Statutory Transfer of Co-operative Appellate Jurisdiction Takes Effect from Notification Date; Pending Civil Suit Does Not Bar Deemed Membership

1) Introduction

The Bombay High Court (Amit Borkar, J.) in DIGANT PAREKH (HUF) THRO. ITS KARTA MR. DIGANT PAREKH v. AKRUTI KAILASH CONSTRUCTION (decided on 16-01-2026) examined the interplay between (i) statutory transfer of appellate/revisional powers under the Maharashtra Co-operative Societies Act, 1960 (“MCS Act”) by government notification, (ii) the status of a flat purchaser under a registered Maharashtra Ownership Flats Act, 1963 (“MOFA”) agreement (Form No. 5), and (iii) whether the pendency of a civil suit concerning the underlying agreement prevents the grant of deemed membership under Section 22(2) of the MCS Act.

The petitioners (a HUF and its Karta) had a registered agreement for sale dated 16-09-2013 with the developer entities (respondent nos. 1 and 2), followed by a rectification deed dated 05-03-2014 correcting the purchaser’s name. While the developers filed S.C. Suit No.2225 of 2016 seeking enforcement of the agreement and injunction, the petitioners later sought membership in the premises co-operative housing society (respondent no. 6). When the society did not act, the petitioners invoked Section 22(2) and obtained an order of deemed membership (18-08-2022). That order was later set aside in revision by the Divisional Joint Registrar (25-11-2024), mainly because the civil suit was pending—prompting the present writ petition.

2) Summary of the Judgment

  • The High Court quashed the revisional order dated 25-11-2024 (Revision Application No.409 of 2024) and restored the deemed membership order dated 18-08-2022.
  • The Court held that the Notification dated 08-10-2024, issued under Section 3 of the MCS Act, shifted appellate powers under Sections 152 and 154 to the Joint Registrar (SRA), and therefore the Divisional Joint Registrar lacked jurisdiction to decide the revision thereafter.
  • On merits (considered because writ relief is discretionary), the Court held that:
    • the petitioners were persons who had “taken” flats under a valid MOFA Form No. 5 agreement; and
    • the pendency of S.C. Suit No.2225 of 2016 did not by itself bar deemed membership under Section 22(2), absent any civil court restraint order.
  • The civil suit was directed to proceed uninfluenced by the writ court’s observations.

3) Analysis

3.1 Issues Framed by the Court

  1. Whether the revisional order dated 25-11-2024 suffered from want of jurisdiction due to the Notification dated 08-10-2024.
  2. Whether the petitioners were persons who had “taken” flats under the MOFA agreement dated 16-09-2013.
  3. Whether pendency of S.C. Suit No.2225 of 2016 barred deemed membership under Section 22(2) of the MCS Act.

3.2 Precedents Cited

(a) Lal Shah Baba Dargah Trust v. Magnum Developers and Others, (2015) 17 SCC 65

The developers argued that even if jurisdiction had been reassigned by notification, the earlier authority should continue to function until the new forum became operational (relying on the Supreme Court’s approach under the Waqf Act where a shift from a single-member to a three-member Tribunal was introduced).

The High Court carefully distinguished this precedent:

  • In Lal Shah Baba Dargah Trust, the Supreme Court addressed a situation where stopping the earlier forum would create a legal vacuum because the new tribunal had not been constituted/activated, risking denial of the statutory remedy.
  • Here, the Court treated the 08-10-2024 Notification under Section 3 as a direct, legally operative transfer of jurisdiction to a newly designated authority, not merely a change in composition requiring further constitutive acts.
  • Accordingly, the “continuity to avoid vacuum” rationale in Lal Shah Baba Dargah Trust was held inapplicable; the Court emphasized that the statute contemplates one competent forum at a time for the relevant subject/area.

(b) Maharaja Chintamani Saran Nath Shahdeo v. State Of Bihar and Others, (1999) 8 SCC 16

The developers invoked the principle that writ jurisdiction is discretionary and the Court should not quash an order if doing so would revive an illegality. In effect, they argued: even if the revisional order was without jurisdiction, restoring the deemed membership order would restore an unlawful decision.

The High Court accepted the relevance of the doctrine as a decision-making constraint in writ jurisdiction, and therefore proceeded to examine the merits of the original deemed membership order. Ultimately, since the Court found the deemed membership order to be legally sustainable, the “revival of illegality” objection did not prevent relief.

3.3 Legal Reasoning

(A) Immediate effect of jurisdiction-transfer notification under Section 3 (MCS Act)

The Court’s central jurisdictional holding is that once the State validly issues a notification under Section 3 reallocating powers for a defined class of societies/territorial jurisdiction, the transfer operates from the notification date.

  • The Notification dated 08-10-2024 conferred appellate powers under Sections 152 and 154 upon the Joint Registrar (SRA) for societies within the Slum Rehabilitation Authority’s jurisdiction.
  • The Court rejected the argument that “non-operationalization” of the office could sustain jurisdiction in the former authority, reasoning that jurisdiction is a creature of statute and changes when law/notification changes, not when administrative readiness is achieved.
  • This avoids forum ambiguity and prevents concurrent jurisdiction, which the Court viewed as incompatible with the statutory scheme.

In practical terms: parties cannot be forced (or allowed) to litigate before an authority that has been statutorily divested of power, even if the successor authority’s office took time to become physically functional.

(B) “Taken a flat” under MOFA and entitlement to membership

On merits, the Court treated the registered MOFA agreement (Form No. 5) as a strong statutory indicator that the purchaser has “taken” a flat for purposes connected with society formation/membership.

  • The agreement dated 16-09-2013 was registered and in Form No.5 under Section 4 MOFA.
  • The Court stressed MOFA’s protective/welfare character: flat purchasers should not be kept dependent on the promoter for basic incidents of occupation and collective management (society formation under Section 10 MOFA).
  • The developers’ contention—that full payment is a prerequisite to being treated as a purchaser who has “taken” the flat—was rejected for the limited purpose of membership. The Court treated any unpaid consideration as giving the developer remedies akin to an unpaid seller under Section 55 of the Transfer of Property Act, 1882, rather than a power to block membership.
  • The Court also noted contractual features such as Clause 48 (agreement as document of title; no further conveyance required) to reinforce that the agreement carried significant title/value for membership purposes.

The Court thereby separated: (i) disputes about payment/enforcement (civil court domain) from (ii) statutory/co-operative incidents of a flat purchaser’s status relevant to membership (registrar/society domain).

(C) Pendency of civil suit is not an automatic bar to deemed membership under Section 22(2)

The revisional authority had set aside deemed membership largely because S.C. Suit No.2225 of 2016 was pending. The High Court held this approach legally flawed:

  • Membership adjudication under Section 22(2) is not a final determination of title; it is an administrative/statutory decision enabling society functioning.
  • A pending civil suit does not paralyze statutory powers unless the civil court issues an express restraint order affecting the society/registrar.
  • The Court indicated that membership could be conferred even while civil disputes proceed; the suit would continue independently and uninfluenced by the writ court’s observations.

3.4 Impact

(i) Administrative law / co-operative adjudication

  • Clear forum rule: A Section 3 notification reallocating appellate powers is treated as immediately divesting the prior authority, reducing forum-shopping and jurisdictional overlap.
  • Operational delays do not preserve jurisdiction: Administrative “non-readiness” is not a legal basis to sustain jurisdiction once law has transferred it.

(ii) MOFA purchasers and co-operative membership

  • Membership protection: A registered MOFA Form No.5 purchaser’s pathway to society membership cannot be blocked merely by alleging balance consideration disputes.
  • Channeling disputes: Payment/enforcement disputes remain actionable through civil proceedings/TPA remedies, rather than being used to deny co-operative membership.

(iii) Parallel civil proceedings

  • No automatic stay of statutory processes: Mere pendency of a civil suit does not freeze the registrar’s powers under Section 22(2), unless restrained by a competent civil order.

4) Complex Concepts Simplified

  • “Deemed membership” (Section 22(2), MCS Act): If a society fails to decide a membership application within the statutory framework, the Registrar can treat the applicant as admitted (i.e., “deemed” to be a member), preventing the society from stalling admissions.
  • Notification under Section 3 (MCS Act): A government instrument that allocates/redistributes the Registrar’s powers among designated officers for specific areas/classes of societies. The Court treated such redistribution as legally effective from the notification date.
  • “Taken a flat” (MOFA context): Not limited to final conveyance; a registered MOFA agreement (Form No.5) evidences a legally protected purchaser status sufficient to claim membership-related rights, while payment disputes are litigated separately.
  • “Unpaid seller” (Section 55, TPA): A seller who has transferred rights but has not received full price retains legal remedies to recover dues; this does not automatically entitle the seller to obstruct the buyer’s statutory incidents (like society membership) unless a court orders otherwise.
  • Writ discretion and “revival of illegality”: Even if an impugned order is jurisdictionally defective, a writ court may refuse relief if setting it aside resurrects an illegal earlier order; here, the Court examined merits and found the earlier deemed membership order lawful.

5) Conclusion

This decision lays down two practically significant rules: first, a statutory notification under Section 3 of the MCS Act transferring appellate powers operates immediately and divests the former authority from the notification date, irrespective of administrative transition claims. Second, a registered MOFA Form No.5 purchaser is treated as having “taken” the flat for membership purposes, and the pendency of a civil suit over the agreement does not by itself bar deemed membership under Section 22(2) absent a civil restraint order. The judgment strengthens statutory membership protections for flat purchasers while keeping contractual/payment disputes within appropriate civil law remedies.