Co-Operative Societies Act | Strangers Can Be Impleaded In Society Dispute If Necessary For Adjudication: Bombay High Court

The Bombay High Court has held that a Co-operative Court exercising powers under Section 94(3)(c) of the Maharashtra Co-operative Societies Act, 1960 can implead a person who is not covered by the categories enumerated under Section 91(1)(a) to (e), if such person's presence is necessary for the effective and complete adjudication of the questions involved in the dispute. The Court, however, cautioned that such power is not unbridled and cannot be exercised to enlarge the scope of the dispute or bring within the Co-operative Court's jurisdiction matters which it is otherwise incompetent to adjudicate.

Justice Sandeep V. Marne was hearing a writ petition challenging the orders of the Co-operative Court and the Co-operative Appellate Court directing the impleadment of a developer as a party to a dispute filed by members of a co-operative housing society. The petitioners had challenged resolutions passed by the Society's Special General Body and Managing Committee accepting a settlement proposal with the developer, contending that the resolutions drastically reduced the Society's entitlement to land. Although the dispute was instituted only against the Society and its former office bearers, the developer sought impleadment on the ground that the petitioners had made allegations of collusion against it. The Co-operative Court allowed the application, which was affirmed in revision by the Co-operative Appellate Court.

The petitioners contended that the developer was a stranger to the dispute and did not fall within any of the categories of persons specified under Section 91(1)(a) to (e) of the Act. The developer, on the other hand, submitted that Section 94(3)(c) conferred a wider discretion upon the Co-operative Court to add any person whose presence was necessary for effective adjudication of the dispute.

The Court held that Section 94(3)(c) operates independently of Sections 91(1) and 94(3)(a). It observed that the provision contemplates two distinct categories of persons: those who ought to have been joined as parties and those whose presence before the Court is necessary for effective and complete adjudication of the dispute. While the first category would ordinarily comprise persons falling within Section 91(1)(a) to (e), the second category is not confined to such persons.

Courts cannot give a narrow or restrictive meaning to language used in Section 94(3)(c) so as to circumscribe the power of impleadment conferred on a Co-operative Court to only such persons who are enumerated under Section 91(1)(a) to (e) or only a pendente-lite purchaser,” the Court observed.

The Court held that if the Legislature intended to restrict impleadment only to persons covered by Section 91(1) or pendente lite purchasers under Section 94(3)(a), it would not have used the expression "any person whose presence before the Co-operative Court may be necessary."

The Court clarified that impleadment under Section 94(3)(c) does not mean that the Co-operative Court acquires jurisdiction to adjudicate rights between the impleaded person and the parties to the dispute. Such impleadment is only to facilitate effective adjudication of the issues already involved. It cautioned that the power under Section 94(3)(c) must be exercised sparingly and cannot be used to introduce subject matters beyond the jurisdiction of the Co-operative Court or to throw the dispute outside its statutory jurisdiction.

Applying these principles, the Court noted that the petitioners themselves had alleged collusion between the Society and the developer in passing the impugned resolutions. It held that the developer's presence was necessary to enable the Co-operative Court to effectively adjudicate the challenge to the resolutions.

Accordingly, the Court dismissed the writ petition and upheld the orders of the Co-operative Court and the Co-operative Appellate Court directing impleadment of the developer as a party to the dispute.

Case Title: Shreesh Kumar v. Bramha Suncity Co-operative Housing Society Ltd. [Writ Petition No. 15261 of 2023]

Citation: 2026 LiveLaw (Bom) 320

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