The Bombay High Court has clarified that statutory rights granted under the Maharashtra Cooperative Societies Act, 1960 (MCS Act) cannot be nullified by any clause in a private agreement. The Court further emphasized that such agreements cannot form the sole basis for administrative decisions as serious as the deregistration of a cooperative body.
This significant ruling came from Justice Amit Borkar while deciding a writ petition filed by Rameshwar Cooperative Housing Society Limited. The petition challenged an order passed by the Divisional Joint Registrar, Cooperative Societies, which had deregistered an apex cooperative housing association under Section 21A of the MCS Act based on a developer’s objections.
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The dispute stemmed from a housing project named "Neelkanth Heights," developed by respondent no.3, who failed to fulfil his statutory duties as required under the Maharashtra Ownership Flats Act, 1963 (MOFA). According to the petitioners, the developer neglected to constitute the apex body as per the legal mandate under Section 154B of the MCS Act and did not execute the conveyance deed in accordance with Section 11 of MOFA.
In response to this prolonged inaction, the petitioners—representing a group of cooperative societies formed by flat purchasers—convened a special general meeting and constituted an apex association. This federation was validly registered under Section 154B-2 of the MCS Act.
However, the developer approached the Divisional Joint Registrar claiming the registration was done without his consent and alleged misrepresentation. Acting on this, the Registrar deregistered the association under Section 21A.
The High Court rejected this move, stressing that:
“In a society governed by rule of law, the supremacy of statute over contract is non-negotiable.”
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Justice Borkar highlighted that once cooperative societies are validly registered, they hold an autonomous statutory right to federate, and such a right cannot be dependent on the developer's consent. The Court noted that the formation of societies by flat purchasers flows directly from Section 10 of the MCS Act and MOFA, and this right cannot be restricted through contractual clauses.
The Court further said:
Any clause in the agreement of sale between the flat purchaser and the developer which is inconsistent with the rights and obligations flowing under the MCS Act and MOFA is void to the extent of such inconsistency.
The judgment criticized the Registrar’s decision, observing that there was no fraud or misrepresentation proven against the petitioners. It also reiterated that the obligations cast upon developers to assist in the formation of cooperative societies are mandatory under MOFA.
“While a developer may have commercial or logistical reasons for planning completion of a larger layout in phases, such planning cannot override the statutory rights of flat purchasers and the autonomy of registered cooperative societies to federate under the MCS Act.”
The High Court concluded that the Registrar had wrongly invoked powers under Section 21A and set aside the impugned order.
Thus, the petition filed by Rameshwar Cooperative Housing Society Limited was allowed, upholding the statutory rights of flat purchasers and reinforcing that private contracts cannot dilute legislative mandates.
Case Title: Rameshwar Cooperative Housing Society Limited v. Divisional Joint Registrar, Cooperative Societies
Case No.: Writ Petition No. 4704 of 2025
Petitioners’ Counsel: Akshay Patil, Devika Madekar, Kalpesh U. Patil
Respondent’s Counsel: Neha Bhide
