Registrar Can Use Single Member's Complaint As 'Source Information' For Suo-Moto Enquiry But Must Apply Independent Mind: Bombay High Court

"Registrar acts essentially on his own accord and satisfaction albeit the information being a motivator," Bombay High Court, in a significant judgment, held that while the Registrar of Co-operative Societies can initiate a suo-moto enquiry under Section 83 of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) based on a complaint from a single member, such an order is unsustainable if the Registrar fails to apply an independent mind.

A bench of Justice Sandeep V. Marne observed that the Registrar cannot merely act as an adjudicator of a private complaint but must instead treat such information as a source for their own independent assessment.

The Petitioner-Society, representing occupiers of Raghuleela Megamall in Kandivali, challenged an order passed by the Deputy Registrar directing an enquiry into its affairs under Section 83 of the MCS Act. The enquiry was initiated following a complaint by a single member (Respondent No. 3) alleging financial irregularities and mismanagement. The Petitioner contended that since the complaint was not backed by one-fifth of the members as required by the statute, the Registrar could not have ordered the enquiry under the guise of suo-moto power.

The primary question before the Court was whether the Registrar can exercise suo-moto powers under Section 83 of the MCS Act based on a complaint filed by a single member or a non-member. The Court also considered whether the Deputy Registrar in the present case had applied an independent mind to the allegations or had mechanically acted upon the member's complaint.

The Statutory Scheme of Section 83 MCS Act

The Court began by analyzing the three distinct situations under Section 83 where an enquiry can be ordered: suo-moto by the Registrar, on an application by one-fifth of the members, or based on a special report. The bench noted that the legislature used the word ‘may’ for suo-moto enquiries, indicating discretionary power, while the word ‘shall’ is used when a valid requisition is made by the requisite number of members, making the enquiry mandatory in the latter case.

Complaint As Source Information For Suo-Moto Action

The Court clarified that there is no absolute bar against the Registrar taking cognizance of information provided by a single member or even a non-member. It observed that for the purpose of holding an enquiry suo-moto, the Registrar can receive information from various sources. The bench noted that "suo-moto" must be read in contradistinction to "members," meaning the Registrar is not prevented from acting on a complaint of a third person as long as it is treated as source information.

"The Registrar can take note of information so received and may of his own proceed to hold the enquiry."

Mandatory Application of Independent Mind

However, the Court emphasized that the exercise of suo-moto power is predicated on the Registrar’s independent satisfaction. Relying on the precedent in Janhit Nagri Sahakari Pat Sanstha Maryadit, the Court held that the Registrar must not act in a mechanical manner by merely referring to a complaint. There must be material on record warranting the exercise of such powers, and the Registrar must genuinely apply their mind to form an opinion on whether an enquiry is indeed warranted.

"If Registrar virtually abdicates his powers and discretion to the dictates of some private complainant, then obviously, exercise of power by the Registrar will be unsustainable."

Registrar Cannot Act As An Adjudicator Of Complaints

The Court found that the Deputy Registrar had essentially "adjudicated" the complaint made by Respondent No. 3 rather than conducting a suo-moto assessment. The bench noted that the Deputy Registrar does not possess adjudicative power under Section 83 to decide a complaint made by a single member. Instead of undertaking an independent assessment of the Society's records, the official had reproduced the complaint and proceeded to order an enquiry based solely on its contents.

Distinction Between Regulatory and Adjudicatory Power

The Court observed that Section 83 is a regulatory and supervisory power intended to ensure that a society functions in accordance with the law. It is not a forum for adjudicating individual grievances. The bench remarked that using words like "decision on the complaint" in the order indicated that the Deputy Registrar had overstretched their authority by treating the complaint as a matter to be "decided" rather than information to be "verified."

"The principle... about permissibility for Deputy Registrar to take cognizance of complaint cannot be overstretched to mean that Registrar can ‘adjudicate’ such complaint and render a 'decision' thereon."

The Folly of the Remanded Proceedings

The Court took serious note of the fact that the Divisional Joint Registrar had previously set aside a similar order in an earlier round of litigation, holding that the enquiry was not initiated suo-moto. Despite this, the Deputy Registrar, in the remanded proceedings, committed the same error by acting squarely on the basis of the single member's complaint without any independent application of mind to the society's audit reports or other records.

The Court concluded that the orders passed by the Deputy Registrar and the Divisional Joint Registrar were indefensible and contrary to the statutory scheme of the MCS Act. While the law allows the Registrar to use a complaint as a "trigger," it does not allow the Registrar to bypass the 1/5th membership requirement by simply labeling a private adjudication as a suo-moto action. Consequently, the High Court allowed the Writ Petition and set aside the orders directing the enquiry.

Date of Decision: 25 June 2026