Bye-law 136 stipulates that the Managing Committee bears collective responsibility for all decisions taken by the Secretary, Chairman, or any individual committee member. However, the Mumbai High Court has offered a nuanced interpretation of this provision.
On 29th April 2025, the Deputy Registrar issued an order disqualifying all Managing Committee members of Jal Ratan Deep CHSL for a period of five years. This action followed complaints from two society members alleging non-compliance with Section 75 of the Maharashtra Cooperative Societies Act, which pertains to the Annual General Meeting (AGM). The cited lapses included:
- Failure to present the annual budget
- Absence of a plan for disposal of surplus funds
- Non-submission of the rectification report for previous audits
The petitioners’ counsel contended that the blanket disqualification was excessively punitive, especially since the Committee had complied with the remaining provisions of Section 75. Notably, 95 other society members expressed their support for the Committee.
Justice Amit Borkar concurred with this argument. He emphasised that when considering disqualification, penalties, or the appointment of an administrator, the Registrar must apply appropriate legal standards. Specifically, the nature of the default must be assessed—whether it is core or ancillary, intentional or inadvertent, malicious or due to genuine constraints. He observed:
“In the present case, the Registrar has treated all omissions equally, without distinguishing between serious and technical lapses.”
Justice Borkar further clarified that the Registrar must identify which office-bearers—such as the Secretary, Chairman, or Treasurer—were statutorily or functionally responsible for preparing and presenting the relevant documents. Ordinary committee members who had no direct involvement cannot be disqualified without clear evidence of complicity.
Implications and Open Questions for the Registrar
This judgement introduces several complexities for the Deputy Registrar:
- How should one determine whether a default is core or ancillary, wilful or inadvertent, malicious or due to genuine difficulty?
- If disqualification is deemed excessive, can alternative penalties be imposed? For instance:
- A fine of ₹5,000 on the Secretary if monthly Managing Committee meetings are not held.
- A fine of ₹2,000 if the annual budget is not presented at the AGM.
- Can the bye-laws be amended to explicitly map specific defaults to corresponding penalties? Without such clarity, enforcement may become subjective and inconsistent.