Every Procedural Lapse By Itself Doesn’t Constitute Actionable Wrong: Bombay High Court

The Petitioner, before the High Court, raised a challenge to the redevelopment process undertaken by the Respondent -Society, by issuing a Letter of Intent favoring the Respondent -Developer, without following the mandatory process of issuing tenders as contemplated in the notification issued by the State Government dated July 4, 2019. The Petitioner sought issuance of directions to the Respondent -Deputy Registrar to carry out a fresh redevelopment process for the Society under his supervision, in accordance with the guidelines framed by the first Respondent as contained in the notification.

The Division Bench of Justice Manjusha Deshpande and Justice Suman Shyam held, “This Court has taken a view that the GR dated 04.07.2019, is not mandatory, but directory in nature. The guidelines are intended to be followed to ensure a fair and transparent redevelopment process. Therefore, every deviation and procedural lapse by itself does not constitute actionable wrong unless it is violative of the object of the directives or some statutory requirement.”

Advocate Manoj Upadhyay represented the Petitioner while AGP Rakesh Pathak, represented the Respondent.

Factual Background

The Petitioner, an Ex-Chairman of the Respondent Society, was removed from the post of Chairman in the meeting of the Co-operative Housing Society. During the tenure of the Petitioner as a Chairman, the Respondent Society approached the Respondent- Landlord-CumDeveloper of the plot, for granting development rights of the Society. The Petitioner, who was not in favour of the proposed redevelopment being undertaken purportedly without following the due procedure of law, opposed it. It was alleged by him that, after his removal as a Chairman of the Respondent Society, the Society, without following the mandatory procedure in order to favour the Developer had issued a Letter of Intent without following the tender process.

The Petitioner then filed a complaint under Sections 75(5), 77(A) and 78(1) of the Maharashtra Co-operative Societies Act, 1960 (MCS Act). Pursuant to the complaint filed by the Petitioner, the Deputy Registrar issued a Show Cause Notice, to the Members of the Managing Committee of the Society. It was alleged that during the pendency of such proceedings, the Respondent Society passed illegal resolutions, during the Special General Body Meeting. According to the Petitioner, the Respondent Society, with mala fide intention, without following the Model Bye Laws No.175(a) and (b) of the Housing Society, and without adhering to the directives issued by the State Government, vide Government Resolution dated July 4, 2019, under Section 79(A) of the MCS Act, was in the process of appointing Respondent as a Developer, which needed to be interfered with by the Court.

Reasoning

On a perusal of the documents and submissions, the Bench noted that the Petitioner is the only Member of the Co-operative Housing Society who has been aggrieved by the decision of redevelopment, as well as the appointment of the Respondent as a Developer. The appointment of the Respondent was challenged by the Petitioner on the ground of non-adherence to Section 79(A) of the MCS Act and the procedure laid down in the Resolution. The Bench further held, “In view of the observations made by this Court, there remains no doubt that the guidelines issued under Section 79(A) are only directory and not obligatory.”

The Bench was of the view that a majority decision taken in a properly convened meeting will prevail. “Thus, taking into consideration the consistent view expressed by this Court, the prayers made by the Petitioner are not maintainable, as the decision for appointment of the Respondent has been taken by the majority, in accordance with law and it is done under the supervision of Authorized Officer of the Respondent No.2. No case for interference is made out by the Petitioner”, it held.

Cause Title: Devendra Kumar Jain v. State of Maharashtra (Neutral Citation: 2025:BHC-OS:17731-DB)

Appearance

Petitioner: Advocates Manoj Upadhyay, Rakesh Mishra

Respondent: AGP Rakesh Pathak, Senior Advocate Mukesh Vashi, Advocates Vaishali Sanghavi, Pratik Shetty, Palak Mehta, Prachi Parmar, Ameet Mehta, M/s. Solicis Lex, Advocates Abhishek Sawant, Karan Bhargava

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