Bombay HC Quashes Minister’s Order, Rules Housing Society Registration Without Promoter Hearing Is Fraudulent

Mumbai: The Bombay High Court on Thursday held that a Registrar cannot grant registration to a housing society without first hearing the promoter or developer, while quashing the Maharashtra Minister of Cooperation’s order that had restored the registration of a housing society.

Fraudulent Registration of Paramount Park ‘D’ Wing

Justice Milind Jadhav said the registration, granted in July 2020 during the COVID-19 period, to Paramount Park ‘D’ Wing Tenant Co-operative Housing Society in Dombivli, was “fraudulent, without jurisdiction, and void ab initio (void from the beginning),” and criticised both the registering authority and the minister for acting in violation of law and natural justice.

Promoter Not Heard, Court Observes Misrepresentation

“The Hon’ble Minister only heard the Society and not the Promoter, yet falsely recorded that the Promoter was heard,” the court said, describing the registration process as “a classic case where misrepresentation and fraud are writ large on the face of record.”

Petition by Deshmukh Enterprises

The court was hearing a petition filed by Deshmukh Enterprises, through promoter Dilip Sudhakar Deshmukh, challenging the June 2022 order of the Minister of Cooperation that had restored the society’s registration. The HC restored the earlier order of the Divisional Joint Registrar, Thane, which had cancelled the society’s registration in November 2021 after finding it was obtained through fraud.

Unauthorised Registration by Flat Purchasers

The developer had executed a Deed of Declaration in June 2019 to form a condominium under the Maharashtra Apartment Ownership (MAO) Act. However, a group of flat purchasers independently applied to register their building as a co-operative housing society under the Maharashtra Co-operative Societies (MCS) Act in July 2020 — without the promoter’s knowledge or consent.

Registrar Acted Without Jurisdiction

Justice Jadhav noted that the Deputy Registrar, Dombivli, who had “no jurisdiction” over the project, approved the society’s registration within just two days of receiving the application. “It is seen that the Deputy Registrar, Dombivli, who had no jurisdiction, granted registration within 48 hours without notice to the promoter or any due verification,” the court observed.

False Claims by Flat Purchaser Highlighted

Ironically, the same officer later admitted his mistake, writing to the Divisional Joint Registrar that the society’s registration had been obtained “fraudulently” and recommending its cancellation.

The court also took note of the fact that one T. R. Ayyar, a flat purchaser, falsely projected himself as the society’s chief promoter. “This is shocking and absurd. How he becomes the chief promoter of the building is unexplained,” the court remarked.

Promoter’s Delay Does Not Justify Circumvention of Law

Justice Jadhav said that while there was delay by the promoter in forming the society or condominium, “that does not give flat purchasers the right to circumvent the law and act unilaterally.”

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Cancellation Order Restored

Finding that both the Registrar and the Minister acted illegally, the court reinstated the Divisional Joint Registrar’s cancellation order. “Court cannot turn a blind eye to such misrepresentation and fraud when it is prima facie evident from the record,” Justice Jadhav concluded, allowing the writ petition and disposing of pending applications.

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