[Cites 21, Cited by 0]
Bombay High Court
Gera Development Private Limited vs The State Of Maharashtra Thr Its ... on 1 April, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:15342
wp3151-2026-J.doc
Sayali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3151 OF 2026
Gera Developers Private Limited,
through it's authorized signatory
SAYALI Gulzar Malhotra, having its registered
DEEPAK
UPASANI office at 200, Gera Plaza, Boat Club Road,
Digitally signed by
SAYALI DEEPAK
UPASANI
Date: 2026.04.01
Pune 411 001 ... Petitioner
12:42:00 +0530
Vs.
1. The State of Maharashtra,
through it's Secretary, Department
of Cooperation, Mantralaya,
Mumbai
2. The Divisional Joint Registrar,
having address at Cooperative
Societies, Sakhar Sankul,
Pune 411 005.
3. The District Deputy Registrar,
having address at Coop. Societies,
Pune City, Pune, Sakhar Sankul, Pune
4. The Deputy Registrar, Cooperative
Societies, Pune City (1), Pune (DR),
having address at 582 D,
Marketyard, Gultekdi, Pune
5. Gera's Isle Royale CHS Limited,
Sr. No.24, Hissa NO.1 to 8,
Geras Isle Royle, Bavdhan Khurd,
Pune 411 021, through Chairman/
Chief Promoter
Goraksh Chandrakant Garad ...Respondent
1
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Mr. Nikhil Sakhardande, Senior Advocate with Mr.
Pralhad Paranjape, Mr. Manish Kelkar, Mr. Nitish
Gaiokwad, and Mr. Saket Tare for the petitioner.
Mr. Y.D. Patil, AGP for respondent Nos.1 to 4-State.
Mr. Sandeep Phatak for respondent No.5.
CORAM : AMIT BORKAR, J.
RESERVED ON : MARCH 25, 2026.
PRONOUNCED ON : APRIL 1, 2026
JUDGMENT:
1. The petitioner, by the present petition, challenges the legality
and correctness of the impugned judgment and order dated 17
February 2026 passed by respondent no. 1, namely the Minister of
Co-operation, State of Maharashtra. By the said order, respondent
no. 1 has allowed Revision Application Nos. 253 and 254 of 2025
preferred by respondent no. 5, thereby setting aside the judgment
and order dated 26 March 2025 passed by respondent no. 2 and
restoring the orders dated 03 October 2023 and 13 October 2023
passed by respondent no. 3.
2. The factual matrix giving rise to the present petition is as
follows. The petitioner is a developer of repute and has undertaken
development activities in the Bavdhan area of Pune. For such
purpose, the petitioner acquired development rights in respect of a
portion of land bearing Survey No. 24, Hissa No. 1-8, situated at
Bavdhan Khurd, admeasuring 5 H 20 Ares, from Suyog Co-
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operative Housing Society Ltd. under a duly registered
Development Agreement. The said land was subsequently
amalgamated and renumbered as Survey No. 24/1 and further
subdivided into six sub-plots bearing Plot Nos. 'A', 'B', 'C', 'D', 'E'
and 'F'. The development undertaken by the petitioner consists of a
layout project comprising Tower-1 having 30 flats under MOFA,
Tower-2 having 60 flats under RERA, Tower-3 having 30 flats
under RERA, 35 bungalows or row houses under MOFA, and two
proposed towers, namely Tower-4 and Tower-5 under RERA.
3. It is the case of the petitioner that, in accordance with the
sanctioned plans, Tower-1 and the 35 bungalows or row houses
were completed prior to the enactment of the Real Estate
(Regulation and Development) Act, 2016 and are therefore
governed by the provisions of MOFA and are not registered under
RERA. Tower-2 and Tower-3 are duly registered under RERA
bearing Registration No. P52100009870, whereas Towers 4 and 5
are also registered under RERA bearing Registration No.
P52100011031. The development was conceived as a phase-wise
project. The building plans and layout were initially sanctioned in
the year 2011 and were subsequently approved in the year 2015
upon issuance of a Commencement Certificate. The petitioner has,
in terms of the respective registered agreements, handed over
possession of flats and bungalows to the purchasers upon
execution of possession letters and consent letters in respect of
Towers I, II and III.
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4. It further appears that certain individuals claiming to be the
heirs of the erstwhile land owners instituted Second Appeal No.
397 of 2011 before the Hon'ble High Court. By an interim order
dated 05 August 2016, the Court directed that no new
construction be commenced and no third-party rights be created.
The said proceedings were subsequently settled amicably between
the parties and the Second Appeal came to be disposed of by order
dated 02 September 2024. According to the petitioner, the
individual agreements and possession letters executed with the
purchasers specifically provided that the petitioner would be
entitled to form separate Co-operative Housing Societies for each
building or project for the purposes of management, maintenance,
and administration of common areas, and further to constitute an
Apex Body or Federation of such societies as contemplated in the
Eighth Schedule of the agreements.
5. The record indicates that on 24 January 2023, members of
respondent no. 5 issued a notice to the petitioner proposing
formation of a co-operative society. The petitioner, by its reply
dated 07 February 2023, clarified the process of formation of
separate societies for different phases of the project, namely Phase
1 comprising Gera's Isle Royal Villas, Phase 2 comprising Tower 1,
Phase 3 comprising Towers 2 and 3, and Phase 4 comprising
Towers 4 and 5, along with an Apex Body for all such societies.
The petitioner also, by communication dated 10 February 2023,
informed respondent no. 5 that it had no authority to
independently initiate the process of formation of a society without
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the petitioner's consent. In the meantime, on 08 February 2023,
one Mr. Gorakh Chandrakant Garad, claiming to be the Chief
Promoter of the proposed Gera's Isle Royale Co-operative Housing
Society Ltd., filed an application before respondent no. 3 under
Section 10(1) of the MOFA Act. The petitioner appeared in the said
proceedings and filed its objections. However, respondent no. 3,
after hearing the parties, allowed the said application.
6. Pursuant thereto, on 03 October 2023, respondent no. 3
granted registration to respondent no. 5 society. The petitioner,
being aggrieved, preferred Appeal No. 108 of 2023 challenging the
order dated 03 October 2023 and Appeal No. 13 of 2025
challenging the registration certificate dated 13 October 2023
before respondent no. 2, namely the Divisional Joint Registrar,
Pune. In the meantime, by order dated 20 December 2024 passed
in Special Civil Suit No. 69 of 2024, the Civil Court at Pune
granted relief in favour of the petitioner by restraining respondent
no. 5 from causing obstruction in the construction of Towers 4 and
5. Thereafter, respondent no. 2, by judgment and order dated 26
March 2025, allowed Appeal No. 108 of 2023, set aside the order
dated 03 October 2023 and remanded the matter to respondent
no. 3 for reconsideration. Consequentially, Appeal No. 13 of 2025
was also allowed and the registration certificate dated 13 October
2023 came to be cancelled. It is further the case of the petitioner
that, despite having knowledge of the said order dated 26 March
2025, the said Mr. Gorakh Chandrakant Garad, acting as Chief
Promoter of respondent no. 5, withdrew an amount of
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approximately Rs. 56,00,000 from the society's bank account and
transferred the same to his personal account.
7. In the aforesaid background, the petitioner, on 03 April
2025, made an application before respondent no. 4 seeking
appointment of an Interim Liquidator under Sections 102 and 103
of the Maharashtra Co-operative Societies Act, 1960, with a view
to prevent further financial irregularities and to safeguard and
regulate the assets and liabilities of the society. Respondent no. 5
thereafter preferred Revision Application No. 253 of 2025
challenging the judgment dated 26 March 2025 passed in Appeal
No. 108 of 2023 and Revision Application No. 254 of 2025
challenging the order passed in Appeal No. 13 of 2025. Upon
service of notice, the petitioner appeared before respondent no. 1
and filed detailed replies opposing the revisions. The petitioner
also submitted written arguments on 15 September 2025.
8. It is the grievance of the petitioner that respondent no. 1,
while passing the impugned order dated 17 February 2026, failed
to consider material facts on record, including the order passed by
the Civil Court, Pune in Special Civil Suit No. 1231 of 2025,
whereby an injunction had been granted in favour of the society
and the petitioner had been directed to continue maintenance of
common amenities and facilities in the project till further orders.
Notwithstanding the same, respondent no. 1 proceeded to allow
the revision applications and restore the orders passed by
respondent no. 3. According to the petitioner, the impugned order
suffers from patent illegality, is contrary to the factual position and
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settled legal principles, and is therefore liable to be set aside.
9. Mr. Nikhil Sakhardande, learned Senior Advocate appearing
on behalf of the petitioner, submitted that the impugned order
suffers from non-consideration of material facts. He contended
that the development in question comprises multiple components
governed by distinct statutory regimes. According to him, the
layout consists of Tower-1 having 30 flats governed by the
Maharashtra Ownership Flats Act, 1963, 35 bungalows or row
houses also governed by the said enactment, Tower-2 having 60
flats registered under the Real Estate (Regulation and
Development) Act, 2016, Tower-3 having 30 flats registered under
RERA bearing Registration No. P52100009870, and two proposed
towers, namely Tower-4 and Tower-5, which are likewise
registered under RERA. He submitted that the impugned order
fails to appreciate this statutory distinction.
10. Learned Senior Advocate further submitted that though
Section 10 of the Maharashtra Ownership Flats Act casts an
obligation upon the promoter to take steps for formation of a co-
operative society, the impugned order passed by respondent no. 1
is erroneous in law as it does not consider that Towers II and III
are governed by the provisions of the Real Estate (Regulation and
Development) Act, 2016. He submitted that Rule 9 of the
applicable Rules mandates formation of a separate society for each
project and, in terms of Section 2(zn) of the Act, each tower
constitutes a distinct project. He further submitted that Section 17
of the Act obligates the promoter to convey title in respect of each
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such project independently. On this basis, it was urged that
separate societies are required to be formed for each building or
phase within the layout, having regard to the differing statutory
regimes and nature of development.
11. It was further contended that the impugned order proceeds
on an erroneous premise of obtaining 51 percent consent by
treating all unit holders across different towers and bungalows as a
single unit. According to the learned Senior Advocate, such an
approach is contrary to the scheme of the Real Estate (Regulation
and Development) Act, 2016. He further submitted that the
petitioner has consistently expressed readiness and willingness to
form separate co-operative housing societies for each building or
phase and thereafter constitute an Apex Body or Federation in
terms of the Eighth Schedule of the agreements and the governing
law. Reference was made to an email dated 24 July 2021 in
support of such willingness. However, according to him, due to the
conduct of the Chief Promoter and lack of cooperation from
certain unit purchasers, the petitioner was unable to secure the
requisite consent for formation of separate societies.
12. Learned Senior Advocate further submitted that respondent
no. 1 has failed to consider that the petitioner had, by its
communication dated 07 February 2023, informed the unit holders
regarding the process of forming separate societies phase-wise
along with an Apex Body for all such societies. He emphasized that
this communication preceded the filing of the application by
respondent no. 5 before respondent no. 3. It was therefore
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contended that respondent no. 5 had no authority in law to
unilaterally initiate the process of formation of a society without
the consent of the petitioner.
13. It was further submitted that the interpretation placed by
this Court on Rule 9 of the relevant Rules contemplates that in the
case of a layout development, the promoter is entitled to form
separate co-operative societies for each individual building and
thereafter constitute a federation of such societies. The petitioner,
according to the learned Senior Advocate, remains ready and
willing to incorporate separate societies for all completed phases
and to initiate such process within a period of one week, if so
directed. Section 61 of the Real Estate (Regulation and
Development) Act, 2016 provides for penalty in cases of
contravention of provisions of the Act other than those specifically
covered under Sections 3 and 4. The provision stipulates that
where a promoter contravenes any such provisions, or the rules or
regulations made thereunder, the promoter shall be liable to a
penalty which may extend up to five percent of the estimated cost
of the real estate project as determined by the Authority. On these
submissions, it was prayed that the impugned judgment and order
dated 17 February 2026 passed by respondent no. 1 be quashed
and set aside and the revision applications preferred by respondent
no. 5 be dismissed.
14. Per contra, Mr. Sandeep Pathak, learned Advocate appearing
on behalf of respondent no. 5, submitted that the petitioner-
developer lacks locus standi to challenge the formation and
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registration of the society, once such formation is carried out in
accordance with the provisions of the Maharashtra Co-operative
Societies Act, 1960 read with the Maharashtra Ownership Flats
Act, 1963 and the Rules framed thereunder. He submitted that in
the present case, upon the tenth purchaser acquiring a flat or unit
under a registered agreement dated 14 August 2014, a statutory
obligation arose upon the petitioner-developer to take necessary
steps for formation and registration of the society within a period
of four months, that is, on or before 14 December 2014, in terms
of Section 8 of the MCS Act read with Section 10 of MOFA and
Rule 8 of the MOFA Rules. Learned Advocate further submitted
that under Sections 10 and 11 of MOFA read with Sections 8, 9
and 10 of the MCS Act, the flat and row-house purchasers acquire
a statutory right to have a co-operative housing society formed and
to obtain conveyance of the land and building in favour of such
society within the prescribed time. He submitted that such right is
not dependent upon the unilateral discretion or preference of the
promoter. In the present case, as the petitioner-developer failed to
initiate steps for formation of the society within the stipulated
period, 109 out of 155 unit holders, constituting more than 51
percent of the total, passed a resolution dated 07 January 2023
resolving to form a single co-operative housing society in respect of
Plot A. He submitted that all requisite documents and statutory
forms were duly executed and submitted before the competent
authority along with Application No. 23 of 2023 under the
relevant provisions of the MCS Act read with Section 10 of MOFA,
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which application came to be allowed on 03 October 2023.
15. It was further submitted that the statutory framework under
MOFA and the MCS Act permits either formation of a single society
for the entire layout or multiple societies for different buildings or
phases, and that the decision in that regard rests with the majority
of the purchasers. According to him, once an overwhelming
majority has elected to form a single co-operative housing society,
and the competent Registrar has recorded satisfaction under
Sections 8, 9 and 10 of the MCS Act, such a decision cannot be
defeated merely on the basis of the promoter's preference for a
different structure. He further submitted that the provisions of the
Real Estate (Regulation and Development) Act, 2016 primarily
regulate registration of projects and obligations of the promoter
towards allottees, and do not prohibit formation of a single society
for a composite development comprising multiple buildings. In the
present case, the project has been conceived and marketed as a
unified development under the name "Gera's Isle Royale" with
common amenities and infrastructure including a common
entrance, club house, swimming pool, gymnasium, garden,
children's play area, squash court, tennis court and basketball
court, thereby justifying formation of a single society.
16. Learned Advocate further submitted that even assuming that
Towers 2 and 3 are registered under the Real Estate (Regulation
and Development) Act, 2016, the land and common amenities
continue to be situated on the same Plot A, and the purchasers
across the bungalows and towers have consciously opted for
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formation of a single society. He submitted that the Minister has
rightly appreciated this composite factual and legal position in
upholding formation of a single co-operative housing society for
the entire layout. It was further submitted that, at the time of filing
Application No. 23 of 2023, the project comprised 155 existing
units, namely 120 flats and 35 row houses, in respect of which
Occupation Certificates had already been obtained, and 109 unit
holders had supported the proposal, thereby satisfying the
requirement of majority consent under Section 10 of MOFA and
applicable administrative circulars. He submitted that members
pertaining to proposed Towers 4 and 5, which were yet to be
constructed or handed over, could not be taken into account for
the purpose of determining consent, and therefore the contention
of the petitioner seeking to include such prospective units to dilute
the majority was rightly rejected.
17. He further submitted that during the pendency of
proceedings, six row-house owners, in collusion with the
petitioner, executed a Deed of Declaration under the provisions of
the Maharashtra Apartment Ownership Act on 06 July 2024,
despite the fact that 21 out of 35 row-house owners had already
participated in the process of formation of the society and the
society had been duly registered on 13 October 2023. According to
him, once a valid co-operative housing society has been
constituted and registered on the basis of majority consent, any
subsequent attempt by a minority of unit holders to create a
separate legal structure cannot be permitted to defeat the rights of
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the existing society or to fragment ownership and management to
the detriment of the majority. He therefore submitted that the
petition deserves to be dismissed.
18. He further submitted that under Rule 9 of the applicable
Rules framed under the Real Estate (Regulation and Development)
Act, 2016, the promoter is required to submit an application to the
Registrar for registration of a co-operative housing society or other
legal entity within a period of three months from the date on
which 51 percent of the total number of allottees in a building or
wing have booked their apartments. Upon expiry of the said
period, the right to initiate formation of such legal entity accrues
in favour of the allottees themselves, thereby entitling them to take
independent steps for registration of the society.
19. He further submitted that mere issuance of an email by the
petitioner or the act of placing documents before purchasers for
obtaining their signatures cannot be construed as compliance with
the statutory obligation to initiate formation of a legal entity.
According to him, such acts are only preparatory in nature and do
not amount to taking effective steps within the meaning of the
governing provisions. He submitted that once the statutory period
of three months has elapsed, the right of the promoter to
exclusively undertake the process of formation of the legal entity
does not survive, and the same stands vested in the allottees. In
such circumstances, the petitioner cannot seek to rely upon such
incomplete or passive steps to contend that its right to form the
society continued to subsist.
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REASONS AND ANALYSIS:
20. For the purpose of deciding the issue involved in the present
petition, it becomes necessary to advert to the relevant statutory
provisions governing formation of legal entity and obligations of
the promoter. Accordingly, Section 2(zj),Section 2(zn) and 61 of
the RERA Act, Rule 9 of the Rules framed under the Real Estate
(Regulation and Development) Act, 2016, and Section 10 of the
Maharashtra Ownership Flats Act, 1963 are required to be set out.
"2(zj) "project" means the real estate project as defined
in clause (zn);
2(zn) "real estate project" means the development of a
building or a building consisting of apartments, or
converting an existing building or a part thereof into
apartments, or the development of land into plots or
apartments, as the case may be, for the purpose of selling all
or some of the said apartments or plots or building, as the
case may be, and includes the common areas, the
development works, all improvements and structures
thereon, and all easement, rights and appurtenances
belonging thereto;
61 of RERA Act: Penalty for contravention of other
provisions of this Act.
If any promoter contravenes any other provisions of this Act,
other than that provided under section 3 or section 4, or the
rules or regulations made thereunder, he shall be liable to a
penalty which may extend up to five per cent. of the
estimated cost of the real estate project as determined by the
Authority.
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Rule 9. Formation of legal entity and transfer of title. -
(1) Promoter to enable formation of Legal Entity like
Cooperative Society, Company, Association, Federation etc.
under clause (e) of sub-section (4) of section 11 of the Act.-
(i) Where a Co-operative Housing Society or a
Company or any other legal entity of allottees is to be
constituted for a single building not being part of a Layout;
or in case of layout of more than one building or a wing of
one building in the layout, the Promoter shall submit the
application in that behalf to the Registrar for registration of
the Co-operative Housing Society under the Maharashtra Co-
operative Societies Act, 1960 or a Company or any other
legal entity, within three months from the date on which fifty
one per cent. of the total number of allottees in such a
building or a wing, have booked their apartment.
(ii) Where a Promoter is required to form an Apex
Body either as a federation of separate and independent Co-
operative Housing Societies or Companies or any other Legal
Entities or as a Holding Company of separate and
independent Co-operative Housing Societies or companies or
any other Legal Entities, then the Promoter shall submit an
application to the Registrar for registration of the co-
operative society or the company to form and register an
Apex Body in form of Federation or Holding entity consisting
of all such entities in the Layout formed as per clause (i) of
sub-rule (1) of rule 9 (1)(i) herein above. Such application
shall be made within a period of three months from the date
of the receipt of the occupancy certificate of the last of the
building which was to be constructed in the Layout.
(iii) If the promoter fails to form the legal entity such
as Cooperative Society or Company or Association or
Federation, as the case may be, the Authority shall by an
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order direct the Promoter to apply for formation of such
legal entity or may authorize the allottees to apply for
formation of such legal entity.
Section 10. Promoter to take steps for formation of co-
operative society or company. -
(1) As soon as a minimum number of persons required to
form a Co-operative society or a company have taken flats,
the promoter shall within the prescribed period submit an
application to the Registrar for registration of the
organisation of persons who take the flats as a co-operative
society or, as the case may be, as a company; and the
promoter shall join, in respect of the flats which have not
been taken, in such application for membership of a co-
operative society or as the case may be, of a company.
Nothing in this section shall affect the right of the promoter
to dispose of the remaining flats in accordance with the
provisions of this Act. [Provided that, if the promoter fail
within the prescribed period to submit an application to the
Registrar for registration of society in the manner provided
in the Maharashtra Co-operative Societies Act, 1960, the
Competent Authority may, upon receiving an application
from the persons who have taken flats from the said
promoter, direct the District Deputy Registrar, Deputy
Registrar or, as the case may be, Assistant Registrar
concerned, to register the society: Provided further that, no
such direction to register any society under the preceding
proviso shall be given to the District Deputy Registrar,
Deputy Registrar or, as the case may be, Assistant Registrar,
by the Competent Authority without first verifying
authenticity of the applicants request and giving the
concerned promoter a reasonable opportunity of being
heard.
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(2) If any property consisting of building or buildings is
constructed or to be constructed [and the promoter submits
such property to the provisions of the Maharashtra
Apartment Ownership Act, 1970, by executing and
registering a Declaration as provided by that Act] then the
promoter shall inform the Registrar as defined in the
Maharashtra Co-operative Societies Act, 1960, accordingly;
and in such cases, it shall not be lawful to form any co-
operative society or company."
21. Section 2(zj) of the Act defines the expression "project" to
mean a real estate project as defined under Section 2(zn) of the
said Act. Section 2(zn) further defines "real estate project" to mean
the development of a building or a building consisting of
apartments, or the conversion of an existing building or any part
thereof into apartments, or the development of land into plots or
apartments for the purpose of sale, whether in whole or in part.
The definition is of wide amplitude and expressly includes
common areas, development works, improvements, structures, as
well as all easements, rights and appurtenances attached thereto.
22. Section 61 of the Act provides for consequences of
contravention of provisions of the Act other than those specified
under Sections 3 and 4. It stipulates that where a promoter
violates any such provision or the rules or regulations framed
thereunder, the promoter shall be liable to a penalty which may
extend up to five percent of the estimated cost of the real estate
project as determined by the Authority.
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23. Rule 9 of the applicable Rules under Act provides for
formation of a legal entity and transfer of title. Sub-rule (1)(i)
mandates that where a co-operative housing society, company or
any other legal entity of allottees is to be constituted, whether for
a single building or for a building or wing forming part of a larger
layout, the promoter is required to submit an application to the
Registrar for registration of such entity within a period of three
months from the date on which 51 percent of the total number of
allottees in such building or wing have booked their apartments.
Sub-rule (1)(ii) further provides that in cases where an Apex Body
is to be constituted in respect of a layout comprising multiple
buildings or wings, the promoter is required to submit an
application for registration of such Apex Body within a period of
three months from the date of receipt of the Occupation Certificate
of the last building in the layout. Sub-rule (1)(iii) stipulates that in
the event of failure on the part of the promoter to form such legal
entity within the prescribed time, the Authority may either direct
the promoter to initiate such formation or authorise the allottees
to undertake the same.
24. Section 10 of the Maharashtra Ownership Flats Act, 1963
casts a statutory obligation upon the promoter to take steps for
formation of a co-operative society or company as soon as the
minimum number of persons required to constitute such entity
have taken flats. The provision mandates that the promoter shall,
within the prescribed period, submit an application to the Registrar
for registration of such organisation of flat purchasers. The proviso
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contemplates that in the event of failure on the part of the
promoter to submit such application within the prescribed period,
the Competent Authority may, upon an application made by the
flat purchasers, direct the concerned Registrar to register the
society after verifying the authenticity of the request and upon
granting an opportunity of hearing to the promoter. Sub-section
(2) clarifies that where the promoter submits the property to the
provisions of the Maharashtra Apartment Ownership Act, 1970 by
executing and registering a declaration, the formation of a co-
operative society or company would not be permissible.
25. The dispute arises out of a development project where the
layout contains different buildings and units and those parts are
not all governed by the same statutory position. The petitioner
argues that because some parts of the project are under MOFA and
some are under RERA, a single society for all of them was not
proper. The petitioner also argues that it had already expressed
willingness to form separate societies phase wise, and that
respondent no. 5 could not have bypassed the promoter and
directly moved for formation of one society. On the other hand,
respondent no. 5 argues that the petitioner did not take effective
steps within time, that the purchasers had the right to act, and that
a clear majority of the relevant unit holders chose to form one
society for the completed part of the project. After going through
the material placed before me, I am of the view that the challenge
raised by the petitioner cannot be accepted.
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26. The first aspect which needs to be understood is the
statutory duty cast upon the promoter. The scheme of Rule 9 of the
Rules and Section 10 of the Act does not leave any discretion with
the developer to act as per its convenienc. The language of these
provisions shows that once a sufficient number of flat purchasers
come into the project, a legal obligation arises. The promoter is
required to take steps within the time prescribed by law for
formation of the legal entity, such as a co-operative society or any
other recognised body. The purchasers, after investing their money
and taking possession, are entitled to have a proper organisation
which can manage common areas, handle maintenance, and
represent their collective interest. Without such a body, the
purchasers remain dependent.
27. In this background, the contention of the petitioner that it
had sent emails or had kept documents ready for signatures cannot
be accepted. Such acts may show some intention but they do not
satisfy the requirement of law. The rule 9 speaks of steps to be
taken within three months. There is a difference between
preparing papers and actually initiating the legal process before
the competent authority. If such incomplete acts are treated as
compliance, then the purpose of fixing a time limit would fail. The
promoter could then indefinitely delay the process by saying that it
was ready and willing without ever completing the task. The law
expects the promoter to move the process of registration in a
effective manner. Therefore it must be held that mere readiness
does not keep the promoter's right alive.
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28. The petitioner has argued that every tower must be treated
as a separate project, and therefore a separate society is required
for each such tower. According to the petitioner, since each tower
consists of apartments which are independently developed and
sold, each tower answers the definition of a separate project. On
that basis, it is contended that Rule 9 makes it mandatory to form
a separate society for each such project.
29. At first glance, this argument appears logical because the
definition of "real estate project" is wide and includes development
of a building consisting of apartments for the purpose of sale. A
single tower can indeed fall within that definition. However, the
difficulty arises when this definition is applied in isolation without
considering the full scheme of the law and the factual situation of
the development. The definition itself is not as narrow as the
petitioner suggests. It not only refers to a building, but also
includes common areas, development works, improvements, and
all rights and appurtenances connected with it. This indicates that
the concept of a project is not always confined to a single
structure. It can also extend to a larger development where
different parts are connected by common facilities and common
planning.
30. Rule 9 also cannot be read in a mechanical manner. The Rule
speaks of formation of a legal entity for a building or a wing, but it
also recognises situations where there is a layout consisting of
more than one building. In such cases, the Rule itself contemplates
formation of an Apex Body or federation of societies. This shows
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that the law is conscious of complex developments where more
than one building forms part of a larger scheme. Therefore, it
cannot be said that the Rule mandates in all circumstances that
each tower must necessarily have a completely separate society,
without regard to the overall nature of the project.
31. In the present case, the material on record shows that the
development was planned as a composite layout. The towers and
bungalows are situated on the same plot, and they share common
infrastructure and amenities. The purchasers were part of one
larger residential scheme. In such a situation, to treat each tower
as entirely independent for all purposes, including formation of
society, would ignore the unity of the project. At the same time, it
is also true that the law does recognise that in certain cases
separate societies may be formed for separate buildings or phases.
But that depends upon the facts and the manner in which the
project is implemented. It is not an absolute rule flowing
automatically from the definition of "project". Therefore, while it
may be correct to say that each tower can be viewed as a project
for certain purposes under the Act, it does not necessarily follow
that a separate co-operative society must be formed for each tower
in every case. The formation of society has to be decided by
considering the overall development, the existence of common
facilities, the intention reflected in the agreements, and the
conduct of the parties, along with the statutory scheme. The
petitioner's argument would lead to fragmentation even in cases
where the project is clearly integrated.
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32. Coming to the next submission, the petitioner has repeatedly
stated that it was always willing to form separate societies for
different phases of the project. On a plain reading, this submission
may appear reasonable. The record shows that the purchasers
themselves had already begun taking steps for formation of a
society. At the same time, the petitioner, in its own
communications, had accepted that the project was to be
developed in phases and that separate societies and an Apex Body
could be formed. This shows that the petitioner had full
knowledge of the process of registration which it now seeks to rely
upon.
33. Despite such knowledge, the petitioner did not bring the
process to its logical conclusion within the time required by law.
There is no material to show that the petitioner actually initiated
the statutory process in the prescribed manner by filing proposal
for registration. Once the promoter, who is primarily responsible,
fails to act within time, the law does not compel the purchasers to
indefinitely depend upon the promoter. The statutory scheme itself
provides that in such a situation, the right to move forward passes
to the purchasers. They are then entitled to take steps for
formation of the legal entity. This shift of right is provided to
protect the purchasers from delay on the part of the promoter.
Therefore, the argument of the petitioner that it was willing to act
cannot override the fact that it did not act in the manner and
within the time required by law. The purchasers, having waited
and having found no effective action from the promoter, were
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justified in proceeding on their own. Once that stage was reached,
the petitioner cannot turn back and say that its earlier intention
should be treated as sufficient compliance.
34. The next important aspect relates to consent of the
purchasers. In the present matter, respondent no. 5 has placed
material to show that 109 out of 155 existing unit holders
supported the proposal for formation of one co-operative housing
society. Out of 35 bungalow owners, 21 have supported the
proposal. This clearly crosses the threshold of 51 percent. It is a
clear indication that more than half of the existing occupants were
in favour of one society. Therefore, the majority of 109 out of 155,
including 21 bungalow owners, has to be treated as valid and
sufficient for the purpose of forming the society.
35. When a project is developed in such a manner that it
provides common facilities to all residents, it indicates that the
project is not divided. A common entrance, a shared club house,
swimming pool, gymnasium, garden and other such amenities are
meant for daily use by all occupants. People living in different
towers or units use the same access, the same facilities, and
depend upon the same maintenance arrangements. Because of
this, their living conditions become connected with each other. In
such circumstances, formation of one common society may, in
present case, will be more effective. It avoids duplication of
management. It allows better coordination in maintaining common
areas. It reduces confusion about responsibility. It also ensures that
all persons who are using shared amenities contribute and
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participate through a single body. Therefore, the idea of one
society in a composite project cannot be said to be contrary to law
in the present case.
36. In view of the foregoing discussion and reasons recorded
hereinabove, the following order is passed:
(i) The Writ Petition stands dismissed;
(ii) The impugned judgment and order dated 17 February
2026 passed by respondent no. 1 in Revision Application
Nos. 253 and 254 of 2025 is upheld;
(iii) Rule is discharged;
(iv) In the facts and circumstances of the case, there shall
be no order as to costs;
(v) Pending applications, if any, do not survive and stand
disposed of accordingly.
(AMIT BORKAR, J.)
