Bombay High Court
Prakash Raghunath Saave vs The State Of Maharashtra Thr ... on 4 March, 2025
2025:BHC-AS:10391
Megha 16_wp_13147_2024_fc.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.13147 OF 2024
Prakash Raghunath Saave
(Promoter of deregistered Harmony
Plaza Premises Co-operative Society) ...Petitioner
V/s.
1. The State of Maharashtra
through Co-operation Minister
2. Divisional Joint Registrar,
Co-operative Societies, Konkan
Division, Navi Mumbai.
3. Assistant Co-operative Registrar,
Co-operative Societies Palghar
4. M/s. Jainam Builders Bhagidari
Sanstha By & through its partner
Navinchandra Kishanlal Shah
5. Dhananjay Hiraji Sankhe
6. Sou. Madhavi Hiraji Sankhe
7. Sou. Bhanumati Hirichandra
Kansara
MEGHA
8. Sudhir Harishchandra Patil
SHREEDHAR
PARAB
Digitally signed by
MEGHA
9. Shohilal Nathulal Sutar
SHREEDHAR PARAB
Date: 2025.03.05
18:49:18 +0530
10.Smt. Meena Avinash Patil
11.Smt. Sharla Vasant Kavar
Page No. 1 of 37
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12. Durgeshkumar Harswarup
Agrawal
13. Smt. Trupti Manish Patil
14. Smt. Renuka Shantilal Jain
15. Shantilal Kalulal Jain
16. Pritam Kamlakar Gharat
17. Aashish Kamlakar Gharat
18. Smt. Aasha Ashok Pardeshi
19. Shri. Nilesh Bacchubhai
Bhanushali
20. Shankar Gumansingh
Rajpurohit
21. Smt. Bandhini Balkrishna Patil
22. Smt. Vidyakant Tilakdhari Jha
23. Smt. Jayanti Mithalal Rathod
24. Smt. Kamla Bherulal Jain
25. Smt. Kanchan Santosh Jain
26. Mahendrashingh Bhawarsingh
Bhatti
27. Smt. Shantidevi Hukaram Mali
28. Chatarsing Bhavanisingh Tanvar
29. Ramjan Ummed Ali Gilani
30. Smt. Vidyakumari Pukhraj Mali
31.Virendra Jagaram Chaudhari
32. Smt. Pushpadevi Babulal Jain
33. Tansukhlal Bhawarlal Jain
34. Mohan Meghaji Chaudhari
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35. Smt. Priya Mohan Chaudhari
36. Smt. Vandana Vasudeo Naik
37. Smt. Tejal Rahul Naik
38. Premchand Ramchandra Matlani
39. Shabir Ajij Memon
40. Shankarsingh Gumnamsingh
Rajpurohit
41. Smt. Anita Kumari Shankarsingh
Rajpurohit
42. Roshan Tulshiram Prajapati
43. Udyan H. Saave
44. Vasudeo Babu Naik
45. Rahul Naik
46. Rajendra Laxman Churi
47. Smt. Dhanashree Tabib
48. Tarun Prakashsingh Ponda
49. Ramanbhai Shyamji Shah
50. Santosh Aatmaram Sankhe
51. Mahesh G. Rana
52. Smt Smita Raajen Gandhi
53- Smt. Shanti Navin Mithiyas
54. Nevhil Henni Maithiyas
55. Rajesh Bhairulal Jain
56. Vilas Harishchandra Churi
57. Smt. TabsumNasimulgani Mulla
58. Ganpatsingh Vasantsingh
Rajput
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59. Smt. Jaya Premchand Matlano
60. Roshan Tulsiram Prajapati
61. Yatindra Haricharan Sharma
62. Smt. Manju Sharma
63. Rakesh Navinchandra Shah
64. Rakesh Sohanlal Jain
...Respondents
______________
Mr. Sarthak S. Diwan for the Petitioner.
Mr. Y.D. Patil, AGP for Respondent Nos.1 to 3-State.
Mr. Rohan Savant with Mr. Gaurav Lele for Respondent No.4.
______________
CORAM : SANDEEP V. MARNE, J.
Judgment reserved on : 18 February 2025.
Judgment pronounced on : 04 March 2025.
Judgment :
1) The broad issues that arise for consideration in the
present Petition are as under:
(i) Whether it is lawful for the Registrar to prescribe, by
way of a Circular, higher number of persons than the
one prescribed in sub-section (1) of Section 6 of the
Maharashtra Co-operative Societies Act, 1960 (MCS
Act), who need to sign an application for registration of
a cooperative society?
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(ii) If the answer to the above question is in the affirmative,
whether the prescribed percentage of flat purchasers in
such Circular can be applied in relation to the total
number of flats sanctioned and/or completed or whether
the same needs to be applied in relation to the total
number of flats sold at the time of filing of application
for registration of the society?
2) Above questions arise in the light of challenge set up by
the Petitioner to order dated 21 August 2024 passed by the
Hon'ble Minister (Co-operation) dismissing the Appeal preferred
by him and confirming the order dated 8 November 2023 passed
by the Divisional Joint Registrar of Co-operative Societies,
Konkan Division, Navi Mumbai, allowing Miscellaneous
Application No.39 of 2023 filed by Respondent No.4-Developer
thereby ordering de-registration of cooperative society formed by
the flat purchasers, which was registered vide Certificate dated
26 July 2017.
3) Brief facts leading to the filing of the present Petition are
that Respondent No.4-M/s. Jainam Builders has constructed a
building named- Harmony Plaza Premises on land bearing
Survey No.112/3/1, opposite S.T. stand, Boisar Tarapur Road,
Boisar (West), Taluka and District-Palghar. Initially the
construction of the building was commenced by another
developer, M/s. Harmony Developers, which was a partnership
firm and which had completed construction of 25 units in the
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building. M/s. Harmony Developers entered into development
agreement dated 18 August 2008 with Respondent No.4- M/s.
Jainam Builders and transferred development rights in the land
in favour of Respondent No.4. This is how Respondent No.4
became promoter of the said building and constructed 198 units
in the building including the initial 25 units constructed by M/s.
Harmony Developers. It appears that by the year 2017,
Respondent No.4 had sold 83 units out of total 198 units
constructed in the building. The shop purchasers decided to form
a cooperative Society and preferred an application for
registration thereof before the Assistant Registrar, Co-operative
Societies, Palghar Taluka. The Assistant Registrar issued
certificate of registration dated 26 July 2017 thereby registering
Harmony Plaza Premises Co-operative Society. Respondent No.4
got aggrieved by registration of the Society formed by the unit
purchasers and accordingly filed Miscellaneous Application
No.39 of 2023 before the Divisional Joint Registrar seeking de-
registration of the society under the provisions of Section 21A of
the MCS Act. The application was opposed by the Society as well
as by the shop purchasers by filing reply. The Divisional Joint
Registrar allowed the application preferred by Respondent No.4
by order dated 8 November 2023 and directed de-registration of
the society with further direction for appointment of Official
Assignee to look after affairs of the society. Petitioner, who was
the Chief Promoter of the Society filed appeal before the Hon'ble
Minister challenging order dated 8 November 2023. The appeal
is however rejected by the Hon'ble Minister by order dated 21
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August 2024. Accordingly, Petitioner has filed the present
Petition challenging the decisions of the Divisional Joint
Registrar and the Hon'ble Minister.
4) Mr. Sarthak Diwan, the learned counsel appearing for
the Petitioner would submit that the Divisional Joint Registrar
has grossly erred in directing de-registration of the society
ignoring the position that Respondent No.4-Developer was
deliberately avoiding formation and registration of the society
with a view to avoid payment of maintenance in respect of unsold
units to the society. He would rely upon provisions of Section 6 of
the MCS Act in support of his contention that requisite number
of persons for registration of a housing society is only 10 whereas
83 promoters had applied for registration of the society. He would
rely upon judgment of this Court in Janabai Shripat Patil
and Ors. V/s. The Hon'ble Minister for Co-operation and
Ors.1 in support of his contention that administrative circular
issued by the Registrar cannot override requirement of the
statute. He would also rely upon judgment of this Court in
Padmavati Construction Co. & Ors. V/s. State of
Maharashtra and anr.2
5) Mr. Diwan would then refer to provisions of Circular
dated 23 March 2016 and submit that even if the said Circular is
held to be applicable, the prescribed percentage of flat
purchasers will have to be necessarily considered in relation to
Writ Petition No.8200 of 2023, decided on 21 November 2024.
(2007) 1 Bom CR 609
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the total flats sold and not in relation to total flats constructed/
sanctioned. He would submit that the judgment of this Court in
Mukesh Makandas Mehta Vs. The State of Maharashtra 3
conclusively rules that prescribed percentage under Section
154B-2 of the MCS Act is referrable to the number of flats sold
and not the number of flats sanctioned by the Planning
Authority. He would submit that though the judgment in
Mukesh Makandas Mehta (supra) is rendered in the context of
provisions of Section 154B-2 of the MCS Act, the same analogy
would apply to the present case, which deals with a situation
prior to coming into force of Section 154B-2 in the MCS Act. He
would submit that as on the date of filing of application for
registration of Society, only 83 shops were sold and all the shop
owners had participated in registration of the Society. Thus, the
application was preferred by 100% shop purchasers thereby
meeting the requirement prescribed under the circular dated 23
March 2016. He would thus pray for setting aside orders passed
by the Divisional Joint Registrar and the Hon'ble Minister.
6) Petition is opposed by Mr. Rohan Savant, the learned
counsel appearing for Respondent No.4. He would submit that
under Section 6 of the MCS Act, Registrar has jurisdiction to
prescribe higher percentage of persons needed for formation and
registration of the Society. That in exercise of such power, the
Registrar issued Circulars dated 29 November 2010 and 23
March 2016 prescribing 60% and 51% of unit purchasers
2024 SCC Online Bom 1296
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respectively, in relation to total number of flats sanctioned or
constructed in a building. That the said Circulars have been
issued by the Registrar in exercise of powers conferred upon him
under Section 6 of the MCS Act and are accordingly binding. So
far as the judgment of this Court in Janabai Shripat Patil
(supra) Mr. Savant would submit that same is rendered in
ignorance of provisions of sub-section (1) of Section 6 of the MCS
Act as well as in ignorance of judgment of Division Bench of this
Court in Anil Jadwani and Ors. V/s. The State of
Maharashtra and Ors.4, and is accordingly per incuriam. That
the judgment in Padmavati Construction Co. (supra) merely
contains a stray observation about administrative circular is not
overriding requirement of the MCS Act, which observation again
is made in ignorance of provisions of sub-section(1) of Section 6
of the MCS Act. He would submit that after judgment in
Padmavati Construction Co. (supra) the Division Bench has
rendered the judgment in Anil Jadwani (supra) recognising
jurisdiction of the Registrar to issue circular prescribing
requirement of higher number of persons than 10 for registration
of the society. He would submit that in Anil Jadwani (supra)
this Court held that the earlier circulars of 2 May 1980 and 24
July 1992 were not issued in exercise of amended provisions of
sub-section (1) of Section 6 of the MCS Act and were held to be
inoperative. That taking note of judgment of Division Bench in
Anil Jadwani (supra) the Registrar issued circular dated 29
November 2010 in exercise of power under provisions of sub-
Writ Petition No.660 of 2010, decided on 6 October 2010.
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section (1) of Section 6 of the MCS Act prescribing that 60% of
the purchasers of units constructed or sold must apply for
registration of society. That the percentage was subsequently
reduced vide circular dated 23 March 2016 to 51%. He would
submit that both the circulars dated 29 November 2010 and 23
March 2016 thus have statutory force.
7) Mr. Savant would submit that total number of shops in
the building are 198 and therefore, 83 shop purchasers could not
have applied for formation and registration of co-operative
Society, which is in the teeth of circular dated 23 March 2016. He
would submit that provisions of Section 154B-2 of the MCS Act
has no application to the present case as the said provision is
brought into effect on 9 March 2019. Even under Section 154B-2
of the MCS Act, either 5 persons or 51% of total number of flats
as per sanctioned plan, whichever is higher, is required for
formation of registration of society. He would submit that Section
154B-2 merely gives statutory flavour to the requirement
prescribed in the circular dated 23 March 2016. He would submit
that ratio of the judgment in Mukesh Makandas Mehta (supra)
cannot be made applicable in respect of the requirement
prescribed in the circular dated 23 March 2016. That the
judgment in Mukesh Makandas Mehta (supra) is rendered
while interpreting the provisions under Section 154B-2 of the
MCS Act where the language is entirely different than the
language employed in circular dated 23 March 2016. Mr. Savant
would accordingly submit that the concurrent findings recorded
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by the Divisional Joint Registrar and the Hon'ble Minister do not
warrant interference by this Court in exercise of jurisdiction
under Article 227 of the Constitution of India. He would
accordingly pray for dismissal of the Petition.
8) I have also heard Mr. Patil, the learned AGP for
Respondent Nos.1 to 3-State, who opposes the Petition and
supports the orders passed by the Divisional Joint Registrar and
the Hon'ble Minister (Cooperation).
9) Rival contentions of the parties now fall for my
consideration.
10) In the present case, the Divisional Joint Registrar has
exercised jurisdiction under the provisions of Section 21A of the
MCS Act for directing de-registration of the society by recording
satisfaction that there was misrepresentation at the time of
registration of the Society by the applicants. The Divisional Joint
Registrar relied upon report submitted by the Assistant
Registrar on 20 January 2020. That report reflected that though
sanctioned plan approved construction of only 174 flats /shops,
total number of 198 flats/shops are actually constructed in the
building. That though there are 40 residential flats in the
building, the Society is registered as 'premises society'. The
report further indicated that since 174 flats are sanctioned in the
approved plans, 104 flats/shops representing 60% of total flats
sanctioned ought to have participated in proposal for formation
of Society, whereas only 83 promoters participated in the said
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proposal. The Divisional Joint Registrar, after taking into
consideration the report of the Assistant Registrar, held that the
promoters had produced false information and documents while
seeking registration of the Society. The Divisional Joint
Registrar accordingly directed de-registration of the Society
mainly on the ground that 60% flat/shop purchasers were not
part of the proposal as required under circulars dated 29
November 2010, 23 March 2016 and 3 March 2017.
11) The findings recorded by the Divisional Joint Registrar
have been confirmed by the Hon'ble Minister referring to
Circulars dated 29 November 2010 and 23 March 2016. The
Hon'ble Minister however taken into consideration reduced
requirement of '51%' prescribed in the circular dated 23 March
2016, which was erroneously considered as '60%' by the
Divisional Joint Registrar. The Hon'ble Minister held that since
total units are 198, the requisite number of 51% persons for
formation of society was at least 101.
12) Factual position in the present case is that the
sanctioned plan dated 14 March 2005 of Zilla Parishad, Thane
sanctioned 134 shops and 40 flats (174 units in the building).
However Respondent No.4-Developer appears to have carried out
construction in violation of sanctioned plan of 14 March 2005 by
constructing 198 units in the building. As per the circular dated
29 November 2010, 60%-unit purchasers were required to apply
for registration of the society, which requirement is reduced to
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51% vide circular dated 23 March 2016. In the present case,
since the application for registration was filed after 23 March
2016, the correct requirement was 51% of constructed
/sanctioned units for applying for registration of the society. To
this extent, the Divisional Joint Registrar has erred in applying
the numerical figure of '60' for determining the minimum
percentage of units constructed/sanctioned in the building.
Hon'ble Minister has corrected the said error by applying correct
percentage of '51' by taking into consideration the Circular dated
23 March 2016.
13) Before proceeding further on the issue of society's
promoters fulfilling the requirement of minimum percentage of
persons prescribed in the circular dated 23 March 2016, it would
be first necessary to answer the fundamental issue as to whether
prescription of minimum percentage of unit holders for
registration of society in the said Circular causes any violence to
provisions of Section 6 of the MCS Act. This is the first issue
formulated in the opening portion of the judgment. This issue
would not have ordinarily arisen as none of the parties ever
argued before the Divisional Joint Registrar or Hon'ble Minister
that Registrar did not have power to prescribe higher number of
persons than the one prescribed under sub-section (1) of Section
6 of the MCS Act for registration of a cooperative society. The
issue has essentially cropped up on account of reliance by
Petitioners on judgment rendered by this Court in Padmavati
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Construction Co. (supra), which is followed by the co-ordinate
Bench in Janabai Shripat Patil (supra).
14) To answer issue No.1, it would be necessary to take
into consideration provisions of Sub-Section (1) of Section 6 of
the MCS Act which provides thus:
6. Conditions of registration
(1) No society, other than a federal society, shall be registered
under this Act, unless it consists of at least ten persons or such
higher number of persons as the Registrar may, having regard to
the objects and economic viability of a society and development of
the co-operative movement, determine from time to time for a
class of societies, (each of such persons being a member of a
different family), who are qualified to be members under this Act,
and who reside in the area of operation of the society:
15) Thus, under Section 6(1) of the MCS Act, the minimum
number of persons required for formation and registration of a
cooperative society (other than a federal society) is 10. However,
sub-section (1) of Section 6 of MCS Act has been amended by
Mah. Act 20 of 1986, under which the Registrar has been
conferred with power to prescribe higher number of persons for
formation and registration of the Society having regard to the
objects and economical viability of the society and development of
the cooperative movement for each class of societies. Thus upto
1986, any co-operative society could be registered with 10
members applying for such registration. However, after the
amendment of 1986, it is lawful for the Registrar to prescribe
higher number of persons required for the registration of the
Society for different classes of societies.
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16) Petitioners have relied on judgment of coordinate Bench
of this Court in Padmavati Constructions (supra) in support of
their contention that the Registrar cannot prescribe higher
number of persons than the one prescribed in Section 6 of the
Act. This Court held in paragraph 11 as under:
11. The submission that an inadequate number of persons have
joined together in the formation of the co-operative society in the
present case has no merit whatsoever. 27 out of 34 flat purchasers
joined in the application for registration of the co- operative
society. Section 6 of the Maharashtra Co-operative Societies Act,
1960 requires that a society cannot be registered unless it
consists of atleast 10 persons. The requirement of the Act
cannot be overridden by an administrative circular. Be
that as it may, in any event 27 out of 34 flat purchasers would
meet even the requirement of 60% which is stipulated under the
policy directives of the State Government. Finally the last
submission to the effect that the revisional authority had
reappreciated the facts and has transgressed the limits of the
revisional jurisdiction cannot be accepted. The Deputy Registrar
had rejected the application for registration of a co-operative
society on the ground that a minimum of 60% of the flat holders
have not joined together in the application. This ex facie was
erroneous. The Deputy Registrar allowed extraneous material on
the record in his decision making, in that he came to the
conclusion that since common amenities are to be provided for the
flat holders of three buildings, the amenities could not be divided
if the registration of the three buildings was to be made
independently. The Divisional Joint Registrar affirmed the
conclusion of the Deputy Registrar. As already noted above, the
flat purchase agreements contained a specific provisions in regard
to the manner in which separate and independent societies would
be formed of the purchasers of units in the building constructed
on the retained land on the one hand and the balance land on the
other. The manner in which the conveyance can be executed
either to the respective co-operative societies or to a confederation
of the societies is also spelt out in the agreements. The
agreements also contained provisions in regard to the user of the
common amenities. In this view of the matter, the issue of
registration of a co-operative society could not have been derailed
by a reference to considerations which had no bearing on the
obligation of the promoter to form a co-operative society in
accordance with law. For all these reasons, no case for
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interference under Article 226 has been made out. The Petition
shall stand dismissed. The Petitioners shall pay costs quantified
at Rs.10,000/- each to the State of Maharashtra and to the Fifth
Respondent.
(emphasis and underlining supplied)
17) In my view however the judgment in Padmavati
Constructions (supra) is rendered in the facts of that case. In
that case, out of 34 flats, 27 purchasers had applied for
registration of the society and had accordingly met with the
requirement of 60% of total flats. Therefore, it was held that
rejection of application for registration of society by the Deputy
Registrar on account of non-meeting of requirement of 60% of flat
holders in joining together in the application was factually
erroneous. However, this Court made a passing reference in
paragraph 11 of the judgment that 'the requirement of the Act
cannot be overridden by an administrative circular'. In my view,
the above stray observation made by this Court in Padmavati
Constructions (supra) cannot be read as if this Court has laid
down a ratio that circular issued by the Registrar under the
provisions of sub-section (1) of Section 6 of the MCS Act
prescribing higher number of persons required for registration of
society would be ineffective and needs to be ignored. It is settled
position of law that observations in the judgment are not to be
construed as statute and that the observations must be read in
the context in which they appear. It is held in Haryana
Financial Corporation and Another V/s. Jagdamba Oil
Mills and Anr.5 as under:
(2002) 3 SCC 496
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19. Courts should not place reliance on decisions without
discussing as to how the factual situation fits in with the fact
situation of the decision on which reliance is placed.
Observations of courts are not to be read as Euclid's
theorems nor as provisions of the statute. These
observations must be read in the context in which they
appear. Judgments of courts are not to be construed as
statutes. To interpret words, phrases and provisions of a
statute, it may become necessary for Judges to embark upon
lengthy discussions but the discussion is meant to explain and
not to define. Judges interpret statutes, they do not interpret
judgments. They interpret words of statutes, their words are
not to be interpreted as statutes. In London Graving Dock Co.
Ltd. v. Horton (at p. 761) Lord MacDermot observed: (All ER
p. 14C-D)
"The matter cannot, of course, be settled merely by
treating the ipsissima verba of Willes, J., as though they
were part of an Act of Parliament and applying the rules
of interpretation appropriate thereto. This is not to
detract from the great weight to be given to the language
actually used by that most distinguished Judge."
xxx
21. Circumstantial flexibility, one additional or
different fact may make a world of difference between
conclusions in two cases. Disposal of cases by blindly
placing reliance on a decision is not proper.
(emphasis supplied)
18) The above principles are restated by the Apex Court in
Ashwani Kumar Singh V/s. U.P. Public Service Commission
and Ors.6
19) In Padmavati Constructions (supra), this Court
neither had occasion to notice nor attention of this Court was
drawn to the provisions of sub-section (1) of Section 6 of the MCS
2003 11 SCC 584
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Act, under which Registrar is empowered to issue Circular
prescribing higher number of persons required for registration of
particular class of society. In my view therefore, judgment of this
Court in Padmavati Constructions (supra) cannot be read in
support of an absolute proposition of law that Circular issued by
the Registrar in exercise of power under sub-section (1) of
Section 6 of the MCS Act would cease to have any effect and that
a society can be registered in ignorance of minimum percentage
prescribed by the Registrar in such Circular.
20) As a matter of fact, after delivering of judgment in
Padmavati Construction (supra) the Division Bench of this
Court had an occasion to deal with Registrar's power to prescribe
higher number of persons required for registration of society
under sub-section (1) of Section 6 of the MCS Act. In Anil
Jadwani (supra) decided on 6 October 2010, the Division Bench
of Court had an occasion to deal with the issue of validity of
order passed by the Divisional Joint Registrar ordering de-
registration of the Society on the ground of non-meeting of
requirement of 60% by flat purchasers signing an application for
registration of co-operative society. As on 6 October 2010,
Registrar had not issued any Circular prescribing minimum
persons required for formation of co-operative housing society.
This Court took note of amendment effected to sub-section (1) of
Section 6 the MCS Act in the year 1986 whereby power was
conferred on the Registrar to prescribe higher number of persons
than 10 for registration of a particular class of society. However,
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circular dated 2 May 1980 was sought to be relied upon for the
purpose of contending that 60% flat purchasers were required to
sign the application for registration of a co-operative housing
society. This Court held that circular issued by the State
Government on 2 May 1980, prior to amendment of the MCS Act
in 1986, could not be treated as circular issued by Registrar in
exercise of power under sub-section (1) of Section 6 of the MCS
Act. This Court was also presented with another circular issued
by the Registrar on 1 January 1993, by which checklist was
prescribed while dealing with applications for registration of the
cooperative housing societies. This Court found that even under
the Circular dated 1 January 1993, the Registrar did not
prescribe higher number of persons required for registration of
cooperative housing society in exercise of power under sub-
section (1) of Section 6 of the MCS Act. This Court therefore held
that as on the date of rendering the judgment in Anil Jadwani
(supra) on 6 October 2010, no Circular was issued by the
Registrar prescribing minimum 60% of persons joining the
application for registration of co-operative housing society. The
Division Bench held in paragraph Nos.7 to 12 of the judgment as
under:
7. So far as conditions of registration of a Cooperative
Society are concerned, it is sub-section 1 of Section 6 of the
Cooperative Societies Act which is relevant. It reads as under:
XXXX
8. The Maharashtra Cooperative Societies Act was enacted
in the year 1961. At that time for making an application for
registration of a society including a Cooperative Housing Society,
which is not a federal society only 10 persons were required.
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There was no power conferred on any authority to prescribe
higher number of persons. That provision was incorporated in
the Act by Maharashtra Act 20 of 1986. In other words, till 12-5-
1986 when Maharashtra Act 20 of 1986 came into force, only 10
persons were required to sign an application for registration of a
Cooperative Housing Society. By Section 5 of Maharashtra Act
20 of 1986, power was conferred on the Registrar to specify such
higher number of persons than 10, as the Registrar may, having
regard to object and economic viability of the society and
development of the cooperative movement, decide for a class of a
society. The Respondents rely on a Government Circular dated
24th July, 1992 to claim that higher number of persons than 10
is specified for signing an application for registration of a
Cooperative Housing Society. Perusal of the Circular dated 24th
July, 1992 shows that it merely modifies the Government
Circular dated 2nd May, 1980. The Government Circular dated
24th July, 1992 lays down that by Government Circular dated
2nd May, 1980 it was provided that 90% of the promoters should
sign the application for registration of Cooperative Housing
Society. Now, that condition is relaxed and now only 60% of the
promoters can sign an application for registration of a
Cooperative Housing Society. It is relying on this Circular it is
contended that 60% of the flat purchasers must sign an
application for registration of a Cooperative Housing Society.
Therefore, it becomes necessary to see the Circular dated 2nd
May, 1980. Perusal of the Circular shows that it does not refer to
any provision in the Act under which it has been issued. It is
paragraph 3 of this Circular which is relevant for our purpose. It
reads as under:
3. The procedure of registration of Cooperative Housing
Societies prescribed under this Circular clearly and
distinctively specifies the various stages of the procedure and
the requirements of the various documents, as will be seen
from the accompaniments (Annexures "I" to "X" and forms `X'
`Y'`Z') to this Circular. The procedure should be invariably
followed by the registering authorities while registering
Cooperative Housing Societies in the State.
9. Thus, these Circular lays down the procedure for registration
of a Cooperative Housing Society. Annexure "VIII" of which
heading is "Instructions for filling in the Form "A" and statement
`A', `B' and `C' (Application for Registration of a Cooperative
Housing Society)." Paragraph 1 & 4 of that Annexure reads as
under:
1.The application for registration should be in
Quadruplicate.
2.......
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3.......
4. Mimimum 90% promoters should sign against their
names in all the 4 copies of the Statement "A".
According to Respondents, this Circular is issued by the State
Government under Section 4 of the Cooperative Societies Act.
Section 4 reads as under:
4. A society, which has as its object the promotion of the
economic interests or general welfare of its members, or
of the public, in accordance with cooperative principles,
or a society established with the object of facilitating the
operations of any such society, may be registered under
this Act:
Provided that, no society shall be registered if it is likely
to be economically unsound, or the registration of which
may have an adverse effect on development (of the
co.operative movement, or the registration of which may
be contrary to the policy directives which the State
Government may, from time to time, issue)
10. It is submitted on behalf of the Respondents that Section 4
contemplates the State Government issuing policy directive in
relation to registration of a Cooperative Society and that 1980
Circular is a policy directive issued by the State Government.
11. In our opinion, this submission is incapable of being
accepted. As noted above, this Circular was issued in the year
1980, when the provision of Section 6 required only 10 persons
to sign the application for registration, and there was no power
given by Section 6 to any authority to specify any higher number
of persons. Thus, if 1980's Circular is taken to be a policy
directive issued under Section 4, then it will be contrary to the
provisions of Section 6, which requires only 10 persons to sign
the application for membership. If 1980's Circular is taken to
contain policy directive of the State Government, then it will
result in amending the provision of Section 6 and it is impossible
that by policy directive the State Government can amendment
the provisions of the Statute. In 1986, by Section 6 of the
Maharashtra Act 20 of 1986, power to specify higher number of
persons was conferred on the Registrar. Therefore, even if it is
assumed that under Section 4 while issuing policy directive the
State Government could issue a policy directive in relation to
number of persons required to sign the application for
registration of a society, then the State Government ceased to
have that power, once by Maharashtra Act 20 of 1986 that power
was conferred on the Registrar, and therefore, when the State
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Government issued the Circular dated 24th July, 1992, there
was no provision made in the Cooperative Societies Act to which
that Circular could be referred. One more aspect, in our opinion,
which is relevant is that the order of the State Government
dated 10th March, 1995 issued under Section 7 of the
Cooperative Societies Act shows that even according to the State
Government, by its Circulars of 1980 and 1992 it did not
prescribe higher number of persons than 10 for signing an
application for membership. Section 7 of the Cooperative
Societies Act confers power on the State Government to exempt
any society or class of societies from any of the requirement of
the Act as to registration, subject to such conditions as Section 7
itself may impose. In exercise of its power under Section 7, the
State Government has issued an order dated 10th March, 1995 ,
which provided that requirement of sub-section 1 of Section 6 of
the Act, that there should be minimum number of 10 persons for
signing an application for registration of a Cooperative Housing
Society will not apply in relation to Cooperative Society whose
plinth area of the flat is less than 700 sq.ft. and the society
exhaust the entire FSI. If by the Circulars of 1980 & 1992 the
State Government had prescribed the higher number of persons
than 10, then in the above referred order of 10 th March, 1995 the
State Government would not have referred to the requirement in
sub- section 1 of Section 6 of minimum 10 persons signing the
application for membership. In our opinion, therefore, the
authorities were not justified on relying on the 1980 & 1992's
Circulars of the State Government to hold that more than 10
persons are required to sign the application for registration of a
Cooperative Housing Society.
12. Though, the authorities in their order have not relied on the
Circulars issued by the Registrar dated 1-1-1993, before us
reliance was placed on that Circular. Perusal of the Circular
issued by the Registrar dated 1-1-1993 shows that the purpose of
that Circular is to give to the sub-ordinate officers a check list in
relation to registration of a Cooperative Housing Society. The
purpose of that Circular does not appear to be to specify the
higher number of persons to apply for registration of a
Cooperative Housing Society. Perusal of that Circular shows that
the Circular gives separate check list for different kind of
societies. The First Class of societies of which check lists were
given are the tenant ownership housing societies. Then the
check lists are given of tenant co-partnership housing societies,
which are sponsored by the Builders. There clause 28
incorporated the requirement of 60% promoters signing the
application. The Third Class of society of which check list is
provided is a cooperative society of open plots. All these societies,
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where land and buildings are on lease hold or ownership basis,
but the societies are proposed by persons other than builders.
Perusal of the check lists shows that the requirement of 60%
promoters signing an application is included. But it is clear that
this requirement is included because of the Government
Circulars of 1980 and 1992 and is not included because of any
order passed or determination made by the Registrar in exercise
of the powers conferred on him by Section 6, after that Section
was amended by Maharashtra Act 20 of 1986. Perusal of
provisions of sub-section 1 of Section 6 shows that the
determination of higher number of persons is to be made
by the Registrar by taking into consideration various
things and aspects. It is apparent that the Circular dated 1-1-
1993 cannot be termed as determination made by the Registrar
in exercise of the power under sub-section 1 of Section 6 of the
Act. It is thus clear that neither the Government Circulars 1980
and 1992 result in prescribing higher number of persons than 10
for signing an application for registration of a cooperative
Housing Society nor the Circular of the Registrar dated 1-1-1993
achieved that. Therefore, as on the date on which the society was
registered in the present case, the requirement of law was that
at lease 10 persons who have taken the flats should sign the
application for registration of a society and therefore, as
admittedly, that many persons had signed the application in the
present case, there was no justification for the Divisional Joint
Registrar to de-register the society.
(emphasis supplied)
Though the Division Bench judgment in Anil Jadwani (supra)
deals with a slightly different issue of existence of Registrar's
Circular at the relevant time in exercise of power under sub-
section (1) of Section 6 of the MCS Act, it does ultimately
recognise the power of the Registrar to prescribe higher number
of persons required for registration of particular class of society.
21) In Janabai Shripat Patil (supra) coordinate bench of
this Court has followed the judgment in Padmavati
Construction Co. (supra) and has held in paragraph Nos.20 and
21 as under:-
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20. Mr. Shah has premised his arguments on the non-satisfaction of
requirement of 61% while filing the Application for registration.
Though not submitted in so many words, the submission appears to
be that as the number of flat purchasers were stated to be 192, for
the purpose of meeting the requirement of 61%, the requisite
number would be about 118 members and the application states
that 75 members have signed amounting to 68%. According to his
submissions, the portrayal of requisite number of members without
the adequate numbers being available in fact amounts to
misrepresentation.
21. There is no dispute that the Respondent No.4 falls within
the definition of "housing society" as per Section 2(16) of the MCS
Act. More than 10 members qualified to be admitted as members
have joined together in making the application for registration.
The decision of Padmavati Construction (supra) is a
sufficient answer to the contention about inadequate
number of members endorsing the application for
registration based on the policy directives issued vide the
Government Circular dated 23rd March, 2016. The decision
re-iterates the well settled position in law that the
requirement of the Act cannot be overridden by an
administrative circular.
(emphasis supplied)
Careful perusal of the findings recorded in judgment in Janabai
Shripat Patil (supra) would indicate that attention of this
Court was not invited atleast to two aspects. Firstly, this Court
has not noticed the provisions of sub-section (1) of Section 6 of
the MCS Act conferring power on the Registrar to prescribe
higher number of persons required for formation of a co-operative
housing society. Therefore, the observation made by this Court in
paragraph 21 of the judgment that 'the position of law is well
settled that the requirement of the Act cannot be overridden by an
administrative circular' is without noticing Registrar's statutory
power under Section 6 of the MCS Act to prescribe higher
number of persons required for formation of co-operative housing
society. This Court has not noticed that the Circular is traceable
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to exercise of statutory power. If the statute confers power on the
Registrar to prescribe higher number of persons for registration
of a cooperative society, the circular issued by the Registrar in
exercise of that power cannot be held to be unenforceable merely
because the prescription of number of persons for formation of a
society therein exceeds the one provided in Section 6 of MCS Act.
22) Also, while rendering the judgment in Janabai Shripat
Patil (supra) attention of this Court was not invited to the
judgment of the Division Bench in Anil Jadwani (supra), in
which this Court has specifically recognised the power of
Registrar to issue circular prescribing higher number of persons
than 10 for registration of a co-operative housing society. In fact,
the Registrar took note of the Division Bench judgment in Anil
Jadwani (supra) and thereafter issued circular dated 29
November 2010 in exercise of power under sub-section (1) of
Section 6 of the MCS Act prescribing that minimum 60% of total
flats /units sanctioned or constructed must join together for
registration of a co-operative society. Circular dated 29 November
2010 specifically refers to the judgment in Anil Jadwani. The
circular is actually issued to fill in the lacunae noticed by this
Court in Anil Jadwani where the circular issued by the State
Government on 2 May 1980 coupled with the circular of the
Registrar on 1 January 1983 prescribing a mere checklist were
being utilised for the purpose of enforcing 60% requirement for
registration of co-operative housing society. Since Division Bench
of this Court held in Anil Jadwani (supra) that Registrar was
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yet to issue any circular prescribing higher number of persons
required for registration of co-operative housing society, the
Registrar stepped in and took corrective action by issuing
circular dated 29 November 2010, which reads thus:-
जा.क्र. गुरु 'डी ३ संस्था नोंदणी २०१० सहकार
आयुक्त व निनबंधक, सहकारी संस्था महाराष्ट्र राज्य,
पुणे यांचे काया&लय
निदनांक :- २९ नोव्हेंबर, २०१०.
:: परिरपत्रक::
महाराष्ट्र सहकारी संस्था अधिधनिनयम १९६० व महाराष्ट्र सहकारी संस्था निनयम १९६१ मधील
तरतूदीनुसार सहकारी गृहनिनमा&ण संस्थांची नोंदणी केली जाते. सदर अधिधनिनयमाच्या निनयम ६
मधील तरतुदीनुसार निनबंधक (सहकार आयुक्त) यांना आवश्यकते नुसार बदल करण्याचे किंकवा
सुधारणा करण्याची तरतुद आहे.
त्यानुसार या काया&लयाने क्र. गृह/संस्था नोंदणी/चेक लिलस्ट/ई-२/८७. निदनांक ९ एनि?ल.
१९८७ व निदनांक १ जानेवारी, १९९३ रोजी परिरपत्रके काढली होती. त्याच ?माणे कृनिA व
सहकार निवभाग, मंत्रालय, मुंबई-३२ यांनी क्र. सीएसएच-१०७१/२५८३१-१४-सी, निदनांक २
मे. १९८० व सहकार व वस्योद्योग निवभाग, मंत्रालय, मुंबई-३२ यांनी क्र. सगृयो-
१०९२/२००४/?.क्र. ४४/१४-सी, निदनांक २४ जुलै १९९२ रोजी परिरपत्रके काढली होती.
उपरोक्त शासनाने काढलेले दोन परिरपत्रके हे त्यांना अधिधकार नसतांना काढलेली असल्याने व
या काया&लयाने काढलेली परिरपत्रके सहकार कायद्यातील निनयमाशी सुसगं त नसल्यानं मा. उच्च
न्यायालयाने रिरट निपटीशन नं. ६६०/२०१० च्या अनुAंगाने निनण& य दतांना चारही परिरपत्रके
कायद्याशी सुसंगत नसल्याने रद्द करण्यात आलेली असून , निनबंधक यांनी सहकार कायद्यातील
निनयमांशी सुसंगत असलेली सुधारीत परिरपत्रक काढण्यासाठी आदेशीत केले आहे.
महाराष्ट्र सहकारी संस्था अधिधनिनयम १९६० मधिधल कलम ४ अन्वये एखादी सहकारी संस्था
नोंदणी करणेपव ु O त्या संस्थेची आर्थिथक सक्षमता पडताळणे किंकवा सव& साधारण कल्याणाचे
संवध& न करणे आवश्यक आहे. तसेच ती शासनाच्या धोरणा निवरुद्ध नसली पानिहजे.
तसेच महाराष्ट्र सहकारी संस्था अधिधनिनयम १९६० चे कलम ८ अन्वये निवनिहत नमुन्यात संस्था
नोंदणीचा अज& असला पाहीजे. ज्या व्यनिक्तकडू न / जिजच्या वतीने असा अज& करण्यात आला
असेल अशी व्यक्ती संस्थेसबंधी निनबंधकास आवश्यक वाटेल अशी मानिहती पुरनिवल.
तसेच महाराष्ट्र सहकारी संस्था निनयम ४ व ५ मध्ये नोंदणी ?स्तावावर करावयाची निवनिहत
पध्दती व तरतूदी नमूद केल्या आहेत. त्यानुसार सहकारी गृहनिनमा&ण संस्था नोंदणीसाठी या
काया&लयान निदनांक ९ एनि?ल, १९८७ व निदनांक १ जानेवारी, १९९३ रोजीच्या
परिरपत्रकासोयत चेक लिलस्ट सोडल्या तथानिप सोबत सुधारिरत चेकलिलस्ट निदल्या आहेत.
महाराष्ट्र सहकारी संस्था अधिधनिनयम १९६० मधिधल कलम ६ अन्वये सहकारी संस्था
नोंदणीसाठी निकमान १० व्यक्तीची अट असली तरी त्याच कलमान्वये सहकारी संस्थांचे
निनबंधक (सहकार आयुक्त) यांना संस्थांच्या उद्देशानुसार निवशिशष्ट ?कारच्या सहकारी
संस्थासाठी निकमान व्यक्तीच्या अटीसबंधातील संख्या वाढनिवणे संदभा&त अधिधकार ?दान
करण्यात आलेले आहेत. त्यानुसार सहकारी गृहनिनमा&ण संस्थांच्या बाबतीत सामाधियक
देखभाल, समान उनिदष्टे, सभासदांचे बहुमत, इमारत दरुु स्ती व देखभाल, अशिभहस्तांतरण इ.
बाबींचा अंतभा&त असल्याने व अशा संस्थांची आर्थिथक सक्षमता ?बळ असलेचे दृष्टीने व सध्या
इमारत बांधणीमध्ये १० पेक्षा निकत्येक पटीने अधिधक गाळे / फ्लॅट असणारी टॉवस& / संकुले
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एकाच फ्लॅट / भूखंडावर उभी राहात असल्याने, गृहनिनमा&ण संस्थांच्या नोंदणीकरीता वरील सव&
बाबी निवचारात घेता नोंदणीसाठी, महापालिलका किंकवा तत्सम ?ाधिधकरणाकडू न मंजूर
आराखडयानुसार एकूण बांधल्या जाणाऱ्या अथवा बांधून पूण& झालेल्या सदनिनकांच्या /
गाळयांच्या ६० % इतके गाळे धारक नोंदणी ?स्तावात स्वाक्षरीसनिहत सामील होणं आवश्यक
राहील.
उपरोक्त नमूद केलेल्या बाबी निवचारात घेवून गृहनिनमा&ण संस्थांची नोंदणी करण्यात यावी.
(राजगोपाल देवस)
सहकार आयुक्त व निनबंधक
सहकारी संस्था, महाराष्ट्र राज्य, पुणे.
(emphasis supplied)
23) Circular dated 29 November 2010 has been superseded
and replaced by fresh Circular dated 23 March 2016 which alters
and reduces the prescribed percentage from 60 to 51. In my view
therefore the Circular dated 23 March 2016 has been issued by
the Registrar in exercise of statutory power conferred under sub-
section (1) of Section 6 of the MCS Act and the same cannot be
treated as 'policy directive' as observed in Janabai Shripat
Patil (supra). In fact, this Court has erroneously considered the
Circular dated 23 March 2016 as 'government circular' ignoring
the position that same is actually issued by the Registrar under
the provisions of sub-section (1) of Section 6 of the MCS Act.
This Court did not notice in Janabai Shripat Patil (supra)
that under provision of Section 4 of the MCS Act, the State
Government is empowered to issue policy directives in relation to
registration of the societies. Section 4 of the MCS Act provides
thus:
4. Societies which may be registered.
A society, which has as its objects the promotion of the
economic interests or general welfare of its members or of the
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public, in accordance with co-operative principles or a society
established with the object of facilitating the operations of any
such society, may be registered under this Act:
Provided that, no society shall be registered if it is likely to be
economically unsound, or the registration of which may have
an adverse effect on development of the co-operative movement,
or the registration of which may be contrary to the policy
directives which the State Government may, from time to time,
issue.
24) In Anil Jadwani (supra), this Court has noticed the
difference in the power conferred on State Government under
Section 4 of the MCS Act to issue policy directives from the
power vested in the Registrar in prescribing higher number of
persons for registration of particular class of society under sub-
section (1) of Section 6 of the MCS Act and has held that the
power to prescribe higher number of persons than 10 for
registration of a society can be exercised only by the Registrar
under sub-section (1) of Section 6 of the MCS Act and that the
same cannot be exercised by the State Government under proviso
to Section 4 of the MCS Act. In Janabai Shripat Patil this
Court has not noticed this distinction in the provisions of
Sections 4 and 6 of the MCS Act nor the attention of this Court
was invited to judgment of Division Bench in Anil Jadwani. In
my view therefore the observations made by this Court in the
judgment in Janabai Shripat Patil (supra) about requirement
of the Act cannot be overridden by administrative circular is per
incuriam.
25) It is therefore held that the Registrar has power to
prescribe a greater number of persons than 10 required for
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registration of particular class of societies. Consequently, the
Circulars issued by Registrar on 29 November 2010 and 23
March 2016 in exercise of power under sub-section (1) of Section
6 of the MCS Act are enforceable and no society can be registered
in violation of the prescribed percentage in the said two
circulars.
26) It would also be apposite to take into consideration the
provisions of Chapter XIII-B of the MCS Act inserted by the
Amendment Act of 2019, which came into effect from 9 March
2019. Chapter XIII-B has been inserted in the MCS Act for
making separate and special provisions in respect of co-operative
housing societies. By Section 154B of the MCS Act, other
provisions of the MCS Act are excluded from being applied to co-
operative housing societies, while some of the provisions are
made applicable mutatis mutandis to such housing societies. The
registration of a housing society is now dealt with under the
provisions of Section 154B-2 of the MCS Act, which provides
thus:-
154B-2. Registration of co-operative societies
(1) No tenant co-partnership housing society shall be registered
under this Act, unless it consists of at least five persons (each of
such persons being a Member of different family) or at least fifty-
one per cent. (of total number of flats as per sanctioned plan) flat
purchasers or intending Members and who are qualified to
become Member under this Act, whichever is higher, joins the
registration proposal of housing society to be registered.
(2) No tenant ownership housing society shall be registered under
this Act, unless it consists of at least five persons (each of such
persons being a Member of different family) or at least fifty-one
per cent. (of total number of plots as per proposed or sanctioned
lay- out plot purchasers and who are qualified to become Member
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under this Act, whichever is higher, joins the registration proposal
of housing society to be registered.
(3) No Association of society shall be registered unless it has at
least five housing societies as its Members.
(4) No Co-operative Housing Association shall be registered unless
it has at least two housing societies or other legal bodies as its
Members.
(5) Nothing in this section shall be deemed to affect the
registration of any society made before the commencement of the
Maharashtra Co-operative Societies (Amendment) Act, 2019.
(6) The word "limited" or "unlimited" shall be the last word in the
name of every society with limited or unlimited liability, as the
case may be, which is registered or deemed to be registered under
this Act.
Explanation-For the purpose of this section, the expression
"Member of a family means a wife, husband, father, mother,
dependent son or unmarried dependent daughter.
27) Thus, under the provisions of Section 154B-2, tenant co-
partnership housing society or tenant ownership housing society
cannot be registered unless it consists of at least 5 persons or at
least 51% of total number of flats /plots in the sanctioned plan
joined together for registration of the society. Thus, so far as co-
operative housing societies are concerned, the minimum
requirement of 10 persons is reduced to 5 persons under Section
154B-2 of the MCS Act, to ensure that housing society can be
formed in respect of smaller buildings with less than 10 flats.
However, the minimum percentage prescribed in circular dated
23 March 2016 (51%) is now given a statutory flavour under the
provisions of Section 154B-2 of the MCS Act. In the present case,
since registration of society has taken place before coming into
effect of Section 154B-2 of the MCS Act, provisions of that
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Section are irrelevant. The same are however, taken note of for
the limited purpose of observing that even under the amended
Section 154B-2, 51% flat purchasers must join together for
registration of housing society on account of use of the word
'whichever is higher'. Provisions of Section 154B-2 are also
relevant for the purpose of deciding the second issue formulated
for answer.
28) In my view therefore, the Registrar is fully empowered to
prescribe that 51% flat purchasers must join together for
registration of cooperative housing society under circular dated
23 March 2016. The first issue is answered accordingly.
29) Coming to the second issue, the same relates to
application of prescribed numerical figure of '51%' in circular
dated 23 March 2016 to the exact number of flats/units in the
building. The circular dated 23 March 2016 seeks to apply the
said numerical value of 51% to total number of flats sanctioned
or constructed. After amendment of MCS Act by insertion of
Chapter XIII-B, the requirement is now that minimum 5 persons
or atleast 51% (of the total number of flats as per sanctioned
plan) flat purchasers must join the registration proposal. It
would be advantageous to compare the provisions of the circular
dated 23 March 2016 and Section 154B-2 of the Act:
Circular dated 23 March 2016 Section 154B-2
51% Tenement Holders of the total No tenant co-partnership housing society
flats/tenements to be constructed or shall be registered under this Act unless it
already completed under the Plan consists of at least five persons (each of such
sanctioned by the Municipal Corporation or persons being a member of different family)
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such other Authority would be required to or atleast fifty one percent (of total number
participate in the Proposal for Registration of flats as per sanctioned plan) flat
under their signature. purchasers or intending members and who
are qualified to become member under this
Act, whichever is higher, joins the
registration proposal for housing society to
be registered.
30) The requirements of Circular dated 23 March 2016 are
slightly different than the requirement under Section 154B-2 of
the MCS Act. While Section 154B-2 of the MCS Act seeks to
apply 51% requirement to 'total number of flats as per sanctioned
plan', the Circular seeks to apply the requirement of 51% to "the
total flats/tenements to be constructed or already completed
under the Plan sanctioned by the Municipal Corporation". Thus,
under the Circular dated 23 March 2016, the requirement of 51%
can be made applicable even to the total number of 'flats
completed'. Thus, the mischief likely to be played by the
developer under Section 154B-2 by not constructing 51% flats as
per sanctioned plan, would not apply in case of Circular dated 23
March 2016 as the society can be formed of 51% flats
'constructed'.
31) Mr. Diwan has placed reliance on my judgment in
Mukesh Makandas Mehta (supra) where this Court had an
occasion to discuss the requirements under Section 154B-2 of the
MCS Act. He has relied on observations made in paragraph 44 of
the judgment as under:
44. It is Petitioner's contention that total number of units in the
building 'Silver Utopia' are 19. Therefore 51% of units would
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mean 10 units, whereas only 8 unit purchasers (consisting of
only 5 persons/entities) had made application for registration of
society. Careful reading of the provision would indicate that the
bracketed portion of '(each of such persons being a Member of
different family)' is applicable only to ' at least five persons' and
not to 'fifty-one percent of total number of flats'. Therefore, when
condition of 'total number of flats' is to be applied, it is is not
necessary that the purchasers thereof must be members of
different family. Secondly, the expression 'at least fifty-one per
cent (of total number of flats as per sanctioned plan) flat
purchasers or intending Members' would indicate that fifty-one
percent figure would apply not to 'total number of flats' but to
'flat purchasers'. Therefore, the statutory scheme is such that the
application for registration of a housing society can be made
either by 5 persons (who need to be members of different family)
or by 51% flat purchasers, whichever is higher. To illustrate, if a
building consists of 20 flats and 16 flats therein are sold, atleast
8 such flat purchasers must join in formation of society.
Conversely, if in the same building, only 8 flats are sold, 4 such
flat purchasers cannot form a society and the condition of 5
persons of different families signing the application for
registration of the housing society would apply. If the provision
is read the way Mr. Sawant wants me to read i.e. to apply the
percentage of '51' to total number of flats, the same would
destroy the very objective behind making special provision for
registration of a housing society. To illustrate, in a building
wherein 100 flats are sanctioned in the Plan, if the developer
delays construction and obtains part occupancy certificate and
constructs and sells only 40 flats, cooperative housing society
will not be formed till the developer exceeds construction of 51
flats and sells them. Thus, making a special provision of
registration of a cooperative housing society would become
counterproductive as such interpretation would then make
registration of a cooperative housing society more difficult than a
non- housing society, which can be registered with only 10
persons under Section 6. In my view therefore, the numerical
value of '51%' will have to be applied to 'flat purchasers' and not
to 'total number of flats as per sanctioned plan'. In the present
case, only 9 Units were sold at the relevant time and 8 unit
purchasers applied for formation and registration of housing
society, thereby meeting the requirement under Section 154B-2
of the MCS Act.
32) The above observations in paragraph 44 of the judgment
in Mukesh Makandas Mehta are made while interpreting
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provisions under Section 154B-2 of the MCS Act. The present
case is governed by the Circular dated 23 March 2016 as the
application for registration of society was made before
amendment of MCS Act by which Section 154B-2 came to be
inserted therein. As observed above, the requirements under the
Circular and in Section 154B-2 of the MCS Act are entirely
different. Also, the observation in Para 44 of the judgment in
Mukesh Makandas Mehta (supra) are made to deal with a
situation where the developer fails to construct 51% flats out of
the sanctioned ones. The observations are essentially made to
deal with larger projects where the developer completes
construction in a phased manner where, though plans get
sanctioned for development of the entire layout, but the developer
does not complete construction of all sanctioned units. In such
circumstances, application of requirement of 51% to 'total flats
sanctioned' would result in a situation of non-formation of society
for a considerable period of time. In a given case, where the
planning authority has sanctioned 100 flats, but the developer
completes construction of only 40 flats, secures part occupancy
certificate, and is unable to complete construction of remaining
building and neglects to maintain the constructed portion of the
building. In such case also, application of 51% requirement to
total flats sanctioned would operate to the disadvantage of flat
purchasers, who would not be able to manage affairs of the
building by forming a collective body. However, whether the
observations made in Mukesh Makandas Mehta (supra) in the
facts of that case would apply to every case of 51% purchasers of
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sold flats forming a society becomes questionable. To illustrate, if
the developer sells 12 out of 100 sanctioned flats, whether 7 flat
purchasers can form a society and make the developer member of
such society in respect of 88 unsold flats becomes questionable.
Whether formation of such society would be advisable where 7
flat purchasers would be taking the responsibility of maintaining
the building when the developer is yet to sell 88 balance flats is
also questionable. I am not delving deeper into this aspect as
provisions of Section 154B-2 of the MCS Act are not applicable in
the present case. The issue is left open to be decided in an
appropriate case. For the present case, it is sufficient to observe
that provisions of Section 154B-2 MCS Act were not even
available when Petitioners made application for registration of
society and therefore the judgment in Mukesh Makandas
Mehta (supra) rendered while interpreting the provisions of
Section 154B-2 of the MCS Act, would have no application here.
33) In the present case, there is no room for mischief by the
developer as he has completed construction of all sanctioned
units. All that was needed was some patience on the part of unit
purchasers to await sale of 51% of the units. Registration of
society before sale of 51% units would require the developer to
become member of society in respect of more than 51% unsold
units and pay maintenance in respect thereof. In my view
therefore, circular dated 23 March 2016 will have to be
necessarily interpreted to mean that the prescribed percentage of
51% would apply to total number of flats constructed or
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completed as per the sanctioned plans. The second issue
formulated above is answered accordingly.
34) After having answered both the issues for consideration,
it is now time to turn back to the facts of the present case. The
total number of flats constructed as per the sanctioned plans are
174 as there appears to be some dispute about additional units
being constructed as per sanctioned plan. Therefore 89 unit
purchasers ought to have joined in formation of the society.
However, only 83 unit purchasers filed application for
registration of the society. Therefore, the society could not have
been registered at the relevant time in absence of fulfillment of
requirement of 51% of 174 constructed flats joining together for
formation of society. Therefore, the order of de-registration does
not suffer from any flaw. It also appears that the society is
registered as 'premises society' as if the same comprises only of
commercial units, though 40 flats are sanctioned and
constructed.
35) By now more than 51% units might have been sold in the
building and the unit purchasers can form a society if 89 or more
unit purchasers can join in signing the application for
registration. This would also cure the technical defect of
registration of particular class of society.
36) Petition is accordingly dismissed. It would however be
open for the unit purchasers to file a fresh application for
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registration of society if 89 or more unit purchasers can file
application for registration. There shall be no orders as to costs.
[SANDEEP V. MARNE, J.]
4 March 2025
