# Inquiry and Inspection of MSCS by Central Registrar

## Inquiry under Section 78

### When can Inquiry be Held?

Central Registrar may, on the request of:

A Federal co-operative to which the MSCS is affiliated, OR
A creditor, OR
Not less than 1/3rd of the members of the Board, OR
Not less than 1/5th of the total members of the MSCS

### Procedure

Hold an inquiry himself or direct an authorized person to hold inquiry into constitution, working & financial condition.
Notice of 15 days must be given to MSCS before inquiry (opportunity of being heard).

### Powers Available

1. Access to books, accounts, documents, securities, cash of MSCS; may summon any person.

2. May require a general meeting by giving notice of not less than 7 days at headquarters.

3. May summon any person believed to have knowledge of MSCS's affairs.

### Follow-up / Communication

Central Registrar shall, within 3 months from date of receipt of report, communicate it to:

The MSCS,
Financial Institutions to which MSCS is affiliated, and
Person at whose instance inquiry was made.

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## Inspection under Section 79

### When, How, Opportunity of Hearing

Same as Section 78 (same triggering persons, same 15 days notice).

### Powers Available (Different from Inquiry)

1. Access to books, accounts, papers, vouchers, securities and stock; and in event of serious irregularities, may take them into custody.

2. May call a meeting of MSCS where, in his opinion, it is necessary.

3. Every officer shall furnish information about working of MSCS as registrar may require.

### Inspection Report

Copy of the inspection report shall be communicated to the MSCS within 3 months from the date of completion of such inspection.

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## Key Differences: Inquiry vs Inspection

Aspect	Inquiry (S.78)	Inspection (S.79)
Powers over documents	Access only	Access + Can take into custody if serious irregularities
Notice for meeting	Min 7 days for general meeting	May call meeting when necessary
Report communication	Within 3 months of receipt of report; to MSCS, FIs, requester	Within 3 months of completion; to MSCS only

Worked example

### Example 1

Example - Trigger for inquiry: ABC MSCS has 500 members and a Board of 12 members. An inquiry under Section 78 can be triggered by request of: any creditor, OR at least 4 Board members (1/3rd of 12), OR at least 100 members (1/5th of 500).

### Example 2

Example - Custody power difference: During inspection of XYZ MSCS, the inspector finds evidence of large-scale fund diversion. He CAN take books and securities into custody under Section 79. Under Section 78 inquiry, he would only have access rights, not custody powers.

⚠️ Common exam mistakes

Confusing the percentages for triggering inquiry - 1/3rd is for Board members, 1/5th is for total MSCS members
Forgetting that custody of documents is allowed only in inspection (S.79), not inquiry (S.78)
Mixing up 7 days notice (for calling general meeting) with 15 days notice (for the inquiry itself)
Not noting that inspection report goes only to MSCS, while inquiry report also goes to FIs and the requester

Reference: Sections 78 and 79 — Multi-State Co-operative Societies Act, 2002

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Inquiry (Section 78) and Inspection (Section 79) of MSCS

Worked example

⚠️ Common exam mistakes