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IN THE HIGH COURT OF JUDICATURE AT BOMBAY AURANGABAD BENCH
SHARMILA U. DESHMUKH, J.
Lodha Belmondo Hsg. Federation Ltd. – Petitioner
Versus
State of Maharashtra – Respondent
Writ Petition No. 15253 of 2023
Decided On : 22-11-2024
Based on the provided legal document, the key points are as follows:
The registration of a Federal Society under the Maharashtra Co-operative Societies Act (MCS Act) must comply with both the MCS Act and the Real Estate Regulation and Development Act (RERA). The court emphasized that both statutes should be read harmoniously, and compliance with both is necessary for valid registration (!) (!) .
The registration process requires that the project be sufficiently developed, specifically that the layout has received an occupancy certificate for the last building to be constructed. The court found that the registration was premature because the project was still under development, and the Federal Society's registration did not meet the requirements under RERA (!) (!) .
The obligation to form a Federal Society is linked to the completion of the project. The statutory rights to form such a society are contingent upon the project’s completion, and the rules under RERA prescribe a specific timeline for the formation of the Apex Body after the occupancy certificate is issued (!) (!) .
The contractual arrangements under the Maharashtra Ownership of Flats Act (MOFA) and the agreements with flat purchasers specify that the ultimate organization (Federal Society) should be formed after project completion, and this process is governed by the terms of the agreements and the applicable statutes (!) (!) .
The registration of the Federal Society, in this case, was deemed invalid because it was not in accordance with the procedural requirements, particularly the timing mandated under RERA and the rules framed thereunder. The authorities rightly held that the registration was premature and not in compliance with the legal framework (!) (!) .
The statutes involved—MCS Act, MOFA, and RERA—operate in different regulatory spheres, and there is no conflict between them. RERA’s provisions are in addition to and do not override the MCS Act, and the statutes should be interpreted harmoniously (!) (!) .
The formation of a Federal Society is a process that depends on the completion of the project and adherence to statutory procedures. The registration cannot be granted before the project is sufficiently developed and the relevant conditions are fulfilled, as failure to do so could hinder the rights of flat purchasers and developers (!) (!) .
The court dismissed the petition, affirming that the authorities acted correctly in considering the statutory provisions and procedural requirements, and that the registration of the Federal Society was indeed premature and not in accordance with the law (!) .
In summary, the legal position established is that the registration of a Federal Society under the MCS Act requires compliance with both the Act and RERA, particularly the completion of the project and adherence to prescribed timelines. The authorities’ decision to deny registration due to premature application was upheld, emphasizing the importance of following statutory procedures to protect the rights of all stakeholders involved.
JUDGMENT :
SHARMILA U. DESHMUKH, J.
1. RULE. Rule made returnable forthwith and taken up for hearing with consent.
2. By this petition, exception is taken to the judgment and order of dismissal dated 11th July 2023 passed by the Respondent No. 1 in Revision Application No. 528 of 2023 preferred against the order dated 29th August 2022 passed by the Divisional Joint Registrar.
3. Aggrieved by the registration of the Petitioner as Federal Society, the Respondent No. 2-Developer filed Appeal No. 76 of 2022 under Section 152 of the Maharashtra Co-operative Societies Act, 1960 [for short “MCS Act”] which was allowed by order dated 29th August 2022 resulting in de-registration of the Petitioner Federation. As against this, the Revision Application filed under Section 154 of MCS Act before Respondent No. 1 came to be dismissed by the impugned judgment and order dated 11th July 2023.
4. The facts borne out from the record are that six Co-operative Housing Societies comprising of 28 buildings constructed by Respondent No. 2 on land bearing Gat No. 205, 221, 225, 227 and 228-247 (Part) of District Pune came together for the purpose of forming a Federal Society. The six societies are part of a larger layout which layout includes country houses, villas and is an ongoing project. Pursuant to Agreements executed with Respondent No 2 under Section 4 of the Maharashtra Ownership of Flats (Regulation of Promotion of Construction of sale, Management and Transfer) Act, 1963 [for short “MOFA”] members were put in possession of their individual tenements and came to be registered under the Maharashtra Co-operative Societies Act, 1960 as Co-operative Housing Societies during the period 2018-2021.
5. On 22nd April 2022, an application was filed by the Petitioner under Rule 4(1) of the Maharashtra Co-operative Societies Rules, 1961 [For short “MCS Rules”] seeking registration as federal societies and on the very same day i.e. on 22nd April 2022, the Assistant Registrar issued the registration certificate and classified the Petitioner under Rule 10 of Maharashtra Co-operative Societies Rules, 1961 in the Class of “General Society” and sub Class of “Other Society.”
6. By communication dated 24th May 2022, the Petitioner intimated the Respondent No 2 about the registration of Petitioner as Housing Federation and called upon Respondent No. 2 to transfer and hand over management and financial control of all the common amenities.
7. Upon being made aware of the registration of Petitioner Federation, the Respondent No 2 preferred an Appeal under Section 154 of MCS Act on 30th May 2022, challenging the registration. The Appeal was resisted by the Petitioner vide reply dated 13th June 2022. By order dated 29th August 2022 passed by Respondent No. 3, the Appeal was allowed and registration of the Petitioner stood cancelled on the ground of non compliance of the procedure under Rule 9(1)(ii) of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017 [for short “Rules of 2017”] framed under the Real Estate (Regulation and Development) Act, 2016 [for short, “RERA”].
8. Revision Application No. 528 of 2022 was preferred by the Petitioner before Respondent No. 1, which was dismissed vide impugned order dated 11th July 2023.
9. In the present Petition, the owners of the villas, country houses and flats in the said project filed Intervention Application being Interim Application(Stamp) No. 24619 of 2024, which was allowed by this Court.
SUBMISSIONS:
10. Dr. Chandrachud, learned counsel appearing for the Petitioners submits that the Petitioner was duly registered as Federal Society having complied with the minimum requirement of five societies as mandated under Section 8 of the MCS Act. He submits that the registration is in consonance with Clause 14 of the Flat Purchaser’s Agreement which provides for formation of ultimate organisation. He submits
The registration of a Federal Society under the Maharashtra Co-operative Societies Act must comply with the provisions of both the MCS Act and RERA, and is contingent upon project completion.
Court ruled that separate societies for mixed-use buildings are permitted only if substantial independent functioning and separation exist, as required by statutory provisions.
The Registrar of Co-operative Societies has the authority to prescribe a higher number of signatories for registration than the statutory minimum, and such Circulars are enforceable.
The court emphasized that registration of a Cooperative Housing Society without following proper jurisdictional authority and principles of natural justice is void ab initio.
Promoters must disclose the precise nature of the organization (cooperative society or otherwise) in agreements, and unilateral declarations that lack collective consent do not comply with statutory ....
The statutory rights of flat purchasers to form a co-operative society under the MOFA Act cannot be overridden by contractual obligations to join a defunct entity.
The court affirmed that flat purchasers have the statutory right to form a co-operative society independent of any existing company, as mandated by the MOFA Act.
The court upheld the validity of bifurcation orders under the Maharashtra Co-operative Societies Act, confirming that procedural compliance with consultation requirements was met.
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