Mumbai, Feb 19: The Bombay High Court has held that the Registrar of Co-operative Societies cannot adjudicate disputes between a housing society and its members while exercising powers under the provisions of the Maharashtra Co-operative Societies Act (MCS Act).
Justice Amit Borkar, on February 17, allowed a petition filed by Desai Harmony Co-operative Housing Society Ltd challenging an order issued under Section 79(1) of the MCS Act directing it to delete penal charges imposed on certain members under bye-law 169(A) for alleged encroachment.
Assistant Registrar’s order challenged
On March 21, 2025, the Assistant Registrar had concluded that the penal charges were illegal and ordered their removal from the society’s records. The society contended that such a determination amounted to adjudication of a dispute, which falls outside the scope of Section 79(1).
Advocate Siddhesh Bhole, appearing for the petitioner, argued that Section 79(1) confers only supervisory and administrative powers. It does not give the Assistant Registrar power to adjudicate disputes between a member and the society.
The advocate submitted that adjudication requires evidence, hearing and findings on rights, which exist only under specific dispute resolution provisions of the Act. Therefore, the Assistant Registrar travelled beyond jurisdiction while directing deletion of charges.
On the other hand, Advocates Abhishek Bhat and Gautam Kanchanpurkar for the contesting respondent society members supported the impugned order. They contended that the Registrar’s direction was merely a step to ensure compliance with the law and to correct an illegality.
Section 79(1) limited to administrative enforcement
After examining the provision, the Court observed that “a plain reading shows the provision operates in a limited field”. It enables the Registrar to issue written directions to ensure compliance with the Act, Rules, bye-laws or prior orders.
The Court clarified: “The section, therefore, works as an administrative enforcement tool. It does not create a forum for deciding contested rights.”
Justice Borkar noted that determining whether penal charges were valid would require examination of facts and interpretation of bye-laws — an exercise amounting to adjudication.
“Once the Registrar concludes that the charges are illegal, he effectively decides the dispute between parties,” the Court said, holding that Section 79(1) “cannot replace” the dispute resolution mechanism provided under the Act.
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“The present case concerns penal charges for alleged encroachment. Whether such charges are valid depends on facts, interpretation of bye-laws and application of law. Such issues need adjudication by a competent forum,” Justice Borkar emphasised.
The court clarified that it has not examined the merits of the penal charges. The question of their validity remains open and may be decided independently by a competent forum in appropriate proceedings.
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