Authorised Enquiry Officer · Order under Section 88 · 27.01.2024
Section 88: former office-bearers made personally liable to repay the loss
An enquiry officer appointed under Section 88 of the MCS Act found nine former office-bearers of a Kothrud housing federation responsible for misuse of funds and ordered recovery of ₹32,36,539 from them, jointly and individually, with 15% interest, plus the cost of the enquiry.
Key points
- A Section 88 enquiry follows a test audit or Section 83 enquiry that reveals loss to the society, and fixes personal liability on the persons responsible.
- The charges covered four items, including unauthorised honorarium, office construction expenses and parking money; the former office-bearers returned the Rule 72 notices and did not take part in the enquiry.
- Nine persons were ordered to repay a total of ₹32,36,539 with 15% interest from the date of the misappropriation, jointly and individually, together with the ₹30,000 cost of the enquiry.
The facts
A special auditor’s test audit and an enquiry under Section 83 found serious irregularities in the accounts of a co-operative federation of housing societies in Kothrud, Pune. In September 2023 the Deputy Registrar appointed an advocate as authorised officer to hold an enquiry under Section 88. Notices under Rule 72(2) were issued to the former office-bearers in October 2023, setting out four charges. The notices sent by registered post came back, and the former office-bearers wrote that they would not co-operate with the enquiry. The auditor was offered for cross-examination; no one appeared for arguments.
What the enquiry officer ordered
On the documents and evidence on record, the officer held that the former officers and office-bearers had misused their position and caused financial loss to the federation, and that they were jointly and individually responsible for the amounts under the four charges. He ordered recovery of ₹32,36,539 from nine named persons (about ₹3.6 lakh each) with interest at 15% per year from the date of the misappropriation, and also directed them to bear the ₹30,000 cost of the enquiry with 15% interest.
Why it matters
A Section 88 order can be recovered as arrears of land revenue, and an appeal lies under Section 152. This order shows how audit findings move to personal liability for committee members who authorise unlawful payments, including honoraria not permitted by the bye-laws. Refusing to take part in the enquiry did not help the persons charged.
Eleven-page enquiry report and order in Marathi. Names of individuals are omitted on this page. This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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