# Ajay Rai v. State Of U.P. & Ors

- **Citation:** (2024) 2 ILRA 1544
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-01-11
- **Case number:** Criminal Misc. Writ Petition No. 17595 of 2023
- **Bench:** Vivek Kumar Birla, Vinod Diwakar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-rai-v-state-of-u-p-ors-51291
- **Pages:** 7

## Headnote

Criminal Law - Uttar Pradesh Co-operative
Societies Act, 1965 - Sections 16, 17,
65(2), 68, 103 & 105 - Code of Criminal
Procedure, 1973 - Sections 154 & 155 -
First Information Report (F.I.R.) - Quashing of
F.I.R.
-
Article
226
-
Embezzlement
-
Cognizable Offence

The petitioner, Ajay Rai, challenged the F.I.R.
registered as Case Crime No. 0182 of 2023
under Section 409 IPC at P.S. Dullahpur,
Ghazipur, alleging misappropriation of Rs.
16,17,833 as the Officiating Secretary of Sikhadi
Samiti. The F.I.R. followed an inquiry under
2 All. Ajay Rai Vs. State Of U.P. & Ors.
1545
Section 66 of the U.P. Co-operative Societies
Act, 1965, which confirmed illegalities after the
petitioner's suspension. The petitioner argued:
(1) false implication with ulterior motives, (2) no
offence under Section 409 IPC disclosed, (3)
F.I.R. registration by the Additional District Cooperative Officer violated a 2000 Government
Order vesting such power in the Regional
Deputy Commissioner, (4) lack of prior approval
from the Registrar under Sections 103 and 105,
(5) non-invocation of arbitration under Sections
16 and 17, and (6) no prior inquiry under
Section 65(2). Held: The F.I.R. registration
complied with Section 154 Cr.P. , as per Lalita Kumari Vs
Government of U.P. ((2014) 2 SCC 1), mandating
registration for cognizable offences like embezzlement.
The 2000 Government Order, being administrative, does
not override statutory provisions, and the Assistant
Commissioner's delegation to the Additional District Cooperative Officer was vali The inquiry committee's
findings, based on ledger scrutiny, established a prima
facie case, unchallenged by the petitioner. Sections 16
and 17 (arbitration) were irrelevant to criminal
proceedings, and Sections 65 and 68 inquiries were duly
conducte Section 105's prior sanction was not
mandatory at the F.I.R. stage. The petitioner failed to
demonstrate malice or fit within the quashing criteria of
St. of Har. Vs Bhajan Lal ((1992) Supp (1) SCC 335).
With the investigation at a preliminary stage, no
interference under Article 226 was warrante The
petition was dismissed as meritless.

Case Law Cited:

## Text

1544 INDIAN LAW REPORTS ALLAHABAD SERIES
deprivation of right of property available to
the petitioner. Such argument of learned
counsel for the petitioner appears to be
misconceived.

15. It is apposite to refer Section 451 of
Cr.P.C. which enables the trial Court to grant
interim custody pending trial. Similarly, Section
457 also vests power in the Magistrate to deal
with the seized property as deemed proper and
necessary. An accused whose property is seized
by police officer can file application for grant of
interim custody. This is an effective and
efficacious remedy. Section 457 of Cr.P.C. for
ready reference is reproduced here-in-under:-

"457. Procedure by police upon seizure of
property.

(1) Whenever the seizure of property by
any police officer is reported to a Magistrate
under the provisions of this Code, and such
property is not produced before a Criminal
Court during an inquiry or trial, the Magistrate
may make such order as he thinks fit respecting
the disposal of such property or the delivery of
such property to the person entitled to the
possession thereof, or if such person cannot be
ascertained, respecting the custody and
production of such property.

(2) If the person so entitled is known, the
Magistrate may order the property to be
delivered to him on such conditions (if any) as
the Magistrate thinks fit and if such person is
unknown, the Magistrate may detain it and
shall, in such case, issue a proclamation
specifying the articles of which such property
consists, and requiring any person who may
have a claim thereto, to appear before him and
establish his claim within six months from the
date of such proclamation."

(Emphasis supplied by us)

16. Thus, on the basis of what has been
discussed above, the petitioner ought to have
approached the jurisdictional Magistrate seeking
appropriate remedy in respect of the property
seized and therefore, when an alternative remedy
is available, in our considered opinion the present
writ petition is not maintainable.

17. In view of the above, the petition lacks
merit, which is accordingly, finally disposed of,
leaving it open to the petitioner to avail
appropriate remedy as may be available to him in
accordance with law.

8. Interim order, if any, stands
discharged.
----------
(2024) 2 ILRA 1544
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.01.2024

BEFORE

THE HON'BLE VIVEK KUMAR BIRLA, J.
THE HON'BLE VINOD DIWAKAR, J.

Criminal Misc. Writ Petition No. 17595 of 2023

Ajay Rai ...Petitioner
Versus
State Of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Awadhesh Kumar Malviya

Counsel for the Respondents:
G.A., Sri Rajesh Kumar Madhesia(S.L.O.)

Criminal Law - Uttar Pradesh Co-operative
Societies Act, 1965 - Sections 16, 17,
65(2), 68, 103 & 105 - Code of Criminal
Procedure, 1973 - Sections 154 & 155 -
First Information Report (F.I.R.) - Quashing of
F.I.R.
-
Article
226
-
Embezzlement
-
Cognizable Offence

The petitioner, Ajay Rai, challenged the F.I.R.
registered as Case Crime No. 0182 of 2023
under Section 409 IPC at P.S. Dullahpur,
Ghazipur, alleging misappropriation of Rs.
16,17,833 as the Officiating Secretary of Sikhadi
Samiti. The F.I.R. followed an inquiry under
2 All. Ajay Rai Vs. State Of U.P. & Ors.
1545
Section 66 of the U.P. Co-operative Societies
Act, 1965, which confirmed illegalities after the
petitioner's suspension. The petitioner argued:
(1) false implication with ulterior motives, (2) no
offence under Section 409 IPC disclosed, (3)
F.I.R. registration by the Additional District Cooperative Officer violated a 2000 Government
Order vesting such power in the Regional
Deputy Commissioner, (4) lack of prior approval
from the Registrar under Sections 103 and 105,
(5) non-invocation of arbitration under Sections
16 and 17, and (6) no prior inquiry under
Section 65(2). Held: The F.I.R. registration
complied with Section 154 Cr.P. , as per Lalita Kumari Vs
Government of U.P. ((2014) 2 SCC 1), mandating
registration for cognizable offences like embezzlement.
The 2000 Government Order, being administrative, does
not override statutory provisions, and the Assistant
Commissioner's delegation to the Additional District Cooperative Officer was vali The inquiry committee's
findings, based on ledger scrutiny, established a prima
facie case, unchallenged by the petitioner. Sections 16
and 17 (arbitration) were irrelevant to criminal
proceedings, and Sections 65 and 68 inquiries were duly
conducte Section 105's prior sanction was not
mandatory at the F.I.R. stage. The petitioner failed to
demonstrate malice or fit within the quashing criteria of
St. of Har. Vs Bhajan Lal ((1992) Supp (1) SCC 335).
With the investigation at a preliminary stage, no
interference under Article 226 was warrante The
petition was dismissed as meritless.

Case Law Cited:

1. Lalita Kumari Vs Government of U.P., (2014) 2 SCC 1

2. St. of Har. Vs Bhajan Lal, (1992) Supp (1) SCC 335

3. Dilawar Singh Vs St. of Delhi, (2007) 12 SCC 641

4. Abhay Gupta Vs St. of U.P., 2010 SCC OnLine All 2033

(Delivered by Hon'ble Vinod Diwakar, J.)

1. Heard Shri Awadhesh Kumar Malviya,
learned counsel for the petitioner, Shri Rajesh
Kumar Madhesia, learned State Law Officer for
the State-respondents, and perused the record.

2. By way of the instant petition, the
petitioner has challenged the legality and
correctness of the impugned F.I.R. registered as
Case Crime No.0182 of 2023, under section 409
IPC at P.S. Dullahpur, District Ghazipur.

3. In brief, the prosecution case is that
during an inspection by the Additional District Cooperative Officer at Sikhadi Samiti, the Officiating
Secretary i.e. the petitioner was observed engaging
in certain illegalities. Immediately, the matter was
reported to the Chairman of the Samiti, leading to
the petitioner's suspension. Subsequently, vide
order dated 23rd November 2022, by invoking
section 66 of the Uttar Pradesh Co-operative
Societies Act, 1965, a detailed inquiry was
conducted by a three-member committee. The
findings of the inquiry revealed that the petitioner
had misappropriated a sum of Rs.16,17,833/-.

4. In support of the prayer, learned
counsel for the petitioner has made the
following submissions:

4.1 The petitioner has been
falsely implicated by the department with
ulterior motives.

4.2 Upon reading the F.I.R., no
offence under section 409 IPC is made out
at its face.

4.3 The registration of the F.I.R.
is in contravention of the Government
Order dated 16.8.2000, which stipulates
that in such cases, the Regional Deputy
Commissioner, Co-operative, Varanasi, is
empowered to register the F.I.R. However,
in this instance, the impugned F.I.R. was
registered based on the complaint of the
Additional District Co-operative Officer,
Jakhniya, Ghazipur.

4.4 The petitioner asserts that, in
accordance with Sections 103 and 105 of
the Uttar Pradesh Co-operative Societies
Act, 1965, requisite approval from the
Registrar, Co-operative, was not obtained
prior to the registration of the impugned
F.I.R.
1546 INDIAN LAW REPORTS ALLAHABAD SERIES

4.5 The petitioner emphasizes
that Sections 16 and 17 of the Uttar
Pradesh Co-operative Societies Act, 1965,
providing for arbitration proceedings have
not been invoked as a remedy.

4.6 No inquiry was conducted
prior to the registration of the impugned
F.I.R. as required under section 65(2) of the
Uttar Pradesh Co-operative Societies Act,
1965.

5. Per contra, learned A.G.A. submits
that during on-the-spot inspection by the
Additional District Co-operative Officer at
Sikhadi Samiti, illegalities were noted. The
complainant, satisfied with prima-facie
evidence of the petitioner's involvement in
embezzlement and illegal recovery of loan
amounts from the farmers, constituted a
committee comprising three members. The
committee's
report,
dated
17.10.2022,
reveals findings on five points, indicating
the petitioner's engagement in the illegal
recovery and embezzlement of funds. The
committee scrutinized the ledgers of 56
account
holders,
revealing
significant
irregularities in the pass-books, with
substantial differences in the amounts
disbursed and subsequently recovered.
Serious allegations against the petitioner,
evident from the F.I.R. and the inquiry
report, establish the ingredients of a
cognizable offense. The investigation is in
their
preliminary
stages,
and
no
intervention in writ jurisdiction is deemed
necessary by this Court at this juncture.

6. For the sake of clarity, sections
65(2), 68, 105 and 106 of the Uttar Pradesh
Co-operative Societies Act, 1965 are
reproduced herein below:

"Section 65. (2) An inquiry of the
nature referred to in sub-section (1) shall
be held by the Registrar or by a person
authorized by him in writing on this behalf
on the application of- (a) a cooperative
society to which the society concerned is
affiliated; (b) not less than one-third of the
total members of the society; (c) a majority
of the members of the committee of
management of the society.

Section 68. (1) If in the course of
an audit, inquiry, inspection or the winding
up of a cooperative society, it is found that
any person who is or was entrusted with
the organization or management of such
society or who is or has at any time been
an officer or an employee of the society,
has made or caused to be made any
payment contrary to this Act, the rules or
the bye-laws or has caused any deficiency
in the assets of the society by breach of
trust
or
willful
negligence
or
has
misappropriated or fraudulently retained
any money or other property belonging to
such society, the Registrar may of his
motion or on the application of the
committee, liquidator or any creditor,
inquire himself or direct any person
authorized by him by an order in writing in
this behalf to inquire into the conduct of
such person; Provided that no such inquiry
shall be commenced after the expiry of
twelve years from the date of any act or
omission referred to in this sub-section. (2)
Where an inquiry is made under subsection (1), the Registrar may, after
affording
the
person
concerned
a
reasonable opportunity of being heard,
make an order of surcharge requiring him
to restore the property or repay the money
or any part thereof, with interest at such
rate, or to pay contribution and costs or
compensation to such an extent as the
Registrar may consider just and equitable.
(3) Where an order of surcharge has been
passed against any person under subsection
(2)
for
having
caused
any
deficiency in the assets of the society by
2 All. Ajay Rai Vs. State Of U.P. & Ors.
1547
breach of trust or willful negligence, or for
having misappropriated or fraudulently
retained any money or other property
belonging to such society, such person
shall, subject to the result of appeal, if any,
filed against such order, be disqualified
from continuing in or being elected or
appointed to an office in any cooperative
society for five years from the date of the
order of surcharge.

Section 105. (1) No court inferior
to that of a stipendiary magistrate of the
first class shall try any offence under this
Act. (2) No prosecution shall be instituted
under this Act without the previous
sanction of the Registrar, and such sanction
shall not be given without affording the
person sought to be prosecuted an
opportunity to present his case.

Section 106. No person other
than a cooperative society shall trade or
carry on business under any name or title
of which the word Sahkari or its equivalent
in
English,
cooperative
forms
part,
Provided that nothing in this section shall
apply to the use by any person or his
successor in interest of any name or title
under which he carried on business at the
date on which the Cooperative Societies
Act, 1912, had come into operation."

7. The First Information Report,
stands as an indispensable document in the
realm of criminal justice. It serves as the
linchpin, marking the commencement of
criminal proceedings and facilitating the
subsequent
investigation
into
alleged
offenses.
The
legal
foundation
for
registration of F.I.R. is firmly grounded in
Sections 154 and 155 of the Code of
Criminal Procedure, which delineate the
procedure and authority for lodging an
F.I.R. Section 154 of the Cr.P.C. lays down
the mandate for the registration of an F.I.R.
It underscores the obligation of the police
to register an F.I.R. upon receiving
information about the commission of a
cognizable
offense.
This
provision
encapsulates
the
immediacy
and
compulsoriness with which the F.I.R. must
be lodged to set the criminal justice
machinery in motion promptly by the
informant. Section 155 provides certain
exceptions in cases where there might be a
delay in lodging the F.I.R. due to
exceptional circumstances. Despite this, the
general thrust of Section 154 emphasizes
the expeditious registration of the F.I.R. to
ensure the prompt initiation of the
investigative process. The conjoint reading
of sections 154 & 155 of Cr.P.C. explicitly
state that anyone possessing knowledge
about the commission of a cognizable
offense has the authority to file an F.I.R.
This includes not only the victim or an
eyewitness but also any person who
becomes
cognizant
of
the
offense,
extending
even
to
police
officers
themselves.
The
universality
of
the
authority
to
lodge
an
F.I.R.
is
a
foundational principle ensuring that the
criminal justice system remains accessible
to those with information about potential
criminal acts. This inclusivity empowers
informants
comprising
victims,
eyewitnesses, and even law enforcement
officers to initiate the process, fostering a
collaborative and comprehensive approach
to crime reporting. In essence, the legal
framework governing the registration of
F.I.R. is intricately woven into the fabric of
criminal justice. Sections 154 and 155, in
conjunction with numerous judgments of
the
Supreme
Court,
establish
the
foundation upon which the F.I.R. stands as
an essential document initiating the process
of criminal justice. The universal authority
granted to individuals, including victims,
eyewitnesses, and even police officers,
underscores the inclusive nature of the
1548 INDIAN LAW REPORTS ALLAHABAD SERIES
F.I.R. registration process, ensuring the
swift and effective administration of
justice.

8. In Lalita Kumari v. Government
of Uttar Pradesh and others1, a watershed
judgment on the guiding principle for
registration of the F.I.R. makes it clear that
the police officer is under the authority of
law to register an F.I.R. on receipt of
information of a cognizable offence. The
police officer cannot avoid his duty of
registering the F.I.R. if a cognizable offence
is disclosed. The object sought to be
achieved
by
registering
the
earliest
information as F.I.R. is, among other
things, two-fold: i) that the criminal process
is set into motion and is well documented
from the very start, and ii) that the earliest
information received in relation to the
commission of cognizable offence is recorded
so that there cannot be any embellishment
etc. One way of keeping a check on the
authorities
with
such
power
is
by
documenting
every
action
of
theirs.
Accordingly, under the Code of Criminal
Procedure, police actions are provided to be
written and documentary.

9. It is noteworthy that whenever an
F.I.R. is registered, it does not mean that the
investigation is mandatory to be commenced,
and there are no inbuilt safeguards with the
Code to prevent a likelihood of misuse. In
Dilawar Singh v. State of Delhi 2, it is held
that even if an F.I.R. has been registered and
the police have commenced the investigation,
the aggrieved person may approach the
Magistrate under section 156(3) Cr.P.C. to
seek an order for proper investigation. In this
regard, the reliance is also placed in Abhay
Gupta v. State of U.P.3.

10. If there is sufficient evidence to
corroborate the complainant's allegations, the
charge sheet is filed, or else, a final report
mentioning that no evidence was found could
be filed in the Court.

11. Shri Malviya's primary contention is
that the complainant has no authority to
register the impugned First Information
Report, as per the provisions outlined in the
notification dated 16.8.2000 issued by the
office of the Registrar, Cooperative Societies,
Uttar Pradesh. According to the said
notification, the power to register the F.I.R. in
instances
of
embezzlement
involving
Rs.25000/- or more is exclusively vested in
the Regional Deputy Commissioner, Cooperative. In the instant matter, the F.I.R. has
been registered by the Additional District
Cooperative
Officer, thus contravening,
according to the petitioner, the stipulations set
forth in the aforementioned notification.

12. In this context, it is prudent to assert
that an administrative order lacks the
authority
to
conclusively
establish
or
adjudicate the rights of the parties involved.
Rather, these orders are confined to
considerations of policy regulation and
expediency- subjective elements within the
discretion of the administrative officer. The
distinction
between
administrative
and
judicial processes becomes evident as
administrative determinations are usually
applied to matters situated within the realm
of public policy, a conceptualization of law
seen as inherently inflexible. In contrast,
the adjudication of legal rights is explicitly
reserved
for
the
judicial
domain,
representing a crucial departure from the
more adaptable and policy-oriented nature
of administrative decisions. A crucial
distinction emerges is that legal rights fall
squarely within the realm of judicial
functions.
Judicial
determinations,
in
contrast to administrative orders, are
contemplated
as
mechanisms
for
2 All. Ajay Rai Vs. State Of U.P. & Ors.
1549
definitively deciding legal rights. Courts
are equipped with the authority, procedural
frameworks, and legal principles necessary
for resolving disputes and determining the
rights and obligations of parties involved.
The administrative decisions are driven by
the
discretionary
powers
of
the
administrative officer. This subjectivity
introduces an element of flexibility that
may not align with the precision and
rigidity
often
associated
with
the
adjudication of legal rights.

13. Learned Additional Government
Advocate has drawn our attention to the
order dated 23.10.2023 emanating from the
office of the Assistant Commissioner-cumAssistant Registrar, Co-operative. In this
directive, the Assistant
Commissioner
specifically instructs the Additional District
Co-operative Officer to initiate the process
for registration of the First Information
Report against the petitioner in the present
case.
Essentially,
the
Assistant
Commissioner has delegated his authority
to the Additional District Co-operative
Officer for the purpose of registering the
F.I.R., therefore, the petitioner's argument
has no legal strength and is thus misplaced.

14. The combined examination of the
concept
of
delegated
legislation
in
administrative
jurisprudence
and
the
guiding principles derived from Lalita
Kumari's case (supra) judgment clarifies
that registration of F.I.R. by the Assistant
Commissioner or Additional District Cooperative Officer is inconsequential. The
crucial consideration lies in determining
weather the contents of the F.I.R. forms
part of the cognizable offence or not.

15. The second noteworthy argument
of
the
petitioner's
counsel
is
noncompliance of sections 16, 17, 65(2), 68,
103 and 105 of the Uttar Pradesh Cooperative Societies Act, 1965 before
registration of the impugned FIR.

16. The legal mandates delineated in
the Uttar Pradesh Co-operative Societies
Act of 1976 underscore various procedural
aspects and criteria pertinent to Cooperative Societies. Section 16 specifically
prescribes the procedure for the division of
assets and liabilities of these societies,
while Section 17 delineates eligibility
criteria for individuals seeking membership
in Co-operative Societies. Section 65
imposes a mandatory inquiry by the
Registrar into the constitution, functioning,
and financial condition of the Co-operative
Society, and Section 68 empowers the
Registrar to initiate an inquiry, either on his
own motion or in response to an application
from the Committee, Liquidator, or any
Creditor. This authority extends to directing
an appointed individual, through written
order, to investigate the conduct of the
concerned person.

17.

Furthermore,
Section
103
addresses offenses and penalties within the
purview of the Co-operative Societies Act,
and Section 105 establishes a crucial
procedural safeguard, stipulating that no
prosecution under the Act shall be initiated
without the prior sanction of the Registrar.

18. These statutory provisions,
collectively governing the affairs of Cooperative Societies registered under the
Act, align with the overarching objective of
the legislation. The enactment of the Cooperative Societies Act is rooted in the
intent to shield farmers from exploitation
by traditional middlemen, ensuring they
receive fair prices for their produce and
safeguarding their economic interests. The
Co-operative Department's vision dovetails
1550 INDIAN LAW REPORTS ALLAHABAD SERIES
with these objectives, aiming to facilitate
accessible credit to farmers through co-operative
societies on equitable terms.

19. In light of the stated aims and
objectives of the Co-operative Societies Act of
1965, it is reasonably deduced that the
registration of the impugned First Information
Report in the present case does not prima facie
contravene any provisions of the Act. The
regulatory framework appears to be in
consonance with the broader objectives of
shielding the agricultural community from
exploitation and promoting their economic wellbeing through co-operative initiatives. In the
wake of the aims and objective of the Act, it
could be safely concluded that no provisions of
the Co-operative Societies Act, 1965 have prima
facie been violated for registration of the
impugned F.I.R. in the instant case.

20. Lalita Kumari case (supra) explicitly
emphasizes the mandatory nature of First
Information Report registration, as outlined in
Section 154 of the Code of Criminal Procedure.
The Uttar Pradesh Co-operative Societies Act,
1965 remains silent on the specific procedure for
registering an F.I.R. in cases involving
embezzlement of society funds and the illicit
recovery of credit from farmers, therefore,
general legal principles in the regards would be
applicable. The petitioner neither contends that
the criminal proceedings against him is tainted
with malice nor suggests any ulterior motives in
the initiation of the prosecution.

21. Furthermore, the petitioner fails to
align their case with any of the seven illustrations
provided in the landmark judgment of State of
Haryana and others v. Bhajan Lal and others4,
which delineates circumstances warranting the
quashing of criminal proceedings.

22. Turning to the facts of present case,
serious allegations of embezzlement amounting
to Rs.16,17,833.00, collected unlawfully from
impoverished farmers by the Officiating
Secretary of the Samiti, form the crux of the
matter. The registration of the F.I.R. follows a
conclusive determination of embezzlement by a
three-member
committee.
No
substantive
reasons have been proffered by the petitioner's
counsel to dispute the findings of this committee,
which serves as the basis for the impugned F.I.R.
In the legal context, the delegation of the power
to register the F.I.R. holds no consequential
weight, both in light of Lalita Kumari case
(supra) and on broader legal grounds.

23. As the investigation is in its initial
stages, the extraordinary power vested in this
Court under Article 226 of the Constitution of
India to quash the F.I.R. is deemed unwarranted
given the current facts-circumstances.

24. The instant petition is devoid of
merits, and hence dismissed.
----------
(2024) 2 ILRA 1550
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.01.2024

BEFORE

THE HON'BLE VIVEK KUMAR BIRLA, J.
THE HON'BLE VINOD DIWAKAR, J.

Criminal Misc. Writ Petition No. 18834 of 2023

Adil & Ors. ...Petitioners
Versus
The State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Brijesh Kumar Pandey

Counsel for the Respondents:
G.A., Sri Vinod Singh

Criminal
Law
-
Code
of
Criminal
Procedure, 1973 - Sections 173(8) &
156(3) - Further Investigation - Power of