Bengal govt will not conduct spl audit of coop bank: Cal HC

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Kolkata, Jul 16 (PTI) The Calcutta High Court on Friday directed that the West Bengal government's co-operation department will not conduct, without its permission, a special audit of Contai Cooperative Bank, the chairman of which is Leader of the Opposition in the Assembly, Suvendu Adhikari of the BJP.

The court, however, allowed inspection of its books of accounts and other records and documents.

Justice Shampa Sarkar, hearing a petition by the bank challenging the state government's decision to hold a special audit of its accounts, directed that it will not be conducted without the leave of the court.

'Special audits are needed when it is suspected that the laws and regulations have been violated in the management of an organisation. The reasons for the special audit have not been disclosed in the notice issued to the petitioners,' Justice Sarkar said in the order.

Allowing the inspection of the books of accounts, other records and documents, the bench directed that the inspection will be with regard to the non-compliances which were alleged to have been detected in the statutory audit report for 2019-2020 by the state government.

The court directed filing of affidavit-in-opposition within four weeks by all the respondents including the Reserve Bank of India (RBI) and reply affidavits thereto, if any, to be filed within two weeks thereafter.

The matter would appear for hearing again following the filing of affidavits by all parties, the court said.

Justice Sarkar said that the question of jurisdiction and power of the state government to order a special audit will be decided at the final hearing.

The bench directed that this order is restricted only to the petitioners.

The Contai Co-operative Bank, headquartered at Contai in Purba Medinipur district, challenged the June 12 and Jun 14 decisions of the state's co-operation department to hold a special audit of its accounts along with other banks and to hold an inspection respectively.

The orders were challenged on the ground that the petitioner being a banking company was guided by the provisions of Banking Regulation Act, 1949.

Jaydip Kar, senior advocate representing Contai Co- operative Bank Ltd, submitted that neither the Government of West Bengal, Finance Department, nor the Additional Registrar of Cooperative Societies (Urban Credit), West Bengal, has any control over the internal management and finances of the petitioner.

He submitted that it is the RBI which has the power to audit and conduct a special audit in respect of the petitioner bank.

Stating that the bank has always cooperated with the statutory audit, Kar claimed that all compliances have been done and the audit reports have been filed with the RBI.

Appearing for the Co-operation department, Advocate General Kishore Dutta submitted that the petitioner is a co- operative society registered under the West Bengal Co- operative Societies Act, 2006 having the licence to do banking operations.

Thus, the state government would not lose control or the powers conferred upon it under the West Bengal Cooperative Societies Act, 2006 to inspect, regulate and take appropriate measures in order to reform the cooperative banks and ensure proper functioning including prevention of misappropriation, misuse and activities detrimental to the interest of the members of the society and the public, Dutta submitted before the court. PTI AMR NN NN

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