HC strikes down registration of Dombivli housing society

The court pointed out that the real dispute appeared to stem from unpaid maintenance dues of over ₹70 lakh owed by residents to the developer

MUMBAI: The Bombay High Court on Thursday set aside the registration of a cooperative housing society in Dombivli after finding that it was formed “fraudulently, without jurisdiction and in complete violation of law” during the COVID-19 pandemic.

HC strikes down registration of Dombivli housing society

Justice Milind N Jadhav quashed the registration of Paramount Park D Wing Tenant Co-operative Housing Society, which was formed by some flat owners from D Wing of the Paramount Park project which has five other wings. The order came on a writ petition filed by Deshmukh Enterprises, the developer of the project, through its promoter Dilip Deshmukh.

The dispute dates back to 2011, when Deshmukh Enterprises sold flats in the D wing of Paramount Park. As per the agreement with buyers, the developer was required to form a legal association of residents, either a co-operative housing society under the Maharashtra Co-operative Societies (MCS) Act or a condominium under the Maharashtra Apartment Ownership (MAO) Act.

Under the MAO Act, each owner holds title to their individual apartment and a share of the common areas, whereas under the MCS Act, the entire property (land and building) is owned by the society, and members hold shares in the society rather than individual titles to their flats.

In June 2019, the developer executed a Deed of Declaration in favour of flat owners in wings A to F under the MAO Act to form a condominium. However, a year later, in July 2020, amid the pandemic, some flat owners from D wing independently applied for registration of a co-operative society under the MCS Act.

The Deputy Registrar of Co-operative Societies, Dombivli, granted registration to the society within just two days of receiving the application, on July 29, 2020. However, the same Deputy Registrar wrote to the Divisional Joint Registrar, Thane, on August 26, 2020, saying the society’s registration was obtained through “fraud and misrepresentation.”

Acting on this letter and the developer’s complaint, the Divisional Joint Registrar conducted a suo motu inquiry and, after hearing both sides, passed a detailed order on November 18, 2021, cancelling the society’s registration. The society then appealed to the Minister for Cooperation, who, on June 21, 2022, restored its registration, without hearing from the developer.

In his writ petition, Deshmukh alleged that the process of registration of the housing society was riddled with fraud. He alleged that one of the flat owners, Thingranjan Ayyar, claimed to be the chief promoter of the project, even though he was merely a resident of the society. Ayyar and others misrepresented facts, used a title certificate from 2011 – nearly a decade before the society’s registration, and concealed the existence of the 2019 Deed of Declaration while registering a separate housing society, the developer claimed.

In his order, Justice Jadhav described the registration of the society as a “fraudulent act” based on suppression of facts and fabrication of documents. The Deputy Registrar, Dombivli, had “no jurisdiction whatsoever” to grant registration to the housing society since the project fell within Thane district, the court said.

“Such jurisdiction cannot be conferred on an authority by consent or convenience,” the judge observed, terming the entire registration process “void ab initio” (from the beginning). Moreover, the D wing shared common amenities such as the entrance, water tanks, electricity meters, and open spaces with wings A to F in the same layout, making it ineligible for registration as an independent society, the court said.

Justice Jadhav also set aside the cooperation minister’s 2022 order restoring the society’s registration, saying it was “ex parte and obtained behind the back of the promoter.” The minister had falsely recorded that the promoter was heard, and that the entire process violated the “principles of natural justice”, the court observed.

The court pointed out that the real dispute appeared to stem from unpaid maintenance dues of over ₹70 lakh owed by residents to the developer. Internal disagreements and arrears “seem to be the major bone of contention” that led some residents to hurriedly register a separate society, it said.