The Rajasthan High Court has set aside the appointment of former Chief Justice of India Sanjiv Khanna as a one-man commission to adjudicate claims and counter-claims concerning properties attached in connection with the liquidation of Adarsh Credit Co-operative Society Limited.
A Division Bench comprising Justice Munnuri Laxman and Justice Sangeeta Sharma, while deciding a batch of special appeals, held that the appointment could not be sustained as the dispute was already pending adjudication before the Single Judge and the statutory scheme under the Multi-State Cooperative Societies Act, 2002 provided mechanisms for resolving such issues.
The appeals arose from interim orders passed in writ petitions concerning attachment of properties and directions to maintain status quo. Subsequently, the Single Judge had constituted a Special Committee headed by retired CJI Sanjiv Khanna, which was challenged before the Division Bench.
The respondents contended that the appointment of the retired CJI was a consensus order. The appellants disputed this, submitting that the appointment was not based on consensus but was an exercise of discretion by the Single Judge.
Examining the impugned order dated July 28, 2026, the Division Bench noted that it did not refer to any specific agreement between the parties for appointing a retired CJI to adjudicate their disputes. The Bench recorded that the appellants’ principal grievance was that such an appointment violated the statutory scheme under the Multi-State Cooperative Societies Act, 2002.
The Bench observed that the 2002 Act prescribes its own mechanism for realisation of assets of a defunct society and provides for the liquidator to take custody of the society’s assets. The dispute in the present matter arose from the liquidator’s claim that the properties under attachment had been purchased from the society’s funds.
However, the Division Bench specifically declined to decide at this stage whether the liquidator had the authority to attach the properties, since the sustainability of the attachment orders was already pending before the Single Judge.
While the Bench refused to disturb the attachment and status quo arrangements at this stage, it held that the appointment of the retired CJI as a one-man commission could not continue. The Court held:
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“We are of the view that until the adjudication is done in order to safeguard the properties in question, we are not inclined to interfere in the order of attachment or the order granting status quo by the learned Single Judge. However, we are inclined to set aside the order of appointing the retired Hon’ble Chief Justice of India as a one man commission to adjudicate the claims and counter claims of the parties to the writ petitions.”
The Bench further found that the liquidator ought not to have directed a change in the name of the owner while the adjudication was pending. It directed that status quo as it stood on July 9, 2026 shall continue.
The appeals were accordingly allowed and disposed of, with the matters remitted to the Single Judge for hearing and decision of the pending writ petitions.
