WP 8194 of 09 1 SSK/29 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 8194 OF 2009 Anand Darshan Co-op. Housing Society Ltd. ....Petitioners Versus The Deputy Registrar, Co-operative Societies, “D” Ward, Mumbai & Ors. ...Respondents with WRIT PETITION NO.2980 OF 2010 Mohan Hemani ....Petitioners Versus The Deputy Registrar, Co-operative Societies, “D” Ward, Mumbai & Ors. ...Respondents Mr. N. V. Walawalkar, Sr.Advocate i/b. Mr. A. S. Desai, Advocate for the Petitioner in W.P.No.8194 of 2009. Mr. P. K. Dhakephalkar, Sr.Advocate a/w. Mr. R. S. Ghadge i/b. Mr. Vijay Mane, Advocate for the Petitioners in WP.2980 of 2010. Mr. Y. S. Jahagirdar, Sr. Advocate, i/b. Mr. A. M. Vernekar, Advocate for Respondent Nos.2 & 3 in both petitions. Ms. P. S. Cardozo, AGP for Respondent Nos.1, 4, 5 & 6 in both petitions(except for Respondent No.5 in WP No.8194 of 2009) CORAM : R. V. MORE, J. DATED :2nd AUGUST, 2010. P.C.: Heard Mr. Walawalkar and Mr. Dhakephalkar, learned Senior Counsel in Writ Petition Nos.8194 of 2009 and 2980 of 2010 respectively, Mr. Jahagirdar, learned Senior Counsel for Respondent Nos.2 & 3 and Ms. Cardozo, learned AGP for rest of the Respondents in both the petitions. WP 8194 of 09 2 SSK/29 2. Rule. By consent, Rule is made returnable forthwith. 3. The petition no.8194 of 2009 is filed by the Co-operative Housing Society and petition no.2980 of 2010 is filed by the members of the said Co-operative Housing Society. Anand Darshan Co-operative Housing Society (for the sake of brevity referred to as “the said Society”) consists of 3 Buildings viz. “A”, “B” & “C” Wings. In “A” Wing there are 16 tenements plus 1 Bank and 2 garages. In “B” and “C” Wings there are 41 tenements plus 9 garages. Mr. Hemant Narichania-Respondent No.2 in both the petitions filed proposal for bifurcation of the said Society. This proposal was signed by 12 members. The proposal was considered by the Deputy Registrar and thereafter, an order under section 18 of the Maharashtra Co- operative Societies Act, 1960 was passed thereby bifurcating the said society into 2 Societies viz. New Anand Darshan Co-operative Housing Society consisting of “A” Wing and Peddar Road Co-operative Housing Society consisting and B & C Wings. This order was confirmed in an appeal and revision by the Divisional Joint Registrar and the Hon’ble Minister respectively and therefore, the present petition. 4. Mr. Dhakephalkar, learned Senior Counsel challenges the order of bifurcation mainly on two grounds. There is no consultation with the Federal Society as contemplated under section 18 of the said Act and the WP 8194 of 09 3 SSK/29 said Society was not given an opportunity to file objections as per section 18(2)(b) of the M.C.S.Act, 1960. 5. Mr. Jahagirdar, learned Senior Counsel appearing for the Respondent Nos.2 & 3 on the contrary supports the impugned order by submitting that the bifurcation is in the larger interest of the members of the said Society. He further submits that the consultation with the Federal Society was done. An opportunity to file objections to the said Society was also granted. In the premises, he submitted that the petitions are without any merit. 6. Having considered the rival submissions alongwith the relevant documents, I find substance in the argument of Mr.Dhakephalkar, learned Senior Counsel. The section 18(1) & (2) of the M.C.S. Act, 1960 reads as follows: “18. (1) Where the Registrar is satisfied that it is essential in the public interest, 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 WP 8194 of 09 4 SSK/29 not withstanding 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. (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 WP 8194 of 09 5 SSK/29 the society or from any member or class of members thereof, or from any creditor or class of creditors.” Sub-section (2) of section 18 makes it obligatory on the part of the Registrar to prepare a draft of the proposed order and send the same to the Society inviting suggestions and objections. It is further obligatory on the part of Registrar to give mandatory period of two months to the Society for giving suggestions and objections. After receipt of the suggestions and objections to the draft of proposed order, the Registrar is duty bound to consult the federal society and only thereafter, an order under section 18 of the M.C.S.Act,1960 bifurcating the Society can be passed. 7. In the present case, the First Draft Order was prepared on 5th September, 2007. The Second Draft Order was prepared on 18th March, 2008. Admittedly, the Deputy Registrar in pursuance of these two Draft Orders has not taken any action under section 18 of the M.C.S.Act, 1960. The Deputy Registrar, thereafter, prepared Third Draft Order on 22nd August, 2008. A copy of this Draft Order was sent to the said Society on 26th August, 2008. It is the case of the Petitioner that after receipt of the Draft Order, they applied for time to give objections and suggestions. However, without giving such time, the matter was closed for orders on 19th September, 2008. On the contrary, it is the case of the WP 8194 of 09 6 SSK/29 Respondents that nobody appeared on behalf of the said Society on 15th September, 2008 and therefore, the matter was closed on 19th September, 2008. 8. Admittedly, the Mumbai District Co-operative Housing Federation is the federal Society so far as Housing Societies in Bombay are concerned. It is pertinent to note that the Deputy Registrar never sent Third Draft Order in pursuance of which decision under section 18 of M.C.S.Act is taken, to the Federal Society as contemplated under section 18 of the said Act. Initially, a resolution was passed by the Federal Society for consultation on 23rd May, 2008 thereby rejecting the recommendation. The Respondent No.2 thereafter, personally approached the Secretary of the Federal Society requesting recommendation for bifurcation and the Secretary of the Federal Society requested the Deputy Registrar by an letter dated 19th July, 2008 to take appropriate decision. The Secretary of the Federal Society, contrary to the decision of the Managing Committe of the Federal Society could not have sent the letter dated 19th July, 2008 to the Deputy Registrar. The First and Second Draft Orders were admittedly abandoned by the Deputy Registrar and therefore, the recommendation of the Secretary of the Federal Society has no relevance. Facts remain that the Third and Final Draft Order was never sent to Federal Society for obtaining recommendations. Thus, the order bifurcating the said Society WP 8194 of 09 7 SSK/29 does not stand scrutiny of law. 9. In the light of above facts, the impugned orders bifurcating the said Society deserves to be quashed and set-aside. The matter is required to be remanded back to the Deputy Registrar to take decision afresh after following the procedure under Section 18 of the M.C.S.Act, 1960 and Rule 17 of the M.C.S. Rules, 1961. Mr. Dhakephalkar, learned Senior Counsel at this stage makes a statement that the said Society shall give suggestions and objections to Draft Order dated 22nd August, 2008 within a period of three weeks from today. I therefore dispose of the petition by passing following order : 1. The order dated 3rd November, 2008 passed by the Deputy Registrar, Co-operative Societies, “D” Division, Mumbai as well as the orders passed in appeal and revision arising out of this order viz. orders dated 16th April, 2009 and 26th August, 2009, bifurcating the said society into two societies are quashed and set-aside and the matter is remanded back to the Deputy Registrar for decision afresh in this regard. 2. The said Society shall give its suggestions and objections to the Draft Order dated 22nd August, 2008 within a period of three weeks from today. WP 8194 of 09 8 SSK/29 3. The Deputy Registrar, thereafter, shall take decision regarding bifurcation of the said Society after following the provisions the M.C.S.Act, 1960 and M.C.Rules, 1961 as expeditiously as possible and preferably within a period of four months from the date of objections and suggestions by the said Society. (R. V. MORE, J.)