SURESH AGARWAL AND ORS v. SUDHIR AGARWAL AND ORS
Validity of Cooperative Society Managing Committee: Impact of Resignations on Statutory Strength and the Application of Section 154B-19(2) of the Maharashtra Cooperative Societies Act.
Court: Bombay High Court
Citation: 2025:BHC-AS:53178
Decision Date: 05-12-2025
List of Laws
Maharashtra Cooperative Societies Act; Section 154B-19 of the Maharashtra Cooperative Societies Act; Section 154B-22 of the Maharashtra Cooperative Societies Act; Rule 74 of the Maharashtra Cooperative Societies (Election to Committee) Rules 2014; Section 73 of the Maharashtra Cooperative Societies Act; Section 77A of the Maharashtra Cooperative Societies Act; Section 78 of the Maharashtra Cooperative Societies Act
Case Brief
- Facts: A dispute arose in Splendor Complex CHS Limited regarding the validity of the managing committee after several members resigned. Initially, 18 members were elected to the 19-member committee for the term 2022-2027. One member resigned, and later, seven more members tendered their resignations. The society attempted to fill vacancies through co-option, but disputes arose regarding the validity of the committee's constitution and quorum due to the resignations. Respondent No. 1 filed a dispute seeking a declaration that the managing committee was not validly constituted.
- Procedural Posture: The Cooperative Court partly granted relief to the disputant by restraining the managing committee from discussing or passing any resolution for his expulsion. Appeals were filed against this order. The Cooperative Appellate Court dismissed some appeals and partly allowed others, restraining the managing committee from conducting meetings or passing resolutions until the dispute was resolved or fresh elections were held. The petitioners (original managing committee members) filed writ petitions challenging the Appellate Court's order in the Bombay High Court.
- Issue: Whether the managing committee of the cooperative society remained validly constituted after the resignations, considering the requirements of Section 154B-19(2) and Section 154B-22 of the Maharashtra Cooperative Societies Act, and Rule 74 of the Maharashtra Cooperative Societies (Election to Committee) Rules, 2014; specifically, whether the constitution of the managing committee is to be tested only at the moment of declaration of result or at every point during the tenure, how reserved seats are to be treated, and what is the role and limit of co-option.
- Holding: The Bombay High Court dismissed the writ petitions, holding that the managing committee ceased to be a legally constituted committee from the moment its elected strength dropped below 13, which is more than two-thirds of the sanctioned strength of 19, as required by Section 154B-19(2) of the Maharashtra Cooperative Societies Act.
- Reasoning: The Court reasoned that the requirement of having more than two-thirds of the sanctioned strength elected applies throughout the tenure of the committee, not just at the time of election. The Court clarified that Section 154B-22, which deals with quorum and reserved seats, does not dilute the requirement of more than two-thirds elected members for a valid constitution. The Court emphasized that co-option is a temporary measure and cannot be used to repair a committee whose elected strength has fallen below the statutory threshold. The Court also clarified that once a committee is constituted under Section 154B-19(2), its quorum does not change because of later vacancies. The Court stated that the Appellate Court acted correctly in granting protective relief and stopping the weakened committee from taking important decisions.