The Bombay High Court held that the redevelopment of a Co-operative Housing Society in Mumbai, including the appointment of a developer, cannot be interfered with merely on the ground of procedural lapses in government-issued guidelines. The Court, while adjudicating a petition challenging the issuance of a Letter of Intent in favor of a developer by the Society, observed that the guidelines under Section 79(A) of the Maharashtra Co-operative Societies Act, 1960, and the 2019 Government Resolution are directory and not mandatory, emphasizing that the majority decision of the society members prevails when procedural transparency is substantially maintained.
Brief Facts:
The petitioner, an ex-Chairman of a Co-operative Housing Society, opposed the redevelopment process initiated by the Society, alleging that the appointment of a developer was done without following the mandatory tender process as required under the State Government notification. After his removal from the post of Chairman, the Society allegedly issued a Letter of Intent favoring a particular developer without inviting competitive bids. The petitioner approached the Deputy Registrar and later the High Court, claiming mala fide intentions and seeking directions to conduct a fresh redevelopment process under official supervision.
Contentions of the Petitioner:
The petitioner contended that the Society bypassed Section 79(A) of the MCS Act and the guidelines in the 2019 GR, claiming unfair preference to the developer and unilateral decision-making post his removal. Counsel for the respondents, including the Society and the developer, submitted that the redevelopment process was duly conducted under the supervision of an Authorized Officer appointed by the Deputy Registrar. They highlighted that all society members, except the petitioner, had consented to the redevelopment, and the process complied with the broad guidelines issued under the 2019 GR. Further, they emphasized that the GR and Section 79(A) directives are directory in nature and not mandatory.
Observations of the Court:
The Court noted that the petitioner himself had previously communicated to society members about the proposed redevelopment under his signature, calling for their inputs. It observed that the Special General Body Meeting was conducted in the presence of an Authorized Officer, videographed, and a report submitted to the Deputy Registrar, who granted a no-objection certificate for the redevelopment.
The Court referred to earlier precedents, including Maya Developers v. Neelam R. Thakkar and Harish Arora v. Deputy Registrar, underscoring that compliance with the guidelines is sufficient if participation, notice, and disclosure are ensured. The Court clarified that the 2019 GR under Section 79(A) is directory, providing a framework to ensure fair and transparent processes. Procedural lapses, by themselves, do not constitute an actionable wrong unless they undermine the objective of the guidelines. The Court emphasized, "Where majority decisions are consistent with material compliance with the provisions of the Directive, that is surely enough. The autonomy of the cooperative society in decision-making is paramount."
The decision of the Court:
The High Court dismissed the Writ Petition, holding that the appointment of the developer by the majority of society members waslawful, conducted under the supervision of an Authorized Officer, and did not warrant interference. The Court clarified that disputed questions of fact raised by the petitioner could not be adjudicated in a Writ Petition. Consequently, the Writ Petition was dismissed as devoid of merit.
Case Title: Devendra Kumar Jain Vs. State of Maharashtra & Ors.
Case No.: Writ Petition (L) No.7536 of 2025
Coram: Justice Suman Shyam, Justice Manjusha Deshpande
Advocate for Petitioner: Adv. Manoj Upadhyay, Rakesh Mishra
Advocate for Respondent: Adv. Rakesh Pathak (AGP), Mukesh Vashi, Senior Advocate, Vaishali Sanghavi, Pratik Shetty, Palak Mehta, Prachi Parmar, Ameet Mehta, Abhishek Sawant, Karan Bhargava
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