In a significant ruling highlighting the importance of functional independence in housing societies, the Bombay High Court has upheld the bifurcation of Balaji Tower Cooperative Housing Society from Shree Ganesh CHS in Nerul, Navi Mumbai.

Justice Amit Borkar observed that although both societies were registered under a single cooperative registration, they were physically and functionally separate — located over a kilometer apart, with distinct entrances, utilities, and finances.

Background: One Registration, Two Plots

Shree Ganesh CHS was registered in 1993 over two CIDCO plots — Plot No. 1 in Sector 28 and Plot No. 8 in Sector 22.
While Plot No.1 has 18 residential and 2 commercial buildings, Plot No.8 comprises 80 flats forming Balaji Tower.

Over time, Balaji Tower residents built and maintained their building independently, secured separate water and electricity connections, and even maintained their own bank accounts and audits.

How the Dispute Arose

Despite functioning independently for years, Balaji Tower remained officially under Shree Ganesh CHS. Members alleged that they weren’t notified about general body meetings and were effectively denied their voting and participation rights.

In 2021, they approached the Joint Registrar under Section 18 of the Maharashtra Cooperative Societies Act seeking bifurcation. The Registrar approved the split in 2022, but the order was later overturned on appeal.

The residents then approached the Bombay High Court through Writ Petitions No.1218 and 1228 of 2023.

Court’s Key Findings

The Court noted several crucial factors:

• The two plots were more than one kilometer apart with no connecting internal road.
• Both plots had separate water and electricity connections, property tax assessments, and audits.
• Shree Ganesh CHS never maintained Balaji Tower, nor invited its members to general meetings.
• The residents of Balaji Tower effectively operated as an independent unit for years.

Justice Borkar ruled that the bifurcation merely formalized a long-standing reality.

No CIDCO Permission Required

Opponents argued that CIDCO’s prior approval was necessary since it was the lessor of the land.
However, the Court clarified that Sections 17(2) and 18(5) of the Maharashtra Cooperative Societies Act automatically transfer assets and liabilities upon registration of the new society — and do not require any separate permission from CIDCO.

“The law itself operates the transfer by statute,” the judge observed, adding that cooperative law aims to promote welfare and not “forced association.”

Outcome

The Court quashed the 2023 appellate order, restored the Joint Registrar’s 2022 order approving bifurcation, and directed both societies to cooperate in transferring records, accounts, and assets relating to Plot No.8.
A request to stay the judgment was also rejected.

Also Read: Bombay High Court Rules BMC Permission Not Required for Tenantable Repairs

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