Court affirms that audit findings are preliminary and not subject to revision, restoring inquiry into alleged financial irregularities.
The Bombay High Court has set aside a ministerial order that had halted an inquiry into alleged financial irregularities within Shivkrupa Sahakari Patpedhi Limited. The court ruled that the audit findings and the subsequent order for inquiry were preliminary steps in the statutory process and not subject to revisional jurisdiction under Section 154 of the Maharashtra Cooperative Societies Act, 1960.
In a decision dated February 24, 2026, Justice Amit Borkar emphasized the distinction between audit findings and adjudicatory determinations, underscoring that the statutory scheme of the Act requires audit findings to serve as preliminary alerts rather than final decisions. The court held that the revisional authority had overstepped its jurisdiction by entertaining a revision against these preliminary steps, which do not determine rights or liabilities.
The case involved allegations against former managing committee members of Shivkrupa Sahakari Patpedhi Limited, accused of financial misconduct. A Special Report by the Statutory Auditor highlighted serious irregularities, leading the Additional Registrar to order an inquiry under Section 88 of the Act. However, the inquiry was quashed by a ministerial order following a revision application by the implicated members.
Justice Borkar clarified that the audit report under Section 81(5B) and the order directing an inquiry under Section 88 are preparatory steps within the statutory process. They do not determine rights or liabilities and are therefore not subject to revision under Section 154. The court restored the inquiry, directing it to proceed according to law, and denied a stay on the judgment, ensuring that the inquiry could continue without further delay.
Bottom Line:
Maharashtra Cooperative Societies Act, 1960 - Audit findings under Section 81 and inquiry under Section 88 are preliminary in nature and do not amount to adjudicatory determinations; revisional jurisdiction under Section 154 is not maintainable against such preliminary steps.
Statutory provision(s): Maharashtra Cooperative Societies Act, 1960 - Sections 81, 88, 154
Shivkrupa Sahakari Patpedhi Limited v. State of Maharashtra, (Bombay) : Law Finder Doc id # 2857658
