Deputy Registrar’s Order Redistributing Land Set Aside as Without Jurisdiction
The Bombay High Court has ruled that once a co-operative housing society bifurcates into two separate societies and the arrangement is registered, the division of land and assets between them attains finality in law. The land sharing arrangement fixed at the time of bifurcation cannot later be reopened or altered by taking recourse to the deemed conveyance provisions under the Maharashtra Ownership Flats Act, 1963 (MOFA).
Justice Sandeep V. Marne, hearing Writ Petition No. 12955 of 2024, set aside an order dated 21 March 2023 passed by the District Deputy Registrar, Co-operative Societies, Mumbai City (4), acting as Competent Authority under MOFA. The Competent Authority had granted a certificate of unilateral deemed conveyance in favour of a flat owners’ society, awarding it not only the land specifically allotted to it at the time of bifurcation, but also proportionate rights in two recreation grounds and internal roads that had gone to the other society.
How the Dispute Originated
The Petitioner society originally owned a large parcel of land that was subdivided into 55 plots in 1973 for construction of bungalows by its members. Twenty four of these members did not have the means to construct bungalows and instead opted for flats. To accommodate them, the society engaged a builder to construct flats on six plots, while eighteen other plots were surrendered to the same builder for construction of a separate sale component building for outside buyers.
The land was accordingly split into three notional sectors, bungalow plots as Sector A, the flats built for the 24 members as Sector B, and the builder’s sale component as Sector C.
These 24 members, who initially continued as members of the original society, later decided to form their own separate society. The District Deputy Registrar approved this bifurcation on 14 February 2006, cancelling the registration of the original society and registering two new societies in its place, the Plot Owners’ society and the Flat Owners’ society.
The 2008 Agreement That Divided the Land
Following bifurcation, both societies entered into a formal agreement dated 6 May 2008 to settle the division of land between them. Under this agreement, Sector A, admeasuring 10,851.30 square metres and comprising Plot Nos. 12 to 42 along with gardens and internal roads, went exclusively to the Plot Owners’ society. Sector B, admeasuring 2,206.30 square metres, went exclusively to the Flat Owners’ society. Both societies also agreed that the garden abutting Sectors B and C would be used jointly.
Years later, the Flat Owners’ society sought a larger share, specifically proportionate rights in the two recreation grounds within the layout. Instead of challenging the 2008 arrangement directly, it filed an application before the Competent Authority under Section 11(3) of MOFA seeking deemed conveyance, and succeeded in obtaining the March 2023 order granting it additional land beyond what the 2008 agreement had allotted.
Why the Court Says Bifurcation Itself Is a Conveyance
The core of the Court’s reasoning lies in Section 17(2) of the Maharashtra Co-operative Societies Act, 1960. This provision states that when a society divides into two or more societies, the very act of registering the new societies is sufficient in law to vest the assets and liabilities of the original society in the new societies. This operates notwithstanding anything contained in the Transfer of Property Act, 1882, or the Indian Registration Act, 1908, meaning no separate conveyance deed is legally required.
The Court held that this statutory mechanism exists specifically to avoid the need for a fresh document of conveyance every time a society bifurcates. The arrangement agreed between the two societies at the time of division itself functions as the conveyance.
Applying this to the facts, the Court found that Respondent No. 3, the Flat Owners’ society, had already become the legal owner of the 2,206.30 square metres allotted to it under the 2006 bifurcation order and the 2008 agreement. Since ownership had already vested by operation of law, there was no occasion for the society to invoke Section 11(3) of MOFA, a provision meant to address situations where a builder or promoter has failed to convey land to flat purchasers, not to redistribute land already settled between two bifurcated societies.
Deemed Conveyance Cannot Cure a Bifurcation Dispute
The Court noted that the Competent Authority had grossly overstepped its jurisdiction by entertaining the application at all. It relied on an earlier ruling of the same Court, in a matter concerning Jay Anand Co-operative Housing Society, which had similarly held that Section 11 of MOFA cannot be used to cure defects in a bifurcation order.
The judgment clarifies that if a society believes the bifurcation arrangement itself was unfair or that it received less land than it was entitled to, its remedy lies elsewhere in law, not through a MOFA deemed conveyance application. The Court has left this door open for the Flat Owners’ society, permitting it to pursue appropriate remedies to challenge the bifurcation arrangement on merits, independent of the observations made in this order.
What This Means for Housing Societies
For co-operative housing societies across Mumbai and Maharashtra that have gone through or are contemplating bifurcation, this ruling sends a clear message. The land sharing arrangement finalised at the time of splitting a society is not a provisional or negotiable position that can later be revisited through the deemed conveyance route. It is treated in law as a completed conveyance the moment the new societies are registered. Any grievance about the fairness of that division has to be pursued through the correct legal remedy, and not by dressing it up as a builder’s failure to convey title under MOFA.
Also Read: Co-op Appellate Court: Past Members Can Sue Societies for Refund
