In a significant ruling clarifying the limits of the Registrar’s powers, the Bombay High Court has held that a complaint by a single member of a cooperative society cannot be the sole basis for ordering an enquiry under Section 83 of the Maharashtra Co-operative Societies (MCS) Act, 1960.
The Court set aside orders passed by the Deputy Registrar and Divisional Joint Registrar that had directed an enquiry into the affairs of Raghuleela Megamall Kandivali (West) Premises Co-operative Society solely on the basis of a complaint filed by one member, Dr. L.B. Tiwari.
Key Takeaway for Society Members and Managing Committees
Many members and even office-bearers of cooperative societies are unaware that Section 83 does not empower the Registrar to order an enquiry merely on the complaint of one or a few members.
The provision clearly lays down three routes for ordering an enquiry into the constitution, working, and financial condition of a society:
- Suo moto (on the Registrar’s own motion after independent application of mind)
- On an application by at least one-fifth (20%) of the total members
- On the basis of a special report under the third proviso to Section 81(5B)
The word “shall” is used for the 1/5th members route — making enquiry mandatory if the statutory requirement is met. In contrast, the word “may” is used for suo moto action, giving the Registrar discretion — but only after genuine independent assessment.
What Went Wrong in the Raghuleela Megamall Case
Dr. L.B. Tiwari, a member of the Raghuleela Megamall Kandivali (West) Premises Co-operative Society, filed a complaint on 9 March 2018 alleging financial irregularities by the Managing Committee, including unauthorised withdrawals, excess housekeeping expenses, and aid to an NGO without AGM approval.
The Deputy Registrar initially ordered an enquiry in April 2018. That order was challenged and set aside by the Divisional Joint Registrar in August 2018, who held that the Deputy Registrar had not exercised suo moto powers but had acted on a single complaint.
After remand, the Deputy Registrar again passed a fresh order on 2 March 2019 appointing an Enquiry Officer. The society’s revision against this order was dismissed by the Divisional Joint Registrar on 9 March 2020. The society then approached the Bombay High Court.
Justice Sandeep V. Marne, while allowing the petition on 25 June 2026, held that the Deputy Registrar had egregiously erred by:
- Treating the single-member complaint as sufficient ground for enquiry.
- Failing to demonstrate any independent application of mind or consideration of other material.
- Essentially adjudicating the complaint (even sending a copy of the order to the complainant stating his complaint was disposed of) instead of using it merely as a source of information for genuine suo moto action.
- Repeating the same mistake that had already been pointed out in the earlier round of proceedings.
The Court observed that while a complaint by even a single member or a third party can be a source of information, the Registrar cannot abdicate his discretion and act mechanically on it. He must apply his mind independently to form an opinion whether enquiry is warranted.
Court’s Reliance on Established Precedents
The judgment extensively analysed earlier decisions, including:
- Ashok Saha vs State of Maharashtra (2011) — which held that a complaint must be supported by the requisite percentage of members.
- Janhit Nagari Sahakari Pat Sanstha Maryadit (2023) and Jeevan Niwas CHSL — which clarified that the Registrar can take note of information from complaints but must still exercise independent judgment for suo moto action.
- Jayprakash Sahakari Griha Rachana Sanstha (Division Bench, 2022) — which upheld a wider but disciplined interpretation of suo moto powers.
The Court emphasised that the principle allowing the Registrar to take cognizance of a complaint cannot be overstretched to mean he can adjudicate it and pass a “decision” on it under Section 83.
Why This Ruling Matters
This judgment serves as an important reminder for thousands of cooperative housing and premises societies across Maharashtra:
- A single disgruntled member cannot easily paralyse the managing committee by triggering a full-fledged enquiry.
- Members who want to force an enquiry must gather support from at least 20% of the society’s members.
- Registrars must maintain proper records showing independent application of mind when exercising suo moto powers.
The ruling protects managing committees from frivolous or vendetta-driven complaints while preserving the Registrar’s supervisory role when genuine, independently verified grounds exist.
The Bombay High Court has once again reinforced that statutory safeguards in the MCS Act cannot be bypassed through mechanical or complaint-driven actions.
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