Bombay High Court Upholds Redevelopment Decision in Cooperative Housing Society Case

Court rules guidelines under Section 79(A) of Maharashtra Co-operative Societies Act as directory, not mandatory, in redevelopment disputes.

In a significant ruling, the Bombay High Court has dismissed a writ petition challenging the redevelopment process of a cooperative housing society in Mumbai. The court, comprising Justices Suman Shyam and Manjusha Deshpande, upheld the decision of the majority of society members to appoint a developer, stating that the guidelines under Section 79(A) of the Maharashtra Co-operative Societies Act, 1960, are directory and not mandatory.

The case, Devendra Kumar Jain v. State of Maharashtra, revolved around the redevelopment of Ramanuj Co-operative Housing Society, part of a larger initiative involving four societies under the 'Mahesh Nagar Federation'. The petitioner, Devendra Kumar Jain, contested the society's decision to issue a Letter of Intent to a developer without following the tender process stipulated in a government resolution dated July 4, 2019.

Representing the petitioner, Mr. Manoj Upadhyay argued that the society's actions were in violation of the mandatory procedures for redevelopment. However, the court observed that the guidelines were intended to ensure a fair and transparent process and that deviations or procedural lapses do not constitute actionable wrongs unless they violate statutory requirements or the directives' objectives.

The court further emphasized the autonomy of cooperative societies in decision-making, noting that a majority decision taken in a properly convened meeting should prevail. Justice Manjusha Deshpande highlighted that the petitioner's removal as chairman and subsequent opposition did not hold merit against the collective decision of the majority.

The ruling aligns with previous judgments, including Maya Developers v. Neelam R. Thakkar, reinforcing that the guidelines serve as a framework and are not obligatory. The decision underscores the democratic principles within cooperative societies, where the will of the majority takes precedence in redevelopment matters.

Bottom Line:

Redevelopment of Co-operative Housing Societies - Guidelines under Section 79(A) of Maharashtra Co-operative Societies Act, 1960, and the Government Resolution dated 04.07.2019 - Held, these guidelines are directory and not mandatory. Majority decision in a properly convened meeting prevails unless it violates statutory requirements or the object of the directives.

Statutory provision(s): Maharashtra Co-operative Societies Act, 1960 Section 79(A), Government Resolution dated 04.07.2019

Devendra Kumar Jain v. State of Maharashtra, (Bombay)(DB) : Law Finder Doc Id # 2789808