Separate Society Can't Be Registered Without Statutorily Bifurcating Existing One Under Maharashtra Cooperative Societies Act: High Court

The safeguards under the Maharashtra Cooperative Societies (MCS) Act for division of an existing housing society into two or more cannot be bypassed, the Bombay High Court made it clear recently while quashing an order registering a separate society comprising of 10 shops of a building, which was carved out of an existing society.Single-judge Justice Amit Borkar held that without statutorily bifurcating an existing society under the MCS Act, the Deputy Registrar cannot register a separate society. "Physical separability by itself does not determine the legal position. Such an inquiry may become relevant where the competent authority exercises statutory power of division or bifurcation under Sections 17 and 18 of the MCS Act, after following due procedure and recording reasons. In the present case, there is no order of bifurcation. The original society continues to subsist. In the absence of a statutory division of the existing society, the authorities could not have permitted registration of another society in respect of premises which already form part of a duly registered cooperative society," the judge said in the order passed on February 12.The judge said that the registration of a society under section 9 cannot be used as a means to indirectly fragment an existing society. "If such a course is permitted, it would defeat the scheme of the Act and create overlapping jurisdictions over the same property. The statute contemplates orderly formation, alteration, and division of societies through defined procedures. Those safeguards cannot be bypassed," the judge held.The bench was dealing with a plea filed by Sarita Cooperative Housing Society Ltd. which comprised of a building including 56 residential units and 10 shops. The society was registered since 1986. However, the owners of the 10 shops resigned from the said society's membership and applied for a separate registration of their own formed society in 2010. The Deputy Registrar therefore, called for objections on the application made by the shop owners. To this, the petitioner society contended that the shop premises form an 'inseparable part' of a single integrated structure and that mere fulfilment of the minimum numerical requirement prescribed for registration cannot justify registration of a new cooperative society when the premises are already included within an existing registered society.The said objections were however, rejected and the new society was registered, carving it out from the existing housing society. Justice Borkar in his order, noted that the petitioner society was in existence since 1986 and for more than two decades, the building stood governed by one registered society. "The proposal for forming a separate society came much later, in the year 2010. The record further shows that the entire structure, consisting of 10 shops and 56 flats, was constructed under a single sanctioned building plan. There is no material to suggest that the shops were conceived or approved as a separate and independent unit. The building is one composite structure, both in design and in legal character. When a society is formed and registered in respect of a building constructed under one sanctioned plan, all units forming part of that plan ordinarily fall within its fold, unless lawfully separated in accordance with statutory procedure," the judge held. In his order Justice Borkar opined that the authorities failed to appreciate the legal effect of the prior registration of the petitioner society and the absence of any order under Sections 17 or 18. "By treating a portion of the same building as an independent structure without a lawful process of bifurcation, the authorities have misdirected themselves in law. The result is that two societies now claim authority over different parts of one integrated building, which the statute does not contemplate without proper division. This approach amounts to a misapplication of the provisions of the MCS Act and has led to an erroneous exercise of jurisdiction. The impugned orders, therefore, cannot be allowed to stand," the judge held. With these observations, the bench quashed and set aside the order of the Deputy Registrar. Appearance:Advocates Kishor Tembe and Madhavi Nalawade appeared for the Petitioner Society. Assistant Government Pleaders SD Chipade, Mamta Shrivastava and VR Raje represented the State Authorities. Case Title: Sarita Cooperative Housing Society Ltd. vs Minister for Cooperation & Textile Department (Writ Petition 3541 of 2015)Citation: 2026 LiveLaw (Bom) 65Click Here To Read/Download Order

Separate Society Can't Be Registered Without Statutorily Bifurcating Existing One Under Maharashtra Cooperative Societies Act: High Court

Narsi Benwal

Tags