Bombay High Court
Harish Arora And Ors vs The Deputy Registrar Of Co Operative Soc … on 9 June, 2025
Author: Amit Borkar
Bench: Amit Borkar
2025:BHC-AS:22586
wp3433-2025-J Final.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3433 OF 2025
1. Harish Arora,
Age 45 years, Occupation: Business,
residing at Flat Nos.1 & 2, Trishul
Building, 18-A, Kane Road,
Bandra (West), Mumbai - 400 050
2. Venetia Palia
Age 50 years, Occupation: Business,
ATUL
GANESH residing at Flat No.3, Trishul
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Building, 18-A, Kane Road,
Date: 2025.06.09
15:30:52 +0530
Bandra (West), Mumbai - 400 050
3. Phiroze Karmali,
Age 55 years, Occupation: Business,
residing at Flat No.51, Trishul
Building, 18-A, Kane Road,
Bandra (West), Mumbai - 400 050
4. Khalid Omar Wakani,
Age 65 years, Occupation: Business,
residing at Darus-Salaam 'A',
Plot No.197-B, Kane Road,
Bandra (West), Mumbai 400 050
5. Nafees Khan
Age 64 years, Occupation: Business,
residing at Flat No.52, Trishul
Building, 18-A, Kane Road,
Bandra (West), Mumbai - 400 050
6. Vinay Wadhera ... Petitioners
Age 59 years, Occupation: Business,
1
::: Uploaded on - 09/06/2025 ::: Downloaded on - 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
residing at Flat No.6, Trishul
Building, 18-A, Kane Road,
Bandra (West), Mumbai - 400 050
V/s.
1. The Deputy Registrar of Cooperative
Societies, 'H-West' Ward, Mumbai
havint its address at Mahasul Bhavan,
2nd Floor, Opposite Bandra Bus Depot,
Bandra (West), Mumbai 400 050
2. Devdas A. Aroskar,
Age Adult, Occupation: Advocate,
Authorized Officer appointed by
Dy. Registrar of Cooperative Societies,
'H-West' Ward, Mumbai, having office
at 51/2656. Safalya Cooperative Hsg.
Society Ltd., Gandhi Nagar, Near Bank
of Maharashtra, Bandra (East),
Mumbai - 400 051.
3. Aarti Gupta,
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.82,
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
4. Sneha Rajani,
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.12,
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
5. Uday Shetty,
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.II,
2
::: Uploaded on - 09/06/2025 ::: Downloaded on - 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
6. Bennie Philips
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.42,
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
7. Parmvir S. Parmar,
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.32,
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
8. Bobbie Phillips,,
Adult, Occupation Business
Indian Inhabitant, residing at Flat No.22,
Trishul Building, 18-A Kane Road,
Bandra (West), Mumbai 400 050
9. Bandra Trishul Premises Cooperative
Housing Society Limited, A Society
registered under the provisions of
the Maharashtra Cooperative Societies
Act, 1960 bearing Regn No.BOM/HSG/
1220 of 1991 and having its registered
address at Trishul Building, 18-A
Kane Road, Bandra (W),
Mumbai 400 050
10. The Divisional Joint Registrar, Coop.
Societies, Mumbai, having office at
6th Floor, Malhotra House, Opposite
CSMT, Fort, Mumbai 400 001 ... Respondents
3
::: Uploaded on - 09/06/2025 ::: Downloaded on - 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Mr. Mayur Khandeparkar, with Mr. Himalaya
Choudhari, Mr. Rahul Singh, and Ms. Pranali Raut i/by
Legal Catalyst for the petitioners.
Mrs. V.R. Raje, AGP for respondents-State.
Mr. Girish Godbole, Senior Advocate with Mr. Rohit
Gupta, Ms. Nitya Shah, Ms. Kinnar Shah, Ms. Aditi
Bhargava and Mr. Brijesh Nittekar i/by Divya Shah
Associates for respondent Nos.3 to 7.
CORAM : AMIT BORKAR, J.
RESERVED ON : MAY 9, 2025
PRONOUNCED ON : JUNE 9, 2025
JUDGMENT:
1. By way of the present petition instituted under Article 227 of
the Constitution of India, the petitioners, who were members of
the managing committee of respondent No.9-Society, have assailed
the legality, validity, and propriety of three separate but
interrelated orders passed by respondent No.1, the Deputy
Registrar, Cooperative Societies. First, the petitioners impugn the
order dated 11th February 2025 passed under Section 79A(3) of
the Maharashtra Cooperative Societies Act, 1960 (hereinafter
referred to as “the MCS Act” or “the said Act” for the sake of
brevity), whereby they have been disqualified from continuing as
members of the managing committee for a period of six years.
Second, they also question the consequential order dated 20th
February 2025 passed under Section 77A of the said Act, whereby
an Authorized Officer has been appointed to take charge of the
affairs of the society in place of the elected managing committee.
Third, the petitioners challenge the interim order passed by
4
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
respondent No.10 on 20th February 2025 in pending revision
proceedings, directing the parties to maintain status quo in
relation to the subject matter arising from the order dated 1st
February 2025 passed under Section 79A(3) of the said Act.
2. Before adverting to the legal questions involved, it would be
appropriate to set out in brief the facts giving rise to the present
controversy. The factual matrix reveals that the predecessor
managing committee of respondent No.9-housing society had
initiated the process of redevelopment of the society’s property. To
that end, a Special General Body Meeting (SGBM) was convened
on 10th July 2023, wherein a resolution was passed to commence
the redevelopment process. Thereafter, the Project Management
Consultant engaged by the society prepared the tender documents,
and invitations were issued to prospective developers to submit
their proposals. However, allegations of mismanagement surfaced
against the then committee, including certain petitioners and
respondents herein. Consequently, by an order dated 29th
November 2023, an Administrator was appointed to manage the
affairs of respondent No.9-society. The Administrator assumed
charge on 18th December 2023.
3. Subsequently, the election process was initiated, and on 25th
August 2024, elections were duly held under the supervision of the
Election Officer. The petitioners, along with respondent Nos.3 and
4, were elected as members of the new managing committee of the
society. The newly elected committee assumed charge on 1st
September 2024 and chose to continue with the redevelopment
process earlier initiated. In the course of redevelopment, the newly
5
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
constituted committee proceeded to short-list developers and
called upon them to submit revised and improved offers.
Accordingly, on 9th and 10th October 2024, a Special General
Body Meeting was held, in which two developers, MIC/LLP and
Narang Realty, presented their enhanced proposals before the
general body. Thereafter, a subsequent Special General Body
Meeting was held on 16th October 2024, wherein the general body
resolved to short-list MIC/LLP and Narang Realty as the final
contenders. In continuation of the said process, a managing
committee meeting was held on 24th October 2024 to take a final
call regarding appointment of MIC/LLP as the developer.
4. It appears from the record that on 8th November 2024,
respondent No.1, Deputy Registrar, received two complaints from
members of the society, raising objections to the redevelopment
process undertaken by the newly elected managing committee of
respondent No.9-housing society. The complainants prayed for a
declaration that all minutes of meetings, resolutions, and
appointment letters pertaining to redevelopment activities
undertaken on or after 25th August 2024, i.e., after the new
committee took charge, be declared illegal, null and void ab initio.
A further prayer was made for staying the implementation and
effect of such decisions. The main contention in the complaints
was that the voting process conducted during the Special General
Body Meeting held on 16th October 2024 for short-listing and
selecting the developer was allegedly in violation of the directives
issued under Section 79A of the MCS Act, as incorporated by the
Government Resolution dated 4th July 2019. According to the
6
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
complainants, the said Government Resolution prescribed
mandatory procedural norms and safeguards to be observed by
cooperative housing societies while undertaking redevelopment
projects. Around the same time, another complaint was filed
before respondent No.1, purportedly invoking powers under
Section 73 of the MCS Act, alleging that the resolutions passed by
the general body and the managing committee, particularly the
resolution dated 24th October 2024 in furtherance of
redevelopment, were vitiated by irregularities and procedural
impropriety. The complaint called for appropriate action against
the petitioners and other members of the managing committee.
5. In view of the said complaints, respondent No.1 initiated
inquiry and on 18th December 2024, issued show-cause notices to
petitioner Nos.4 to 6, calling upon them to file their reply and
submit relevant documents in support of their actions. Pursuant
thereto, the petitioners submitted their written replies along with
necessary documents. Subsequently, on 16th January 2025,
respondent Nos.3 to 8 filed their rejoinder submissions. After
completion of the pleadings, the parties placed their respective
written submissions on record.
6. Upon consideration of the materials placed before him,
respondent No.1 passed an order dated 11th February 2025, in
purported exercise of powers under sub-section (3) of Section 79A
of the MCS Act. By the said order, the petitioners were disqualified
from continuing as members of the managing committee of
respondent No.9-housing society for a period of six years. The
disqualification was based on the finding that the petitioners had
7
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
violated binding directives issued under Section 79A of the Act,
specifically those relating to redevelopment procedures.
7. Aggrieved by the said order of disqualification, the
petitioners preferred revision applications on 17th February 2025
under Section 154 of the MCS Act before the Divisional Joint
Registrar, Pune Region, i.e. respondent No.10. Upon urgent
mentioning, the revisional authority, on 20th February 2025,
passed an interim order directing all parties to maintain status quo
till 27th February 2025.
8. However, on the same day i.e. 20th February 2025,
respondent No.1 passed yet another order appointing respondent
No.2 as Administrator of respondent No.9-housing society,
purportedly in exercise of powers under Section 77A of the said
Act. Although the petitioners received an official copy of the said
order from respondent No.1 on the same day, they were first
informed about the Administrator’s appointment only on 23rd
February 2025, when respondent No.2 served a notice upon the
petitioners requiring them to hand over charge, despite the fact
that 23rd February 2025 was a Sunday. On the very next day, i.e.
24th February 2025, petitioner No.4 addressed a formal
communication to respondent No.1, bringing to his notice the
subsistence of the status quo order passed by the revisional
authority and requested that no coercive steps be taken in the
matter. Nevertheless, the revision applications were not taken up
for hearing on 27th February 2025 and were adjourned to 7th
March 2025. The interim order of status quo was extended
accordingly. Left with no efficacious remedy and apprehending
8
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
further prejudice to their rights, the petitioners approached this
Court by filing the present writ petition under Article 227 of the
Constitution on 4th March 2025.
9. On 6th March 2025, after considering the urgency involved
and the potential consequences arising from the disputed order,
this Court was pleased to grant ad-interim relief in favour of the
petitioners. By the said interim order, it was directed that the order
dated 20th February 2025 appointing respondent No.2 as
Administrator of respondent No.9-housing society shall not be
acted upon and shall remain in abeyance until 20th March 2025.
In the course of hearing, a specific grievance was raised on behalf
of the petitioners to the effect that respondent No.1 had failed to
take into account the binding precedent laid down by a coordinate
Bench of this Court in Writ Petition No.8732 of 2021. According to
the petitioners, the judgment in the said writ petition squarely
covered the present factual scenario and required strict adherence
by the subordinate authorities. It was alleged that despite
respondent No.1 being duly informed of the said decision, he
chose to disregard the ruling by resorting to a distinction based on
factual context rather than addressing the ratio laid down therein.
In view of the seriousness of this allegation, this Court deemed it
appropriate to direct respondent No.1 to file a personal affidavit
explaining the basis on which the said precedent was not followed
and clarifying the reasoning that led to the contrary conclusion in
the impugned order dated 11th February 2025. Thereafter, on 27th
March 2025, upon examining the affidavit filed by respondent
No.1 dated 18th March 2025, this Court noticed certain assertions
9
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
made in paragraph 19 thereof which appeared to rely upon facts
not evident from the record. Accordingly, respondent No.1 was
directed to file a further affidavit placing on record the precise
source of information and documentary material, if any, which
formed the basis of the factual assertions made in the said
paragraph.
10. Mr. Khandeparkar, learned Advocate appearing on behalf of
the petitioners, assailed the legality and validity of the impugned
orders on the foundational ground that both the order of
disqualification passed under Section 79A(3) and the order of
supersession under Section 77A of the MCS Act, suffer from patent
breach of the principles of natural justice. It was pointed out that
petitioner Nos.1 to 3 were not issued any notice, nor were they
afforded any opportunity of hearing in the proceedings leading to
the disqualification under Section 79A(3). So far as the order
under Section 77A is concerned, it was fairly admitted by the
respondents themselves that the same was passed without issuing
any show cause notice or giving any personal hearing to the
petitioners. It was thus urged that both orders, which visit the
petitioners with serious civil consequences, namely, disqualification
for six years and removal from the elected post, stand vitiated in
law and are liable to be treated as nullities. In support of his
contentions, the learned Advocate placed reliance upon the
decisions of this Court in Maya Developers v. Neelam R. Thakkar,
(2016) 6 Bom CR 629; Kamgar Swa Sadan Co-op. Hsg. Society
Ltd. v. Divisional Joint Registrar, 2018 SCC OnLine Bom 1319; and
Bay Home Properties Developers (P) Ltd. v. National Properties
10
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Builders and Developers, 2019 SCC OnLine Bom 5299. He
submitted that as per the ratio of the aforesaid decisions, the
Government Resolution dated 4th July 2019 issued under Section
79A of the Act is directory in nature and not mandatory, and as
such, its non-observance cannot be a ground for disqualification
unless it is shown that there was total non-compliance or mala fide
exercise of power.
11. He further contended that in the present case, there has been
substantial and material compliance with the directives contained
in the said Government Resolution. According to him, notices of
meetings were properly issued, disclosure of shortlisted developers
was made in the meeting held on 9th and 10th October 2024, and
members were granted adequate time of six days to evaluate the
revised offers of developers before voting took place in the Special
General Body Meeting held on 16th October 2024. He emphasized
that all 18 registered members of the society were present and
participated in the decision-making process. These decisions, he
submitted, were subsequently ratified in the Special General Body
Meeting held on 29th January 2025. He also submitted that the
impugned order dated 11th February 2025 has been passed
without prior consultation with the Federal Society as mandated,
thereby rendering it unsustainable in law. Additionally, it was
argued that respondent No.1 demonstrated bias in favour of the
complainants by invoking Section 79H(3) of the MCS Act, which
stood repealed and had no applicability. It was further contended
that respondent No.1, in his affidavit dated 18th March 2025,
relied upon facts which were not part of the original record and,
11
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
despite being directed by this Court, failed to disclose the source of
such information. The learned counsel submitted that the conduct
of respondent No.1 amounted to favoritism towards respondent
Nos.3 to 8, thereby attracting the principle laid down by the
Supreme Court in Union of India v. K.K. Dhawan, (1993) 2 SCC
56, particularly clauses (iv) and (v) of paragraph 28. In such a
situation, he urged, the mere availability of an alternative statutory
remedy under Section 154 of the Act ought not to deter this Court
from exercising its supervisory jurisdiction under Article 227 to
prevent miscarriage of justice and protect the democratic process
in cooperative governance.
12. Per contra, Mr. Godbole, learned Senior Advocate appearing
for respondent Nos.3 to 7, supported the impugned orders and
opposed the maintainability of the writ petition. He submitted that
the petitioners have already availed of the alternate statutory
remedy by filing revision applications under Section 154 of the
Act, and those proceedings are still pending. According to him,
such revision is an efficacious remedy and, therefore, in view of
well-settled principles of judicial restraint, this Court should
decline to exercise its extraordinary jurisdiction. He further
submitted that the petitioners had made a factually incorrect
statement before this Court on 6th March 2025, by alleging that
they had brought to the notice of respondent No.1 the judgment in
Vilas Vishnu Jadhav v. State of Maharashtra, Writ Petition No.8732
of 2021. In support of his submission, he placed on record
affidavits of the Advocates who were present during the relevant
hearings and contended that the said judgment was never
12
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
produced before respondent No.1, nor was it argued during the
proceedings.
13. Mr. Godbole relied upon the unreported judgment of this
Court in Mercury CHSL v. State of Maharashtra & Ors., Writ
Petition No.6042 of 2025, decided on 8th May 2025, to submit
that the impugned orders were well-reasoned and passed within
the scope of authority conferred under the Act. He argued that the
judgment in Kamgar Swa Sadan CHSL (supra) did not directly
deal with the consequence of non-compliance of Section 79A
directives in redevelopment matters. Referring to the judgment in
Vijay Lakhi v. District Deputy Registrar, Writ Petition No.1889 of
2025, he contended that though the Registrar has no power to
annul resolutions of the general body, he retains the jurisdiction
under Section 79A(3) to disqualify members of the managing
committee for breach of directives issued under Section 79A(1).
14. He urged that the judgment in Vilas Vishnu Jadhav (supra)
has rightly been distinguished by respondent No.1, as it pertained
to a different factual context. In the present case, there was clear
evidence of procedural lapses, lack of transparency, and absence of
confidence-building among the majority members of the society.
Hence, the Registrar’s interference was justified. However, if this
Court is of the view that Vilas Vishnu Jadhav squarely applies to
the present facts, he submitted that a reference be made to a
Larger Bench, as there is an apparent conflict between the views
taken in Vilas Vishnu Jadhav and Vijay Lakhi. He concluded by
submitting that the material placed on record does not establish
substantial compliance with the 79A directives. He further alleged
13
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
that the Chairman of the society had a vested interest in the
redevelopment process and had acted in breach of trust. Therefore,
the writ petition, according to him, ought to be dismissed and the
petitioners relegated to pursue their statutory revision.
15. In support of the preliminary objection regarding
maintainability of the writ petition, Mr. Godbole placed reliance
upon several decisions of the Hon’ble Supreme Court including:-
Jai Singh v. Union of India, (1977) 1 SCC 1,- K.S. Rashid and Son
v. Income-Tax Investigation Commission, (1954) 1 SCC 69,- Radha
Krishan Industries v. State of Himachal Pradesh, (2021) 6 SCC
771, and – Whirlpool Corporation v. Registrar of Trade Marks,
(1998) 8 SCC 1. He submitted that these judgments clearly lay
down the principle that the High Court should not interfere under
Article 227 when equally efficacious alternative remedies are
available under the statute.
16. Mrs. Raje, learned Assistant Government Pleader appearing
for the State authorities, adopted the submissions advanced by Mr.
Godbole. She further submitted that the petitioners had made an
incorrect factual statement before this Court during the hearing
held on 6th March 2025 by asserting that the judgment in Vilas
Vishnu Jadhav was brought to the notice of respondent No.1. She
emphasized that the essential procedural requirements laid down
in the Government Resolution dated 4th July 2019 were not
followed in their letter and spirit. In her submission, there was no
substantial compliance with the directives under Section 79A of
the Act, and therefore, the impugned orders are not liable to be
interfered with. She accordingly prayed for dismissal of the writ
14
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
petition and for the petitioners to be relegated to pursue the
revisional remedy.
17. In light of the rival submissions, the following principal
points arise for determination in this case:
(i) Whether the existence of an alternate statutory remedy
under the MCS Act bars the present writ petition, or whether
this case falls under the exceptions permitting the Court to
exercise jurisdiction under Article 226.
(ii) Whether the disqualification of the petitioners for
alleged non-compliance with the GR dated 4th July 2019 is
legally sustainable, including sub-questions as to the nature
of the 2019 guidelines (mandatory or directory), and the
scope of Section 79A(3) itself.
(iii) Whether the process leading to the impugned orders
violated the principles of natural justice and fair hearing, and
if so, with what effect.
(iv) Whether the appointment of an Administrator under
Section 77A in the facts of the case was within the
authority’s lawful powers and justified, or whether it
amounted to an improper supersession of the managing
committee.
(v) Whether the petitioners have established that the
impugned decisions were tainted by bias, malice in law, or
reliance on irrelevant/repealed provisions, so as to call for
invalidation on grounds of arbitrariness.
15
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Maintainability of Writ Petition-Availability of Alternate Remedy
18. One of the first objections raised by the respondents is that
the present writ petition is not maintainable because the
petitioners have an alternate statutory remedy available to them
under Section 154 of the Maharashtra Co-operative Societies Act,
1960. The objection is that since a revision application is filed
before the repondent no. 10, the petitioners should be directed to
avail that remedy instead of directly coming to this Court.
19. It is well-settled in law that the rule regarding exhaustion of
alternate remedies is not an absolute bar to the jurisdiction of this
Court. It is a rule of judicial discretion, not of compulsion. In other
words, this Court has the power under Article 226 or 227 of the
Constitution of India to entertain a writ petition even when an
alternate remedy is available, if the facts of the case so warrant.
The Supreme Court has time and again clarified that the presence
of an alternate remedy does not by itself take away the jurisdiction
of the High Court.
20. In the well-known case of Whirlpool Corporation v. Registrar
of Trade Marks [(1998) 8 SCC 1], the Supreme Court laid down
three exceptions to the general rule that a writ should not be
entertained when an alternate remedy exists. These three
exceptions are: (a) when the petitioner seeks to enforce
fundamental rights; (b) when there is a clear violation of
principles of natural justice;(c) when the order is passed by an
authority without jurisdiction, or when the validity of a statute
itself is under challenge. These exceptions have been consistently
16
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
applied and affirmed by the Supreme Court in Harbanslal Sahnia v.
Indian Oil Corporation [(2003) 2 SCC 107] and recently in Radha
Krishan Industries v. State of Himachal Pradesh [(2021) 6 SCC
771].
21. There can be no quarrel with the settled principle that where
an alternative statutory remedy is available, the writ jurisdiction
under Article 226 is ordinarily not to be invoked. However, it is
equally well settled that the existence of an alternate remedy does
not absolutely bar the jurisdiction of the High Court, especially
where the case falls within one of the recognized exceptions to the
general rule.
22. The Full Bench of this Court in Shireen Sami Ghadiali & Ors.
v. Spenta Cooperative Housing Society Ltd., 2011 (3) Mah LJ 486,
has laid down the guiding principles on this issue. It held that
although revision under Section 154 is a remedy available as of
right to an aggrieved person, the High Court may still entertain a
writ petition notwithstanding the availability of such remedy,
where the case falls within any of the judicially recognized
exceptions. One of the exceptions is the situation where there
exists a binding judicial precedent in favour of the petitioners, and
the authority, has chosen to ignore it.
23. In the present case, as already discussed earlier, the
judgment in Vilas Vishnu Jadhav (Supra) has clearly held that the
Government Resolution dated 4th July 2019, issued under Section
79A(1), is recommendatory and directory in nature. The
judgments in the case of Maya Developers (Supra), Kamgar Swa
17
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Sadan (supra) and Bay Home Properties (supra) were specifically
brought to the attention of respondent No.1 prior to the issuance
of the impugned order, yet he consciously chose to sidestep the
binding precedents and proceeded to impose disqualification based
solely on the Government Resolution, without any independent
legal justification. This constitutes a sufficient ground to invoke the
writ jurisdiction of this Court.
24. Additionally, reliance may also be placed on the judgment of
the Supreme Court in State of M.P. v. Sanjay Nagayach, (2013) 7
SCC 25. In paragraph 34 of the said decision, the Supreme Court
categorically upheld the High Court’s exercise of writ jurisdiction
under Article 226 despite the availability of an appellate remedy,
as the order passed by the Joint Registrar therein was found to be
arbitrary and in clear violation of statutory safeguards. The Court
held that where the impugned action is in violation of mandatory
procedural requirements or principles of natural justice, the High
Court is justified in exercising its extraordinary jurisdiction to
prevent injustice. The reasoning and principle laid down in Sanjay
Nagayach apply with equal force to the facts of the present case.
25. Furthermore, the record in the present matter clearly shows
that the order dated 11th February 2025, which disqualified the
petitioners for a period of six years, was passed without issuing
any notice to petitioner Nos.1 to 3, in clear breach of the audi
alteram partem rule. Similarly, the order dated 20th February 2025
passed under Section 77A, appointing an Administrator, was
passed without publication of notice as required by law, thereby
depriving the society members of an opportunity to object to the
18
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
proposed supersession.
26. Both these orders have been passed without following
minimum standards of natural justice, and hence fall squarely
within the exception laid down by the Supreme Court in Whirlpool
Corporation (Supra), which permits a writ court to entertain a
petition where the action is vitiated by procedural irregularity,
violation of natural justice, or lack of jurisdiction, despite the
existence of an alternative remedy.
27. In addition to the above, it must also be borne in mind that,
as rightly pointed out by the petitioners, this case is covered by at
least three binding decisions of this Court holding that the
directions under Section 79A(1) of the MCS Act, as contained in
the Government Resolution dated 4th July 2019, are merely
guidelines and not mandatory commands. This fact brings the
present case squarely within the principle laid down by the Full
Bench in Shireen Ghadiali, where it was held that when binding
precedents are ignored, judicial intervention under Article 226 is
not only warranted but becomes necessary to preserve consistency
in the application of law.
28. Applying these settled principles to the present case, this
Court finds that two important and exceptional features stand out:
First, the petitioners have made a strong prima facie case
that the impugned actions of disqualification and
supersession were taken in breach of natural justice, as no
fair opportunity of hearing was granted to petitioner Nos.1
to 3 before such serious consequences were imposed. It19
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.docwould fall squarely within the second exception laid down in
Whirlpool Corporation.
Second, the petitioners have alleged that the authority acted
without proper jurisdiction, and in a manner that was
procedurally unfair. It has been pointed out that the
respondent no. 1 relied on a Government Resolution which is
only directory in nature, and even referred to provisions that
were repealed and not in force. The matter would therefore
involves a deeper question of legal validity and procedural
fairness.
29. The respondents’ reliance on the decision of Jai Singh v.
Union of India [(1977) 1 SCC 1] is misplaced. In that case, the
petitioner had already chosen to file a civil suit, and also raised
issues involving disputed facts which were not suitable for
summary determination by a writ court. In the present case,
however, there are no complex or disputed facts requiring a full-
fledged trial. The documents and proceedings relied upon by both
parties are largely on record. The real issue is how the law applies
to those facts, and that is something well within the jurisdiction of
this Court under Article 226.
30. In the opinion of this Court, therefore, the present writ
petition deserves to be entertained despite the existence of a
statutory remedy. The issues raised go to the root of natural
justice, jurisdiction, and legal propriety. To send the petitioners to
another forum in the face of such clear allegations would cause
unnecessary delay, multiplicity of proceedings, and possibly render
20
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
the whole exercise futile.
31. Therefore, in light of the settled legal position, this Court
finds no merit in the objection raised as to the maintainability of
the writ petition. On the contrary, the present case falls within the
well-established exceptions to the rule of alternate remedy, and the
interference of this Court is warranted to prevent injustice arising
from procedural impropriety, jurisdictional error, and non-
compliance with binding judicial authority.
32. It is accordingly held that this writ petition is entertainable.
The objection raised by the respondents regarding alternate
remedy is rejected.
Nature of the 2019 Government Resolution and Validity of
Disqualification
33. Central to this case is the question, whether non-compliance
with the redevelopment guidelines issued under Section 79A can
entail the extreme consequence of disqualification of an entire
managing committee. To answer this, one must ascertain the
character of those guidelines, are they mandatory rules or advisory
norms?
34. In order to examine the challenge raised in the present writ
petition, it would be appropriate to first consider the scope and
ambit of the powers conferred by Section 79A of the MCS Act.
Section 79A forms part of Chapter VIII of the said Act, which deals
with the supervision, control, and regulation of cooperative
societies by statutory authorities. The said section reads as follows:
21
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
“79A. (1) If the State Government, on receipt of a report
from the Registrar or otherwise is satisfied that in the public
interest or for the purposes of securing proper
implementation of co-operative production and other
development programmes approved or undertaken by
Government or to secure the proper management of the
business of the society generally, or for preventing the affairs
of the society being conducted in a manner detrimental to
the interests of the members or of the depositors or the
creditors thereof, it is necessary to issue directions to any
class of societies generally or to any society or societies in
particular, the State Government may issue directions to
them from time to time, and all societies or the society
concerned, as the case may be, shall be bound to comply
with such directions.
(2) The State Government may modify or cancel any
directions issued under sub-section (1), and in modifying or
cancelling such directions may impose such conditions as it
may deem fit.
(3) Where the Registrar is satisfied that any person was
responsible for complying with directions or modified
directions issued to a society under sub-sections (1) and (2)
and he has failed, without any good reason or justification,
to comply with the directions, the Registrar may by order –
(a) if the person is a member of the committee of the
society, declare him to be disqualified to be or to
continue to be a member of the committee of any
society for a period of six years from the date of the
order;
(b) if the person is an employee of the society, direct
the committee to remove such person from
employment of the society forthwith, and if any
member or members of the committee, without any
good reason or justification, fail to comply with this22
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.docorder, declare them disqualified as provided in clause
(a) above;
Provided that, before making any order under this sub-
section, the Registrar shall give a reasonable opportunity of
being heard to the person or persons concerned and consult
the federal society to which the society is affiliated:
Provided further that, such federal society shall communicate
its opinion to the Registrar within a period of forty-five days
from the date of receipt of communication, failing which it
shall be presumed that such federal society has no objection
to take action under this section and the Registrar shall be at
liberty to proceed further to take action accordingly.
Any order made by the Registrar under this section shall be
final.”
35. A plain reading of the aforesaid provision makes it clear that
Section 79A empowers the State Government to issue binding
directions to cooperative societies, either generally or specifically,
in certain well-defined circumstances. The power under sub-
section (1) is broad in scope but not unguided. It can only be
exercised when the Government is satisfied that such directions
are necessary either (i) in public interest, or (ii) for ensuring
proper implementation of cooperative production or development
programmes approved by the State, or (iii) to secure proper
management of the affairs of the society, or (iv) to prevent
mismanagement or conduct detrimental to the interest of its
members, depositors, or creditors. The use of the expression “shall
be bound to comply” signifies the nature of such directions once
validly issued.
23
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
36. Sub-section (3) of Section 79A confers authority on the
Registrar to take consequential action in case of non-compliance
with such directions. If the Registrar is satisfied that a person who
was responsible for complying with the directions has failed to do
so without sufficient justification, he is empowered to pass an
order of disqualification against such person. The disqualification
can extend up to a period of six years and operates to prevent such
a person from being, or continuing as, a member of the committee
of any cooperative society. However, this power under sub-section
(3) is not unrestrained. The Registrar is statutorily duty-bound to
adhere to principles of natural justice. The provision mandates that
before passing an order of disqualification, the concerned person
must be given a reasonable opportunity of being heard.
Additionally, the Registrar must consult the federal society to
which the concerned cooperative society is affiliated. The
consultation, though mandatory, is time-bound, if the federal
society does not furnish its opinion within forty-five days, the law
presumes absence of objection, and the Registrar is at liberty to
proceed further.
37. It is also relevant to note that the statute provides finality to
the order passed by the Registrar under this provision. That,
however, cannot mean that the Registrar’s order is immune from
judicial review. What is meant by finality in the statutory sense is
that the order is not appealable before any other authority under
the MCS Act. However, where allegations of procedural
irregularity, non-compliance with natural justice, or jurisdictional
errors are raised, such an order is always subject to scrutiny by this
24
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Court in exercise of its constitutional powers.
38. On cumulative reading, Section 79A thus strikes a balance
between the need for administrative control in public interest and
the procedural safeguards intended to prevent arbitrary exercise of
power. The Registrar must be satisfied on objective material; the
delinquent must be afforded a fair hearing; the federal society
must be consulted; and the reasons must be discernible from the
order. The power is quasi-judicial in character and carries civil
consequences, and therefore, strict adherence to procedural
fairness is the legislative intent behind the provision.
39. When tested against this framework, the Government
Resolution dated 4th July 2019, issued under Section 79A(1),
assumes critical significance. On a careful reading of its clauses, it
becomes clear that the responsibilities assigned therein are
structured in two ways, certain functions are to be discharged by
the Secretary acting in an administrative capacity, and others are
to be undertaken by the managing committee collectively.
40. For instance, the first part of Clause 5 enjoins the Secretary
to convene the general body meeting, whereas the second part
obligates the managing committee to seek quotations from a
Project Management Consultant and place proposals before the
general body. Clause 11 again places a duty on the Secretary to
prepare minutes of the general body meeting and furnish them to
all members. Likewise, Clause 15(a) casts the responsibility on the
Secretary to seek reports, and Clause 16 requires him to publish
notices. This distribution of functions clearly reflects that most
25
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
operational steps under the Resolution are procedural in nature
and typically within the power of the Secretary, who acts as the
administrative link between the committee and the general body.
The managing committee, on the other hand, is entrusted with
policy-level decision-making but always as a collective body.
Therefore, it would be difficult to isolate any one member of the
managing committee and fasten personal liability unless the
directive itself mandates an individual act, or there is evidence of
deliberate obstruction or individual deviation from a collective
resolution.
41. It is, therefore, necessary to emphasise the statutory
distinction in language and purpose between Sections 78, 78A,
and 79A(3). Having examined the statutory framework of Section
79A as a whole, it becomes necessary to turn to a more focused
analysis of sub-section (3) of the said provision. Sub-section (3)
confers upon the Registrar the power to disqualify a person, who is
a member of the managing committee, if he is found to have
failed, without any sufficient cause or justification, to comply with
directions issued under sub-section (1). The essential requirement
for invoking such power is the Registrar’s satisfaction, founded on
material, that such person bore responsibility to ensure compliance
and failed in discharging the same. However, this power cannot be
interpreted or exercised in isolation. The language and legislative
design of Section 79A(3) must be read harmoniously with Sections
78 and 78A of the MCS Act, which deal with suspension and
supersession of the committee or individual members under
broader grounds such as persistent default, negligence, or acts
26
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
prejudicial to the interest of the society. Section 78 empowers the
Registrar to suspend or remove the entire committee for acts of
collective failure or dereliction, whereas Section 78A empowers
the Registrar to supersede the committee or remove any member
thereof if statutory prerequisites are satisfied. What distinguishes
Section 79A(3) from Sections 78 and 78A is its narrower focus and
individualized character. It does concern itself with with a defined
breach of a binding direction, issued under Section 79A(1), and
traceable to a specific person’s dereliction. Thus, for Section
79A(3) to apply, the Registrar must first identify whether the
responsibility to act was specifically placed upon the person
concerned by the directive, and only thereafter can disqualification
follow. While Section 78 empowers the Registrar to take action
against the committee as a whole for collective default or
negligence, and Section 78A allows action either against the
committee or individual members for specific misconduct, Section
79A(3) is narrower in scope and person-specific in design. It
presupposes that the directive issued under Section 79A(1), read
along with relevant rules or the bye-laws of the society, imposes a
clear obligation on a person, whether as a committee member or
as an employee. Only when such obligation can be discerned and
the Registrar is satisfied that the person has failed to discharge that
duty without sufficient justification, can the consequence of
disqualification under Section 79A(3) be lawfully attracted. This
satisfaction must stem from a conjoint reading of the directions
under Section 79A(1), the MCS Rules, and the registered bye-laws
of the society. It must be shown that such person was under a
27
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
statutory or institutional duty to act in a particular manner, and
that he consciously failed or refused to do so. The burden,
therefore, lies to demonstrate that the directive required
something specific from the person, that the individual failed in
that obligation, and that such failure was without just cause.
Absent such findings, disqualification under Section 79A(3) cannot
be sustained merely because one is part of the managing
committee. Disqualification is not automatic by association; it must
be grounded in demonstrated dereliction.
42. Applying the aforesaid legal principles to the facts of the
present case, it becomes necessary to determine whether mere
deviation from the Government Resolution dated 4th July 2019,
without anything further, would justify the extreme consequence
of disqualification under Section 79A(3) of the Maharashtra
Cooperative Societies Act.
43. The scope and effect of Section 79A of the MCS Act,
particularly in the context of Government Resolutions issued
thereunder, has been the subject of judicial interpretation by
multiple coordinate Benches of this Court. One of the leading
decisions on this point is the judgment in Maya Developers
(Supra), wherein the Court, in paragraph 79, after closely
analysing the 2009 directive governing redevelopment, came to
the conclusion that the directive issued under Section 79A does
not have the force of a mandatory statutory command, but instead
lays down broad guidelines. In M/s. Maya Developers , this Court
was dealing with a situation where certain members of a society
objected that the managing committee had not strictly followed
28
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
the 2009 guidelines in appointing a developer (the case arose in a
civil suit context). The Court observed that the choice of issuing
such a directive under Section 79A, rather than through a statutory
amendment or a binding regulation, itself indicated the intent of
the Government to merely provide a framework for guidance,
rather than a mandatory rulebook. It was further noted that the
language of the directive employed expressions like “should” rather
than “shall” or “must”, underscoring its directory nature.
Importantly, the Court clarified that material compliance, involving
participation, notice, and disclosure, would suffice and that non-
literal adherence to every clause would not render the process
invalid. The judgment strongly emphasized that the authority of
the general body of a cooperative housing society, which
represents its democratic will, must be preserved, and that
guidelines cannot override decisions taken by a duly convened
general body meeting. The Court made a significant observation
that it was “impossible to accept that the 2009 directive is
mandatory”, and that what is essential is to ensure broad
participation, transparency, and an informed decision by the
majority. If those ends were met, technical non-compliances would
not vitiate the process.
44. The said interpretation in Maya Developers was considered
and approved by another coordinate Bench in the case of Kamgar
Swa Sadan Cooperative Housing Society Ltd., wherein the Court,
in paragraphs 36 and 37, reiterated that the 2009 directive is not
mandatory and observed that so long as material compliance is
shown, no adverse inference can be drawn. In that case, the
29
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
managing committee itself challenged a show-cause notice from
the Registrar which threatened action for not following the 2009
guidelines in toto. This Court quashed the Registrar’s notice,
holding that the 2009 guidelines were directory and not
mandatory, since they “provided no consequences for their non-
compliance”. The Court noted that the directives’ objective was to
assist societies and protect members, and nothing in the text of the
2009 GR indicated that a failure to comply would lead to any
automatic dissolution of the committee or other punishment.
Importantly, the Court cautioned that the State cannot use these
directives to interfere in a society’s affairs unless the non-
compliance is of such nature that it defeats the directives’ very
purpose and causes prejudice to the members. Simply put, if a
society substantially complies and the redevelopment decision is
backed by a bona fide majority, the Registrar should not readily
wield the axe of Section 79A(3). The Court further held that even
if there was a deviation from the procedural steps laid out in the
2009 Government Resolution, no consequences were prescribed
under the resolution itself for such non-compliance. Therefore, the
resolution could not be considered binding in nature, and its
breach could not attract disqualification under Section 79A(3).
The Court, therefore, held that the resolution must be treated as
directory, not mandatory.
45. The development continued with Bay Home Properties
Developers (P) Ltd. & Ors. (Supra). Although the case involved
private parties (two rival developers and factions within a society),
this Court discussed the 2009 directives and reiterated that their
30
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
interpretation cannot be static or uniform regardless of context.
The Court recognized that some members might insist on strict
compliance treating them as mandatory, whereas outsiders (like a
losing developer) cannot invoke them to invalidate a society’s
majority decision. The underlying message was that the directives
are for the benefit of the members, not a weapon for third parties
or a tool for needless technical obstruction. Thus, even that
decision fell in line with treating the directives as broadly
prescriptive but not inflexible commands. The GR dated 4th July
2019, which concerns us, did not materially alter the judicial
understanding that had developed. The Division Bench upheld the
legal principle that Government Resolutions under Section 79A,
which do not provide for consequences in case of non-compliance,
are to be construed as recommendatory in nature.
46. In fact, when Vilas Vishnu Jadhav (Supra) came up in this
Court, the 2019 guidelines were squarely at issue. There, as in this
case, managing committee members had been disqualified for
purported non-compliance with the redevelopment guidelines. The
Court set aside those disqualifications, holding unequivocally that
non-compliance with the 4th July 2019 GR did not automatically
invite disqualification. The judgment notes that “nothing in the 4th
July, 2019 GR indicated that non-compliance would lead to
mandatory consequences such as disqualification”. It also pointed
out the internal inconsistency in the impugned order of that case
(similar to the one at hand) where the operative part overshot
what the findings justified. In paragraphs 8 to 10 of the said
judgment, the Court recorded that the only reason for the
31
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
disqualification of the petitioners therein was the alleged non-
compliance with the 2019 Government Resolution. The Court held
that such non-compliance, even if assumed, could not form the
basis for disqualification under Section 79A(3), since the 2019
resolution, like its 2009 predecessor, did not provide for any
consequences in case of deviation. It was specifically noted that the
ratio of Kamgar Swa Sadan applied squarely to the 2019 resolution
as well, because the 2019 resolution too governed redevelopment
and did not alter the legal character of the directive, it merely
superseded the previous guidelines with an updated version. The
coordinate Bench concluded that the legal position remained
unchanged: that guidelines issued under Section 79A are directory,
and disqualification of elected members for their alleged non-
compliance would amount to exceeding jurisdiction under Section
79A(3). Accordingly, the orders disqualifying the petitioners in
Vilas Vishnu Jadhav were quashed and set aside.
47. In view of this consistent judicial position, I hold that the
Government Resolution of 4th July 2019 is directory in nature. Its
guidelines are intended to be followed to ensure a fair and
transparent redevelopment process; however, every deviation or
procedural lapse by itself does not constitute actionable wrong
unless it is shown to violate the object of the directives or violate
some express statutory requirement. If the managing committee
substantially adheres to the mandate, for example, by informing
members, taking a majority vote, selecting a developer in a broadly
competitive manner, then it cannot be said to have “failed to
comply” merely because an arithmetical requirement or a
32
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
documentation formality was not fulfilled to the letter. As observed
in Maya Developers(Supra) , “it is sufficient if participation, notice
and disclosure were ensured”, with majority will prevailing in a
properly convened meeting. This ensures the autonomy of the
cooperative society in decision-making, which is itself a goal of the
cooperative law.
48. Furthermore, it is a fundamental principle of administrative
law that Government Resolutions, Circulars, or Executive
Instructions are subservient to statutory enactments and must yield
where there is any inconsistency. They are framed to facilitate
implementation of statutes, not to supplant or override them. It is
equally well settled that while the Government may be bound by
its own circulars in administrative decision-making, such circulars
or resolutions cannot override statutory law nor can they bind
constitutional courts while interpreting legislative provisions. This
Court is thus not constrained by the language of the Resolution
alone but is duty-bound to test its application in the light of
statutory text, legislative intent, and settled judicial interpretation.
Once the Government Resolution dated 4th July 2019 was
interpreted in authoritative judicial pronouncements to be merely
directory and not mandatory in character, it was incumbent upon
respondent No.1, acting as a statutory authority, to follow the
binding precedent and give effect to the legal position settled by
this Court.
49. In the present case, the petitioners had specifically brought
to the notice of respondent No.1 the judgments in Maya
Developers and Kamgar Swa Sadan CHSL , which reaffirms the
33
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
directory nature of the 2009 Government Resolution. Respondent
No.1, however, declined to follow the ratio laid down therein, on
the ground that the facts and circumstances in the present case
were distinguishable. In doing so, respondent No.1 has erred in
principle. It was the duty of respondent No.1, as a statutory
authority functioning within the territorial jurisdiction of this
Court, to follow the binding interpretation of law laid down by the
parent High Court. This duty flows not only from the principle of
judicial discipline but also from the mandate of Article 141 of the
Constitution of India, which gives binding force to the law
declared by constitutional courts. It must be emphasised that once
a legal principle is laid down by a High Court, it binds all
authorities within the territorial jurisdiction of the Court,
irrespective of factual variation, unless the precedent is
distinguished on a question of law or set aside by a higher forum.
The ratio decidendi of a judgment, being the principle of law laid
down, is binding regardless of factual distinctions, unless the Court
has itself limited its applicability to a particular factual matrix. The
principle of judicial discipline obligates all statutory authorities to
follow binding judicial precedent. Respondent No.1, being a quasi-
judicial authority, was not at liberty to disregard the interpretation
placed upon the Government Resolution by this Court merely on
subjective assessment of facts. To do so would amount to judicial
indiscipline and a denial of the rule of law. Administrative
convenience or disagreement with the ratio cannot justify
deviation from binding precedent. In such a situation, the
impugned action of disqualification must be held to be vitiated on
34
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
the ground of legal perversity, as it rests on a premise already
negated by settled judicial prcededents. Therefore, respondent
No.1 was not entitled to bypass the effect of binding precedent
merely on the ground that circumstances in the present case were
factually distinguishable.
50. In this context, it would be apposite to refer to the decision
of the Supreme Court in State of Madhya Pradesh & Ors. v. Sanjay
Nagayach & Ors., (2013) 7 SCC 25. In that case, the Supreme
Court was dealing with the validity of an order passed by the
Registrar of Cooperative Societies whereby an elected managing
committee of a cooperative society was superseded before
completion of its term. The action of supersession was challenged
on the ground that there was no meaningful or effective
consultation, and the Registrar had failed to consider binding
judicial precedents of the High Court.The Supreme Court, in its au-
thoritative pronouncement, reiterated the settled position that
statutory authorities such as the Registrar or Joint Registrar of Co-
operative Societies are under a legal obligation to follow judicial
precedents. The Court observed that the ratio decidendi of a judg-
ment has the force of law and binds all authorities acting under
statutory powers when they are called upon to decide similar is-
sues. Any departure from binding precedent, without legal justifi-
cation, would amount to a breach of constitutional discipline and
administrative propriety.
51. While disapproving the conduct of the Joint Registrar in that
case, who had brushed aside binding decisions of the Madhya
Pradesh High Court, the Supreme Court observed that it could not
35
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
comprehend how a statutory authority could act in disregard of
settled judicial pronouncements. It was further held that statutory
decisions are not to be taken in isolation but in conformity with le-
gal principles crystallized through court judgments.
52. In addition to the above reasoning, the Supreme Court is-
sued broad and significant directions to be followed uniformly by
all authorities in cases involving supersession or disqualification of
elected cooperative committees, which include the following:
(i) Supersession of an elected Managing Committee/Board
is an exception and be resorted to only in exceptional cir-
cumstances and normally elected body be allowed to com-
plete the term for which it is elected.
(ii) Elected Committee in office be not penalised for the
shortcomings or illegalities committed by the previous Com-
mittee, unless there is any deliberate inaction in rectifying
the illegalities committed by the previous Committees.
(iii) Elected Committee in office be given sufficient time,
say at least six months, to rectify the defects, if any, pointed
out in the audit report with regard to incidents which origi-
nated when the previous committee was in office.
(iv) The Registrar/Joint Registrar are legally obliged to
comply with all the statutory formalities, including consulta-
tion with the financing banks/controlling banks, etc. Only af-
ter getting their view, an opinion be formed as to whether an
elected Committee be ousted or not.
36
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
(v) The Registrar/Joint Registrar should always bear in
mind the consequences of an order of supersession which has
the effect of not only ousting the Board out of office, but also
to disqualify them for standing for election in the succeeding
elections. The Registrar/Joint Registrar therefore is duty-
bound to exercise his powers bona fide and not on the dicta-
tion or direction of those who are in power.
(vi) The Registrar/Joint Registrar shall not act under politi-
cal pressure or influence and, if they do, be subjected to dis-
ciplinary proceedings and be also held personally liable for
the cost of the legal proceedings.
(vii) Public money is not to be spent by the State Govern-
ment or the Registrar for unnecessary litigation involving dis-
putes between various factions in a cooperative society. Tax-
payers’ money is not expected to be spent for settling those
disputes. If found necessary, the same is to be spent from the
funds available with the Bank concerned.
53. These directions laid down by the Supreme Court continue
to hold the field and are of binding force across the country. They
reinforce the principles of democratic governance, fairness in ac-
tion, and judicial discipline which must guide all statutory authori-
ties while exercising coercive powers against elected cooperative
bodies.
54. Thus, the interpretation of Section 79A(1), as declared by
this Court, effectively takes away the discretion vested in
respondent No.1 to disqualify managing committee members
37
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
solely on the basis of non-compliance with the said Government
Resolution. In such a situation, any punitive action based on a
contrary reading of the law is liable to be held as vitiated in law,
being founded on a misinterpretation of the statutory provision
and in disregard of binding judicial authority.
55. Moreover, on a careful analysis of the material placed on
record, it emerges that the decision to select the developer for the
redevelopment project was not taken unilaterally by the managing
committee but was arrived at through a resolution passed by the
general body of the society. The general body, being the supreme
decision-making authority under the scheme of the MCS Act and
the bye-laws of housing societies, had deliberated upon the
proposals and had, through democratic means, approved the
developer’s appointment. In such a situation, the managing
committee cannot be said to have acted arbitrarily or contrary to
the collective will of the society.
56. It is well settled that the managing committee, acting in
furtherance of the general body’s resolution, cannot be visited with
penal consequences unless there is specific material to show that
the committee members indulged in acts of personal misconduct,
dishonest conduct, or willful disregard of statutory obligations.
57. If at all, there were any allegations of fraud, financial
irregularities, or misuse of office during the redevelopment
process, the appropriate course of action available to the Registrar
was to invoke the powers under Section 78A of the Maharashtra
Cooperative Societies Act. Section 78A specifically empowers the
38
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Registrar to initiate action for removal or supersession of a
member of the managing committee or the entire committee, if
satisfied that there exists material indicating mismanagement,
breach of trust, or acts detrimental to the interest of the society.
That provision also incorporates procedural safeguards, including
issuance of notice and opportunity of hearing.
58. However, in the present case, the Registrar has not
proceeded under Section 78A. Instead, he has chosen to exercise
power under Section 79A(3) to disqualify the petitioners for a
period of six years, purportedly on the ground of non-compliance
with directions issued under Section 79A(1), i.e. the Government
Resolution dated 4th July 2019. As already held earlier in this
judgment, such directions are recommendatory in nature and do
not attract penal consequences in the absence of an express
statutory violation or deliberate defiance of binding obligations.
Section 79A(3) cannot be stretched to cover allegations of
irregularities or mismanagement unless it is first shown that there
existed a specific individual duty under the directive, and that such
duty was breached without justification. In the facts of this case,
no such finding has been recorded by respondent No.1. The
disqualification imposed, therefore, is not only disproportionate to
the nature of the alleged breach, but also procedurally and
jurisdictionally unsustainable. Accordingly, once it is accepted that
the selection of developer was based on a general body resolution,
and in the absence of any concrete findings of fraud, collusion, or
mala fides on the part of individual committee members, the
invocation of Section 79A(3) for disqualifying them for six years is
39
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
clearly misconceived and legally impermissible. The appropriate
recourse in case of established wrongdoing lies elsewhere in the
statute, such as under Section 78A, but not under the limited
framework of Section 79A(3).
Violation of the principles of natural justice
59. Further, the petitioners have rightly drawn the attention of
this Court to a serious procedural irregularity in the manner in
which the proceedings under Section 79A(3) of the Maharashtra
Cooperative Societies Act, 1960, were conducted. It is an admitted
position, and also evident from the record, that the show cause
notices initiating proceedings under Section 79A(3) were issued
only to petitioner Nos.4 to 6. However, there is nothing on record
to suggest that similar notice or opportunity of hearing was ever
extended to petitioner Nos.1 to 3, who were equally affected by
the final order dated 11th February 2025.
60. This omission assumes considerable significance in view of
the fact that the order dated 11th February 2025 imposes a civil
consequence of disqualification for six years against all petitioners,
including petitioner Nos.1 to 3. The law is well settled that any
order affecting the civil rights or legal status of a person must be
preceded by notice and an opportunity of hearing. This principle is
a foundational component of natural justice and finds implicit
recognition in every statutory process that may result in adverse
consequences for an individual.
61. It is trite that no person can be condemned unheard, a
doctrine long established in Indian jurisprudence. Even where the
40
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
statute does not expressly mandate issuance of notice, the
requirement of fair hearing is to be read into the procedure
wherever the administrative or quasi-judicial authority proposes to
pass an order prejudicial to the interests of a person. The Supreme
Court, in a catena of decisions, has reiterated that compliance with
principles of natural justice is an indispensable requirement,
particularly in matters involving penalty or disqualification.
Consultation with federal society
62. Further, an additional and equally significant infirmity in the
impugned action lies in the failure of respondent No.1 to adhere to
the statutory requirement of consultation with the federal society,
as expressly contemplated under the first proviso to Section
79A(3) of the Maharashtra Cooperative Societies Act, 1960. The
provision mandates that before passing an order disqualifying a
member of the managing committee, the Registrar shall consult
the federal society to which the society is affiliated. The
consultation, far from being a mere formality, is an integral
safeguard built into the statute. In the present case, it is an
admitted position that no such consultation was undertaken before
passing the disqualification order dated 11th February 2025. The
failure to consult strikes at the lawfulness of the order.
63. It is pertinent to note that this Court has, on multiple
occasions, taken a consistent view that consultation must be real,
effective, and meaningful. It is not a ritualistic exercise. The
federal society, being a supervisory institution with domain
knowledge and representative character, is expected to provide an
41
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
informed opinion on whether disqualification of a managing
committee member is warranted in the facts of a given case. Such
input, based on ground realities, often serves as a check on
administrative overreach. [See: Karbhari Govidrao Patil Vs B D
Pawar, 1976 Mah. L. J. 841; Suresh Dyandeo Khumkar v. State of
Maharashtra, 1987 Mah LJ 474; Pundalik Kadhav v. District
Deputy Registrar, 1990 Mah LJ 925; Shalikram Shivram
Khobragade v. Divisional Joint Registrar, Co-Operative Societies,
(1998) 1 Mah LJ 206; Ravindra V. Gaikwad v. State of
Maharashtra, (2002) 5 Mah LJ 464; Sadashiv v. Hon’ble Minister
for Co-Operation and Textile, (2012) 6 Mah LJ 213; Vinod
Ghanshyam Meshram v. Minister of State, Co-Operation and
Marketing Maharashtra, (2016) 1 Mah LJ 367]
64. This principle also finds affirmation in the judgment of the
Supreme Court in Sanjay Nagayach (Supra), where the Apex Court
emphasized that prior consultation becomes mandatory where the
proposed action involves removal or ouster of a democratically
elected body. The Court highlighted that such decisions must not
be taken lightly and require a fair and deliberative process.
Reference was also made therein to the decision in Indian
Administrative Services (SCS) Association, U.P. v. Union of India ,
1993 Supp (1) SCC 730, where the Supreme Court had explained
the doctrine of “consultation” to mean a process involving a
meeting of minds, exchange of views, and discussion of the
material facts relevant to the decision-making process. The object
of requiring such consultation is not procedural formality, but
substantive participatory decision-making, so that the action taken
42
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
is not arbitrary but guided by cooperative wisdom. Thus, when the
Registrar proceeds to disqualify an elected member or committee
without involving the federal society, he acts in breach of a
mandatory statutory precondition, rendering the order legally
unsustainable.
65. In view of the foregoing discussion, this Court is of the
considered opinion that the order dated 11th February 2025,
passed by respondent No.1 under Section 79A(3) of the
Maharashtra Cooperative Societies Act, cannot be sustained in law.
The said order suffers from multiple legal defects, including:
(i) failure to issue notice to some of the affected petitioners, in
violation of natural justice;
(ii) erroneous invocation of Section 79A(3) despite the directory
nature of the Government Resolution dated 4th July 2019;
(iii) lack of any allegation or finding of fraud or misconduct that
could warrant disqualification; and
(iv) most importantly, failure to comply with the mandatory
requirement of prior consultation with the federal society.
66. Each of these grounds, independently and cumulatively,
renders the impugned order liable to be set aside. The rule of law
requires that penal consequences, especially those affecting elected
representatives, must be preceded by fair procedure, objective
satisfaction, and strict adherence to statutory safeguards. In the
absence of these, the order cannot be allowed to stand.
Supersession via Section 77A
67. I now turn to the follow-up order by which the petitioners’
43
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
managing committee was superseded and an Administrator
appointed under Section 77A. Having held that the disqualification
was bad in law, it follows undeniably that the very basis for
appointing the Administrator disappears – cessante ratione legis
cessat ipsa lex (when the reason for a law ceases, the law itself
ceases). If the committee members were not validly disqualified,
there was no vacancy or failure in the committee to warrant
intervention under Section 77A. On this ground alone, the
supersession cannot stand.
68. Nonetheless, since arguments were addressed on the
propriety of invoking Section 77A in this context, a brief discussion
is merited. The scheme of Section 77A makes it clear that before
passing such an order, the Registrar is ordinarily required to
publish a notice on the notice board of the society’s head office, so
that all members, including ordinary members of the society, are
informed of the proposed action and may, if they so wish, raise
objections. This safeguard is essential to ensure transparency and
participation, and to prevent arbitrary removal of elected
committees under administrative pretexts. Section 77A, as noted,
is designed to deal with situations of vacuum or impasse in a
society’s management, such as failure to elect a new committee, or
a newly elected committee being unable to take charge, or rival
claims leading to a stalemate. It is a mechanism to protect the
functioning of a society when the normal governance by an elected
committee is not possible. It is not meant to be a punitive provision
to remove committees for wrongdoing; that role is played by
Section 78 or Section 78A. The distinction is crucial because
44
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Section 78 (and analogous provisions) provide procedural
safeguards reflecting the gravity of action (e.g., requirement of
inquiry under Section 83 or consultation with federal society,
government approval for certain societies, etc.), whereas Section
77A is more administrative with fewer formalities (save for the
public notice requirement which can even be dispensed in
urgency). To use Section 77A as a shortcut for supersession is to
bypass the substantive and procedural protections that would
otherwise apply. Courts have frowned upon such misuse.
69. The respondents’ argument that once disqualification
happened, Section 77A had to step in is a post facto rationalization
of their own unlawful act. One cannot create a void by an illegal
order and then claim entitlement to fill it. Since I have held the
disqualification illegal, the vacancy in the committee was
artificially created and cannot be the basis to sustain the
Administrator’s appointment. Even apart from that, the manner in
which Section 77A was invoked, without publishing notice to the
society’s members to file objections, further underscores the
arbitrary approach. The Registrar’s order appointing the
Administrator invoked the proviso (waiving notice due to alleged
urgency) but gave no convincing reason for such urgency. The
immediate appointment of an outsider as Administrator, without
exploring less interfering options, indicates a predetermined
resolve to oust the petitioners at all costs. This fortifies the
inference of malice in law (i.e.misuse of power for an improper
purpose).
45
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
70. Therefore, independent of the fate of the disqualification
order, the order under Section 77A appointing an Administrator
cannot be justified. It was an excessive and inappropriate use of
that provision.
71. On careful perusal of the said order, it becomes evident that
the same has been passed without publishing any notice to the
members of the society. The only justification cited by respondent
No.1 for bypassing the statutory requirement of notice is the
second proviso to Section 77A, which permits the Registrar to
dispense with notice where he is satisfied that immediate action is
necessary, or that it is not reasonably practicable to issue or
publish such notice.
72. While the statute undoubtedly empowers the Registrar to act
urgently in exceptional situations, the power to dispense with
notice is an extraordinary and exceptional measure, not to be
invoked as a matter of routine or administrative convenience. The
removal or supersession of an elected managing committee is a
matter of grave consequence, for the functioning of the entire
society. It effectively displaces democratically elected
representatives and hands over management to a non-elected
Administrator. Therefore, strict compliance with procedural
safeguards, particularly notice and opportunity of objection,
becomes indispensable unless truly urgent and exceptional
circumstances exist.
73. In the present case, no special or compelling reasons have
been assigned by respondent No.1 in the impugned order for
46
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
dispensing with such publication. The reason cited, that there may
be impediment in day-to-day functioning of the society, appears
vague and generic, and does not satisfy the high threshold of
urgency or impracticability contemplated by the second proviso to
Section 77A. The invocation of such exceptional power requires
the Registrar to record specific and objective reasons
demonstrating why publication of notice was not possible or why
immediate action was unavoidable. No such satisfaction is evident
from the order under challenge.
74. It must also be kept in mind that the power under Section
77A, although administrative in form, is quasi-judicial in character
insofar as it affects legal rights and positions of elected members.
It is well settled that even where a statute permits departure from
notice requirements in exceptional cases, such departure must be
substantiated with reasons recorded in writing, and not left to
subjective or blanket assumptions.
75. In light of the above discussion, this Court is of the
considered view that the order dated 20th February 2025 passed
under Section 77A of the Maharashtra Cooperative Societies Act is
procedurally flawed, as it has been passed without affording an
opportunity to the members of the society. The failure to publish
notice, as required by law, and the absence of any special
circumstances justifying such departure, renders the order contrary
to principles of natural justice and legally unsustainable. The
process leading to the appointment of an Administrator stands
vitiated on this ground alone.
47
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Allegations of Bias and Use of Repealed Provisions
76. The final issue that requires consideration relates to the
conduct of respondent No.1 in the discharge of his statutory
powers under Section 79A(3) of the MCS Act. The question is
whether such conduct attracts the principles laid down by the
Supreme Court in K.K. Dhawan, (supra). In paragraph 28 of that
judgment, the Supreme Court held that disciplinary action may be
taken even against an officer exercising quasi-judicial functions, if
he has acted in breach of legal duties, negligently, or with a view
to confer undue benefit on another. Particularly relevant in the
present case are clauses (iv) and (v), which state:
“(iv) if he had acted negligently or that he omitted the
prescribed conditions which are essential for the exercise of
statutory powers;
(v) if he had acted in order to unduly favour a party.”
77. The focus of the inquiry is not the correctness of the decision
per se, but the manner in which the officer discharged his duty,
whether in compliance with law or in breach of it. The Court
clarified that government officers are not immune from
accountability, merely because their actions are cloaked with the
garb of official authority or quasi-judicial discretion.
78. In the present case, respondent No.1 was granted an
opportunity to respond to the allegations, and pursuant to the
directions issued by this Court on 6th March 2025, he filed an
affidavit dated 18th March 2025. In paragraph 13F of the said
affidavit, respondent No.1 acknowledged that the petitioners had
48
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
brought to his notice binding judicial pronouncements, including
Bay Home Properties, Kamgar Swa Sadan CHSL, all of which hold
that the Government Resolution of 2009, issued under Section
79A(1), is recommendatory and directory in nature. He also
admitted that the petitioners had submitted that there had been
substantial compliance with the guidelines, and no breach
justifying penal action had occurred.
79. Despite this, respondent No.1 attempted to justify the
disqualification of managing committee members by stating that
the factual circumstances of the case were different. However, this
explanation does not withstand scrutiny. Once this Court has
authoritatively held that the directions in the form of GR of 2009
under Section 79A are directory, failure to follow directory
provisions does not attract penal consequences. Moreover,
respondent No.1, in his capacity as Registrar, has no jurisdiction
under Section 79A(3) to adjudicate upon the legality or propriety
of resolutions passed by the general body of a cooperative society.
That jurisdiction, if at all, lies under Section 91 of the MCS Act,
wherein disputes regarding general body resolutions may be
adjudicated by the Cooperative Court.
80. It is undisputed that the decision to appoint the developer
was taken by the general body of the society. Therefore, under the
guise of Section 79A(3), respondent No.1 could not have
interfered with that collective decision or penalised elected
members for implementing it.
49
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
81. Despite specific opportunity given by this Court to explain
the basis of his decision, respondent No.1 failed to offer a
satisfactory justification for his action. Instead, he relied upon
paragraph 19 of his reply affidavit to state that the managing
committee had violated redevelopment guidelines. However, the
reasoning given is general and does not explain how such findings
were arrived at, nor does it show what material was relied upon in
arriving at that conclusion.
82. On 27th March 2025, this Court called upon respondent
No.1 to file an additional affidavit, specifically requiring him to
disclose the source of information upon which he had relied to
make the factual assertions in paragraph 19 of his earlier affidavit.
Even in the subsequent affidavit, respondent No.1 failed to disclose
any documentary material or specific source that could support the
findings recorded. Such failure assumes significance when the
conclusions sought to be drawn have led to civil consequences of
disqualification for a period of six years against elected members.
83. It is well settled that factual findings which form the basis of
statutory action must be founded upon credible material. Mere
assertions or vague references to procedural lapses do not
constitute sufficient basis for exercising quasi-judicial powers. In
the present case, no documentary evidence was placed on record
by the complainants or respondent No.1 to establish that the
redevelopment process involved any misconduct warranting
disqualification. Therefore, the findings recorded in the impugned
order appear to be based on extraneous considerations, and not on
material which can withstand judicial scrutiny.
50
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
84. Ignoring Binding Precedent – Omission of Duty and Legal
Mala Fides: Respondent No.1’s order is also vitiated by his failure
to follow binding legal precedent. The judgments of this Court in
Maya Developers and Kamgar Swa Sadan clearly lay down that the
Government Resolution 2009 is directory and not mandatory in
nature. Non-compliance with the GR may attract other
consequences or require corrective measures, but it is not a ground
for automatic removal of committee members. The GR dated 4th
July 2019 cannot be viewed as effecting any material deviation
from the scheme and spirit of the 2009 GR. A comparative reading
of the two resolutions reveals that the language, structure, and
underlying objectives remain broadly consistent. Both GRs
emphasise due diligence, transparency, and member participation.
There is no indication in the 2019 GR to suggest that non-
compliance with any of its clauses would by itself attract penal
consequences such as disqualification or removal of office bearers.
These rulings were directly on point, as the facts involved
disqualification of managing committee members under Section
79A(3) for alleged non-compliance of the similar GR. It was the
duty of respondent No.1, as an authority under the Act, to be
apprised of and adhere to the law declared by this Court. This
omission to consider the prevailing law is another facet of
negligence and dereliction of duty encompassed by Dhawan
ground (iv). In effect, respondent No.1 omitted a prescribed
condition essential for fair exercise of power, the condition being
that his decision must align with the law as interpreted by the
High Court. If the omission was willful, it is even more egregious,
51
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
suggesting a “conscious violation of law to the prejudice of
another”, which the Supreme Court has identified as a hallmark of
malice in law.
85. Violation of Principles of Natural Justice and Fair Play: The
record, paragraph No. 19 of affidavit in reply dated 18th March
2025, lends credence to the petitioners’ complaint that respondent
No.1 considered materials that were not part of the official record
of inquiry. If that is so, the decision was based on “extraneous”
information, which appears not to be part of record of respondent
no. 1 . This offends the basic principles of natural justice and
reinforces the impression that respondent No.1 was influenced by
factors outside the legitimate scope of the inquiry. Such conduct
violates the dictum in A.K. Kraipak v. Union of India (1969) 2 SCC
262 that even administrative decisions must be made fairly,
impartially, and on relevant evidence. The Supreme Court’s
warning that “the instrumentalities of the State must discharge
their functions in a fair and just manner” was unfortunately not
heeded by respondent No.1. An adjudicator’s duty to act fairly is
the cornerstone of the rule of law, and any deviation from it results
in arbitrariness. By acting on material behind the back of one
party, respondent No.1 tilted the playing field, a clear indicator of
bias. In this regard, the Kraipak principle of nemo judex in causa
sua (no person shall be a judge in his own cause) also comes into
play. While respondent No.1 was not personally interested in the
matter, the effect of his procedure was that he became a judge on
the basis of his own private knowledge (or perhaps the one-sided
inputs from the complainant group), rather than on the evidence
52
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
presented through a fair process. This vitiates the decision-making
process entirely.
86. Undue Favouritism – Evidence of Bias to Favour a Party: The
cumulative effect of respondent No.1’s actions leads to the
conclusion that he acted in a manner to unduly benefit one side of
the dispute at the cost of the other. The complainant group, which
presumably had grievances about the petitioners’ approach to
redevelopment, achieved through the Deputy Registrar’s order
what they could not through the ordinary democratic process of
the society’s election or through a proper legal process: the
summary removal of the petitioners. The sequence of events
suggests a premeditated outcome. Clause (v) of K.K. Dhawan
specifically contemplates disciplinary action where an officer has
“acted in order to unduly favour a party”. Even absent direct
evidence of bribery or corruption, if the pattern of conduct shows a
tilted balance or preferential treatment without justification, the
charge of undue favouritism can be made out. In the present case,
respondent No.1’s departure from the norm, all operated to the
sole advantage of the complainant faction. This “colourable”
exercise of power, using a legitimate power for an illegitimate
end, is nothing but undue favouritism in action. As the Supreme
Court observed in State of Punjab v. Gurdial Singh, (1980) 2 SCC
471, the Court will be “undeceived by illusion” and will not
hesitate to strike down an act where “the true object is to reach an
end different from the one for which the power is entrusted”.
Here, the power under Section 79A(3) (entrusted to ensure good
governance of societies) was apparently used to achieve the end of
53
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
appeasing a particular group and ousting the petitioners (elected
managing committee members), a purpose alien to the Act.
87. It is also apposite to recall the Supreme Court’s elucidation
of “malice in law” from Kalabharati Advertising v. Hemant
Vimalnath Narichania, (2010) 9 SCC 437, if a public authority acts
with an intention not authorized by law, or consciously disregards
legal limits, the element of malice in law is attracted even if there
is no overt malice in fact. The Supreme Court reiterated that legal
malice (malice in law) occurs when an act is done without lawful
excuse or for an improper purpose. I find that element present,
respondent No.1’s improper purpose being to hasten the removal
of petitioners contrary to law. Conscious disregard of law to the
detriment of elected managing committee members, as seen here,
is exactly what Kalabharati cautions against. Respondent No.1’s
conduct, as discussed, fulfills all essentials of malice in law. It
shows a “depraved disregard” for the petitioners’ rights and for the
constraints of law. That an authority would sidestep a binding
precedent cannot be seen as a good-faith mistake; it reflects either
an unacceptable level of incompetence or a willful abuse of power.
Both alternatives are equally condemnable for a quasi-judicial
officer.
88. What followed, however, raises grave legal concern.
Respondent No.1 issued show-cause notices and, in a span of
weeks, proceeded to disqualify the petitioners for a period of six
years, invoking breach of the 2019 redevelopment guidelines.
While doing so, it is undisputed that respondent No.1 was
specifically made aware of the above binding precedents ( Maya
54
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
Developers and Kamgar Swa Sadan), which held that the
Government Resolution of 2009 is directory and not mandatory in
nature. Yet, there is no discussion or application of that judgment
in the impugned order. The reasoning offered is wholly mechanical
and bereft of reference to the legal position settled by this Court.
Further, immediately after passing the disqualification order,
respondent No.1 proceeded to appoint an Administrator over the
society under Section 77A. This was done without issuing prior
notice to the petitioners nos. 1 to 3.
89. What compounds the impropriety is the subsequent order
dated 20 February 2025 passed by respondent No.1, whereby an
Administrator was appointed under Section 77A(1)(b) of the Act.
As per the settled legal position, any action resulting in
supersession or removal of an elected managing committee must
be preceded by publishing due notice . In the present case, it is not
disputed that no prior notice was published before passing the said
order. The appointment of the Administrator was communicated
only post facto, and in fact, the members of society learnt of the
same when respondent No.2 arrived at the society premises
seeking to take charge.
90. At the heart of the cooperative movement lies the principle
of democratic self-governance. The statutory scheme of the MCS
Act also mandates that departures from democratic functioning,
such as supersession of elected bodies or appointment of
administrators, must be undertaken only in strict compliance with
procedural safeguards and legal standards. In the case on hand,
there is material on record which indicates that the respondent
55
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
No.1 invoked powers under Section 79A(3) to disqualify the
committee and simultaneously passed an order under Section 77A
to appoint an Administrator. However, such invocation of power
suffers from procedural impropriety and lack of adherence to the
principles of natural justice. Neither was any notice served upon
the petitioners nos. 1 to 3, nor was any opportunity of hearing
granted before such drastic steps were taken. This vitiates the
entire decision-making process.
91. It is equally trite that an order under Section 77A cannot be
passed in a mechanical manner. Such appointment of an
Administrator can only be resorted to upon fulfillment of
jurisdictional facts. In the present case, respondent No.1 not
demonstrated that there existed any urgency warranting departure
from the settled legal process. The absence of notice, coupled with
the absence of any objective material indicating emergent
circumstances, leads to a legitimate inference that the actions
taken by respondent No.1 were not only ultra vires the statutory
scheme but also tainted by arbitrariness and colourable exercise of
power. The rule of law mandates that public authorities must act
with transparency, fairness, and fidelity to statutory norms. When
statutory functionaries deviate from these core principles and act
with haste or bias, it undermines not only the integrity of the
process but also the trust reposed in them by the cooperative
community.
92. Clause (v) of the said judgment is also attracted. The manner
and timing of respondent No.1’s actions, disqualifying the
petitioners and appointing an Administrator without publishing
56
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
notice, and in apparent coordination with a group of complainants,
suggests that the statutory powers were used not to uphold
legality, but to favour a rival faction in the society. The result was
to remove the elected committee and hand over control to an
outside administrator in complete disregard of procedural
safeguards. This reflects undue favour and colourable exercise of
power, as warned against in Gurdial Singh (Supra).
93. In the conspectus of the facts presented before this Court, it
becomes evident that respondent No.1, while purporting to act
within the confines of Sections 79A(3) and 77A of the MCS Act,
has in fact circumvented the statutory procedure laid down under
Section 78 for supersession of an elected managing committee.
The records disclose that respondent No.1 first purported to
disqualify the members of the managing committee under the
guise of non-compliance with redevelopment guidelines issued
under Section 79A(1), and, without any independent or
intervening cause, proceeded to appoint an Administrator under
Section 77A. This sequence of actions, when holistically
considered, leaves little room for doubt that the Registrar, in
substance if not in form, accomplished the same result that could
only have been achieved through a valid invocation of powers
under Section 78, namely, the removal or supersession of an
elected committee on the ground of mismanagement. However,
what is statutorily required under Section 78 is not a mere
declaration or assertion of non-compliance, but the fulfillment of
procedural safeguards, including issuance of show cause notice,
grant of reasonable opportunity of hearing, recording of findings
57
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
as to mismanagement, and an express order of supersession. The
action of respondent No.1 thus amounts to a colourable exercise of
power, a legal concept deeply embedded in Indian constitutional
jurisprudence. The law is well-settled that what cannot be done
directly cannot be permitted to be done indirectly. When power is
exercised ostensibly for a purpose but the real object is something
else, such exercise is liable to be struck down as colourable.
94. In K.C. Gajapati Narayan Deo v. State of Orissa , AIR 1953 SC
375, the Constitution Bench explained the doctrine of colourable
legislation in the following terms:
“If the Constitution of a State distributes the legislative
sphere amongst different authorities, questions do arise as to
whether any particular enactment is within the competence
of the legislature which passed it. Such questions are to be
decided by applying the test of pith and substance… But
fraud on the Constitution may also arise where the
legislature or executive purports to act within its power but
uses its power for a collateral or extraneous purpose.”
95. Though the context in the above authorities pertained to
legislative power, the same principles apply with greater force to
administrative and quasi-judicial actions of statutory authorities. In
the instant case, respondent No.1, by misapplying Section 79A(3)
as a tool of disqualification and following it up with an order
under Section 77A, effectively achieved the replacing of a duly
elected body. Such a course of action, in the considered opinion of
this Court, falls afoul of the doctrine of colourable exercise and is
58
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
impermissible in law.
96. It must also be borne in mind that Section 77A is not an
alternative to Section 78. The legislative intent behind Section 77A
is to enable the Registrar to fill a vacuum caused by failure of
election, resignation, or inability of a committee to function, and
not as a punitive measure against alleged mismanagement.
Appointment of an Administrator must be resorted to only in
situations where democratic governance is rendered impossible
due to factual exigencies, and not to short-circuit the discipline of
Sections 78 or 78A.
97. Even assuming, for the sake of argument, that there was
material available to justify scrutiny of the committee’s conduct,
the lawful course would have been to invoke Section 78, after
complying with the procedural safeguards embedded therein. The
choice of a seemingly “easier” route under Section 79A(3) and
Section 77A, bereft of the rigor and protection of due process,
reveals not mere technical infirmity but a substantive deviation
from the statutory mandate. Such deviation cannot be
countenanced by a Court of law bound to uphold the rule of law
and procedural fairness.
98. In view of the above, this Court holds that the impugned
orders suffer from legal mala fides, are vitiated by non-compliance
with principles of natural justice, and amount to a colourable and
excessive exercise of statutory powers. The cumulative effect of
this conduct, when examined in light of the principles laid down
by the Supreme Court in K.K. Dhawan,(Supra) clearly discloses
59
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
abuse of power attracting disciplinary consequences, particularly
clauses (iv) and (v) thereof.
99. To avoid the risk of being misunderstood, the Court clarifies
that Section 79A of the MCS Act and the Government Resolution
dated 4 July 2019 do impose obligations aimed at protecting the
welfare of cooperative societies. The 2019 GR provides a
framework to ensure transparency and fairness in redevelopment
projects (for example, requirements of competitive bidding,
general body approvals, etc.). Authorities like respondent No.1 are
expected to enforce such directives in letter and spirit. However,
enforcement must be carried out within the four corners of the
law, following proper procedure, and without ulterior motives.
The Government Resolution itself does not sanction peremptory
disqualification; as noted, non-compliance with its provisions is
not penal by automatic removal of the committee. By jumping to
the most extreme step (disqualification and supersession) in the
teeth of contrary directives in the form of binding precedent,
respondent No.1 transgressed the ambit of his lawful powers. In
doing so, he breached the duty of reasonable, unbiased decision-
making that the Act demands of him.
100. Viewed in its entirety, the material placed before this Court
reveals a troubling pattern. Respondent No.1 chose to ignore
multiple binding precedents of this Court, failed to disclose the
basis of adverse factual conclusions, and proceeded to pass orders
with serious civil consequences, disqualifying elected office bearers
for six years, without adhering to minimum procedural fairness.
60
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
101. Such actions, if permitted to continue without proper judicial
scrutiny, may cause serious harm to the purposes of the
cooperative movement. When statutory authorities interfere with
the functioning of duly elected Managing Committees without
following due process or without sufficient legal basis, it not only
weakens the democratic foundation of cooperative societies but
also creates an atmosphere of fear and uncertainty among office
bearers and members. The very spirit of cooperative governance
lies in the principle of democratic decision-making and collective
management by members. If elected committees can be removed
or destabilised on vague or insubstantial grounds, it would amount
to indirect interference in the choice of the members who have
exercised their statutory right to elect their representatives. Such
interference cannot be allowed unless it is clearly supported by law
and necessary to prevent actual and proven mismanagement or
misconduct.
102. Further, there is a grave risk that arbitrary actions of this
nature may encourage undesirable practices, including possible
nexus between vested private interests and certain regulatory
officers. This may result in manipulation of redevelopment projects
or society affairs for personal or commercial gain, in disregard of
the welfare of the society members. The very object and scheme of
the MCS Act which is to promote transparency, accountability, and
self-governance among cooperative societies, stands defeated if
statutory powers are exercised to undermine duly elected bodies
rather than to support and guide them.
61
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
103. Having regard to the factual matrix, the governing statutory
framework, and the binding judicial pronouncements, this Court
concludes that the impugned orders passed by respondent No.1
are not only illegal but also amount to a willful abuse of statutory
powers. They stand vitiated for the following reasons:
(a) Violation of binding precedents, wherein the
redevelopment GR was held to be directory.
(b) Breach of natural justice in appointing Administrator
under Section 77A without publishing notice.
(c) Disregard of binding Supreme Court directions in
Sanjay Nagayach.
(d) Colourable exercise of power falling within clauses (iv)
and (v) of paragraph 28 of K.K. Dhawan.
(e) Misuse of office to favour a particular faction,
undermining democratic rights of elected representatives.
104. In view of the detailed discussion and findings recorded
hereinabove, this Court is satisfied that the impugned action taken
by respondent No.1 suffers from serious legal and procedural
infirmities, and hence, interference in writ jurisdiction is
warranted. To ensure fairness, transparency, and accountability in
the functioning of statutory authorities, this Court considers it
appropriate to issue the following directions.
(i) Accordingly, the impugned order dated 11th February
2025, passed by respondent No.1 in exercise of powers
under Section 79A(3) of the Maharashtra Cooperative
Societies Act, 1960, disqualifying the petitioners from
continuing as managing committee members, as well as the
order dated 20th February 2025, passed under Section 77A
of the said Act appointing an Administrator, are both
62
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
quashed and set aside.
(ii) Having regard to the material on record and the
manner in which respondent No.1 has proceeded, by
ignoring binding precedents, relying on unverified factual
inferences, and passing orders in breach of natural justice,
this Court directs the Principal Secretary (Co-operation),
Government of Maharashtra, to appoint a senior officer of
appropriate rank and integrity to conduct a comprehensive
and impartial inquiry into the role and conduct of
respondent No.1 in relation to the subject matter of the
present writ petition.
(iii) The said inquiry shall be conducted in accordance with
law and completed expeditiously, and in any case, within a
period of eight weeks from the date of pronouncement of
this judgment.
(iv) Upon conclusion of the inquiry, a detailed compliance
report setting out the findings and action taken, if any, shall
be filed before this Court within the aforesaid time frame.
(v) The parties shall be at liberty to apply for further
directions, including appropriate consequential reliefs, in the
event of non-compliance with the directions issued herein, or
after the filing of the compliance report.
(vi) Let this writ petition be placed for compliance and
further directions on 25th August 2025.
63
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
wp3433-2025-J Final.doc
105. Rule is made absolute in the aforesaid terms. In the facts and
circumstances of the case, there shall be no order as to costs.
106. At this stage, learned AGP requested to stay the operation of
this judgment. However, considering the reasons assigned, the
request for stay is rejected.
(AMIT BORKAR, J.)
64
::: Uploaded on – 09/06/2025 ::: Downloaded on – 09/06/2025 22:41:59 :::
[ad_1]
Source link