Published on: Aug 18, 2026, 08:27:20 IST By HT Correspondent Prefer HTon Google Share via Copy link MUMBAI: Complaints raised by a couple of disgruntled society members cannot be a reason to initiate an inquiry into the financial affairs of a housing society, the Bombay High Court observed last week.

The court made the observation while quashing an order passed by a deputy registrar initiating an inquiry under the Maharashtra Co-operative Societies (MCS) Act, 1960 into the financial conditions of a housing society in Kurla.

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”.

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.

The judges said the objective of the latter provision was that “it should not be one or two members who have some grievance to make or have an axe to grind against the members of the managing committee against whom an inquiry is sought to be initiated, but it must be a majority public opinion and this requires a good as one-fifth of the members seeking such an inquiry.” The court was hearing a petition filed by Vaishali Manjrekar and seven others who had contested the deputy registrar’s order of last year.

The court said there were, as laid down in the statute, three modes for the registrar to initiate an inquiry into the society’s finances which were either a suo motu inquiry, an application made by one-fifth of the members of the society, or on the basis of a special report under section 81 of the MCS Act, and “it is only in this manner, the registrar shall conduct an inquiry”, the court said.

In this case, the registrar’s order stated that on August 14, 2025, a complaint was made by two society members alleging that former members of the society had caused financial loss to the society and that an inquiry must be conducted.

The court noted that the registrar has stated that he had initiated the inquiry as a ‘suo motu exercise’ but relied on the complaint by the two members.

The judges said that the deputy registrar’s stand that the source of the information was the complaint by the two members but he had later applied his own mind to initiate the inquiry, did not appeal to them as it fell foul of the legislature’s intention behind laying down the modes to initiate the inquiry.

“By no stretch of imagination the said provision makes it permissible to take cognizance of the complaint and then treat it as a ‘suo motu exercise’ and this is precisely what the officer (deputy registrar) has attempted to plead before us…” the judges observed.

Housing Society Catch every big hit, every wicket with Crickit, a one stop destination for Live Scores, Match Stats, Infographics & much more.