Mumbai: In a significant ruling, the Bombay High Court has upheld the condition in the 2016 circular of the registrar of cooperative societies, which mandates that a minimum of 51% of flat or shop buyers have to jointly apply for the registration of a cooperative housing society (CHS).
Justice Sandeep Marne upheld the validity of the circular issued on March 23, 2016, noting: “The registrar is fully empowered to prescribe that 51% flat purchasers must join together for registration of [a] cooperative housing society under [the] circular dated 23 March 2016.”
The HC was hearing a petition filed by Prakash Saave, promoter of Harmony Plaza Premises Cooperative Society in Boisar, after the society was de-registered by the divisional joint registrar of cooperative societies on November 8, 2023.
The circular to the effect was issued following an application filed by the developer Jainam Builders contending that 51% Rule had not been complied with while registering the society. As per the builder, only owners of 83 tenements, of the total 174 sanctioned tenements, had applied for the registration, which amounts to only 47.7%.
The decision was upheld by the Minister (Co-operation) by an order passed on August 21, 2024. Saave challenged this before the HC questioning the authority of the registrar to deregister the society.
His plea contended that under section 6 of the Maharashtra Co-operative Societies (MCS) Act, the requisite number of people to apply for registration of a CHS is only 10. Hence, he claimed, that the registrar could not have changed the statutory requirement by issuing an executive fiat like the March 2016 circular.
Developer, however, pointed out that section 6 of the MCS Act itself empowers the registrar to prescribe a higher percentage of people needed for the formation and registration of the society. The registrar, accordingly, had issued circulars in November 2010 and March 2016, prescribing a requirement of 60% and 51% of unit purchasers, respectively.
The court accepted the developer’s argument stating that the registrar had the power to prescribe a greater number of people required to register cooperative societies.
“Consequently, the circulars issued by [the] registrar on 29 November 2010 and 23 March 2016 in exercise of power under sub-section (1) of Section 6 of the MCS Act are enforceable, and no society can be registered in violation of the prescribed percentage in the said two circulars,” Justice Marne said on March 4.
The court held that the decision to de-register the society was not illegal. However, it said that the March 2016 circular states that “51% holders of the total flats / tenements to be constructed or already completed”, can apply for registration.
Since 174 tenements have been sanctioned in Harmony Plaza Premises by the planning authority and all of them are now constructed, 51% of them — 89 unit purchasers — can now apply for registration of the society, the court added.
