In a significant ruling clarifying the scope of administrative authority under cooperative housing laws, the Bombay High Court has held that the Registrar of Co-operative Societies cannot adjudicate disputes between a housing society and its members while exercising powers under the Maharashtra Co-operative Societies Act.
Justice Amit Borkar delivered the judgment on February 17 while allowing a petition filed by Desai Harmony Co-operative Housing Society Ltd challenging an order passed by the Assistant Registrar under Section 79(1) of the Maharashtra Co-operative Societies Act, 1960.
Background of the Case
The dispute arose after the Assistant Registrar, by an order dated March 21, 2025, concluded that penal charges imposed by the society under bye-law 169(A) for alleged encroachment were illegal. The Registrar directed the society to delete those penal charges from its records.
The society contended that such a determination effectively amounted to adjudication of a dispute, which falls outside the scope of powers conferred under Section 79(1) of the Act.
Scope of Section 79(1) Explained
Section 79(1) empowers the Registrar to issue written directions to ensure compliance with the Act, Rules, bye-laws, or prior lawful orders. However, the Court observed that a plain reading of the provision shows that it operates within a limited supervisory and administrative domain.
Justice Borkar emphasized that once the Registrar concludes that charges are illegal, he effectively decides a dispute between parties. Such a determination requires evaluation of evidence, hearing both sides, and recording findings on rights and liabilities. These elements are characteristic of adjudication, which must take place under specific dispute resolution provisions of the Act and not under Section 79(1).
The Court categorically stated that Section 79(1) cannot replace the statutory dispute resolution mechanism provided under the MCS Act.
Arguments Before the Court
Advocate Siddhesh Bhole, appearing for the petitioner society, argued that Section 79(1) confers only supervisory and administrative powers. It does not authorize the Assistant Registrar to adjudicate disputes between a member and the society.
On the other hand, Advocates Abhishek Bhat and Gautam Kanchanpurkar, representing the contesting members, supported the impugned order, contending that the Registrar’s direction was merely a step to ensure compliance with the law and to correct an illegality.
Court’s Clarification on Merits
Importantly, the High Court clarified that it has not examined the merits of the penal charges imposed by the society. The question regarding the validity of those charges remains open and may be decided independently by a competent forum in accordance with law.
Key Takeaways
The ruling reinforces the distinction between supervisory powers and adjudicatory powers under cooperative housing law. It underscores that administrative oversight cannot be used as a substitute for formal dispute resolution mechanisms.
By drawing this boundary, the Bombay High Court has reaffirmed procedural safeguards and the importance of due process in resolving disputes between housing societies and their members.
