High Court Reduces Kedar’s Fine from ₹5 Lakh to ₹50,000

Nagpur: In a significant decision, the Nagpur bench of the Bombay High Court granted partial relief to former Congress MLA Sunil Kedar by reducing the fine imposed on him from ₹5 lakh to ₹50,000. The fine was initially levied by Justice (retired) JN Patel, who was appointed by the Nagpur District Central Cooperative Bank (NDCCB) to conduct an inquiry under Section 88 of the Maharashtra Co-operative Societies Act, 1960, to investigate a ₹170 crore scam.

Background of the Case

The ₹170 Crore Scam

In 2002, a substantial financial irregularity amounting to ₹170 crore surfaced at the NDCCB. At that time, Sunil Kedar was serving as the chairman of the bank. The scam involved multiple disputed transactions that raised serious questions about the management and financial practices within the bank.

Appointment of Inquiry Officer

Justice (retired) JN Patel was appointed to conduct an inquiry under Section 88 of the Maharashtra Co-operative Societies Act, 1960. His role was to investigate the scam and bring to light the facts and circumstances surrounding the irregularities.

Kedar’s Summoning and Response

Summoning for Evidence

As part of the investigation, Justice Patel summoned Sunil Kedar to provide evidence and present documents related to the disputed transactions. This was a crucial step to ensure transparency and accountability in the inquiry process.

Objection to Oral Evidence

Kedar objected to providing oral evidence. He was then directed to file an affidavit explaining the facts and circumstances related to the transactions mentioned in the charge-sheet dated March 27, 2003. This affidavit was expected to shed light on Kedar’s involvement and his perspective on the matter.

Adjournment and Fine Imposition

Application for Adjournment

On December 1, 2023, Kedar filed an application for adjournment. This was a formal request to delay the proceedings, allowing him more time to prepare his defence and gather the necessary documentation.

₹5 Lakh Fine

Justice Patel granted the adjournment but imposed a hefty fine of ₹5 lakh on Kedar. This decision was based on the belief that the adjournment would cause a significant delay in the investigation process, warranting a financial penalty to discourage unnecessary delays.

High Court’s Intervention

Challenge in High Court

Kedar challenged the ₹5 lakh fine in the Nagpur bench of the Bombay High Court. He argued that the fine was excessive and not justified, especially given his objections to providing oral evidence.

High Court’s Verdict

Justice Anil Pansare of the Bombay High Court reviewed the case and provided partial relief to Kedar. The fine was reduced from ₹5 lakh to ₹50,000. Justice Pansare stated, “The government’s argument that to give a fair chance, the petitioner has been called upon to provide evidence is beyond the scope of granting a fair opportunity. Providing a fair opportunity does not include compelling a person to give evidence, particularly when he has chosen not to testify.”

Implications of the High Court’s Decision

This decision sets a significant legal precedent regarding the imposition of fines in cases where individuals choose not to provide oral evidence. It underscores the importance of ensuring that fines and penalties are proportionate and justifiable.

Impact on Future Inquiries

The ruling could influence how future inquiries under the Maharashtra Co-operative Societies Act are conducted. It highlights the need for inquiry officers to consider the rights of individuals who choose to provide written affidavits instead of oral testimony.

Relief for Kedar

For Sunil Kedar, the reduction in the fine provides substantial relief. It acknowledges his right to challenge decisions that he perceives as unfair while still holding him accountable to a certain extent.

Understanding Section 88 of the Maharashtra Co-operative Societies Act

Purpose of Section 88

Section 88 of the Maharashtra Co-operative Societies Act, 1960, empowers authorities to conduct inquiries into the affairs of cooperative societies. This is to ensure transparency and accountability in the functioning of these societies.

Scope of Inquiries

Inquiries under Section 88 can cover a wide range of issues, including financial irregularities, management practices, and compliance with legal norms. The aim is to protect the interests of the members and ensure the proper functioning of cooperative societies.

The Role of the NDCCB

NDCCB’s Responsibility

The Nagpur District Central Cooperative Bank has a significant role in the local financial ecosystem. It is responsible for managing and safeguarding the funds of its members, ensuring ethical practices, and maintaining financial stability.

Impact of the Scam

The ₹170 crore scam had a profound impact on the NDCCB’s credibility and financial health. It underscored the need for stringent oversight and robust management practices to prevent such incidents in the future.

Justice (Retired) JN Patel’s Role

Inquiry Officer’s Responsibilities

As the appointed inquiry officer, Justice Patel’s responsibilities included gathering evidence, interviewing witnesses, and reviewing documents to uncover the truth behind the financial irregularities.

Decision to Impose Fine

Justice Patel’s decision to impose a fine on Kedar was based on his assessment of the delay caused by the adjournment. This was intended to maintain the momentum of the investigation and ensure timely resolution.

Justice Anil Pansare’s Perspective

Review of the Fine

Justice Anil Pansare’s review of the fine focused on the principles of fairness and proportionality. He considered Kedar’s objections to providing oral evidence and the impact of the fine on ensuring a fair inquiry process.

Reduction of the Fine

By reducing the fine to ₹50,000, Justice Pansare aimed to balance the need for accountability with the importance of a fair and justifiable penalty. This decision reflects a nuanced understanding of the legal and procedural complexities involved.

The reduction of Sunil Kedar’s fine from ₹5 lakh to ₹50,000 by the Nagpur bench of the Bombay High Court marks a significant development in the ongoing investigation into the ₹170 crore scam at the NDCCB. This decision underscores the importance of fairness and proportionality in legal proceedings, setting a precedent for future inquiries. It also highlights the critical role of inquiry officers and the judiciary in ensuring justice while respecting the rights of individuals involved.

1. What was the original fine imposed on Sunil Kedar?

The original fine imposed on Sunil Kedar was ₹5 lakh.

2. Why was the fine imposed on Kedar?

The fine was imposed as a penalty for seeking an adjournment during the inquiry into the ₹170 crore scam at the NDCCB.

3. What was the basis for reducing the fine?

The fine was reduced based on the argument that compelling Kedar to provide oral evidence was beyond the scope of granting a fair opportunity.

4. Who reduced the fine, and to what amount?

The fine was reduced by Justice Anil Pansare of the Bombay High Court to ₹50,000.

5. What is Section 88 of the Maharashtra Co-operative Societies Act?

Section 88 empowers authorities to conduct inquiries into the affairs of cooperative societies to ensure transparency and accountability.

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