2026 Supreme(Online)(Bom) 1391

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Amit Borkar, J
Shivkrupa Sahakari Patpedhi Limited – Appellant
Versus
State of Maharashtra – Respondent
WRIT PETITION No.676 OF 2026

Preliminary audit reports and orders initiating statutory inquiries are not 'decisions' or 'orders' affecting rights and liabilities; therefore, they are not amenable to revisional jurisdiction, which is reserved for final adjudicatory determinations that carry legal consequences.

Headnote:(A) Maharashtra Cooperative Societies Act, 1960 - Section 81(5B) - Special Report by Auditor - Nature and effect - Audit under the Act is meant to examine correctness of accounts and verify if management acted within financial framework - Auditor’s function is investigative and fact-finding, not adjudicatory - A Special Report is a statutory trigger as an early warning and does not impose liability or declare guilt - It is not an order or decision amenable to revisional jurisdiction as it does not adjudicate rights or liabilities. (Paras 20, 22, 27, 28)

(B) Maharashtra Cooperative Societies Act, 1960 - Section 154 - Revisional jurisdiction - Nature and scope - Revisional power arises only against a decision or order passed by a subordinate authority that has reached finality and affects legal rights - Mere administrative acts, procedural steps, or preliminary reports such as an order initiating an inquiry do not constitute revisional subjects as they do not determine rights or liabilities. (Paras 35, 37, 39, 45)

(C) Principles of Natural Justice - Administrative vs. Adjudicatory processes - Requirements of hearing - Natural justice principles do not mandate a full hearing at the preliminary audit stage, as statute provides for an inquiry stage where affected persons can defend themselves - Judicial precedents regarding natural justice cannot be applied to shield against statutory inquiries at the threshold. (Paras 33, 47)

Facts of the case:
A cooperative society sought an inquiry against former office bearers regarding financial irregularities. A statutory auditor submitted a special report identifying irregular transactions. Based on this, the competent authority passed an order initiating a formal inquiry. The affected parties challenged both the special report and the inquiry order before the revisional authority, which set them aside. The society approached the High Court challenging this revisional order.

Findings of Court:
The Court found that the revisional authority acted in excess of jurisdiction by treating preliminary administrative documents as appealable decisions. The audit report and initiation of inquiry are preparatory steps that do not cause civil consequences or crystallize liability, and thus are not subject to revision under the relevant section of the statute.

Issues: Whether a Special Audit Report submitted under the Act and an order initiating a formal inquiry constitute 'decisions' or 'orders' amenable to revisional jurisdiction, and whether they satisfy the requirements of natural justice at the preliminary stage.

Ratio Decidendi: Audit findings are preliminary observations and not adjudicatory determinations. Revisional jurisdiction under the subject statute is limited to decisions that have reached a stage where legal consequences flow and rights are determined. Preliminary procedural steps are not 'orders' and cannot be quashed prematurely, as the law provides for a subsequent inquiry stage for testing evidence and hearing parties.

Result: Writ petition allowed; impugned order set aside and order initiating inquiry restored.