HC upholds circular requiring 51% of buyers to jointly apply for registration of CHS | Mumbai news

MUMBAI: In an important ruling, the Bombay high court has upheld the validity of a March 2016 circular issued by the registrar of cooperative societies, stipulating that a minimum 51% of flat or shop buyers have to jointly apply for the registration of a cooperative housing society (CHS).

“The registrar is fully empowered to prescribe that 51% flat purchasers must join together for registration of [a] cooperative housing society under [the] circular dated 23 March 2016,” said a single judge bench of justice Sandeep Marne.

The issue was raised in a petition filed by Prakash Saave, promoter of Harmony Plaza Premises Cooperative Society in Boisar. Saave had moved the high court after the divisional joint registrar of cooperative societies for the Konkan division issued a circular in November 2023 to deregister the society after the developer, Jainam Builders, contended that the 51% rule had not been fulfilled. Owners of only 83 of the 174 sanctioned tenements—around 47.7%—had applied for registration of the society.

Saave had questioned the authority of the registrar to deregister the society. His counsel, advocate Sarthak Diwan, argued that under section 6 of the Maharashtra Co-operative Societies (MCS) Act, the requisite number of people to apply for registration of a CHS is only 10. The registrar could not have changed the statutory requirement by issuing an executive fiat like the March 2016 circular, said Diwan, and cited several judgements in support of his contentions.

However, advocate Rohan Sawant, representing the developer, pointed out that section 6 of the MCS Act itself empowers the registrar to prescribe a higher percentage of people needed for the formation and registration of the society; accordingly, the registrar had issued circulars in November 2010 and March 2016, prescribing a requirement of 60% and 51% of unit purchasers, respectively, he added.

Justice Marne accepted the developer’s argument and held that the registrar had the power to prescribe a greater number of people required to register cooperative societies. “Consequently, the circulars issued by [the] registrar on 29 November 2010 and 23 March 2016 in exercise of power under sub-section (1) of Section 6 of the MCS Act are enforceable, and no society can be registered in violation of the prescribed percentage in the said two circulars,” said the judge.

In this backdrop, the court held that the order to de-register the society was not illegal, but noted that the words used in the March 2016 circular are “51% holders of the total flats/tenements to be constructed or already completed”. Since 174 tenements have been sanctioned in Harmony Plaza Premises by the planning authority and all of them are now constructed, 51% of them—89 unit purchasers—can now apply for registration of the society.