[Cites 10, Cited by 0]
Bombay High Court
Yoges Jayantilal Shah vs The State Of Maharashtra Thro. The ... on 17 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:12843
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2962 OF 2026
ATUL Yogesh Jayantilal Shah & 169 Others ... Petitioners
GANESH
KULKARNI Vs.
Digitally signed by
ATUL GANESH
KULKARNI The State of Maharashtra & Others ... Respondent
Date: 2026.03.17
12:27:58 +0530
WITH
WRIT PETITION NO.3137 OF 2026
ICC One and Two Cooperative
Housing Society Limited ... Petitioners
Vs.
The State of Maharashtra & 200 Others ... Respondent
Mr. S.S. Patwardhan with Mr. Sukumar Ghanvat i/by
Mr. Utkarsh Desai for the petitioners in
WP/2962/2026.
Mr. S.S. Patwardhan with Mr. Akhil Kupade i/by Mr.
Akhil Kupade for the petitioner in WP/3137/2026.
Mr. O.A. Chandurkar, Additional G.P. with Mr. H.D.
Mulla, AGP for respondent Nos.1 to 4-State in
WP/2962/2026.
Ms. S.S. Jadhav,, AGP for respondent Nos.1 to 4-State
in W/3137/2026.
Mr. Akhil Kupade for respondent No.5 in
WP/2962/2026.
Mr. Girish S. Godbole, Senior Advocate with Mrs. Usha
Tiwari and Ms. Vandana Tiwari for respondent No.6 in
both WPs.
CORAM : AMIT BORKAR, J.
RESERVED ON : MARCH 10, 2026.
PRONOUNCED ON : MARCH 17, 2026
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JUDGMENT:
1. Both the writ petitions arise out of similar set of facts and
evidence. As the issues involved are similar and arise from similar
order, both the writ petitions are being decided together by this
common judgment.
2. By the present writ petitions instituted under Articles 226
and 227 of the Constitution of India, the petitioners have assailed
the Judgment and Order dated 16 February 2026 passed by
respondent No.2 in Revision Application No.311 of 2025 preferred
by respondent No.6, the proposed co-operative society.
3. The facts according to petitioners giving rise to the present
writ petitions may briefly be stated as follows. The petitioners
claim to be lawful members of respondent No.5, the existing co-
operative housing society, which is the original society. Initially,
195 members had preferred an appeal before respondent No.3, the
Divisional Joint Registrar. However, certain original appellants
were not available for executing the vakalatnama. Consequently,
the present writ petition has been instituted on behalf of 170
petitioners. It is not in dispute that both the petitioners and the
chief promoter of respondent No.6, the proposed society, are
members of respondent No.5 Society. The said society comprises
two residential towers, namely Tower One and Tower Two.
Approximately 190 members are residing in Tower One, whereas
about 340 members are residing in Tower Two. The chief promoter
of respondent No.6, along with approximately 88 members
residing in Tower One, submitted a joint application dated 21
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October 2024 before respondent No.4 seeking exercise of powers
under Section 18 of the Maharashtra Co-operative Societies Act,
1960 for the purpose of effecting division of respondent No.5
Society into two separate societies. Thereafter, another application
dated 25 October 2024 was also submitted reiterating the request
for division of the said society. Along with the said application, the
chief promoter forwarded certain resolutions purportedly passed
by the proposed society. However, the said resolutions did not bear
the names of any proposer or seconder. Subsequently, on 25
November 2024, the chief promoter submitted a proposal along
with certain documents in support of the application seeking
division of respondent No.5 Society. It is the case of the petitioners
that neither the chief promoter nor the members who had signed
the aforesaid application had submitted any requisition to
respondent No.5 Society for convening a Special General Meeting
for taking a decision regarding division of the society, as
contemplated under Section 17 of the said Act.
4. Upon receipt of the aforesaid proposal from the chief
promoter, respondent No.4 issued a communication dated 9
December 2024 directing the Head Clerk, Smt. R. R. Indulkar,
working in his office, to visit the premises of respondent No.5
Society and submit a report in relation to the application
submitted by the chief promoter of respondent No.6. Pursuant
thereto, the said Head Clerk is stated to have visited the office of
respondent No.5 Society. At the time of her visit, only the chief
promoter of respondent No.6 and two staff members of respondent
No.5 Society were present. According to the petitioners, except
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interacting with the chief promoter of the proposed society, the
said Head Clerk did not consult or hold any discussion with any
other member of respondent No.5 Society prior to submitting her
report. Thereafter, the chief promoter of respondent No.6
submitted yet another application dated 16 December 2024 before
respondent No.4, reiterating the request for division of the society
and assigning certain reasons in support thereof. The petitioners
contend that the reasons set out therein were not sustainable
either under Section 17 or Section 18 of the Maharashtra Co-
operative Societies Act, 1960. Subsequently, the aforesaid Head
Clerk, Smt. R. R. Indulkar, submitted her report dated 18
December 2024 to the office of respondent No.4.
5. After receipt of the said report, respondent No.4, the
Assistant Registrar, without consulting the Federal Society,
prepared a draft order dated 20 December 2024 proposing division
of respondent No.5 Society into two entities, namely respondent
No.5 Co-operative Housing Society for Tower Two and respondent
No.6 proposed Co-operative Housing Society for Tower One. Upon
learning about the said draft order, certain petitioners submitted
an application dated 27 December 2024 requesting respondent
No.4 to furnish the documents on the basis of which the said draft
order had been prepared. In response thereto, respondent No.4
furnished the relevant documents by communication dated 6
January 2025. Thereafter, the petitioners submitted detailed
objections on 14 February 2025 and again on 17 February 2025
requesting respondent No.4 to cancel the proposed draft order and
to reject the proposal submitted by the chief promoter of
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respondent No.6. However, respondent No.4, the Assistant
Registrar, without adverting to the objections raised by the
petitioners, proceeded to pass the final order dated 25 February
2025 directing division of respondent No.5 Co-operative Housing
Society into two separate societies, namely respondent No.5
existing society for Tower Two and respondent No.6 proposed
society for Tower One. Being aggrieved and dissatisfied with the
said order dated 25 February 2025, the petitioners preferred
Appeal No.70 of 2025 along with a stay application before
respondent No.3, the Divisional Joint Registrar.
6. Respondent No.3, by order dated 4 March 2025, granted
interim stay to the aforesaid order dated 25 February 2025. The
said interim stay continued from time to time until final disposal of
the appeal. Copies of the roznama of the hearings dated 11 March
2025 and 25 March 2025 have been annexed on record.
Respondent No.6, the proposed society, filed its reply on 11 March
2025 and contested the appeal. The appeal before respondent
No.3 was filed on 3 March 2025. It is the grievance of the
petitioners that respondent No.4, the Assistant Registrar, without
awaiting the report of the committee appointed for carrying out
the actual division of respondent No.5 Society, proceeded to issue
a notification registering respondent No.6 as a separate society and
also issued the Registration Certificate dated 3 March 2025 in
favour of respondent No.6 proposed Co-operative Housing Society.
7. In view thereof, the petitioners filed an application on 25
March 2025 seeking formal amendment of the appeal so as to
challenge the aforesaid notification and registration certificate. By
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order dated 25 March 2025, respondent No.3 allowed the said
amendment application. On 25 March 2025, respondent No.3
heard the parties and directed them to file written submissions.
Accordingly, respondent No.6 filed its written submissions
opposing the appeal. The petitioners also filed their written
submissions reiterating their contentions and prayed for allowing
the appeal. Upon consideration of the rival submissions,
respondent No.3 passed the final judgment and order dated 9 April
2025 allowing the appeal. By the said order, the order dated 25
February 2025 passed by respondent No.4 was set aside and the
registration certificate issued in favour of respondent No.6
proposed society was also quashed.
8. Being aggrieved by the said order dated 9 April 2025,
respondent No.6 approached this Court by filing Civil Writ Petition
No.5639 of 2025. However, since an alternative statutory remedy
was available, respondent No.6 withdrew the said writ petition
with liberty to file a revision application before respondent No.2.
By order dated 29 April 2025 passed in the said writ petition, this
Court observed that if respondent No.6 files a revision application
along with an application for stay, the Minister shall decide the
stay application within a period of two weeks. Thereafter, on 2
May 2025, respondent No.6 preferred Revision Application No.311
of 2025 under Section 154 of the Maharashtra Co-operative
Societies Act, 1960 before respondent No.2, the Hon'ble Minister,
challenging the judgment and order dated 9 April 2025 passed by
respondent No.3.
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9. According to the petitioners, despite the short notice, their
advocates reached Mantralaya at about 2.45 p.m. on 13 August
2025 in order to appear in the said proceedings. However, owing
to heavy rush for obtaining entry passes, they could not secure the
same before 3.00 p.m. Ultimately, the entry pass was issued at
approximately 3.15 p.m. As there was another queue for entry into
the Mantralaya building, the advocates were able to enter the
premises only around 3.30 p.m. The advocate representing the
revision applicant, who met them on the ground floor, informed
the advocates for the petitioners that the hearing in the revision
application had already concluded and that the matter had been
closed for orders, with liberty granted to the parties to file written
submissions within twenty days. Thereafter, the advocates for the
petitioners reached the place of hearing at about 3.35 p.m.
10. Since respondent No.2, the Minister, was not physically
present at the venue of hearing and was conducting the
proceedings through video conferencing from another location, the
advocates for the petitioners were unable to mention the matter
and seek an opportunity of hearing. They also attempted to
mention the matter at the end of the board. However, the same
could not be done as respondent No.2 logged out immediately
after hearing the last matter on the board. Consequently, the
petitioners were deprived of an opportunity of hearing which,
according to them, is mandatory under Section 154 of the
Maharashtra Co-operative Societies Act, 1960. In the aforesaid
circumstances, the petitioners submitted applications dated 3
September 2025 requesting that an opportunity of hearing be
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granted to them. By way of precaution, the petitioners also filed
short written submissions praying for dismissal of the revision
application. However, after a lapse of more than seven months
from the date on which the proceedings were closed for orders,
respondent No.2, the Minister, without granting any opportunity of
hearing to the petitioners and without considering the applications
dated 3 September 2025 or the written submissions filed by the
petitioners, proceeded to pass the impugned judgment and order
dated 16 February 2026. By the said order, the revision application
filed by respondent No.6 was allowed. Consequently, the judgment
and order dated 9 April 2025 passed by respondent No.3 in Appeal
No.70 of 2025 was set aside and the order dated 25 February 2025
passed by respondent No.4, directing bifurcation of respondent
No.5 Co-operative Housing Society and granting registration to
respondent No.6 proposed society, was confirmed. Being aggrieved
thereby, the petitioners have approached this Court by filing the
present writ petition.
11. Mr. Patwardhan, learned Advocate appearing on behalf of
the petitioners, submitted that the impugned order has been
passed in clear breach of the principles of natural justice.
According to him, the impugned order came to be passed without
affording the petitioners any opportunity of hearing. He pointed
out that the petitioners had submitted a specific application dated
3 September 2025 before respondent No.2 requesting that they be
granted an opportunity of hearing in the revision proceedings.
However, respondent No.2 failed to consider the said application
and proceeded to pass the impugned order without hearing the
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petitioners. It is, therefore, contended that the impugned order is
in direct contravention of the mandate of Section 154 of the
Maharashtra Co-operative Societies Act, 1960. On this ground
alone, it is urged that the impugned order deserves to be quashed
and set aside.
12. It is further submitted that the authorities under the Act
failed to properly appreciate the statutory scheme governing the
exercise of powers under Section 18 of the Maharashtra Co-
operative Societies Act. According to the learned counsel,
respondent No.4 invoked the suo motu power under Section 18 by
assigning the sole reason that there was no possibility of passing a
resolution for division of the society in accordance with the
procedure contemplated under Section 17 of the Act. It is
contended that such reasoning is legally untenable, since the
power under Section 18 cannot be exercised merely on the ground
that the procedure prescribed under Section 17 may not result in a
resolution for division of the society. The learned counsel submits
that the suo motu power under Section 18 is required to be
exercised only when the division is demonstrably in the interest of
all the members of the society and not merely to accommodate the
demands of a particular group of members. According to him, the
order dated 25 February 2025 has been passed in disregard of the
requirements of Sections 17 and 18 of the Act.
13. The learned counsel further submitted that respondent No.2
failed to take into account the mandatory procedural requirements
prescribed under Section 18 of the Maharashtra Co-operative
Societies Act, 1960 read with Rule 17 of the Maharashtra Co-
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operative Societies Rules, 1961. It is submitted that the statute
requires the authority to prepare a draft scheme for division of the
society and thereafter consult the Federal Society before issuance
of the draft order. In the present case, however, no draft scheme
was prepared by respondent No.4 and what was issued was merely
a draft order dated 20 December 2024. It is further submitted that,
according to respondent No.4's own record, the opinion of the
Federal Society was obtained only on 20 January 2025, which was
subsequent to issuance of the draft order. Thus, the draft order was
issued without preparation of a draft scheme and without prior
consultation with the Federal Society. According to the petitioners,
such procedure is contrary to the provisions of Section 18 of the
Act and Rule 17 of the Rules. Consequently, the final order passed
on the basis of the said draft order is also vitiated for non-
compliance with the statutory requirements.
14. The learned counsel submitted that respondent No.2 also
failed to consider that in the final order dated 25 February 2025
respondent No.4 has observed that the rights and interests of the
members residing in Tower One would be adversely affected since
222 members residing in Tower Two had opposed the division of
the society. According to the petitioners, such an observation is
wholly unsustainable and devoid of logic. The mere fact that
members residing in Tower Two opposed the proposal for division
cannot lead to the conclusion that the rights or interests of
members residing in Tower One were being adversely affected in
the functioning of respondent No.5 society. It is pointed out that
neither in the application submitted by the chief promoter of
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respondent No.6 nor in the final order passed by respondent No.4
has any specific instance been recorded demonstrating that the
rights of members residing in Tower One were violated due to the
numerical strength of members residing in Tower Two. The
petitioners contend that the members residing in Tower One have
never been deprived of their rights as members of respondent No.5
society.
15. It is further submitted that while passing the impugned
order, respondent No.2 failed to notice that in the final order dated
25 February 2025 respondent No.4 had observed that the present
petitioners had failed to demonstrate how the division of the
society would adversely affect the members residing in Tower Two
and why such division should not be permitted. According to the
learned counsel, in the objections submitted by the petitioners to
the draft order, it had been clearly explained that the proposed
division would adversely affect not only the members residing in
Tower Two but also the members residing in Tower One. It is
contended that respondent No.4 misdirected himself in law by
placing the burden upon the petitioners to demonstrate adverse
consequences. Under the scheme of Section 18 of the Act, the
authority must be satisfied that the proposed division is in the
interest of all the members of the society. The statute does not
contemplate ordering division merely on the ground that it may
not cause prejudice to some members. It is further submitted that
respondent No.4 has failed to assign any cogent reasons to
demonstrate how the proposed division would be in the interest of
the members of the existing society. It is also pointed out that the
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application seeking division was supported by less than fifty
percent of the members residing in Tower One.
16. The learned counsel further submitted that respondent No.2
failed to consider that the principal contention of respondent No.6
was based on the alleged numerical imbalance between the
members residing in Tower One and Tower Two. According to
respondent No.6, the difference in the number of members would
result in exclusion of members residing in Tower One from
representation in the managing committee in future elections and
would make it difficult for them to secure passage of resolutions
with the support of a majority. It was further contended by
respondent No.6 that such numerical imbalance would lead to
disparity in the long run and the interests of members residing in
Tower One would remain unprotected. The petitioners contend
that these allegations are vague and unsupported by any factual
material. No specific instance has been cited to demonstrate that
members residing in Tower Two have dominated the decision
making process or caused injustice to members residing in Tower
One. It is submitted that mere numerical difference between
members of two towers cannot by itself constitute a valid ground
for bifurcation of an existing co-operative housing society. It is
further pointed out that the present managing committee of the
existing society comprises a majority of members residing in Tower
One, which demonstrates that there is adequate representation of
members from Tower One in the administration of the society.
17. Per contra, Mr. Godbole, learned Senior Advocate appearing
on behalf of respondent No.6, submitted that the absence of an
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opportunity of oral hearing at the stage of deciding the revision
application has not caused any prejudice to the petitioners.
According to him, the petitioners had already filed detailed written
submissions before the revisional authority and the same were
duly considered. He further submitted that the submissions
advanced on behalf of the members in Writ Petition No.2962 of
2026 are substantially similar to the submissions made by the
society and, therefore, no prejudice can be said to have been
caused to the members. He further submitted that the authority
had relied upon the report of the Head Clerk while passing the
order of bifurcation and it is not necessary that the Registrar
himself must personally carry out inspection. It is also pointed out
that it is not the case of the petitioners that the report submitted
by the said clerk is factually incorrect. The learned Senior Counsel
further submitted that the existing society consists of two towers.
Tower One has approximately 190 members, whereas Tower Two
has around 340 members. According to him, both the towers have
separate infrastructure such as independent water tanks, separate
electricity connections, independent assessment by the Municipal
Corporation of Greater Mumbai and separate water bills.
18. Placing reliance on the judgment of this Court in Unnat
Nagar Division 3 Co-operative Housing Society Limited & Another
vs. State of Maharashtra & Others, 2025 SCC OnLine Bom 39, the
learned Senior Counsel submitted that the appellate authority
committed an error in distinguishing the said judgment on the
ground that the said decision had considered facts that arose
subsequent to the bifurcation. Inviting attention to paragraphs 31
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to 33 of the said judgment, he submitted that this Court has held
that obtaining the opinion of the Federal Society after preparation
of the draft order does not cause prejudice to the parties.
19. The learned Senior Counsel also placed reliance on the
judgment of this Court in Abdul Rehman Adam Dawa & Others vs.
District Deputy Registrar of Co-operative Societies & Others , 2025
SCC OnLine Bom 4378. He submitted that the parameters
indicated in the said judgment, such as collective welfare of
members, better administration and management, preservation of
common facilities and maintenance of harmony among members,
as well as the test formulated in paragraph 29 of the said decision,
stand satisfied in the present case. According to him, the proposed
bifurcation promotes democratic functioning and enhances
accountability in financial matters. He further submitted that
although the order passed in the said judgment has been stayed,
the operation of the judgment itself has not been stayed and,
therefore, the precedential value of the decision continues to
subsist.
20. The learned Senior Counsel further submitted that the
judgment of the Supreme Court in Hemant Vimalnath Narichania
& Another vs. Anand Darshan Co-operative Housing Society
Limited & Others, (2016) 6 SCC 142 has been distinguished by this
Court in the case of Unnat Nagar Division 3 Co-operative Housing
Society (supra). He submitted that merely because a majority of
members oppose the proposal for bifurcation, the legitimate rights
of 137 members out of 190 members residing in the second
building cannot be defeated. According to him, the majority
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opposing the bifurcation belong to the ICC-2 building. He submits
that the authorities under the Act have taken into account the
benefit of the members and the necessity of bifurcation for the
purpose of efficient maintenance and management of the property.
In these circumstances, according to him, the impugned order does
not warrant interference in the exercise of writ jurisdiction and the
writ petition deserves to be dismissed.
REASONS AND ANALYSIS:
21. First, the contention regarding breach of natural justice
appears to have considerable substance and therefore requires
careful examination. The record shows that the petitioners had
specifically approached the revisional authority by submitting an
application dated 3 September 2025 requesting that they be
granted an opportunity of hearing in the revision proceedings.
Along with that application, they also filed short written
submissions so that their stand on the merits of the matter may at
least remain on record. From the material placed before this Court
it is clear that these written submissions were available before the
revisional authority at the time when the matter was taken up for
consideration. However, the circumstances in which the
proceedings came to be closed assume significance. On the day
fixed for hearing, the advocates representing the petitioners had
reached Mantralaya in order to appear before the revisional
authority. Because of the delay in obtaining entry passes and the
procedure for entering the building, they could not reach the place
of hearing immediately. At the same time the hearing was being
conducted through video conferencing and the Minister logged out
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soon after the matters on the board were completed. As a result of
this situation, the advocates for the petitioners could not
effectively present their case and the proceedings came to be
closed for orders. In substance, therefore, the petitioners were
deprived of the opportunity of making oral submissions before the
revisional authority.
22. In the present case the revisional authority ultimately passed
the impugned order after more than seven months from the date
on which the proceedings were closed. Despite the passage of such
considerable time, the petitioners were never called for hearing.
Nor does the impugned order record any reason explaining why
the request for hearing made by the petitioners was not accepted.
Merely because written submissions were available on record
cannot substitute the statutory requirement of hearing when the
statute itself contemplates such opportunity. Written submissions
may supplement oral arguments. They cannot replace them where
the law requires that parties must be heard. Therefore, in the facts
of the present case the failure to grant an oral hearing clearly
amounts to violation of the principles of natural justice as well as
the mandate of Section 154 of the Act. This defect goes to the root
of the matter and by itself provides sufficient ground to set aside
the revisional order.
23. Second, it becomes necessary to examine the procedure
which was followed by the Assistant Registrar while initiating the
process of division of the society under Section 18 of the Act.
Section 18 of the Maharashtra Co-operative Societies Act read with
Rule 17 of the Rules lays down a definite procedure which must be
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followed before a society is divided. The authority is first required
to prepare a draft scheme showing how the division of the society
is proposed to take place. After preparing such draft scheme,
consultation with the Federal Society is required. Only thereafter a
draft order may be issued inviting objections from the concerned
members.
24. The decision of the Supreme Court in Hemant Vimalnath
Narichania v. Anand Darshan Co-operative Housing Society Ltd.
(2016) 6 SCC 142 explains in a clear manner the procedure that
must be followed when the Registrar proposes to divide an existing
co-operative housing society under Section 18 of the Maharashtra
Co-operative Societies Act read with Rule 17 of the Rules. From
the reading of the said provisions, the Supreme Court observed
that the process begins with preparation of a draft scheme by the
Registrar. The preparation of a draft scheme is not a mere
preliminary formality. It is intended to set out the proposed
manner in which the society is to be divided, the distribution of
assets and liabilities, and the arrangement of management after
the division. This draft scheme therefore forms the basic
foundation of the entire process because it enables all concerned
persons to understand the structure and consequences of the
proposed division. After preparing such draft scheme, the next step
required by law is consultation with the Federal Society. The
consultation is meaningful only when the draft scheme is
forwarded to the Federal Society so that it can examine the
proposal and make suggestions or recommendations. The Supreme
Court has clarified that this consultation must take place at the
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stage of the draft scheme itself. The Federal Society is expected to
review the scheme and advise the Registrar regarding the
feasibility and propriety of the proposed division, keeping in view
the interests of the members and the proper functioning of the co-
operative structure. Once the suggestions or views of the Federal
Society are received, the Registrar is required to consider them.
After such consideration the Registrar may then proceed to prepare
a draft order proposing the actual division of the society. This draft
order is not the final decision. It is only a proposal which is
circulated so that the members of the society may be informed
about the intended action. The draft order must therefore be sent
to the concerned society with a direction that the society should
invite objections or suggestions from its members. This step
ensures participation of the members in the decision-making
process and allows them to place their concerns before the
authority. If any objections or suggestions are received from the
members, the Registrar must consider them carefully. The
authority is required to examine whether any modification to the
proposed arrangement is necessary in light of such objections.
Only after undertaking this exercise and after applying his mind to
the material placed before him can the Registrar pass a final order
of division.
25. The Supreme Court further clarified an important aspect of
the statutory procedure. The Court observed that the stage of
consultation with the Federal Society arises only at the stage of
preparation of the draft scheme. After that stage is over and the
Registrar prepares the draft order for inviting objections from the
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members, the statute does not require the draft order to be sent
again to the Federal Society for consultation. In other words, the
consultation with the Federal Society is a one-time step linked
specifically with the draft scheme and not with the subsequent
draft order.
26. The record of the present case indicates that this procedure
was not followed in the manner contemplated by law. Respondent
No.4 issued a draft order dated 20 December 2024 proposing
division of the society. However, the opinion of the Federal Society
was obtained only later on 20 January 2025. This clearly shows
that consultation with the Federal Society was not undertaken
prior to the issuance of the draft order. Further, the record does not
indicate that any detailed draft scheme was prepared before the
issuance of the draft order. For this reason also the process
undertaken by respondent No.4 cannot be said to be in conformity
with Section 18 read with Rule 17 of the Rules.
27. The reliance placed on the decision in Unnat Nagar Division
3 Co-operative Housing Society Ltd. v. State of Maharashtra , 2025
SCC OnLine Bom 39, does not advance the case of respondent
No.6 when the facts of the present matter are examined in their
proper perspective. In Unnat Nagar Division 3, this Court was
considering a challenge to the process adopted by the Deputy
Registrar while exercising powers under Section 18 of the
Maharashtra Co-operative Societies Act read with Rule 17 of the
Rules. The contention raised before the Court in that matter was
limited in nature. It was argued that the Deputy Registrar had
circulated the draft order to the Federal Society instead of
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consulting the Federal Society at the stage of draft scheme and
therefore the statutory procedure had been violated. While
considering that submission, this Court held that in the facts of
that case the consultation with the Federal Society, though
undertaken after preparation of the draft order, had not caused
any prejudice to the society concerned. The Court noted that the
society had full opportunity to raise objections to the proposed
bifurcation and the decision had been taken after considering the
material on record. On that factual foundation the Court held that
the deviation complained of was not of such nature as to vitiate
the decision.
28. The situation in the present matter stands on a materially
different footing. First, in the present case the procedural
irregularity is not confined merely to the stage at which the
Federal Society was consulted. The record indicates that no proper
draft scheme was prepared prior to issuance of the draft order.
Section 18 read with Rule 17 contemplates that the Registrar must
first prepare a draft scheme setting out the proposed manner of
division and thereafter consult the Federal Society on that scheme.
In the absence of a draft scheme itself, the subsequent steps lose
their statutory foundation. Therefore the procedural defect here is
not a minor variation in the order of consultation but the absence
of a mandatory step itself. Second, the decision in Unnat Nagar
Division 3 proceeded on the basis that the affected parties had
been afforded adequate opportunity to participate in the process
and that no real prejudice was demonstrated. In the present case,
however, the material on record shows that the objections of the
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members were not meaningfully considered and the ultimate
revisional decision was rendered without granting the petitioners
an opportunity of oral hearing. Thus the element of prejudice is
clearly established. Third, in Unnat Nagar Division 3 the Court was
satisfied that the exercise of power under Section 18 had been
undertaken after examining whether the proposed bifurcation
would promote better administration and management of the
society. In the present matter, on the other hand, the Assistant
Registrar invoked suo motu power mainly on the ground that
passing a resolution under Section 17 was unlikely. Such reasoning
does not reflect the statutory requirement that the division must be
in the interest of the members as a whole. Fourth, in the present
case the authority also proceeded to grant registration to the newly
proposed society even while the appeal against the order of
division was pending. This circumstance introduces an additional
procedural infirmity which did not arise in the factual context of
Unnat Nagar Division 3. For these reasons, the ratio of Unnat
Nagar Division 3 Co-operative Housing Society Ltd. cannot be
mechanically applied to the facts of the present case. Consequently,
the principle laid down in Unnat Nagar Division 3 does not assist
respondent No.6.
29. Third, the exercise of suo motu power under Section 18 also
requires close scrutiny. The Assistant Registrar has recorded in his
order that there was no possibility of passing a resolution for
division of the society in accordance with the procedure
contemplated under Section 17. On that basis he invoked the suo
motu powers available under Section 18. Section 18 confers power
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upon the Registrar to divide a society when such division is
necessary in the interest of the members or for better management
of the society. The power under Section 18 is therefore required to
be exercised with caution and only when the authority is satisfied
that division of the society is necessary for the collective benefit of
the members as a whole. It cannot be exercised simply because
one group of members desires separation or because there exists
disagreement within the society. In the present case the record
shows that the request for division was supported by about 88
members residing in Tower One. This number itself is less than
half of the total members residing in that tower. There is also no
detailed material placed on record demonstrating that the division
of the society would result in better administration, improved
management, or protection of the collective interest of all
members. The reasoning adopted by the Assistant Registrar that
the opposition from members of Tower Two amounts to
infringement of the rights of members residing in Tower One is not
convincing. Mere opposition by one group of members does not
automatically establish that the other group is suffering prejudice.
The authority ought to have examined whether the functioning of
the existing society had in fact resulted in denial of rights or unfair
treatment to members of Tower One. The order does not refer to
any specific instance of such prejudice. In absence of such material
the invocation of suo motu powers under Section 18 cannot be
said to be justified.
30. Fourth, the report prepared by the Head Clerk and the
manner in which the inspection was conducted also raises certain
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concerns. It is true that the law does not require the Registrar
himself to personally conduct every inspection. Administrative
assistance may always be taken from subordinate officers.
However, when such report forms an important basis for taking a
drastic step like division of a society, the enquiry leading to that
report must be fair and comprehensive. In the present matter the
Head Clerk visited the office of the society and met the chief
promoter of the proposed society along with two staff members.
There is nothing to indicate that she interacted with other
members of the society or sought their views before preparing her
report. A report prepared after hearing only one side of the dispute
cannot provide a reliable foundation for an important decision.
The authority should have ensured that the enquiry included
consultation with representatives of both towers and other
concerned members. Such balanced enquiry would have helped
the authority in forming an objective view. Since the report relied
upon by the authority appears to have been prepared on limited
interaction, its evidentiary value becomes dobtful.
31. Fifth, the argument advanced by respondent No.6 regarding
numerical imbalance between the two towers also needs
consideration. According to respondent No.6, Tower Two has
around 340 members whereas Tower One has around 190
members. On that basis it is contended that members residing in
Tower One may find it difficult in future to secure representation
in the managing committee or to pass resolutions in the general
body. However, this apprehension remains speculative. No specific
instance has been pointed out where members of Tower Two have
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actually exercised their majority in a manner which caused
injustice to the members of Tower One. On the contrary, it has
been pointed out by the petitioners that even in the present
managing committee the majority of members are residents of
Tower One. This circumstance indicates that participation of Tower
One members in the management of the society is not excluded.
Therefore, the mere existence of a larger number of members in
one tower cannot by itself be treated as a sufficient ground for
dividing the society into two separate entities. Some concrete
material showing real prejudice would have been necessary.
32. For all these reasons, the Court is of the view that the
impugned revisional order dated 16 February 2026 cannot be
sustained in law. The order suffers from violation of natural justice
as well as non compliance with the statutory procedure governing
division of co-operative societies. Consequently the said revisional
order deserves to be set aside and the matter requires
reconsideration in accordance with law.
33. In view of the discussion and findings recorded hereinabove,
the following order is passed.
(i) Both the Writ Petitions are partly allowed.
(ii) The Judgment and Order dated 16 February 2026
passed by respondent No.2 in Revision Application No.311 of
2025 is quashed and set aside.
(iii) Consequently, the order dated 25 February 2025 passed
by respondent No.4 directing division of respondent No.5
Co-operative Housing Society and the Registration Certificate
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dated 3 March 2025 issued in favour of respondent No.6-
Proposed Co-operative Housing Society shall not operate and
stand set aside.
(iv) The Judgment and Order dated 9 April 2025 passed by
respondent No.3-Divisional Joint Registrar in Appeal No.70
of 2025 shall stand restored.
(v) The proceedings, if any, seeking division of respondent
No.5 Society under Section 18 of the Maharashtra Co-
operative Societies Act, 1960 may be undertaken afresh only
in accordance with law and strictly in compliance with the
procedure contemplated under Section 18 of the said Act
read with Rule 17 of the Maharashtra Co-operative Societies
Rules, 1961, after granting due opportunity of hearing to all
concerned parties.
(vi) Rule is made absolute in the aforesaid terms. There
shall be no order as to costs.
(AMIT BORKAR, J.)
