Smt. Nair Pushpa Sureshkumar & Ors. v. The State of Maharashtra & Ors.

1960. These provisions define the statutory rights of members to access records of the Society and the corresponding duties of the Managing Committee. They also determine when and how members of a Managing Committee incur disqualification for breach of those duties. The sections read as follows.

13. Section 154-B-8. Rights of Members to inspect the documents.—(1) Every Member of a society shall be entitled to inspect, free of cost, at the society's office during office hours, or any time fixed for the purpose by the society, a copy of the Act, the rule and the bye-laws, the last audited annual balance sheet, the profit and loss account, a list of the members of the Committee, a register of members, the minutes of general meetings, minutes of Committee meetings and those portions of the books and records in which his transactions with the society have been recorded. (2) A society shall furnish to a Member, on request in writing and on payment of such fees at such rate as may be decided by the Registrar, from time to time, the copies of any documents mentioned in the foregoing sub-section within forty-five days from the date of payment of such fees and when the Society is assisted by the Government in the form of share capital, loan and land, the said Society shall furnish such information within thirty days from the date so requested by a member. Section 154-B-23. Disqualification of Committee and its Members.—(1) Without prejudice to the other provisions of this Act or the rules made thereunder, in relation to the disqualification of being a Member of the Committee, no person shall be eligible to be appointed, nominated, elected, co-opted for being a Member of Committee,—

(i) if he is a defaulter of any society, or

(ii) if he carries on business of letting, subletting and selling of flats in the housing society of which he is a Member, or

(iii) if he has been held responsible under Section 79, 88,

(iv) if he has incurred any disqualification under this Act or the rules made thereunder, or

(v) if he incurs any of the disqualification similar to that mentioned in the provisions of clause (vii), (viii) or (ix) of clause (f) of sub-section (1) of Section 73-CA. (2) A Member, who has incurred any disqualification under sub-section (1), shall cease to be a Member of Committee and his seat shall thereupon be deemed to be vacant. (3) A Member of a Committee who has ceased to be a Member thereof, on account of having incurred disqualification under clause (ii), (iii), (iv) or (v) of subsection (1), shall not be eligible to be re-elected, re-co-opted or re-nominated as a Member of Committee for five years from the date on which he or she has so ceased to be a Member of the Committee. (4) A Member of a Committee who has ceased to be a Member thereof, on account of having incurred disqualification other than disqualifications, referred to in sub-section (3), shall, unless otherwise specifically provided in this Act, be eligible to be re-elected, re-co-opted or renominated as a Member of Committee as soon as such disqualification ceases to exist.

14. I now examine Sections 154B-8 and 154B-23 in the context of the facts already recorded. The two provisions operate in different fields but are closely connected. Their combined effect must be understood to determine whether the Registrar lawfully exercised jurisdiction and whether the petitioners rightly incurred disqualification.

15. Section 154B-8 creates two distinct rights and obligations. Sub-section (1) grants every member a right to inspect specified documents free of cost. That right is immediate. It does not depend on any fee. Sub-section (2) directs that on a written request and on payment of prescribed fees the Society must furnish copies of the documents mentioned in sub-section (1). The period for supply is forty-five days from the date of payment. Where the Society is assisted by the Government, the period is thirty days.

16. Three important features emerge. First, the statute makes a clear distinction between inspection and obtaining copies. Inspection is free and unconditional. Supply of copies follows only upon payment. Second, the obligation to supply copies arises immediately upon receipt of the requisite fees. Third, the section sets a definite time limit for furnishing copies once fee is paid. This time limit cannot be extended by the Society unilaterally.

17. Section 154B-8 gives a clear right to every member to see the records of the Society and to receive copies of those records within the time fixed by law. This right carries with it a duty on the Society and its Managing Committee to respond without delay. The law expects the Society to function in the open. Members must know how decisions are taken and what business is conducted in their name. If information is kept back, members cannot protect their interests. The Legislature has therefore placed a strict duty on the Society to give documents when asked. This provision aims to prevent any hidden or secret working of the committee. The Managing Committee holds office for the benefit of all members. It cannot keep records away from them. When a member asks for copies of minutes or other documents, the Society must supply them promptly. Silence, delay or inaction cannot be treated as a valid answer. If the Society does not act, the right given by the law becomes meaningless. A committee that avoids giving records raises doubt about its functioning. The law does not permit such conduct. The duty to supply documents is therefore not optional. It is a binding obligation that must be honoured in both letter and spirit.

18. I now turn to Section 154B-23. This provision deals with disqualification of committee members. Sub-section (1) identifies circumstances under which a person becomes ineligible to be appointed, nominated, elected or co-opted as a member of the committee. Of relevance here is clause (iii), which covers persons held responsible under Section 154B-8(2) or Section 154B-27. Thus, where a committee member is found responsible for breach of obligations under Section 154B-8(2), disqualification follows.

19. Sub-section (2) states the legal consequence. Once a member incurs any disqualification under sub-section (1), he ceases to be a committee member. The seat automatically falls vacant. This operates by force of law and not by a separate order. Sub-section (3) prescribes the further consequence that where the disqualification arises under clause (iii), the concerned member becomes ineligible for re-election, re-co-option or re-nomination for five years.

20. Section 154B-23 has been enacted to make sure that those who run the Society do so in a responsible and honest manner. Members of a Managing Committee hold a position of trust. They deal with the money, property and day-to-day affairs of the Society. When a committee member refuses to give documents, hides information or blocks a member’s lawful right under Section 154B- 8, such conduct shows that he cannot be trusted to continue in that position. The law therefore treats such a person as unfit to remain on the Committee. This provision is meant to protect the cooperative movement. A Society can function smoothly only when its committee works openly and truthfully. The Legislature has therefore empowered the Registrar to step in at the earliest sign of such misconduct. The Registrar is given authority to disqualify such committee members so that misuse of power does not continue, and the Society does not suffer further harm. A person who does not respect the rights of the members cannot be allowed to hold a position where those rights must be safeguarded. The law steps in to remove such persons so that cooperative institutions remain clean and well-governed.

21. The petitioners say that respondent No. 4 paid the copy charges only on 10 May 2023 and the Society supplied the minutes on 12 May 2023. They argue that their duty to give copies started only after payment and that they acted promptly once the charges were paid. On that basis they say that disqualification and supersession are too harsh. This argument needs careful examination of the dates and the earlier correspondence.

22. Respondent No. 4 first asked for the documents on 18 January 2023. He sent repeated reminders and made it clear that he was ready to pay whatever fees were required. The Society did not inform him of the fee amount until 10 May 2023. In the meantime, the District Deputy Registrar had already stepped in on 12 April 2023 and given a clear direction that the documents must be supplied within seven days. That meant the Society had to comply on or before 19 April 2023. The Society did not do so. The minutes were supplied only on 12 May 2023 and even then only partly. The dates speak for themselves. There was a long and unexplained delay from January to May. The Society did not follow the Registrar’s direction. The petitioners have shown no letter, receipt or e-mail to show that they told respondent No.4 about the fees earlier or made any attempt to help him comply. Their stand that “payment is a condition” cannot save them. Once a lawful direction was issued and the member was repeatedly asking for documents, the Society was bound to act. One cannot take advantage of one’s own failure to communicate.

23. The petitioners then argue that Section 154B-27 provides only a monetary penalty of Rs. 5,000 for non-supply of documents and that therefore the Registrar could not disqualify or supersede the committee. This argument mixes up two separate provisions serving different purposes. Section 154B-27 deals with calling for documents and punishing certain breaches with a fine. Section 154B-23 deals with disqualification of committee members who fail to perform their statutory duties and obstruct transparency. The Act clearly intends both remedies to operate in their own fields. The presence of a penalty does not cancel the separate power of disqualification. If that were accepted, the entire purpose of Section 154B-23 would be lost. The Legislature has not stated that Section 154B-27 is the only remedy. The petitioners have shown no reason, either in the wording of the law or in its purpose, to restrict the Registrar’s power in the manner they suggest.

24. The petitioners say that even though the law is strict, the Court should take a practical view and excuse small mistakes if they have substantially complied. Courts do apply this principle in proper cases. If a party has made genuine efforts to follow the law and only a minor lapse has occurred, the Court may not insist on perfect compliance. The Court should not allow strict wording to cause unfair results when the party has acted honestly and promptly. But this principle applies only when the facts show real and timely steps by the party. It cannot be used by someone who stays silent for months and acts only when the authority starts taking action. Substantial compliance requires sincere and early effort. It is not available to a party who wakes up only after pressure from the authorities. Here the direction of the District Deputy Registrar required the Society to supply documents within seven days. If the petitioners disagreed with that direction or felt it was improper, they were required to challenge it immediately and seek a stay. They did neither. Once the direction remained in force, they were bound to follow it without delay. They cannot now say that they complied "substantially" when the supply was made only after the deadline expired and only after show cause proceedings began. The record contains no evidence showing any legitimate difficulty or obstacle faced by the petitioners between January and May. There is no material to show any genuine attempt to comply within time. The facts show a prolonged delay and inaction. In such circumstances, the claim of substantial compliance cannot be accepted. The law does not permit a party to ignore a binding direction and later seek shelter under this principle.

25. The respondents have pointed out in their affidavit that the petitioners have already been held responsible for causing loss to the Society under Section 88 and that a recovery certificate has been issued. This is an independent finding made earlier. It shows that the Society had already suffered financial loss due to acts of the petitioners. This fact cannot be ignored. It indicates that there were irregularities and problems in the way the Society was being managed. The petitioners have not placed any material before this Court to challenge or weaken that earlier finding. That earlier determination forms part of the background in which the Registrar had to consider the conduct of the petitioners. When a committee is already found responsible for financial loss, delay or refusal to give minutes becomes more serious. The Registrar is entitled to consider whether the minutes were being withheld to avoid detection of further irregularities. Respondent No. 4 was asking specifically for minutes from October 2022. Those minutes relate to the period in which the alleged irregularities and financial loss had taken place. If those minutes had been supplied in time, the facts could have come to light earlier. The record suggests that the non-supply was not accidental. It had the effect of blocking scrutiny. The petitioners have not given any convincing reason for keeping back these records for months. In these circumstances, the part of a larger pattern of mismanagement.

26. For deciding how long a person should be disqualified under Section 154B-23, the Registrar must follow clear and fair standards. The law gives the power, but the use of that power must be guided by common sense and the need to protect the Society. The following points are important.

(i) Nature of the breach

The Registrar must see what exactly the committee member has done wrong. If the wrong involves hiding documents, blocking transparency or ignoring lawful directions, it becomes more serious. When a member’s conduct directly affects another member’s right to get documents under Section 154B-8, stricter action becomes necessary.

(ii) Length of the misconduct

The Registrar must see how long the misconduct continued. A small mistake corrected quickly is one thing. A delay of several months or refusal even after reminders is quite different and more serious.

(iii) Repeated requests and warnings

If a member keeps asking for documents in writing and the Society does nothing, it shows that the committee knowingly ignored its duty. If the Society still fails to act even after the disqualification.

(iv) Purpose or effect of the non-compliance

The Registrar must see whether the refusal to give documents might have been to hide wrongdoing, financial loss or misuse of power. If the misconduct affects the honest functioning of the Society, stronger action is justified.

(v) Past behaviour of the committee member

If the member has earlier been found responsible for wrongdoing under Sections 79, 88, 154B-8(2) or 154B-27, or if a recovery certificate has already been issued, it shows a pattern of poor management. Repeat violations call for stricter punishment.

(vi) Harm caused to the Society

The Registrar must consider whether the misconduct caused financial loss, confusion in the Society’s working or loss of trust among members. Greater harm demands a disqualification that fits the seriousness of the situation.

(vii) Response of the committee member

The Registrar should see whether the member offered a timely explanation or took steps to correct the mistake. A member who ignores the law for months and later gives technical excuses cannot ask for leniency

(ix) Cooperation during proceedings

If the member did not produce documents during inquiry or did not assist the process, it shows that he is not fit to continue on the Committee. Lack of cooperation may justify the maximum disqualification.

(x) Need to protect the Society

The main goal is to protect the Society and its members from further harm. If the Registrar finds that allowing such a member to continue would put the Society at risk, a full fiveyear disqualification may be required.

(xi) Proportionality

Although the law provides for a five-year disqualification, the misconduct. Small and unintentional mistakes may call for a shorter period. Serious and deliberate wrongdoing may justify the full term.

27. The next issue is whether disqualifying the petitioners for five years is too harsh. A disqualification for a fixed period is serious. It removes a person from the Managing Committee and stops him from contesting elections for that entire period. The The punishment must fit the conduct. When the facts of this case are seen together, the decision to disqualify for five years appears reasonable. The petitioners did not comply with repeated requests from a member. They did not obey a clear and time-bound order issued by the District Deputy Registrar. They supplied the documents only after legal proceedings started. This shows a pattern of disregard for statutory duties. There is also the fact that a recovery certificate under Section 88 is already issued against the petitioners for causing financial loss to the Society. This shows that the Society had already suffered under their management. When financial irregularities are present, withholding minutes becomes more serious because such records help to uncover what went wrong. The Registrar must protect the Society and its members. When a committee repeatedly fails to follow the law and is already found responsible for financial loss, a strict measure becomes necessary to prevent further harm. The law itself fixes the period of five years for such disqualification. The Registrar has only applied what the statute provides. In these circumstances, the order of disqualification does not appear excessive or unreasonable. It is supported by the facts and falls squarely within the legal power conferred by Section 154B-23.

28. To decide whether non-compliance with Section 154B-8 should result in disqualification of the whole Managing Committee or only those members who were directly responsible under the bye-laws, the issue must be understood in a practical manner. Section 154B-8 creates a legal duty on the Society to give documents to its members. The Society works through its Managing Committee. Therefore, the duty under Section 154B-8 is, in law, the duty of the entire Committee. Supplying minutes, keeping records and answering members’ written requests are not small administrative tasks. They are essential duties of those who run the Society. The law expects the Committee as a whole to ensure that these duties are fulfilled. Under the Co-operative Societies Act and the model bye-laws, the Managing Committee functions on the principle of collective responsibility. The Committee takes decisions together and carries out statutory duties as one body. Unless the bye-laws very clearly say that only one officer, such as the Secretary, alone is responsible for supplying documents and that other members are exempt from this duty, the entire Committee remains responsible for compliance.

29. In some situations, disqualification of the entire Committee becomes necessary. This happens when the non-compliance is not caused by one person alone but by the collective inaction of the whole Committee. If no member of the Committee takes steps to comply, if repeated reminders are ignored, if the Committee shows a pattern of delay or withholding information, or if the documents relate to the Committee’s own meetings and decisions, the responsible. In such cases, disqualifying the entire Committee is lawful and appropriate.

30. However, there may be rare cases where disqualification can be limited to certain members. This can happen only when the bye-laws clearly appoint a particular officer as the sole custodian of records and the Committee can show that the other members were not aware of the officer’s lapse and that they took reasonable steps to ensure compliance. In such a situation, the lapse may be personal to that officer and not a collective failure. Only then can the Registrar restrict disqualification to that individual.

31. The question the Registrar must not ask is “who was supposed to give the documents”. The correct question is “who failed in their legal duty to make sure that the documents were given”. A Committee cannot escape responsibility by blaming one officer when, in reality, the whole Committee ignored requests, failed to act on the Registrar’s direction and allowed the breach to continue for months.

32. When these principles are applied to the present case, the conclusion is clear. Repeated reminders were sent to the Society from January to May 2023. The Registrar issued a clear direction on 12 April 2023. No member of the Committee has shown any steps taken by them to comply. The documents sought were minutes of the Committee’s own meetings. The non-compliance continued until proceedings were initiated. This shows a collective failure, not an individual lapse. There is no material to show that only one officer was responsible or that the rest of the Committee tried to ensure compliance. In these circumstances, the disqualification of the entire Managing Committee is fully supported by the law and cannot be faulted.

33. I now consider the appointment of an administrator under Section 77A(1). This section gives the Registrar the power to remove a Managing Committee and appoint an administrator when there are serious lapses in the Society’s management. The law expects the Managing Committee to run the Society in a lawful and orderly manner. When there are grave irregularities, continued mismanagement or clear failure to follow the Act, the appointed an administrator on 29 May 2023. Both decisions were based on the same set of facts. There was long delay in supplying documents. There was a recovery certificate already issued under Section 88 showing financial loss caused by the committee. There were complaints about breach of by-laws. All these factors together show that the Society was not being managed properly. The to continue would harm the Society. In that background, appointing an administrator was a proper and necessary step. It was not arbitrary or excessive.

34. The revisional authority considered their case and dismissed it on 27 October 2023. After losing in revision, they have come to this Court. The fact that statutory remedies existed does not prevent this Court from hearing the matter. But the petitioners cannot say that they were denied any opportunity. They received the show cause notice. They filed a reply. The Registrar gave reasons in his order. There is nothing on record to show any procedural unfairness. The basic requirements of a fair hearing were met. The petitioners also stressed minor points about the exact amount of copying charges and the exact date of payment. These arguments do not help them because the Registrar’s direction to supply documents within seven days was not followed. The documents were given only after proceedings were started. A late payment cannot wipe out earlier non-compliance. The law does not permit a committee to ignore directions for weeks or months and then claim compliance only when action is taken against them. I have also considered the judgments cited by the respondents. The principle laid down is that the powers under Section 154B-23 are meant to ensure honesty and accountability. When a member makes repeated requests, when the Registrar gives clear directions and when the Society still fails to comply, the substitute its own view of the facts when the record gives a clear and reasonable basis for the Registrar’s action.

35. For all these reasons, both writ petitions fail. Writ Petition No. 14087 of 2023 and Writ Petition No. 14098 of 2023 are dismissed. The orders dated 26 May 2023 under Section 154B-23 and 29 May 2023 under Section 77A(1) are confirmed. No costs. Parties shall act in accordance with this judgment.

36. All pending interim applications stand disposed of.

37. At this stage, learned Advocate for the petitioners seek continuation of ad-interim relief. Since the ad-interim relief was in force for more than one year, the same is continued for a period of 4 weeks from today. (AMIT BORKAR, J.)