Bombay High Court
THE SWA GRIHA CHS LTD THRU AUTHORISEDversusTHE STATE OF MAHARASHTRA THRU G P AND ORS
- Decided
- Disposal
- Disposed Off
Holding
A new society cannot be registered under Section 9 where an existing cooperative housing society already exists; the only lawful route is bifurcation under Sections 17 or 18 of the Maharashtra Co‑operative Societies Act.
Summary
The Swa‑Griha Co‑operative Housing Society Ltd. (Petitioner) challenged the registration of a separate society, Atharva CHS Ltd. (Respondent No.4), for Wings A and B of its building. The Deputy Registrar had granted registration despite the existence of the original society, a decision affirmed by the Joint Registrar and the Minister. The petitioner argued that the building’s common amenities, contractual obligations to make flat purchasers members, and the statutory scheme of the Maharashtra Co‑operative Societies Act (MCS Act) required any split to be effected only through bifurcation under Sections 17 or 18, not by a fresh registration under Section 9. The court held that the Deputy Registrar erred in entertaining the application under Section 9 when a society already existed, and that the proper remedy is bifurcation. Consequently, the orders of the Deputy Registrar, Joint Registrar and Minister were set aside and the registration of Atharva CHS Ltd. was cancelled. The writ petition was allowed.
Issues considered
- Whether a new cooperative housing society can be registered under Section 9 of the MCS Act when an existing society already governs the same building
- Whether the contractual obligations of flat purchasers to become members of the existing society preclude formation of a separate society
- Whether the proper procedure for splitting an existing society is bifurcation under Sections 17 and 18 of the MCS Act
Legislation cited
Subjects
- cooperative housing society
- registration
- bifurcation
- Section 9
- Section 17
- Section 18
- common amenities
- contractual obligation
- MHADA
- redevelopment
- civil appellate jurisdiction
- writ petition
Judgment
Megha 8_wp_7754_2026.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.7754 OF 2026
The Swa-Griha CHS Ltd. ...Petitioner
V/s.
1. The State of Maharashtra and Ors.
2. The Jt. Registrar Co.op. Societies
3. Dy. Registrar Co-op. Societies,
MHADA
4. Atharva CHS Ltd.
5. Vilas Kate
6. M/s. Sugee Developers Pvt. Ltd. ...Respondents
________________
Mr. Mayur Khandeparkar with Mr. Raghav Dharmadhikari i/b. Mr.
Pradeep Gole for the Petitioner.
Mr. Anil Sakhare, Senior Advocate with Mr. V.S. Kapse, Mr. Kunal Rane
and Mr. Pawan Tiwari i/b. Mr. Nikhil Rajeshirke for Respondent No.4.
Mr. Prakhar Tandon (through VC) i/b. Mr. Agam Maloo for Respondent
No.6.
Mr. A.C. Bhadang, AGP for Respondent -State.
________________
CORAM: SANDEEP V. MARNE, J.
Judgment reserved on: 1 SEPTEMBER 2026.
Judgment pronounced on: 18 SEPTEMBER 2026.
JUDGMENT:
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1) Rule. Rule is made returnable forthwith. Since pleadings in the
Petition are complete, the same is taken up for final hearing with the
consent of the learned counsel appearing for parties.
2) Petitioner is a cooperative housing society and is aggrieved by
registration of a separate society (Atharva CHS Ltd.) by flat purchasers of
Wings- A and B of its building. The Petitioner has accordingly challenged
registration order dated 20 February 2025 passed by the Deputy
Registrar, Cooperative Societies, Mumbai (Deputy Registrar), order
dated 8 July 2025 passed by the Joint Registrar, Co-operative Societies,
Slum Rehabilitation Authority, Mumbai (Joint Registrar) dismissing its
Appeal and Order dated 18 February 2025(2026) passed by the Hon’ble
Minister, Cooperation, dismissing its Revision Application.
3) The Maharashtra Housing and Area Development Authority
(MHADA) is the owner of land admeasuring 1125.84 sq. yards equivalent
to 941.31 sq. mtrs situated at City Survey No.1330 of old Parel Division,
Mumbai (Land-1). MHADA constructed a building of ground + three
upper floors on Land-1 and allotted the tenements therein to various
persons, who formed Petitioner-Society, which was registered on 10
January 1968. By Indenture of Lease dated 22 November 1980 MHADA
granted lease of 99 years in respect of the Land-1 in favour of the
Petitioner-Society. Thereafter by Deed of Sale dated 22 November 1982,
MHADA sold right, title and interest in respect of Land-1 to the
Petitioner-Society. There were total 32 members in the Petitioner-
Society occupying 32 flats each admeasuring about 322 sq.ft. carpet area.
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4) Petitioner-Society resolved to undertake the exercise of
redevelopment of its building. MHADA granted approval for joint
redevelopment of the land of the Society alongwith adjoining lands
belonging to MHADA. Accordingly, adjoining land admeasuring 2100 sq.
mtrs. (Land-2) and tit-bit area of 388.99 sq.mtrs. (Land-3) were included
in the redevelopement process of the Petitioner-Society. MHADA granted
approval for joint redevelopment of the land of the Society alongwith
adjoining Land Nos. 2 and 3 belonging to MHADA. Accordingly, adjoining
lands were also undertaken for redevelopment. Development Agreement
dated 5 August 2020 was executed between the Petitioner and
Respondent No.6-Developer for redeveloping the land admeasuring
3430.30 sq.mtrs. Commencement Certificate was issued on 2 December
2020. A Tripartite Agreement was executed between MHADA,
Respondent No.6 and the Petitioner-Society on 2 December 2021, under
which it was agreed to provide 75 flats to MHADA alongwith obligations
on the Petitioner-Society to admit the allottees as its members.
5) Respondent No.6 commenced construction of the building
comprising of wings- A, B, C and D and executed Agreements with flat
purchasers. According to the Petitioner-Society, the Agreements for Sale
executed with the flat purchasers contained covenants for flat purchasers
becoming member of the Petitioner-Society. On 12 January 2024, the
building was certified to be fit for occupancy. On 12 February 2024,
MHADA executed Supplementary Lease Deed in respect of the remaining
land admeasuring 2488.99 sq.mtrs. (RG Plot area admeasuring 330 sq.mtrs
+Tit-Bit Plot area admeasuring about 55.99 sq.mtrs. and MHADA’s own plot
admeasuring about 2100 sq.mtrs.) in favour of the Petitioner-Society.
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6) Respondent No.6-Developer forwarded a list of flat purchasers to
the Petitioner. Full Occupancy Certificate dated 14 March 2024 in respect
of the building was issued. It appears that several flat purchasers were
enrolled as members of the Petitioner-Society. However, Respondent
No.5-Chief Promoter of Atharva CHS Ltd. submitted a proposal to the
Deputy Registrar for registration of a new society in respect of Wings-A
and B and the proposal was signed by 71 flat purchasers of Wings-A and
B. The Petitioner-Society opposed the Application. However, by order
dated 20 February 2025, the Deputy Registrar allowed the Application
and granted registration in respect of Atharva Co-operative Housing
Society Ltd. (Respondent No.4) in respect of wings-A and B of the
building.
7) The Petitioner-Society filed appeal before the Joint Registrar,
which is rejected by order dated 8 July 2025. The Petitioner-Society filed
revision before the Hon’ble Minister-Cooperation, which is rejected by
order dated 18 February 2025(2026). Aggrieved by the order passed by
the Deputy Registrar, Joint Registrar and Hon’ble Minister, Co-operation,
the Petitioner-Society has filed the present Petition.
8) Mr. Khandeparkar, the learned counsel appearing for the
Petitioner-Society submits that the Deputy Registrar has grossly erred in
granting registration to Respondent No.4-Society. He submits that once
the Petitioner-Society is already in existence, it is impermissible to
entertain an application for registration of a new Society. That the only
remedy is to file an application for bifurcation of the existing society
under Sections 17 and 18 of the Maharashtra Co-operative Societies Act,
1960 (MCS Act). That the impugned order of the Deputy Registrar
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therefore suffers from serious jurisdictional error. He submits that there
are 240 flats in four wings of the Society, out of which 165 flat owners are
members of the Petitioner-Society. That even in respect of Wings A and
B, 72 flats purchasers are members of the Petitioner-Society. He submits
that there is contractual obligation on the flat purchasers to become
members of the Petitioner-Society. That the contractual obligation is
both in the Development Agreement as well as in Agreement for Sale
executed with the flat purchasers.
9) Mr. Khandeparkar further submits that it is otherwise
impermissible to form a separate society in respect of Wings A and B as
there are common amenities in the building in respect of the four wings,
which share a common podium parking consisting of 10 floors, which is
adjacent to Wings C and D. That water meter of all the wings is common
and electricity connection is also common. That generator, ring well,
water disposal management system is also common for all Wings. There
is also one entry where vehicles would enter into the compound, which is
located near C wing. That gymnasium, which is an amenity for all the
four wings, is located on 27th Floor of A and B wings. That the common
passage and the recreational ground is also common. He therefore
submits that it is impermissible to form a separate society in respect of a
building which has amenities, making it impossible to divide them.
10) Mr. Khandeparkar further submits that the entire development
itself is undertaken by the Petitioner-Society. That IOD, Commencement
Certificate, sanctioned plans, Occupancy Certificate, etc., are also issued
in the name of the Petitioner-Society. That the Petitioner-Society had
developed the entire building with a condition that the flat purchasers
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shall become its members. That therefore formation of a separate society
in respect of the building constructed by the Petitioner-Society is clearly
impermissible.
11) Mr. Khandeparkar further submits that a contractual undertaking
cannot be disregarded and in support, he relies on judgment of this
Court in Kritika Jewels Coop. Housing Society V/s. State of
Maharashtra and Ors.1. He further submits that mere difficulties in
managing or disputes relating to management of the society cannot be a
ground for formation of a separate society and in support, he relies on
judgment of this Court in Cosmopolitan III Co-operative Housing
Society Limited V/s. Hon’ble Minister Cooperation, Marketing Govt. of
Maharashtra and Ors.2 He submits that formation of a separate Society
affects ownership of land as it is impossible to subdivide the land. He
submits that formation of two societies reduces rights of owners in
common areas. In support, he relies on judgment of this Court in
Sadguru Universal CHS Ltd. V/s. State of Maharashtra through Govt.
Pleader 3. In support of his contention that registration under Section 9
of the MCS Act cannot be used to indirectly fragment an existing society,
he has relied on judgment of this Court in Sarita Cooperative Housing
Society Ltd. V/s. The Minister for Cooperation & Textile Department
and Ors.4. Mr. Khandeparkar would accordingly pray for setting aside the
impugned orders passed by the Deputy Registrar, Joint Registrar and
Hon’ble Minister, Cooperation.
1 Writ Petition No.12234 of 2024, decided on 19 November 2025.
2 (2025) 2 High Court Cases (Bom) 363
3 2025 SCC OnLine Bom 4382
4 Writ Petition No.3541 of 2025, decided on 12 February 2026.
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12) The Petition is opposed by Mr. Sakhare, the learned Senior
Advocate appearing for Respondent No.4-Society. He submits that the
three authorities have concurrently ruled against the Petitioner-Society.
That the three authorities have recorded detailed findings of formation
of a separate society qua Wings A and B. That formation of separate
society is needed on account of existence of several disputes about the
manner in which affairs of the Society were being conducted by the
Managing Committee of the Petitioner-Society. He submits that the
building of Wings A and B is independently constructed on Land No. 2
admeasuring 2100 sq. m. having no connection with other parts of the
land. That all the three parts are always treated as separate and
independent. That the building is also separately constructed in respect
of A and B wings and completely separate from C and D wings. That A
and B wings are separated by a gap and two buildings are connected with
each other. That therefore there is absolutely no reason why there needs
to be a common housing society in respect of large number of flats
forming part of two distinct structures.
13) Relying on provisions of Section 9 of the MCS Act, Mr. Sakhare
submits that there is no prohibition / limitation on formation of multiple
housing societies under the scheme of the MCS Act. He submits that
under Section 154B-2, it is permissible to form and register a society the
moment the conditions stipulated therein are satisfied. That the plain
reading of provisions of Sections 9 and 154B-2 of the MCS Act clearly
permits formation of a separate housing society and that there is no
compulsion that there has to be one society in respect of the building in
the layout. That, interpreting prohibition for formation of multiple
society would cause violence to the provisions of the MCS Act. That the
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Court cannot read into Sections 9 and 154B-2 of the MCS Act something
which is consciously not provided for. That when law permits formation
and registration of Respondent No.4-Society, any contractual stipulation
or practical difficulty cannot come in the way of right of the flat
purchasers of the A and B Wings to form and register a new society. Mr.
Sakhare further submits that there are otherwise completely different,
distinct and separated amenities in respect of Wings A and B. That there
are separate electricity meters for common passage lights and other
utilities. That there are separate water tanks installed for each wings.
With installation of separate pumps for lifting waters, separate water
meters can always be installed. That Respondent No.4-Society is willing
to take care of the underground tank, which can also be segregated by
the two societies. That fire suppression and detection systems installed
for each wings are also separate and independent. That terrace area can
always be notionally divided into two distinct sections. That offices of
the Societies are also different. That the two societies also have two
gymnasiums. That Respondent No.4 is willing to bear all costs and
expenses for maintenance of recreational ground area. That Respondent
No.4-Society is prepared to engage its own independent security
personnel. That the parking building is also separate and separate floors
are allotted to members of Respondent No.4-Society for parking their
vehicles. On above broad submissions, Mr. Sakhare would pray for
dismissal of the Petition.
14) In rejoinder, Mr. Khandeparkar submits that the Legislature has
retained application of provisions of Sections 17 and 18 of the MCS Act
to co-operative housing societies and that therefore there needs to be
harmonious reading of provisions of Sections 9 and 154B-2 with Sections
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17 and 18 of the MCS Act. That therefore new society can be registered
only after bifurcation of the existing society. He submits that the
provisions of Section 154B-2 are otherwise violated in the present case
as registration of new society requires minimum 5% of total number of
flats sanctioned. That there are 240 flats in the building and therefore
proposal by minimum 120 flat purchasers is necessary whereas only 71
persons had signed the proposal. That the proposal itself was faulty and
could not have been otherwise granted.
15) Rival contentions urged on behalf of the parties now fall for my
consideration.
16) The Petitioner is a society formed in respect of the entire building
which comprises of Wings A, B, C and D. The Petitioner-Society was in
fact the original owner of part of the land admeasuring 941.31 sq. mtrs
and the entire redevelopment process has been implemented at the
instance of and in the name of the Petitioner-Society. Since purchasers
of flats in sale component wings have formed a separate society, the
Petitioner-Society is aggrieved by grant of registration to the said
Society. It believes that it alone can manage the affairs of the building
and formation of multiple societies is impermissible in respect of the
same building.
17) On the other hand, it is the contention of Respondent No.4-
Society that Wings A and B of the building are distinct and separate from
Wings C and D. The flat purchasers of sale component wings possibly do
not desire to dwell together with the flat occupiers who were part of old
Page No.9 of 36
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building as well as with MHADA allottees and want to manage affairs of
their own Wings separately.
18) The first issue that arises for consideration is whether the Deputy
Registrar could have entertained and decided the application for
registration of a new society in the light of existence of the Petitioner-
Society. Perusal of the order dated 20 February 2025 passed by the
Deputy Registrar indicates that he was apparently not even made aware
of existence of Petitioner-Society in respect of the building. The chief
promoter of Respondent No.4-Society (Respondent No.5) filed a proposal
complaining that the developer had not cooperated for formation of the
society. It was contended by the chief promoter that an application was
submitted to the developer for securing Form-Z. However, no
cooperation was received from the developer. This is how the application
for registration of Respondent No.4-Society was pitched by Respondent
No.5-chief promoter. The Petitioner-Society was not impleaded in the
proceedings filed before the Deputy Registrar. The notice was apparently
issued only to the developer. The Deputy Registrar apparently felt that
what was filed by the chief promoter was a proposal for registration of a
new society in respect of the building without being aware of the
position that the Petitioner-Society already existed in respect of the
buildings. The Deputy Registrar formed an opinion that despite
requesting the developer to form a society, he had not cooperated and
accordingly, the Deputy Registrar proceeded to pass order dated 20
February 2025. This is clear from the following findings recorded by the
Deputy Registrar in order dated 20 February 2025:
ज्याअर्थीं , नि योजि त अर्थींर्व को-ऑप हौसिं ग ो ायटी लि , अर्थींर्व नि ल्डींग, ए र्व ी विंर्वग,
काका ाहे गाडगीळ माग, निटळक भर्व च्या ा ू ा, प्रभादेर्वी, मुं ई ४०००२५ या
ंस्र्थींेच्या पु र्विर्वका करण्यात आ े ा अ ू दर ंस्र्थींे े / प्राधि6करणा े
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पु र्विर्वका ा ु ार निर्वका क यां ा ंस्र्थींेच्या पु र्विर्वका केल्या ंतर ां6 ेल्या इमारतीमध्ये
१२९ दनि का6ारकां ा निर्वक्री के ेल्या दनि का6ारकां ी निर्वका क मे. गु ी डेव् प
प्रा.लि यां ा अ ेक र्वेळा पत्र व्यर्वहार करू ंस्र्थींेची ोंदणी करू निमळणे निर्व ंती के े ी
आहे. मात्र निर्वका क यां ी दनि का 6ारकांच्या इमारतीची हकार कायद्याअंतगतची
ोंदणी करू निद े ी ाही. त्यामुळे एकूण १२९ दनि का 6ारकांपैकी ७१ दनि का6ारक
यां ी ोंदणी प्रस्तार्वार्वर स्र्वाक्षरी करू नि योजि त ंस्र्थींेची ोंदणी करू निमळणे निर्व ंती
के े ी आहे, आणिण,
ज्याअर्थींI, नि योजि त अर्थींर्व को-ऑप हौसिं ग ो ायटी लि , अर्थींर्व नि ल्डींग, ए र्व ी विंर्वग, ..
काका ाहे गाडगीळ माग, निटळक भर्व च्या ा ू ा, प्रभादेर्वी, मुं ई ४०००२५ या ंस्र्थींेचे
मुख्यप्रर्वतक यां ी दाख के ेल्या ोंदणी प्रस्तार्वाची छा ी के ी अ ता ोंदणी
प्रस्तार्वा ा निर्वका काचे हकाय ल्या े या काया यात ु ार्वणी घेण्यात आ ी. परंतु
तद्नंतर निर्वका का े या काया यात ंस्र्थींा ोंदणी करण्याकरिरता मु ा झेड स्र्वाक्षरी र्व
णिQक्या ह ादर के े ा ाही.
१. निर्वक ेल्या गाळयांची यादी.
२. महा गर पालि के े मं ूर के ेल्या काQाची प्रत.
ज्याअर्थींI, ंस्र्थींेच्या मुख्य प्रर्वतकां ी निर्वहीत म
ु न्यात ंस्र्थींा ोंदणी ा त आर्वश्यक
कागदपत्रा ह या काया या प्रस्तार्व ादर के े ा आहे. आणिण,
ज्याअर्थींI, मे. गु ी डेव् प प्रा.लि या निर्वका का े दर इमारतीच्या अ ुषंगा े ंस्र्थींेची र्व
कागदपत्रे, र्व चाव्या आणिण मा मत्ता ंस्र्थींेकडे हस्तांरीत करार्वी. त ेच या काया या े
दर नि योजि त ंस्र्थींेच्या इमारतीचे निर्वका क र्व नि योजि त ंस्र्थींा यां ी र्वरी ंदर्भिभय
पत्रान्र्वये ु ार्वणी उपस्थिस्र्थींत राहू आप े म्हणणे ादर के े आहे. नि योजि त ंस्र्थींेमध्ये
ानिम भा दांचे निहताचे दृष्टी े ंस्र्थींेची ोंदणी करणे आर्वश्यक अ ल्याची माझी खात्री
झा े ी आहे. आणिण,
त्याअर्थींI खा ी प्रमाणे आदेQ देण्यात येत आहेत.
19) Thus, the Deputy Registrar was not even aware of the position that
a new society was sought to be registered by separating from the existing
society. As a matter of fact, 72 flat purchasers of Wings A and B were
already made members of the Petitioner-Society. Thus, at the time of
passing of order dated 20 February 2025 by the Deputy Registrar, 72 flat
purchasers of Wings A and B were already members of another Society
and by suppressing this position, the registration of Respondent No.4
Society was sought.
20) Though Respondent No.5-Chief Promoter did not implead the
Petitioner as party to the proceedings before the Deputy Registrar, it
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appears that the Petitioner-Society got wind of proposal submitted by
Respondent No.5 and it filed its objections vide letter dated 6 February
2025. However, the impugned order dated 20 February 2025 indicates
that the Deputy Registrar did not take cognizance of objections raised by
the Petitioner-Society. Thus, the impugned order dated 20 February 2025
suffers from twin vices viz., (i) it is passed in ignorance of the fact that
the Petitioner-Society is already formed in respect of the building and
(ii) it ignores the objection raised by the Petitioner-Society vide letter
submitted on 6 February 2025.
21) The Joint Registrar failed to appreciate this position where the
Deputy Registrar had decided the proposal for registration in ignorance
of existence of Petitioner-Society. Ordinarily therefore, the Joint
Registrar ought to have set aside order of the Deputy Registrar and ought
to have remanded the proceedings for fresh adjudication. However, the
Joint Registrar as well as the Hon’ble Minister have failed to appreciate
this position and have erroneously dismissed the appeal and revision
preferred by the Petitioner-Society.
22) Coming back to the core issue of permissibility to form and
register a separate society under Section 9 of the MCS Act in the light of
existence of another society in respect of a building, in my view, the
scheme of the MCS Act does not permit formation of a new society
independently when another society is already formed in respect of the
building. The MCS Act provides for a remedy for formation of a new
society under the provisions of Sections 17 and 18 of the MCS Act. Both
Sections 17 and 18 of the MCS Act provide for remedy of division of the
existing society. Under Section 17, members of the Society can pass a
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resolution by two-third’s majority and decide to divide itself into two or
more societies. Thus, under Section 17, members of the society can
themselves decide to divide the society into two societies. Section 17 of
the MCS Act provides thus:-
17. Amalgamation, transfer, division or conversion of societies.
(1)A society may, with the previous approval of the Registrar, by
resolution passed by two-thirds majority of the members present and
voting at a special general meeting held for the purpose, decide-
(a)to amalgamate with another society;
(b)to transfer its assets and liabilities, in whole or in part, to any
other society;
(c)to divide itself into two or more societies; or
(d)to convert itself into another class of society:
Provided that, when such amalgamation, transfer, division or
conversion, aforesaid, involves a transfer of the liabilities of a society
to any other society, no order on the resolution shall be passed by the
Registrar, unless he is satisfied that-
(i)the society, after passing such resolution, has given notice
thereof in such manner as may be prescribed to all its members,
creditors and other persons, whose interests are likely to be affected
(hereinafter in this section referred to as "other interested persons"),
giving them the option, to be exercised within one month from the
date of such notice, of becoming members of any of the new societies,
or continuing their membership in the amalgamated or converted
society, or demanding payment of their share or interest or dues, as
the case may be,
(ii)all the members and creditors and other interested persons, have
assented to the decision, or deemed to have assented thereto by
virtue of any member or creditor or any other interested person
failing to exercise his option within the period specified in clause (i)
aforesaid, and
(iii)all claims of members and creditors and other interested persons,
who exercise the opinion within the period specified, have been met
in full or otherwise satisfied
Provided further that, in case of societies doing the business
of banking, no such amalgamation, transfer, division or conversion
shall be initiated without the prior approval of the Reserve Bank of
India.
(2)Notwithstanding anything contained in the Transfer of Property
Act, 1982, or the Indian Registration Act, 1908, in the event of
division or conversion, the registration of the new societies or, as the
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case may be, of the converted society, and in the event of
amalgamation, on the amalgamation the resolution of the societies
concerned with amalgamation, shall in each case be sufficient
conveyance to vest the assets and liabilities of the original society or
amalgamating societies in the new societies or converted or
amalgamated society, as the case may be.
(3)The amalgamation of societies, or division or conversion of a
society shall not affect any rights or obligation of the societies so
amalgamated, or society so divided or converted, or render defective
any legal proceedings which might have been continued or
commenced by or against the societies which have been
amalgamated, or divided or converted; and accordingly, such legal
proceedings may be continued or commenced by or against the
amalgamated society, or, as the case may be, the converted society, or
the new societies.
(4)Where two or more societies have been amalgamated, or a society
has been divided or converted, the registration of such societies or
society shall be cancelled on the date of registration of the
amalgamated society, or the converted society, or the new societies
between which the society may have been divided.
23) Under Section 18 of the MCS Act, power is conferred on the
Registrar to inter-alia order sub-division of society into two or more
societies, if he is satisfied that it is essential to do so in public interest or
in the interest of the members of the society or in the interest of
cooperative movement or for the purpose of securing proper
management of any society. Power under Section 18 of the MCS Act can
be exercised by the Registrar either suo-motu or even on an application
made by members of the Society, who do not form two-third majority.
Section 18 of the MCS Act provides thus:
18. Power to direct amalgamation, division and
reorganisation in the public interest or in the interest of
members, etc.
(1)Where the Registrar is satisfied that it is essential in the public
interest or in the interest of members of such societies or in the
interest of the co-operative movement, or for the purpose of
securing the proper management of any society, that two or more
societies should amalgamate or any society should be divided to
form two or more societies or should be reorganised then
notwithstanding anything contained in the last preceding section
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but subject to the provisions of this section, the Registrar may, after
consulting such federal society as may be notified by the State
Government by order notified in the Official Gazette, provide for the
amalgamation, division or reorganisation, of those societies into a
single society, or into societies with such constitution, property
rights, interests and authorities, and such liabilities, duties and
obligations, as may be specified in the order.
Provided that, such notified federal society shall
communicate its opinion to the Registrar within a period of forty-
five days from the date of receipt of communication, failing which it
shall be presumed that such federal society has no objection to the
amalgamation, division or reorganisation and the Registrar shall be
at liberty to proceed further to take action accordingly.
(2)No order shall be made under this section, unless-
(a)a copy of the proposed order has been sent in draft to the society
or each of the societies concerned.
(b)the Registrar has considered and made such modifications in the
draft order as may seem to him desirable in the light of any
suggestions and objections which may be received by him within
such period (not being less than two months from the date on which
the copy of the order as aforesaid was received by the society) as the
Registrar may fix in that behalf, either from the society or from any
member or class of members thereof, or from any creditor or class of
creditors.
(3)The order referred to in sub-section (1) may contain such
incidental, consequential and supplemental provisions as may, in the
opinion of the Registrar, be necessary to give effect to the
amalgamation, the division or reorganisation.
(4)Every member or creditor of or other person inserted in each of
the societies to be amalgamated, divided or reorganised who has
objected to the scheme of amalgamation, division or reorganisation,
within the period specified, shall be entitled to receive, on the issue
of the order of amalgamation, division or reorganisation his share or
interest if he be a member and the amount in satisfaction of his dues
if he be a creditor.
(5)On the issue of an order under sub-section (1), the provisions in
subsections (2), (3) and (4) of section 17 shall apply to the societies
so amalgamated, divided or reorganised as if they were
amalgamated, divided or reorganised under that section, and to the
society amalgamated, divided or reorganised.
(6) Nothing contained in this section shall apply for the
amalgamation of two or more co-operative banks or two or more
primary agricultural credit societies.
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24) Thus, members of the existing society or even a person who is not
interested in becoming member of the existing society can apply to the
Registrar for the purpose of bifurcation of the existing society into two
societies. Upon recording satisfaction about existence of one out of the
four enumerated grounds under Section 18(1), the Registrar can process
the proposal, prepare a draft order, consult the federal society and make
an order of bifurcation.
25) Therefore, when a cooperative housing society is already formed in
respect of a building and residents (members or otherwise) are desirous
of separation from existing society and formation of a new society, the
only course of action open to them is to pass a resolution for bifurcation
under Section 17 or to apply to the Registrar for bifurcation under
Section 18 of the MCS Act. It is wholly impermissible to directly
approach the Deputy Registrar by filing application under Section 9 of
the MCS Act for registration of a new society.
26) If power of the Registrar to directly entertain an application for
registration of a new society in respect of a building for which there
already exists another housing society is recognised, the same would
lead to an anomalous situation. Once a housing society is registered in
respect of a building, it becomes entitled to manage the entire land and
the building. The Society is entitled to seek conveyance as well as control
the structure of the building as well as the amenities situated in the land.
Therefore, bifurcation of an existing housing society often involves
complicated questions. Therefore, detailed and comprehensive
procedures are prescribed under Sections 17 and 18 of the MCS Act
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before making the order of bifurcation of the existing society. The
procedure under Section 18 is as under:
(i) Upon receipt of application for bifurcation, the Registrar
needs to first consult the federal society in respect of
proposal for bifurcation, if, in his opinion, there is need for
entertaining the bifurcation proposal.
(ii) The Registrar thereafter needs to prepare a draft order by
making a provision for constitution, property rights,
interest and authorities as well as by determining the
liabilities, duties and obligations of the two societies.
(iii) The draft order needs to be sent to the existing society for
inviting its suggestions and objections.
(iv) Registrar needs to take into consideration the suggestions
and objections and thereafter make modification in the
draft order as may be necessary.
(v) The Registrar can thereafter make an order of bifurcation
of existing society into two societies.
27) Thus, the statutory scheme of Sections 17 and 18 of the MCS Act
indicates that bifurcation of existing society is not a simple process and
cannot be casually ordered. Federal society (Mumbai District Cooperative
Housing Federation Ltd.) needs to be consulted, which very often visits
the building and verifies whether it is possible to easily bifurcate the
properties, amenities, utilities, etc. The Registrar is guided by the
opinion of the federal society. The Registrar also needs to take into
consideration the objections, which may be received from existing
society or its members to the bifurcation proposal. He is required to
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conduct hearings. While preparing draft of the order as well as while
sanctioning the same, the Registrar needs to make detailed provisions
for division of the land, superstructure, facilities, amenities, finances,
fund, etc. of existing society into two societies. This is the reason I have
held that bifurcation of existing society is not a casual exercise to be
undertaken by Deputy Registrar, but there is a comprehensive procedure
as bifurcation results into vesting of property allocated to each of the
societies. In this connection provisions of sub-section (2) of Section 17 of
the MCS Act are of significance, which provides that in the event of
division of existing society, the registration of new society itself
constitutes a conveyance for vesting of assets and liabilities of original
society in the new society.
28) In view of the detailed procedure contemplated for division of the
existing society under Sections 17 and 18 of the MCS Act, it is difficult to
accept a proposition that residents of a building for which a housing
society is already formed, can apply under Section 9 of the MCS Act for
registration of a new society. The statutory scheme under Sections 17
and 18 of the MCS Act is such that once a housing society is already
registered qua a building, application for registration of a new society in
respect of that building cannot even be entertained by the Registrar. The
Registrar needs to reject such application and the remedy open to the
aggrieved member is to pass a resolution for bifurcation under Section 17
or apply to the Registrar for bifurcation under Section 18 of the MCS Act.
In Cosmopolitan III Co-operative Housing Society Ltd. (supra) the
coordinate Bench of this Court has held that a statutory scheme of
Section 18 read with Rule 17 of the MCS Act necessitates bifurcation
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order to be a comprehensive process. In paragraphs 15 and 16 it is held
as under:-
15. The statutory scheme of Section 18 read with Rule 17 necessitates
the bifurcation order to be a comprehensive order providing for
constitution, property rights, interests and authorities, liabilities, duties
and obligations and to contain such incidental, consequential and
supplemental provisions as are necessary to give effect to the division.
Before ordering bifurcation, the Registrar is required to consult the
Federal Society on the draft scheme and after considering its
suggestions, if any, and where there are no remarks offered within 45
days, the draft of the proposed order is to be sent to the Society inviting
suggestions and objections and thereafter the final order is to be issued.
16. Considering the statutory provision, the use of the expression
“interest of members of such societies”, or “in interest of the co-
operative movement” or “for the purpose of securing proper
management of the society” cannot be construed in a narrow sense of
personal interest of the members and has to be understood in the
context of the statutory scheme of Section 18. While adjudicating an
application for bifurcation, there has to be holistic consideration of the
consequences ensuing from the bifurcation and whether the bifurcation
order is capable of providing a clear cut division of the constitution of
the societies, the property rights and interests, separation of common
amenities, etc. which are necessary for the smooth functioning of the
bifurcated societies. To achieve that end, the property rights and
interests and common amenities should not be intertwined in such a
manner so as to be inseparable. The intent behind the preparation of
the draft scheme in respect of the bifurcation is to ensure that the
scheme makes necessary arrangement for separation of property rights
and common amenities.
29) Chapter XIII- B has been inserted in the MCS Act for making
special provisions relating to housing societies. No doubt, under Section
154B-1, the provisions of Section 9 of the MCS Act continue to apply
mutatis mutandis even to thehousing societies. Therefore, registration of
a housing society can be processed under Section 9 of the MCS Act. The
only difference is that registration needs to be done by keeping in mind
the eligibility prescribed under Section 154B-2 of the MCS Act. However,
what bears mention is the fact that provisions of Sections 17 and 18 of
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the MCS Act are also made applicable to housing societies after
incorporation of Chapter XIII-B. Therefore, provisions of Sections 9, 17
and 18 of the MCS Act need to be harmoniously construed to mean that
proposal for registration of a new society can be entertained by the
Registrar under Section 9 only when there is no housing society already
formed in respect of the concerned building. In every case where there
already exists a housing society formed by flat purchasers/residents of a
building, it would be impermissible to entertain a proposal for
registration of a new society under Section 9 of the MCS Act. The only
remedy available to the members of existing society or residents of the
building, who are desirous of formation of a new society is to go for
bifurcation by adopting resolution under Section 17 or by applying for
bifurcation under Section 18 of the MCS Act. Thus, the provisions of
Section 9 on one hand and Sections 17 and 18 of the MCS Act on the
other, can harmoniously co-exist if interpreted in the above manner.
They operate in distinct situations and can co-exist harmoniously.
30) I am therefore not inclined to accept the contention raised by Mr.
Sakhare that the Legislature has not imposed any restriction or embargo
on power of the Registrar to register a new society under Section 9 of the
MCS Act in respect of a building where there already exists another
housing society. If such contention is accepted, the same would lead
absurdity, confusion and anomalous situation. If new society is allowed
to be registered without bifurcating the existing society, there would be
utter chaos as multiple societies would get registered in respect of the
same building. This is not the legislative object and in fact goes against
the very spirit of the cooperative movement.
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31) Even going by the Circular dated 30 July 2004, on which heavy
reliance is placed by the Joint Registrar and Hon’ble Minister, it is seen
that the guidelines prescribed therein apply only for the purpose of (i)
bifurcation of existing societies or (ii) registration of multiple wingwise
societies at the stage of formation. The Circular dated 30 July 2004
consciously does not take into consideration the eventuality of
registration of a new society in respect of a building in which there is
already existing society (except where bifurcation is contemplated). The
Circular providing for wing-wise formation of societies apply only at the
inception when organisations are to be formed by the flat purchasers of
buildings having multiple wings or where bifurcation of a society into
wing-wise multiple societies is proposed. This is clear from opening part
of Circular dated 30 July 2004.
Qा ाच्या अ े नि दQ ा आ े आहे की, -याच र्वेळा एकाच इमारतीमध्ये दो विंकर्वा
अधि6क विंर्वग अ ेल्या प्रकरणात विंर्वगनि हाय अ ेक गृहनि माण ंस्र्थींा ोंदनिर्वण्याचे प्रस्तार्व
Qा ाकडे प्राप्त होतात. त्यापैकी काही इमारतींची प्रर्थींम हकारी गृहनि माण ंस्र्थींा म्हणू
ोंदणी झा े ी अ ते र्व त्यांचें निर्वभा करण्यांचा प्रस्तार्व अ तो तर इतर हु ंख्य
प्रकरणी इमारतीचे, ोंदणी करतेर्वेळी विंर्वगनि हाय अ ेक ंस्र्थींांमध्ये ोंदणी करार्वी अ ा
प्रस्तार्व अ तो. Qा ाच्या निद ांक १७/१/१९८५ च्या परिरपत्राका ु ार एका
इमारती ाठी एक गृहनि माण ंस्र्थींा ही हकार आयुक्तांची णिQफार मान्य करण्यात आ ी
आहे र्व त्या ु ार र्व नि 6 ं कां ा कळनिर्वण्यात आ े े आहे. दर परिरपत्रका ु ार
विंर्वगनि हाय हकारी गृहनि माण ंस्र्थींांची ोंदणी करता येत ाही. मात्र भा दांकडू काही
र्वेळा अQा ंस्र्थींांची मागणी करण्यात येते.
(emphasis and undelrling added)
Thus the Circular dated 30 July 2004 cannot be used for assuming power
in Registrar to sub-divide the existing society into wing-wise multiple
societies without undertaking the process of bifurcation.
32) In Sarita Cooperative Housing Society Ltd. (supra) this Court has
held that in absence of statutory division of existing society, the
Registrar cannot permit registration of another society in respect of the
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premises which already formed part of duly registered cooperative
society. This Court held in paragraphs 10 and 11 as under:
10. The core question is not whether the shops can be physically
demarcated from the residential flats. Physical separability by itself
does not determine the legal position. Such an inquiry may become
relevant where the competent authority exercises statutory power of
division or bifurcation under Sections 17 and 18 of the MCS Act, after
following due procedure and recording reasons. In the present case,
there is no order of bifurcation. The original society continues to
subsist. In the absence of a statutory division of the existing
society, the authorities could not have permitted registration of
another society in respect of premises which already form part of
a duly registered cooperative society. Registration under Section 9
cannot be used as a means to indirectly fragment an existing
society. If such a course is permitted, it would defeat the scheme
of the Act and create overlapping jurisdictions over the same property.
The statute contemplates orderly formation, alteration, and
division of societies through defined procedures. Those safeguards
cannot be bypassed.
11. In my considered view, the authorities have failed to appreciate the
legal effect of the prior registration of the petitioner society and the
absence of any order under Sections 17 or 18. By treating a portion of
the same building as an independent structure without a lawful process
of bifurcation, the authorities have misdirected themselves in law. The
result is that two societies now claim authority over different parts of
one integrated building, which the statute does not contemplate
without proper division. This approach amounts to a misapplication of
the provisions of the MCS Act and has led to an erroneous exercise of
jurisdiction. The impugned orders, therefore, cannot be allowed to
stand.
(Emphasis supplied)
33) In my view therefore, the impugned order passed by the Deputy
Registrar on 20 February 2025 suffers from serious jurisdictional error as
the Deputy Registrar could not have entertained application under
Section 9 of the MCS Act for registration of a new society in respect of a
building for which Petitioner-Society already existed.
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34) Even otherwise, formation and registration of multiple societies in
respect of the building in the present case is not warranted. From the
plans as well as photographs, it clearly appears that the building in
respect of which Petitioner-Society is formed is a part of one common
structure. Though the building is divided into four wings, all the wings
are connected together by a common terrace. There is a common
underground water tank in respect of the four wings. The water supply
lines, electricity meter, water pumps, etc. are all common. There is a
common entrance to the building from which vehicles can enter. The
other entry is only through a small gate from which vehicles cannot pass.
Therefore, for vehicular entry, all the four Wings depend on common
entrance from the road. From the other gate as well as from the narrow
gap, vehicles cannot pass. There is a common recreational ground for all
four wings. The Gymnasium for the four wings is provided on 22 nd floor
of A and B wings building. Even though there might be small gap on
account of 'L' shape of the building between Wings B and C, the entire
structure ultimately forms part of one common block. From the common
terrace of all wings on the top, which is joined together, one can easily
pass from one Wing to the other. In these circumstances, it prima facie
becomes difficult to believe that it is easy for two distinct societies to
manage affairs of the building separately, independently and without
causing any friction. In fact, Mr. Sakhare has placed on record copy of
letter dated 3 August 2026 signed by Secretary of Respondent No.4-
Society in which Respondent No.4-Society has undertaken to maintain
various common facilities on its own for all Wings. Respondent No.4-
Society has agreed to assume full liability for all expenses relating to
house-keeping, electricity, CCTV surveillance system. This willingness
on the part of Respondent No.4-Society to look after the expenditure
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required for some of the common amenities on behalf of four wings itself
makes it abundantly clear that it is impossible to sub-divide the
amenities, facilities and utilities in respect of the building.
35) Most importantly, all the four Wings have independent and
common parking comprising of 10 floors. Wings A, B, C and D do not
have parking facility in those wings and developer has constructed
separate parking block of 10 floors in which all the cars of the residents
of the four Wings get parked. There can be no dispute to the position
that it is impossible to sub-divide parking building for Wings A, B and C,
D.
36) In my view therefore, formation of two societies in respect of the
building would create difficulties in the areas of land and property
ownership as well as it would adversely affect the rights and convenience
of the members. In Sadguru Universal CHS Ltd. (supra) this Court has
laid down the parameters to be examined by the Registrar while deciding
whether two societies can exist. In paragraphs 18 and 19 this Court held
as under:-
18. For deciding whether two societies can exist, the first authority
must examine the following compulsory parameters:
(i) Structural design and layout:
The design of the building is the starting point. If the
commercial portion and the residential portion are physically separated
by walls, lobbies, or different levels and if there are independent
entrances, separate staircases, and separate lift systems for each
portion, then the building reflects separation by design. For example, if
the commercial units on the lower floors have their own entrance from
the main road and residents use a different lobby and lift, then separate
functioning is possible. But if both the commercial and residential
occupants use the same main gate, lobby, staircase, or lift, then the
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building is one integrated structure. In such a case, separate societies
cannot be justified.
(ii) Access and entry points:
Separate entry and exit points are a practical sign of
independence. If customers and visitors to shops can enter and exit
without passing through residential areas, and residents can access
their homes without passing through or depending on commercial
units, it supports independent functioning. Shared access means shared
control and responsibility. The authority must check if both portions
have separate entrances and exits. If customers, visitors and delivery
vehicles for commercial units use the same access used by residents,
then the building functions as one unit.
(iii) Utilities and amenities:
Separate utilities show independent functioning. If the
commercial units and residential units have different water supply
lines, drainage systems, electricity connections, lift banks, and fire
safety systems, then they can manage their affairs separately. But if
both units use the same water tank, the same drainage system, the
same firefighting equipment, or the same security staff, then they are
dependent on each other. Such common use means that decisions about
maintenance will affect both groups. The authority must verify if water
supply, drainage, lifts, electric cabin, firefighting system and other
utilities are common. If the same utilities are used, separation cannot
be permitted. If utilities are independent, separation may be justified.
(iv) Maintenance and financial responsibility:
The authority must consider who will pay for common repairs and
facilities. If commercial and residential users have independent systems
and bear their own expenses, separate societies may work. But if
maintenance involves common lifts, compound walls, external painting,
or structural repairs, then separation will cause conflict. When
responsibility is common, the law requires one society. The authority
must determine who shares the cost of maintenance. If common
expenses are shared and cannot be fairly separated, then one society
should manage the building. If separate expenses exist and can be
accounted independently, separate societies may be examined.
19. In addition to the above, the authority must also examine the
following parameters, where substantial compliance is required:
(a) Parking and circulation area:
Parking arrangements speak about dependence. If the
commercial units have their own parking areas and their vehicle
movement does not affect residential movement, it shows
independence. But if customers of the commercial units use the same
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parking spaces, internal roads, or compound as the residents, there is
no separation. Who uses parking and internal movement areas, and
whether circulation of commercial visitors affects residential comfort. If
separate parking cannot be created due to municipal design, but records
clearly earmark certain slots for residents and others for commercial
units, it satisfies substantial compliance.
(b) Use pattern and occupancy:
How the premises are used on a daily basis also indicates whether
separation exists. Commercial units operate during business hours.
Residential units operate round the clock. If activities of commercial
units interfere with residential life, such as crowding, noise, or
customers using residential passages, then both are linked. In such
circumstances, separation into two societies will only lead to disputes.
Whether commercial activity disturbs residential use or whether
timings and movement of commercial traffic interfere with residents’
rights. Perfect segregation in use is not required. What matters is
whether activities in one part disturb or interfere with the other. If each
portion functions independently without affecting the other, the test
stands met.
(c) Legal and ownership documents:
The authority must examine sanctioned plans and approvals. If the plan
clearly shows separate commercial block and separate residential block,
then the promoter may justify two societies. But if the plan shows one
single building with mixed use, then one society is the rule. The
promoter cannot, after selling units, artificially divide the building.
Whether the sanctioned plan, occupation certificate and sale
documents support separation. There may be cases where the
sanctioned plan is composite but the actual construction has resulted in
clear separation. In such cases, the authority can rely on actual
construction along with correspondence or undertakings from the
promoter or owners.
(d) Impact on members’ rights and convenience:
The Registrar must ensure that forming two societies does not take
away any member’s rights. No member should be denied access to
common areas, terraces, passages, or utilities. If forming two societies
will result in restrictions or disputes, one society must be formed.
Whether separation affects the right of any member to use common
areas or results in inconvenience or discrimination. If forming two
societies will not reduce rights of any owner in common areas and
convenience will improve, it is considered sufficient compliance.
(Emphasis supplied)
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37) The Joint Registrar and Hon’ble Minister have led stress on
Circular dated 30 July 2004 for holding that same permits formation of
societies in respect of each wing of a building. However, in Sadguru
Universal CHS Ltd.(supra) this Court has held that said Circular is not
issued under any provisions of the MCS Act and cannot be treated as law.
It is held to be merely administrative instructions not creating any
enforceable rights. This Court held in paragraph 33 of the judgment as
under:
33. Therefore, the Circular dated 30 July 2004, not issued under any
provision of the MCS Act and not authenticated in accordance with
Article 166, cannot be treated as “law” within the meaning of Article 13.
At best, it is an administrative instruction. It does not create
enforceable rights. It cannot be relied upon to defeat rights flowing
from the MCS Act or from the Maharashtra Ownership Flats Act. In
conclusion, such a circular has no statutory force and cannot be
treated as law under Article 13 of the Constitution.
(Emphasis supplied)
38) In my view, by Circular dated 30 July 2004 the State Government
has suggested guidelines for processing applications for registration of
separate societies for each wing in a building. The guidelines stipulated
in Circular dated 30 July 2004, though may not create any enforceable
rights, can be kept in mind by the Registrar while deciding application
for registration of wing wise societies. The said Circular also provides for
guidelines while deciding proposal for bifurcation and formation of new
wing wise societies. Since Sections 17 and 18 of the MCS Act do not lay
down detail parameters for deciding the application for bifurcation
particularly for housing societies, which has building with multiple
wings, the Registrar can make use of guideline stipulated in the Circular
dated 30 July 2004.
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39) In the present case, even if the guidelines in Circular dated 30 July
2004 are considered, it is difficult to hold that formation of two societies
in respect of the building would be appropriate. The most important
parameter stipulated in the Circular dated 30 July 2004 is that Planning
Authority ought to have sanctioned layout by subdividing things such as
electricity connections, water meter, etc. In respect of building
comprising of multiple wings, which share common underground tank,
formation of multiple societies would be not advisable. In the present
case, it is an admitted position that there is common underground tank
for all the four wings. Therefore, even if guidelines stipulated in Circular
dated 30 July 2004 are applied in the present case, it is difficult to hold
that two separate societies can be formed in respect of the building.
40) Mr. Sakhare has strenuously highlighted the difference of opinion
in relation to management of Wings A and B and Wings C and D of the
building. It appears that in Wings A and B, sale component flats are
situated, which are purchased by outsiders. Sale component flats are
apparently larger in size possibly indicating a different economic and
social class purchasing flats therein. On the other hand, the flats in
Wings C and D apparently accommodate the original members of the
Petitioner-Society, who were residents of the old building (32 in
number). Additionally, there was an obligation to accommodate 75 flats
in Wings C and D for being allotted to MHADA as per the Tripartite
Agreement dated 2 December 2021. Since the original plot of Petitioner-
Society was itself owned by MHADA and since MHADA permitted
amalgamation of adjoining lands owned by it, there was an obligation to
provide 75 flats to allottees of MHADA, who are also residing in Wings C
and D. It appears that residents of Wings A and B are finding it difficult
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to come on same page with residents of Wings C and D. However, as
rightly pointed out by Mr. Khandeparkar the flat purchasers of Wings A
and B were fully aware of the position that they had contractually agreed
to become members of the Petitioner-Society and that they will have to
become part of common decision making and management process with
residents of Wings C and D. The flat purchasers of Wings A and B have
thus purchased the flats with their eyes wide open to the fact that they
will be required to reside in a particular socio-economic class. Now they
cannot turn around and complain that there are social or economic
differences between the two sets of residents. This is particularly because
all the four Wings are so commonly fused that formation of two societies
would result in more chaos than solving the one that may exist today.
Also the flat purchasers of wings A and B are apparently majority in
number. Therefore, the case does not involve a situation where the
residents of old building are imposing their decision on residents of sale
component flats.
41) This Court has held that mere existence of disputes for
management cannot be a reason for undertaking the exercise of
bifurcation. In Madhur Naina Co-operative Housing Society Limited
V/s. State of Maharashtra and Ors.5 this Court has held that mere
existence of disputes between members relating to redevelopment
process cannot be a reason for invoking Section 18 of the MCS Act. This
Court has held in paragraph 18 as under:-
18. Acting on the proposal dated 6 August 2024, the Deputy Registrar
decided to exercise powers under Section 18(1) of the MCS Act which
5 Writ Petition No.850 of 2026, decided on 22 July 2026
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empowers the Registrar to direct amalgamation, division or
reorganization of Societies. Section 18 of the MCS Act provides thus:
18. Power to direct amalgamation, division and reorganisation in
the public interest of members, etc.—
(1) Where the Registrar is satisfied that it is essential in the public
interest or in the interest of members of such societies, or in the
interest of the co-operative movement, or for the purpose of
securing the proper management of any society, that two or more
societies should amalgamate or any society should be divided to
form two or more societies or should be reorganised then
notwithstanding anything contained in the last preceding section
but subject to the provisions of this section, the Registrar may,
after consulting such federal society as may be notified by the
State Government by order notified in the Official Gazette,
provide for the amalgamation, division or reorganisation of those
societies into a single society, or into societies with such
constitution, property, rights, interests and authorities, and such
liabilities, duties and obligations, as may be specified in the
order :
Provided that, such notified federal society shall communicate its
opinion to the Registrar within a period of forty-five days from
the date of receipt of communication, failing which it shall be
presumed that such federal society has no objection to the
amalgamation, division or reorganisation and the Registrar shall
be at liberty to proceed further to take action accordingly.
(2) No order shall be made under this section, unless—
(a) a copy of the proposed order has been sent in draft to the
society or each of the societies concerned ;
(b) the Registrar has considered and made such
modifications in the draft order as may seem to him
desirable in the light of any suggestions and objections
which may be received by him within such period (not being
less than two months from the date on which the copy of
the order as aforesaid was received by the society) as the
Registrar may fix in that behalf, either from the society or
from any member or class of members thereof, or from any
creditor or class of creditors.
(3) The order referred to in sub-section (1) may contain such
incidental, consequential and supplemental provisions as may, in
the opinion of the Registrar, be necessary to give effect to the
amalgamation, the division or reorganisation.
(4) Every member or creditor of, or other person interested in,
each of the societies to be amalgamated, divided or reorganised,
who has objected to the scheme of amalgamation, division or
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reorganisation, within the period specified, shall be entitled to
receive, on the issue of the order of amalgamation, division or
reorganisation his share or interest, if he be a member, and the
amount in satisfaction of his dues if he be a creditor.
(5) On the issue of an order under sub-section (1), the provisions
in sub- sections (2), (3) and (4) of section 17 shall apply to the
societies so amalgamated, divided or reorganised as if they were
amalgamated, divided or reorganised under that section, and to
the society amalgamated, divided or reorganised.
(6) Nothing contained in this section shall apply for the
amalgamation of two or more co-operative banks or two or more
primary agricultural credit societies.
42) In Cosmopolitan III Co-operative Housing Society Ltd. (supra)
this Court has held that the disputes between the society members,
allegations of misappropriation, non-holding of elections, etc. are all
capable of being redressed by adopting remedies under the provisions of
the MCS Act and that bifurcation of the Societies is not the remedy. This
Court has held in paragraphs 21 and 22 of the judgment as under:
21. The bifurcation order also cannot be sustained as there is no
reasoned finding in the order as to why the bifurcation is necessary. The
Joint Registrar failed to notice that the mechanism provided under the
MCS Act were sufficient for resolving the disputes sought to be put
forth as ground for bifurcation as the allegations appear to be qua the
concerned Managing Committee members.
22. The allegation of misappropriation of Society funds, non-holding of
elections, irregular manner in passing of resolutions, maintenance, etc.
are all issues which are capable of being redressed by adopting the
necessary remedy under the provisions of MCS Act. The enquiry which
ought to have been conducted is whether the disputes have the effect of
disrupting the effective management of Society. In addition, it was also
necessary to consider whether the legislative intent of effective
management can be achieved in the facts of present case where there is
practical impossibility of division of land in proportion to the built-up
area.
43) In my view, therefore, mere existence of disputes between
residents of Wings A and B and residents of Wings C and D cannot be a
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reason for formation of a new Society in respect of the same building
when such formation is otherwise impermissible.
44) In the present case, there is yet another reason why a separate
society in respect of Wings A and B cannot be formed or registered. The
building has been constructed at the instance of the Petitioner-Society.
In that sense, the Petitioner is the real promoter. The IOD, CC, OC, etc.
are all issued in the name of the Petitioner-Society. In the Development
Agreement dated 5 August 2020, following stipulations are incorporated
in clauses 6(h) and 6(n):
6. Covenants and Undertakings of the Society:
xxx
h. The Developer shall nominate all prospective purchasers as new
members of the Society being the purchasers of the Developer's
Allocation as per applicable laws, rules and regulation. Such
prospective purchasers shall be enrolled as members of the Society. In
case of the Developer falling to nominate such prospective Purchasers,
the Society shall enroll Developer as a nominal member of the Society
for such flats comprised of Developer's Allocation and the Developer
shall pay maintenance charges and all other outgoings for such unsold
units till they are sold.
Xxx
n. The Society shall cause and the Existing Members shall obtain no
objection certificate from their financial Institutions regarding any
lien/mortgage created by the Existing Members with respect to their
respective Existing Premises before execution of Permanent Alternate
Accommodation Agreement. The society shall record the charge/lien of
the banks/financial institutions with respect to the flats of members in
the New Building who have taken loan from banks /financial
institutions in the New Building.
45) Thus, it was specifically agreed in the Development Agreement
itself that developer was required to nominate all prospective purchasers
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as new members of the Petitioner-Society and the Petitioner was to
enroll them as its members. Even in Tripartite Agreement with MHADA
executed on 2 December 2021, there was contractual stipulation for
admission of 75 tenement allottees of MHADA to be admitted as
members of the Petitioner-Society. More importantly, in Agreement
executed under Section 4 of the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale, Management and
Transfer) Act, 1963, by Respondent No.6-developer with flat purchasers
of A and B wings, there are specific contractual stipulations in recital (H)
and clause 17 as under:-
H. The Developer/Promoter proposes to construct on the Project Land,
a multi-storied building ("Said New Building") comprised of 4 Wings
l.e. Wing-A, Wing-B, Wing-C and Wing-D, all four wings having
common Ground floor for stilt car parking + 1 to 23rd upper residential
floors and proposed separate car parking low rise building comprising
of ground floor to upper podium floor for car parking. The
Developer/Promoter will carry out the Redevelopment of the said
Property as per said offer Letter and approvals as may be sanctioned
by the Concerned Authorities (hereinafter referred to as the "Project").
The said New Building is comprised of 32 units/flats of the existing
members of the said Old Building and 75 units/flats to be handed over
to MHADA towards MHADA Share and saleable units/flats.
xxx
17.1 Since, the Society i.e. The Swa-Griha Co-operative Housing
Society Limited is already in place, the Developer/Promoter shall not
be under any obligation to form and register a new separate and
Independent society of flat purchasers/allottees as envisaged under
the provisions of the relevant Act. The Allottee/s along with other
Allottees In the said New Building shall become the member of the
Society and for this purpose also from time to time sign and execute
application for registration and/or membership and the other papers
and documents necessary for becoming a member, including the bye-
laws of the Society and duly fill in, sign and return to the
Developer/Promoter within Seven days of the same being forwarded by
the Developer/Promoter to the Allottee/s.
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17.2 The Developer/Promoter may become a member of the Society to
the extent of all unsold and/or unallotted flat(s)/premises/units, areas
and spaces in the said New Building.
17.3 The Developer/Promoter shall within the time limit stipulated
under the said Act and rules made thereunder, handover all necessary
permissions, certificates, plans and title documents etc.to the Society.
The Society Including the Allottee/s herein shall serve and maintain
all documents, plans received from the Deloper/Promoter and
subsequently carry out necessary repairs, structural audit, fire audit at
regular Interval and also present periodical structural audit reports
and repair history as per the requirements of the Chief Fire Officer
through the authorised agency of the concerned authorities.
46) Thus, in all the Agreements for Sale executed with flat purchasers,
(who have now formed new society) there was specific prohibition on
formation or registration of new, separate or independent society and on
the other hand, there was obligation to become member of the
Petitioner-Society. The residents of Wings A and B cannot violate the
above contractual stipulations and go for registration of new Society. In
Kritika Jewels Coop. Housing Society (supra), this Court has dealt with a
case where the Registrar, while registering the society, had reserved right
of the promoter to form a society of commercial shops on first floor
above the stilt parking. This Court took note of contractual stipulations
for formation of one society and held that it was impermissible to violate
the same and to form multiple societies. This Court has held in
paragraphs 11, 12, 14 and 17 as under:
11. The agreements executed with the flat purchasers form a reliable
and binding record of what the promoter promised at the time of sale.
These agreements are not casual statements. They are registered
documents. They reflect the understanding between the promoter and
every purchaser. When the promoter has undertaken in these
agreements to form one common cooperative society for both
residential and commercial units, that promise carries legal weight.
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12. Such a commitment cannot be ignored while deciding the nature of
the society to be registered. The agreements show thatthe promoter
treated the entire building, including the commercial shops, as one
single project meant to be managed through one common society. This
is credible evidence of the promoter’s intention at the time of
construction and sale.
xxx
14. In these circumstances, the contractual undertaking binds the
promoter. It is a strong piece of evidence that the entire building was
meant to be governed by one common society. The Registrar could not
overlook this commitment while deciding the registration application.
xxx
17. The judgments relied upon by the promoter, including the decisions
in Sadguru Universal and in Haresh Bhatia, recognise that more than
one cooperative society can exist within the same building. In the
present case, the promoter has given a clear contractual undertaking to
form one common society for both residential and commercial units.
This undertaking forms part of the registered agreements with the
purchasers. There is no such undertaking in the cases cited by the
promoter. In fact, the Courts in those cases proceeded on a different
factual foundation where no promise of a single combined society
existed. A contractual undertaking cannot be disregarded unless the
promoter places material to show that circumstances have changed or
the sanctioned plan has been modified. No such evidence has been
brought on record. The cited judgments cannot override a binding
contractual promise. They also cannot be applied where the physical
structure itself does not support separation. For these reasons, the
decisions in Sadguru Universal and Haresh Bhatia do not assist the
promoter and cannot justify the reservation made by the Registrar in
the present case.
47) Thus, there is estoppel by contract under which Respondent No.4-
Society cannot be registered by flat purchasers of Wings A and B.
48) The conspectus of the above discussion is that orders of the
Deputy Registrar, Joint Registrar and Hon’ble Minister-Cooperation
suffer from multiple illegalities as discussed above. Impugned orders are
thus indefensible and liable to be set aside.
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49) The Petition accordingly succeeds and I proceed to pass the
following order:
(i) Order dated 20 February 2025 passed by the Deputy
Registrar, directing registration of Respondent No.4-
Society is set aside.
(ii) Order dated 8 July 2025 passed by the Joint Registrar
dismissing the Appeal and Order dated 18 February
2025(2026) passed by the Hon’ble Minister dismissing the
Revision Application are also set aside.
(iii) Consequently, registration granted in favour of
Respondent No.4-Society stands cancelled.
50) Writ Petition is allowed in above terms. Rule is made absolute
Considering the facts and circumstances of the case, there shall be no
order as to costs.
[SANDEEP V. MARNE, J.]
51) After the Judgment is pronounced, the learned counsel appearing
for Respondent No.4-Society seeks stay of the Judgment for a period of
six weeks. The request is opposed by the learned counsel appearing for
the Petitioner. Considering the fact that Respondent No.4-Society has
been registered in the year 2024, there shall be stay to the operation of
the judgment for a period of six weeks.
[SANDEEP V. MARNE, J.]
Digitally
signed by
MEGHA
MEGHA SHREEDHAR
SHREEDHAR PARAB
PARAB Date:
2026.09.18
18:16:05
+0530
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