Section 78 of MSCS Act, 2002 : Section 78: Inquiry By Central Registrar

Explanation using Example

Imagine a multi-state cooperative society that operates across various states in India, offering credit facilities to its members. Several members have raised concerns about possible mismanagement of funds and have approached a federal cooperative to which their society is affiliated. The federal cooperative, in turn, requests the Central Registrar to conduct an inquiry into the society's financial condition.

The Central Registrar agrees and notifies the society about the impending inquiry, providing them with the required 15 days' notice. During the inquiry, the authorized person exercises their power to access the society's books and accounts at any reasonable time. They discover discrepancies in the financial records and call a general meeting of the society by providing a 7-day notice, overriding the society's by-law that typically requires a longer notice period.

At the general meeting, which has the same authority as any meeting called under the society's by-laws, members discuss the findings and decide on corrective measures. After the inquiry concludes, the Central Registrar sends the report to the society, the federal cooperative, and any financial institutions associated with the society within three months, as required by the Act.