Bombay High Court holds Registrar cannot adjudicate disputes under enforcement provision; rules must stem from statute, not bye-laws
In a significant ruling that clarifies the limits of regulatory authority in cooperative housing society disputes, the Bombay High Court has quashed an order directing a housing society to refund maintenance charges collected from its members. The Bombay High Court held that the Registrar of Cooperative Societies does not possess adjudicatory powers under Section 154B-27 of the Maharashtra Cooperative Societies Act, 1960, and cannot decide disputes over the legality of levies.
Justice Amit Borkar, presiding over the matter, emphasized that the power to adjudicate—that is, to hear and decide conflicts between parties—must be expressly granted by statute. It cannot be inferred from model bye-laws or executive instructions. The judgment reinforces a key legal principle: subordinate instruments like bye-laws cannot expand the jurisdiction of a statutory authority beyond what the parent legislation permits.
Background of the Case
The dispute involved M/s. Aether Cooperative Housing Society Ltd. and several of its members (Respondents Nos. 3 to 16 and 18). The members had approached the Divisional Joint Registrar (Respondent No. 2), invoking Section 154B-27(1) of the Act read with Model Bye-law 174. They contended that the society had levied maintenance charges in a manner contrary to its own bye-laws. Since the bye-laws prescribed a specific method for recovery, the members argued, the society could not deviate from it. They sought a declaration that the society was not entitled to recover the challenged charges.
The Registrar, acting under Section 154B-29, directed the society to refund maintenance charges collected from May 2022 onward and to issue revised bills to the members. The society challenged this direction before the Bombay High Court, arguing that the Registrar lacked the jurisdiction to adjudicate such a dispute under Section 154B-27.
The Legal Question: Enforcement vs. Adjudication
At the heart of the case was the interpretation of Section 154B-27, titled “Obligation of society to take action and Registrar’s powers to enforce.” The provision empowers the Registrar to issue directions to a society to perform its obligations under the Act, rules, bye-laws, or government orders. If the society fails to comply, the Registrar may even take action at the society’s expense.
After a careful reading, Justice Borkar concluded that the provision is purely an enforcement mechanism. “It empowers the Registrar only to issue directions for enforcement of obligations, responsibilities and duties cast upon the society… It does not confer upon the Registrar any adjudicatory power to decide disputes relating to conflicting rights of parties,” the court observed.
Determining whether maintenance charges were levied in accordance with law, the court noted, is a “substantive adjudicatory exercise.” This function falls outside the Registrar’s remit under Section 154B-27. Consequently, the impugned order was declared “without jurisdiction.”
Bye-Laws Cannot Create Jurisdiction
The respondents had heavily relied on Model Bye-law 174 to argue that the Registrar was authorized to enforce compliance, thereby implying adjudicatory power. The court firmly rejected this contention, invoking a landmark Supreme Court precedent.
In A.P.D. Jain Pathshala v. Shivaji Bhagwat More (2011), the Supreme Court ruled that the creation of an adjudicatory forum or the conferment of adjudicatory power requires a clear statutory mandate. Executive instructions or subordinate instruments like bye-laws cannot create such power. The High Court applied this principle directly, stating, “If such adjudicatory power is not granted by statute, it cannot be inferred from Model Bye law 174.”
Justice Borkar elaborated: “A bye law framed by a cooperative society is subordinate to the statute. It cannot confer jurisdiction where none exists in the statute. The Registrar cannot clothe himself with adjudicatory power by invoking a bye law when the Act does not contemplate such power.”
The Bombay High Court found that the Registrar and the Revisional Authority had proceeded on an erroneous assumption of adjudicatory competence—a competence the statute does not recognize.
Outcome and Implications
As a result, the Bombay High Court quashed and set aside the orders passed by the Registrar and the Revisional Authority. The writ petition filed by the society was disposed of in its favor.
However, the judgment is not a final verdict on the merits of the maintenance charge dispute itself. The court explicitly noted that its ruling “will not preclude respondent members from availing statutory remedies as are permissible in law.” This leaves the door open for the members to pursue their grievance through the appropriate adjudicatory forums established under the Act, such as a Cooperative Court or another body expressly empowered to decide disputes.
Broader Significance
This ruling has immediate relevance for thousands of cooperative housing societies across Maharashtra. It draws a clear line between:
- Regulatory Enforcement: The Registrar’s power to ensure societies follow existing rules and orders.
- Dispute Adjudication: The power to hear evidence, interpret contracts and bye-laws, and resolve conflicts between societies and members.
The Bombay High Court judgment prevents regulatory overreach by ensuring that substantive disputes over charges, accounts, and contractual interpretations are heard by proper judicial or quasi-judicial bodies, not administratively by the Registrar under an enforcement provision. It upholds the rule of law by insisting that jurisdiction must flow explicitly from the legislature, not from subordinate rules or administrative interpretation.
For society members, the message is to seek redressal through the correct legal channels. For society managements, it affirms that while they must comply with enforcement directives, their substantive actions can only be challenged before a competent adjudicating authority.
The Bombay High Court’s decision thus strengthens the legal architecture governing cooperative societies by reinforcing the separation between administrative enforcement and judicial dispute resolution.
For the Petitioner- Ms. Chanchal Singh along with Prashita Manodia, instructed by R. V. Sankpal & Associates.
For the State – The Divisional Joint Registrar, Cooperative Societies & Ors.
Mrs. D. S. Deshmukh, Additional Government Pleader (AGP).
For Respondent No. 17- Mr. Rahul Soman.
For Respondent Nos. 3 to 16 & 18- Mr. Rakesh Sawant along with Ashish Shukla, instructed by Arhat Legal.
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