Registrar must not ‘shirk responsibility’ citing ‘complexity’: HC

The Bombay High Court ruled that the registrar of co-operative societies must handle disputes over maintenance dues and cannot claim complexity as an excuse.

Mumbai: The Bombay High Court on Saturday held that the registrar of co-operative societies cannot refuse to exercise its jurisdiction by claiming that a matter is ‘too complicated’. The court was hearing a plea by a city-based housing society which had tried to recover maintenance dues dating back to 1982 from defaulting members.

Registrar must not ‘shirk responsibility’ citing ‘complexity’: HC

The case first arose when Saraf Kaskar Industrial Premises Co-operative Society Ltd approached the deputy registrar trying to recover maintenance dues from its members. The deputy registrar however rejected the society’s application and said that matter involved “complicated questions of law” and advised the society to instead follow up the case before the co-operative court and go through a full-fledged trial.

According to the registrar, the complications arose because some members had made a few payments that did not reflect in the society’s accounts. The registrar also added that the society had waited several decades before bringing up the matter, without offering any explanation for the delay. The exact amount of the dues too were unclear from the records.

Examining the registrar’s orders, justice Amit Borkar said that there was a special remedy under the Maharashtra Co-operative Societies Act, 1960 which had been enacted precisely to give housing and industrial premises societies a speedy and effective mechanism to recover legitimate dues. The provision allowed the registrar to treat arrears owed to the society as arrears of land revenue, and issue a recovery certificate after the society had produced their accounts and supporting documents.

The court explained that such proceedings are intended to be quick and do not need a full trial which would involve the examination of witnesses or cross-examination. Instead, these can be confined to verification of accounts, receipts, resolutions and other records maintained in the ordinary course of the society’s business.

The bench said that the registrar is expected to “apply his mind” to the documents produced by both sides and take note of any material produced by members to show that their payments have not been properly credited or that the society’s calculations are unreliable.

The court highlighted that the registrar’s duty is to strike a balance. “He must not allow frivolous objections by members to derail the recovery machinery, but he also cannot ignore genuine disputes raised with reference to records,” the court said.

“The registrar cannot shirk his statutory responsibility by resorting to vague observations about complexity. Unless the dispute involves issues that clearly travel beyond the scope of summary enquiry, the registrar is bound to consider the documents and reach a finding on whether arrears are due,” the court added.

The court held that the deputy registrar had been wrong to dismiss the society’s applications, and his orders were set aside. The high court directed that both parties should appear before the deputy registrar, K-West Ward on September 29, and the registrar must then decide the matter within three months. The court added that the registrar must give both parties a fair hearing and record the findings based on the submitted documents.