Managing Committee Members Are Duty-bound To Protect Funds In CHS
Legally Speaking - Property and Housing Laws | By Solicitor Gajanan Khergamker
We have a unique case where the managing committee members treat the society like their own property and use the monies collected from members at free will and randomly without offering any explanation to members. When asked, they threaten to resign or simply bully members into silence. What does the law say about this? Can one approach a court of law for a remedy?
— Firoze Malakar, Raigad
The managing committee members, office bearers, officers of a cooperative society are expected to work prudently with due diligence for the betterment of all.
It is the duty of all managing committee members, office bearers, officers of the society to see to the well-being of all the remaining members and concerned persons. But unfortunately, there are hundred of instances in the state of Maharashtra which suggest the majority of managing committee members commit acts of misappropriation of funds in their respective regions.
If we look into the cases filed before the cooperative court in the state of Maharashtra, we will find that a large number of managing committee members are involved in misrepresenting, misapplication, misappropriation of funds. Sometimes their acts may not be for their personal gains but it is definitely detrimental to the interest of the society.
Every managing committee member, office-bearer, officer of the society is expected to handle cash, funds in such manner so as to enable all to achieve their aims and objects of the society. In the bye-laws of the society aims and objectives are shown but while acting towards the fulfilling of these aims and objectives it is noticed that some bad elements in the guise of managing committee members have manipulated the records for their personal gains.
A number of managing committee members indulge in activities that are detrimental to the interest of the society. These people are the trustees of the funds of the society and they are the care takers of the funds of the society. Therefore any act of misappropriation on their part amounts to civil breach of trust and criminal breach of trust and misappropriation of funds by manipulating or fabricating records. Every member of the society has every right to challenge the act of any managing committee member suspected of this act. He has every right to bring the act of misappropriation before the concerned legislators who is competent to deal with such activities.
If the member has got concrete evidence then he can approach the registrar and ask him to take action u/s 83 to 88 for recovery of the said misappropriated amount from the said managing committee member. It is to be noted here that the managing committee member is the custodian of the society funds. Therefore he is also liable for criminal prosecution for which sufficient evidence is required.
A member can move before the competent court of law if he has sufficient evidence against such wrong doers. There are instances wherein the managing committee members in collusion decide not to take any action. In that case the aggrieved member can definitely knock on the court’s doors or the concerned registrar to teach them and other such wrongdoers a lesson.
If a member has sufficient information and evidence then he can approach the registrar to take legal action against the said person. The Registrar can appoint an enquiry officer u/s 83 or he himself can make an enquiry. The Registrar can Suo Moto can order reassessment of audit for the said period in which misappropriation of funds took place.
The auditor himself is a competent person to lodge a criminal complaint against the said managing committee member for violation of the bye-laws of the society and for misappropriation of the funds of the society. At the same time the said enquiry officer or auditor can file a dispute u/s 91 of the Maharashtra Cooperative Societies Act 1960.
The said cooperative court is the only competent authority to pass an award for seizure of the misappropriated property and/or recover the misappropriated fund from the said wrongdoing person.
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