Registrar Must Verify Independence Before Registering Two Societies: Bombay HC

Sadguru Universal CHS Ltd. Vs State of Maharashtra (Bombay High Court)

Summary: The Bombay High Court considered whether a promoter governed by the Maharashtra Ownership Flats Act, 1963 (MOFA) can register two separate co-operative societies for a single building where the lower floor contains commercial units and the upper floors contain residential units. The building on Plot No.19, Sector 17, New Panvel (West), comprised 24 commercial units on the ground floor and 88 residential units from the third to thirteenth floors and had been sanctioned as one building, with an Occupancy Certificate issued on 24 June 2020. Separate societies were registered for the residential and commercial purchasers. The residential society challenged the separate registration, contending that there was only one sanctioned building and that entrances, passages, terrace, firefighting systems and other facilities were common.

The commercial society contended that the two societies had different objects, separate facilities including a lift, and could subsequently form a co-operative housing association for common purposes. Examining Sections 6, 9, 154B-2(4) and 154B-1(8) of the Maharashtra Cooperative Societies Act, 1960 together with Section 10 of MOFA, the Court held that multiple societies in the same building cannot be justified merely because some premises are commercial and others residential. The controlling enquiry is whether there is genuine physical, functional and financial independence. The authority must examine mandatory parameters relating to structural design and layout, access and entry points, utilities and amenities, and maintenance and financial responsibility. It must additionally examine parking and circulation areas, use and occupancy patterns, legal and ownership documents and the impact on members’ rights and convenience.