[Cites 3, Cited by 0]
Bombay High Court
Prem Sinha vs Divisional Joint Registrar Co-Op ... on 18 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:13442
908-wp3388-2026 Final.doc
MPBalekar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3388 OF 2026
Prem Sinha ... Petitioner
V/s.
Divisional Joint Registrar
Co-Op. Societies Konkan Division
and Ors. ... Respondents
Mr. S. Deshpande a/w S. Gujar for the petitioner.
Mr. A.A. Alaspurkar, AGP, for the State.
Adv. Namita Bipin Tripathi for Respondent No.3.
CORAM : AMIT BORKAR, J.
DATED : MARCH 18, 2026
P.C.:
1. The challenge in the present writ petition arises from an
order passed by the authority under the Maharashtra Co-operative
Societies Act, 1960 in exercise of powers under Section 82(4) of
the said Act. By the said order, the authority has proceeded to
disqualify the petitioner who was holding the post of Secretary of
the society, along with the Chairman and the Treasurer.
2. On perusal of the impugned order, it appears that the
authority has recorded a finding that the society and the members
responsible for submission of the audit rectification report failed to
submit such report within the prescribed period of three months.
The authority has referred to the audit for the financial year 2022-
2023 and has proceeded on the footing that there was non
908-wp3388-2026 Final.doc
compliance with the requirement of filing a rectification report
under Section 82 of the Act. According to the authority, such
failure itself was sufficient to attract action under Section 82(4)
and therefore disqualification of the office bearers came to be
ordered. The reasoning in the order indicates that the authority
has treated the non submission of the rectification report as a
default under the Act without examining the nature of the audit
observations or whether any irregularity was actually recorded in
the audit.
3. However, when the Audit Report submitted under Section 81
of the Act is carefully perused, the position which emerges is
somewhat different. The audit report does not record any specific
irregularity, defect, or financial impropriety in the functioning of
the society. No finding is recorded in the audit which points out
that the accounts of the society suffer from defects or that the
management of the society has committed any violation which
requires correction. The report, on its plain reading, does not
contain any recommendation pointing out such irregularity. In this
situation, the mere mention that a rectification report should be
submitted cannot by itself assume the character of a statutory
default. Section 81 of the Act contemplates that the audit should
identify defects, irregularities, or lapses in the working of the
society. It is only when such findings are recorded that the
question of rectification arises. In the absence of any such finding
in the audit report itself, the direction to submit a rectification
report remains only a formal statement. It cannot automatically
lead to consequences such as disqualification of elected
908-wp3388-2026 Final.doc
representatives of the society.
4. A further perusal of the impugned order shows that the
authorities under the Act have proceeded mainly on the basis of
the statement contained in the audit report directing submission of
a rectification report within the prescribed time. The order does
not record any independent finding that the society failed to rectify
any particular defect or irregularity as contemplated by the
provisions of the Act. The scheme of Sections 81 and 82 indicates
that these provisions operate together as a structured process.
First, the audit under Section 81 must identify specific
irregularities or defects in the working of the society. Thereafter,
under Section 82, the society is required to take steps for
rectification of those defects and submit a report regarding
compliance. Section 82 also specifies the nature of irregularities or
defects which may require correction. These are broadly set out in
clauses (i) to (ix) of the provision. Therefore, before invoking the
power of disqualification under Section 82(4), it must first be
shown that the audit had recorded such irregularities and that the
society or the responsible office bearers failed to rectify them
within the statutory period.
5. In the present case, such a foundation is absent. The audit
report itself does not record any defect or irregularity falling
within the categories contemplated under Section 82. In the
absence of such finding, the requirement of submitting a
rectification report loses its significance. A mere statement in the
audit report asking the society to submit a rectification report
cannot be treated as equivalent to a finding of irregularity under
908-wp3388-2026 Final.doc
the Act. If the authority proceeds to disqualify elected office
bearers without first establishing the existence of such
irregularities, the action becomes unsupported by the statutory
scheme. Disqualification affects the democratic rights of elected
members. Such power therefore must be exercised strictly in
accordance with the conditions laid down in the Act. When the
basic requirement of establishing irregularity or defect is missing,
the action taken by the authority cannot be sustained in law.
6. In these circumstances, the impugned order suffers from a
fundamental defect. The authority has assumed the existence of a
default without examining whether the audit had in fact pointed
out any irregularity as contemplated under the statute. The
disqualification of the petitioner is therefore based on a premise
which is not supported by the material on record. Consequently,
the impugned order passed by the authorities under the Act cannot
be allowed to stand.
7. The writ petition therefore deserves to be allowed to the
limited extent concerning the petitioner. Rule is made absolute in
terms of prayer clause (a) insofar as the petitioner is concerned.
8. The writ petition stands disposed of accordingly.
(AMIT BORKAR, J.)
