Financial Frauds In Cooperative Societies Of Rajasthan’s Hanumangarh Short-Change Villagers

Amarpal Singh Verma

Hanumangarh (Rajasthan): The increasing instances of embezzlement in gram seva sahkari samitis (village cooperative societies) have tarnished credibility of the cooperative movement in Rajasthan’s Hanumangarh district.

The latest case surfaced in Talwara Jheel village of Tibbi tehsil two months ago, when around 350 villagers realised that they lost hard-earned money, totalling crores of rupees, to the fraudulent activity.

Sharing the plight of his two brothers and sisters-in-law, Kuldeep Jandu said they had put together around Rs 10 lakh over the years.

“They deposited a portion of their savings in the cooperative society’s mini bank three years ago, after learning about the good interest rate it offered,” Kuldeep Jandu told 101Reporters.

“On July 24, when a need arose, they decided to take a portion of the money deposited in the savings account. However, the administrator told them to come back in five to six days. When they went again on July 30, they got the same reply. That was when we all grew suspicious. We told many villagers about this. When they also sought their money and got the same reply, we understood that we have been duped,” Jandu added.

Sukhdev Singh, from the same village, said three of his family members had fixed deposit receipts (FDRs) amounting to Rs 7.5 lakh in the cooperative bank.

“When they matured in June last year, the administrator neither renewed them nor released our funds. He only offered reassurances. Given the cooperative nature of the society, we had no reason to doubt any wrongdoing,” he said.

Based on a complaint from villagers, the Cooperative Department launched an investigation two months ago. “The preliminary probe has unearthed irregularities amounting to Rs 5.5 crore. More investigations are needed to unearth the full extent of misappropriation of funds,” said Shivkumar Periwal, Deputy Registrar, Cooperative Department.

In response to a question raised by Anupgarh MLA Santosh in the state Assembly this year, regarding embezzlement and corruption cases in cooperative societies and other similar institutions in Bikaner division, the government revealed that investigations and recovery efforts were still pending in 16 village cooperative societies in Hanumangarh district. Only one of them has recovered Rs 3 lakh so far.

On a question from Pilibanga MLA Dharmendra Mochi, the government said complaints of embezzlement have been received from several areas within Hanumangarh district, including Ratanpura and Dabli Kalan in Sangaria Assembly constituency, Araiwali and Gurusar in Hanumangarh constituency, Jabrasar and Pandusar in Nohar constituency, and Malsisar, Sahuwala, Ramgarh and Utradabas in Bhadra constituency.

“Employees of cooperative societies misappropriated the money of villagers. Besides the financial losses, such incidents led to a decline in their trust in these institutions,” Mochi said, adding that embezzlement has been reported at the cooperative society of Hardaswali village in his constituency, but no action has been taken against those responsible.

Tardy Probe Alleged

When allegations of fund misappropriation emerged at Ratanpura society in Sangaria tehsil last November, the complaint lodged by villagers was allegedly disregarded. This prompted them to launch a movement by establishing the Ratanpura Peedit Kisan Mazdoor Sangharsh Samiti.

Rupinder Mann, a committee member, explained that the samiti escalated the issue, from the local administration to CM Ashok Gehlot, leading to an official investigation. “The probe revealed embezzlement exceeding Rs 20 crore. Approximately 650 families, ranging from impoverished labourers to affluent farmers, lost their money. The corrupt employees spared none.”

However, Periwal pointed out that an investigation is promptly initiated as soon as a complaint is reported.

“Currently, all complaints are under examination. The administrators involved have faced suspension or dismissal in relevant cases. Additionally, some instances have led to the filing of reports with local police, resulting in the arrest of the accused parties,” Periwal claimed.

The affected villagers have been seeking compensation for their losses. Since August 13, Talwara Jheel villagers have been staging protests in front of the cooperative society office, which continues to date.

“My family of four collectively deposited Rs 16.5 lakh. Because of the embezzlement, our financial situation has taken a severe hit. We want the government to return our money,” said Vinod Nehra, one of the protesters.

Ratanpura villagers launched a sit-in protest in front of the society office on December 8 last year, which is still continuing. In Jabrasar, three villagers accused the cooperative society of embezzling nearly Rs 70 lakh. A few months ago, they even climbed onto a water tank, demanding a thorough investigation into the matter.

Tibbi residents have also launched a protest in front of the village cooperative society office since September 21, seeking an investigation into a suspected case of embezzlement there. Balram Saharan, the society’s president, recently submitted a memorandum in this regard to the officials of the Cooperative Department in Hanumangarh.

“Subsequently, the deputy registrar of the Cooperative Department ordered Cooperative Inspector Sumitra Chaudhary to launch a probe. She came here twice, but she was removed from that duty and replaced by another investigating officer before the probe could be completed. This has raised more suspicions. We are sitting on a dharna demanding that the investigation be completed by the same officer,” Saharan said.

Government Response

After concluding the investigation in Ratanpura, the Hanumangarh Central Cooperative Bank recently seized the assets of accused manager Ramesh Kumar, his son Gaurishankar and assistant manager Bhup Singh.

“These assets will now be put up for auction, the proceeds of which will be deposited into the cooperative society. Subsequently, the society will allocate and distribute this amount among the villagers,” said Manoj Kumar, managing director of the central cooperative bank.

However, the villagers doubt this action will suffice to recover their lost funds.

“The market value of the assets seized from the accused within the village does not exceed Rs 3 crore, whereas the people have suffered embezzlement exceeding Rs 20 crore. We insist that the government return our money,” said Mann.

Manoj, however, said there was no such possibility.

“The villagers had entrusted their money with the cooperative society, and the government bears no responsibility in this matter. Money transactions fall under the purview of the cooperative society and the villagers,” he claimed.

Mismanagement Rules

According to Pramod Sambhar, state coordinator of BJP cooperative cell, the elections to cooperative societies were kept pending for 11 years, before it finally took place in May.

“This seems to be a major factor contributing to the surge in scams. The elections to the posts of presidents of village service cooperative societies, district central cooperative banks, and buying and selling cooperative societies were not held during this period,” he said.

During the extended period, the administrators (the managers of cooperative societies were appointed as administrators) and previously elected presidents continued to hold their positions, despite the rules stipulating that administrators cannot serve for more than six months. “There was a lack of oversight. Only formalities related to audits were fulfilled. A significant number of cooperatives were left unaudited too,” Sambhar said.

According to information provided by the state government in the Assembly in January, as of March 31, 2022, out of the total 443 cooperative societies slated for backlog audits, 65 were gram seva cooperative societies and 166 other cooperative societies. Hence, 231 cooperative societies did not go through any auditing process. Among these, 88 cooperative societies were from Hanumangarh district.

According to Advocate Mohammad Mushtaq, a member of the State Cooperative Union, which is the apex cooperative organisation in Rajasthan, the Cooperative Department was responsible for conducting audits of cooperative societies until two decades ago. However, a change was made based on the recommendations of Vaidyanathan Committee.

“Subsequently, chartered accountants started to conduct the audits, which is believed to have led to an increase in irregularities. The lack of timely and comprehensive training for officials in cooperative institutions was another contributing factor,” Advocate Mushtaq added.

“The governing board autonomously appoints managers in a cooperative society through resolutions, and these managers cannot be transferred. Only the board of directors holds the authority to remove them. These employees, in collusion with the board of directors, remain stationed at one location until retirement. To address this, the government must amend the law to gain the right to remove and transfer them. Regular transfers are necessary to find a solution,” MLA Mochi said.

Manoj Kumar explained that cooperative societies currently operate manually.

“We are working in collaboration with the Central government to transition them under the Primary Agricultural Credit Societies’ Computerisation Scheme.”

Computerisation will make all records accessible online, ensuring transparency and reducing embezzlement. “It will enable us to monitor the income-expenditure, transactions, FDRs and stock of each society more efficiently. Approximately 240 of the 250 societies in the district will go online in the coming months,” he informed.

(Amarpal Singh Verma is a Rajasthan-based freelance journalist and a member of 101Reporters, a pan-India network of grassroots reporters)