Hello @ChandreshModi-8300,
User 2 (User administrator) can update the membership of both the groups, regardless of whether he is owner of the group or not because User administrator role has the permission to update group membership. He can add users, devices, other groups to any group in Azure AD. Below is the permission that user administrator role has:
microsoft.directory/groups/members/update - Update groups.members property in Azure Active Directory.
On the other hand User1 (Cloud Device administrator) can add members to only Group1 as he is the owner of that group and he can add users, devices and other groups only to Group1.
- With Cloud Device administrator role, you can Delete/Disable/Enable devices in Azure Active Directory but you cannot Add/Remove Users in the directory.
- With User administrator role, you can Add/Remove users in Azure AD but cannot Delete/Disable/Enable the devices.
Read more:
Cloud Device Administrator permissions
User Administrator permissions
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