Bombay High Court · Oral order · 03.02.2023
Fabricated AGM records: petition dismissed with ₹3 lakh costs
The Bombay High Court upheld the five-year disqualification of a housing society’s secretary under Section 75(5) for not holding AGMs, found that the AGM documents he produced for the first time in court appeared to be fabricated, and dismissed his petition with costs of ₹3 lakh.
Key points
- An inspection under Section 89A found that the AGMs for 2017-18 and 2018-19 were not held and the audited accounts were not placed before members; the secretary was disqualified for five years under Section 75(5), and the revision failed.
- AGM “records” produced for the first time before the High Court, unsupported by any affidavit or attendance details, were held to be an attempt to create a record and mislead the Court.
- The managing committee holds a fiduciary position; failure to hold the AGM without reasonable excuse justifies disqualification. The petition was dismissed with ₹3,00,000 costs payable to the State Legal Services Authority.
The facts
On an inspection ordered under Section 89A of the MCS Act, the inspector reported in January 2022 that the managing committee of Paras Nagar CHS had not called the AGM for 2017-18 by 30 September 2018, and that the AGM proposed for 2018-19 was not held, so the audit report, financial statements and balance sheet up to 2018-19 were never approved or given to members. The Deputy Registrar issued a show-cause notice under Section 75(5). No specific reply was filed; written submissions claimed the AGMs had been held and that the action was meant to obstruct elections. In March 2022 the Deputy Registrar disqualified the secretary and other office-bearers for five years. The treasurer had admitted in writing that the AGMs were not held. The Divisional Joint Registrar dismissed the secretary’s revision.
What the Court held
The Court set out Section 75 in detail and held that the concurrent findings could not be faulted: no record of any AGM was produced before the inspector or the authorities. Documents placed before the High Court for the first time, without affidavit or attendance particulars, appeared to be bogus and were an attempt to mislead the Court. The record also showed financial irregularities, including a cheque of ₹5.3 lakh from the society’s account in favour of the petitioner’s son. The Court said the committee is the repository of the members’ trust, and a reasonable excuse under Section 75(5) must be judged objectively; here there was none. Describing the petition as frivolous, it dismissed it with costs of ₹3 lakh to be deposited with the Maharashtra State Legal Services Authority within four weeks, failing which the amount would be recovered as arrears of land revenue.
Why it matters
The order confirms the Registrar’s power to disqualify office-bearers who do not hold AGMs, and warns that courts will deal severely with litigants who produce manufactured minutes or attendance records. The ₹3 lakh was costs imposed on dismissal of the petition, not a statutory penalty. See also the Registrar orders under Section 75(5) from Pune (2023) and MHADA (2024).
Twenty-four-page order in English (scanned copy). This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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