In a landmark order that could affect thousands of mixed-use housing projects across Maharashtra, the Bombay High Court has ruled that a developer cannot register two separate cooperative housing societies — one for commercial units and another for residential units — unless both are functionally and physically independent.

The Court has also struck down reliance on a 2004 Maharashtra government circular, holding that it has no statutory authority and cannot override the Maharashtra Cooperative Societies Act (MCS Act) or the Maharashtra Ownership Flats Act (MOFA).

Case Summary:

Case: Sadguru Universal CHS Ltd. vs. State of Maharashtra & Ors.
Court: Bombay High Court (Civil Appellate Jurisdiction)
Coram: Justice Amit Borkar
Date of Judgment: November 11, 2025
Filed by: Sadguru Universal CHS Ltd., New Panvel (West), Navi Mumbai
Respondents: State of Maharashtra, Registrar of Cooperative Societies, and Sadguru Infra Projects (the builder)

The Dispute:

A single building in New Panvel was constructed with 24 commercial units on the ground floor and 88 residential flats above.
The builder, Sadguru Infra Projects, registered two separate societies — one for commercial and another for residential owners.

The residential society (petitioner) objected, arguing:

• Only one building plan and one Occupancy Certificate were issued by CIDCO.
• Both residential and commercial owners use common passages, terraces, lifts, firefighting systems, and parking areas.
• Two societies would create conflict and violate MOFA, which mandates one collective society.

Key Findings by the High Court:

1⃣ Two Societies Not Allowed Without Real Separation

“The mere fact that some units are commercial and some are residential does not give the promoter a right to form two societies.”

• Separate societies are permissible only if there is clear physical and functional separation — e.g., separate entrances, lifts, utilities, firefighting systems, and maintenance mechanisms.

2⃣ Parameters for Allowing Two Societies

The Court listed mandatory parameters to assess independence:

• Structural Design & Layout
• Separate Entrances and Exits
• Independent Utilities (water, electricity, firefighting)
• Maintenance & Financial Responsibility

Additional parameters include:

• Parking and circulation
• Use pattern (timings and activity interference)
• Legal documents (OC, plan approval)
• Impact on members’ convenience and rights

3⃣ Govt Circular of 2004 Has No Legal Standing

The Court held that the Government Circular dated 30 July 2004, which allowed separate societies for wings or sections, has no statutory force.

“A circular issued by an administrative department does not become law only because it has been issued by a Government officer.”

It was not issued under the MCS Act and not authenticated under Article 166 of the Constitution, so it cannot override the law or curtail citizens’ rights.

4⃣ Matter Remanded for Fresh Inquiry

Both the Registrar and Revisional Authority failed to conduct any ground verification.
The Court set aside both orders and directed a fresh factual inquiry within four months to decide if two societies can truly function independently.

Impact on Developers and Societies:

• Builders can no longer arbitrarily split one building into separate societies to retain control or reduce obligations.
• Residential and commercial unit owners in mixed-use projects will now gain stronger rights under MOFA.
• The judgment redefines the scope of Section 154B-2(4) of the MCS Act — emphasizing functional, not formal, independence.

Expert Quote (Suggested Style):

“This judgment reinforces that MOFA’s purpose is to protect flat buyers — not builders’ convenience. If a structure functions as one building, the law expects one cooperative body,” said a Mumbai-based housing law expert.

Conclusion:

This ruling could reshape how housing societies are formed in Maharashtra — especially across CIDCO, MMRDA, and municipal layouts where commercial and residential units coexist.
It’s a strong message to developers and authorities: registration can’t be a paper exercise — it must reflect ground realities.

The post Bombay High Court Shocker: Builder Can’t Form Two Societies in One Building appeared first on Square Feat India.

Background of the Case

The dispute arose from a development agreement signed in April 2013, where Rajhans Realtors was entrusted with the redevelopment of the housing society’s property. Under the agreement:

• The developer was to complete the project within 36 months and provide alternate accommodation to residents.
• The complainant was entitled to a 675 sq. ft. flat, including an additional 108 sq. ft. sale area.
• The developer agreed to pay a monthly rent to members until the project was completed.

However, the project was delayed, and the complainant alleged that:

• No rent was paid since June 2016, leading to financial hardship.
• The flat’s promised area was reduced without consent.
• The society and developer engaged in unilateral negotiations, keeping members in the dark.

MahaRERA’s Ruling

After multiple hearings where the developer and society failed to appear, MahaRERA proceeded ex-parte. However, the authority concluded that:

• Redevelopment projects do not fall under MahaRERA’s jurisdiction, as they are not classified as real estate sales.
• The Permanent Alternate Accommodation Agreement (PAAA) signed between the parties does not qualify as an Agreement for Sale, making the dispute outside RERA’s scope.
• Termination of the Development Agreement is a matter for civil courts, not MahaRERA.

Impact and Next Steps

The ruling highlights limitations in RERA’s coverage, particularly in redevelopment projects, where homebuyers must seek relief in civil courts rather than through MahaRERA. The complainant may now pursue legal action in other forums to recover dues and seek compensation.

SFI Analysis of MahaRERA’s Dismissal of the Redevelopment Dispute

MahaRERA’s dismissal of the complaint highlights the regulatory gap in redevelopment projects under RERA. While RERA aims to protect homebuyers, its scope does not extend to redevelopment agreements, leaving residents without a clear legal recourse in such cases. The complainant’s grievances—non-payment of rent, reduction in flat size, and lack of transparency—are significant concerns, yet MahaRERA ruled it lacked jurisdiction since redevelopment does not involve direct real estate sales.

This decision underscores the need for clearer regulations governing redevelopment projects, as delays and disputes are common in such agreements. Residents facing similar issues are left to seek justice through civil courts, which can be time-consuming and costly. Given the increasing number of redevelopment projects in urban areas, policymakers may need to consider reforms to provide adequate protection for displaced residents and ensure accountability for developers engaging in such projects.

Stay tuned for more updates on real estate legal disputes and policy changes.

Also Read: MahaRERA fines 12 developers Rs 5.85 lakh for printing advertisements without MahaRERA number

The post MahaRERA Dismisses Complaint Against Developer Over Redevelopment Dispute appeared first on Square Feat India.