Facts: Jay Anand Co-operative Housing Society Ltd. (the Petitioner) challenged two orders. The first order, dated November 3, 2018, bifurcated the Petitioner-Society under Section 18(1) read with Section 17 of the Maharashtra Co-operative Societies Act, 1960 ("MCS Act"). The second order, dated November 5, 2020, granted Deemed Conveyance in favor of Jay Anand Bungalow Co-Operative Housing Society Ltd. A contempt petition was also filed alleging violation of a status quo order. The Petitioner argued that the bifurcation was illegal because it was based on an improper exemption granted under Section 7 of the MCS Act, which applies to new societies, not existing ones, and without providing a hearing as required by Section 157. The Petitioner also contended that the second Deemed Conveyance was invalid because a prior Deemed Conveyance had already been granted to the Petitioner.
Procedural Posture: The case came before the Bombay High Court as a set of writ petitions (WP No. 478 of 2020 and WP No. 2936 of 2022) and a contempt petition. The writ petitions challenged the legality and validity of the orders passed by Respondent No. 3 regarding the bifurcation of the society and the grant of Deemed Conveyance to the newly formed society. The Contempt Petition alleged violation of an interim order of status quo.
Issue: (1) Was the exemption granted under Section 7 of the MCS Act valid for bifurcating an existing cooperative society? (2) Was the bifurcation order valid, considering the lack of a hearing and non-compliance with Section 18 of the MCS Act? (3) Was the second Deemed Conveyance valid, given the prior Deemed Conveyance to the original society? (4) Did the Respondents violate the status quo order?
Holding: The Bombay High Court held that (1) the exemption granted under Section 7 of the MCS Act was invalid for bifurcating an existing society; (2) the bifurcation order was invalid due to the lack of a hearing and non-compliance with Section 18 of the MCS Act; (3) the second Deemed Conveyance was invalid because a prior Deemed Conveyance had already been granted to the original society; and (4) entering into the Development Agreement did not violate the status quo order.
Reasoning: The Court reasoned that Section 7 of the MCS Act applies only to the registration of new societies, while Section 157 governs exemptions for existing societies and mandates a hearing. The exemption order was the basis for the bifurcation, and since it was invalid, the bifurcation order was also invalid. The Court also found that the bifurcation order did not comply with the requirements of Section 18 of the MCS Act, which requires a general body resolution with a 3/4th majority. Furthermore, the Court held that once a Deemed Conveyance is granted, the competent authority cannot entertain a second application for the same property. The Court found that the Development Agreement did not violate the status quo order because it contained provisions restricting the developer's rights to the area not covered by the Deemed Conveyance. The Court relied on the principles of natural justice, particularly audi alteram partem, and the specific provisions of the MCS Act and MOFA to reach its decision.