In a landmark decision, the Bombay High Court has upheld the validity of a circular issued by the registrar of cooperative societies, which mandates that at least 51% of flat or shop buyers must collaboratively apply for the registration of a cooperative housing society (CHS).
Justice Sandeep Marne, presiding over the case, affirmed the registrar’s authority under a circular dated March 23, 2016, to set this requirement. The ruling came in response to a petition by Prakash Saave, the promoter of Harmony Plaza Premises Cooperative Society in Boisar, who challenged the deregistration of his society. The deregistration followed a complaint from Jainam Builders, the developer, asserting that the 51% participation threshold had not been met—only 83 out of 174 sanctioned tenements, about 47.7%, had joined the application for society registration.
Saave contested the registrar’s decision to deregister the society, arguing through his counsel, Advocate Sarthak Diwan, that the Maharashtra Co-operative Societies (MCS) Act stipulates a minimum of only 10 members to apply for CHS registration. Diwan maintained that the registrar’s 2016 circular, which altered this statutory requirement, amounted to an executive overreach.
However, Advocate Rohan Sawant, representing the developer, argued successfully that Section 6 of the MCS Act grants the registrar the authority to specify a higher percentage of participants necessary for the formation and registration of a cooperative society. He highlighted that prior circulars issued in November 2010 and March 2016 had already adjusted the required percentage to 60% and 51% respectively.
Justice Marne sided with the developer’s interpretation, stating that the circulars were issued lawfully under the powers granted by the MCS Act. “The circulars issued by the registrar on November 29, 2010, and March 23, 2016, in exercise of power under subsection (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,” he declared.
