The Bombay High Court has clarified that the setting aside of a cooperative society’s deregistration restores its legal existence, enabling it to seek unilateral deemed conveyance under the Maharashtra Ownership Flats Act even if internal governance structures remain dysfunctional. This ruling reinforces statutory protections for flat purchasers against developer delay and provides critical clarity on the powers of liquidators during revival proceedings.
Background & Facts
The Dispute
The dispute arises from a cooperative housing society in Maharashtra that was deregistered following a confirmed order of liquidation. After deregistration, some members challenged the order under Section 152 of the Maharashtra Co-operative Societies Act. The appellate authority allowed the appeal and set aside the deregistration. Subsequently, an application was filed under Section 11 of the Maharashtra Ownership Flats Act (MOFA) seeking unilateral deemed conveyance of the property from the developer to the society. The Competent Authority granted the application. The developer and certain owners now challenge this order, arguing that the society lacked legal capacity to file the application due to its prior liquidation and absence of a duly elected managing committee.
Key Facts
- The society was originally registered under the Maharashtra Co-operative Societies Act.
- An interim order of liquidation was passed, later confirmed by the competent authority.
- The society was formally deregistered as a result of the liquidation proceedings.
- On 12.04.2021, members filed an appeal under Section 152 of the Maharashtra Co-operative Societies Act challenging the deregistration.
- On 18.11.2022, the appellate authority allowed the appeal and set aside the deregistration order.
- On 05.03.2023, an application under Section 11 of MOFA was filed by a person acting on behalf of the society seeking deemed conveyance.
- The Competent Authority allowed the application on 20.07.2023.
- No general body meeting had been held since deregistration.
- No managing committee had been elected after deregistration.
- The society remained under liquidation, with a liquidator appointed under Sections 102 and 103 of the Maharashtra Co-operative Societies Act.
- The developer had executed agreements under Section 4 of MOFA with the flat purchasers.
Procedural History
- 2018: Society placed under liquidation; interim order issued.
- 2019: Liquidation confirmed; society deregistered.
- 12.04.2021: Appeal filed under Section 152 of the Maharashtra Co-operative Societies Act challenging deregistration.
- 18.11.2022: Appellate authority set aside deregistration order.
- 05.03.2023: Application under Section 11 of MOFA filed for deemed conveyance.
- 20.07.2023: Competent Authority granted the application.
- 15.09.2023: Writ petition filed before the Bombay High Court challenging the Competent Authority’s order.
- 24.03.2026: Judgment delivered by the Bombay High Court.
The Parties' Positions
Petitioners (Developer and Certain Owners): Argued that the society ceased to exist upon deregistration and that setting aside the deregistration did not revive its full legal capacity. They contended that only a duly elected managing committee could file an application under Section 11 of MOFA. They further asserted that the liquidator, even if empowered under the Co-operative Societies Act, could not initiate conveyance proceedings without specific authorization from a general body meeting.
Respondents (Competent Officer, District Deputy Registrar, and Society): Maintained that once deregistration was set aside, the society was legally restored to its pre-deregistration status. They argued that the liquidator, acting under Sections 102 and 103 of the Maharashtra Co-operative Societies Act, had the authority to protect the society’s property rights, including seeking conveyance under MOFA.
Relief Sought
The petitioners sought quashing of the Competent Authority’s order dated 20.07.2023 granting deemed conveyance, and a declaration that the application under Section 11 of MOFA was invalid due to lack of proper authority.
The Legal Issue
The central question was whether a cooperative society, whose deregistration has been set aside by an appellate authority, regains the legal capacity to apply for unilateral deemed conveyance under Section 11 of the Maharashtra Ownership Flats Act, even if no elected managing committee exists and the society remains under liquidation.
Arguments Presented
For the Petitioner
The petitioners contended that deregistration extinguished the society’s legal personality, and that setting aside the deregistration order merely removed the legal bar to re-registration but did not automatically restore its operational capacity. They relied on the principle that only a duly constituted managing committee can represent the society in legal proceedings. They argued that the liquidator’s powers under the Co-operative Societies Act are confined to winding up and asset protection, and do not extend to initiating conveyance proceedings. They further submitted that allowing such applications without elections would undermine democratic governance within societies and open the door to abuse.
For the Respondent
The respondents argued that setting aside deregistration under Section 152 of the Maharashtra Co-operative Societies Act operates retrospectively to restore the society’s legal status as if the deregistration never occurred. They cited Sections 102 and 103 of the Co-operative Societies Act to establish that the liquidator, as the statutory custodian of the society’s affairs, is empowered to take all necessary steps to preserve its assets - including seeking conveyance under MOFA. They emphasized that the purpose of MOFA is to protect flat purchasers, and that allowing developers to exploit internal governance defects would defeat the statute’s object.
The Court's Analysis
The Court began by affirming that deregistration is not a permanent extinguishment of legal personality but a procedural status that can be reversed. It held that when an appellate authority sets aside a deregistration order, the society is revived ab initio, meaning its legal existence is restored as if the deregistration had never taken place. The Court rejected the petitioners’ argument that revival is partial or conditional, stating: "When deregistration is set aside by a competent appellate authority, the legal position is that the society is brought back into existence. It cannot be treated as non-existent after that point."
The Court then addressed the role of the liquidator. It observed that under Sections 102 and 103 of the Maharashtra Co-operative Societies Act, the liquidator is not merely a wind-up officer but a statutory custodian with a duty to protect the society’s assets and interests. The Court noted: "His duty is not only to wind up. He is also required to protect the assets and interests of the society. He must take steps to recover dues and to ensure that the affairs are handled properly till a final decision is taken."
The Court further held that the right to conveyance under Section 11 of MOFA is a statutory right vested in the society, not contingent on the perfection of its internal management. It emphasized that the developer’s obligation to convey title is absolute once agreements under Section 4 of MOFA are executed. The Court warned that permitting developers to challenge conveyance applications on grounds of internal irregularities would create a loophole to evade statutory obligations: "If such objections are allowed, it would give an easy excuse to the developer to avoid or delay conveyance. That would defeat the very purpose of the statute."
The Court concluded that the developer, as a third party, has no standing to question the authority of the person filing the application unless the applicant is wholly unauthorized or acting in bad faith. Internal governance disputes are matters between members and cannot be weaponized by developers to obstruct conveyance.
The Verdict
The writ petition was dismissed. The Court upheld the Competent Authority’s order dated 20.07.2023 granting unilateral deemed conveyance under Section 11 of the Maharashtra Ownership Flats Act. The society’s legal status was deemed revived upon the setting aside of deregistration, and the liquidator was recognized as a valid applicant for conveyance. No monetary relief was awarded, but the order of conveyance stands confirmed, and the developer is directed to execute the conveyance deed within 60 days of the judgment.
What This Means For Similar Cases
Deemed Conveyance Cannot Be Blocked by Internal Governance Defects
- Practitioners representing societies under liquidation may now file Section 11 MOFA applications through the liquidator without waiting for elections or general body meetings.
- Developers can no longer resist conveyance on grounds of non-election of a managing committee or absence of meetings.
- Courts will treat statutory rights under MOFA as superior to procedural irregularities in internal society management.
Liquidator’s Role Expanded Beyond Winding Up
- Liquidators under the Maharashtra Co-operative Societies Act now have express authority to initiate conveyance proceedings to protect society assets.
- This includes filing applications, appearing before Competent Authorities, and executing documents necessary for title transfer.
- Legal notices and applications filed by liquidators in such contexts are presumed valid unless proven mala fide.
Revival of Deregistered Societies Is Full and Retroactive
- Setting aside deregistration restores the society’s legal personality as if it had never been deregistered.
- Any rights or obligations that existed prior to deregistration (including developer agreements) are revived.
- This applies even if the society remained dormant or inactive during the period of deregistration.
