JUDGEMENT
Shree Chandrashekhar, J. -
(1.)The petitioners have challenged the order dated 16.06.2015 by which cognizance of the offence punishable under section 406, 420/120-B IPC has been taken in C.P. No. 42 of 2015 and summons has been issued to them. They are members of the Dhanbad Bar Association who were elected office-bearers of the Association for 2012-2014.
(2.)An audit of accounts of the Dhanbad Bar Association was conducted by M/s Anjali Jain & Associates which has submitted a report to the Association on 30.08.2014. The gravamen of the allegations against the petitioners is that the auditors have found misappropriation of Rs.1.25 crores from the funds of the Association. In the report dated 30.08.2014, what the auditors have observed, therefore, has become important. A copy of the audit report has been brought on record by the complainant-O.P No. 2 vide Annexure-C to the counter-affidavit. The relevant extracts of the report are reproduced below:
JUDGEMENT_116_LAWS(JHAR)2_2019_1.html
Annexure-A to the Auditor's Report
"1. Proper Books of Account as required by Bye-Law containing details of income expenditure have not been made at all.
2. No Sub-Committee for proper and prudent functioning of the Bar Association has been made.
3. No Library Register has been made.
4. Proper vouchers have not been kept and maintained by the Association.
5. Fixed Assets Register has not been kept and maintained by the Association.
6. There are instances where their arise difference between the ledger posting, Cash Book Entry and vouchers presented and hence the authenticity of the books produced to audit cannot be relied to full extent.
7. The Capital Expenditure incurred by the association has not been found regular as the documentary evidences in support of its decision by any committee has not been produced to Audit.
8. Salary register has not been produced to audit and hence the amount booked under this head remains unverified.
9. The Expenditure amounting to Rs.5,17,191/- towards construction of Shed in Different Locations remained unverified for want of vouchers of Expenditure. Moreover the accountal based on estimate is nothing but an irregular/unacceptable expenditure providing chances of defalcation for which quantum remained unascertained due to non-availability of proper records of expenditure.
10. Most of the expenditures accounted are based on an estimate sheet rather than their actual expenditure voucher and hence their chances of mis-utilization cannot be ruled out.
11. Festival Advance Amounting to Rs.23,98,000/- distributed during the year remained unverified due to non-availability of any documentary evidence in this context.
12. The agreement for shops has not been done as is evident from the records produced to audit. Moreover the allotment system of shops is also not transparent and hence chances of mal-practices in this context are inevitable.
13. The details of collection from Vakalatnama Forms, Affidavit Form, Welfare Stamps & Stamp Papers have not been produced to Audit and accordingly the amount received under these main heads of income remain unverified.
14. The unspent Cash Suspense of Rs.2,78,670/- remained unexplained during the period.
15. Internal Control System for monitoring of Cash & Bank balances and safe-guarding the interest of the Association and its Assets does not exist in the association."
(3.)The complaint-petition proceeds on a premise that withdrawal beyond Rs.10,000/- is not permissible and if at all fund is required urgently it has to be approved in the General Body Meeting which has not been done and the Model Rules, in particular, Model Rule 23(b) have not been followed. The petitioners were custodian of the records which they were required to produce before the auditors, but vouchers, bills etc. were not produced by them to the auditors due to which the accounts produced by them which are based on estimates have been found irregular and, thus, unacceptable. Letters were written to the Jharkhand State Bar Council for initiating an enquiry in the matter and the Bar Council of India was informed about criminal misappropriation of the funds and illegal allotment of Bar building to the shopkeepers by the accused persons by taking huge Salami for their personal benefits. The Bar Council of India has in turn written a letter to the Jharkhand State Bar Council and accordingly, an enquiry was conducted by a Committee of the Jharkhand State Bar Council which finding the complaint against the accused persons true recommended action against them and in the report submitted by the Steering Committee of the Jharkhand State Bar Council one of the recommendations was to lodge a First Information Report, if needed.
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