If you suspect financial irregularities in the accounts of your housing society and the Managing Committee is not cooperating or providing transparent records, you have the right to escalate the matter. However, you must follow the procedure outlined under Section 83 of the Maharashtra Cooperative Societies (MCS) Act, 1960, and Rule 71 of the MCS Rules, 1961.
When Can You Request an Inquiry?
An individual member alone cannot file an application with the Registrar for a financial inquiry into the society’s affairs. To initiate an official inquiry:
- At least 1/5th of the total members of the society must jointly file an application.
- The application must be supported with sufficient evidence, such as suspicious financial records, unaccounted transactions, or denial of access to accounts.
Who Can Initiate an Inquiry?
Under Section 83 of the MCS Act, an inquiry can be initiated in the following ways:
- Suo motu by the Registrar.
- On a request from a federal or financing bank.
- Based on a special report filed by the society’s auditor.
- Through a valid application submitted by 1/5th of the members, supported with proper justification and documents.
- What Will the Registrar Do?
Upon receiving the application, the Registrar:
- May require the applicants to deposit an amount to cover the cost of the inquiry.
- Will evaluate the nature and seriousness of the allegations.
- May appoint an inquiry officer or auditor to conduct a detailed inspection.
The inquiry officer will have the power to:
- Examine records and financial books.
- Question current and past office bearers.
- Submit a detailed report to the Registrar.
Who Bears the Cost of the Inquiry?
The cost of the inquiry is decided based on the outcome:
- If the allegations are proven, the deposit will be refunded to the applicants. The Registrar may apportion the cost among the society, guilty office bearers, or even past members, depending on their involvement.
- If the allegations are false, vexatious, or malicious, the applicants will have to bear the full cost of the inquiry.
- If the allegations are not proved, but are not found to be malicious or false, the State Government will bear the cost.
Timeframe for Action
Once the inquiry report is submitted, the Registrar must pass final orders within six months. These orders may include directions for recovery, action against committee members, or remedial steps for better governance.
Why This Process Matters
This structured inquiry process is designed to protect members’ interests while preventing the misuse of complaints. It ensures that genuine cases of financial mismanagement, embezzlement, or misappropriation of funds can be investigated fairly and responsibly.
