Court’s Decision
The Bombay High Court (Justice Amit Borkar) held that the Registrar cannot dissolve a co-operative housing society’s managing committee and appoint an Administrator under Section 77A of the Maharashtra Co-operative Societies Act, 1960 unless lesser democratic remedies are first exhausted.
The Court quashed the orders passed by the District Deputy Registrar, Divisional Joint Registrar, and the Minister for Co-operation, which had successively upheld the appointment of an Administrator for Purushottam Bhagwan Co-operative Housing Society.
Justice Borkar observed:
“Section 77A is not a weapon to displace elected management at will. The Registrar must first attempt internal solutions under clauses (i) and (ii) before resorting to outsiders.”
The Court restored the managing committee and emphasized that the Registrar’s power is a safeguard, not a substitute for elected self-governance.
Facts
The petitioners were elected members of the managing committee of a housing society in Mumbai for the 2021–2026 term. The committee originally consisted of eight members. Between April and June 2023, four members resigned, reducing the committee below quorum.
To restore functionality, the remaining members co-opted two new members in January 2024. However, certain society members challenged this before the Registrar under Section 77A, alleging that the committee had become defunct due to lack of quorum and the co-option was invalid.
On 26 November 2024, the District Deputy Registrar dissolved the committee and appointed an independent Administrator. Appeals before the Divisional Joint Registrar and Minister for Co-operation were dismissed in March and July 2025, respectively, prompting the writ petition before the High Court.
Issues
- Whether the Registrar could invoke Section 77A(1)(b-1) to dissolve the managing committee without first publishing a notice inviting objections.
- Whether appointment of an Administrator under clause (iii) was justified when internal remedies under clauses (i) and (ii) could have been applied.
- Whether the Government Resolution (GR) dated 3 January 2024, prescribing a quorum of three for small societies, applied retrospectively.
- Whether co-option of members after resignation of the majority was valid in law.
Petitioners’ Arguments
The petitioners, represented by Senior Counsel Girish Godbole, contended that the Registrar failed to comply with procedural safeguards under Section 77A(1). The law mandates publication of notice and recording of reasons for urgency before dissolution. No such notice or satisfaction was recorded.
They further argued that Section 77A requires the Registrar to first consider internal remedies—either filling vacancies or forming a temporary committee—before appointing an external Administrator. The Registrar’s failure to do so rendered the order arbitrary.
Referring to the Government Resolution dated 3 January 2024, the petitioners argued that for small societies with fewer than 35 members, the required quorum was reduced to three. Therefore, their committee of four members satisfied the quorum, making the dissolution invalid.
Reliance was placed on:
- Vishwas Bajirao Patil v. State of Maharashtra, 2019 SCC OnLine Bom 1770 – where this Court held that the Registrar must strictly comply with the step-wise hierarchy under Section 77A.
- Swapnil Likhar v. District Deputy Registrar, W.P. No. 4442/2017 (Nagpur Bench, 17 July 2018) – reiterating that appointment of an Administrator is permissible only as a last resort.
- Vineeta Sharma v. Rakesh Sharma, (2020) 9 SCC 1 – for the principle that beneficial directions may have retroactive effect.
Respondents’ Arguments
Senior Advocate A.Y. Sakhare, for the contesting respondents, argued that the committee had become non-functional after four resignations, leaving it below quorum (five members). Consequently, any co-option resolution passed by four members lacked legal validity.
He relied on the same GR dated 3 January 2024, arguing that it was prospective and applied only to committees formed after its issuance. The petitioners’ committee, constituted in 2022, could not benefit from it.
Relying on Commissioner of Income Tax v. Essar Teleholdings Ltd., (2018) 3 SCC 253, the counsel emphasized that notifications operate prospectively unless explicitly stated otherwise.
It was further submitted that the Registrar rightly invoked Section 77A(1)(b-1) as the committee had “ceased to function,” and therefore, appointment of an Administrator was essential to prevent paralysis of the society.
Analysis of the Law
The Court meticulously analyzed Section 77A, which empowers the Registrar to intervene when a managing committee becomes non-functional. Justice Borkar clarified that the provision creates a graded framework of intervention:
- Clause (i) – To fill casual vacancies by appointing society members.
- Clause (ii) – To form a temporary three-member committee from within the society.
- Clause (iii) – To appoint an “authorised officer” (outsider) only as a last resort.
The Court underscored that democratic self-management is the rule, and external administration is an exception.
“Section 77A seeks continuity of governance, not substitution of democracy. The Registrar must justify why lesser measures failed before invoking drastic ones.”
Justice Borkar elaborated that the deletion of the third proviso to Section 77A(1) by the Maharashtra Act 28 of 2022 significantly tightened the conditions for appointing outsiders. The Legislature consciously limited this power to avoid abuse by registrars.
Further, the substitution of “Administrator” with “Authorised Officer” in 2013 was intended to restrict tenure and scope of external appointees, ensuring they act merely as temporary caretakers.
Precedent Analysis
- Arun Trivikramrao Rajurikar v. Govardhan Janardhan Kore, 1982 Mah LJ 576 – Held that when quorum is lost due to resignation of majority members, the committee becomes defunct, justifying Registrar’s intervention. However, such intervention must adhere to statutory safeguards.
- Union of India v. Rajendra N. Shah, (2022) 19 SCC 520 – The Supreme Court clarified that though Part IX-B of the Constitution does not apply to state co-operatives, its democratic principles guide state legislation. The Court relied on this to emphasize democratic self-governance.
- Commissioner of Income Tax v. Essar Teleholdings Ltd., (2018) 3 SCC 253 – Cited to hold that the 2024 GR has no retrospective effect and applies prospectively.
These precedents collectively shaped the interpretation that Registrar’s power under Section 77A must align with cooperative democracy and proportionality.
Court’s Reasoning
The Court found that the Registrar acted mechanically, bypassing statutory preconditions. There was no material to show that he considered lesser options under clauses (i) and (ii).
Justice Borkar observed that the loss of quorum did not automatically warrant dissolution:
“The law prefers minimal intervention. The Registrar should first co-opt members or form a temporary committee from within the society. Dissolution is a measure of last resort.”
Further, the Court noted that the Registrar failed to publish notice or record satisfaction about urgency—violating the mandatory safeguards under Section 77A(1). The decision was thus procedurally defective.
On the Government Resolution, the Court held it was prospective and did not retrospectively validate the petitioners’ co-option. However, this did not save the Registrar’s order, which was invalid for want of due process.
Conclusion
The High Court quashed the orders dated 1 July 2025, 18 March 2025, and 26 November 2024, reinstating the petitioners’ managing committee.
Key findings:
- The Registrar failed to justify dispensing with notice or urgency.
- Democratic remedies under clauses (i) and (ii) were not exhausted.
- Appointment of an Administrator under clause (iii) was unwarranted and disproportionate.
“The essence of co-operative law lies in self-governance. The Registrar must act as a facilitator, not as a replacement of elected will.”
The Court restored the managing committee and directed fresh elections to be conducted as per law.
Implications
This ruling significantly strengthens procedural safeguards under Section 77A, ensuring that co-operative societies are not deprived of their elected governance without due process.
It mandates:
- Strict adherence to step-wise intervention before appointing Administrators.
- Reasoned satisfaction and notice before invoking Section 77A.
- Reinforcement of cooperative democracy as the guiding principle.
The decision curtails arbitrary administrative control and empowers society members to preserve their democratic rights.
