The report of the 2-member commission headed by retired high court judge J A Patil came down heavily on those in authority describing the scam as a "bad precedent" which reflected "greed, nepotism and favouritism" by those associated with it.
The panel found 25 of the society's 102 members ineligible and 22 cases of benami purchase of flats.
The report said Adarsh society enjoyed political patronage of former chief ministers, Vilasrao Deshmukh, Sushil Kumar Shinde and Ashok Chavan, former revenue minister Shivajirao Nlengekar Patil, former minister for urban development Sunil Tatkare and former minister of urban development Rajesh Tope.
Ashok Chavan was the only chief minister charged in the scam by the CBI but governor K Sankaranarayanan had refused sanction to the investigative agency to prosecute him a few days ago.
The beneficiaries included politicians across the spectrum and their relatives.
Those found ineligible for ownership of flats included former Maharashtra assembly speaker Babasaheb Kupekar of NCP, senior Indian diplomat in US Devyani Khobragade, former Shiv Sena MP Suresh Prabhu and three relatives of former chief minister Ashok Chavan, who had to step down after the scam surfaced.
Chief minister Prithviraj Chavan said the decision on rejection of the findings of the inquiry commission was taken by the Cabinet "in the interest of the people".
He, however, refused to elaborate on how the Cabinet's decision was in larger public interest.
The much awaited report, which was submitted to the state government on April 18 this year was tabled in the House on the last day of the winter session on Friday.
The interim report was submitted to the state government on April 13, 2012 and the Action Taken Report (ATR) was tabled on the floor of the House on April 17, 2012.
The sources said while 12 others which include senior bureaucrats Jairaj Phatak and Pradeep Vyas will face court proceedings, charges against Chavan will be closed.
The CBI sources said they had collected detailed evidence against Chavan which was presented before the governor while seeking sanction against him.
CBI had alleged in its charge sheet that Chavan had increased the floor space index of the controversial Adarsh Society in lieu of two flats to his relatives.
Chavan also asked the society to take 40 per cent members from civilian category, when it was originally meant only for war veterans, CBI has alleged, adding that Chavan played a key role in the scam.
As to the issue of jurisdiction, it said defence ministry had forwarded a complaint to it, which led to the probe.
The Maharashtra government has taken a stand that CBI had no jurisdiction to probe the scam.
Chavan's mother-in-law Bhagvati Sharma, sister-in-law Seema Sharma and father-in-law's brother Madanlal Sharma have flats in the society.
CBI has filed charge sheet against Chavan and 12 others for criminal conspiracy, cheating and criminal misconduct under Indian Penal Code and also under Prevention of Corruption Act.
BJP targets Maharashtra CM
The BJP targeted Maharashtra chief minister Prithviraj Chavan on Friday over the state cabinet rejecting the final report of the state-appointed commission which probed the Adarsh Housing Society scam.
"The corrupt face of Congress-NCP has been exposed, with the government rejecting the report," Maharashtra state BJP president Devendra Fadnavis told reporters here.
"By rejecting this report, Chavan, who was brought to Maharashtra, as a clean person, has shown that he is also a part of this corruption, along with other three former chief ministers who have been named as corrupt by this report," Fadnavis said.
Asked about the BJP's strategy to counter Maharashtra's Congress-NCP led government on the Adarsh issue, Fadnavis said, "We are exploring all legal options. We will go to the court against the corrupt and also to the people, because ultimately, after rejection of this report, people know the facts. We will expose Congress and NCP before the people".
The Congress and the NCP seem to have colluded, to reject the Adarsh report, the BJP leader said.
Replying to a query about Maharashtra governor K Sankaranarayanan's reported refusal to permit the CBI to prosecute former state chief minister Ashok Chavan for the Adarsh housing scam, Fadnavis said, "So far, we haven't got any information officially on whether the governor gave permission or not".
"However, if he has indeed not given permission, the BJP will definitely explore all legal options. We will fight till the high court and Supreme Court to ensure that the guilty are punished," he said.
The two-member commission has reportedly mentioned names of former Maharashtra chief ministers and some Nationalist Congress Party politicians, he said.
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