Mumbai: In a case arising from an inquiry into the functioning and accounts of Amit Darshan Cooperative Housing Society in Vile Parle West, the Bombay High Court has ruled that a report submitted by an officer under Section 88 of the Maharashtra Cooperative Societies Act is illegal if it is filed after the officer has been replaced.
Justice Amit Borkar held that once an officer is substituted, he becomes functus officio, meaning he no longer has any authority to continue the inquiry. Even if the officer says he was unaware of the replacement order, his powers do not revive, and anything he does afterward has no legal effect.
In October 2018, the Deputy Registrar suo motu (on its own) began an investigation into Amit Darshan under Section 83, which allows the authorities to examine a cooperative society’s functioning and accounts. This report is only an opinion and does not fix responsibility.
After this inquiry, an officer was appointed under Section 88 in October 2019. Section 88 is used to determine who is responsible for financial losses to the society and how much each person must repay. The appointed officer framed charges and received replies but delayed completing the report. As a result of the delay, the Registrar replaced him on February 14, 2022.
Despite losing his authority, the officer went ahead and prepared a report on February 28 and submitted it on March 1, 2022. Based on this report, the authorities issued a recovery certificate of Rs49.45 lakh in October 2022 under Section 98, which is the provision allowing recovery of amounts determined under Section 88.
Eight members of the society’s managing committee challenged this before the high court, contending that the AO did not examine material documents. It was also contended that three petitioners were not members of the managing committee at the relevant time. Despite this undisputed fact, they have been held liable for the alleged loss without any basis under the Act.
The court held that the report was void because the AO had no authority to act once he was replaced. Since the report was invalid, the recovery certificate and the later appellate and revision orders based on it also could not stand.
Justice Borkar directed that the matter must be sent back for a fresh Section 88 inquiry, to be conducted by the new or any future authorised officer. The officer must give all parties a fair hearing and complete the proceedings according to law.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
