Bombay High Court
City Estate Developers Ltd. vs The Honourable Minister, Co-Operation ... on 4 November, 2025
Author: Amit Borkar
Bench: Amit Borkar
2025:BHC-AS:46922
915-wp15071-2022.doc
Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.15071 OF 2022
SHABNOOR
AYUB
PATHAN
Digitally signed by
SHABNOOR AYUB
PATHAN
City Estate Developers Limited ... Petitioner
Date: 2025.11.06
14:35:47 +0530
V/s.
The Minister, Cooperation, Marketing,
and Textile Department & Ors. ... Respondents
Mr. Bhavin Gada with Ms. Shruti Shirke i/by Dhruv
Liladhar & Co., for the petitioner.
Mrs. V.R. Raje, AGP for respondent No.1-State.
Mr. Dileep Satale with Ms. Saaniya Arfan Sait, Ms.
Padma C., Vedastu Rane i/by Mr. Arya Sapre for
respondent Nos.2 to 4 & 8.
CORAM : AMIT BORKAR, J.
DATED : NOVEMBER 04, 2025
P.C.:
1. The petitioner has filed this writ petition to challenge the
order dated 22 June 2022 passed in Revision Application Nos. 176
to 179 of 2022. By the said order, the Revisional Authority allowed
the revision applications filed by respondent Nos. 2 to 4 and set
aside the earlier order dated 4 March 2022, which had confirmed
the cancellation of registration of the cooperative housing society.
2. The facts stated by the petitioner are as follows. The
petitioner is the owner and developer of land bearing CTS Nos.
636 and 636/1 to 6, admeasuring about 4790 square metres. On
this land, the petitioner developed a building known as
"Devdarshan Cooperative Housing Society" consisting of two
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wings, each having ground plus fifteen floors. The petitioner, as
the developer, allotted flats in the said building to several
purchasers. In the year 2012, the flat purchasers submitted an
application to respondent No. 2 for registration of the housing
society. On 2 January 2014, respondent No. 6 directed the
registration of the society under Section 10 of the Maharashtra
Ownership Flats (Regulation of the Promotion of Construction,
Sale, Management and Transfer) Act, 1963 (MOFA). Accordingly, a
registration certificate was issued on 3 January 2014.
3. Thereafter, the petitioner filed an application under Section
21A of the Maharashtra Cooperative Societies Act, 1960 (MCS Act)
seeking de-registration of the said society before respondent No. 5.
Respondent No. 5, by order dated 4 March 2022, allowed
Application No. 2 of 2014 filed by the petitioner and cancelled the
registration of respondent No. 8 society. Aggrieved by this order,
the society preferred Revision Application No. 179 of 2022 and
other connected revisions before respondent No. 1. The Revisional
Authority, by order dated 22 June 2022, set aside the order dated
4 March 2022 and restored the registration certificate dated 3
January 2014. Hence, the petitioner has approached this Court.
4. Learned counsel for the petitioner, Mr. Gada, submitted that
at the time when the flat purchasers applied for registration of the
society, the construction of the building was not complete. He
contended that the society falsely represented that 60% of the flat
purchasers had signed the proposal for registration. He referred to
the Government Circular dated 15 October 2021 and argued that
as per the said circular, a completion certificate is a mandatory
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document for registration of a tenant co-partnership housing
society. He pointed out that such a certificate was not produced at
the time of registration of the present society.
5. He also referred to the Government Circular dated 29
November 2010, which requires that at least 60% of the total flat
purchasers must sign the registration proposal. He submitted that
in this case, there are 108 flat purchasers, but only 56 had signed
the application, which falls short of the mandatory 60%
requirement. He relied upon the judgment of this Court in
Waghmay Mahila Machhimar Sahakari v. Commissioner of
Fisheries & Ors., 2020 (1) Mh.L.J. 864, in support of his
submission.
6. On the other hand, learned counsel for respondent Nos. 2 to
4 and 8, Mr. Satale, submitted that despite 101 persons having
purchased flats in Wings A and B of the Devdarshan Cooperative
Housing Society, the petitioner failed to take steps to register the
society. Therefore, 75 flat purchasers, including four commercial
unit holders, submitted a proposal to register the society under
Section 10(1) of the MCS Act read with Rule 8 of the MOFA Rules.
He contended that under Section 9 of the MCS Act, the minimum
requirement for forming a cooperative housing society is 10
members, which was clearly satisfied in this case. Hence, the
registration was lawful and proper.
7. He relied upon the judgments of this Court in Aurum Avenue
Co-operative Housing Society Ltd. and Another v. State of
Maharashtra and Others, 2025 SCC OnLine Bom 709, and
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Rameshwar Cooperative Housing Society Ltd. and Others v.
Divisional Joint Registrar and Others, 2025 SCC OnLine Bom
2017. He pointed out that this Court, while considering the earlier
judgment in Waghmay Mahila (supra), has distinguished between
two types of cases: (a) challenge to registration on the ground of
non-compliance with statutory conditions, and (b) cases of fraud
in obtaining registration, where Section 21A of the MCS Act can be
invoked.
8. He submitted that more than ten purchasers had bought flats
in 2006 and 2007, and as per Sections 6 and 9 of the MCS Act, the
petitioner was under a statutory obligation to form a cooperative
society. Since he failed to do so, the purchasers were entitled to file
a proposal for registration. He therefore contended that the
petitioner cannot claim to be an aggrieved person.
9. He further referred to the Government Circular dated 15
October 2011 issued under Section 79A of the MCS Act and
submitted that while a completion certificate is required for tenant
co-partnership societies, it is not an essential condition for
registration of every housing society. Registration under Sections 6
and 9 of the MCS Act depends on the number of members, not on
completion of construction. He submitted that the Revisional
Authority rightly exercised its jurisdiction and passed the
impugned order. Hence, no interference is warranted under Article
226 of the Constitution of India, and the writ petition deserves to
be dismissed.
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10. To examine the legality of the registration and subsequent
de-registration proceedings, it is necessary to consider the scope
and intent of Sections 6, 9 and 21A of the Maharashtra
Cooperative Societies Act, 1960, prior to introduction Section
154B, since registration of society is of the year 2014. These
provisions together define the process of registration, its
conditions, and the limited power of de-registration vested in the
Registrar in the year 2014.
11. Section 6 lays down the basic requirement for registration of
a society. It states that a cooperative society, other than a federal
society, must have at least ten members, each belonging to a
different family, who are qualified to be members under the Act
and who ordinarily reside in the area of operation of the proposed
society. The legislative purpose of this provision is simple, it
ensures that the society represents a genuine cooperative effort by
a sufficient number of independent persons and not a private
arrangement among a few individuals.
12. This section gives the Registrar discretion to fix a higher
number of members for a particular class of societies, considering
the nature of the society, its financial liability, and the development
of the cooperative movement. The threshold of "ten members" is,
therefore, the statutory minimum. Any administrative circular
requiring a higher percentage of members, such as the 60%
requirement in the Government circular, cannot override this
statutory minimum.
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13. Thus, for registration of a cooperative housing society, once
ten or more qualified persons agree to come together and fulfill
the conditions under the Act, the Registrar is empowered to
register the society.
14. Section 9 provides the operative authority for registration. It
authorizes the Registrar to register a society once he is satisfied
that the proposal complies with the Act, the Rules, and any lawful
policy directions issued by the State Government, and that the
proposed by-laws are not inconsistent with the law. The Registrar
must then complete the registration within two months from the
date of receipt of the application.
15. This provision shows that the satisfaction of the Registrar is
administrative in nature but must be based on compliance with
statutory conditions. Once the Registrar is satisfied that the
proposed members are eligible, the area of operation is defined,
and the by-laws are in order, registration must follow. The law
does not require the Registrar to examine the physical completion
of the building in case of housing societies. The formation of a
cooperative society is a matter of collective management, not
dependent on construction status.
16. The proviso to Section 9 allows flexibility to the Registrar in
framing norms and conditions for registration. However, such
norms cannot contradict the main provision. Therefore, the
Registrar cannot impose additional requirements such as a
completion certificate when the statute itself does not make it a
mandatory condition.
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17. Section 21A confers a limited and exceptional power on the
Registrar to de-register a society. The power can be exercised only
when the registration was obtained by misrepresentation, or when
the society's work is complete or its object has ceased to exist, or
when it has been registered for a purpose no longer served.
18. The phrase "registered on misrepresentation" means
deliberate concealment or false statement of material facts at the
time of registration. It does not cover minor procedural lapses or
differences of opinion. Fraud or misrepresentation must be proved
by clear and convincing evidence. The Registrar must also give a
fair opportunity of hearing to the chief promoter, committee, and
members before passing any de-registration order.
19. The purpose of this section is to prevent fraudulent or
redundant societies from remaining on record, not to allow
promoters or builders to undo lawful registrations made by
genuine purchasers. Where the society fulfills the statutory
requirements and operates in furtherance of the objects for which
it was formed, de-registration under Section 21A cannot be
justified.
20. I have carefully considered the rival submissions and perused
the material on record. The issue that arises for determination is
whether the Revisional Authority acted within its jurisdiction and
in accordance with law while setting aside the order dated 4
March 2022 and restoring the registration of the Devdarshan
Cooperative Housing Society.
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21. It is not in dispute that the petitioner is the owner and
developer of the land on which the building stands, and that
several flat purchasers had acquired their respective units long
before the year 2014. It is also not in dispute that despite repeated
requests, the petitioner did not take steps to form or register the
cooperative housing society, as required under Section 10(1) of the
Maharashtra Ownership Flats Act (MOFA). The obligation to form
a society is a statutory duty cast on the promoter or builder. Failure
to perform this duty gives rise to a right in the flat purchasers to
form the society on their own. This legal position is well settled.
22. The record shows that more than ten flat purchasers had
purchased flats in the building as early as 2006 and 2007. The
proposal for registration of the society was signed by 75 members.
Even if one accepts the petitioner's contention of 56 members, the
fact remains that the statutory minimum required under Section 6
of the Maharashtra Cooperative Societies Act is ten members. Once
this requirement is met, the registration cannot be said to be
contrary to the Act. The question of 60% signatures, referred to in
the circular dated 29 November 2010, is an administrative
guideline. It cannot override the clear provision of the statute
which fixes the minimum number of members. Administrative
circulars must operate within the statute. They cannot curtail a
right granted by law.
23. The petitioner's second ground is that there was no
completion certificate at the time of registration. The circular
dated 15 October 2021 relied upon by the petitioner applies to
tenant co-partnership societies. The present society is a flat
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purchasers' society. For such societies, the requirement of
completion certificate is not a precondition for registration. The
provisions of Sections 6 and 9 of the MCS Act are clear. The
formation of a cooperative housing society depends upon the
existence of members and their willingness to manage the property
jointly, not upon the completion status of the building. Non-
production of a completion certificate, therefore, cannot invalidate
the registration.
24. The petitioner has invoked Section 21A of the MCS Act
seeking de-registration of the society. That provision confers a
limited power on the Registrar to cancel registration when the
registration has been obtained by fraud, misrepresentation, or
mistake. Every procedural irregularity or omission does not
amount to fraud or misrepresentation. Fraud must be specific,
deliberate, and established by cogent evidence. Mere assertion that
some signatures were not genuine or that certain documents were
not annexed at the time of registration is not sufficient. In the
present case, the petitioner has not produced any reliable evidence
showing that the society obtained registration by practicing fraud
or making false representations.
25. The Revisional Authority examined the material and found
that there were sufficient members to justify registration. It also
found that the petitioner, despite being under statutory duty to
form the society, failed to do so, thereby compelling the flat
purchasers to take the initiative. The Revisional Authority has
acted within the framework of law. Its finding is supported by the
record and is consistent with the provisions of the MCS Act and
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MOFA. No jurisdictional error or perversity is shown.
26. The contention that the petitioner is an aggrieved person is
also without merit. A builder or promoter who fails to form a
society cannot claim prejudice when the purchasers themselves
form it. The right to form a society vests in the flat purchasers.
Once the promoter has transferred the flats and consideration is
received, his role as a developer comes to an end except to the
extent of statutory obligations. The petitioner cannot use the
machinery of Section 21A to undo what he was legally bound to
do.
27. This Court, in Aurum Avenue Co-operative Housing Society
Ltd. v. State of Maharashtra and Rameshwar Co-operative Housing
Society Ltd., has clearly held that Section 21A is to be invoked
only in cases of fraud or misrepresentation. The Revisional
Authority was right in applying that principle. The decision in
Waghmay Mahila Machhimar Sahakari does not help the petitioner
because that case dealt with the failure to satisfy statutory
preconditions at the initial stage, not with a situation where a
promoter failed in his own duty to register the society.
28. Upon consideration of the entire record, this Court is
satisfied that the Revisional Authority's order dated 22 June 2022
is lawful. It is supported by reasons, consistent with statutory
provisions, and does not call for interference in the writ
jurisdiction. The petitioner has failed to establish any ground of
illegality, irregularity, or perversity warranting interference under
Article 226 of the Constitution of India.
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29. Hence, I pass following order :
(i) The writ petition is dismissed.
(ii) The order dated 22 June 2022 passed by the Revisional
Authority confirming the registration of Devdarshan
Cooperative Housing Society is upheld.
(iii) There shall be no order as to costs.
(AMIT BORKAR, J.)
