The Bombay High Court has held that for invoking Section 21A of the Maharashtra Co-operative Societies Act, 1960, “misrepresentation” must be of such nature and degree that, if it had not been made, the society would not have been registered. Mere inaccurate or incomplete information is not enough. Misrepresentation under Section 21A must involve deliberate deception, suppression of material facts, or presentation of forged or fabricated documents, and it cannot be inferred from events occurring after registration. Since such jurisdictional fact was not established in the present case, the Divisional Joint Registrar had no basis to de-register the society.
The Court further held that de-registration proceedings cannot be used to safeguard or secure title to land, and title disputes must be pursued in appropriate proceedings independently of the society’s registration. Considering the 45-year existence of the society and the petitioner’s real objective of protecting its claimed title in the land, the Court found no error in the Minister’s order restoring the society’s registration.
A Single Judge Bench of Justice Sandeep V. Marne observed that the scope of enquiry under Section 21A is in an “extremely narrow compass” and that de-registration can be ordered only in the four specific situations set out in Section 21A(1), namely where the society is registered on misrepresentation made by applicants, where the work of the society is completed or exhausted, where the purposes for which it was registered are not served, or where a primary agricultural co-operative credit society improperly uses the word “bank” or its derivatives. In this case, the only ground pressed was “misrepresentation made by applicants.”
The Bench found that the Divisional Joint Registrar had relied mainly on three factors, title disputes, alleged unauthorized construction, and rejection of the society’s deemed conveyance application, but most of these events arose long after the society’s registration in 1981 and therefore could not amount to misrepresentation at the time of registration. The Bench further observed that the Assistant Registrar, while registering a society, is not expected to adjudicate title disputes, and there was no material to show that the applicants had furnished false information, forged documents, or deliberately suppressed decisive facts in the registration process.
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The Bench also rejected the petitioner’s argument that the society lacked the required 10 eligible members under Section 6 because four of them were garage occupiers. It noted that the application for registration had fully disclosed that the building contained 6 flats and 4 garages, and therefore there was no concealment or false statement. At the highest, if garage occupiers were wrongly treated as eligible members, that would be an error in judgment by the Assistant Registrar, remediable in appeal under Section 152, but not a case of “misrepresentation” under Section 21A.
Similarly, where some promoters were family members, the Bench found that this too had been specifically disclosed in the registration papers. The Bench also strongly noted the conduct of Dr. Sharma, who had voluntarily taken membership in the society, retained a garage, earlier served as an office bearer, and yet later sought de-registration through his company after about 33 years, effectively suing himself in the proceedings.
Briefly, the petition challenged the order passed by the Hon’ble Minister (Co-operation), who had set aside the Divisional Joint Registrar’s order dated 3 September 2024 directing de-registration of Krishna Kunj Co-operative Housing Society under Section 21A of the Maharashtra Co-operative Societies Act, 1960. The petitioner, Elite Diagnostic Center Pvt Ltd., claimed ownership over the land on which the society’s building stood and sought de-registration of the society on the ground that its registration in 1981 was obtained by misrepresentation.
The petitioner alleged, among other things, that the building was put up without proper title, that the society had suppressed material facts relating to title disputes and construction irregularities, and that the proposal for registration wrongly showed 10 members though only 6 flats existed, with open spaces being shown as garages. A striking feature of the case was that the petitioner company’s director, Dr. Satish Sharma, was himself a member of the same society and had earlier functioned as its office bearer, while also being impleaded as a respondent in the petition filed on behalf of the company.
