Renuka 905-WP-10494-2026.docx IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 10494 OF 2026 Chirag Sheth and Anr ...Petitioners V/s. Deputy Registrar Of Co-Operative Societies SRA and Ors ...Respondents ________________ Mr. Karl Tamboly with Mr. Adil Parsurampuria, Mr. Atul Mishrra,Mr. Tejas Agarwal and Ms. Darshi i/b Mr. Aditya Lele for Petitioners. Mr.Saurish Shetye with Ms. Farheen Mustafa i/b Adv. Jenil Shah for Respondent No. 9. Ms. Savina R. Crasto, AGP for Respondent-State. ________________ CORAM: SANDEEP V. MARNE, J. DATED: 14 AUGUST 2026. P.C.: 1) The challenge in the present Petition is to order dated 10 August 2026 passed by the Assistant Registrar Co-operative Societies (East and West Suburbs), SRA Mumbai (Assistant Registrar). 2) By the impugned order passed under Section 82 (4) of the Maharashtra Co-operative Societies Act, 1960 (MCS Act), the Assistant Registrar has disqualiBed the entire managing committee of the Society on account of failure to submit the rectiBcation report for the years 2023-2024 and 2024-2025. The Assistant Registrar has also passed a consequent order dated 10 August 2026 appointing an Authorized OfBcer on the society on account of disqualiBcation of the entire managing Page No. 1 of 6 14 August 2026 2026:BHC-AS:33791 Renuka 905-WP-10494-2026.docx committee by exercising powers under Section 77A 1(b-1) of the Maharashtra Co-operative Societies Act. 1960 (MCS Act). 3) Mr. Shetye, the learned counsel appears on behalf of Mr. Ankit Narendra Shah and submits that the impugned orders are passed based on the complaint made by his client. Accordingly, Mr. Ankit Narendra Shah be impleaded as Respondent No. 9 to the Petition. Amendment to be carried out forthwith. 4) I have heard Mr. Tamboly, the learned counsel appearing for the Petitioner, Mr. Shetye, the learned counsel appearing for Respondent No. 9 and Ms. Crasto, the learned AGP appearing for Respondent-State and have considered the submissions canvassed by them. 5) Perusal of the order dated 10 August 2026 passed by the Assistant Registrar would indicate that he has disqualiBed the entire managing committee by exercising power under Section 82 (4) of the MCS Act. Under sub-section (4) of Section 82 of the MCS Act, the Registrar can order disqualiBcation only of such person who is found responsible for failure to submit the audit rectiBcation report. Section 82 (4) does not envisage automatic disqualiBcation of the entire managing committee the moment failure to submit audit rectiBcation report occurs. In any case, the Assistant Registrar has not recorded a Bnding as to how all the members of the managing Committee were responsible to submit the audit rectiBcation report. Page No. 2 of 6 14 August 2026 Renuka 905-WP-10494-2026.docx 6) It also appears that the Assistant Registrar has ultimately concluded that there is a failure on the part of the managing committee to ‘submit’ the audit rectiBcation report. This conclusion appears to be contrary to the Bndings recorded in earlier part of the order in which the Assistant Registrar has taken note of Bling the audit rectiBcation report by the managing committee. Thus, there appear to be inconsistencies in the Bndings recorded by the Assistant Registrar in the impugned order. 7) Going further, the Assistant Registrar has recorded a Bnding that there was a delay in submission of the audit rectiBcation report and that the audit rectiBcation report does not contain opinion of the Auditor, who had conducted the audit. After going through provisions of Section 82 of the MCS Act and Rule 73 of the Maharashtra Co-operative Societies Rules, 1961, prima facie it appears that there is no provision for obtaining opinion of the auditor while submitting the audit rectiBcation report. 8) It is also seen that the Assistant Registrar has taken the extreme step of disqualifying all the members of the managing committee for a period of two years without even going into the issue of proportionality. No effort is made to Bnd out the person who was responsible for failure to submit the rectiBcation report. Also, since the rectiBcation report is actually submitted, whether mere delay and failure to obtain opinion of the auditor were factors sufBcient to mechanically order disqualiBcation is not considered. In Kailash Maheshwari and Ors. Page No. 3 of 6 14 August 2026 Renuka 905-WP-10494-2026.docx V/s. State of Maharashtra and Ors. 1 , this Court has laid down the principles governing exercise of jurisdiction by the Registrar while exercising the power of disqualiBcation of the managing committee members in the context of provisions of Section 75 of the MCS Act. This Court has held in paragraph No. 55 as under:- 55. Second, Section 75(5) clearly uses the expression "whose duty it was." This means that liability cannot be fastened mechanically upon all members of the committee. The Registrar was required to identify which ofBce bearers had the statutory or functional duty to prepare and place the relevant documents, such as the Secretary, Treasurer, or Chairman. Ordinary members, who had no direct role in preparing or placing audited accounts, rectiBcation reports, or budgets, cannot be disqualiBed without evidence of complicity. The impugned order fails to record such Bndings and has applied disqualiBcation indiscriminately to the entire committee. 9) The principles discussed by this Court in Kailash Maheshwari (supra) on the issues of proportionality and the need to disqualify the entire managing committee in the context of Section 75 would squarely apply to the scenario of Section 82 of the MCS Act as well. 10) There is also a serious allegation by the Petitioner that the complainant (Respondent No. 9) is a relative of the developer and that the disqualiBcation proceedings are initiated deliberately to protect the interests of the developer and to scuttle the ongoing mediation proceedings. Since the proceedings are being remanded, this Court is not going into the merits of the allegations at this stage. Since the order of the Assistant Registrar suffers from the vice of exercise of jurisdiction 1 Writ Petition No. 10587 of 2025 decided on 25 September 2025 Page No. 4 of 6 14 August 2026 Renuka 905-WP-10494-2026.docx with material irregularity, I am inclined to ignore the availability of alternate remedy for the Petitioner. 11) Considering the above position, in my view, the inquiry conducted by the Assistant Registrar under Section 82 (4) of the MCS Act appears to be contrary to the statutory scheme. In my view, therefore, the proceedings deserve to be remanded before the Assistant Registrar by setting aside the order dated 10 August 2026. 12) Petition accordingly succeeds in part and I proceed to pass the following order:- (i) Order dated 10 August 2026 passed under Section 82 (4) as well as the order dated 10 August 2026 passed under Section 77 (A) of the MCS Act are set aside. (ii) The proceedings under Section 82 (4) of the MCS Act are remanded before the Assistant Registrar for fresh adjudication. (iii) The Assistant Registrar shall readjudicate the proceedings having regard to the law laid down by this Court in Kailash Maheshwari (supra) as well as after taking into consideration provisions of Section 82 of the MCS Act and Rule 73 of the MCS Rules. 13) All contentions of parties on merits are expressly kept open. Page No. 5 of 6 14 August 2026 Renuka 905-WP-10494-2026.docx 14) Writ Petition is accordingly partly allowed and disposed of. There shall be no order as to costs. [SANDEEP V. MARNE, J.] Page No. 6 of 6 14 August 2026 Signed by: Renuka S Thakur Designation: PA To Honourable Judge Date: 17/08/2026 15:31:08