Court finds no misrepresentation in society's registration process; emphasizes limited scope of supervisory jurisdiction under Article 227 of the Constitution.
In a significant judgment, the Bombay High Court has dismissed a writ petition filed by Elite Diagnostic Center Pvt. Ltd., seeking the de-registration of Krishna Kunj Co-op. Housing Society Ltd. The court, presided by Justice Sandeep V. Marne, held that there was no misrepresentation involved in the registration of the society, which was formed 45 years ago.
The petitioner, Elite Diagnostic Center Pvt. Ltd., which claims ownership of the land on which the society's building is constructed, sought de-registration under Section 21A of the Maharashtra Co-operative Societies Act, 1960. The company argued that the society was registered based on gross misrepresentation, including the erroneous inclusion of garages as units to meet the required number of members for registration.
However, the court found that the registration was duly processed with full disclosure of the number of flats and garages. Justice Marne pointed out that any belief regarding the eligibility of garage occupiers as members could not be classified as misrepresentation under Section 21A. He further emphasized that misrepresentation, as understood in law, requires deliberate deception or suppression of material facts, which was absent in this case.
The court also addressed the unusual circumstance where the director of the petitioner company, Dr. Satish Sharma, was a member and former office bearer of the society. Justice Marne highlighted the contradiction in Dr. Sharma's stance, as he had secured membership based on owning a garage while his company challenged the society's registration on similar grounds.
In his judgment, Justice Marne underscored the limited scope of supervisory jurisdiction under Article 227 of the Constitution, noting that it should not be used to correct every error of law or fact. He stated that the court's role is not to act as a court of first appeal but to intervene only in cases of grave dereliction of duty or flagrant abuse of justice.
The court observed that the primary motive behind the de-registration plea appeared to be the petitioner's concern over its title to the land rather than any genuine issue with the society's registration process. Justice Marne advised that such title disputes should be resolved through appropriate legal proceedings without misusing de-registration provisions.
The judgment reaffirms the society's right to continue managing the building collectively, as it has done for decades, and dismisses the petition with no order as to costs.
Bottom line:-
Application under Section 21A of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) for de-registration of a co-operative society cannot be allowed in the absence of clear evidence of misrepresentation, fraud, or falsification of documents at the time of registration. Events occurring after the registration cannot constitute grounds for de-registration under Section 21A.
Statutory provision(s): Article 227 of the Constitution of India, Maharashtra Co-operative Societies Act, 1960 - Section 21A, Section 6, Section 9, Section 152
