Case Note & Summary
The petitioner, Lodha Belmondo Housing Federation Ltd., a federation registered under the Maharashtra Co-operative Societies Act, 1960, challenged the de-registration of its federation by the Divisional Joint Registrar and the dismissal of its revision by the State of Maharashtra. The federation was formed by six co-operative housing societies in a larger layout developed by respondent No.2, Macrotech Developers Ltd. The registration was granted on the same day the application was filed, without notice to the developer. The developer appealed under Section 152 of the MCS Act, and the appeal was allowed on the ground that the registration violated Rule 9(1)(ii) of the Maharashtra RERA Rules, 2017, which requires the promoter to form an apex body within three months of receiving the occupancy certificate for the last building in the layout. The revision was dismissed. The petitioner argued that the MCS Act does not require project completion for registration of a federal society, and that RERA Rules cannot override the statutory right under the MCS Act. The developer and intervenors contended that the registration was premature and violated the contractual and statutory scheme under MOFA and RERA. The court held that the provisions of RERA and its Rules must be read harmoniously with the MCS Act, and Rule 9(1)(ii) is binding. The registration of a federal society before the project completion would interfere with the promoter's obligations and rights. The court also noted that the registration was granted without notice to the developer, violating principles of natural justice. The petition was dismissed, upholding the de-registration.
Headnote
A) Co-operative Societies - Federal Society Registration - Harmonious Construction of Statutes - MCS Act, 1960, Sections 8, 9; RERA, 2016, Sections 88, 89; RERA Rules, 2017, Rule 9(1)(ii) - The court considered whether the registration of a federal society under the MCS Act is valid when the real estate project is ongoing and the promoter has not formed the apex body as required under RERA Rules. Held that the provisions of RERA and its Rules must be read harmoniously with the MCS Act, and Rule 9(1)(ii) imposes an obligation on the promoter to form the apex body only after the occupancy certificate of the last building, which cannot be circumvented by early registration of a federal society. (Paras 10-13)
B) Real Estate - Apex Body Formation - Promoter's Obligation - RERA, 2016, Section 89; RERA Rules, 2017, Rule 9(1)(ii) - The court examined whether the promoter's obligation under RERA Rules to form an apex body within three months of the last occupancy certificate is mandatory. Held that the rule is binding and the registration of a federal society before the project completion violates the statutory scheme, as it would interfere with the promoter's rights and obligations in an ongoing project. (Paras 14-16)
C) Co-operative Societies - Registration Procedure - Notice to Promoter - MCS Act, 1960, Section 10; MOFA, 1963, Section 5A - The court considered whether the registration of a federal society without notice to the developer is valid. Held that the principles of natural justice require that the developer be heard before registration, especially when the registration affects the developer's rights over common amenities. (Para 14)
Issue of Consideration
Whether the registration of a federal society under the Maharashtra Co-operative Societies Act, 1960 is valid when the project is ongoing and the promoter has not formed the apex body as per Rule 9(1)(ii) of the Maharashtra Real Estate (Regulation and Development) Rules, 2017.
Final Decision
The writ petition is dismissed. The impugned orders of de-registration and dismissal of revision are upheld.
Law Points
- Harmonious construction of statutes
- Subordinate legislation cannot override statute
- Statutory right to form federal society subject to compliance with other laws
- RERA overriding effect under Section 89
- MOFA obligations for formation of society
Case Details
2024 LawText (BOM) (11) 220
Writ Petition No.15253 of 2023
Dr. Abhinav Chandrachud, Ms. Madhavi Tavanandi, Mr. Suraj Chakar for Petitioner; Mr. Atul Damle, Senior Advocate, Mr. Amogh Singh, Ms. Shilpa Nair, Mr. Himanshu Mishra for Respondent No.2; Mr. Dinyar Madon, Senior Advocate, Mr. Uttam Shukla, Mr. Aditya Dhatrak for Intervenor; Ms. Tanu Bhatia, AGP for State
Lodha Belmondo Hsg. Federation Ltd.
State of Maharashtra, Macrotech Developers Ltd., Divisional Joint Registrar, Cooperative Societies, Pune Division, Assistant Registrar, Cooperative Societies Maval
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Nature of Litigation
Writ petition challenging the de-registration of a federal society and dismissal of revision by the State.
Remedy Sought
Petitioner sought quashing of the order of de-registration and restoration of its registration as a federal society.
Filing Reason
The petitioner's registration as a federal society was cancelled by the Divisional Joint Registrar on the ground of violation of Rule 9(1)(ii) of the RERA Rules, 2017, and the revision against that order was dismissed by the State.
Previous Decisions
The Divisional Joint Registrar allowed the developer's appeal and cancelled the registration of the petitioner federation on 29th August 2022. The revision application filed by the petitioner before the State was dismissed on 11th July 2023.
Issues
Whether the registration of a federal society under the MCS Act is valid when the real estate project is ongoing and the promoter has not formed the apex body as per Rule 9(1)(ii) of the RERA Rules, 2017.
Whether the authorities under the MCS Act can assume jurisdiction under RERA while adjudicating an appeal under Section 152 of the MCS Act.
Whether the registration of a federal society without notice to the developer violates principles of natural justice.
Submissions/Arguments
Petitioner argued that the MCS Act does not require project completion for registration of a federal society, and RERA Rules cannot override the statutory right under the MCS Act. The registration was in compliance with Section 8 of the MCS Act and Clause 14 of the Flat Purchaser's Agreement.
Respondent No.2 argued that the registration was granted without adjudication and without notice to the developer, violating natural justice. The registration was premature as the project is ongoing, and the promoter is obligated to form the apex body only after the last occupancy certificate under Rule 9(1)(ii) of RERA Rules.
Intervenors argued that registration of a federal society in an under-construction project would vest rights to seek conveyance and control common amenities, affecting the developer's rights and other flat purchasers.
Ratio Decidendi
The provisions of RERA and its Rules must be read harmoniously with the MCS Act. Rule 9(1)(ii) of the RERA Rules, 2017, which requires the promoter to form an apex body within three months of the last occupancy certificate, is binding and cannot be circumvented by early registration of a federal society under the MCS Act. The registration of a federal society before project completion violates the statutory scheme and principles of natural justice if done without notice to the developer.
Judgment Excerpts
The Authorities constituted under the MCS Act have assumed the jurisdiction under RERA while adjudicating the Appeal under Section 152 of MCS Act by coming to a finding of non compliance of Rules of 2017.
Rule 9(1)(ii) of Rules of 2017 cannot be interpreted in such a manner as to take away the statutory right of the five societies desiring to form a Federal Society, irrespective of whether the project has been completed or not.
The registration of Petitioner as Federal Society vests a right to seek conveyance in an under construction project affecting the rights of the Developer and the other flat purchasers in layout as the common amenities would then be controlled by the Federal Society.
Procedural History
The petitioner applied for registration as a federal society on 22nd April 2022, and the Assistant Registrar issued the registration certificate on the same day. The developer filed an appeal under Section 152 of the MCS Act on 30th May 2022, which was allowed on 29th August 2022, cancelling the registration. The petitioner filed a revision under Section 154 before the State, which was dismissed on 11th July 2023. The petitioner then filed the present writ petition before the High Court.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: Sections 6(3), 8, 9, 10, 152, 154, 154B-2
- Maharashtra Co-operative Societies Rules, 1961: Rules 4(1), 10
- Real Estate (Regulation and Development) Act, 2016: Sections 88, 89
- Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017: Rule 9(1)(ii)
- Maharashtra Ownership of Flats (Regulation of Promotion of Construction of sale, Management and Transfer) Act, 1963: Sections 4, 5, 5A, 10, 11
