Authority: High Court of Judicature at Bombay, Civil Appellate Jurisdiction

Order Date: 18 September 2026 (judgment pronounced); orders dated 20 Feb 2025, 8 July 2025 and 18 Feb 2025 (2026) were set aside.

Case Overview

  • Parties: Petitioner – Swa‑Griha Co‑operative Housing Society Ltd (a cooperative housing society formed on 10 Jan 1968). Respondents – State of Maharashtra & Ors., Joint Registrar Co‑op. Societies, Deputy Registrar Co‑op. Societies, MHADA, Atharva CHS Ltd (proposed new society for Wings A & B), Vilas Kate, Sugee Developers Pvt Ltd (developer).
  • Background: MHADA owned Land‑1 (1125.84 sq yd ≈ 941.31 sq m) and granted a 99‑year lease (22 Nov 1980) and later sold title (22 Nov 1982) to Swa‑Griha. The society comprised 32 members occupying 32 flats (~322 sq ft each). MHADA approved joint redevelopment of Land‑1 together with adjoining Land‑2 (2100 sq m) and Land‑3 (388.99 sq m). A Development Agreement dated 5 Aug 2020 with Sugee Developers covered 3430.30 sq m; a Tripartite Agreement (2 Dec 2021) provided 75 flats to MHADA and required the society to admit those allottees as members.
  • Construction: Sugee Developers built Wings A, B, C, D; Occupancy Certificate issued 12 Jan 2024; Full Occupancy Certificate 14 Mar 2024. A list of flat purchasers was forwarded to the society; many purchasers were enrolled as members.
  • Dispute: 71 flat purchasers of Wings A & B (Chief Promoter Vilas Kate) applied to the Deputy Registrar for registration of a separate society – Atharva CHS Ltd – on 20 Feb 2025. The Deputy Registrar granted registration despite the existence of Swa‑Griha. The society appealed to the Joint Registrar (order 8 July 2025) and then to the Minister of Cooperation (order 18 Feb 2025 (2026)), both of which dismissed the appeals.
  • Petitioner’s Contentions: (i) Registration of a new society under Section 9 MCS Act is impermissible when an existing society already governs the building; the correct remedy is bifurcation under Sections 17/18. (ii) Only 71 signatures were obtained, below the 5 % threshold (120 signatures required for 240 flats). (iii) 72 flat purchasers of Wings A & B were already members of Swa‑Griha, showing the Deputy Registrar acted in ignorance. (iv) The building shares common amenities – podium parking (10 floors), water tank, electricity meter, generator, fire system, entrance, gymnasium, recreational ground – making separate societies impractical. (v) Development Agreement and Sale Agreements expressly required flat purchasers to become members of Swa‑Griha; contractual undertakings cannot be ignored.
  • Respondent‑4’s Contentions: (i) The three authorities correctly found that Wings A & B constitute a distinct structure on Land‑2 (2100 sq m) with separate utilities, meters, water tanks, pumps, fire systems, parking allocations, and therefore may form a separate society. (ii) Section 9, read with Section 154B‑2, permits registration when conditions are satisfied; no statutory prohibition exists.
  • Court’s Legal Analysis:
  • The MCS Act’s scheme mandates that when a cooperative housing society already exists for a building, any division must proceed via Section 17 (member‑passed resolution) or Section 18 (Registrar‑initiated bifurcation).
  • Section 9 cannot be used to “indirectly fragment” an existing society; doing so would defeat the Act’s purpose and create overlapping jurisdiction.
  • The Deputy Registrar acted without knowledge of the existing society and ignored the petitioner’s objection dated 6 Feb 2025 – a procedural vitiation.
  • The Joint Registrar and Minister failed to remand the matter for fresh adjudication despite the clear error.
  • The Court examined statutory provisions, prior judgments (Kritika Jewels, Cosmopolitan III, Sadguru Universal, Sarita, Madhur Naina) and held that mere management disputes do not justify bifurcation; physical inseparability of utilities and common amenities further precludes separate societies.
  • Circular dated 30 July 2004, cited by the authorities, is merely administrative guidance and not law; it cannot override the statutory scheme.
  • Conclusion: The registration of Atharva CHS Ltd was illegal; the proper avenue would have been bifurcation under Sections 17/18, which was not pursued.

Final Outcome

  • Order dated 20 Feb 2025 (Deputy Registrar) granting registration of Atharva CHS Ltd is set aside.
  • Order dated 8 July 2025 (Joint Registrar) dismissing the appeal is set aside.
  • Order dated 18 Feb 2025 (2026) (Minister) dismissing the revision is set aside.
  • Consequently, the registration of Atharva CHS Ltd is cancelled.
  • The writ petition is allowed; no costs awarded.
  • A stay of six weeks was granted to the respondent‑4 society pending registration in 2024, but the judgment remains operative thereafter.

Topics: Cooperative Housing Law, Society Bifurcation, MCS Act Interpretation