Bifurcation Of Cooperative Society In Maharashtra Does Not Require Prior Permission From CIDCO: Bombay High Court

The Bombay High Court held that bifurcation of a cooperative society under Section 18 of the Maharashtra Cooperative Societies Act, 1960, does not require prior permission from CIDCO, and that registration of a newly constituted society itself effects the necessary transfer of assets and liabilities as contemplated by the statute. The Court observed that importing an external approval requirement where the statute is silent would be contrary to the legislative scheme.Justice Amit Borkar was hearing writ petitions filed by Balaji Tower Cooperative Housing Society and others challenging the appellate order, which had set aside the Joint Registrar's decision directing bifurcation of Shree Ganesh CHS Ltd. (Respondent No. 4) into two separate societies. The petitioners contended that the two segments of the original society had, in practice, functioned independently for years, having separate access, separate electricity and water connections, distinct maintenance accounts and tax assessment. Hence, it was contended that bifurcation under Section 18 was therefore appropriate and lawful. The State and CIDCO, however, argued that CIDCO's prior permission was necessary because the land formed part of CIDCO's sanctioned layout and development plans.The Court noted that even though both plots were formally placed under one registration at the beginning, in day-to-day functioning, they never operated as one cooperative unit. All essential elements of cooperation are absent. There is no common management, no common access road, no shared expenditure, and no participation of Balaji Tower residents in the affairs of Shree Ganesh CHS Ltd.The Court examined the statutory scheme, in particular Sections 17 and 18 of the MCS Act, and noted that Section 17(2) contains a “notwithstanding” clause which overrides other enactments and that Section 18(5) provides for the effect of re-organisation or division of societies, including vesting of property and liabilities in the new entities upon registration. The Court observed that these provisions demonstrate Parliament's intent to make the Registrar's registration process self-sufficient for effecting transfers incidental to bifurcation; no further external sanction was prescribed. “If prior permission of CIDCO or any other authority was intended to be a condition for bifurcation, the Legislature would have expressly stated so. The Legislature has not done so. Courts cannot read into the statute something that is not written. The rule of interpretation is that when the language of the statute is plain and unambiguous, it must be given effect,” the Court observed.The Court further remarked that Respondent No. 4 had itself passed a resolution granting no objection to bifurcation. This shows that the members of the original society accepted the division. Hence, the Court held that no separate permission from CIDCO was required, and the Joint Registrar acted within jurisdiction when directing bifurcation. Accordingly, the High Court set aside the appellate order and restored the Joint Registrar's bifurcation order, concluding that the Joint Registrar had acted within jurisdiction in directing bifurcation and that the appellate order setting aside that decision was erroneous.Case Title: Balaji Tower Cooperative Housing Society Ltd. & Ors. v. State of Maharashtra & Ors. [WRIT PETITION NO.1218 OF 2023 WITH INTERIM APPLICATION NO.11989 OF 2025]Click Here To Read/Download Order

Bifurcation Of Cooperative Society In Maharashtra Does Not Require Prior Permission From CIDCO: Bombay High Court

Saksham Vaishya

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