MCS Act: Section 81 – Deals with audit, test audit, re-audit, and submission of specific and special reports by auditors. MCS Act: Section 154 – Provides for revision of decisions or orders passed by subordinate officers.
Administrative vs. Quasi-Judicial Orders – Orders directing test audit or re-audit under Section 81(3)(c) and 81(6) are administrative in nature and not revisable under Section 154.
Auditor’s Findings – Mere findings or conclusions in audit, test audit, or re-audit reports do not constitute a ‘decision’ or ‘order’ and cannot be challenged under Section 154.
Specific and Special Reports – Findings in specific reports (for lodging FIR) and special reports (for financial irregularities) do not amount to a ‘decision’ unless acted upon by the Registrar.
Registrar’s Permission for FIR – Registrar’s written permission for lodging FIR based on auditor’s specific report constitutes a ‘decision’ and can be challenged.

The Bombay High Court held that the revision application under Section 154 of the MCS Act was not maintainable against the mere findings in the re-audit report. The court quashed the Divisional Joint Registrar’s order dated 2 August 2024 and remanded the appeal for fresh consideration on merits.

Auditor’s Findings Not Revisable: Findings or conclusions in audit, test audit, re-audit, specific, or special reports do not constitute a ‘decision’ or ‘order’ and cannot be challenged under Section 154 of the MCS Act. (Para 35-39)

Administrative Orders: Orders directing test audit under Section 81(3)(c) or re-audit under Section 81(6) are administrative in nature and not revisable under Section 154. (Para 30-34)

Registrar’s Permission for FIR: Registrar’s written permission for lodging FIR based on auditor’s specific report constitutes a ‘decision’ and can be challenged. (Para 40-44)

Subjects:

Audit Report – Findings, Re-audit, Test Audit, Specific Report, Special Report.
Administrative Order – Test Audit, Re-audit, Section 81(3)(c), Section 81(6).
Revision Application – Section 154, Maintainability, Quasi-Judicial Order.
Registrar’s Permission – FIR Lodging, Specific Report, Decision.

Major Acts:

1. Maharashtra Co-operative Societies Act, 1960 (MCS Act) – Sections 81, 82, 83, 87, 88, 152, 154.

2. Indian Penal Code, 1860 (IPC) – Relevant for FIR lodging based on audit findings.

Facts:

1. Nature of the Litigation:
   – The petitioner, Shri. Sayajirao Narayan Takwane, challenged the order of the Divisional Joint Registrar, Co-operative Societies, Pune, which set aside a re-audit report and directed a fresh re-audit.
   – The re-audit report had assessed losses of Rs. 33,76,111/- and apportioned the loss among members of the previous managing committee.

2. Remedy Sought:
   – The petitioner sought to quash the Divisional Joint Registrar’s order dated 2 August 2024, which allowed the revision application against the re-audit report.

3. Reason for Filing the Case:
   – The petitioner contended that the revision application under Section 154 of the MCS Act was not maintainable against the mere findings of the auditor in the re-audit report.

4. Previous Decisions:
   – The Divisional Joint Registrar had set aside the re-audit report and ordered a fresh re-audit. The petitioner challenged this order, arguing that the revision was not maintainable against the auditor’s findings.

Issues:

1. Whether a revision application under Section 154 of the MCS Act is maintainable against the mere findings in a re-audit report?

2. Whether the findings or conclusions in an auditor’s report (normal audit, test audit, re-audit, specific report, or special report) constitute a ‘decision’ or ‘order’ that can be challenged under Section 154?

3. Whether orders directing test audit or re-audit under Section 81(3)(c) and 81(6) of the MCS Act are administrative or quasi-judicial in nature?

Submissions/Arguments:

1. Petitioner’s Arguments:
   – The revision application under Section 154 is not maintainable against the auditor’s findings in the re-audit report, as they do not constitute a ‘decision’ or ‘order’.
   – Reliance was placed on judgments in Gopal Kashinath Pawar v. State of Maharashtra and Umred Vikas Khand Sahakari Shetki Kharedi Vikri Samiti Maryadit v. Divisional Joint Registrar, which held that mere findings in audit reports are not revisable.

2. Respondent’s Arguments:
   – The findings in the re-audit report, which held the previous managing committee members responsible for financial irregularities, constituted a ‘decision’ and were revisable under Section 154.
   – Reliance was placed on Daulatrao Shankarrao Thakare v. Divisional Joint Registrar, where it was held that the auditor’s conclusion leading to lodging of FIR was a ‘decision’.