REAL ESTATE UPDATE
15th January, 2024
Issue No. 24/24-25
BOMBAY HIGH COURT CLARIFIES APPLICABILITY OF MCS ACT 79(A) GUIDELINES ON REDEVELOPMENT OF SOCIETIES
BACKGROUND
The Writ Petition No. 8732 of 2021 filed in the Bombay High Court in Vilas Vishnu Jadhav and Anr. vs. State of Maharashtra, addresses two orders issued under Section 79A (3) of the Maharashtra Cooperative Societies Act, 1960 (MCS Act), disqualifying the Petitioners from the membership of their society’s Managing Committee for six years. The disqualification was based on a complaint filed on 9th January, 2020, by other society members, accusing the Petitioners of failing to comply with a Government Resolution (GR) dated 4th July, 2019, which outlined guidelines for the redevelopment of cooperative societies. Co-Operative Court (Respondent No.2), after reviewing the complaint, concluded that the Petitioners had not adhered to the guidelines and issued the disqualification order.
The Petitioners contested this order asserting that the GR was directory in nature and did not carry mandatory compliance requirements. They further argued that the disqualification under Section 79A (3) should apply only to members of the Managing Committee and not to general society members.
COURT’S RULING
The Bombay High Court, presided over by Justice Sharmila Deshmukh, reviewed the Government Resolution dated 4th July, 2019, which had superseded an earlier GR dated 3rd January, 2009. The Court referred to the ruling of its earlier case Kamgar Swa Sadan Co-operative Housing Society Ltd., where it was held that the guidelines of 3rd January, 2009, were directory and not mandatory, as no consequences were provided for their non-compliance. In the present case, the Court observed that nothing in the 4th July, 2019, GR indicated that non-compliance would lead to mandatory consequences such as disqualification. As such, the Court held that non-compliance with the GR could not automatically result in the disqualification of society members under Section 79A (3) of the MCS Act.
The Court also pointed out an inconsistency in the operative part of the impugned order, which had disqualified the Petitioners from the entire society, whereas the findings of Respondent No.2 referred only to their disqualification from the Managing Committee. The Court clarified that the Petitioners should only be disqualified from the Managing Committee, in line with the findings, and not from the society as a whole.
CONCLUSION
The Bombay High Court’s judgment provides crucial legal clarity for cooperative societies in Maharashtra, particularly regarding the interpretation of government guidelines related to redevelopment. The Court’s ruling establishes that unless explicitly stated as mandatory, such guidelines are directory, meaning non-compliance does not automatically trigger disqualification under Section 79A (3) of the MCS Act. This decision emphasizes the importance of distinguishing between directory and mandatory guidelines in cooperative society regulations. The ruling is expected to provide direction for future cases involving society redevelopment and the disqualification of managing committee members, ensuring a more consistent and predictable legal framework for both society members and managing committee members in the state.
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