Bombay High Court Allows Petition Challenging Minister's Order Cancelling Bifurcation of Cooperative Society — Upholds Division of Commercial and Residential Buildings Under Section 18 of MCS Act. The court held that the Minister's order was based on erroneous grounds regarding consultation with a non-existent federal society and improper calling of objections, and that the long-standing independent functioning of the bifurcated societies warranted restoration of the bifurcation.

Writ petition challenging the Minister's appellate order under Section 152 of the MCS Act quashing the bifurcation of a parent cooperative society into separate societies for commercial and residential buildings.

The petitioner, the bifurcated society for the commercial building, sought quashing of the Minister's order and restoration of the Divisional Joint Registrar's bifurcation order.

The Minister allowed the appeal of the parent society and set aside the bifurcation of the commercial and residential buildings at Lamington Road, which the petitioner contended was erroneous and against the interests of the members.

The Divisional Joint Registrar had passed a final order under Section 18 of the MCS Act permitting bifurcation into four societies. The parent society appealed to the Minister under Section 152, who allowed the appeal and quashed the bifurcation for the commercial and residential buildings at Lamington Road.

Whether the Minister's order under Section 152 of the MCS Act quashing the bifurcation was valid given the lack of a constituted federal society and proper calling of objections. Whether the long-standing independent functioning of the bifurcated societies for nearly thirty years warranted restoration of the bifurcation.

Petitioner argued that the Minister's order erroneously relied on lack of consultation with a federal society that did not exist, and that objections were properly called and considered. Petitioner submitted that the bifurcated societies had been functioning independently for thirty years and that the impugned order would cause disruption. Respondent no. 1 (parent society) argued that the bifurcation was not in the interest of the cooperative movement and that the Minister's order was correct.

The Minister's appellate order under Section 152 of the MCS Act was unsustainable because it was based on erroneous grounds: (i) there was no federal society constituted and notified under Section 18, so consultation was not required; (ii) objections from members were properly called and considered by the Divisional Joint Registrar. Additionally, the bifurcated societies had been functioning independently for nearly thirty years, and cancelling the bifurcation at that stage would cause disruption and was not in the interest of the members.

The impugned order erroneously referred to the requirement of the opinion of the federal society. He submitted that there was no federal society constituted and notified by the State Government in the official gazette as referred to in Section 18 of the MCS Act. The Divisional Joint Registrar before passing the final order, considered all the suggestions and objections submitted before him as specifically recorded in the order. The petitioner society and the respondent society have been carrying out their business and affairs for almost the last thirty years as independent societies.

The parent society was registered in 1960. In 1990, the petitioner filed Writ Petition No. 2052 of 1990 for appointment of an Administrator. In 1992, the court directed the Deputy Registrar to include a proposal for bifurcation into four units. In 1995, a fresh draft order was issued, and after objections, the Divisional Joint Registrar passed a final bifurcation order in 1996. The parent society appealed to the Minister under Section 152, who allowed the appeal on 27th March 1997, quashing the bifurcation for the commercial and residential buildings at Lamington Road. The petitioner then filed the present writ petition challenging that order.

• Maharashtra Co-operative Societies Act, 1960: 18, 20, 152
• Indian Societies Registration Act, 1860: