Supreme Court Upholds Division of Housing Society Under Maharashtra Co-operative Societies Act
The Supreme Court of India recently ruled in the case of Hemant Vimalnath Narichania & Another vs. Anand Darshan C.H.S. Ltd. & Others, clarifying the procedural requirements for the division of a housing society under the Maharashtra Co-operative Societies Act, 1960. The case revolved around the division of Anand Darshan Co-operative Housing Society into two separate societies, a decision that was challenged in the Bombay High Court and later reversed by the Supreme Court.
The judgment is significant as it outlines the legal process involved in the division of co-operative housing societies and sets a precedent for future cases where society members seek division due to structural or management differences.
Background of the Case
Anand Darshan Co-operative Housing Society Ltd. was a registered co-operative society consisting of two buildings:
- Building 1: A Wing (16 apartments, a bank, and two garages).
- Building 2: B and C Wings (41 apartments and nine garages).
On May 24, 2007, twelve members from A Wing filed an application before the Deputy Registrar for the division of the society. They sought to separate A Wing into an independent society due to differences in management and operational preferences.
The Deputy Registrar initiated the division process under Section 18 of the Maharashtra Co-operative Societies Act, 1960, and a draft scheme for division was prepared on July 16, 2007. The draft scheme detailed the proportionate division of property, rights, liabilities, and common areas.
The final order was issued on November 3, 2008, allowing the division of Anand Darshan Co-operative Housing Society into:
- New Anand Darshan Co-operative Housing Society Ltd. (consisting of A Wing).
- Pedder Road Anand Darshan Co-operative Housing Society Ltd. (consisting of B and C Wings).
The decision was appealed before the Divisional Joint Registrar and later the Revisional Authority, both of whom upheld the division. However, the original society (now consisting of B and C Wings) challenged the decision in the Bombay High Court, which ruled in its favor.
Arguments Presented
Petitioner’s (Hemant Vimalnath Narichania & Others) Arguments
- The division was lawfully approved by the Deputy Registrar under Section 18 of the Maharashtra Co-operative Societies Act.
- The required procedures, including consultation with the federal society, were duly followed.
- The division was necessary due to practical difficulties in managing A Wing and B-C Wings together.
- The High Court’s ruling was based on an incorrect interpretation of the procedural requirements under the Act.
Respondent’s (Anand Darshan C.H.S. Ltd. & Others) Arguments
- The High Court correctly held that the federal society was not consulted before issuing the final division order.
- The division would lead to disputes over common areas and shared facilities.
- The division process did not comply with all procedural safeguards under the Maharashtra Co-operative Societies Act.
- The Deputy Registrar’s decision was flawed and should be set aside.
Supreme Court’s Ruling
The Supreme Court, in its judgment delivered by Justices V. Gopala Gowda and Uday Umesh Lalit, ruled in favor of the petitioners and restored the division of the society. The Court made the following key observations:
1. High Court Misinterpreted the Consultation Requirement
The Supreme Court held that the High Court erred in ruling that the final division order needed to be sent again to the federal society for consultation. The consultation requirement applies only at the stage of drafting the scheme, not at the final order stage.
“The assessment made by the High Court in that behalf is completely incorrect. In the present case, at the stage of draft scheme, the Federal Society was consulted, and thereafter, the draft order was prepared.”
2. Procedural Requirements Were Followed
The Supreme Court found that the Deputy Registrar had followed the correct procedure:
- A draft scheme was prepared and sent to the federal society for consultation.
- A draft order was issued and circulated to the existing society and members for objections.
- After considering objections, the final order was issued in accordance with the law.
3. Right to Division of a Co-operative Society
The Supreme Court upheld the right of members to seek division of a co-operative society when justified under Section 18 of the Maharashtra Co-operative Societies Act. The Court noted that co-operative societies must function efficiently, and division is an available legal remedy when differences arise.
4. Restoration of the Deputy Registrar’s Order
The Supreme Court restored the original order of the Deputy Registrar, allowing the creation of two separate societies:
- New Anand Darshan Co-operative Housing Society Ltd. (A Wing).
- Pedder Road Anand Darshan Co-operative Housing Society Ltd. (B and C Wings).
Final Verdict
The Supreme Court ruled in favor of the petitioners and directed the Deputy Registrar to take the necessary steps to implement the division.
Conclusion
This ruling reaffirms the legal framework governing the division of co-operative societies under the Maharashtra Co-operative Societies Act. It establishes that:
- The consultation requirement applies only at the draft scheme stage, not at the final order stage.
- Members have a right to seek division when justified under the law.
- Authorities must follow due process, but procedural misinterpretations should not hinder legitimate divisions.
This judgment provides clarity for housing societies facing internal management disputes and seeking separation for smoother administration.
Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!
Download Judgment: Hemant Vimalnath Nar vs Anand Darshan C.H.S. Supreme Court of India Judgment Dated 23-02-2016-1741852774109.pdf
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