial of the special offence.
For instance, in Mirza Iqbal Hussain Vs. State of Uttar
Pradesh MANU/SC/0088/1982 : (1992) 3 SCC 516,
this Court was called upon to determine whether the trial
court had jurisdiction to pass an order of confiscation
under the Prevention of Corruption Act, 1947. This Court
held that the provisions of the Code of Criminal Procedure would apply in full force because the Prevention of
Corruption Act, 1947 did not provide for confiscation or
prescribed any mode by which an order of confiscation
could be made. Therefore, it was held that a court trying
an offence under the Prevention of Corruption Act, 1947 was empowered to pass an order of confiscation in view
of Section 452 of the Code of Criminal Procedure. In
determining whether a special procedure will override the
general procedure laid down under the Code of Criminal
Procedure, the courts have to ascertain whether the
special law excludes, either specifically or by necessary
implication, the application of the provisions of the Code
of Criminal Procedure.

1. The Code of Criminal Procedure provides the method for conducting investigation, inquiry, and trial with the ultimate objective of determining the guilt of the Accused in terms of the substantive law. The criminal proceedings kick in when the information of the commission of an offence is provided to the police or the magistrate. Section 154 of the Code of Criminal Procedure details the procedure for recording the first information in relation to the commission of a cognizable offence. It provides that any information relating to the commission of a cognizable offence if given orally to an officer in charge of a police station shall be reduced into writing by them or under their direction. The information provided by the informant is known as the FIR.

5.apl.140 & 141.2017.Judgments.odt (25)

1. In Lalita Kumari Vs. Government of U.P.
   MANU/SC/1166/2013: (2014) 2 SCC 1 a
   Constitution Bench of this Court held that the main
   object of an FIR from the point of the view of the
   informant is to set the criminal law in motion and from
   the point of view of the investigating authorities is to
   obtain information about the alleged criminal activity to
   take suitable steps to trace and punish the guilty. The
   criminal proceedings are initiated in the interests of the
   public to apprehend and punish the guilty. It is a well
   settled principle of law that absent a specific bar or
   exception contained in a statutory provision, the criminal
   law can be set into motion by any individual.

2. In A. R. Antulay V. Ramdas Sriniwas
   Nayak, MANU/SC/0082/1984: (1984) 2 SCC 500 a
   Constitution Bench of this Court held that the concept of
   locus standi of the complainant is not recognized in the
   criminal jurisprudence, except in situations where the
   statute creating an offence provides for the eligibility of
   the complainant. The Court observed that the right to
   initiate criminal proceedings cannot be whittled down
   because punishing an offender is in the interests of the
   society:

This general principle of nearly universal
application is founded on a policy that an offence
i.e. an act or omission made punishable by any
law for the time being in force [See Section 2(n) Code of Criminal Procedure] is not merely an
offence committed in relation to the person who
suffers harm but is also an offence against
society. The society for its orderly and peaceful
development is interested in the punishment of
the offender. Therefore, prosecution for serious
offences is undertaken in the name of the State
representing the people which would exclude any
element of private vendetta or vengeance. If such
is the public policy underlying penal statutes, who
brings an act or omission made punishable by law
to the notice of the authority competent to deal

5.apl.140 & 141.2017.Judgments.odt (26) with it, is immaterial and irrelevant unless the
statute indicates to the contrary. Punishment of
the offender in the interest of the society being
one of the objects behind penal statutes enacted
for larger good of the society, right to initiate
proceedings cannot be whittled down,
circumscribed or fettered by putting it into a
strait-jacket formula of locus standi unknown to
criminal jurisprudence, save and except specific
statutory exception."

1. By referring the provisions as well as the judgment in Lalita Kumari Vs. Government of U.P.. and [A. R. Antulay V.

Ramdas Sriniwas Nayak](https://indiankanoon.org/doc/1502681/). The Hon'ble Apex Court in Para

No.20 observes as follows:
"20. The 1960 Act is a special law enacted to govern
co-operative societies in Maharashtra. Section 81 of
the 1960 Act casts a public duty on the auditor and the
Registrar to audit co-operative societies. In pursuance
of this objective, Section 81(5B) obligates them to
register an FIR in case they discover any financial
irregularities in the audit reports of a co-operative
society. According to said provision, when the auditor
comes to the conclusion in the audit report that any
person is guilty of an offence relating to the accounts
or of any other offences, they are mandated to file a
specific report to the Registrar. Where the auditor has
failed to do so, the Registrar is empowered to cause an
FIR to be filed by a person authorized by them in that
behalf. The statutory obligation is cast on the auditor
and the Registrar because they are the first persons to
acquire knowledge about the financial irregularities in a
co-operative society in the course of conducting an
audit. Since only the auditor and the Registrar are
privy to such irregularity, the 1960 Act obligates them
to bring the information about the financial irregularity
to the knowledge of the police."

5.apl.140 & 141.2017.Judgments.odt (27)

1. Finally the Hon'ble Apex Court observed in para No.24

are as under:

"24. Section 81(5B) of the Act casts a positive
obligation on the auditor or the Registrar to file an FIR.
It does not use any negative expression to prohibit
persons other than the auditor or the Registrar from
registering an FIR. Therefore, it would be contrary to
basic principles of statutory construction to conclude
that Section 81(5B) debars persons other than the
auditor or the Registrar from filing an FIR. The ratio of
the decision of this Court in Jamiruddin Ansariv. CBI
(2009) 6 SCC 316 is predicated on a provision of law
distinct from the statutory provision applicable to the
present case."
33. Thus, in view of the interpretation of Section 81(5B) a

plain reading of the said provision does not lead to the conclusion

that the legislature intends to debar any person other than the

auditor or the Registrar from registering an FIR. Section 81(5B)

cannot be interpreted to mean that any other person who comes

to know about the financial irregularity on the basis of the audit

report is debarred from reporting the irregularity to the police.

In the absence of any specific provision or necessary intendment,

such an inference will be against the interests of the society. The

interests of the society will be safeguarded if financial

irregularities in cooperative banks are reported to the police, who

can subsequently take effective actions to investigate crimes and

protect the commercial interests of the members of the society.

5.apl.140 & 141.2017.Judgments.odt (28)

1. In view of the above interpretation by the Hon'ble Apex

Court of the provision, the submission of the learned counsel for

the applicants that in view of Section 81(5B) the Auditor is not

the person, who can lodge the report is not sustainable.

1. In the circumstances, I am of the view of that, the

submission made by the learned counsel for the applicants that

the provisions of the Maharashtra Cooperative Societies Act are

ignored and the Auditor is not the person authorized to lodge the

report. The report is lodged by ignoring the provision under

Section 81(5B) is not sustainable. The FIR adverted to the audit

which was conducted by PW.1 in respect of the affairs of the

cooperative society and thereafter the criminal law was set in

motion. The investigating agency has carried out the

investigation and after investigation the charge sheet was filed.

The prosecution has adduced the evidence and on the basis of

the evidence the charges are proved against the present

applicants. As observed earlier that in view of the scope of the

revision reappreciation of the evidence is not permissible. The

only thing this Court has to see whether any illegality or error is

committed by the Court while dismissing the appeal. After

considering the record, the view taken by the learned trial Court

as well as the learned first Appellate Court on the basis of the

evidence is reasonable, it is not a case that there was no

5.apl.140 & 141.2017.Judgments.odt (29) evidence at all or the evidence was wrongly appreciated by the

                                  learned trial Court or the first Appellate Court. In view of that,

                                  both the revision applications being devoid of merits and liable to

                                  be dismissed.     Therefore, both the revision applications are

                                  dismissed.

1. Both applicants shall surrender before the

                                 Superintendent, Yavatmal District Prison to undergo the sentence
   
                                 on 06.04.2026.
   

(URMILA JOSHI-PHALKE, J.)

                           Sarkate.

Signed by: Mr. A.R. Sarkate
Designation: PA To Honourable Judge
Date: 25/03/2026 20:00:01