The Bombay High Court has clarified a fundamental principle of procedural law: once a cooperative housing society is de-registered, it ceases to be a legal person and cannot remain a respondent in pending proceedings. This judgment ensures that adjudicatory processes adhere to the basic tenet that no decision can be rendered against a non-existent entity.
Background & Facts
The Dispute
The dispute arose from maintenance dues claimed by M/s. Thakkar Enterprises through Ramesh N. Thakkar, a member of the Hermes Drome Co-op HSG Society Ltd, against the petitioner, Sayali Deepak Upasani. The Society initiated recovery proceedings under Section 101 of the Maharashtra Co-operative Societies Act, leading to a recovery certificate issued on 12 December 2018.
Procedural History
The case progressed through the following stages:
- 2018: Recovery certificate issued by the Competent Authority
- 2020: Petitioner filed a Revision Application before the Divisional Joint Registrar
- 22 February 2021: The Registrar de-registered respondent No. 1 Society, terminating its legal existence
- 6 November 2025: Revisional Authority passed an order against the petitioner, despite the Society’s de-registration
Relief Sought
The petitioner sought quashing of the 2025 order on grounds that the respondent Society no longer existed and no lawful representative had been substituted. The petitioner also sought restraint on coercive recovery actions by the defunct Society.
The Legal Issue
The central question was whether a proceeding under Section 101 of the Maharashtra Co-operative Societies Act can continue against a housing society that has been formally de-registered, and whether the absence of a substituted legal representative vitiates the entire adjudicatory process.
Arguments Presented
For the Petitioner
The petitioner argued that upon de-registration, the Society lost its legal personality under Section 101 and could no longer be a party to litigation. Reliance was placed on the principle that a non-existent entity cannot be subjected to adjudication. The petitioner contended that the Revisional Authority’s order was void ab initio due to the absence of a proper respondent.
For the Respondent
The respondents did not contest the fact of de-registration but argued that the proceedings were initiated when the Society was still active, and therefore the order should stand. They suggested that the petitioner’s remedy lay in challenging the recovery certificate, not the procedural posture of the revision.
The Court's Analysis
The Court examined the nature of legal personality under cooperative law and held that de-registration is not a mere administrative formality but a termination of legal existence. The Court emphasized that procedural fairness requires a live party capable of receiving notice, filing replies, and making submissions.
"A legal entity that has been de-registered cannot defend itself. A proceeding cannot go on without a proper representative of that entity."
The Court rejected the notion that prior initiation of proceedings validates continuation after the respondent’s extinction. It distinguished between procedural irregularities and jurisdictional defects, holding that the absence of a representative goes to the root of the proceeding. The Court cited the doctrine of audi alteram partem and held that adjudication without a proper respondent violates natural justice.
The Court further noted that coercive recovery actions by a de-registered society are unlawful. Only an official assignee or a person appointed by the Registrar may act on behalf of the defunct entity.
The Verdict
The petitioner succeeded. The Court quashed the order dated 6 November 2025 and held that no proceeding can continue against a de-registered housing society without substitution of a lawful representative. The matter was remanded to the Revisional Authority for fresh adjudication after proper substitution.
What This Means For Similar Cases
Legal Representation Is Mandatory After De-registration
- Practitioners must immediately verify the registration status of any cooperative society named as a respondent in pending proceedings
- If de-registered, file an application for substitution of the official assignee or Registrar-appointed representative
- Failure to substitute renders the entire proceeding void
Coercive Recovery by Defunct Societies Is Illegal
- Recovery notices, attachment orders, or eviction threats issued by a de-registered society are without legal basis
- Members may seek injunctions against such actions under Section 101 and Article 226
- Only the Registrar or an assignee may initiate recovery post-de-registration
Procedural Defects Cannot Be Curried by Merits-Based Decisions
- Courts will not validate orders on substantive grounds if the respondent is not legally present
- The defect is jurisdictional, not curable by subsequent evidence or argument
- This principle applies equally to civil, revenue, and quasi-judicial proceedings under cooperative statutes
