Quashing of criminal proceedings requires a prima facie offence; cooperative law bar did not exclude Penal Code charges.

At the quashing stage, the Court must accept the complaint's allegations at face value and intervene only where no prima facie offence is disclosed or the proceeding is an abuse of process. Allegations of unlawful allotment at undervalue, manipulation of society records, and wrongful gain disclosed a prima facie case of cheating and related criminality, so quashing was not justified and the matter had to go to trial. A member of the cooperative society could maintain the complaint where the alleged acts harmed the society's interests, and non-impleadment of the allottee and purchaser did not bar prosecution. A bar under the Cooperative Societies Act did not extend to Penal Code offences.

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Issues: (i) Whether the complaint disclosed a cognizable offence under the Penal Code so as to justify quashing of the criminal proceedings. (ii) Whether the complainant, as a member of the society, had locus standi to maintain the complaint despite the alleged non-impleadment of the allottee and subsequent purchaser. (iii) Whether the provisions of the Cooperative Societies Act barred cognizance of offences under the Penal Code.

Issue (i): Whether the complaint disclosed a cognizable offence under the Penal Code so as to justify quashing of the criminal proceedings.

Analysis: The complaint and the Registrar's report alleged a conspiracy to make an unlawful allotment at an undervalue and to secure wrongful gain by manipulation of the society's records. For exercise of inherent power under Section 482 of the Code, the Court had to see whether the allegations, taken at face value, made out an offence and not to test their truth at that stage. The materials disclosed a prima facie case of cheating and related criminality, and the matter required trial.

Conclusion: The complaint disclosed a cognizable offence and quashing was not justified.

Issue (ii): Whether the complainant, as a member of the society, had locus standi to maintain the complaint despite the alleged non-impleadment of the allottee and subsequent purchaser.

Analysis: The complaint alleged that the office-bearers, in collusion with another person, caused loss to the society and its members. The absence of the allottee and purchaser as accused did not, by itself, destroy the prosecution. A member of the society could maintain the complaint where the allegations disclosed wrongful acts affecting the society's interests.

Conclusion: The complainant had locus standi and the complaint was not barred on that ground.

Issue (iii): Whether the provisions of the Cooperative Societies Act barred cognizance of offences under the Penal Code.

Analysis: The statutory bar under the Cooperative Societies Act was confined to offences under that Act. It did not preclude cognizance of offences under the Penal Code where the complaint otherwise disclosed such offences. The Court also noted that the report of the Registrar could be relied on for the limited purpose of forming a prima facie view, unless set aside.

Conclusion: There was no statutory bar to cognizance of the Penal Code offences alleged in the complaint.

Final Conclusion: The High Court's quashing order could not stand, and the criminal proceedings were restored for trial on their merits.

Ratio Decidendi: At the stage of quashing, the Court must accept the complaint's factual allegations at face value and may interfere only if no prima facie offence is disclosed or the proceeding is plainly an abuse of process; a statutory bar confined to one enactment does not extend to independent offences under the Penal Code.

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