Full Text
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2249 OF 1997
1. Navjivan Commercial Premises
Co-operative Society bearing Registration No.
BOM/WD/GNL/O/368/95-96 having
Registered Office at Commercial
Building No. 3, Lamington Road, Mumbai-400 008
… Petitioner
(Ori. Affected Party /
Respondent No. 3.
Co-operative Society Act, 1960 having its office at Navjivan Co-operative
Housing Society Ltd., Lamington Road
Mumbai – 400 008 ….Original Appellant
…. Original
Respondent No. 1
2. The State of Maharashtra
Mumbai
3. Divisional Joint Registrar of
Co-operative Societies
Mumbai Division, 3rd floor
Konkan Bhavan, New Mumbai
Respondent No. 2
4. Deputy Registrar
Co-operative Societies, ‘D’ Ward, Malhotra House, Opp. G.P.O., Mumbai-400 001
IN
WRIT PETITION NO. 2249 OF 1997
Navjivan Co-operative Housing Society, duly registered under the Maharashtra Co-operative
Society Act, 1960 having its office at Navjivan
Co-operative Housing Society Ltd., Lamington
Road, Mumbai – 400 008
…. Applicant
(Orig. Resp. No. 1)
In the matter between
1. Navjivan Commercial Premises
Co-operative Society bearing Registration No.
BOM/WD/GNL/O/368/95-96 having
Registered Office at Commercial
Building No. 3, Lamington Road, Mumbai-400 008
… Petitioner
(Ori. Affected Party /
Respondent No. 3.
Co-operative Society Act, 1960 having its office at Navjivan Co-operative
Housing Society Ltd., Lamington Road
Mumbai – 400 008 ….Original Appellant
…. Original
Respondent No. 1
….Original
Respondent No. 2
2. The State of Maharashtra
Mumbai
3. Divisional Joint Registrar of
Co-operative Societies
Mumbai Division, 3rd floor
Konkan Bhavan, New Mumbai
4. Deputy Registrar
Co-operative Societies, ‘D’ Ward, Malhotra House, Opp. G.P.O., Mumbai-400 001
Mr. Veerendra Tulzapurkar, Senior Advocate a/w. Mr. Karl Shroff, Ms. Lata Dhruv, Mr. Mitesh Naik and Mr. Ronak Shah i/b. M/s. Dhru & Co. for the Petitioner.
Mr. Rajesh B. Jain a/w. Mr. Rohit Jain and Mr. Neha R. Doshi i/b. Legal
Juris for Respondent No. 1.
Ms. M. S. Bane, AGP for the State.
JUDGMENT
1. This petition is filed to challenge the Judgment and Order passed by the learned Minister in appeal under Section 152 of the Maharashtra Co-operative Societies Act, 1960 (“MCS Act”) filed by respondent no. 1. By the impugned order the appeal is allowed and the Judgment and Order for bifurcation of the parent society into respective separate societies for residential buildings and for commercial building passed by the Divisional Joint Registrar, Cooperative Societies under Section 18 of the MCS Act is quashed and set aside. Respondent no. 1 is the original parent society. The petitioner is a bifurcated society consisting of occupants of commercial building originally part of respondent no. 1-society. In view of the order permitting bifurcation, the petitioner society was registered for the commercial building. However, in view of the impugned order, the bifurcation of the parent society for a separate society for the commercial building stands cancelled; hence, the petition by the society registered for the commercial building.
FACTS IN BRIEF:
2. The parent society was registered sometime in the year 1960 and formed for around 2000 members for the buildings situated at Lamington Road, Matunga, Chembur and Mahim. There were a total of 19 residential buildings and one commercial building on Lamington Road. There were disputes amongst members of the parent society; hence, in the year 1984-85, the buildings at Mahim were separated by registration of a separate society. The petitioner had formed a society of members of the commercial building and the same was independently registered as “Navjivan III Welfare Association” registered under the Indian Societies Registration Act, 1860. The association of commercial building was registered with the office of the Charity Commissioner on 28th February 1990.
3. There were various litigations between the members of the commercial building and the parent society. Writ Petition No. 2052 of 1990 was filed by the petitioner for the appointment of an Administrator on the allegation of mismanagement. By order dated 14th May 1990 Administrator was appointed. It is the petitioner’s case that they filed an application under Section 18 of the MCS Act for the bifurcation of the parent society into four manageable societies, i.e. one for Chembur, one for Matunga and two separate societies at Lamington Road to separate the commercial building from the residential buildings.
4. In the meantime, when the Administrator was in charge of the management of the parent society, elections were held, and a new managing committee took charge of the parent society. On 18th June 1992, the District Deputy Registrar issued a draft order for bifurcating the parent society into three separate societies: one at Lamington Road, the second at Chembur, and the third at Matunga.
5. The petitioner filed Civil Application No. 3893 of 1992 in the pending Writ Petition No. 2052 of 1990 seeking directions against the District Deputy Registrar, Co-operative Societies for bifurcation of the parent society into four societies, i.e. separate society for commercial building at Lamington Road in addition to the three societies proposed by the draft order dated 18th June 1992. By order dated 17th September 1992, this Court directed that the Deputy Registrar to modify the draft order of bifurcation, which should include a proposal to divide the parent society into four units, i.e. firstly at Chembur, secondly at Matunga, thirdly at Lamington Road and fourthly the commercial wing at Lamington Road. In continuation of the order dated 17th September 1992, this court, by an order dated 24th 1995, issued further directions to the Deputy Registrar, Co-operative Societies, to dispose of the bifurcation application of the petitioner under Section 18 of the MCS Act and directed all the parties to comply with the lawful requisitions in order to enable the Deputy Registrar, Cooperative Societies to dispose of the proceedings for splitting up the society as applied for.
6. In view of the directions issued by the order dated 24th 1995, a fresh draft order was issued on 24th October 1995. By the fresh draft order, the Deputy Registrar proposed two separate societies for Lamington Road, i.e. one for the residential buildings and another for the commercial building, in addition to the separation of the buildings at Chembur and Matunga. Objections were called for on the said draft order, and after taking into consideration the objections, the Divisional Joint Registrar passed a final order under Section 18 of the MCS Act permitting the division of the parent society into four separate societies, i.e. separate society for residential buildings and a separate society for the commercial building at Lamington Road, separate societies respectively for Chembur and Matunga.
7. Aggrieved by the said order of bifurcation, respondent no. 1, i.e. the parent society, filed an appeal before the learned Minister under Section 152 of the MCS Act. By the impugned order, the appeal was allowed, and the bifurcation of the societies for commercial and residential buildings at Lamington Road was quashed and set aside. Hence, the society for the commercial building has filed the petition.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
8. Learned senior counsel for the petitioner submitted that the impugned order has not taken into consideration that the Divisional Joint Registrar has passed a speaking order for the bifurcation of the society for commercial building. The bifurcation order deals with all the relevant aspects to be considered in terms of the requirements contemplated under Section 18 of the MCS Act. The observation in the impugned order with regard to the public interest and cooperative movement is objected to by the learned senior counsel for the petitioner on the ground that the Bifurcation order has, in detail, taken into consideration the requirement for the separate society for commercial building at Lamington Road.
9. According to the learned senior counsel for the petitioners, the impugned order erroneously referred to the requirement of the opinion of the federal society. He submitted that there was no federal society constituted and notified by the State Government in the official gazette as referred to in Section 18 of the MCS Act. Hence, there was no question of any consultation with the federal society, which was not in existence. However, the Deputy Registrar, Co-operative Societies, had forwarded the draft order to the Bombay District Housing Federation being federal society; however, the federal society failed to submit any opinion or comments on the draft order. Thus, it was submitted that the reason recorded in the impugned order regarding consultation of the federal society was erroneous and not in accordance with the provisions of Section 18 of the MCS Act.
10. With reference to the second reason in the impugned order regarding calling for objections from the parent society and its members, learned senior counsel for the petitioner submitted that the Deputy Registrar, Co-operative Societies, had forwarded the draft order dated 24th October 1995 to the parent society calling for objections and suggestions from the members. Accordingly, the respondent no.1-society issued a circular dated 31st October 1995, and the draft order was circulated amongst the members for submitting suggestions and objections. The Divisional Joint Registrar before passing the final order, considered all the suggestions and objections submitted before him as specifically recorded in the order. The operative part of the directions indicates that the entire scheme was formulated for bifurcation into four societies, which was in the interest of the members of the society. Thus, the learned senior counsel for the petitioner submitted that the impugned order, without recording any valid reasons, reversed the findings of the Divisional Joint Registrar.
11. Learned senior counsel submitted that the impugned order erroneously referred to the provisions of Section 20 of the MCS Act. With reference to the facilities and amenities, it was submitted that the Divisional Joint Registrar had fairly suggested that all the common facilities shall be availed by both societies till proper arrangements were arrived at. The observation made in the impugned order with regard to the arrears allegedly due from the members of the petitionersociety was already sorted out by way of an arrangement contained in the order dated 6th May 1997 passed by this Court, and the members of the petitioner-society were required to recover the arrears from the members of the commercial building and pay the same to the respondent no. 1 – society. Accordingly, an amount of Rs. 19,00,000/was already paid to respondent no. 1 – society pursuant to the permission granted by this Court by order dated 7th September 2023.
12. Learned senior counsel for the petitioner further submitted that by letter dated 3rd March 1994 addressed to members of the commercial building, respondent no.1-society had indicated the desire to have a separate society for residential buildings and commercial building. Thus, even respondent no.1 had agreed that a separate society is necessary for the commercial building. Lastly, the learned senior counsel for the petitioner submitted that the impugned order is dated 27th March 1997, and in the meantime, necessary directions issued by order dated 6th May 1997 passed in this petition are followed for the last thirty years. The petitioner society and the respondent society have been carrying out their business and affairs for almost the last thirty years as independent societies. The petitioner, by way of an additional affidavit dated 28th November 2023, placed on record relevant factors showing that both societies have been inter alia functioning independently; hence, at this stage, the impugned order cancelling the bifurcation of the commercial building requires interference by this court. Hence the order of bifurcation passed by the Divisional Joint Registrar under Section 18 of the MCS Act requires to be confirmed.
13. In support of his submissions, learned senior counsel relied upon the decisions of this Court in the case of Pundalik Kadhav vs. District Deputy Registrar, Co-operative Societies, Chandrapur and Others[1] and Sureshchandra Agarwal and Ors. vs. Div. Joint SUBMISSIONS ON BEHALF OF RESPONDENT NO.1:
14. Learned counsel for respondent no. 1 submitted that the parent 1 1990 Mh. L. J. 925 2 Writ Petition No. 373 of 2006 dated 6th March 2006. society had proposed the division of the society only for three societies in view of the geographical distance between the main society at Lamington Road and the other buildings at Matunga and Chembur. He submitted that the members of the parent society never intended to bifurcate buildings at Lamington Road into two societies. All the amenities and facilities were meant to be common for the residential and commercial building. He submitted that reliance placed on the order dated 24th March 1995 passed by this Court issued no directions to divide the parent society into four societies.
15. Learned Divisional Joint Registrar misconstrued the order passed by this Court to mean that this Court had directed the division of the original parent society into four separate societies. The fact that the learned Divisional Joint Registrar kept the issue regarding the division of property open indicates that the division of the property was not possible, hence, there could not be any bifurcation of the societies into the society for commercial building and separately for residential buildings. He submitted that there was no substance in the argument made on behalf of the petitioner that since the interim arrangement for running the two separate societies has continued for the last thirty years, the same would justify the order of bifurcation.
16. This Court, while passing an interim order dated 6th May 1997, permitted the continuance of the separate societies subject to compliance with certain conditions as set out in the order. However, the petitioner failed to comply with the conditions. Hence, Contempt Petition No. 3181 of 2010 was filed by respondent no.1. Thereafter, the petitioner deposited an amount of Rs. 19,00,000/- as against the total arrears of Rs. 45.91 lakhs. Hence, respondent no. 1 filed an Interim Application No. 1970[4] of 2022, praying for dismissal of the Writ Petition on the grounds of non-compliance with the conditions set out in the order dated 6th May 1997.
17. By order dated 9th June 2023 passed by this Court in Interim Application No. 3650 of 2022, respondent no. 1 was permitted to withdraw the amount of Rs. 19,00,000/- deposited by the petitioner. The said order was challenged by the petitioner before the Hon’ble Supreme Court; however, the same was confirmed. Thereafter, the petitioner filed Interim Application (St) No. 32181 of 2023 for permission to deposit the balance amount with interest.
18. The learned counsel for the respondent no. 1 submitted that there was no substance in the argument made on behalf of the petitioner that after the formation of a separate society for the buildings in Mahim Division, there was mistreatment and injustice to the members of the commercial building and hence the welfare association was registered. He submitted that none of the members of the commercial building any time filed any complaint. The buildings at Lamington Road comprise approximately 900 members, out of which 724 members are residing in the residential buildings. Learned counsel for respondent no. 1 thus submitted that bifurcation of a separate society only for commercial building would create disputes on various issues as the common amenities and facilities are provided by taking into consideration the requirements of the seven residential buildings and one commercial building. Even the entry to the residential building is through the commercial building. Thus, none of the grounds as set out under Section 18 of the MCS Act are satisfied for bifurcating the parent society for registration of a separate society only for commercial building.
19. In support of this submission, learned counsel for respondent NO. 1 relied upon the decision of this Court in the case of Bombay Catholic Co-operative Housing Society Ltd., Bombay vs. V. B. Mathankar and Others[3]. He submitted that this Court has taken a view that in writ jurisdiction, the facts as recorded by the Appellate Authority cannot be re-appreciated for substituting a different opinion.
20. Learned counsel for respondent no.1 referred to Section 20 of the MCS Act and submitted that without deciding the issue with regard to the division of the assets of the society, bifurcation of the society cannot be permitted. He submitted that it was neither in conformity with the objects of the MCS Act and the cooperative movement nor was it in the interest of the members to bifurcate the society for commercial building. He relied upon the relevant conditions as set out under Section 18 required to be satisfied for the bifurcation of the society. He submitted that none of the conditions contemplated under Section 18 are satisfied in the present case for permitting the bifurcation of the society for commercial building. He thus relied upon the relevant findings recorded by the learned Minister while allowing the appeal and submitted that the order of the Divisional Joint 3 2000 (3) Mh.L.J 273 was held to be not justified. The Divisional Joint Registrar, while permitting bifurcation of the society, has referred to the availability of the FSI and the issue with regard to the recovery of arrears of maintenance from the members of the commercial building. However, without recording any finding with regard to the division of the properties, permitted bifurcation of the society for commercial building resulting in further complications regarding the utilisation of the common property and amenities available for the residential as well as the commercial building.
21. The learned counsel for respondent no.1 submitted that after the order of bifurcation was passed by the Divisional Joint Registrar on 25th March 1996, the members of respondent no. 1 – society, including members of the commercial building, passed a unanimous resolution opposing the bifurcation on the ground that the same would create an issue with regard to all the basic amenities including water, electricity, parking area, drainage, community hall and the entrance. Hence, in the general body meeting of respondent no. 1, which included members of the commercial building, it was agreed that bifurcation of the society for commercial building was neither feasible nor desirable by the members. He submitted that inspite of the said resolution, few members of the commercial building have filed the present petition for challenging the rejection of bifurcation.
22. Learned counsel for respondent no. 1 thus submitted that the first Appellate Authority has, after appreciating the facts, recorded a finding that it is not practical to bifurcate the society for commercial building. All the submissions made on behalf of the petitioner would amount to re-appreciation of the findings of facts recorded by the first Appellate Authority, which is beyond the scope of interference under Articles 226 and 227 of the Constitution of India. He thus submitted that this is not a fit case for exercising powers under Articles 226 or 227 for interfering with the well-reasoned order passed by the first Appellate Authority.
RESPONSE BY THE PETITIONER TO THE SUBMISSIONS OF RESPONDENT NO. 1:
23. In response to the submissions made on behalf of respondent no. 1, learned senior counsel for the petitioner submitted the issue about the alleged arrears of maintenance and non-compliance of conditions set out by this Court at the time of granting interim relief is no ground to oppose the order of bifurcation. He submitted that the bifurcation order has already been implemented, and the separate society has been smoothly functioning for the last thirty years. The issue with regard to the division of the property and recovery of arrears of maintenance can be sorted out by appropriate remedies under the MCS Act and the Rules framed thereunder. Though the petitioner disputed that there are no arrears of maintenance from the members of the petitioner society, learned senior counsel submitted that the said could be sorted out by making necessary payments if there are any arrears of maintenance; however, the same would be irrelevant so far as deciding bifurcation of the society as contemplated under Section 18 of the MCS Act. He thus submitted that considering that the reasons recorded by the Divisional Joint Registrar while confirming the draft order of bifurcation are erroneously set aside by the impugned order, this is a fit case to exercise powers under Articles 226 and 227 for setting aside the impugned order passed on the reasons not tenable in view of the conditions contemplated under Section 18 of the MCS Act.
ANALYSIS
24. I have considered the rival submissions of the parties. The order passed by the Divisional Joint Registrar for bifurcation of the society is by exercising powers under Section 18 of the MCS Act. Sub-Section (1) of Section 18 permits bifurcation of the society if the Registrar is satisfied that it is essential in the public interest or in the interest of the members or in the interest of the cooperative movement or for the purpose of securing the proper management of any society. Sub- Section (1) of Section 18 also provides for consultation with the federal society as may be notified by the State Government by order notified in the official gazette before issuing any order proposing division of the society. The proviso to sub-section (1) gives a conditional time of forty five days to the federal society to submit its opinion, failing which the section (2) of Section 18 imposes two conditions, i.e. a copy of the proposed order to be sent to the concerned society and consideration of the suggestions and objections, if any, either from the society or from any of its members and make such modifications in the draft order as may be desirable to the Registrar.
25. Sub-section (3) of Section 18 provides that the division order passed under sub-section (1) may contain such incidental, consequential, and supplemental provisions necessary to give effect to the division. Once the Registrar is satisfied that division can be permitted, the order may contain the necessary directions on incidental, consequential, and supplemental requirements if needed for the bifurcation of society in the opinion of the Registrar. Sub-section (5) of Section 18 provides that on the issuance of the order under subsection (1), the provisions in sub-sections (2), (3) and (4) of Section 17 shall apply to the society so divided under sub-section (1) of Section
18. Considering the controversy involved in the present matter, it is not necessary to discuss the sub-sections (2), (3) and (4) of Section 17.
26. Thus, as per the scheme of Section 18, a bifurcation order should first contain the satisfaction of the Registrar as contemplated under sub-section (1) to permit the division of the society with such constitution, property rights, interest and authorities and such liabilities, duties and obligations as may be specified in the order. Consideration of the suggestions and objections, if any, either from the society or from any of its members is mandated before issuing the order under sub-section (1) of Section 18. The Registrar is further empowered to issue incidental, consequential and supplemental directions to give effect to the order of the division.
27. In the present case, the Deputy Registrar issued a draft order proposing bifurcation of the parent society into three societies, i.e. Society at Lamington Road, Chembur and Matunga. So far as the bifurcation of the buildings situated at Chembur and Matunga is concerned, there is no dispute amongst the members of the society. The disagreement is on the bifurcation of a separate society for the commercial building at Lamington Road. It is the petitioner’s case that on account of mistreatment and injustice suffered by the members of the commercial building, they formed an organisation called Navjivan III Welfare Association, registered under the Indian Societies Registration Act 1860. Though in the present petition, the petitioner has relied upon the registration of the said Association, it cannot be examined by this court for the first time as a justification for bifurcation. The registration of the said Association does not form part of the reasons in the bifurcation order passed under Section 18 of the MCS Act. Thus, it would be of no consequence at this stage to decide the correctness of the bifurcation order.
28. On an application filed for bifurcation, the first draft order was issued on 18th June 1992, proposing a scheme for registering three societies with separate units at Lamington Road, Chembur and Matunga. The draft order further provided for the area of operation of these societies in their respective separate wards, considering their respective locations. Necessary directions were proposed for the maintenance of separate accounts and the statutory registers. Since the three proposed societies were situated at separate locations, there was no question of dividing the properties. Thus, depending upon their respective amenities and properties, necessary directions were proposed for dividing the assets and liabilities on ‘as is where is’ basis as reflected in the books of accounts maintained by the three units separately. Since the location of the three societies was independently situated, the respective FSI of the respective properties of the three units was proposed to be shared with the respective three proposed societies.
29. The petitioner, aggrieved by the bifurcation only based on geographical distance, filed an application in the pending Writ Petition in this Court on behalf of the Navjivan III Welfare Association formed by the members of the commercial building. This Court vide order dated 24th March 1995 issued directions for deciding the pending application of the petitioner under Section 18 of the MCS Act after necessary compliance by all the concerned authorities with lawful requisitions of the co-operative department to enable the Deputy said directions were issued in furtherance of an order dated 17th September 1992, passed by this Court directing the Deputy Registrar to modify the draft order of bifurcation to include a proposal to divide the parent society into four units, i.e. firstly at Chembur, secondly at Matunga, thirdly at Lamington Road and fourthly the commercial wing at Lamington Road. Accordingly, a fresh draft order was issued proposing separate societies at Lamington Road, one for residential buildings and one for commercial building. Thus, suggestions and objections were called for regarding the fresh draft order.
30. The Divisional Joint Registrar, in his order dated 25th 1996, relied upon the said order dated 24th March 1995 passed by this Court to mean that this court had issued directions for the separation of the society for commercial building. However, a perusal of the order dated 24th March 1995 read with the order dated 17th September 1992 passed by this Court indicates that directions were issued to the Deputy Registrar to modify the draft order and include a proposal to divide the parent society into four units, i.e. respective separate societies at Chembur and Matunga and two separate societies at Lamington Road respectively for residential buildings and commercial building and the concerned parties were directed to comply with all the lawful requisitions for bifurcation of the society. Thus, after the fresh draft order was issued by the Deputy Registrar, the Divisional Joint out under Section 18 of the MCS Act.
31. A perusal of the bifurcation order does not contain any reasons recorded by the Divisional Joint Registrar indicating his satisfaction as contemplated under sub-section (1) of Section 18 for permitting bifurcation. He has simply referred to the objections and suggestions and said that the bifurcation is practical. The bifurcation order also leaves all the contested issues regarding common amenities and property undecided.
32. Regarding the important issues with regard to the common property and amenities, the Divisional Joint Registrar, in the order of bifurcation, has kept the decision on the same open. In reference to objections numbers 7, 8, 9 and 10, the Divisional Joint Registrar has opined that the objection regarding arrears of maintenance would not form part of the adjudication of the bifurcation order. Regarding the objection to the allotment of the 20 unoccupied offices in the commercial building, it was observed that the same would be decided in the pending petition in this court, and the new Managing Committee of the proposed commercial society would follow the orders passed in the pending petition in this Court. Regarding the said observations, it is necessary to note that there is nothing on record to point out any particulars of any pending litigation regarding the unoccupied and unsold 20 closed offices in the commercial building. Regarding the objection to the allotment of parking space, the Divisional Joint subject to conditions in the order. However, no conditions and further directions form part of the bifurcation order. With reference to the objections regarding separate space for parking, water supply, drainage and electricity, the bifurcation order suggested that the same shall be decided mutually as per provisions of the MCS Act. Thus, the bifurcation order is bereft of any provision for the issues with regard to common facilities and properties.
33. In the scheme of bifurcation approved by the Divisional Joint order, was directed to be shared jointly by both societies. The bifurcation order further recorded that the proposed society at Lamington Road shall enter into partnership as provided under Section 20 of the MCS Act after following due procedure. The order further records that if the proposed societies cannot arrive at any such arrangement, the existing arrangement will continue. The directions issued for the division of the common amenities and properties by leaving the same open to be decided by the members themselves indicate that the same was not settled in the scheme approved by the Divisional Joint Registrar in the order of bifurcation.
34. With reference to such reasons recorded by the Divisional Joint objections in the impugned order. The learned Minister has opined that it was necessary for the Divisional Joint Registrar to take into consideration whether the bifurcation order was in the public interest or in the interest of the members of the society or whether it concerned the co-operative movement. Learned Minister further opined that the High Court order relied upon by the Divisional Joint Registrar does not contain any directions for dividing the society into four societies. Hence, the Divisional Joint Registrar was under obligation to take into consideration whether all the conditions as set out under Section 18 of the MCS Act were satisfied for issuing the order of bifurcation. The impugned order further states that the issue regarding the division of the property is being kept open for the members to adopt appropriate proceedings under Section 20 of the MCS Act. The learned Minister thus opined that before the bifurcation of commercial building as a separate society, it was necessary and essential to settle the dispute on the questions with regard to the common property and amenities, including the dispute with regard to the division of available FSI. Thus, the learned Minister concluded that in the absence of specific directions for settling issues with regard to the common property and amenities, an order for bifurcation under Section 18 was not justified. Hence, after considering all the factual aspects in reference to the objections and suggestions of the members and the reasons recorded for bifurcation, the learned Minister allowed the appeal of respondent no. 1 and cancelled the order of bifurcation of the society for commercial building at Lamington Road.
35. The arguments raised on behalf of the petitioner are mainly based by supporting the Divisional Joint Registrar’s order being a speaking order. The arguments made on behalf of the petitioner regarding the existing arrangement continued for the last thirty years in view of the interim order passed by this Court cannot be a relevant factor to decide whether the order of bifurcation is in accordance with the conditions set out under Section 18 read with Rule 17 of the MCS Rules. There is no dispute that at the time of passing an interim order granting stay to the order of bifurcation, certain conditions were set out for compliance by the petitioner. The amount of arrears of maintenance is not in dispute. It is also not in dispute that the entire amount of arrears has not yet been deposited by the petitioner. Thus, I do not see any substance in the argument raised on behalf of the petitioner that, in view of the separation of the society for commercial building existing for the last thirty years, would indicate that the reasons recorded in the bifurcation order are justified.
36. It is not in dispute that 20 shop premises in the commercial building are unsold and not occupied. It appears that there is no dispute that the registration of the parent society consisted of assets of the properties, including the unsold 20 shop premises. Thus, the unsold 20 shops situated in the commercial building sought to be bifurcated are owned by the original parent society. If the society is to be bifurcated, the issues with regard to the division of the property owned by the parent society are required to be dealt with in the scheme of bifurcation. Thus, before passing the order of bifurcation, it is necessary to adjudicate the necessary arrangements with regard to the division of assets and liabilities in the scheme for the division of the property approved by the Registrar.
37. A perusal of the order of bifurcation is bereft of any provisions or directions with regard to sufficient conveyance that would vest assets and liabilities of the original society in the two divided societies. The Divisional Joint Registrar has referred to better management, which is in reference to the geographical proximity of the buildings at Matunga and Chembur; however, that bifurcation is accepted by the members. So far as the commercial building is concerned, the Divisional Joint Order dated 24th October 1995 passed by this Court. He has not correctly understood the directions issued by this court. A perusal of the order dated 24th March 1995 read with the order dated 17th September 1992 passed by this Court indicates that directions were issued to the Deputy Registrar to modify the draft order and include a proposal to divide the parent society into four units, i.e. respective separate societies at Chembur and Matunga and two separate societies at Lamington Road respectively for residential buildings and commercial building and the concerned parties were directed to comply with all the lawful requisitions for bifurcation of the society. Thus, the Divisional Joint Registrar, while examining the draft order prepared as per the directions of this court, was under obligation to scrutinize the proposed division and record satisfaction as contemplated under sub-section (1) of Section 18 of the MCS Act. However, instead of following the procedure prescribed under the law, the Divisional Joint Registrar has said that he is permitting division ‘in obedience of orders of High Court’.
38. Except for issuing general and uncertain directions, the scheme for bifurcation in the Divisional Joint Registrar’s order does not provide any specific arrangement regarding common amenities and property of the buildings at Lamington Road. The scheme directs the society for residential buildings and the society for commercial building at Lamington Road to enter into partnership as per Section 20 of the MCS Act and further directs that if they fail to enter into a partnership, the management will continue with the society at serial no. 1 in the scheme i.e. respondent no. 1. Even otherwise the directions in the scheme for division is a form of the working arrangement after the division and those directions can be issued provided the Registrar records satisfaction as contemplated in sub-section (1) of Section 18 of the MCS Act. The bifurcation order does not contain any reason, as contemplated under sub-section (1) of Section 18, for permitting bifurcation.
39. Thus, the reasons recorded in the impugned order setting aside the order of bifurcation are justified for setting aside the same for want of satisfaction of the Registrar as contemplated in sub-section (1) of Section 18 of the MCS Act.
40. The learned senior counsel for the petitioner relied upon the decision of this court in the case of Pundalik Kadhav and submitted that the impugned order erroneously opined that it was essential to discuss with the federal society about the bifurcation. He further submitted that the federal society could, at the most, place the available material before the Registrar; hence, failure to obtain the opinion of the federal society would not make the process ineffective. A perusal of the impugned order does not indicate that the learned Minister has expressed any such opinion. However, the case of Pundalik Kadhav was with regard to the dispute about the disqualification of a committee member and consultation with the federal society under Section 78(1) of the MCS Act. Hence, the legal principles laid down in the said decision would not be directly applicable to the facts of the present case. So far as consultation with the federal society as provided in sub-section (1) of Section 18 of the MCS Act is concerned, the same is a part of the process of consultation by the Registrar, who can send the draft scheme to the Federal Society for its opinion. However, for permitting bifurcation, the satisfaction of the Registrar is a must, as contemplated under subsection (1) of Section 18 of the MCS Act. Thus, an order for bifurcation passed without recording satisfaction by the Registrar would stand vitiated.
41. In the decision of this court in the case of Bombay Catholic Co-operative Housing Society Ltd. relied upon by the learned counsel for respondent no. 1, the issue was regarding an order of bifurcation of the society being hit by the provisions analogous to res judicata with reference to the contentions regarding the findings recorded by the Officer in dispute proceedings under sections 91 to 96 of the MCS Act of 1960 and if they were binding on the Assistant only be exercised by the authority mentioned in Section 18 of the MCS Act on its satisfaction that division of the society is essential in the public interest or in the interest of the cooperative movement or for the purpose of securing the proper management of any society and that the order for division of the society can be passed by the concerned authority only upon compliance of the procedure prescribed in section 18 based on the grounds stated therein and the consideration of division of society was not and could not have been the subject matter of the dispute under section 91 of the MCS Act of 1960. Thus, the legal principles settled by this court in the case of Bombay Catholic Co-operative Housing Society Ltd. are not directly applicable to the controversy in the present case.
42. I do not find substance in the other arguments advanced on behalf of the petitioner that the scheme in the bifurcation order was in the interest of the member. The bifurcation order does not record any such reason for permitting bifurcation. The other points argued on behalf of the petitioner are not relevant to support the bifurcation order that is not issued in accordance with Section 18 of the MCS Act.
43. In the decision of Shalini Shyam Shetty and another Vs., the Hon’ble Supreme Court has summarized the scope of interference under Article 227 of the Constitution of India. The relevant extracts from paragraph 49 are as under: “49. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:........ (e) According to the ratio in Waryam Singh [AIR 1954 SC 215], followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and courts subordinate to it, “within the bounds of their authority”. (f) In order to ensure that law is followed by such tribunals and courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them. (g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of the tribunals and courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted. (h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised. emphasis applied
44. The impugned order passed under Section 152 of the MCS Act re-examines the facts of the case and analyses the reasons recorded in the bifurcation order. I do not find any infirmity, jurisdictional error, or manifest error in the impugned order. Powers under Articles 226 and 227 are discretionary and equitable reliefs. There is no violation of the principles of natural justice. This is not a fit case for exercising powers under Articles 226 or 227 of the Constitution of India.
45. For the reasons recorded above, the petition is dismissed.
46. In view of the dismissal of the petition, Interim Application NO. 17924 of 2023 and Interim Application No. 1970[4] of 2022 are disposed of as infructuous. Respondent no. 1 is at liberty to adopt appropriate remedies as permissible in law to agitate the grievances made in the applications. All rival contentions of all parties with respect to the controversy in the applications are kept open. [GAURI GODSE, J.]
44. At this stage learned counsel for the petitioner seeks extension of interim protection granted on 6th May 1997. Learned counsel for respondent no. 1 opposes the said prayer on the ground that the conditions imposed in the said order are not fully complied with by the petitioner.
45. Learned counsel for the petitioner on instructions submits that the conditions imposed by the said order are complied with. Hence, subject to compliance of the conditions imposed by order dated 6th May 1997, the interim protection granted by order dated 6th May 1997 to continue for a period of eight weeks from today. [GAURI GODSE, J.] RAJESHWARI RAMESH PILLAI RAJESHWARI RAMESH PILLAI