The Bombay High Court delivered a significant judgment clarifying the scope and limits of authority of an authorised officer appointed under Section 88 of the Maharashtra Cooperative Societies Act. The case arose from a dispute concerning the management of a cooperative housing society, in which an authorised officer was initially appointed to conduct an inquiry into alleged irregularities committed by the society’s managing committee. Following the initiation of the inquiry and framing of charges against the managing committee members, the Deputy Registrar of Cooperative Societies issued an order replacing the authorised officer with a new officer. Despite this substitution, the original officer submitted his inquiry report, which subsequently formed the basis for a recovery certificate issued against the society members.
The main issue before the High Court was whether an authorised officer, once replaced, could continue to exercise powers vested under the original authorisation, including submitting inquiry reports and initiating consequential proceedings. The Court emphasised that the authority of an authorised officer is derived entirely from the official appointment order. Once that appointment is withdrawn or a new officer is authorised to conduct the inquiry, the original officer becomes functus officio, meaning he no longer possesses the legal competence to act in the matter. The Court noted that any act undertaken by a replaced officer after his authority has ceased is void ab initio and cannot confer any legal validity on subsequent proceedings, including inquiry reports, recovery certificates, or enforcement actions.
In applying the doctrine of functus officio, the Court highlighted that an authorised officer’s role is tied exclusively to the mandate of the appointing authority. Upon replacement, the officer’s powers automatically terminate, irrespective of whether he has actual knowledge of the substitution or whether the inquiry had commenced prior to the replacement. The Court held that this principle is fundamental to maintaining the integrity and legality of quasi-judicial proceedings under the Maharashtra Cooperative Societies Act, ensuring that all actions are performed by officers with current lawful authority.
The High Court also clarified that the competent authority’s decision to replace an authorised officer is generally not subject to interference, provided the substitution is carried out in accordance with statutory provisions and does not violate principles of natural justice. Exceptions may arise only where the replacement involves manifest illegality, mala fide conduct, or deprivation of a party’s right to be heard. In this case, the replacement was validly executed, and there was no evidence to suggest procedural impropriety.
As a result, the High Court declared the inquiry report submitted by the original officer after his replacement as illegal and void. Consequently, any recovery certificate or enforcement action based on that report was also set aside. The Court directed that a fresh inquiry be conducted by the newly appointed authorised officer, who is empowered to proceed with the existing records but must ensure that all parties are afforded an opportunity to present their case anew. This judgment underscores the principle that statutory authority is time-bound and contingent on valid appointment, and it reinforces the legal safeguards necessary to uphold due process in the functioning of cooperative societies.
The ruling serves as a clear precedent, affirming that once an authorised officer is replaced, he ceases to have any power to act, and any actions taken thereafter are legally ineffective. It provides clarity for authorities under the Maharashtra Cooperative Societies Act and reinforces the importance of compliance with procedural norms in quasi-judicial proceedings.
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