Facts: A dispute arose concerning the registration of a cooperative society for a housing project. The petitioner, appointed as Chief Promoter by flat purchasers due to the developer's inaction, applied for society registration under Section 10(1) of the Maharashtra Ownership Flats Act (MOFA). Subsequently, the developer also submitted a proposal. The Assistant Registrar permitted the developer to open a bank account for the proposed society and later granted registration to the society based on the developer's proposal. The District Deputy Registrar rejected the petitioner's application, citing the prior permission granted to the developer. The petitioner alleged fraud in obtaining signatures for the developer's proposal and a substantial reduction in the land area proposed for the society compared to the agreements with flat purchasers.
Procedural Posture: The petitioner challenged the orders of the Assistant Registrar, District Deputy Registrar, and Divisional Joint Registrar before the High Court via writ petitions, which were heard together. The Divisional Joint Registrar had dismissed the petitioner's revision applications against the orders favoring the developer.
Issue: Did the authorities err in prioritizing the developer's proposal and granting registration based on it, despite the pendency of the petitioner's prior application under Section 10(1) of MOFA, and allegations of fraud and discrepancies in the proposed land area? Further, what is the proper procedure for authorities when faced with competing proposals for cooperative society registration under MOFA?
Holding: Yes, the authorities erred. The High Court quashed the orders favoring the developer and directed the District Deputy Registrar to decide the petitioner's application afresh on its merits, considering the competing proposal, allegations of fraud, and discrepancies in land area. The court also directed an inquiry into the conduct of the Assistant Registrar.
Reasoning: The Court reasoned that the Assistant Registrar should have addressed the pendency of the petitioner's prior application before granting permission to the developer to open a bank account. Prioritizing the developer's proposal and rejecting the petitioner's application based on steps taken during the pendency of the prior application was unfair and prejudiced the petitioner's statutory right under Section 10(1) of MOFA. The Court emphasized that when competing proposals exist, the authority must first examine the earlier proposal, especially when it discloses a prima facie claim under the statute. The Court also noted the serious allegations of fraud and the significant reduction in the proposed land area, which required careful scrutiny and a reasoned inquiry by the authorities. The court held that the statutory remedy conferred upon flat purchasers must be given meaningful effect through careful adjudication, not mechanical reliance on majority figures or the promoter's initial right. The court found that the Assistant Registrar's conduct warranted examination by the competent disciplinary authority.