The Bombay High Court, presided over by Justice Sandeep V. Marne, delivered a judgment quashing the order of de‑registration passed against a housing society that had been in existence for forty‑five years. The Court examined whether the society’s alleged provision of inaccurate information after its registration could be treated as misrepresentation attracting the provisions of Section 21A of the Maharashtra Co‑operative Societies Act, 1960.
Section 21A empowers the Registrar of Societies to cancel the registration of a co‑operative society if it is shown that the registration was obtained by fraud, misrepresentation or concealment of material facts. The provision is directed at the stage of registration; it does not apply to subsequent inaccuracies that may arise during the functioning of the society.
The Court observed that the impugned order of de‑registration was based on the contention that the society had furnished inaccurate or incomplete information concerning certain matters after its registration. The authorities had taken the view that such post‑registration inaccuracies amounted to misrepresentation within the meaning of Section 21A and therefore warranted cancellation of the society’s registration.
Justice Marne, after analysing the statutory language and relevant case law and the legislative intent behind Section 21A, concluded that the term “misrepresentation” in this provision refers only to a false statement or concealment made at the time of applying for registration. The Court held that merely giving inaccurate or incomplete information after the society has already been registered does not fall within the ambit of misrepresentation as envisaged by the section.
The judgment further noted that allowing de‑registration on the basis of post‑registration inaccuracies would expand the scope of Section 21A beyond its intended purpose and would expose societies to punitive action for routine administrative errors or omissions that occur during their operational life. Such an interpretation would be contrary to the principle that the power to cancel registration must be exercised sparingly and only where the very foundation of the society’s legal existence is tainted by fraud.
Consequently, the Court set aside the de‑registration order and directed the Registrar to reinstate the society’s registration, subject to any other lawful proceedings that may be initiated against the society for the alleged inaccuracies under appropriate provisions of the Act or other statutes.
The decision has significant implications for co‑operative societies across Maharashtra. It clarifies that authorities must prove fraud or misrepresentation at the inception of the society’s registration before invoking Section 21A for cancellation. Mere inaccuracies in later disclosures, returns or statements will not attract the drastic remedy of de‑registration unless they are shown to be part of a fraudulent scheme to obtain registration.
Legal practitioners note that the judgment reinforces the protective shield afforded to long‑standing societies against arbitrary deregistration and underscores the need for regulatory bodies to adhere strictly to the statutory requirements when exercising their powers under Section 21A. The ruling also serves as a precedent for similar disputes where the allegation of misrepresentation is based on information supplied after the entity’s registration.