Case Note & Summary
The petitioner, Maharashtra State Cooperative Patsanstha Federation Ltd., a federation of cooperative credit societies registered under the Maharashtra Cooperative Societies Act, 1960, challenged a circular dated 25.10.2017 issued by the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra State, Pune. The circular directed the preparation of a programme for conducting test audit of 20% of societies per year whose regular audits were completed up to 30th September. The petitioner contended that the Registrar lacked authority to issue such a circular, as only the State Government could issue directions under Section 81(3)(c) of the Act. The petitioner also pointed out that the State Government had refused to grant approval to the circular via communication dated 02.12.2017. The respondents argued that the Registrar had powers under the Act to issue such guidelines. The court examined Section 81(3)(c) of the Act, which empowers the State Government to direct test audit. The court noted that the circular was issued without State Government approval and that the Registrar had no inherent power to issue such directions. Relying on a Division Bench judgment of the same court in Maharashtra Certified Credit Societies Federation v. State of Maharashtra, the court held that the circular was ultra vires the Act. The court quashed the circular and allowed the writ petition. The judgment emphasizes that only the State Government can issue directions for test audit under Section 81(3)(c) of the Maharashtra Cooperative Societies Act, 1960.
Headnote
A) Cooperative Law - Powers of Registrar - Test Audit - Section 81(3)(c) Maharashtra Cooperative Societies Act, 1960 - The Registrar of Cooperative Societies issued a circular directing test audit of 20% societies per year. The State Government refused approval. The court held that the Registrar has no inherent power to issue such directions; only the State Government can issue directions under Section 81(3)(c). The circular was quashed as being without authority of law. (Paras 2-6)
Issue of Consideration
Whether the Commissioner for Cooperation and Registrar of Cooperative Societies has the authority under the Maharashtra Cooperative Societies Act, 1960 to issue a circular directing test audit of cooperative societies without the approval of the State Government.
Final Decision
The writ petition is allowed. The impugned circular dated 25.10.2017 is quashed and set aside. Rule is made absolute accordingly.
Law Points
- Registrar of Cooperative Societies lacks inherent power to issue circulars for test audit
- State Government alone can issue directions under Section 81(3)(c) of Maharashtra Cooperative Societies Act
- 1960
- Circular issued without State Government approval is ultra vires
