The Bombay High Court on Tuesday observed that removal of elected management committees of cooperative housing societies “cannot be done merely on suspicion or because of minor procedural lapses” as such action “affects the democratic functioning of the societies”.
The court made this observation while quashing and quashing the orders passed by the Assistant Registrar and Joint Registrar of Cooperative Societies earlier this year removing the 10-member housing society management committee at Kamothe in Navi Mumbai, citing non-submission of records and irregular collection of contributions for repair and painting of the building due to its dilapidated condition.
A single-judge bench of Justice Amit B Borkar delivered judgment on the appeal filed by Jijau Coop. Housing Society Ltd has appealed the order of 13 February 2025 passed by the Assistant Registrar removing the management committee of the society and appointing an administrator to deal with the day-to-day affairs of the society.
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On August 26, the Appellate Body of the Joint Registrar upheld the previous order, prompting the association to resort to the Supreme Court.
The petitioner society, through advocates Vivek V Salunke and Manthan A Chaudhari, submitted that the members in the general body meeting held in June 2022, had decided that each family would contribute an amount of Rs. 10,000 per month for five to ten months for repair and painting work.
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At a subsequent meeting, based on an estimate provided by the structural engineer, it was decided that after completion of the work, the final contribution amount would be recalculated and 95 per cent of the members agreed to pay the contributions.
However, the Assistant Registrar, based on a complaint from two members of the association, appointed an authorized officer who submitted a report in October 2024 stating that the association was not functioning in accordance with the bylaws and provisions of the law.
The association said that despite its response to the show-cause notice issued by the Assistant Registrar stating that it complied with the regulations, the concerned authority passed an impugned order, which was later upheld by the Joint Registrar.
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The petitioner society argued that the authorities failed to consider that the general body had approved the contribution plan as a temporary arrangement for repairs to the building requiring urgent repairs and 95 per cent of the members had paid their contributions.
However, advocate BA Lawat, representing the complaining members, and Assistant Chief Minister (AGP) Druti Kapadia for the state, upheld the impugned orders.
Justice Borkar, in his judgement, noted that Section 78A (power of registrar to abolish committee or remove member) of the Maharashtra Cooperative Societies Act, 1960 provides a “serious” and “drastic” power which “must be used with caution”.
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The judge noted that the registrar must consider the evidence and record reasons and “vague complaints without documents cannot form a basis for extreme measures.”
“The elected committee (representing the will of the members) is responsible, but removal is permitted only when the harmful act is proven by material on record,” the High Commissioner recorded.
Judge Borkar noted that the allegations did not show any financial irregularities, that the association had ceased operations, or that its management had collapsed. The judge said that the complainants only approached the registrar because they disagreed with the contribution set by the General Authority, which is the highest authority in society.
“Hence, the impugned orders do not meet the test of law required for cancellation under Section 78A. The drastic measure of removing an elected committee cannot be based on incomplete reasons or violation that is petty in nature,” the SC said.
(Tags for translation)Cooperative Housing Societies
