Mumbai: HC nixes plea challenging disqualification of housing society office-bearers

Justice G S Kulkarni slammed the plea as a classic case of an abuse of the process of law. Representation pic

The Bombay High Court recently came down heavily on a petitioner, who challenged the disqualification of officer-bearers of Paras Nagar Cooperative Housing Society (CHS) in Jogeshwari East by the joint divisional registrar of co-operative societies for five years for not conducting the annual general body meeting (AGM) for two consecutive years. The court pointed out serious flaws in the petitioner's plea and imposed a fine of Rs 3 lakh, which is to be deposited by the petitioner with Maharashtra State Legal Services Authority. The court also observed that precious judicial time was not required to be spent on such a frivolous petition and dismissed the plea.

The petition

The petitioner, Chintamani Pandey, secretary of Paras Nagar CHS, had filed a writ petition before the high court, assailing an order dated June 14, 2022 passed by the divisional joint registrar of co-operative societies, Mumbai Division, whereby the revision application as filed by the petitioner under Section 154 of the Maharashtra Co-operative Societies Act, 1960 was dismissed. In the revision application, the petitioner had challenged an order dated March 3, 2022, passed by the deputy registrar of co-operative societies, K East division, under Section 75 (5) of the MCS Act, whereby the petition was disqualified for the reason that in the capacity as secretary, the petitioner had failed to comply with the vital obligation of holding the AGM.

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Genesis of action

The action taken against the society chairman (who had since expired), the secretary (Pandey) and treasurer was on the basis of an inspection that was undertaken by the registrar. The order was issued on July 14, 2021 and accordingly an inspection report was prepared by Suresh Khedkar, who was appointed as inspector. The action initiated was as per an observation made in the report stating that the society's managing committee has not called an AGM for the year 2017-2018 and no reply was given by the society. According to the report, the committee organised an AGM for the year 2018-2019 in September 2019. However, the meeting was not held eventually. Hence, the audit report, financial statement, balance sheet up to the financial year 2018-2019 were neither approved in the meeting nor given to members of the society. The society did not give any reply or explanation for the same.

The other side

When the report was brought to the notice of the petitioner and other office-bearers, Pandey addressed a letter dated January 17, 2022, to the deputy registrar purportedly intending to comply with the deficiencies in the report, but the letter was not placed on record by the petitioner. On January 31, 2022, a show-cause notice was sent to the petitioner and other office-bearers by the dy registrar as to why no action ought to be taken against them. A reply was to be submitted on or before February 14, 2022.

On February 25, a written submission/argument was made by the office bearers and the notice was denied on grounds that the inspection officer has not verified the record of the society and if the record was to be verified, it would have revealed that the AGM for 2017-2018 and 2018-2019 were conducted, of which the minutes too were recorded. It was contended that the allegations in the notice and inspection report were false.

Hearing allowed

The deputy registrar heard the petitioner and disqualified the petitioner for a period of five years from holding the position of an office-bearer of the committee. Aggrieved, Pandey moved the divisional joint registrar, praying that the order be set aside. The divisional joint registrar after examining the rival contentions, rejected the application and observed that the petitioner was the secretary of the society at the relevant time and that the inspection officer conducted an appropriate enquiry, also inquired regarding the holding of AGM, but no documents were produced to show that any AGM was held.

High court observations

Justice G S Kulkarni of the Bombay High Court, in his 24-page order, pointed out, "It is required to be noted that the present petition is a classic case of abuse of the process of law. The petitioner has left no stone unturned in suppressing the material facts and most importantly the inspection report." The record also indicates that there are some financial irregularities and in that regard, a notice was issued to the petitioner.

Order

After imposing the fine, the court held, "In the event of the amount of cost not deposited, the member secretary of the Maharashtra State Legal Services Authority shall initiate proceedings for recovery of the cost as per law." Advocate Vaishali Nimbalkar, assistant government pleader, who appeared in the case, said, "It is a good order and a benchmark that housing societies office-bearers need to adhere to the rules and regulations laid in the byelaws and the MCS Act."

Expert Speak

Advocate Shreeprasad Parab, expert director, Maharashtra State Housing Federation Limited, said, "The MCS Act mandates that housing societies conduct an AGM within six months from the close of the financial year, ideally before September 30."