Bombay HC Slams Misuse of Powers for De-Registration of Housing Society

Judgment dated 6.10.2026 of the High Court of Bombay in Writ Petition No.9824 of 2016 with Interim Application of Nutan Sayali Cooperative Housing Society  Vs.   The State of Maharashtra and others

Section 21A of MC Societies Act –

Petitioner is a cooperative housing society formed in respect of the structures constructed on Plot Nos. 2 and 3. It is formed and registered on 17 November 1995 on the basis of the proposal signed and submitted by the purchasers of units constructed on both the plots. Respondent No. 4 himself was a signatory to the proposal. Respondent No. 4 also functioned as the office bearer of the society. However, Respondent No. 4 applied for deregistration of the society by filing application under Section 21A of the MCS Act on 13 November 1995 alleging that the society was intended to be formed only in respect of the structures constructed on Plot No. 3 and that therefore there was misrepresentation. The Divisional Joint Registrar rejected the application of Respondent No. 4 by Order dated 21 November 2012. The Respondent No. 4 filed appeal before the Hon’ble Minister, who has allowed the Appeal by impugned Order dated 18 March 2014 and has directed deregistration of the society. Aggrieved by the Order dated 18 March 2014, the Petitioner has filed the present Petition.

Coming to the merits of order dated 18 March 2014, it is seen that the Divisional Joint Registrar had rejected the application filed by Respondent No.4 under Section 21A of the MCS Act by order dated 21 November 2012 recording a finding that there was no misrepresentation by the Applicants at the time of registration of the Society. As observed above, the Hon’ble Minister has recorded a singular reason of non reflection of plot No.2 in the registration application for directing de registration of the Society.

In my view, mere non-reflection of plot No.2 in para 2(b) of the Statement “B” to registration proposal did not mean that there was any misrepresentation on the part of the Applicants at the time o registration of the Society. By now, law is sufficiently settled about the manner in which powers under Section 21A of the MCS Act are to be exercised by the Registrar. In Auram Avenue Co-op Housing Society Ltd. and Anr. Vs. State of Maharashtra and Ors. 1 a co-ordinate Bench of this Court has held that mere error in registration of the society is not a ground for exercising drastic power of de-registration under Section 21A of the MCS Act. It is held that mere minor irregularities in the process of registration does not amount to deliberate misrepresentation and suppression of facts within Section 21A of the MCS Act.

In my view, no case of actionable misrepresentation within the meaning of Section 21A of the MCS Act is made out for directing extreme measure of de-registration of the Society. Non-reflection of plot no.2 in paragraph 2(b) of the application for registration was a mere inadvertence in view of the fact that unit occupiers of structure constructed on plot No.2 had joined the proposal for registration of the Society. There is no misrepresentation, which really goes to the root of the matter or renders the registration itself invalid. 15) Before parting, the conduct of Respondent No.4 must be observed. Respondent No.4 was not only a signatory in the capacity as a co-promoter for registration of the Society, but he also apparently held the position as chairman of the society. He pressed for de-registration of the society before the appellate authority after 19 long years. If there was any misrepresentation, the same was by Respondent No.4, who himself had signed the proposal for registration of the society mentioning only Plot No. 3 in the proposal. He attempted to take benefit of his own wrong and has ensured that a duly formed registered co-operative housing society is de-registered after a period of 19 long years. In my view, therefore, while allowing the present Petition, exemplary costs are required to be imposed on Respondent No.4. This is necessary so as to nip in the bud a tendency on the part of the members of co-operative housing societies, who have grievance against the Managing Committee or against functioning of the society and who initiate the proceedings under 21A of the MCS Act for de-registration of the very same society of which they are members. If members are allowed to have the society deregistered for settlement of their private grievances, the defaulting members would misuse the provisions of Section 21A of the Act and after securing the copies of documents submitted for registration, seek deregistration of the society for avoiding to pay the maintenance charges. The Registrar as well as the State Government must therefore be mindful of the nature of powers that can to be exercised under Section 21 of the MCS Act. This Court has repeatedly come across cases where jurisdiction under Section 21A of the MCS Act is routinely and casually exercised by the Registrars and by the State Government, which is not the legislative objective. It is unfortunate that the Registrar and the State Government ignore the fundamental difference between exercise of power of appeal under Section 152 of the MCS Act against order of registration of society and jurisdiction to be exercised under Section 21A of the MCS Act for de-registration of the Society, which has already been formed for the purpose of collective management of property of the society. Time has come to give a stern message so as to ensure that the drastic powers under Section 21A of the MCS Act are not casually and routinely exercised, as has been done in the present case.