[Cites 8, Cited by 0]
Bombay High Court
Balkisan Dwarkadas Sanghvi vs Padmanabha Co-Op. Soc. Ltd. And Ors on 4 February, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:5781
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Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5873 OF 2019
SHABNOOR
AYUB
PATHAN Balkisan Dwarkadas Sanghvi
Digitally signed by
SHABNOOR AYUB
PATHAN
of Mumbai Indian inhabitant, aged 74 years,
Date: 2026.02.04
16:53:59 +0530 Occupation Business (Retired)
Residing on the 1st floor of
building known as 43 - "Padmanabh"
situated at N. S. Road No.8,
Presidency Society, JVPD, Scheme,
Vile Parle, (West), Mumbai 400 049. ... Petitioner
V/s.
1. Padmanabha Cooperative Society Ltd,
a Co-operative Society Registered
under the provisions of the Maharashtra
Co-operative Societies'Act, 1960
bearing Regd.No.
MUM/TNA/MHADB/HSG/TO/TC/13393
of 2016-17 having its office at PlotNo.43-
Padmanabh, Presidency Society situated
at N. S.Road No.8, JVPD, Scheme,
Vile Parle, (W), Mumbai 400 049.
2. Hiten M. Sheth,
aged 52 years, Occupation: Builder of Mumbai
Indian inhabitant, residing in Flat No.701,
on the 7th floor of 43-Padmanabha,
situated at N. S. Road No.8, JVPD Scheme,
Vile Parle, (West), Mumbai 400 049.
3. The Presidency Co-operative Housing
Society Ltd; a Society registered under the
provisions of the Bombay
Societies Act, 1925 bearing Reg. No.B-333 of
1947having its office at Vishnu Prasad Desai
Bhavan, Second floor, Plot No. A/8, Opp.
1
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Mithibai College, JVPD Vile, Parle,
(West), Mumbai 400 056.
4. The Deputy Registrar,
Co-operative Housing Society,
MHADA, having office at Near
Griha Nirman Bhavan, Kala Nagar,
Bandra (East), Mumbai- 400051.
5. The Divisional Joint Registrar,
Co-operative Societies,
Mumbai Division,
Mumbai, having office at Malhotra
House, 6th Floor, Opp. G.P.O.
Fort, Mumbai-400 001.
6. The Minister of State,
Department of Co-operation,
Transport and Texile Department,
State of Maharashtra, Mantralaya,
Mumbai-400 032. ... Respondents
Mr. Surel Shah, Sr. Advocate a/w Mr. Abbas Zaidy, Mr.
Aditya Keval i/b Zohair & Co., for the Petitioner.
Mr. Y. D. Patil, AGP, for the State - Respondent.
Mr. Shekhar Jagtap a/w Ms. Sairuchita Chouwdhary
i/b J. Shekhar Associates, for Respondent No.1.
Ms. Rachna Mamnani i/b Prashant P. Kulkarni, for
Respondent No.3.
CORAM : AMIT BORKAR, J.
DATED : FEBRUARY 4, 2026
JUDGMENT:
1. By the present petition instituted under Article 226 of the
Constitution of India, the petitioner calls in question the legality
and correctness of the order dated 10 October 2018 passed by the
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Revisional Authority in proceedings arising under Section 9 of the
Maharashtra Co-operative Societies Act, 1960, read with Section
10 of the Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer) Act,
1963.
2. The material facts, in brief, are these. The petitioner asserts
that he is a lessee of respondent No. 3 Society and that the
construction of the building, in respect of which respondent No. 3
submitted a proposal for registration, was undertaken at his
instance. Placing reliance upon the proviso to Section 10 of MOFA,
it is contended that no order directing registration of the society
could have been passed without impleading him as a party to the
proceedings. According to the petitioner, such non-impleadment
has resulted in violation of the statutory mandate as well as the
principles of natural justice.
3. The petitioner further submits that the authority which
passed the impugned order acted without jurisdiction. It is urged
that the proposal for registration ought to have been considered by
the Deputy Registrar, K-West Ward, and not by the Deputy
Registrar, MHADA. The contention proceeds on the footing that, in
relation to societies falling within the purview of MHADA, the
powers under Section 3 of the MCS Act were required to be
exercised by the Deputy Registrar, K-West Ward. Hence, according
to the petitioner, the impugned order suffers from inherent lack of
jurisdiction.
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4. The petition is resisted by respondent No. 3 Society. It is
contended that the petitioner is admittedly a member of the
society and that the construction was carried out by him in that
capacity. It is submitted that once the society is shown as the
applicant in the registration proposal, an individual member
cannot assert a separate legal identity distinct from the society. A
member acts through the collective body and cannot claim an
independent status in respect of acts undertaken for and on behalf
of the society. On this basis, it is urged that the petitioner does not
answer the description of a "promoter" as defined under Section
2(c) of MOFA.
5. In light of the rival submissions, the following questions arise
for consideration: first, whether a person who is a member of a co-
operative society and who undertakes or causes construction
leading to the formation of such society can be regarded as a
promoter within the meaning of Section 2(c) of MOFA; and
second, if such person falls within the definition of promoter,
whether he becomes a necessary party to the proceedings for
registration in view of the proviso to Section 10 of MOFA.
6. For the purpose of deciding these issues, it is necessary to
refer to Sections 2(c) and 10 of MOFA, which read thus:
"2(c) "promoter" means a person and includes a partnership
firm or a body or association of persons whether registered
or not] who constructs or causes to be constructed a block or
building of flats 2 [or apartments] for the purpose of selling
some or all of them to other persons, or to a company, co-
operative society or other association of persons, and
includes his assignees; and where the person who builds and
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the person who sells are different persons, the term includes
both;
Section 10 -
Promoter to take steps for formation of co-operative society
or company.-- 1 (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 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 fails 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 (Mah. XXIV of
1961), 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.
(2) If any property consisting of building is constructed or to
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be constructed and the promoter submits such property to
the provisions of the Maharashtra Apartment Ownership Act,
1970 (Mah. XV of 1971), 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 (Mah. XXIV of 1961),
accordingly; and in such cases, it shall not be lawful to form
any co-operative society or company.
7. Sections 2(c) and 10 of MOFA. Section 2(c) defines the
expression "promoter" to mean a person, including a firm or
association of persons, who constructs or causes to be constructed
a building of flats for the purpose of selling them, wholly or in
part, to others, including a co-operative society. The definition is
inclusive in nature and extends to assignees. It further clarifies that
where the person who constructs and the person who sells are
different, both would fall within its ambit.
8. Section 10 casts a statutory obligation upon the promoter to
take steps for formation of a co-operative society or company once
the minimum number of flat purchasers is reached. The promoter
is required, within the prescribed time, to submit an application to
the Registrar for registration of such organisation. The proviso
empowers the Competent Authority, in case of default by the
promoter, to direct registration upon an application by the flat
purchasers, subject to verification and after affording the
concerned promoter a reasonable opportunity of being heard. Sub-
section (2) further provides that where the promoter submits the
property to the Maharashtra Apartment Ownership Act, 1970 by
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executing a declaration, the formation of a co-operative society
would not be lawful.
9. Section 2(c) defines "promoter" as a person who constructs
or causes to be constructed a block or building of flats for the
purpose of selling some or all flats to other persons or to a
company or cooperative society. The definition expressly covers
situations where the builder and the seller may be distinct persons.
The statutory test is based on who causes the construction for sale.
Membership of a society is a separate status. Being a member does
not ipso facto negate the factual question whether the member
caused the construction for sale. If a member initiates, arranges or
finances the construction with the purpose of alienating flats to
others or to a society, the member satisfies the words "constructs
or causes to be constructed" and comes within the statutory
definition of promoter. The definition uses the verb "causes"; it
reads on causation rather than on description or on the label
placed by the parties. Therefore, the mere fact of membership does
not automatically exclude the individual from being a promoter
when the factual matrix shows causation of construction for sale.
10. The real test is seen the source of the right which the
petitioner is asserting. If that right exists only because he holds the
status of a member of the society, then it is linked to his
membership. In such a case, the right does not stand on its own. It
flows directly from the fact that he is part of the corporate body.
Remove the membership, and the right disappears. That kind of
right is internal to the society. It arises from the bye-laws, the
statute governing the society, and the mutual obligations between
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members.
11. On the other hand, there are transactions which have
nothing to do with the internal working of the society. If the nature
of the transaction is such that any third person, even a complete
stranger to the society, could have entered into it on the same
terms, then the right cannot be said to arise out of membership. In
that situation, the petitioner does not act in his capacity as a
member. He acts as an independent contracting party. The society,
in such a case, deals with him not because he is a member, but
because he has entered into a separate legal arrangement.
12. The distinction is important. A member has certain rights
simply because he belongs to the society. These may include voting
rights, participation in management, or benefits conferred by the
bye-laws. Such rights are rooted in membership and cannot be
separated from it. But where the dispute concerns a contract, a
lease, a construction agreement, or any other transaction which
the society could equally have undertaken with a non-member, the
character of the right changes. It then becomes a matter of civil
relationship, not a matter arising from membership.
13. Therefore, while examining the petitioner's claim, the Court
must ask a basic question. Could this right has been claimed by a
person who is not a member at all. If the answer is yes, then the
right does not arise in the capacity of a member. If the answer is
no, and the right exists only because of membership, then the
dispute squarely arises out of that membership. This approach
prevents confusion between internal disputes of a society and
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independent legal transactions which stand outside the status of
membership.
14. The submission of respondent No.3 that a member "loses his
independent individuality" when the society applies for
registration cannot prevail on legal principle. A co-operative
society acts through its corporate will; it may be the applicant for
registration. That legal identity does not, however, erase separate
legal relations or obligations of persons who in fact acted as
promoters. Statutes effect substantive legal consequences based on
the reality of transactions and not on convenient labels. If a
member acted as promoter, he remains so for purposes of MOFA;
the society's later appearance as applicant does not remedy failure
to accord procedural rights guaranteed to a promoter by the Act.
15. The proviso to Section 10 resolves the second question on
procedure. Section 10 places on the promoter an obligation to
apply for registration of the organisation once the requisite
minimum number of purchasers has been attained. The first
proviso authorises the Competent Authority, upon receiving an
application from persons who have taken flats, to direct the
District Deputy Registrar, Deputy Registrar or Assistant Registrar to
register the society where the promoter defaults in making the
application within the prescribed period. The proviso further
mandates verification of the authenticity of applicants and requires
that the concerned promoter be given a reasonable opportunity of
being heard before a direction is issued. The legislative purpose is
to protect the interests of flat purchasers and ensures formation of
the organisation. At the same time it safeguards the promoter by
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guaranteeing verification and a hearing before the Competent
Authority compels registration through the Registrar. Natural
justice requires that a promoter who is affected by a direction for
compulsory registration must be afforded an opportunity to show
cause and to produce records showing his role, his compliance, or
any other material relevant to the question of registration.
16. Applying the statutory scheme to the facts compels two
conclusions. One, the petitioner prima facie satisfies the statutory
description of promoter because he caused the construction of the
building which is the subject matter of the registration
proceedings. Two, the proviso to Section 10 required that he be
afforded a reasonable opportunity of being heard before any
direction for registration issued to the relevant Registrar. The
record shows neither verification in accordance with the proviso
nor that the petitioner received an opportunity to be heard by the
Competent Authority prior to the impugned order. The omission
thus amounts to breach of natural justice.
17. The next contention is jurisdiction. The petitioner maintains
that powers under Section 3 of the MCS Act, in relation to societies
covered by MHADA, were to be exercised by the Deputy Registrar,
K-West Ward. The impugned order, by contrast, emanated from the
Deputy Registrar, MHADA. Jurisdiction in quasi-judicial
assignments flows from statutory allocation and from notifications
which implement that allocation. Where the Statute and the
enabling administrative scheme vest powers in a specified Deputy
Registrary, a decision by another Deputy Registrar outside that
scope will suffer jurisdictional defect. The Court must examine the
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statutory scheme and the notifications to identify the appropriate
authority. The material on record, including the Revisional
Authority's order and the registration file, indicate that the society
concerned falls within the powers assigned to the Deputy Registrar,
K-West Ward.
18. In view of the foregoing discussion and findings, the
following order is passed:
(i) The impugned orders passed by the authorities under
the Act are hereby quashed and set aside, as being
unsustainable in law.
(ii) The proceedings are remanded to the Deputy Registrar,
K-West Ward, for fresh consideration and decision in
accordance with law and in the light of the observations
recorded hereinabove.
(iii) The parties shall appear before the Deputy Registrar, K-
West Ward, on 9 February 2026 at 11:00 a.m., without
awaiting any further communication.
(iv) The Deputy Registrar shall adjudicate and dispose of
the proceedings expeditiously and, in any case, within a
period of four weeks from the date on which the parties
enter appearance.
(v) It is clarified that issuance of any fresh notice to the
parties shall not be necessary, as the date of appearance is
fixed by this Court.
(vi) Pending such adjudication, the person presently
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authorised to operate the bank account of the respondent
society shall continue to operate the account strictly for the
purpose of meeting routine and day-to-day expenses. No
major financial commitment or capital expenditure shall be
incurred during this interregnum.
19. The writ petition is accordingly disposed of in the aforesaid
terms.
20. There shall be no order as to costs.
(AMIT BORKAR, J.)
