Om Sai Pratibha Co-op. Hsg. Soc. vs State of Maharashtra & others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2002 Supreme(Bom) 193

IN THE HIGH COURT OF BOMBAY
R.J. Kochar, J.
Om Sai Pratibha Co-op. Hsg. Soc. .... Petitioners.
Versus
State of Maharashtra others.... Respondents.
Writ Petition No. 776 of 2002, decided on 21-2-2002.
Advocates appeared :
V.A. Thorat with L.S. Shukla, for petitioners.
C.R. Sonawane, A.G.P., for respondent No. 1/State.
S.I. Menon, for respondent No. 2.

Headnote:Maharashtra Co-operative Societies Act, 1960 - Sections 4, 6, 9, 152 and 154 - Society - Registration of - Proposal for - Allowed by Dy. Registrar - Upheld by Divisional Joint Registrar in appeal by Builders - Revisional Authority/ Minister for co-operation quashed Order under Section 154 of Act - Cancellation of Registration challenged by petitioner/ society - Maintainability of appeals under Sections 152 and 154 of Act by builders - Held - Members was approached Registrar are aggrieved party - Builders cannot file appeal under Section 152 or Revision under Section 154 - They have no role to play in process of registration - Appeals & Revision by builders not maintainable - Rejected in limine.
       Maharashtra Co-operative Societies Act, 1960 - Section 154 - Revision - Against order registering society - Jurisdiction of revisional authority - Held - Jurisdiction of revisional authority under Section 154 very limited - R.A. should be extremely slow in interfering with orders of appellate authority - Cancellation of registration on some flimsy grounds defeats purpose of social enactment. - The revisional authority under Section 154 of the Act has tried the revision as an original dispute and not as a revision which lies only when there is an error of law apparent on the face of the record in the impugned order of the lower authority or the order is totally perverse or if there is manifest miscarriage of justice. It was for the appellants builders to have satisfied the appellate authority in respect of the deficit of the requisite number of the flat holders who ought to have signed the proposal. The appellants, therefore, could not make any grievance against the impugned order before the revisional authority that no opportunity was given to them. The revisional authority functioning under Section 154 of the Act should remember that its jurisdiction is extremely narrow and it could interfere with the orders of the lower authorities only when such orders suffer from errors of law apparent on the face of record or are per se perverse or they cause great injustice to the parties. The powers and jurisdiction of the revisional authority under Section 154 are well known and well conditioned under the civil law. There is no departure from such well established and well entrenched principles in respect of revisions. The revisional authority cannot lose sight of another fact that the appellate authority has larger power in appeal to consider the facts and the revisional authority ought to be extremely slow in interfering with the orders passed by the appellate authority which is the second fact finding forum against the orders of the Dy. Registrar. The revisional authority i.e. the minister cannot further afford to forget that his role as well as the role of the State Government under this Act is to encourage, permit and foster a healthy co-operative movement and not to discourage or obstruct and defeat the purpose of the Act which is to foster a healthy co-operative movement in the State. By proceeding to cancel the registration of the housing societies on some flimsy and technical grounds the minister has in fact discouraged the co-operative movement and has defeated the purpose of the social enactment. It is clearly reflected in the order of the minister that he has failed to imbibe the spirit of the co-operative movement in the State. The minister has failed to appreciate that the purpose of registration of a co-operative society is to bring a sizable number of members together and make them work together in the spirit of co- operation. The purpose of the society is to act through one body to solve the day to day problems and also to deal with the several authorities such as municipal corporation and the State Government. Before proceeding to cancel the registration of a co-operative Housing Society, the authorities must appreciate the hardships and difficulties which would be caused to the members of the society particularly in getting the supply of essential services viz., water, electricity etc. Court has to adopt a liberal approach and not a pedantic one heading towards cancellation of the registration. Court approach must to save and preserve and encourage registration of societies and never to lightly cancel the registration of the co-operative societies to wipe them out of existence. The percentage or the number prescribed by the State Government need not be and should not be strictly considered or computed. There has to be only a substantial compliance with the requisite minimum so that the society would have economic viability to function properly.
       Maharashtra Co-operative Societies Act, 1960 - Section 10 - Societies - Registration of - Minimum requirement of members - 25 out of 41 flat owners applied for registration - Allowed by Dy. Registrar - Confirmed by Divisional Joint Registrar - Registration cancelled by Revisional Authority/ Minister for Cooperation - Contended that 28 members ought to be signed registration proposal - Held - In view of circular dated 24.7.1992 issued by State Government 60% of flat owners in minimum number - Minister wrongly computed 60% of 41 flat owner - Application by 25 owners for registration satisfied requirement of circular - No breach of Section 10 of Act - Order of Minister not sustainable - Set aside - Order of Divisional Joint Registrar restored.
       Maharashtra Co-operative Societies Act, 1960 - Section 10 - Societies - Registration of - Minimum requirement of members - 25 out of 41 flat owners applied for registration - Allowed by Dy. Registrar - Confirmed by Divisional Joint Registrar - Registration cancelled by Revisional Authority/ Minister for Cooperation - Contended that 28 members ought to be signed registration proposal - Held - In view of circular dated 24.7.1992 issued by State Government 60% of flat owners in minimum number - Minister wrongly computed 60% of 41 flat owner - Application by 25 owners for registration satisfied requirement of circular - No breach of Section 10 of Act - Order of Minister not sustainable - Set aside - Order of Divisional Joint Registrar restored.

Judgement Key Points

Builders, having sold flats to purchasers, have no locus standi or role in the registration process of a cooperative housing society and cannot file appeals under Section 152 or revisions under Section 154 as they are not aggrieved parties; such proceedings should be rejected in limine. [4000139520007] (!)
Jurisdiction of the revisional authority under Section 154 is narrow and limited to cases of error of law apparent on the face of the record, perverse orders, or manifest miscarriage of justice; it must exercise caution and be extremely slow to interfere with orders of the appellate authority, which has broader fact-finding powers. [4000139520006] (!)
The revisional authority cannot convert a revision into an original proceeding or probe new allegations not substantiated before lower authorities; appellants bear the burden to prove their case at the appellate stage. (!) [4000139520006]
State authorities under the Act must foster and encourage the cooperative movement, adopting a liberal approach favoring preservation of registrations over pedantic cancellation on flimsy or technical grounds, considering hardships to members in accessing essential services. [4000139520006] (!)
Registration requires substantial compliance with minimum membership thresholds for economic viability, not strict arithmetic computation; a government circular prescribing 60% of total flat owners was satisfied where 25 out of 41 signed the proposal (exceeding 60% of 41). [4000139520005] (!)
Vague or unsubstantiated allegations of misconduct by promoters or violations (e.g., relations among members) do not obstruct registration if statutory requirements are met; separate remedies exist for such disputes. [4000139520006]

JUDGMENT - R.J. KOCHAR, J.:---The petitioner is a Co-operative Housing Society. It is aggrieved by the impugned order of the Minister for Co-operation, State of Maharashtra. By the impugned order dated 3rd January, 2002, the Minister was pleased to cancel the orders dated 17th October, 2001 and 3rd November 1999 passed respectively by the Deputy Registrar, Co-operative Societies and the Divisional Joint Registrar of Co-operative Societies, Mumbai by which orders the petitioner society was allowed to be registered as Co-operative Housing Society under section 9 read with sections 4 and 6 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the Act").

2. The petitioner along with its 28 members had submitted a proposal for registration of the petitioner society. The application for the registration complied with all the prescribed requirements and, therefore, by his order dated 3rd November, 1999, the Deputy Registrar had issued registration certificate to the petitioner society. The respondent No. 2 (hereinafter referred to as "the Builders") aggrieved by the aforesaid order of the Deputy Registrar registering the society, filed an appeal under section 152 of the Act challenging the decision of the Dy. Registrar before the Appellate Authority i.e. Divisional Joint Registrar. The petitioner had filed its affidavit and the builders had also filed rejoinder. The learned Appellate Authority on consideration of the material on record dismissed the appeal by his order dated 17th October, 2001 and confirmed the order of the Dy. Registrar. The builders, being aggrieved by the said order of the Appellate Authority, approached the Minister for Co-operation under section 154 of the Act in revision. The petitioner filed reply in the said revision. The Minister by his order dated 3rd January, 2002 allowed the revision and quashed and set aside the orders passed by both the authorities below. The Minister has given the following specific reasons to quash and set aside the orders impugned before him.

i) The Divisional Joint Registrar did not give an opportunity to the builders to substantiate their allegations that the flat owners of flat Nos. 14, 16, 17, 18, 19 and 20 were related with each other. According to the Minister the builders would have been in a position to prove how section 10 of the Act as violated but for want of such an opportunity the builders could not prove the said allegations and, therefore, the appeal was wrongfully dismissed by the Appellate Authority;

ii) According to the Minister out of 41 flat owners 28 flat owners ought to have signed the registration proposal in accordance with the Government Circular dated 24th July, 1992. According to the said circular minimum number of signatories to apply for registration is 60% of the total flat owners. The Minister observed that only 25 flat owners had submitted the registration proposal and, therefore, he found that the condition for minimum number prescribed in the said circular is not complied with.

3. On the aforesaid two grounds the Minister had cancelled the orders passed by the two authorities below.

4. The present impugned order is the second order which I came across, whereby the very same Minister has accepted the revision application filed by the builders to cancel the registration of the Co-operative Housing Society. I, therefore, thought it proper to decide the issue of registration of the Co-operative Housing Societies under the Act finally at my end.

5. Rule. By consent returnable forthwith. Respondents waive service.

6. The question at hand often arises and is faced by the Co-operative Societies, particularly the Co-operative Housing Societies. Once the registration of the society is cancelled, the flat owners face several problems including the supply of essential services. This petition could not be rejected at the threshold. I have gone through the order passed by the Dy. Registrar in exercise of his powers under section 6 of the Act.

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