Case Note & Summary
The Petitioner, a member of Navbharatiya Bhavan (1) Co-op. Hsg. Soc. Ltd., challenged the order dated 1st November 2014 granting a No Objection Certificate for re-development of the society's building and sought a declaration that the Development Agreement dated 28th October 2014 between the society and the developer was null and void for violating a circular dated 3rd January 2009 issued under Section 79A of the Maharashtra Co-operative Societies Act, 1960. The society had passed resolutions in 2006 and 2008 to redevelop, and after receiving bids, entered into an agreement with Heritage Lifestyles & Developers Pvt. Ltd. The Petitioner argued that the circular required certain procedures before entering into a development agreement, which were not followed. The Court examined the circular and found that it was directory, not mandatory, as it did not use the word 'shall' and was intended to guide societies. The Court held that non-compliance did not render the agreement void. The Court also noted that the Petitioner had participated in the meetings and did not object earlier. The petition was dismissed with no order as to costs.
Headnote
A) Co-operative Societies - Redevelopment - Circular dated 3rd January 2009 under Section 79A of Maharashtra Co-operative Societies Act, 1960 - Whether mandatory - The Court held that the circular is directory and not mandatory, and therefore the Development Agreement entered into without compliance with the circular is not void. The Court reasoned that the circular does not use the word 'shall' and is intended to guide societies, not to invalidate agreements. (Paras 1-18) B) Co-operative Societies - No Objection Certificate - Validity - The Court upheld the No Objection Certificate granted by Respondent No.1 for re-development, finding no violation of any mandatory provision. (Paras 1-18)
Issue of Consideration
Whether the circular dated 3rd January 2009 issued under Section 79A of the Maharashtra Co-operative Societies Act, 1960 is mandatory and whether the Development Agreement dated 28th October 2014 is null and void for non-compliance with the said circular.
Final Decision
The Court dismissed the Writ Petition with no order as to costs.
Law Points
- Circular dated 3rd January 2009 under Section 79A of Maharashtra Co-operative Societies Act
- 1960 is directory and not mandatory
- Development Agreement not void for non-compliance with circular
- No Objection Certificate validly granted
