IMPORTANT POINT
An order under Section 81(3)(c) of the Maharashtra Cooperative Societies Act is administrative and not quasi-judicial, thus not subject to revision under Section 154.

ORAL JUDGMENT

Amit Borkar, J. - The challenge in this writ petition is to the order passed by respondent No.2 granting a stay to the order dated 31 October 2023 passed by the Regional Joint Director (Sugar)-respondent No.4 in the exercise of power under Section 81(3)(c) of the Maharashtra Cooperative Societies Act, 1960 ("the said Act") appointing respondent No.5 as Special Auditor for conducting a test audit of respondent No.6-society.

2. The petitioners are the complainants at whose instance respondent No.4 passed an order under Section 81(3)(c) of the said Act. The petitioners approached respondent No.2 for issuance of direction to respondent No.3 to direct respondent No.4 to conduct a test audit of respondent No.6 - Society. In furtherance of such directions, respondent No.4 passed an order dated 31 October 2023 appointing Respondent No.5 as Special Auditor to conduct a test audit of Respondent No.6. respondent No.6 challenged the order dated 31 October 2023 before Respondent No.1 by invoking power under Section 154 of the said Act. Respondent No.1, by the impugned order, granted a stay to the order dated 31 October 2023. Hence, the petitioners have filed a present writ petition.

3. Mr. Bhavake, learned advocate for the petitioners inviting my attention to the scheme of the said Act, and in particular Sections 81, 152 and 153, submitted that the order passed under Section 81(3)(c) of the said Act is merely an administrative order and against such order revision under Section 154 of the said Act is not maintainable.

4. Per contra, Mr. Shah, learned Advocate for respondent No.6, relying on the judgment in Chimanbhai Dadubhai Desai & Anr. v. Chaturbhai P. Patel & Ors. reported in AIR 1971 Gujarat 156 submitted that the order directing inquiry under Section 81(3)(c) of the said Act involves serious consequences to the cooperative society and, therefore, such order affects rights or liabilities of the cooperative society. Hence, such an order needs to be termed a quasi-judicial order. He submitted that, therefore, the expression "order or decision" in Section 154 of the said Act may contemplate orders that affect the rights and liabilities of the cooperative society. He submitted that the Revisional Authority is also empowered to decide the 'regularity of proceedings' under the Act and Rules and to quash and set aside such proceedings.

5. The precise questions which arise for consideration of this Court, based on the submissions made across the bar, may be formulated thus: (i) Whether an order under Section 81(3)(c) of the said Act is a quasi-judicial or administrative order; (ii) if such order is an administrative order, whether recourse to Section 154 of the said Act is available to the aggrieved party; and (iii) Whether Revisional Authority exercising power under Section 154 after examining 'regularity of proceedings' can quash and set aside the 'proceedings' under the Act and Rules.

6. For proper appreciation of the questions involved, it is necessary to set out relevant provisions of the said Act:

'81. Audit. (1) .............

(2) ...............

(3)(c) If it is brought to the notice of the Registrar that the audit report submitted by the auditor does not disclose the true and correct picture of the accounts, the Registrar or the authorised person may carry out or cause to be carried out a test audit of accounts of such society. The test audit shall include the examination of such items as may be prescribed and specified by the Registrar in such order.

82. Rectification of defects in accounts.

(1) If the result of the audit held under the last preceding section discloses any defects in the working of a society, the society shall within three months from the date of the audit report, explain to the Registrar the defects or the irregularities pointed out by the auditor or auditing firm, and take steps to rectify the defects and provide remedy to irregularities, and report to the Registrar the action taken by it thereon and place the sa