Bombay High Court Sets Aside Inquiry Against Raghuleela Megamall Society, Holds Registrar Cannot Merely Adjudicate a Single Member’s Complaint Under Section 83

Rawlaw

3 hours ago

Inquiry Into Raghuleela Megamall Society Set Aside as Deputy Registrar Failed to Verify Complaint Independently

Facts

Raghuleela Megamall Kandivali (West) is a co-operative society formed by the occupants of commercial units in Raghuleela Megamall, Kandivali, Mumbai.

Its Managing Committee took charge on 31 January 2018.

Respondent No. 3, Dr. Lalchandra Badriprasad Tiwari, was a member of the Society. According to the Society, his professional engagement with the Society had been discontinued, after which disputes arose between him and the Managing Committee.

On 9 March 2018, Respondent No. 3 filed a complaint before the Deputy Registrar of Co-operative Societies alleging several financial and administrative irregularities in the functioning of the Society.

Acting on the complaint, the Deputy Registrar passed an order dated 13 April 2018 appointing an Enquiry Officer under Section 83 of the Maharashtra Co-operative Societies Act, 1960.

The Society challenged that order before the Divisional Joint Registrar. By an order dated 14 August 2018, the Divisional Joint Registrar set aside the first inquiry order and remanded the matter for fresh consideration.

After remand, the Deputy Registrar again passed an order dated 2 March 2019 appointing an authorised officer to conduct an inquiry into the affairs of the Society.

The Society challenged this fresh order through Revision Application No. 212 of 2019. However, the Divisional Joint Registrar dismissed the revision on 9 March 2020.

The Society thereafter approached the Bombay High Court under Article 226 of the Constitution.

During the pendency of the writ petition, the High Court stayed the inquiry proceedings.

Issues

Whether an inquiry under Section 83 of the Maharashtra Co-operative Societies Act could be initiated on the complaint of only one member.
Whether a complaint by a single member could be treated as source information for the Registrar’s suo motu powers.
Whether the Deputy Registrar had independently applied his mind before ordering the inquiry.
Whether the Deputy Registrar had improperly adjudicated the private complaint instead of exercising statutory supervisory power.
Whether the inquiry order dated 2 March 2019 and the revisional order dated 9 March 2020 were legally sustainable.
Whether the earlier remand order prevented the Deputy Registrar from again acting solely on the same complaint.

Petitioner’s Arguments

The Society argued that Section 83 permits an inquiry in only three situations:

suo motu by the Registrar;
on an application made by one-fifth of the members of the Society; or
on the basis of a special audit report contemplated under Section 81.

It submitted that Respondent No. 3 was only a single member and his complaint did not have the support of one-fifth of the members.

The Society contended that the Deputy Registrar had not genuinely exercised suo motu powers. Instead, he had simply acted on the complaint and treated it as if it were a valid statutory application.

The Society argued that the Deputy Registrar had merely reproduced the allegations made by Respondent No. 3 without independently verifying the records or arriving at a prima facie satisfaction.

It further submitted that the Deputy Registrar had no power under Section 83 to adjudicate and dispose of an individual complaint.

The Society also relied upon the earlier order dated 14 August 2018, in which the Divisional Joint Registrar had already found that the first inquiry order was not a proper exercise of suo motu power.

According to the Society, the Deputy Registrar repeated the same error after remand by again relying solely upon Respondent No. 3’s complaint.

The Society therefore sought setting aside of both the inquiry order and the revisional order.

Respondent’s Arguments

Respondent No. 3 opposed the petition and alleged that serious irregularities had occurred in the Society’s affairs.

The allegations included:

withdrawal of substantial amounts without approval of the Annual General Body;
financial assistance being granted to an NGO;
appointment of approximately 30 housekeeping workers while salaries were allegedly paid for 56 workers;
additional expenditure of ₹80,000 on housekeeping;
misuse of Society funds; and
destruction or suppression of relevant records.

It was argued that the Deputy Registrar was entitled to act on the complaint as a source of information.

Respondent No. 3 submitted that an inquiry had merely been ordered and that no final finding had been made against the Society.

He contended that the Society would have a full opportunity to defend itself during the inquiry and therefore no prejudice was caused at this stage.

The State authorities also argued that the term “suo motu” should receive a broad interpretation.

According to them, the Registrar may receive information from a member, outsider or third party and, after considering such information, exercise his own statutory powers under Section 83.

Analysis of the Law

Scope of Section 83 of the Maharashtra Co-operative Societies Act

Section 83 empowers the Registrar to hold an inquiry into the constitution, working and financial condition of a co-operative society.

The inquiry may be ordered in three situations:

by the Registrar suo motu;
on an application made by one-fifth of the members of the Society; or
on the basis of a special report under the relevant provision of Section 81.

The Court noted an important distinction between these situations.

Where one-fifth of the members make an application, the Registrar is ordinarily bound to conduct the inquiry because the statute uses mandatory language.

However, where information is provided by a single member or an outsider, the Registrar is not automatically required to order an inquiry.

Such a complaint can only operate as source information enabling the Registrar to consider whether suo motu action is warranted.

Meaning of Suo Motu Power

The Court held that “suo motu” does not mean that the Registrar must acquire knowledge entirely on his own without receiving information from anyone.

A complaint made by a single member, non-member, former employee or third party may bring irregularities to the Registrar’s attention.

The Registrar can lawfully consider that information.

However, the final decision to initiate an inquiry must be the Registrar’s own decision, based on an independent assessment of the material.

The Registrar must not act mechanically or merely follow the directions or demands of the complainant.

Complaint as Source Information

The Court rejected the Society’s broad argument that a complaint by one member could never be acted upon.

It held that the Registrar is permitted to treat such a complaint as a source of information.

The legal difficulty arises only when the Registrar treats the complaint itself as sufficient and fails to independently assess whether the statutory inquiry is necessary.

Thus, the distinction is between:

using a complaint as information for exercising suo motu power; and
adjudicating the complaint and granting the relief sought by the complainant.

The first is permissible. The second is not contemplated under Section 83.

Requirement of Independent Application of Mind

The Court examined the Deputy Registrar’s order dated 2 March 2019.

It found that the order largely reproduced or summarised the allegations made by Respondent No. 3.

Although the order mentioned alleged excess housekeeping expenses, unauthorised withdrawals, payments to NGOs and other financial irregularities, these were not recorded as the Deputy Registrar’s own prima facie findings.

They were merely described as matters brought to his notice by the complainant.

The order did not identify any independent audit material, financial records or other objective information examined by the Deputy Registrar.

The Court therefore concluded that there was no genuine independent application of mind.

Absence of Adjudicatory Power Under Section 83

The Court further held that Section 83 does not confer power upon the Deputy Registrar to adjudicate a private complaint.

His function under Section 83 is supervisory and investigative.

He may decide whether an inquiry is required, but he cannot hear and dispose of the complaint as if exercising judicial or quasi-judicial jurisdiction over the grievance itself.

In the present case, the Deputy Registrar had conducted hearings on the complaint and communicated that the complaint had been disposed of after taking appropriate action.

This indicated that he had treated the proceeding as an adjudication of Respondent No. 3’s complaint.

The Court held that such exercise was beyond the statutory scheme of Section 83.

Effect of Earlier Remand Order

The Court noted that the Divisional Joint Registrar had earlier set aside the first inquiry order after finding that the Deputy Registrar had not exercised suo motu power.

Although the matter had been remanded, the Deputy Registrar again relied substantially on the same complaint and repeated the same defect.

The second order did not cure the lack of independent assessment.

This provided an additional ground for setting aside the order.

Precedent Analysis

Ashok Saha v. State of Maharashtra

The Society relied upon this decision to argue that an inquiry could not be ordered on the complaint of a single member.

The High Court clarified that the judgment did not establish an absolute prohibition against considering such a complaint.

It only held that a complaint by one member is not equivalent to a statutory application by the prescribed proportion of members.

The Registrar must independently decide whether to exercise suo motu power.

Janhit Nagari Sahakari Pat Sanstha Maryadit v. State of Maharashtra

This judgment held that a complaint by a non-member or a person not representing one-fifth of the members may still be considered as source information.

However, the Registrar must apply his own mind to the allegations and material.

If the inquiry is ordered mechanically merely because a complaint was filed, the exercise is invalid.

The Court applied this principle to the present case and found a similar absence of independent reasoning.

Jeevan Niwas Co-operative Housing Society Limited v. State of Maharashtra

This decision distinguished between acting on source information and acting at the dictates of a private complainant.

It held that a complaint may form part of the material considered by the Registrar, particularly where supported by audit reports or other independent records.

The Registrar’s decision will be valid if it reflects independent satisfaction.

In the present case, unlike Jeevan Niwas, there was no sufficient independent material.

Jayprakash Sahakari Griha Rachana Sanstha v. State of Maharashtra

The Division Bench held that Section 83 is a regulatory and supervisory provision and must be interpreted broadly.

It recognised that information may be received from a third party and may prompt the Registrar to exercise suo motu power.

However, the Registrar must still act on his own satisfaction.

The High Court accepted this principle but held that the Deputy Registrar in the present case had failed to meet that requirement.

K. Pandurangan v. S.S.R. Velusamy

The Supreme Court’s decision was referred to for the proposition that statutory suo motu power does not lose its character merely because its exercise is prompted by an outsider.

The source of information does not control the power.

What matters is whether the statutory authority itself independently exercises the power conferred upon it.

Court’s Reasoning

The High Court held that a single member’s complaint can lawfully be considered by the Registrar.

Therefore, the inquiry order was not invalid merely because Respondent No. 3 did not have the support of one-fifth of the Society’s members.

However, the Deputy Registrar was required to independently examine the allegations and form his own opinion about the necessity of an inquiry.

The Court found that the Deputy Registrar had not done so.

The impugned order merely repeated the allegations made by Respondent No. 3.

It did not refer to any independent verification, audit material or objective assessment of the Society’s records.

The Deputy Registrar had also treated the matter as an adjudication of Respondent No. 3’s complaint and had recorded that the complaint stood disposed of after action was taken.

The Court held that Section 83 does not empower the Registrar to adjudicate a private complaint.

His role is limited to deciding, on the basis of independent satisfaction, whether a statutory inquiry into the Society’s affairs is necessary.

The Deputy Registrar had therefore confused his supervisory power with an adjudicatory function.

The Court also observed that the same defect had been identified in the earlier round of proceedings, yet the Deputy Registrar repeated it after remand.

The order of the Divisional Joint Registrar upholding the inquiry was consequently indefensible.

Conclusion

The Bombay High Court partly allowed the writ petition filed by Raghuleela Megamall Kandivali (West).

It set aside the order dated 9 March 2020 passed by the Divisional Joint Registrar dismissing the Society’s revision.

It also set aside the Deputy Registrar’s order dated 2 March 2019 appointing an authorised officer to conduct an inquiry under Section 83 of the Maharashtra Co-operative Societies Act.

The Court clarified that a complaint by a single member may be considered as source information.

However, the Registrar must independently assess the material and exercise suo motu power on his own satisfaction.

He cannot mechanically reproduce the complaint, adjudicate it and order an inquiry solely on that basis.

No order as to costs was passed.

Case: Raghuleela Megamall Kandivali (West) v. Divisional Joint Registrar, Co-operative Societies, Mumbai Division & Others
Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 2980 of 2021 with Interim Application No. 10703 of 2025
Judge: Justice Sandeep V. Marne
Date: 25 June 2026
Result: Writ petition partly allowed; the Deputy Registrar’s Section 83 inquiry order and the Divisional Joint Registrar’s revisional order were set aside for lack of independent application of mind and improper adjudication of a single member’s complaint.

Bombay High Court Sets Aside Inquiry Against Raghuleela Megamall Society, Holds Registrar Cannot Merely Adjudicate a Single Member’s Complaint Under Section 83