Registrar Cannot Dissolve Cooperative Society's Management Committee Based On Unaccepted Resignations: Bombay High Court
The Bombay High Court recently held that Registrar (Co-operative Societies) cannot dissolve the board of directors of a society on account of half of the members of the committee resigning before the society has accepted the resignations.Justice Kishore C Sant of the Aurangabad bench in a writ petition quashed Registrar’s order dissolving the board of directors of a cooperative society...
The Bombay High Court recently held that Registrar (Co-operative Societies) cannot dissolve the board of directors of a society on account of half of the members of the committee resigning before the society has accepted the resignations.
Justice Kishore C Sant of the Aurangabad bench in a writ petition quashed Registrar’s order dissolving the board of directors of a cooperative society whose six out of 12 members resigned at once, observing that the resignations hadn’t been accepted by the society.
“this Court finds that the Registrar has hurriedly proceeded to pass the order. The By Laws were duly passed and were accepted by passing the orders dated 29.08.2023 by respondent No.2. In view of that, the meeting (to discuss resignations) was scheduled to be held on 16.02.2022. It is before that meeting the action is taken. Technically no resignations were accepted till that date as it was for the Society to take decision on resignations. The impugned order, therefore, deserves to be set aside”, the court held.
The petitioner Vinayak Chavhan, who was elected as the Chairman of the society, challenged an order passed by the Divisional Joint Registrar, Cooperative Societies, Aurangabad, appointing an authorized officer to assume control of the society under Section 77A(b)(1) of the Maharashtra Co-Operative Societies Act, 1960.
The petitioner argued that proper procedure had not been followed in accepting the resignations of committee members. The petitioner contended that under the society's By-Law No. 9, resignations were required to be tendered in handwriting and signed by the concerned individuals. The petitioner claimed that the Registrar had accepted the resignations without adhering to this procedure. The petitioner further highlighted that the impugned order was passed before the meeting where resignations were to be discussed.
The court observed that the Registrar's power to appoint a committee or authorized officer under Section 77A should be exercised only when specific contingencies, as listed in the section, arise. The court emphasized that proper procedure, including displaying notices, should be followed before exercising such powers.
The court found that Registrar did not issue notice under Section 77A(1)(8)(ii) of the Act required to be put displayed on the notice board at the head office of the society, inviting objections and suggestions with respect to the proposed order.
The court noted that the Registrar's actions in this case were premature, as the resignations had not been accepted by the society itself. The court held that the impugned order had been passed hastily and without proper adherence to the society's By-Laws and procedural requirements.
“From the chronology of the events, it is seen that the meeting (to discuss the resignations) was scheduled on 16.02.2022, however, before that meeting the Registrar has removed the Committee and appointed the Administrator without hearing the Committee. Be that as it may, no decision was taken on the resignations. In the By Laws, it is clear that it is the Society who has to take the decision on the resignations of the members”, the court said.
In light of the analysis, the court set aside the impugned order, thereby allowing the writ petition.
Case no. – Writ Petition No. 521 of 2023
Case title – Vinayak Ukharam Chavhan v. Divisional Joint Registrar and Ors.