Writ Petition No.613 of 2013

19th November, 2015.

Petitioner Counsel: Mr. R.M. PANDEY i/b. M.U. PANDEY/RAKESH M. PANDEY
Respondent Counsel: Mr. G.W. MATTOS, Mr. E.P. BHARUCHA, Mrs. SUREKHA SONAWANE, Mr. P.K. DHAKEPHALKAR, Mr. SANJAY JAIN, Ms. SAPNA RAICHURE, Mr. T.N. TRIPATHI i/b T.N. TRIPATHI & CO.

Cases Cited:
Bangalore Medical Trust Vs. B.S. Mudappa, AIR 1991 SC 1902 [Para 19]
Zoroastian Co-op. Housing Society Ltd. & Anr. Vs. Dist. Registrar Co-op. Societies & Ors., 2005(5) ALL MR 731 (S.C.)=(2005) 5 SCC 632 [Para 24]
Vipulbhai M. Chaudhari Vs. Gujarat Co-op.Milk Marketing Federation Ltd., 2015(5) ALL MR 441 (S.C.)=(2015) 8 SCC 1 [Para 25]

JUDGMENT

S. C. DHARMADHIKARI, J. :- Rule. Respondents waive service. By consent, Rule is made returnable forthwith.

2. By this Writ Petition, initially filed as also subsequently amended, the petitioner-Co-operative Housing Society is seeking a writ of mandamus and/or any other appropriate writ, order or direction in the nature thereof declaring clause 3.12(7) of the Cooperative Housing Societies Manual dated 15th October, 2011, copy of which is annexed as Annexure-J to the Writ Petition as ultra vires the Maharashtra Co-operative Societies Act, 1960. The petitioner is also challenging in terms of prayer clause (a), the order dated 21st April, 2009, being Annexure-G and 25th September, 2010, being Annexure-O and the approval of the building plans. The further challenge is to the order Annexure K-1 dated 4th February, 2013.

3. The petitioner is essentially aggrieved by the acts of respondent No.4. The dates and events leading to these acts are few and simple. The petitioner-society is duly registered under the Maharashtra Co-operative Societies Act, 1960. The petitioner claims that it owns a piece of land being Survey No.79A, Hissa No.10 (Part) and Survey Nos.79 and 80, Hissa No.8 of village Vile Parle (East), Mumbai. The said plot was forming part of a Town Planning Scheme of village Vile Parle-V and in the final Town Planning Scheme, that land was numbered as final Plot No.168 of TPS-V. This land / holding was further sub-divided into 24 plots. These 24 plots have been leased by the petitioner-society to its members.

4. Our attention is invited to the agreement of lease executed by the petitioner-society with its members. It is urged that the lease was of a plot of land for residential use. Clause 1 of this agreement is relied upon to further urge that the members can enter upon the plot of land to erect their own dwelling house in accordance with the plan elevation and estimates previously approved in writing by the society. Thereafter, the registered leases are relied upon and clauses 6 and 7 thereof, according to the petitioner, provide for a prior written permission of the lessor-society for doing any business in the building which may be constructed on the demised plot. Further, the demised plot being earmarked as private residence only, any structural alterations or proposed erections cannot be carried out without prior sanction of the society. It is stated that in relation to plot 17, one Dattatraya Gangurde was admitted as a member of the petitionersociety. Dattatraya Gangurde applied for permission to erect a dwelling house on the said leasehold land. A no objection was granted for construction of the dwelling house. However, the said Gangurde assigned his leasehold rights to one Nanji Mauji Shah. It is stated that the plot was affected by a setback of Western Express Highway to the extent of 117 square meters. Therefore, the balance area of the plot is 290.80 square meters. Nanji submitted a plan for construction of building on this 290.80 square meters. However, after the plan was submitted, copy of which is at page 66 of the paper-book, Nanji died and in his place Rajesh Nanji Shah was admitted as a member of the society. Rajesh Nanji also sought the no objection from the society for use of transferable development rights for constructing a building on the said land. The society granted the no objection to Rajesh for use of the TDR. However, Rajesh assigned his right in favour of respondent No.4, who has been admitted as a member of the petitioner-society. By a document, copy of which is at page 30 of the paper-book, respondent No.4 obtained the approval to a plan of construction from the Municipal Corporation of Greater Mumbai and respondent No.4 proposed construction on an area admeasuring 406.86 square meters, but which computation is inaccurate according to the petitioner. The fourth respondent also obtained an order from the second respondent to this petition for change of user of the land from residential to Lodging House and Restaurant. The plans were approved and certain concessions were given. However, reliance is placed upon a letter of 4th June, 2012, from the Executive Engineer of respondent No.2, informing the Architect of respondent No.4 to obtain necessary no objection certificate from the petitioner-society for use of the said land as Lodging House and Restaurant. The respondent No.4 applied to the society for such permission but the society refused the same and to that effect a resolution has been passed by the General Body in a meeting held on 17th June, 2012. On 23rd June, 2012, this decision of the petitioner was communicated to the respondent No.4. Yet, the Executive Engineer of respondent No.2 rejected the objection of the petitioner. The grievance of the petitioner is that instead of approaching a court of law, the respondent No.4 approached the Deputy Registrar, Co-operative Societies (respondent No.3 to this petition) and invoked the guidelines which are contained in the Manual referred above. He sought a permission for the change of user and respondent No.3 passed the impugned order by which the application of the respondent No.4 was granted, rejecting the objections of the petitioner.

5. It is aggrieved by such an order and the stand of the Municipal Corporation of Greater Mumbai that the present petition claiming the aforesaid reliefs has been filed.

6. Mr. Pandey, the learned counsel appearing for the petitioner raised several contentions before us. His principal contention, however, is that the guidelines which have been invoked by respondent No.4 and equally the respondent No.3 do not empower the respondent No.3 to adjudicate upon any contested issues or facts and pass any binding order. That is a power vested in the competent authorities and tribunals created by the Maharashtra Co-operative Societies Act. The respondent No.3 cannot take over such powers and in the manner done. The respondent No.3 was aware of the fact that the petitioner had rejected the request of respondent No.4.

7. A General Body Resolution is relied upon. That resolution has not been challenged by the respondent No.4 before any competent court or forum created by law. Further, whenever there are any such issues and disputes, parties like the respondent No.4 cannot be assisted by the State-respondent No.3 in the manner sought to be done. They have thus clearly overstepped their limits. The guidelines to the extent they permit such over-stepping, crossing of limits and entering the arena be, therefore, declared ultra vires the Maharashtra Co-operative Societies Act and Article 14 of the Constitution of India.

8. The other contentions of Mr. Pandey are that the Municipal Corporation of Greater Mumbai could not have sanctioned and approved the construction plan and layout. The construction of a multi storeyed building in the residential zone and for non-residential user is impermissible and for that purpose, reliance is placed upon the zones carved out under the Development Control Regulations for Greater Mumbai and as amended from time to time. Even the height restrictions and the stipulations regarding open area to be provided have been flouted and violated according to Mr. Pandey. He would, therefore, submit that though the petition claims multiple reliefs against distinct respondents, this Court can exercise its writ jurisdiction and grant them.

9. The petition is essentially contested by the State. Mr. Mattos, learned AGP appearing on behalf of the State and respondent No.3 submits that the State has issued the guidelines so as to subserve the object and purpose of the Maharashtra Co-operative Societies Act. If the cooperation movement is a socio- economic movement and cooperative societies ought to be managed properly, smoothly and efficiently, then, the State as a patriarch steps in to issue the necessary guidelines. They guide the functionaries under the Act and equally managing bodies of individual societies. The State has noticed that there are large number of disputes and which are prevalent in the Cooperative Housing Societies. Some of the disputes do not deserve to be taken to a Court of law for that would waste precious judicial time. In order to find a solution to them and if the Cooperative Housing Society or its Managing Committee fails to take a decision, then, the Registrar in terms of the guidelines has stepped in. He has stepped in to consider the application of the respondent No.4. He has not adjudicated and ruled upon any contested matters and issues. He has only relied upon the admitted facts and such as the large scale non-residential user on other plots of the petitioner-society. He, therefore, bona fide directed the society to grant the necessary approval. He has neither overridden nor taken over far from usurping the jurisdiction of the competent court or authority under the Act. There is, therefore, no merit in the Writ Petition.

10. We must at once clarify that we have not gone into the contentions of Mr. Pandey pertaining to the actions of the Municipal Corporation of Greater Mumbai. We are of the view that as far as the petitioner's grievance against the Municipal Corporation is concerned, the forum for the same is not this Court. This Court cannot go into the disputed facts, particularly about how the approval was sought to the building plans, in what way they were considered and what are the zoning regulations or restrictions in the relevant planning law. Even the applicable Municipal legislation has, therefore, not been looked into by us. It would be open for the petitioner and other parties to take recourse to such remedies as are available in law for resolving this issue and controversy.

11. For the purpose of the present petition, we are restricting our discussion only to the first contention of Mr. Pandey. With regard thereto Mr. Dhakephalkar, learned senior counsel for the respondent No.4 fairly submitted that the order of the respondent No.3 cannot be taken as conclusive and decisive of any factual disputes and issues. These factual disputes and issues are capable of being resolved by the mechanism provided by the Maharashtra Co-operative Societies Act, irrespective of what has been observed and held by the respondent No.3. Therefore, the respondent No.4 is not agitating that the petitioner has necessarily to contest any application made by the respondent No.4 before the respondent No.3 and, therefore, all its other remedies are lost or not available. Mr. Dhakephalkar would submit that recourse to statutory and general remedies by the petitioner is, therefore, permissible and it is not as if any matter or issue which is under contest is concluded or finally adjudicated by the respondent No.3. The guidelines cannot be construed in this manner. Therefore, there is no merit in the writ petition and it must be dismissed.

12. Ordinarily, Mr. Dhakephalkar's contentions would take care of the apprehensions of the petitioner. However, the State defending the intervention by respondent No.3 and supporting its manual that we are required to settle the legal position. Else, the impact of the stand of the State on the cooperative movement as a whole would be tremendous. That would be not in the interest of the public. More so, this State is a pioneer in the movement.

13. For properly appreciating the rival contentions, a reference will have to be made briefly to the Maharashtra Co-operative Societies Act, 1960. It is an Act to consolidate and amend the law relating to Cooperative Societies in the State of Maharashtra. This is how the preamble would read : "Whereas with a view to providing for the orderly development of cooperative movement in the State of Maharashtra in accordance with the relevant directive principles of State policy enunciated in the Constitution of India, it is expedient to consolidate and amend the law relating to the co-operative societies in that State."' The Act has several Chapters and Chapter I of the same contains the preliminary provisions. The short, title, extent and commencement thereof is to be found in section 1. Section 2 contains the definitions and in this case, we are concerned with the definition of the term "Committee". That is to be found in section 2 clause (7). It means the committee of management or board of directors or the governing body or other directing body of a co-operative society, by whatever name called, in which the management of the affairs of a society is entrusted. The other definition and which is relevant for our purpose is that of "cooperative court" and "cooperative appellate court". The cooperative court is defined in section 2 clause (10-aii) to mean a court constituted under the Act to decide disputes referred to it under any of the provisions of the Act. The cooperative appellate court means the Maharashtra Cooperative Appellate Court constituted under this Act. The term "member" is defined in section 2(19) and there are categories of membership. The term "society" is defined in section 2(27) and which definition is extremely relevant for our purpose. It reads as under :

"2(27) "society" means a co-operative society registered, or deemed to be registered under this Act which is autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values."

14. A bare perusal of this definition would indicate as to how a society is understood by law. It is an autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values. These last words and expressions have been inserted by the Maharashtra Act 16 of 2013 with effect from 14th February, 2013. This would explain as to how it is not only a registration of a society or deemed registration which is contemplated by this Act, but the role of the society is defined and outlined. The society is thus an autonomous association of persons. They unite voluntarily. They so unite to meet their common needs and aspirations. That is through a joint ownership and democratically controlled enterprise. More importantly, this enterprise adheres to the cooperative principles and values. It is commonly, therefore, understood that cooperative movement is a socio-economic and moral movement. It is now even constitutionally recognised. Its democratic functioning and the collective endeavour is to achieve a result of fulfilling the common needs and aspirations. The management of such a cooperative society and there could be categories of the same and , inter-alia, a housing society, vests in an elected body. The term "officer" is defined in section 2(20) to mean a person elected or appointed by a society to any office of such society according to its bye-laws, and includes any office bearer such as a chairperson, vice-chairperson etc. elected or appointed under this Act, the rules or the bye-laws, to give directions in regard to the business of such society.

15. The Maharashtra Co-operative Societies Act then assigns a specific role to the Registrar. We have found that registration of a society is a matter governed by Chapter II. In terms of this Chapter and the provisions therein, a co-operative society can be registered and in what way that exercise must be completed is indicated in this chapter. If there are any disputes arising during such exercise, then, those have also to be decided and adjudicated and in that regard the Registrar performs an important role. It is not as if the Registrar functions as an agent or officer of the State. He is expected to apply his independent mind to these disputes and while adjudicating and deciding them he is not bound by any instructions oral or in writing from the State Government as well. In that regard, he does not function as an employee of the State Government. None can dictate to him, therefore, in what manner he should perform his adjudicatory duties and discharge these functions. The Registrar ought to understand this and it is he who guides the subordinate officials reporting to him. It is not as if the Registrar performs only administrative functions. Once he has been conferred and vested with a power to adjudicate disputes, then, that power has to be exercised by him in accordance with law. While exercising this power, he has to ensure that the cooperative society's functional autonomy is not disturbed or interfered with. That a society is free to manage its affairs and so long as it adheres to the law and abides by any of the directions which the law postulates and can be issued to it, the Registrar cannot meddle with its working. The members, their rights and liabilities are also defined and by Chapter III one finds several provisions by which admission of membership is dealt with. The procedure and equally disputes in relation to obtaining membership the expulsion therefrom are, therefore, to be decided and dealt with in terms of the sections falling in Chapter III. By Chapter IV incorporation, duties and privileges of societies is dealt with and in Chapter VII, management of societies is covered. Before Chapter VII are Chapter V and VI which deal with State aid to societies and property and funds of society. It is a partnership and assistance in financial terms which is referred to. However, for acquiring and holding property and building up funds the society may or may not approach the State. Thus, the State is expected to guide the societies and not control them. The regulatory provisions are not enabling the State to take over the administration, management of societies permanently. Eventually, the directive principles of the State policy in Part IV of the Constitution of India vide Article 43-B envisages the State as a Promoter and facilitator and certainly not a dictator. That article reads as under :

"43-B. Promotion of co-operative societies.- The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies."

16. The provisions falling therein enable efficient and proper so also smooth management of the society. There is an obligation to convene meetings and the type of meetings that have to be convened and compulsorily are also provided in the sections falling in this Chapter. The disqualification for membership of the committee being a director on the Board of Directors of a Cooperative Bank prior thereto matters of election, motion of no confidence against officer of the society are some salutary provisions. The elected members of the managing committee have to execute a bond.

17. By section 72 and which falls under Chapter VII, the final authority of the society is vesting in the Managing Committee. Section 72 reads as under :

"72. Final authority of the society.

Subject to the provisions in this Act and the rules, the final authority of every society shall vest in the general body of members in general meeting, summoned in such a manner as may be specified in the bye-laws.

Where the bye-laws of a society so provide, the general meeting shall be attended by delegates appointed by the members, and such meeting shall be deemed to be the meeting of the general body, for the purpose of exercising all the powers of the general body."

18. A perusal thereof indicates that final authority of every society subject to the provisions in this Act and the rules vests in the general body of members in general meeting, summoned in such manner as may be specified in the bye-laws. Then, by section 73, the Committee, its power and functions are defined. Sub-section (1) of section 73 says that the management of every society shall vest in a committee constituted in accordance with this Act, the rules and bye-laws which shall exercise such powers and perform such duties as may be conferred or imposed respectively by the Act, the rules and the bye-laws. The audit, inquiry, inspection and supervision are other provisions and to be found in Chapter VIII by which the Registrar is empowered to hold enquiry. The Registrar has several powers and which are quasi judicial in nature. We are not referring to all the provisions equally empowering the Registrar to exercise quasi-judicial powers during the course of management of societies. Those provisions place the Registrar on such a pedestal that apart from the management being temporarily taken over by him, in specific cases and covered by the statutory provisions, he, in addition to the State Government's power, can issue directions to societies to frame regulations. He can seize records. Since heavy reliance is placed on section 79-A, we refer to the same in great details. That section is reproduced hereinbelow :

"79-A. Government's power to give directions in the public interest, etc.

(1) If the State Government,on receipt of a report from the Registrar or otherwise, is satisfied that in the public interest or for the purposes of securing proper implementation of co-operative production and other development programmes approved or undertaken by Government, or to secure the proper management of the business of the society generally, or for preventing the affairs of the society being conducted in a manner detrimental to the interests of the members or of the depositors or the creditors thereof, it is necessary to issue directions to any class of societies generally or to any society or societies in particular, the State Government may issue directions to them from time to time, and all societies or the societies concerned, as the case may be, shall be bound to comply with such directions.

(2) The State Government may modify or cancel any directions issued under sub-section (1) and in modifying or cancelling such directions may impose such conditions as it may deem fit.

(3) Where the Registrar is satisfied that any person was responsible for complying with any directions or modified directions issued to a society under sub-sections (1) and (2) and he has failed without any good reason or justification, to comply with the directions, the Registrar may be order -

(a) if the person is a member of the committee of the society, declare him to be disqualified to be or to continue to be a member of the committee of any society for a period of six years from the date of the order.

(b) if the person is an employee of the society, direct the committee to remove such person from employment of the society forthwith, and if any member or members of the committee without any good reason or justification, fail to comply with the order, declare them disqualified as provided in clause (a) above:

Provided that, before making any order under the sub-section, the Registrar shall give a reasonable opportunity of being heard to the person or persons concerned and consult the federal society is affiliated.

Provided further that such federal society shall communicate its opinion to the Registrar within a period of forty-five days from the date of receipt of communication, failing which it shall be presumed that such federal society has no objection to take action under the section and the Registrar shall be at liberty to proceed further to take action accordingly.

Any order made by the Registrar under this section shall be final."

19. That is a section or a provision empowering the State Government to give directions to societies in public interest. By sub-section (1) if the State Government on receipt of a report from the Registrar or otherwise, is satisfied that in the public interest or for the purposes of securing proper implementation of co-operative production and other development programmes approved or undertaken by Government, or to secure the proper management of the business of the society generally, or for preventing the affairs of the society being conducted in a manner detrimental to the interests of the members or of the depositors or the creditors thereof, it is necessary to issue directions to any class of societies generally or to any society or societies in particular, the State Government may issue such directions and the society shall be bound to comply with the same. The State Government can modify or cancel any directions and in doing so, it can impose conditions and that is a matter dealt with by subsection (2). By sub-section (3) of section 79-A, the satisfaction of the Registrar is contemplated and that is that any person who was responsible for complying with any directions or modified directions issued to a society under sub-sections (1) and (2) by the Government has failed, without any good reason or justification to comply with them, then, he may by order if the person is a member of the committee of the society, declare him to be disqualified to be or to continue to be a member of the committee of any society for a period of six years from the date of his order. If the person is an employee he can issue directions in terms of clause (b) of sub-section (3) of section 79-A and he can also direct the committee of the society to remove such person, who is an employee, from employment if that person fails to comply with the directions without any good reason or justification. The power to issue directions cannot be equated with or brought on par with any overriding authority by which the right to manage and administer the societies' affairs freely, its autonomy is jeopardised. The State's power is to be exercised sparingly and to ensure that the object and purpose of the MCS Act is not defeated and frustrated. In this behalf and bearing in mind the statutory principle that the power to issue directions generally and in the light of the above provision cannot be prejudicial to the interest of the society, a useful reference can be made to decision of the Hon'ble Supreme Court of India. In the case of Bangalore Medical Trust vs. B.S. Mudappa, reported in AIR 1991 SC 1902, the Hon'ble Supreme Court outlined the ambit and scope of the provisions investing the State Government with a power to issue directions. The Court held as under :

"20. Section 65 empowers the Government to give such directions to the BDA as are, in its opinion, necessary or expedient for carrying out the purposes of the Act. It is the duty of the BDA to comply with such directions. It is contended that the BDA is bound by all directions of the Government, irrespective of the nature or purpose of the directions. We do not agree that the power of the Government under section 65 is unrestricted. The object of the directions must be to carry out the object of the Act and not contrary to it. Only such directions as arc reasonably necessary or expedient for carrying out the object of the enactment are contemplated by section 65. If a direction were to be issued by the Government to lease out to private parties areas reserved in the scheme for public parks and play grounds, such a direction would not have the sanctity of section 65. Any such diversion of the user of the land would be opposed to the statute as well as the object in constituting the BDA to promote the healthy development of the city and improve the quality of life. Any repository of power - be it the Government or the BDA must act reasonably and rationally and in accordance with law and with due regard to the legislative intent.

... ... ... ...

52. Section 65 the overall power reserved in Government to give such directions to the Authority as it considers expedient for carrying out any purpose of the Act was another provision relied to support an order which is otherwise unsupportable. An exercise of power which is ultra vires the provisions in the Statute cannot be attempted to be resuscitated on general powers reserved in a Statute for its proper and effective implementation. The Section authorises the Government to issue directions to ensure that the provisions of law are obeyed and not to empower it itself to proceed contrary to law. What is not permitted by the Act to be done by the Authority cannot be assumed to be done by State Government to render it legal. An illegality cannot be cured only because it was undertaken by the Government. The Section authorises the Government to issue directions to carry out purposes of the Act. That is the legislative mandate should be carried out. And not that the provision of law can be disregarded and ignored because what was done was being done by State Government and not the Authority. An illegality or any action contrary to law does not become in accordance with law because it is done at the behest of the Chief Executive of the State. No one is above law. In a democracy what prevails is law and rule and not the height of the person exercising the power."

A perusal of section 79-A would reveal that it is only for the purpose mentioned therein and in public interest the directions can be issued. That power is not questioned by anybody before us.

20. The manual that is issued in this case and on which reliance is placed is titled "Guidelines for purposes of ensuring smooth and proper functioning of the Co-operative Housing Societies specifically". The Maharashtra Government found that there are large number of registered co-operative housing societies. The disputes inter-se between the members and the society have increased and thereby the smooth functioning is hampered and affected. Since there are several complaints and grievances which have to be redressed a study group was appointed by the State Government and which would discuss and deliberate upon this issue jointly with the stake-holders and make appropriate recommendations to the State Government. Pursuant to such recommendations, the Government issued the Co-operative Housing Societies Manual. We are not concerned in this case with any other society. We are not also concerned in this case with all the guidelines. We are only concerned in this case with the guidelines incorporated in paragraph 3.12. Those are essentially pertaining to facilitation to the members to obtain loans and credit facilities against mortgage of the flat and tenements. They can borrow monies by creating a security in favour of the bank or financial institution equally. When they are carrying on some construction or repairs, then, they must be able to obtain the no objection certificate from the society expeditiously. It is, therefore, provided that if any member wants to carry out any construction or repairs on the plot / tenement, or is inclined to alter or change the user of the premises, then, he is expected to make a written application to the society. The society must convey its decision on this application within one month. If the society rejects the request or within the specified period does not communicate its decision, then the member concerned can approach the Registrar and make an application or request in writing. He can request the Registrar that he should redress his grievance. The obligation on the Registrar is that on receipt of such application, he must hear the society and the applicant and thereafter give a decision thereon, but within the limits or bounds specified in law, namely, The Maharashtra Cooperative Societies Act,1960, The Maharashtra Cooperative Societies Rules and the Bye-laws. Such decision has to be made and conveyed within one month.

21. It is this power of the Registrar which was invoked by respondent No.4. The respondent No.4, after pointing out as to how the membership was acquired, the Bombay Municipal Corporation was approached, the approval and sanction to the building plan was obtained and a construction of ground plus eight upper floors has been carried out by spending huge sums. The construction is carried out after utilising the FSI and the TDR. Once the commencement certificate has been issued after the plans were approved and the construction has been carried out in accordance therewith, then, the respondent No.4 approached the Cooperative Housing Society and requested that a sanction be granted to the change of user. The application was made in that behalf to the society on 15th June, 2012, and the society received it on 16th June, 2012. The application itself recites as to how a General Body Meeting was convened on 17th June, 2012. The application itself and equally the order of respondent No.3 - Registrar refers to the agenda item and no objection certificate to the change of user by the respondent No.4. The General Body resolution and unanimously passed is that such no objection certificate or sanction as is sought by the respondent No.4 should not be granted, but refused. That is how on 23rd June, 2012, the decision of the society was communicated to the respondent No.4. The respondent No.4 then recites and equally the Registrar in his order that the reasons assigned by the society for rejecting the application are not in accordance with law. The order of the respondent No.3 refers to these facts, the stand of the applicant, respondent No.4 and the petitioner-society.

22. We are surprised that the respondent No.3 holds a full fledged hearing as if he is presiding over a court. He has not only entertained the application of the respondent No.4 and called for the comments and remarks by the society which are duly received, but he permitted parties to engage advocates and held extensive hearings. The respective stands have been set out in the order and after noting them, what the respondent No.3 observes is that the directives have been issued in terms of this manual and the sub-clauses or paras thereof which are traceable to section 79-A of the Act. The respondent No.3 feels obliged to consider the grievance of the respondent No.4 in that regard. After extensive reference to the arguments of both sides, the contents of the documents produced before him, he arrives at a conclusion that the change of user is something which the Municipal Corporation can deal with. It is an issue, therefore, which falls within the domain of the Municipal Corporation of Greater Mumbai as well. That the Cooperative Housing Society has to be approached is apparent from the rules and regulations in relation to the specific Housing Society, namely, the petitioner, but the order of the respondent No.3 refers to the change of user in relation to other plots and belonging to the members of the petitioner-society. He states that the petitioner-society has allowed the Nursing / Surgical and Maternity Home to be set up; he has allowed a Health Club exclusively meant to be set up, there are shops, there are nurseries, there are kindergardens etc. All this means extensive commercial user and in the teeth of the clauses of the lease deed has been allowed according to him. Therefore, rejection of the request of the petitioner alone is not justified and hence the respondent No.3 finds it to be unsustainable. It is by such reasoning that he allows the application of respondent No.4 and directs the petitioner to permit the respondent No.4 to use the plot belonging to respondent No.4 for Lodging House and Restaurant. That such a permission is granted by him is apparent from page 97 of the paper-book where the operative order is reproduced.

23. To our mind, this was clearly beyond the limited authority of respondent No.3 and if at all derived from the guidelines or manual. The manual definitely cannot override the provisions of the Act and the rules. It cannot enact a separate code. It is only enabling the Registrar to exercise his powers under sub-section (3) of section 79-A in the event the Government directives are not complied with for good and justifiable reasons. He can only take that action and in order to guide him in taking it, possibly guidelines can be utilised. The guidelines also ensure that petty disputes and which do not require parties to resort to litigation can be put an end to at the level of the society, its Managing Committee and the General body and ordinarily that should be done. If it is not possible to resolve such petty issues and disputes at the society level, then the authorities under the Act can be approached and their intervention sought. Beyond that, we do not see how resort to these guidelines for deciding contested issues is permissible. That under the Maharashtra Cooperative Societies Act, section 91 is enacted and which falls under Chapter IX titled Settlement of Disputes under which by sub-section (1) notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the committee or its officers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to the co-operative court if both the parties thereto are one or other of the categories mentioned in clauses (a) to (e) of sub-section (1) of section 91. Thus, a complete mechanism is created for resolution of disputes and of the nature covered by this provision. The powers of the Co-operative Court are then enumerated and if one is required to refer to the same, then a useful reference can be made to sections 91-A to 98 thereof. In these circumstances, and when the procedure for settlement of disputes and the power of the co-operative court and equally that of the appellate court is set out in the Act itself, then, the Registrar in terms of the aforementioned manual cannot override the same. In the present case, there is a clear attempt to do so. The respondent No.3 had no business, therefore, to take cognizance of the rival versions and deal with them as if he has the powers of a court of law. In the present case, he has usurped the authority and power of a competent court under the Maharashtra Cooperative Societies Act, 1960, as well as that of a civil court. He should not have ventured into the exercise and which he has undertaken at the instance of the parties. In the present case, he could have very well refused to intervene, leaving the parties to their remedies in law. More so, when Mr. Mattos, learned AGP also could not point out any provision in the Act, save and except section 79 and section 79-A thereof. These do not autorise the Registrar to entertain any dispute which can only be decided by the Cooperative Court. That, prima facie, being the nature of the present dispute and in any event it being beyond the purview of the respondent No.3's limited authority, the impugned order is wholly unsustainable. However, instead of acting in accordance with law, the respondent No.3 has taken note of the grievance of the respondent No.4 as if he possesses a general appellate or supervisory power. The authority and management of the Cooperative Housing Society in this case vests in terms of sections 72 and 73 with the General Body and the Managing Committee. That the society has an autonomy and it can independently function is assured and guaranteed in terms of the statutory provisions to which we need not refer again. Any attempt to inter-meddle or interfere with such autonomy and independence, therefore, must be deprecated and discouraged.

24. In this behalf, a reference can usefully be made to the decision of the Hon'ble Supreme Court reported in (2005) 5 SCC 632 : [2005(5) ALL MR 731 (S.C.)] [Zoroastian Co-op. Housing Society Ltd. & Anr. vs. Dist. Registrar Co-op. Societies & Ors.]. The Hon'ble Supreme Court held as under:

"........ The cooperative movement, by its very nature, is a form of voluntary association where individuals unite for mutual benefit in the production and distribution of wealth upon principles of equity, reason and common good. No doubt, when it gets registered under the Cooperative Societies Act, it is governed by the provisions of the Cooperative Societies Act and the Rules framed thereunder. ... ... ...

... ... ...

... ... ... ... ... ... As observed by the High Court of Bombay in Karvanagar Sahakari Griha Rachana Sanstha Maryadit and others vs. State (AIR 1989 Bombay 392) the members have joined the society in accordance with the bye-laws and the members join a housing society by ascertaining what would be the environment in which they will reside. It is not permissible for the State Government to compel the society to amend its bye-laws as it would defeat the object of formation of the society. In that case, the society was constituted with the object of providing peaceful accommodation to its members. Though there may be circumstances justifying the State taking steps to meet shortage of accommodation, it was not open to the State Government to issue a direction to the Registrar of Co-operative Societies to direct a co-operative society to make requisite amendments to their byelaws and grant permission to its members to raise multi-storeyed constructions. In appeal from that decision reported as State of Maharashtra and others vs. Karvanagar Sahakari Griya Rachana Sanstha Maryadit and others (2000 (9) SCC 295) this Court while dismissing the appeal stated that it was clear that though a power was conferred on the Registrar to direct amendment of the bye-laws of a society, yet the paramount consideration is the interest of the society. So also, the power of the State Government to issue directions in public interest, could not be exercised so as to be prejudicial to the interest of the society. In the view of this Court, what was in the interest of the society was primarily for the society alone to decide and it was not for an outside agency to say. Where, however, the government or the Registrar exercised statutory powers to issue directions to amend the bye-laws, such directions should satisfy the requirement of the interest of the society. This makes it clear that the interest of the society is paramount and that interest would prevail so long as there is nothing in the Act or the Rules prohibiting the promotion of such interest. ... ... ..."

25. In the latest decision, after noticing the 97th Amendment to the Constitution of India, the Hon'ble Supreme Court in Vipulbhai M. Chaudhari vs. Gujarat Co-op.Milk Marketing Federation Ltd., (2015) 8 SCC 1 : [2015(5) ALL MR 441 (S.C.)], held as under :

"14. The cooperative societies having been conferred a constitutional status by the Ninetyseventh Amendment, the whole concept of cooperatives has undergone a major change. In 1993, the local self-government viz. Panchayats and municipalities were also given constitutional status under Parts IX and IX-A of the Constitution of India by the 73rd and 74th Amendments. The Statement of Objects and Reasons would show that the Constitution wanted the local bodies to function as vibrant democratic units of self-government. After two decades, cooperative societies were given the constitutional status by including them under Part IX-B. The main object for the said Amendment was also to ensure "their autonomy, democratic functioning and professional management".

15. The National Policy on Cooperatives announced in March 2002 has recognised democracy, equality, equity and solidarity as values of institution. Democratic principles have all through been recognised as one of the cooperative principles though the constitutional affirmation of those principles came only in 2012.

... ... ... ...

36. A conjoint reading of all the provisions under the Act and the Bye-laws of the Society would clearly show that the functional authority of the first respondent Federation vests in the Board of Directors. The entire administration, management and control of the Federation is with the Board. Thus, the Board of Directors is bound to do all such acts and things as may be necessary for the proper management of the Federation. The Chairperson of the first respondent is elected by the Board for a term of three years and after the 97th Amendment to the Constitution, the term is five years. When the post of Chairperson falls vacant, the Board is bound to elect a new Chairperson for the remaining term. The post of Chairperson may fall vacant on account of variety of reasons like resignation, death or cessation of membership in the Board, operation of Section 76- B of the Act i.e. removal by the Registrar on account of persistent default or misconduct.

... ... ... ...

42. It may be seen that all these decisions dealt with the pre-Ninety-seventh Amendment status of the cooperative societies. The Amendment providing constitutional status to the societies has brought out radical changes in the concept of cooperative societies. Democratic functioning and autonomy have now become the core constitutional values of a cooperative society. Such societies are to be registered only if they are founded on cooperative principles of democracy, equality, equity and solidarity.

... ... ... ...

51. The cooperative society registered under the Central or the State Act is bound to function as a democratic institution and conduct its affairs based on democratic principles. Democratic functioning on democratic principles is to be reflected in the respective Acts or Rules or byelaws both on the principle and procedure. If not, it is for the court to read the democratic principles into the Act or Rules or bye-laws. If a procedure is prescribed in any Act or Rule or bye-law regarding election of an office-bearer by the board, as defined under Article 243-ZH(b) of the Constitution of India, and for removal thereof, by way of a motion of no-confidence, the same procedure has to be followed. In case there is no express provision under the Act or Rules or bye-laws for removal of an office-bearer, such office-bearer is liable to be removed in the event of loss of confidence by following the same procedure by which he was elected to office."

26. Thus, cooperation means to be united, not for achieving any ulterior purposes, but a commonly pursued social and economic goal. In that all the constitutional morals as enshrined in the preamble are reflected. To promote cooperation means to establish a just and fair social order. We are of the clear view that having regard to the rival stands and the observations and conclusions reached and drawn by respondent No.3, he has overstepped his limits. He has exceeded his limited authority and has adjudicated upon the disputes and which are factual. The contest between the parties was evident. In such circumstances, the order passed by him cannot be sustained. The impugned order dated 9th August, 2012, and equally that of the Divisional Joint Registrar in revisional proceedings, dated 4th February, 2013, are quashed and set aside. Rule is made absolute in these terms, but without any order as to costs. We clarify that our order does not mean acceptance of either contentions or versions. We leave the parties to such remedies as are provided in the Maharashtra Cooperative Societies Act, 1960, or the general law. All contentions of both sides on maintainability of proceedings and merits of the controversy of both sides are kept open. We further clarify that it would be open for the petitioner-society or respondent No.4 to approach such court or authority to question the act or decisions of the Municipal Corporation of Greater Mumbai or the petitioner-society. All contentions of all parties in relation thereto are kept open.

27. Mr. Dhakephalkar, the learned senior counsel for the respondent No.4 states that on account of the judgment delivered by us, the respondent No.4 may have to take recourse to such remedies, including filing of a dispute under section 91 of the Maharashtra Cooperative Societies Act, 1960, in a competent cooperative court. In the event such a dispute or a civil suit is filed, that may not be disposed of for decades together. The construction having come upto to the eighth floor, respondent No.4 may not be able to utilise the same for the intended user. All this has caused serious prejudice and grave monetary loss as well to the respondent No.4.

28. For such reasons he would submit that in the event the legal proceedings are instituted, they may be directed to be disposed of expeditiously.

29. We do not express any opinion as to what proceedings respondent No.4 can institute and the nature of the reliefs that can be claimed thereunder. However, we are confident that in all such proceedings as may be instituted, the respondent No.4 is free to apply for interim reliefs and equally mandatory orders and directions. These applications, bearing in mind the request made, have to be dealt with and decided expeditiously. We have no doubt that the competent court, in the event approached with such an application in a dispute filed before it, will deal with it and dispose it off as expeditiously as possible and, in any event, within a period of three months from the date of its filing. We further clarify that all legal proceedings shall be decided uninfluenced by any observations and findings or conclusions in the orders of the respondent No.3 and respondent No.5.

Ordered accordingly.