Cooperative law permits bifurcation of societies when it enhances member welfare and does not require external approval beyond statutory provisions.

JUDGMENT:

AMIT BORKAR, J.

1. The petitioners have filed these writ petitions under Article 226 of the Constitution of India. They challenge the judgment and order passed by respondent No.2. Respondent No.2 allowed the appeal filed by respondent No.4. The appeal challenged the order of respondent No.3 directing bifurcation of petitioner No.1 housing society.

2. Respondent No.4 cooperative housing society was registered on 17 February 1993. It was registered on two different plots. Plot No.1 in Sector 28 and Plot No.8 in Sector 22. CIDCO allotted both plots through separate lease agreements dated 21 April 1993. The plots are approximately one kilometre apart. Plot No.1 contains 18 residential buildings and two commercial buildings. Plot No.8 contains 80 residential flats. The construction of respondent No.4 society was completed in 1997. The developer did not complete construction of Balaji Tower Society. The members of Balaji Tower Society, who are petitioners, completed the construction themselves and obtained an occupation certificate in 2004.

3. In 1996, the Chairman of respondent No.4 society submitted a list of members to CIDCO and the Joint Registrar. The list contained names of 534 flat owners. It included 80 members of Balaji Tower Society. This list is reflected in the annual audit report for 1997 to 1998. The General Body confirmed this report in September 1998. The report records that 80 members of Balaji Tower Society formed part of respondent No.4.

4. From 1998 to 1999, the society began showing two categories of members. Authorized and unauthorized members. Till 2011, Balaji Tower Society continued to be shown with 80 members. From 2011 onwards, the membership of Balaji Tower Society reduced from 80 to 53. Respondent No.4 has not explained how membership reduced without following the procedure under Section 35 of the Maharashtra Cooperative Societies Act, 1960 and Rules 28 and 29 of the Maharashtra Cooperative Societies Rules, 1961. The Auditor recorded these facts in his report dated 28 June 2023. He recommended action under Section 88 of the MCS Act. He also recommended filing of a First Information Report against 47 members of respondent No.4 society.

5. The Audit Report for 2023 to 2024 shows total share capital of 475 members. It includes 434 flat members and 21 commercial members. The report also states that the share capital of members of petitioner No.1 Balaji Tower Society was returned. The report explains that names of 80 members of Balaji Tower Society were removed because the society was divided under Section 18 of the MCS Act and the names were deleted from the voters list from 2024.

6. The petitioners submit that distance between the buildings is more than one kilometre. Maintenance of Balaji Tower Society became difficult. Therefore, 115 members of respondent No.4 Shree Ganesh CHS Ltd. submitted a requisition on 22 November 2019 to convene a Special General Meeting and consider bifurcation under Section 17 of the MCS Act. Respondent No.4 did not convene the meeting. Then 33 members of Balaji Tower Society requested the Joint Registrar to intervene and appoint an officer to convene the meeting. Due to the Covid-19 pandemic the meeting could not be convened.

7. Petitioner No.2 thereafter filed an application under Section 18 of the MCS Act before the Joint Registrar seeking bifurcation. In the meantime, the Annual General Meeting of respondent No.4 was held on 30 March 2021. In that meeting respondent No.4 resolved to give sanction for bifurcation subject to payment of transfer fees and m