President Sau. S.S. Sapatnekar dismissed Revision Application No. 23 of 2026 on 7 September 2026. The revision had been filed by Bhandup Co-operative Housing Society Ltd. against an order of Co-operative Court No. 3, Mumbai, dated 26 February 2026. That trial court order had refused to throw out the members’ case at the threshold under Order VII Rule 11 of the Code of Civil Procedure.

The Appellate Court confirmed the trial court order and directed that the dispute will now be heard on merits. It did not decide whether the allotment itself was legal or illegal.

What the five members objected to

The society, registered in 1961 and located at 36, Parimal, Jaydeep Nagar, Bhandup (East), has 32 members and 32 flats in buildings constructed around 1989 (stilt plus four floors). Redevelopment talks began in 2016. A development agreement was executed on 9 November 2023 with M/s. Majestic City Royale Developers of Chembur.

The members — K.S.S. Nair (D-23), Vilas K. Aphale (D-15), Vijendra Ingle (A-18, through constituted attorney Sanjay P. Badekar), Sanjay P. Badekar (C-5) and Om Prakash M. Rahi (D-31) — filed Dispute No. CC/III/65/2025. They asked the Co-operative Court to set aside two Special General Body Meeting resolutions:

• 8 October 2023
• 22 September 2024

Those resolutions concerned allotment of flats in the new building. The members also sought an injunction against their implementation.

Their core complaint, as recorded in the judgment, was not that the society should not redevelop. It was that the method of allotment was illegal.

They alleged that the 8 October 2023 meeting took an “out of the blue” decision on allotment. The agenda notice issued on 3 October 2023, they said, did not mention allotment of flats. An issue of that importance was therefore brought up without prior circulation.

They further alleged that both resolutions were arbitrary, discriminatory and contrary to the State Government’s guidelines dated 4 July 2019 issued under Section 79A of the Maharashtra Co-operative Societies Act, 1960. They pointed to clause 1(d) of the development agreement, which they said required the developer — not the society — to carry out allotment.

They also relied on a direction of the Assistant Registrar dated 9 January 2025, asking the society to take cognizance of their complaint and to allot flats as provided in clause 18(11) of the 4 July 2019 directives. The members said the society had not followed that direction. They added that allotment before grant of Occupation Certificate was premature.

In short: the dispute, as framed by the members, was about internal resolutions on who gets which flat, how that decision was taken, and whether government guidelines on redevelopment allotment were followed.

Society’s stand: this is not a Co-op Court matter

After receiving summons, the society applied under Order VII Rule 11(a) and (d) read with Section 151 CPC to reject the dispute for want of jurisdiction.

Its argument was familiar in redevelopment litigation. Redevelopment, it said, is not the “business” of a co-operative housing society. A challenge to allotment flowing from a development agreement is a contractual dispute. Such a dispute belongs in a civil court or before an arbitrator, not before the Co-operative Court.

The society pointed to an arbitration clause in the 9 November 2023 agreement. It also relied on model bye-law 176(c), which it said sends disputes about non-compliance with a builder-society agreement — especially specific performance — to the civil court.

It cited judgments including Deccan Merchants Co-operative Bank Ltd., Margaret Almeida, Vardhaman Developers and Mohinder Kaur Kochar, and argued that Section 91 of the MCS Act is not attracted when the real grievance is implementation of a redevelopment contract with a third-party developer.

It further submitted that the two resolutions were only procedural steps to implement the development agreement, and that the members were in substance seeking enforcement of clause 1(d). Once rights flow from the agreement, it argued, Section 91 “automatically disappears.”

The society also relied on the Bombay High Court’s observations in the Bhoumik Co-operative Housing Society / Parimal H. Solanki matter: after the 2019 amendment, redevelopment became part of the statutory definition of a housing society, but existing bye-laws continue until they are expressly amended. If a society’s bye-laws do not list redevelopment as an object, that fact cannot be ignored.

Members’ reply on jurisdiction

The members said the application was a delay tactic. They were challenging general body resolutions and the allotment done under those resolutions. Internal management, they argued, is governed by bye-laws. Model bye-laws themselves place “resolutions of the managing committee and general body” and “allotment of flats/plots” within the Co-operative Court’s complaint-redressal framework.

They stressed that the parties are members versus their own society. That, they said, is enough for locus under Section 91. They were not asking for money or refund; they were attacking the legality of resolutions. Consequences flowing from those resolutions could be examined in the same court.

They relied on the Bombay High Court ruling in Eknath Namdev Lashkare v. Pancharatna Properties, where a challenge connected with a development agreement and a general body resolution was held to touch the business and management of the society.

What Section 91 actually requires

The Appellate Court restated the settled two-part test under Section 91 of the MCS Act, drawing from the Bombay High Court’s decision in Baliram Misal v. Saujanya Co-operative Housing Society Ltd. (Writ Petition No. 17591 of 2025):

1. The dispute must concern the subject-matters listed in the section.
2. The parties must fall within the categories listed in Section 91(1)(a) to (e).

Both conditions must be met.

Here, the first condition on parties was admitted: the disputants are members; opponent No. 1 is their registered housing society.

The real fight was the second condition — whether the dispute “touches the business of the society.”

Why the Appellate Court kept the case in the Co-op Court

The Court applied another settled rule: on an Order VII Rule 11 application, the court looks only at the plaint (here, the dispute application), not at the society’s defence, not at documents filed by the opponent, and not at a dissected reading of one sentence. The plaint must be read as a whole. The Court relied on Supreme Court principles summarised in Dahiben v. Arvindbhai Kalyanji Bhanusali and Geetha v. Nanjundaswamy.

On that reading, the members had challenged two general body resolutions on allotment. They alleged absence of agenda, arbitrary decision-making and breach of the 79A guidelines. Passing resolutions for management of the society’s affairs, the Court held, is the business of the society. A dispute attacking those resolutions therefore touches the business of the society.

The Court noted that the members had not, in their pleadings, mounted a frontal challenge to the development agreement itself. They had attacked the resolutions and sought reliefs flowing from that challenge. Whether those reliefs will ultimately be granted is a matter for trial. It cannot be decided by throwing the case out at the door.

The Court also recorded a practical rule used in such cases: if even one of the reliefs is within the Co-operative Court’s domain, the court has jurisdiction to try the dispute. Challenge to general body resolutions on flat allotment is such a relief.

The Parimal Solanki / Bhoumik CHS precedent was held inapplicable on facts. That case turned on whether unamended bye-laws could be read as if they already included redevelopment as an object. In the present case, the members had specifically challenged the society’s own resolutions. That, the Court said, was enough.

The Lashkare judgment, relied on by the members, was discussed. The facts were different — there an administrator had executed a development agreement — but the High Court had held that a connected dispute could touch management and business of the society. The Appellate Court used that principle to support maintainability, while noting that here the members had not asked for the development agreement to be declared void.

On that reasoning, the trial court’s refusal to reject the plaint was held legal. There was no illegality or material irregularity. Interference in revision was declined.

What the Court did not decide

This order is only on maintainability.

The Appellate Court has not held that the 8 October 2023 or 22 September 2024 resolutions are illegal. It has not held that allotment must be done by the developer and not the society. It has not held that the 79A circular was breached. It has not granted any injunction.

Those questions remain open before Co-operative Court No. 3, Mumbai. The society can still contest the members’ case on facts and law. The developer remains a party as original opponent No. 2.

No costs were awarded.

Why the ruling matters beyond Bhandup

Redevelopment disputes often stall at the first hearing on a single line of defence: “This is not the business of the society; go to the civil court or to arbitration.”

This judgment draws a line that many managing committees and members will use. A frontal attack on a development agreement, or a pure claim for specific performance against a developer, may still belong elsewhere. But when members attack their society’s own general body resolutions on how flats are allotted in the new building — agenda, process, alleged discrimination, alleged breach of Section 79A directives — the Co-operative Court is not stripped of jurisdiction merely because a developer and a development agreement exist in the background.

For members, the practical effect is access to a specialised forum without first losing years on a preliminary objection. For societies, the practical effect is that a majority resolution on allotment is not immune from scrutiny inside the co-operative court system simply because the project is a redevelopment.

The dispute now goes back for a full hearing on whether those two allotment resolutions were valid.

Also Read: Co-op Court CAN Hear Redevelopment, Till This Document Is Signed

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