The Bombay High Court ruled last week that complaints from a few dissatisfied members of a housing society are insufficient grounds to launch an inquiry into the society’s financial affairs. This decision came as the court quashed an order from a deputy registrar that had initiated an investigation under the Maharashtra Co-operative Societies (MCS) Act, 1960, concerning the financial conditions of a housing society located in Kurla.
Court Clarifies Inquiry Standards for Society Finances
The court has ruled that a majority opinion is necessary for initiating an inquiry into a society’s finances, specifically requiring at least one-fifth of the members to request such an action. This decision arose during a hearing related to a petition by Vaishali Manjrekar and seven other members, who challenged an order from the deputy registrar last year. The judges emphasized that the inquiry should not be based on complaints from just one or two disgruntled members. They pointed out that the statute outlines three conditions under which the registrar can initiate an inquiry: a suo motu inquiry or a request from one-fifth of the society’s members. The judges criticized the deputy registrar’s attempt to treat a complaint as a suo motu exercise, stating that this interpretation is not permissible.
In this case, the registrar had set up the inquiry suo motu but cited complaints received from two members of the society as source material.
Setting aside the deputy registrar’s order of September 29, 2025, ordering an inquiry into the financial affairs of the Kurla Kamgar Cooperative Housing Society (KKCHS), a division bench of Justices Bharati Dangre and Ashish Chavan observed that section 83 of the MCS Act clearly stated that the inquiry into the society’s financial conditions can be made either suo motu (on his own) by the registrar or on receiving a complaint from “not less than one-fifth of the capacity of members”.
