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IN THE HIGH COURT OF BOMBAY
Gauri Godse, J.
Navjivan Commercial Premises Co-operative Society & Ors. - Appellants
Versus
Navjivan Co-Operative Housing Society & Ors. - Respondents
Writ Petition No. 2249 of 1997 with Interim Application No. 17924 of 2023 with Interim Application No. 19704 of 2022 In Writ Petition No. 2249 of 1997
Decided On : 10-06-2024
MCS Act - Co-operative Societies Bifurcation - Section 18, Section 152 - The court analyzed the provisions of Section 18 of the Maharashtra Co-operative Societies Act, 1960, which allows bifurcation of a society if deemed essential for public interest or proper management. The court emphasized the necessity of the Registrar's satisfaction and consultation with a federal society before bifurcation. The court found that the Divisional Joint Registrar's order lacked sufficient reasoning and did not adequately address common property issues, leading to the conclusion that the bifurcation was unjustified.
Fact of the Case:
The petition challenges the order of the learned Minister under Section 152 of the MCS Act, which quashed the bifurcation of a parent society into separate societies for residential and commercial buildings. The petitioner, a bifurcated society for the commercial building, argued that the bifurcation was necessary due to mismanagement and disputes within the parent society.
Finding of the Court:
The court found that the Divisional Joint Registrar's bifurcation order did not satisfy the requirements of Section 18 of the MCS Act, particularly regarding the necessity of consultation with a federal society and the management of common properties. The Minister's order to quash the bifurcation was upheld as justified.
Issues: Whether the bifurcation of the parent society into separate societies for residential and commercial buildings was justified under Section 18 of the MCS Act, considering the lack of consultation with a federal society and unresolved issues regarding common property.
Ratio Decidendi: The court held that the bifurcation order must demonstrate the Registrar's satisfaction regarding public interest and proper management, and must address common property issues. The absence of these elements rendered the bifurcation order invalid.
Final Decision: The petition was dismissed, upholding the Minister's order that quashed the bifurcation of the society.
JUDGMENT
Gauri Godse, J. - This petition is filed to challenge the Judgment and Order passed by the learned Minister in appeal under Section 152 of the Maharashtra Co-operative Societies Act, 1960 ('MCS Act') filed by respondent no. 1. By the impugned order the appeal is allowed and the Judgment and Order for bifurcation of the parent society into respective separate societies for residential buildings and for commercial building passed by the Divisional Joint Registrar, Cooperative Societies under Section 18 of the MCS Act is quashed and set aside. Respondent no. 1 is the original parent society. The petitioner is a bifurcated society consisting of occupants of commercial building originally part of respondent no. 1-society. In view of the order permitting bifurcation, the petitioner society was registered for the commercial building. However, in view of the impugned order, the bifurcation of the parent society for a separate society for the commercial building stands cancelled; hence, the petition by the society registered for the commercial building.
FACTS IN BRIEF :
2. The parent society was registered sometime in the year 1960 and formed for around 2000 members for the buildings situated at Lamington Road, Matunga, Chembur and Mahim. There were a total of 19 residential buildings and one commercial building on Lamington Road. There were disputes amongst members of the parent society; hence, in the year 1984-85, the buildings at Mahim were separated by registration of a separate society. The petitioner had formed a society of members of the commercial building and the same was independently registered as 'Navjivan III Welfare Association' registered under the Indian Societies Registration Act, 1860. The association of commercial building was registered with the office of the Charity Commissioner on 28th February 1990.
3. There were various litigations between the members of the commercial building and the parent society. Writ Petition No. 2052 of 1990 was filed by the petitioner for the appointment of an Administrator on the allegation of mismanagement. By order dated 14th May 1990 Administrator was appointed. It is the petitioner's case that they filed an application under Section 18 of the MCS Act for the bifurcation of the parent society into four manageable societies, i.e. one for Chembur, one for Matunga and two separate societies at Lamington Road to separate the commercial building from the residential buildings.
4. In the meantime, when the Administrator was in charge of the management of the parent society, elections were held, and a new managing committee took charge of the parent society. On 18th June 1992, the District Deputy Registrar issued a draft order for bifurcating the parent society into three separate societies: one at Lamington Road, the second at Chembur, and the third at Matunga.
5. The petitioner filed Civil Application No. 3893 of 1992 in the pending Writ Petition No. 2052 of 1990 seeking directions against the District Deputy Registrar, Co-operative Societies for bifurcation of the parent society into four societies, i.e. separate society for commercial building at Lamington Road in addition to the three societies proposed by the draft order dated 18th June 1992. By order dated 17th September 1992, this Court directed that the Deputy Registrar to modify the draft order of bifurcation, which should include a proposal to divide the parent society into four units, i.e. firstly at Chembur, secondly at Matunga, thirdly at Lamington Road and fourthly the commercial wing at Lamington Road. In continuation of the order dated 17th September 1992, this court, by an order dated 24th March 1995, issued further directions to the Deputy Registrar, Co-operative Societies, to dispose of the bifurcation application of the petitioner under Section 18 of the MCS Act and directed all the parties to comply with the lawful requisitions in order to enable the Deputy Registrar, Cooperative Societies to dispose of the proceedi
Cooperative law permits bifurcation of societies when it enhances member welfare and does not require external approval beyond statutory provisions.
The court upheld the validity of bifurcation orders under the Maharashtra Co-operative Societies Act, confirming that procedural compliance with consultation requirements was met.
Bifurcation of a cooperative housing society is permissible when it serves collective welfare, promotes better administration, and ensures that members' rights and interests are upheld under the Maha....
Non-compliance with statutory notice requirements under Section 14(4) of the Karnataka Co-operative Societies Act is an irregularity, not a fatal flaw, allowing bifurcation to proceed.
It is not possible to hold that there is no consultation by which there is a violation of Section 7(2) of the Act.
Section 7 of Act, 1993 is only with regard to effective consultation with Gram Panchayat. Meaning thereby that if Gram Panchayat is not agreeable with merger then it is for State Government to decide....
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