Eight Members Sought to Split a 50-Year-Old Society After the Majority Replaced the Developer; Bombay High Court Says Section 18 Cannot Be Used to Stall Redevelopment and Quashes Minister’s Remand

Majority Rejected Division of Naina and Veena Buildings by 18–7 Vote; Bombay High Court Restores Orders Refusing Bifurcation and Allows Redevelopment to Continue

Facts

• Madhur Naina Co-operative Housing Society was registered in 1974 and consisted of two buildings:
  • “Naina”, containing 16 flats; and
  • “Veena”, containing 16 flats.
• Both buildings stood on a common plot admeasuring approximately 1,571.90 square metres. The Society therefore represented 32 flats in total.
• The Society appointed M/s Narayan Shelter for redevelopment by a Letter of Intent dated 26 January 2022.
• According to the Society, Narayan Shelter delayed the redevelopment and failed to make meaningful progress. While the Society was considering termination of that developer, certain members of Veena Building proposed dividing the Society into two separate societies.
• At the Special General Body Meeting held on 5 May 2024:
  • 25 of the Society’s 32 members were present;
  • Seven members voted in favour of bifurcation; and
  • Eighteen members opposed bifurcation.
• The Society consequently rejected the proposal to divide itself. It also proceeded to terminate Narayan Shelter by notice dated 24 June 2024.
• A proposed Veena Co-operative Housing Society claimed to have held a meeting on 9 June 2024 and appointed a Chief Promoter. However, no material was produced to establish that notice of this meeting was served on all 16 residents of Veena Building.
• On 28 July 2024, the Society selected M/s Navkarmik Infra and Development Private Limited as the new developer. A Letter of Intent was issued on 5 September 2024.
• Meanwhile, the proposed Veena Society submitted a bifurcation proposal to the Deputy Registrar on 6 August 2024 under Section 18 of the Maharashtra Co-operative Societies Act, 1960.
• The Deputy Registrar initially prepared a draft bifurcation order and invited objections. The Mumbai District Co-operative Housing Federation gave an opinion supporting bifurcation.
• After examining the Society’s objections, the feasibility report and the Federation’s opinion, the Deputy Registrar rejected the bifurcation proposal on 23 January 2025.
• The Deputy Registrar found, among other things, that:
  • The alleged meeting of 9 June 2024 was not transparently or validly conducted;
  • Only a small minority supported bifurcation;
  • The Society had managed both buildings smoothly for approximately 50 years;
  • The dispute concerned redevelopment rather than day-to-day management;
  • Division of the common plot could reduce redevelopment benefits; and
  • Bifurcation was neither necessary nor beneficial to the members.
• On 4 March 2025, the Divisional Joint Registrar dismissed the proposed Society’s appeal and confirmed the Deputy Registrar’s decision.
• On 18 November 2025, the Minister for Co-operation partly allowed the proposed Society’s revision, set aside both concurrent orders and remanded the matter to the Deputy Registrar for fresh consideration.
• Madhur Naina Society challenged the Minister’s remand order before the Bombay High Court.
• By the time the matter was finally decided, both Naina and Veena buildings had been demolished, most members had executed Permanent Alternate Accommodation Agreements, and the new developer was paying transit rent.

Issues

1. Whether the Minister was justified in setting aside two concurrent orders and remanding the bifurcation proposal without identifying any specific legal or factual error.
2. Whether a revisional authority can routinely order a fresh inquiry instead of deciding the dispute on the available material.
3. Whether the statutory grounds for compulsory division of a society under Section 18 of the Maharashtra Co-operative Societies Act were satisfied.
4. Whether members who failed to obtain the necessary majority for voluntary division under Section 17 could indirectly secure bifurcation under Section 18.
5. Whether opposition to a redevelopment decision or preference for another developer constituted a valid ground for dividing a co-operative housing society.
6. Whether the alleged resolution of the proposed Veena Society dated 9 June 2024 could support the bifurcation proposal when notice of the meeting was not served on all concerned members.
7. Whether reconsidering bifurcation after demolition of the buildings and commencement of redevelopment would unfairly prejudice the majority members.

Petitioner’s Arguments

• Only eight out of the Society’s 32 members were seeking bifurcation.
• Those members supported the terminated developer, M/s Narayan Shelter, and had initiated the bifurcation proceedings to obstruct redevelopment through the newly appointed developer.
• The proposal for division had already been rejected by 18 of the 25 members present at the Special General Body Meeting.
• The required two-thirds majority under Section 17 was unavailable. The minority therefore attempted to bypass Section 17 by invoking the Registrar’s extraordinary powers under Section 18.
• None of the four statutory conditions under Section 18 was satisfied. Bifurcation was not necessary:
  • In the public interest;
  • In the interest of the members;
  • In the interest of the co-operative movement; or
  • For securing the Society’s proper management.
• The Society had successfully managed both buildings for approximately 50 years. There was no difficulty concerning routine administration, maintenance or management.
• The only disagreement concerned the selection of a developer and the redevelopment process.
• The alleged meeting of 9 June 2024 was invalid because notices were not issued to all 16 members of Veena Building.
• Bifurcation would subdivide the common plot and reduce the redevelopment benefits available to all members.
• The feasibility report showed that separate redevelopment would result in:
  • Lower permissible FSI;
  • Reduced carpet area and amenities;
  • An irregular plot for Veena Building;
  • Greater reliance on mechanical parking; and
  • Higher maintenance costs.
• The Minister failed to address the detailed and concurrent factual findings recorded by the Deputy Registrar and Divisional Joint Registrar.
• Both buildings had already been demolished, PAAAs had been executed, and transit rent was being paid. Reopening the issue at this stage would jeopardise the entire redevelopment.

Respondents’ Arguments

• The proposed Veena Society argued that the Minister had merely remanded the matter for a fresh decision and therefore caused no prejudice to the petitioner.
• Since both parties would receive another opportunity before the Deputy Registrar, the High Court should not interfere under Article 227 of the Constitution.
• According to the proposed Society, ten residents of Veena Building supported bifurcation.
• The two buildings were structurally and functionally capable of being separately managed.
• The Federation had supported bifurcation after noting separate facilities such as electricity meters, water tanks and entrances.
• Bifurcation would not reduce the redevelopment entitlement of members of either building.
• Separate societies were necessary because disputes had arisen regarding management and redevelopment.
• Residents of Veena Building could not be compelled to participate in redevelopment largely decided by residents of Naina Building.
• It was alleged that the new developer had been appointed to defeat or avoid the bifurcation proceedings.
• The State supported the Minister’s order and argued that the remand was consistent with the principles laid down in Abdul Rehman Adam Dawa.

Analysis of the Law

Section 17: Voluntary division by the Society

• Section 17 permits a society to divide itself into two or more societies with the Registrar’s prior approval.
• Such division requires a resolution passed by a two-thirds majority of the members present and voting at a Special General Meeting.
• In the present case, only seven members supported division while 18 opposed it. The statutory majority under Section 17 was therefore unavailable.

Section 18: Registrar’s power to direct division

• Section 18 authorises the Registrar to direct division or reorganisation only when it is essential:
  • In the public interest;
  • In the interest of the society’s members;
  • In the interest of the co-operative movement; or
  • For securing proper management of the society.
• This is an extraordinary statutory power. It cannot be exercised simply because a small group of members desires separation.
• The Registrar must record objective satisfaction that at least one of the statutory conditions exists.
• The power cannot be used as an alternative method to achieve a division that failed to obtain the democratic majority required under Section 17.
• The Registrar must consult the notified Federal Society, circulate a draft order and meaningfully consider the suggestions and objections received.
• The Federation’s opinion is relevant but not conclusive. The Registrar must independently assess whether bifurcation meets the statutory tests.

Limits on remand by appellate or revisional authorities

• An appellate or revisional authority is ordinarily expected to decide the dispute on the material available before it.
• A routine remand merely prolongs litigation and requires parties to reargue an already decided matter.
• Remand may be appropriate where special circumstances exist, such as:
  • Violation of natural justice;
  • Failure to consider vital material;
  • Absence of necessary factual findings; or
  • Some genuine requirement for a fresh inquiry.
• A remand order must contain cogent reasons explaining why re-adjudication is necessary.
• It cannot be used to avoid examining concurrent findings recorded by the subordinate authorities.

Majority rule in co-operative housing societies

• A co-operative society functions through decisions taken democratically by its general body.
• Minority members cannot obstruct a redevelopment decision merely because they prefer another developer or disagree with the majority.
• Section 18 cannot be used as an indirect mechanism to frustrate a redevelopment approved by the general body.

Precedent Analysis

1. Abdul Rehman Adam Dawa and Others v. District Deputy Registrar of Co-operative Societies and Others, 2025 SCC OnLine Bom 4378
   1. The judgment explains the four independent grounds on which action may be taken under Section 18.
   1. “Public interest” requires a benefit wider than the personal preference of a few members. There must be a connection with public welfare, safety, civic administration or transparent use of resources.
   1. “Interest of members” requires the proposed division to improve members’ welfare, administration, transparency or legal protection.
   1. “Interest of the co-operative movement” requires the measure to promote democratic, financially sound and member-oriented functioning.
   1. “Proper management” permits intervention only where the existing arrangement has become unmanageable or obstructs lawful and efficient functioning.
   1. A mere desire by a small group of members for separation is insufficient.
   1. Applying these tests, the Court found that none of the four statutory grounds existed in the present case.
2. Daman Singh and Others v. State of Punjab and Others, (1985) 2 SCC 670
   1. The Supreme Court recognised the binding nature of the statutory and democratic framework governing co-operative societies.
   1. Persons who become members of a co-operative society are bound by lawful decisions taken through its governing process.
   1. The decision was relied upon to hold that minority members cannot disregard a valid majority decision merely because it does not suit their individual preference.
   1. Preference for a particular developer could not override the Society’s collective redevelopment decision.
3. Girish Mulchand Mehta and Another v. Mahesh S. Mehta, 2009 SCC OnLine Bom 1986
   1. The Bombay High Court held that redevelopment decisions properly taken by the majority bind dissenting members.
   1. A minority cannot prevent redevelopment supported by the general body merely because it disagrees with the decision or the selected developer.
   1. The present Court applied this principle to reject the attempt to use bifurcation proceedings as an indirect means of stopping redevelopment.

Court’s Reasoning

• The Minister’s order did not identify any genuine reason for remanding the matter.
• The Deputy Registrar had passed a detailed order after examining:
  • The Society’s objections;
  • The Federation’s opinion;
  • The disputed meeting of 9 June 2024;
  • The Society’s functioning over 50 years;
  • The feasibility report;
  • The redevelopment consequences; and
  • The lack of majority support for bifurcation.
• The Divisional Joint Registrar had independently examined and affirmed those findings.
• The Minister did not demonstrate how either authority had committed a legal or factual error. Instead, he recorded general and vague findings and ordered reconsideration.
• The proposed Veena Society failed to produce any document showing that notice of the meeting dated 9 June 2024 had been given to all 16 members of Veena Building.
• The invalidity of that meeting went to the root of the matter because the bifurcation proposal dated 6 August 2024 was based on the resolution allegedly passed at that meeting.
• The Society had managed both buildings without administrative difficulty for approximately 50 years.
• The dispute was not about maintenance or routine management. It arose only from disagreement over redevelopment and the choice of developer.
• The Deputy Registrar had properly considered the feasibility report, which showed that subdivision of the common plot could:
  • Restrict planning opportunities;
  • Reduce permissible FSI;
  • Reduce carpet area and amenities;
  • Create an irregular plot;
  • Affect common parking and access; and
  • Increase maintenance expenses.
• Under common redevelopment, the feasibility report indicated potential use of FSI 4.00 plus fungible area, compared with FSI 2.00 plus fungible area upon bifurcation.
• The proposed Society did not produce any counter-feasibility report rebutting these findings.
• The Minister’s suggestion that an association could later be formed to manage common amenities did not answer the more serious loss of redevelopment benefits.
• The timing of the bifurcation proposal showed its connection with the redevelopment dispute:
  • The majority rejected bifurcation and decided to terminate Narayan Shelter;
  • The alleged Veena meeting followed shortly thereafter;
  • Narayan Shelter was terminated;
  • Navkarmik was appointed as the new developer; and
  • The bifurcation proposal was immediately filed.
• The Court concluded that the proposal was intended to create hurdles in redevelopment through the new developer.
• By the date of judgment, both buildings had been demolished. Most members had executed PAAAs and were receiving transit rent.
• A fresh bifurcation inquiry at that stage could terminate or derail the new redevelopment, stop transit-rent payments and leave members without their homes while generating further litigation.
• Subsequent developments had therefore rendered the proposed bifurcation virtually academic and made remand even more unnecessary.

Conclusion

The Bombay High Court held that Section 18 of the Maharashtra Co-operative Societies Act cannot be used by a small group of members to split a functioning housing society merely because they oppose the majority’s redevelopment decision or prefer a different developer.

None of the statutory grounds for compulsory bifurcation was established. The Minister had failed to address the detailed concurrent findings of the Deputy Registrar and Divisional Joint Registrar and had ordered a fresh inquiry without recording any valid reason.

The Court accordingly:

• Set aside the Minister’s order dated 18 November 2025;
• Confirmed the Deputy Registrar’s order dated 23 January 2025 rejecting bifurcation;
• Confirmed the Divisional Joint Registrar’s order dated 4 March 2025;
• Allowed the writ petition; and
• Made no order as to costs.

Case Details

Case: Madhur Naina Co-operative Housing Society Limited v. State of Maharashtra and Others
Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 850 of 2026
CNR: HCBM010015562026
Neutral Citation: 2026:BHC-AS:30043-DB
Judge: Justice Sandeep V. Marne
Reserved on: 14 July 2026
Pronounced on: 22 July 2026
Result: Petition allowed; Minister’s remand order set aside; concurrent orders rejecting bifurcation restored; no order as to costs.

Read Also: Daughter of Widowed House Help Denied RTE Seat for Want of Late Father’s Caste Certificate; Bombay High Court Accepts Mother’s Certificate and Orders Admission