Complaints by some members can't warrant probe into housing society's finances: Bombay HC

The court made the observation while quashing an order passed by a deputy registrar initiating an inquiry into a housing society in Mumbai's Kurla.

Complaints raised by a couple of disgruntled society members cannot be a reason to initiate an inquiry into the financial affairs of a housing society, the Bombay High Court observed last week. The court made the observation while quashing an order passed by a deputy registrar initiating an inquiry under the Maharashtra Co-operative Societies (MCS) Act, 1960 into the financial conditions of a housing society in Kurla.

The court made the observation while quashing an order passed by a deputy registrar initiating an inquiry under the Maharashtra Co-operative Societies (MCS) Act, 1960. (HT Photo)

Setting aside the deputy registrar’s order of September 29, 2025, ordering an inquiry into the financial affairs of the Kurla Kamgar Cooperative Housing Society (KKCHS), a division bench of Justices Bharati Dangre and Ashish Chavan observed that section 83 of the MCS Act clearly stated that the inquiry into the society’s financial conditions can be made either suo motu (on his own) by the registrar or on receiving a complaint from “not less than one-fifth of the capacity of members”. In this case, the registrar had set up the inquiry suo motu but cited complaints received from two members of the society as source material.

The judges said the objective of the latter provision was that “it should not be one or two members who have some grievance to make or have an axe to grind against the members of the managing committee against whom an inquiry is sought to be initiated, but it must be a majority public opinion and this requires a good as one-fifth of the members seeking such an inquiry.” The court was hearing a petition filed by Vaishali Manjrekar and seven others who had contested the deputy registrar’s order of last year. The court said there were, as laid down in the statute, three modes for the registrar to initiate an inquiry into the society’s finances which were either a suo motu inquiry, an application made by one-fifth of the members of the society. “By no stretch of imagination the said provision makes it permissible to take cognizance of the complaint and then treat it as a ‘suo motu exercise’ and this is precisely what the officer (deputy registrar) has attempted to plead before us…” judges observed.