Bombay High Court
Janabai Shripat Patil And Ors vs The Honourable Minister For ... on 21 November, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:44355
WP-8200-23(final).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8200 OF 2023
1) Janabai Shripat Patil, ]
Age : 53 years. ]
2) Pravin Shripat Patil, ]
Age : 34 years. ]
Digitally
3) Prasad Shripat Patil, ]
signed by
TALLE
TALLE
SHUBHAM
Age : 32 years. ]
SHUBHAM ASHOKRAO
ASHOKRAO Date:
2024.11.21 4) Sandhya Nilesh Patil, ]
19:26:53
+0530
Age : 30 years. ]
All residing at 187 Navade, ]
Near Vitthal Mandir, Valvali, ]
Pale Budruk, Padghe-410208. ] ...Petitioners.
Versus
1) The Hon'ble Minister for Co-operation, ]
State Maharashtra, Mantralya, Mumbai. ]
2) The Commissioner for Co-operation and ]
Registrar for Co-operative Societies, Pune. ]
3) The Joint Registrar, Co-op. Societies (CIDCO), ]
having office at Raigad Bhavan, 3rd Floor, ]
C.B.D. Belapur, Navi Mumbai - 400614. ]
4) Blue Heaven Co-operative Housing Society ]
Ltd, having its registered office at Plot No. ]
8A, Sector 35, Kamothe, Navi Mumbai. ]
5) Puneet construction Co. Pvt. Ltd, ]
A company registered under the Companies ]
Act, having its office at Office No. 103, ]
st
1 floor, Plot No. 21, Sector-6, Nerul, ]
Navi Mumbai. ]
6) Narendra R. Patel, ]
7) Jimmy Narendra Patel, ]
The Respondent No. 6 and 7 their office at ]
Centre Point Building, Office No. 103, ]
1st floor, Plot no.21, Sector 6 Nerul, ]
Navi Mumbai. ] ...Respondents.
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Mr. Surel Shah, Senior Advocate along with Mr. Chinmay Acharya for the
Petitioner.
Ms. P. J. Gavhane, AGP for the Respondent-State (Respondent Nos.1, 2 and 3.)
Mr. N. V. Walawalkar, Senior Advocate along with Mr. Suresh Sabrad, Mr. Pratik
Sabrad, Mr. Amey Sawant and Ms. Neha Zanje for the Respondent No. 4.
Mr. Mayur Khandeparkar, Mr. Nishant Tripathi, Mr. Pranav Vaidya i/b M. Tripathi
& Co.,for the Respondent Nos. 5 to 7.
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Coram : Sharmila U. Deshmukh, J.
Reserved on: September 5, 2024.
Pronounced on : November 21, 2024.
JUDGMENT :
1. Rule. With consent, Rule made returnable forthwith and taken up for final disposal.
2. The challenge in this Petition is to the order dated 7 th April 2022, passed by the Respondent No.1 i.e. State of Maharashtra through the Hon'ble Minister for Co-operation rejecting the Petitioner's Appeal filed against the order dated 9th July, 2019 passed by Respondent No 2 in an Application filed under Section 21A of the Maharashtra Co-operative Societies Act, 1960 [for short "the MCS Act"], seeking de- registration of Respondent No. 4-Society.
3. The Petitioners seek de-registration of Respondent No.4- Society, which came to be registered on 24th May, 2018 pursuant to the application dated 14th May, 2018 filed by Respondent No 6 in the capacity of Chief Promoter of Respondent No.4-Society under Section 10 of the Maharashtra Ownership of Flats (Regulation of the Shubham Talle 2 of 15 ::: Uploaded on - 21/11/2024 ::: Downloaded on - 22/11/2024 00:59:58 ::: WP-8200-23(final).doc Promotion of Construction Sale Management and Transfer) Act 1963, [for short "MOFA"]. The Appeal under Section 21A of MCS Act was filed by the predecessors of present Petitioner on 15 th November 2018. During the appeal proceedings, a report was called from the Respondent No.3 which was submitted on 5 th April, 2019 recommending de-registration of the Society. Vide order dated 9 th July 2019, the Respondent No.2 rejected the Application under Section 21A of the MCS Act.
4. The Original Applicant i.e. predecessor of the present Petitioners did not challenge the order dated 9 th July, 2019. After his death on 10th May 2021, his legal heirs appealed on 10 th January, 2022 against the order dated 9th July 2019, along with an Application for condonation of delay. The delay came to be condoned and by the final impugned order dated 7th April 2022, the Respondent No. 1 rejected the Appeal filed by the Petitioner.
SUBMISSIONS:
5. Mr. Surel Shah, learned Senior Advocate appearing for the Petitioner would submit the registration vests a right in the Respondent No.4 to apply for deemed conveyance, which they have done, resulting in prejudicing the rights of the owners. He submits that the collusion between the Developer and the flat purchasers is evident from the fact that the application for registration was filed by Shubham Talle 3 of 15 ::: Uploaded on - 21/11/2024 ::: Downloaded on - 22/11/2024 00:59:58 ::: WP-8200-23(final).doc the Director of Respondent No.5-Developer claiming to be the Chief Promoter of Respondent No.4-Society. He would point out that the parties to the application are the Respondent No 6 i.e. Director of Respondent No 5 as Applicant and the Respondent No 5 without impleading the owners as the party. He submits that alongwith the Application the statement produced showed the number of members at 192. He would submit that though the minimum requirement under Section 6 of MCS Act was of 10 members, vide circular dated 23 rd March, 2016 the earlier requirement of 61% of the total flat purchasers for registering the Tenant Co-partnership Housing Society was reduced to 51% of the flat purchasers. He submits that the application for registration was endorsed by 75 flat purchasers which is below the 51% requirement. He submits that the Deemed Conveyance Application of the Society states that there are 192 flat purchasers. He points out the report of Respondent No.3 dated 5 th April, 2019 which states that there are 192 units out of which 95 promoters have paid stamp duty, 2 promoters have paid stamp duty in respect of 14 units which is 43% and that Form-A has been signed by 89 promoters resulting in 43%, whereas Form-C has been signed by 87 promoters resulting in 45% and recommends de-registration. He submits that the order of Hon'ble Minister is non speaking, non reasoned order and renders a factually incorrect finding that the Application for de-
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registration has been filed after period of 16 years. He submits that the rejection of the Appeal is based on the order of Consumer Court which is unsustainable. In support of his submissions, he relies upon the following decisions:
W.M.M.S. Sanstha vs. Commr. of Fisheries1.
Cipla Ltd. v. Competent Authority2 Jasbhai Motibhai Desai v. Roshan Kumar3
6. Per contra Mr. Khandeparkar, learned Counsel appearing for the Respondent Nos.5 to 7 would point out the relevant dates by submitting that the Application for registration was filed on 14 th May 2018, Society was registered on 24th May 2018, the Application under Section 21A was filed on 15th November, 2018, and Section 21A application was rejected on 9 th July 2019. He submits that subsequently the Original Applicant had instituted civil proceedings on 6th September 2019 to which the Society is a party. He submits that the original Applicant accepted the rejection of Section 21A application and it is only after the death of the Original applicant on 10 th May 2021 that on 10th January 2022, the legal heirs have filed the present appeals, who do not have the locus to challenge the order. 1 [2020 (1) Mh L.J. 864] 2 2021 SCC OnLine Bom 622.
3 (1976) 1 SCC 671.
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7. He would further submit that the Application for registration was under Section 10 of MOFA by reason of default of the Promoter. He submits that the Original Applicant was heard during the Appeal filed under Section 21A of the MCS Act and thus there is no violation of principles of natural justice. He submits that Clause 25 of the MOFA Agreement imposed an obligation on the owners, who are promoters, to register the Society which was not done. He submits that some of the flat purchaser's had approached the Consumer Court and the Consumer Court directed the Developers to register the Society. He submits that for the purpose of challenging the registration, the misrepresentation has to be demonstrated which is not done in present case. He submits that it is evident from the Application for registration and the accompanying documents that 98 flats were sold and 75 people have signed the Application for registration. He submits that the builder is deemed to be the member of the unsold flats and is liable to join in the registration as one member and therefore the total number of members would be 99 and the requirement of 61% has been met. In support he relies upon the following decisions:-
State of Uttar Pradesh vs Sudhir Kumar SIngh4 Padmavati Construction Co. vs. State of Maharashtra5 4 (2021) 19 SCC 706.
5 2006 SCC Online Bom 1154
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8. Mr. Walavalkar, Learned Senior Advocate appearing for the Respondent-Society would submit that as Mr. Khandeparkar has fully addressed the issue and to avoid repetition, he adopts the submissions of Mr. Khandeparkar.
9. In rejoinder Mr. Shah would submit that the Petitioner's locus cannot be questioned as the infringement of the Petitioner's rights gives locus to the Petitioners to contest the registration.
10. Rival contentions now falls for determination.
11. The core issue arising for determination is whether the material on record establishes misrepresentation by the Respondent No.4 in the process of registration entailing the consequence of de-
registration under Section 21A of MCS Act.
12. In answering the issue, a brief advert to the relevant provisions of MCS Act governing the registration is necessitated. Section 2(16) defines "housing society" to mean a society, the object of which is to provide its members with open plots for housing, dwelling houses or flat; or if the open plots, the dwelling houses or flats are already acquired to provide to its members common amenities and services. Section 4 of MCS Act lays down that a Society may be registered under the Act which has as its objects the promotion of the economic interest or general welfare of its members or of the public, in accordance with co-operative principles or is a society established with Shubham Talle 7 of 15 ::: Uploaded on - 21/11/2024 ::: Downloaded on - 22/11/2024 00:59:58 ::: WP-8200-23(final).doc the object of facilitating the operation of any such society. As per Section 6, a Society to be registered must consist of at least ten members who are qualified to be members and reside in the area of operation of the Society. Section 8 of the MCS Act provides for the filing of Application before the Registrar in prescribed format signed by at least 10 members who are qualified under the Act. Section 9 enjoins the Registrar to register the society within two months from receipt of application upon being satisfied of the requirements of the law.
13. Section 21A of MCS Act deals with the de-registration of Society and one of the grounds available for seeking de-registration and relevant for our purpose is misrepresentation by the Applicants.
14. The application seeking registration has been filed under Section 10 of MOFA which imposes an obligation on the Promoter as soon as the minimum number of persons required to form a co- operative society have taken flats, to submit an application to the Registrar for registration of the organization of persons who take flats as co-operative society. Section 10 of MOFA also obliges the promoter to join in the membership of the Co-operative Society in respect of the flats which have not been taken while protecting the right of the promoter to dispose of the remaining flats in accordance with the MOFA.
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15. Section 2(c) of MOFA defines the expression 'promoter' to mean a person who constructs or causes to be constructed a block or building of flats.
16. The Maharashtra Ownership of Flats (Regulation of Promotion of Construction etc. ) Rules, 1964 are framed under MOFA and Rule 8 requires the Promoter to submit an Application for registration within 4 months from the date on which the minimum number of persons required to form such organization. As the definition of the expression "Promoter" encompasses the person who causes the construction, the owners of the property squarely fall within the definition of "Promoter" and are bound by the statutory obligation of registering the Society within the prescribed period.
17. In the present case, due to default of the Promoter to comply with the MOFA obligations, some of the flat purchasers had approached the Consumer Court by filing Consumer Complaint No. 272 of 2012, and by order dated 20th August 2016, the Consumer Court issued direction to the Developers to register the Co-operative Housing Society within 45 days of the order and also directed the predecessor of the present Petitioners to extend all co-operation for registration of the Society. Due to non compliance of order of Consumer Court, Execution Application was filed in the year 2018 under Section 27 of the Consumer Protection Act, 1986.
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18. The Respondent No 6 in his capacity as Chief Promoter filed the Application for registration under Section 10 of MOFA. The application is signed by 75 flat purchasers. The powers of the Appellate Authority were invoked under Section 21A of MCS Act on the ground of misrepresentation. Perusal of the pleadings in the Appeal indicates that the original applicant premised the cause for de- registration on the alleged fraud committed by the Developers claiming that based on fraudulent and forged documents, the building came to be constructed and the owners were totally unaware of either the allotment of the plot or the construction of the building. The broad based grounds on which the de-registration is sought is of violation of principles of natural justice as owners were not heard, the registration of the Society is fraud upon the Original Owner and on the Authority, the development agreement based on which the construction of the building was carried out is fraudulent and sham document and not binding on the owners and that as the ownership of the property is vested in CIDCO, there is requirement of tripartite agreement according to the law which has not been executed and thus there is no transfer of ownership.
19. The pleadings in the Appeal seeking de-registration clearly alleges fraud by the Developers leading to an inference of a dispute interse between the owners and the developers. Section 21A of MCS Shubham Talle 10 of 15 ::: Uploaded on - 21/11/2024 ::: Downloaded on - 22/11/2024 00:59:58 ::: WP-8200-23(final).doc Act would disentitle the Society from being registered where the registration is on account of misrepresentation by the Applicants. The remit of inquiry for Section 21A of MCS Act is whether there is misrepresentation by the Applicants while seeking registration.
20. Mr. Shah has premised his arguments on the non satisfaction of requirement of 61% while filing the Application for registration. Though not submitted in so many words, the submission appears to be that as the number of flat purchasers were stated to be 192, for the purpose of meeting the requirement of 61%, the requisite number would be about 118 members and the application states that 75 members have signed amounting to 68%. According to his submissions, the portrayal of requisite number of members without the adequate numbers being available in fact amounts to misrepresentation.
21. There is no dispute that the Respondent No.4 falls within the definition of "housing society" as per Section 2(16) of the MCS Act. More than 10 members qualified to be admitted as members have joined together in making the application for registration. The decision of Padmavati Construction (supra) is a sufficient answer to the contention about inadequate number of members endorsing the application for registration based on the policy directives issued vide the Government Circular dated 23rd March, 2016. The decision re-
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iterates the well settled position in law that the requirement of the Act cannot be overridden by an administrative circular.
22. The pleadings in the Appeal by the original Applicant relating to fraud cannot be gone into by the authorities in an Appeal under Section 21A of the MCS Act. Fraud can be stated to be an active concealment of fact by one having knowledge of the fact whereas misrepresentation can be broadly stated to be a mis-statement of fact which misleads. The decision in W.M.M.S Sanstha (supra) describes the expression "misrepresentation" to mean and include a positive assertion of a fact in a manner not warranted by the information, which misrepresentation need not be fraudulent and could be an incorrect presentation of those aspects necessary for grant of registration. The decision therefore confines the misrepresentation to those aspects necessary for grant of registration and not beyond the aspect of registration. The de-registration thus cannot be linked to the dispute between the owners and developers and the allegations of fraud by the Developer.
23. Any inquiry into the issue as regards the alleged fraud by the Developers while constructing the building of Respondent No.4 Society is alien to the inquiry contemplated under Section 21A of MCS Act which is confined to misrepresentation. Misrepresentation is required to be understood as relatable to the mis-statement of fact Shubham Talle 12 of 15 ::: Uploaded on - 21/11/2024 ::: Downloaded on - 22/11/2024 00:59:58 ::: WP-8200-23(final).doc pertaining to the issue of registration and not extraneous thereto.
24. Admittedly, there is a civil suit pending between the parties which will decide the right, title and interest of the present Petitioners in the subject land. Under Section 9 of MCS Act there is duty cast upon the Registrar to register the Society within two months of receipt of application where there is compliance with the provisions of Act or Rules or any other law for the time being in force. The consideration of fraud committed by the Developer or the illegality/irregularity in constructing the building is not part of the Registrar's function and is irrelevant as the registration of Society does not confer any recognition as to its lawfulness. Similarly, the grant of deemed conveyance does not conclude the issue of right, title and interest in the subject property and thus cannot be said to prejudice the right of the owners in order to seek de-registration.
25. The only aspect which is required to be considered is whether there is any misrepresentation in seeking registration of the Society and from the record I find none.
26. It is also not disputed that the Consumer Court by order dated 20th August 2016, had directed the developers to register the Society and the Original Applicant in the present case to extend all co- operation. The order of the Consumer Court has not been challenged till date and therefore binds the parties.
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27. The Respondent Nos.1 and 2 have rightly considered the order of the Consumer Court and has held that the record does not make out any case for de-registration under Section 21A of MCS Act. The Respondent No.1 has further considered that necessary permissions have been issued by CIDCO. Although the same is sought to be assailed on the ground that the Authority could not have gone into the legality of the construction, the said finding will not bind the civil courts and cannot be the basis for vitiating the order. The finding that there is delay of 16 years even if it accepted to be factually erroneous finding is immaterial as the Appeal has not been dismissed on the ground of delay.
28. The authorities under the MCS Act, were bound to comply with the order of the Consumer Forum dated 28 th August 2016, provided that the Application for registration met the requisites of law.
29. As regards the non issuance of notice of registration application to the owners as mandated by Section 10 of MOFA, Mr. Khandeparkar is right in placing reliance on State of UP vs Sudhir Kumar SIngh (supra) that not mere violation of natural justice but de facto prejudice other than non issuance of notice had to be proved. In the present case, the Original Applicant was duly heard in Appeal proceedings and no real prejudice by reason of non issuance of notice at the stage of registration has been demonstrated.
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CONCLUSION :
30. In light of the above discussion, the material on record does not demonstrate misrepresentation by the Respondent No.4 Society on the aspects relating to registration and there is no warrant for interference with the impugned order. Resultantly, Petition fails and stands dismissed. Rule stands discharged.
31. In view of the disposal of Writ Petition, nothing survives for consideration in the pending Civil/Interim Applications and the same stand disposed of.
[Sharmila U. Deshmukh, J.]
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