Bombay HC Upholds Refusal to De-register a 45-Year-Old Housing Society After Director of Petitioner Was Its Own Member
Justice Sandeep Marne dismissed a challenge to the Cooperation Minister's order, holding that post-registration events cannot constitute misrepresentation under Section 21A of the Maharashtra Co-operative Societies Act, and that de-registration proceedings cannot be used as a back-door route to assert title in land.
The Bombay High Court on 2 July 2026 dismissed a writ petition filed by Elite Diagnostic Center Pvt. Ltd. challenging the order of the Minister (Co-operation) dated 6 May 2026, which had set aside the Divisional Joint Registrar's direction to de-register Krishna Kunj Co-operative Housing Society Ltd. Justice Sandeep V. Marne, sitting singly, held that the power of de-registration under Section 21A of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) operates in an extremely narrow compass and cannot be invoked on the basis of events that occurred after the society was registered. The court also declined to exercise its supervisory jurisdiction under Article 227 of the Constitution, taking note of the remarkable circumstance that the very director who affirmed the petition on behalf of the petitioner-company had himself been a member and office bearer of the same society for decades — and had impleaded himself as a respondent in the writ petition.
The Dispute Before the High Court
Krishna Kunj Co-operative Housing Society Ltd. was registered on 23 March 1981 by the Assistant Registrar, Co-operative Societies, Mumbai. The society was formed around a building constructed by M/s. Mak & Mak Builders on a 1,331.13 sq. mtr. plot in Santacruz (West), Mumbai.
The origins of the underlying title dispute go back to 1951, when Kishinibai Malkani and Kanayalal Malkani purchased the property jointly. After Kishinibai's death in 1973, one Chandru Chablani, claiming to be her son, produced a will and applied for probate (Testamentary Petition No. 356 of 1975). The Bombay High Court dismissed that petition and the converted suit on 30 March 1978 without granting probate. The probate petition had not been resolved when the society was registered in 1981.
Separately, Kanayalal Malkani filed S.C. Suit No. 2748 of 1979 against Chandru Chablani. By minutes of order dated 4 December 1987, it was recorded that Kanayalal Malkani had conveyed his interest to Nayan Construction Company Pvt. Ltd. by a deed of conveyance dated 27 September 1987. Nayan Construction Company Pvt. Ltd. subsequently sold the same land to the petitioner, Elite Diagnostic Center Pvt. Ltd., whose name was mutated to revenue records on 1 January 2002. The petitioner claims ownership of the entire 1,331.13 sq. mtr. plot along with the building standing on it.
After approximately 33 years from the society's registration, the petitioner filed Application No. 25 of 2014 under Section 21A of the MCS Act before the Divisional Joint Registrar, seeking cancellation of the society's registration certificate. By order dated 3 September 2024, the Divisional Joint Registrar allowed that application and set aside the registration certificate. He also appointed an Official Assignee under Section 21A(2) of the MCS Act. The society filed Appeal No. 160 of 2025 before the Minister (Co-operation), who by order dated 6 May 2026 allowed the appeal and reversed the Divisional Joint Registrar's order. The petitioner then approached the High Court.
The court identified an unusual procedural feature at the threshold: the petition was verified and affirmed by Dr. Satish Kumar Sharma, described as the director of the petitioner-company. Yet the same Dr. Sharma had purchased a flat and a garage in the society's building, secured membership of the society, functioned as its office bearer, sold the flat but retained the garage, and was continuing as a member on the strength of his garage ownership. He was accordingly impleaded as Respondent No. 11 to the very petition he had affirmed.
The Scope of Section 21A and the Misrepresentation Threshold
The central legal question was whether grounds for de-registration under Section 21A of the MCS Act were made out.
The court set out the four circumstances in which the Registrar can order de-registration under Section 21A(1): (i) the society is registered on misrepresentation made by the applicants; (ii) the work of the society is complete or exhausted; (iii) the purposes for which the society was registered are not served; and (iv) a primary agricultural co-operative credit society uses words like “Bank” or its derivatives in its name. The court noted that the petitioner had pressed only the first ground before the Divisional Joint Registrar — misrepresentation by the applicants.
Justice Marne analysed the Divisional Joint Registrar's order of 3 September 2024 and found that it had rested on three broad factors: the title dispute in respect of the land, the alleged unauthorised nature of the building's construction, and the rejection of the society's application for deemed conveyance by the Competent Authority on 10 June 2014. The court examined each factor against the timeline of the society's registration on 23 March 1981.
On the title dispute, the court found that the petitioner's own title — through Nayan Construction Company Pvt. Ltd. — was acquired well after 1981. The conveyance from Kanayalal Malkani to Nayan Construction Company was executed on 27 September 1987 and the petitioner's name was mutated to records only in 2002. When the society was registered, the petitioner had no title in the land whatsoever. The dismissal of the testamentary petition/suit on 30 March 1978 was the one event predating registration, but the court held that the Assistant Registrar entertaining an application for registration of a society is neither required nor empowered to adjudicate title, and the registration form contained no column requiring promoters to disclose information about a dismissed probate petition.
On the construction and deemed conveyance issues, the court found that the appointment of the Court Receiver was in 1982, MCGM notices regarding allegedly unauthorised construction were post-registration, and the rejection of the deemed conveyance application was in 2014 — all well after 23 March 1981. Events occurring after registration simply cannot constitute misrepresentation by the original applicants at the time of registration.
The court articulated the standard for misrepresentation under Section 21A in clear terms. Mere giving of inaccurate or incomplete information is insufficient. The misrepresentation must be of such nature and degree that had it not been made, the society would not have been registered. It must be noticed in the information given while seeking registration, and must involve deliberate deception, suppression of material facts, or presentation of forged or fabricated documents. The Divisional Joint Registrar, the court held, had not identified any specific false statement or fabricated document in the application submitted in 1981; he had impermissibly read post-registration events back into the registration process.
The Garage-Membership Contention and the Family-Member Objection
Before the High Court, the petitioner sought to raise an additional ground not fully considered below: that the eligibility condition under Section 6 of the MCS Act requiring at least ten members who are not all from the same family was not genuinely satisfied because only six flats were constructed and the four garage entries in the proposal were fictitious, the garages being mere open spaces rather than constructed units. It was further contended that a garage occupier cannot be treated as a flat occupier eligible for membership.
Justice Marne examined the original registration application and found that it fully disclosed the presence of six flats and four garages. Membership for garage occupiers was expressly disclosed, not concealed. If the Assistant Registrar erred in treating garage occupiers as eligible members under Section 6, that would at most constitute an error in judgment correctable by filing an appeal under Section 152 of the MCS Act — a remedy that was available in 1981 but never exercised. Such an alleged error by the Assistant Registrar cannot be characterised as misrepresentation by the original applicants.
On the family-member objection, the court found that all occupants' names were clearly disclosed and a specific declaration was made that two or more promoters were related to each other and from the same family. There was no concealment on that point either.
The court also dealt with the petitioner's reliance on this court's judgment in Rameshwar Co-operative Housing Society Limited & Ors. v. Divisional Joint Registrar & Ors. (WP No. 4704 of 2025, decided 9 May 2025). Justice Marne held that Rameshwar CHSL actually operated against the petitioner. That judgment had held that fraud under Section 21A requires deliberate deception — a person knowingly making false representations or concealing material facts to induce the Registrar to act in a manner he would not otherwise have acted. It had distinguished between procedural illegality or irregularity and fraud or misrepresentation, holding that Section 21A can only be invoked if registration itself was obtained by fraud through deliberate concealment or misstatement of facts going to the root of the registration process. Applying that standard, Justice Marne found nothing on record indicating any intention to deceive on the part of the ten original members.
Article 227 Jurisdiction and the Director Who Sued Himself
The court held that misrepresentation by the applicants is a jurisdictional fact for the Divisional Joint Registrar to exercise power under Section 21A. Since that jurisdictional fact was not established, the Divisional Joint Registrar's order of 3 September 2024 was made without jurisdiction, and the Minister rightly set it aside.
Independently of this finding, the court declined to exercise its supervisory jurisdiction under Article 227 of the Constitution. Referring to the Supreme Court's judgment in Garment Craft v. Prakash Chand Goel, (2022) 4 SCC 181, the court reiterated that supervisory jurisdiction does not permit the High Court to reappreciate evidence or correct every error of law or fact where the final outcome is justified. The jurisdiction is to set right grave dereliction of duty or flagrant abuse of fundamental principles of law or justice, and is exercised sparingly.
The court was satisfied with the ultimate outcome and set out its reasons for declining interference. The society had been registered for 45 years. The application for de-registration was filed 33 years after registration. The petitioner's director had himself purchased a flat, secured membership, functioned as an office bearer of the society, sold the flat, purchased a garage, acquired membership on that basis, and remained a member throughout — all while the company was simultaneously seeking the society's extinction.
Justice Marne found that the real objective of the de-registration proceedings was to protect or assert the petitioner's title to the land on which the building stands. The court held that such title disputes cannot be adjudicated in de-registration proceedings, and those proceedings cannot be permitted to be used as a vehicle for achieving the oblique objective of securing title in land. The petitioner was at liberty to seek a declaration of title in appropriate proceedings without requiring the society to be de-registered after 45 years. De-registering the society at this stage would put the management of the building in a quandary, since the society had managed the building for 45 years with the director of the petitioner actively participating in that management.
Order
Justice Sandeep V. Marne dismissed Writ Petition No. 7855 of 2026 as devoid of merits with no order as to costs. The order of the Minister (Co-operation) dated 6 May 2026, allowing the society's appeal and setting aside the Divisional Joint Registrar's order of 3 September 2024, stands.