## Inquiry by Central Registrar — Section 78 of MSCS Act, 2002

Section 78 empowers the Central Registrar to conduct an inquiry into the constitution, working, and financial condition of a Multi-State Co-operative Society (MSCS).

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### When Can an Inquiry Be Initiated?

The Central Registrar may initiate an inquiry on request from:

The Federal Co-operative to which the MSCS is affiliated, OR
A Creditor of the society, OR
1/3rd of the members of the Board of Directors, OR
1/5th of the total number of members of the MSCS

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### How Is the Inquiry Conducted?

The Central Registrar may:

Conduct the inquiry himself, OR
Direct any person authorised in writing to conduct the inquiry/inspection

The inquiry covers:

Constitution of the society
Working of the society
Financial condition of the society

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### Opportunity of Being Heard

A notice of at least 15 days prior to holding the inquiry/inspection must be given to the society.

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### Powers of the Registrar During Inquiry

Power	Inquiry	Inspection
Access to books, accounts, documents	Yes	Yes
Summon persons in possession of documents	Yes	Yes — and can take them into custody in case of serious irregularity
Call meeting of the society	—	Yes
Ask members/officers to furnish information	—	Yes
Require officer/employee to call a meeting (7 days' notice)	Yes	—
Call meeting himself if officer fails/refuses	Yes	—
Examine a person on oath	Yes	—

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### Submission of Report

Within 3 months, the Registrar (or authorised person) must submit a report to:

Inquiry Report	Inspection Report
MSCS	MSCS
—	Financial Institution concerned
Person on whose request inquiry was conducted	—

Worked example

### Example 1

Example — Triggering an Inquiry: A Multi-State Co-operative Society has 600 members and a Board of 12 Directors. A creditor claims that the society is mismanaging funds. Another group wants to trigger an inquiry through member petition. How many members must sign the petition?

Solution: For an inquiry under Section 78, the petition must be signed by at least 1/5th of the total number of members = 1/5 × 600 = 120 members. Alternatively, if going through Board members, at least 1/3rd × 12 = 4 Directors must request the inquiry.

### Example 2

Example — Powers During Inquiry: During an inquiry into an MSCS under Section 78, the authorised officer suspects that the CFO has removed critical loan files from the registered office. What powers does the officer have?

Solution: During inspection (if escalated to inspection mode), the officer can summon the CFO and take the documents into custody in case of serious irregularity. During inquiry mode, the officer can summon any person in whose possession documents are and examine that person on oath.

⚠️ Common exam mistakes

Confusing the 1/3rd threshold (Board of Directors) with the 1/5th threshold (total members) — these are distinct triggers for the same Section 78 inquiry.
Forgetting the 15-day prior notice requirement before conducting the inquiry/inspection — this is a mandatory procedural step.
Assuming the report is submitted only to the MSCS — for inspection reports, it also goes to financial institutions; for inquiry reports, it goes to the requesting party.
Confusing the 3-month deadline for submitting the report — students sometimes omit this time limit entirely.

Reference: Section 78 — Inquiry by Central Registrar — Multi-State Co-operative Societies Act, 2002

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Inquiry by Central Registrar under Section 78 of MSCS Act 2002

Worked example

⚠️ Common exam mistakes