Abdul Rehman Adam Dawa & Ors. v. District Deputy Registrar of Coop. Societies, K-West Ward, Mumbai Suburban District & Ors.

16. Ms Tulpule, learned counsel for the petitioners, submitted that the site inspection report and the opinion of the Federal Society clearly show that the petitioners’ building was constructed on a separate plot with separate permissions and separate occupancy certificate. She pointed out that Al-Akbar has a separate entrance, water meter, electric meter, property tax assessment and land revenue assessment. She pointed out that since 1997 Al- Akbar has been maintaining its own accounts and managing its affairs independently. She submitted that the managing committee of respondent No.4 acted against members’ interest and committed misappropriation of funds. She referred to the fraudulent conveyance, misappropriation of shop sale proceeds and negligence in land acquisition compensation proceedings.

17. She submitted that the petitioners meet all requirements in the Circular dated 30 July 2004. She stated that respondent No.4 called Special General Body Meeting on 5 April 2017 only to obstruct the bifurcation proposal. She submitted that the Appellate Authority wrongly held that all 14 buildings form a single layout with common FSI and TDR. She submitted that documents show that each plot, including plot CTS 204, had separate permissions, separate IOD and separate OC. No common FSI or TDR was used. She submitted that authorities wrongly held that the petitioners did not show majority support. She submitted that the expression “in the interest of members of such societies” in Section 18 must be interpreted in a broad manner. She relied on Unnat Nagar Division

3 Co-op Housing Society Limited vs State of Maharashtra, 2025 SCC OnLine Bom 39 and Cosmopolitan III Co-op Housing Society Limited vs Hon’ble Minister, 2025 SCC OnLine Bom 1829.

18. Mr. Naik, learned senior counsel for respondent No.4, opposed the petition. He submitted that respondent No.4 consists of 14 buildings and 844 members. Only 80 members from Al- Akbar support bifurcation. He submitted that petitioners failed to show majority support. He submitted that the expression “in the interest of members of such societies” must consider interest of all members of respondent No.4. He submitted that common FSI and TDR were used for construction of all buildings. He submitted that Muntaha members made similar application which was rejected. He submitted that bifurcation is not in the interest of respondent No.4 society. He prayed for dismissal of the petition.

19. To decide the issue involved, it becomes necessary to reproduce Section 18 of the Maharashtra Cooperative Societies Act. Section 18 reads as follows: “18. Power to direct amalgamation, division and reorganization 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 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.”

20. Section 18 gives the Registrar power to direct amalgamation, division, or reorganisation of cooperative societies. The power is wide, but it is not mechanical. The Registrar must exercise it only when certain legal parameters are fulfilled. The section must be interpreted separately for each of the three actions.

21. The expression “it is essential in the public interest” in Section 18(1) of the Maharashtra Co-operative Societies Act, 1960 means that the power of amalgamation, bifurcation, or reorganisation can be exercised only when the decision benefits the public at large and not a few individuals. Public interest refers to the welfare of a larger community that is connected with the functioning of the society. It includes safety, accountability, and efficient use of resources.

22. For applying this ground, the Registrar must examine following tangible and practical factors.

(i) Whether the decision prevents misuse of common property or public funds.

Example.- If a large housing society receives government subsidies for water supply or waste management but due to mismanagement the benefit never reaches the residents, then reorganising or dividing the society may ensure proper use of public money.

(ii) Whether the change will ensure safety and compliance with law.

Example.- If two societies share a common compound, fire safety system, or common approach road and disputes between them affect fire safety clearances or police permissions during emergencies, the Registrar may step in. Division or reorganisation to ensure compliance with safety standards becomes a matter of public interest.

(iii) Whether the change improves civic coordination.

Example.- Municipal authorities provide water, drainage or waste collection to a particular block. Because of confusion in records due to improper society structure, the services get delayed. If reorganisation will remove these obstacles and allow smooth coordination with public authorities, it satisfies public interest.

(iv) Whether the change prevents public inconvenience.

Example.- If disputes between different wings of a large society obstruct access to a public road, or delay repairs to drains passing through the society land, division or reorganisation becomes essential to avoid inconvenience to residents and neighbours.

(v) Whether the decision promotes transparency and accountability.

Example.- In a large society members have no control over accounts. Sub committees manage separate buildings but the main committee controls money of all buildings. Accounts are not disclosed. Members are forced to pay for expenses that do not relate to their building. In such cases, bifurcation ensures transparency and accountability. This directly serves public interest as it protects the rights of many residents.

23. Thus, “essential in the public interest” requires that the decision must serve a purpose wider than individual benefit. The public welfare, civic administration, safety, or transparent use of resources. The power cannot be exercised merely because a group desires separation or amalgamation. The benefit must be to the public or to a substantial body of members whose safety, facilities, and legal rights are affected.

24. The words “in the interest of members of such societies” used in Section 18(1) of the Maharashtra Cooperative Societies Act, 1960 are broad. The Legislature has not limited the Registrar only to situations of public interest or interest of the cooperative movement. The section gives an independent ground. If the proposal benefits the members of the society, the Registrar can act. The expression is flexible because the needs of members differ from society to society. In one case, members may need separation so that they can manage their building and funds without interference. In another case, members may need amalgamation so that a weak society becomes strong and can carry out repairs or redevelopment.

25. The Registrar must examine whether the proposal gives real and measurable benefit to members. The benefit must not be vague or theoretical. The material placed on record must show that the members will receive better services, better financial management, or better representation after the proposed action.

26. For applying this ground, the Registrar must examine following tangible and practical factors

(i) Whether the proposed amalgamation, division or reorganisation will remove hardship or confusion that members are facing due to existing structure. For example, if members of one building maintain separate bank accounts, meters, access and maintenance, continuing under a single large society may only delay decisions and lead to disputes. Division would give clarity.

(ii) Whether members will gain better control of their own affairs. In cooperative law, members are expected to participate in management. If the present structure prevents participation or creates imbalance, division or reorganisation may become necessary.

(iii) Whether funds, property, and resources of the members will be used effectively and in a transparent manner. If members contribute money but do not receive matching benefit or have no say in decision-making, the proposal for division or reorganisation is justified because it protects their financial interest.

27. Thus, the law permits the Registrar to exercise this power wherever it is shown by material that the proposed action is required for the welfare of members. The test is practical. Will the change ensure better administration, transparency, and protection of members' rights. If the answer is yes, then the requirement of Section 18 stands satisfied.

28. The expression “in the interest of the co-operative movement” in Section 18(1) of the Maharashtra Co-operative Societies Act means that the action of amalgamation, division, or reorganisation must strengthen the cooperative system as a whole. The focus is not only on one society, but on the growth, discipline, and healthy functioning of the cooperative sector. The cooperative movement is based on principles of democratic control, transparency, equal participation, and financial accountability. Therefore, the Registrar must examine whether the proposed change will protect or promote these principles.

29. For applying this test, the following parameters may be considered.

(i) Whether the change promotes democratic functioning.-

Example.- In a very large housing society, one managing committee controls all buildings. Members of individual wings have no chance to participate. If dividing the society will give more members the right to vote and manage their affairs, the division supports the cooperative movement because it encourages democratic participation.

(ii) Whether the change improves transparency and accountability in financial matters.- Example.- A society with many buildings maintains one common account. Separate buildings have no control over how funds are spent. If reorganisation allows each building to manage its own funds, maintain its own accounts, and audit its expenses, transparency increases. This strengthens cooperative values.

(iii) Whether the change reduces disputes and promotes harmony.-

Example.- Two societies share a compound and common facilities. They constantly fight over maintenance, parking, and repairs. If amalgamation into one society removes conflict and brings unity under one management, it advances cooperative spirit.

(iv) Whether the change avoids misuse of power by a dominant group.-

Example.- In a large society, one building has majority members. They force decisions that benefit only their wing. Other members feel exploited. If division gives each group autonomy, it prevents misuse of majority and protects equality of members. This serves the cooperative movement.

(v) Whether the change helps smaller groups to function independently and efficiently.- Example.- A remote wing of a large society handles its own day to day affairs. The main committee delays decisions and payments related to that wing. If granting separate registration allows faster decision making and better functioning, it supports the growth of cooperative values.

(vi) Whether the change ensures proper utilisation of cooperative property and assets.- Example.- A building wants to carry out repairs. Funds are available, but the parent society refuses approval without reason. If division permits the building to maintain its property properly, the cooperative institution becomes more efficient and responsible.

30. The expression, therefore, covers any situation where the step taken helps make cooperative societies more democratic, financially sound, and member-oriented. The Registrar must look at these objective factors before exercising power under Section

18. It is not enough that a few members want separation. The change must promote cooperative values and ensure that societies function in a responsible and democratic manner.

31. The expression “for the purpose of securing the proper management of any society” in Section 18(1) of the Maharashtra Cooperative Societies Act means that the Registrar may order amalgamation, division, or reorganisation when it becomes necessary to ensure that the society is managed properly, efficiently, and according to law. Proper management includes transparent accounts, timely decisions, maintenance of records, and protection of the rights of members. The Registrar must examine whether the existing structure of the society has become unworkable and whether reorganisation will improve administration.

32. The following practical parameters explain how this expression must be understood.

(i) When the present size of the society makes administration difficult.-

Example.- A housing society has several buildings spread over different plots. One committee handles hundreds of complaints and maintenance issues every day. Members face delays and mismanagement. If division into smaller societies will allow quicker decisions and better control of accounts, then division secures proper management.

(ii) When there is repeated misuse of funds or lack of financial transparency.-

Example.- The managing committee refuses to show accounts to members. There are complaints of misappropriation or diversion of funds. If giving autonomy to each building or wing ensures separate accounts and proper auditing, then division or reorganisation is justified.

(iii) When internal disputes make smooth functioning impossible.-

Example.- In a very large society, two groups fight over rights relating to common funds or redevelopment. Administration gets paralysed. No decisions are taken. If reorganisation helps in resolving disputes and allows independent functioning, then the Registrar may intervene.

(iv) When members are not able to enjoy basic facilities because of the size or structure of the society.- Example.- The main society committee delays water repair work or refuses to approve urgent repairs of a separate building. If a separate society can attend to its building promptly, then division helps in proper management.

(v) When the present committee is unable to coordinate day to day administration of multiple buildings.- Example.- A society operates fourteen buildings on different plots with separate entrances. Sub committees of buildings do maintenance, but the main committee controls funds and interferes without reason. If reorganisation gives independent control to each building and reduces unnecessary interference, then proper management is achieved.

(vi) When legal obligations are not being fulfilled because of confusion in structure.- Example.- Fire safety certification or property tax documentation cannot be completed because different buildings are managed under one registration and records are mixed. If registering each building separately allows statutory compliance, then the Registrar can order division.

33. The essence is that the law empowers the Registrar to step in only when the existing setup proves unmanageable or creates obstacles for lawful and efficient functioning. The Registrar must record objective reasons, based on material, to show that the proposed change will genuinely improve management of the society. Amalgamation:

34. While examining the question of amalgamation, the law expects the Registrar to apply clear and objective standards. Amalgamation means that two or more societies will come together and function as one single society. This step affects the rights, property and administration of all members. Therefore, the must form an informed opinion that amalgamation is genuinely required for the benefit of the members as a whole.

35. The law lays down four specific grounds on which amalgamation can be ordered. Each ground has a definite meaning. The Registrar must examine the facts of the case in light of these grounds. The decision must not be based on personal views or convenience of a few members.

(i) It must be essential in public interest. Public interest means benefit to a larger group of people and not to a small section. In the context of cooperative societies, public interest may arise when amalgamation will help in proper utilisation of land, common services, or facilities which affect the surrounding locality. For example, when two small societies jointly maintain a common road, water tank or sewage connection, public interest may require that a single management body handles these issues. A unified body may deal with local authorities better. The Registrar must verify whether amalgamation will lead to orderly development and avoid conflicts that may affect residents at large.

(ii) It must serve the interest of the members of the societies. This requires that the welfare of all members must improve after amalgamation. If amalgamation will reduce maintenance burden, increase transparency in accounts, improve repair funds, increase bargaining power with contractors or service providers, or give better access to facilities, then it serves the interest of members. The test is simple. The quality of services should improve and disputes should reduce. If amalgamation will create confusion about rights or liabilities, or if it burdens one group of members, then the ground is not satisfied.

(iii) It must support the cooperative movement. The cooperative movement rests on participation, collective decision making, and accountability. If amalgamation strengthens cooperative principles such as democratic functioning, equal voting rights, and collective benefit, then the ground is satisfied. For example, two weak societies that individually lack funds for repairs may become stronger financially after amalgamation. This strengthens the movement because the societies become self sufficient and less dependent on outside agencies. The Registrar must see whether amalgamation promotes cooperation and unity rather than conflict.

(iv) It must be required to secure proper management and administration of the societies. If separate management results in duplication of work, irregular maintenance, or mismanagement of accounts, amalgamation may be required for proper administration. The Registrar must assess whether a single management body will simplify administrative work. Clear accountability increases efficiency. If amalgamation will remove confusion about common areas, reduce litigation, streamline accounts, and bring clarity in decision making, then the ground stands satisfied.

36. Thus, the Registrar must examine each ground carefully. If even one ground is clearly established on the basis of material on record, he is empowered to order amalgamation.

37. The Registrar must apply his mind to these factors. He must examine whether amalgamation will lead to better administration, transparency in accounts and financial stability. If the functioning of societies is scattered or inefficient, amalgamation may remove duplication of work and reduce expenses.

38. While considering amalgamation, the Registrar must also verify whether the societies have similar objects and similar nature of activities. If the objectives are different, combining them may cause conflict and confusion in day to day working. A cooperative can function smoothly only when its members share common purpose and common responsibility.

39. Before passing any order, the Registrar must place the draft proposal before the members. He must invite objections and suggestions. It is necessary that every member gets equal opportunity to express his views and concerns. Objections from creditors must also be considered. Cooperative movement stands on democratic participation. The decision of amalgamation cannot be forced without giving a hearing to those who are likely to be affected.

40. If after considering all relevant material, the Registrar concludes that amalgamation will result in better management, financial strength, reduction of disputes and improved facilities to members, only then can he pass the final order. Division of a society:

41. The Registrar may order division when: Division will serve the public interest. Division will protect the interest of members. Division is necessary to ensure proper management of the society.

42. In deciding whether a proposed bifurcation genuinely serves the collective welfare, promotes better administration, and ensures long-term stability of the cooperative institution, the authority or the Court has to look beyond the personal wishes of a few members and instead assess the situation from a broader and practical viewpoint. The purpose of Section 18 is not to divide societies for convenience, but to reorganise them only when such reorganisation will result in real benefit to the members as a whole. For this, certain guiding factors or parameters must be kept in mind.

(i) Collective Welfare of Members: The first and most important consideration is whether the division will actually benefit the members collectively. The cooperative society is created to promote the common interest of all its members, such as maintaining common property, managing services, and ensuring fair and equal participation. If the members seeking separation are living in a completely separate plot with independent entry, separate water, electricity and drainage systems, and are already managing their day-to-day activities separately, then formation of a new society for that plot may truly serve their welfare. It will make their management easier and quicker. For instance, suppose a large housing society has fourteen plots spread over a wide area, and one of these plots is physically separated from the others by a public road, has its own security gate, and bears its own maintenance expenses. The members of that plot may find it difficult to participate in the affairs of the parent society or benefit from common services. In such a case, bifurcation may serve their collective welfare, as it will allow them to manage their own affairs without depending on the distant parent society. But if all fourteen plots share common amenities such as a garden, clubhouse, security system, and maintenance staff, then allowing one plot to separate may deprive the others of contributions necessary to maintain those facilities. That will cause inconvenience to all and will not be in the interest of collective welfare. Thus, the key question is whether the bifurcation improves the welfare of members as a whole or whether it divides and weakens them.

(ii) Better Administration and Management: The next parameter is whether the proposed bifurcation will result in better and more efficient administration. The cooperative society is expected to function democratically and manage its affairs smoothly. When a society becomes too large or unmanageable due to its size or internal disputes, smaller societies may function more effectively and ensure that members’ voices are heard. For example, if in a big layout each plot has its own internal roads, water connections, and maintenance arrangements, but the parent society finds it difficult to supervise all the plots due to distance or lack of coordination, formation of separate plot-wise societies may ensure that each group of members can look after their own property effectively. It will also help in quicker decisionmaking and transparent accounting. However, if the separation is sought merely to avoid following majority decisions or to escape from financial obligations, it cannot be said to promote better administration. On the contrary, it may lead to duplication of administrative structures and unnecessary expenses. Therefore, better administration means not just separate management, but more responsible, transparent, and accountable management.

(iii) Long-term Stability and Financial Viability: Another important test is whether the proposed bifurcation will ensure long-term stability of both the new and the existing society. A society that is financially weak or too small to maintain its property and common areas cannot be considered stable. Before approving division, it must be seen whether each of the resultant societies will be capable of managing its affairs, maintaining its property, and meeting financial obligations such as insurance, taxes, and maintenance. For example, if the members of one plot have sufficient number of flats or bungalows and are financially capable of maintaining the plot independently, the separation may be justified. But if the plot consists of only a few houses which cannot bear the expenses of security, water supply, or repairs, the new society may not survive and may eventually come back to the same difficulties. Such division will only create instability and disputes in future

(iv) Preservation of Common Facilities and Harmony: It is also important to see whether the proposed bifurcation will preserve the common amenities and harmony among members. Cooperative housing is based on sharing of facilities and responsibilities. If the division will result in loss of essential common facilities such as open spaces, playgrounds, common pipelines, or shared security arrangements, then such bifurcation will cause harm to all members and should not be approved. For instance, if all 14 plots share one common entry gate and security cabin, and the plot seeking separation depends on the same, then forming a separate society without proper division of such facilities will create practical difficulties and conflict. In such a case, the proposed bifurcation would disturb the unity and peace among members rather than promote welfare.

(v) Genuine Need vs. Personal Interest: Lastly, it must be examined whether the proposal arises from a genuine administrative need or merely from personal disagreements. The law protects the collective structure of cooperative housing and cannot be used as a tool to settle personal scores. If evidence shows that the members seeking separation have faced continued neglect by the managing committee, or that the parent society has failed to look after their portion of the property, then separation may be justified. But if the real reason is dissatisfaction with decisions taken by the majority or refusal to pay common dues, the bifurcation cannot be treated as being in the members’ interest.

43. Only when all these factors, supported by credible evidence, point towards genuine benefit to the members and not mere personal advantage, can it be said that the proposed bifurcation serves the true interest of the members within the meaning of Section 18 of the Act. The goal of cooperative law is to strengthen cooperation, not to multiply divisions. Therefore, the ultimate test is whether the proposed separation will make the members’ life easier, their property better managed, and their society more stable and harmonious in the long run. Reorganisation of a society:

44. Reorganisation is different from amalgamation or division. In reorganisation, the society continues to exist. Only its internal working or structure is adjusted so that it functions better. Section 18 permits reorganisation when certain conditions are satisfied. The Registrar must apply his mind to each condition.

(i) It improves management. The Registrar must examine whether internal restructuring will lead to better day to day administration. He must see whether accounts will become clearer, responsibilities will become defined, and decisions will be taken without delay. For example, if a large society has several buildings and each building struggles for maintenance because there is no clear responsibility, the Registrar may reorganise the functioning by creating blocks or units. Each block may be given authority to handle its own repairs and collection of charges, while the main society handles common areas. This improves efficiency and avoids confusion among members.

(ii) It safeguards the interest of members. The Registrar must ensure that reorganisation does not harm any member’s rights. Reorganisation must result in fairness. Members should receive clear information about their share, liabilities, and facilities. If some members are paying for services that they do not receive, or if one section of the society enjoys facilities paid by another section, the Registrar may reorganise the internal structure so that contribution and benefit match. The guiding principle is simple. No member should bear unnecessary burden due to mismanagement.

(iii) It supports the cooperative movement. A cooperative society must function through collective participation, transparency, and equal treatment. Reorganisation is justified when it strengthens these values. If internal changes create more accountability, improve attendance in meetings, promote joint decision making, and reduce disputes, then it supports the cooperative movement. The Registrar must see whether the change encourages cooperation or whether it creates division among members.

45. Reorganisation includes redistribution of assets or liabilities, change of internal structure, or resizing the areas of operation. It is a flexible power. The Registrar must ensure that every change leads to a fair and balanced distribution of rights and obligations. The object of reorganisation is not to favour a few persons. It is to ensure smooth administration, financial clarity, and protection of every member’s interest.

46. The Registrar must record reasons to show that the proposed reorganisation satisfies the legal requirements. Only then can reorganisation be ordered. Reasons and Findings:

47. The issue before this Court is whether the petitioners have satisfied the requirements of Section 18 of the Maharashtra Cooperative Societies Act, 1960. The provision permits division or bifurcation of a society only when such division is shown to be in the interest of members of the society, or when it promotes better management of the affairs of the cooperative institution.

48. The law does not permit division merely because a group of members wish to separate. The law requires that separation must benefit the members collectively and must result in effective administration and long-term stability of both societies after division.

49. In the present case, the material on record shows that Al- Akbar building stands on a separate plot bearing CTS No. 204. Separate building permissions were issued for this plot. A separate occupation certificate was issued. The building has a separate entrance, separate electricity meter, separate water meter, and separate property tax assessment. The Federal Society confirmed these facts. These facts are not in dispute. Respondent No.4 itself admitted that each building has a subcommittee, maintains its own bank account and manages its day-to-day affairs separately.

50. This conduct indicates that the buildings within respondent No.4 society have been functioning in a decentralised manner since 1997. In substance, each building was managing itself as if it were a separate society. Al-Akbar building, therefore, has been administratively independent for more than two decades.

51. Section 18 requires that bifurcation must serve the collective welfare of members, promote better administration and ensure long-term stability. These tests are satisfied when: (1) The building stands on a separate and identifiable plot. (2) It has its own independent access and utilities. (3) It bears its own financial liabilities and expenses. (4) Separation does not harm the functioning of the parent society.

52. All four conditions exist in the present case. Collective welfare: Al-Akbar building has 94 members. They have been maintaining their building, utilities and bank accounts independently. Bifurcation will allow them to manage their affairs without obstruction. The Federal Society has stated that bifurcation will not cause inconvenience to respondent No.4. The same is noted in the site inspection report. These objective facts show that division will promote the welfare of Al-Akbar members. Better administration: Al-Akbar already has a functioning sub committee. The members maintain their accounts and building facilities independently. They have been doing so for years. Recognition of such independent functioning through grant of separate registration will lead to transparent and efficient management. Long-term stability: Al-Akbar’s independent water connection, electricity connection, separate tax assessment and separate financial management show structural and financial independence. The record shows that the building is capable of functioning as a separate society without depending on respondent No.4 for funds or services.

53. The petitioners have also placed material to show that respondent No.4’s managing committee failed in protecting the interest of the members of the society. There are allegations of fraudulent conveyance, misappropriation of sale proceeds of commercial shops, and failure to safeguard compensation amounts in acquisition proceedings. These allegations demonstrate lack of trust and failure of proper management in respondent No.4. Al- Akbar members seeking bifurcation due to such reasons cannot be treated as acting for personal gain.

54. The argument of respondent No.4 that all buildings are part of a single layout and that common FSI and TDR were used is not supported by any convincing material. The documentary material on record shows that each building has its own permissions and occupation certificates. The Federal Society has confirmed that bifurcation will not affect the other buildings.

55. The contention that majority approval was not obtained also has no substance. Section 18 does not require majority approval of all members. The law requires examination of whether the division is in the interest of members of the society concerned. The expression “interest of members” relates to the members of the part seeking separation and not the parent society as a whole. The scheme under Section 18 specifically contemplates situations where division is warranted even if some members oppose, provided the statutory conditions are satisfied.

56. Respondent No.1 applied the correct parameters and passed a reasoned order on 3 August 2018 after considering site visit, documents, and the opinion of the Federal Society. Respondent No.2 and respondent No.3 set aside that order without addressing the mandatory factors of Section 18 and without examining how bifurcation affects the welfare, administration, or stability of members seeking separation.

57. On these facts, the petitioners have satisfied the legal requirements of Section 18. The refusal by respondent No.2 and respondent No.3 suffers from non-application of mind and is contrary to material on record.

58. For the reasons stated above the writ petition succeeds.

59. The Judgment and Order dated 28 August 2019 passed by respondent No.3, and the order dated 6 November 2018 passed by respondent No.2 in Appeal No.197 of 2018 are quashed and set aside.

60. The order dated 3 August 2018 passed by respondent No.1 under Section 18 of the Maharashtra Cooperative Societies Act, 1960 read with Rule 19 of the Maharashtra Cooperative Societies Rules, 1961 allowing bifurcation of Al-Akbar building from respondent No.4-Momin Gujarat Co-operative Housing Society Limited is restored.

61. The certificate of registration issued to Al-Akbar Co-operative Housing Society on 3 August 2018 shall stand revived and shall continue to remain valid.

62. Respondent No.4 society shall hand over to Al-Akbar Cooperative Housing Society all original documents, record and property relating to CTS No.204, including but not limited to building plans, occupation certificate, correspondences, maintenance records, accounts relating to the building and other connected papers, within a period of four weeks from today.

63. The assets and liabilities of the parent society relating exclusively to Al-Akbar building shall stand transferred to the newly registered society. If any dispute arises regarding distribution of assets or liabilities, the parties are at liberty to approach the Registrar under the provisions of the Act.

64. No order as to costs. (AMIT BORKAR, J.)