In a significant move, the Central Registrar of Cooperative Societies (CRCS) has initiated the winding-up process of Bangalore headquartered Panchawati Multi-State Cooperative Credit Society for persistent violations of the Multi-State Cooperative Societies (MSCS) Act, 2002, and its associated rules.
The Society had come under the scanner after a complaint was lodged by a depositor, Arasaraju from Tumakuru. He alleged that he had deposited Rs 12 lakh in the Tumkuru branch, which was later closed without notice.
Acting on the complaint, the Office of the Registrar of Cooperative Societies, Government of Karnataka, conducted an inspection and confirmed that the Tumkuru branch was non-functional.
Despite issuing a show-cause notice on October 4, 2021, the society failed to respond adequately. A personal hearing was held on January 12, 2022, where the President of the Society was directed to submit documentary proof regarding redressal of the complaint and an explanation for the discrepancies observed in the audit report for FY 2020–21.
In response, the Society maintained that the depositor had sought premature withdrawal and should have approached the Society directly. However, no explanation was provided on the audit report shortcomings. Multiple inspections were subsequently sought by the CRCS, and the Karnataka Registrar confirmed on April 13, 2023, that the Society was not operating from its registered address.
Further inquiries in May and June 2024 revealed that even at the new temporary address, the Society had ceased operations for over two years. The property owner of the rented premises confirmed that the Society had not paid rent and had shut down long ago.
The CRCS noted that the Society has also failed to file mandatory annual returns under Section 120 of the MSCS Act, 2002, further justifying regulatory action.
“In light of the facts and violations, we are initiating the winding-up process under the provisions of the MSCS Act,” the CRCS stated. The Society has been given 15 days from the date of notice publication on the CRCS website to file any objections, failing which the winding-up procedure will proceed without further reference.
