The main legal point established is that the imposition of penalties under Section 79(3) of the Maharashtra Co-operative Societies Act, 1960 must be justified and not arbitrary, taking into account the actual responsibility of the parties involved.

JUDGMENT:

1. Rule.

2. Rule made returnable forthwith and heard finally by consent of the parties.

3. The present petition takes exception to the orders dated 27.05.2019, 23.05.2017 and 05.11.2014 passed by the respondent No.1, respondent No.2 and respondent No.3 statutory authorities. The order dated 27.05.2019 impugned in the present petition has been passed in revision proceedings by the respondent No.7 State. This order, inter-alia, upholds the order dated 23.05.2017 passed by the Divisional Joint Registrar, Mumbai, which in turn upholds the order dated 05.11.2014 passed by the Deputy Registrar, Co-operative Societies, ‘D’ Ward, Mumbai. The impugned order has been passed under the provisions of Section-79(3) of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the Act").

4. The facts in the present case are in a narrow conspectus. The petitioner Nos.1 and 2 are the erstwhile members of the managing committee of Shripati Arcade Annexe-II Co-operative Housing Society, Mumbai -400 036 (hereinafter referred to as the “Society”). The petitioner No.1 was the chairman and the petitioner No.2 was the secretary during their tenure from the year 2008 to 2015. Sometime in the year 2007 an administrator came to be appointed to administer the affairs of the society. In March- 2008, the new managing committee came to be elected of which petitioner No.1 was the chairman and petitioner No.2 was the secretary. Being the statutory officers of the society, the petitioners were required to up keep the statutory records of the society as prescribed in the byelaws. However, the tenure of the petitioners was effective from and on after the tenure of the administrator came to an end in the year 2008 and lasted upto 2015.

5. At the then time there was a dispute in respect of Flat No.C/102 which belonged to one Makwana family. Respondent No.4 identified as Ms. Nandini Makwana had a dispute with her brother Mr.Paresh Makwana in respect of the said fat. In the year 2009, respondent No.4 took inspection of the record maintained by the society and until 2012 did not find any discrepancy or did not lodge any complaint whatsoever about any missing documents. For the first time on 24.02.2012, respondent No.4 fled a written complaint before the Deputy Registrar that the society did not have the records pertaining to fat No.C/102 i.e. the true copy of the registered agreement of sale.

6. Simultaneously, action was initiated in respect of the said fat under Section 101 of the Act for recovery of outstanding dues before the statutory authority.

7. On the basis of the complaint fled by respondent No.4, respondent No.3 passed order dated 23.07.2012, inter-alia, directing that the documents pertaining to fat No.C-102 were required to be obtained from the erstwhile member of the society viz. Smt. Julekha Jagmag. The then secretary of the society Mr.Ashok Sawant had also given a specific statement before the Gamdevi police station that Smt. Julekha Jagmag the then member of the society had taken away papers pertaining to Flat No.C/102 and therefore the same were missing from the records of the society.

8. Pursuant to the above order, respondent No.3 passed a further order dated 05.11.2014 under Section 79(3) of the Act thereby directing the petitioners (who were the chairman and secretary at the then time) to pay a fine of Rs.100.00 per day to the society.

9. The petitioners fled appeal against the above order before the respondent No.2 Divisional Joint Registrar Co-operative Societies, Mumbai Division. The petitioners’ statutory appeal came to be dismissed by order dated 23.05.2017.

10. Being aggrieved, the petitioners fled Revision Application before the Minister Co-operation Marking and Textile Department, Mantralaya, Mumbai under the provisions of Section 154 of the Act. The Revision Application came to be dismissed by order dated 27.05.2019, interalia, upholding the order passed by the respondent No.3. Hence the present petition.

11. The provi