Ramesh K Devadiga And Ors vs. Khernagar Nandadeep Co-Operative Housing Society LTD And Ors

Facts

The petitioners, members of Khernagar Nandadeep Cooperative Housing Society Limited, filed a dispute challenging the society's redevelopment process, alleging irregularities and conflict of interest in the appointment of a developer. They sought an interim injunction and production of documents. The society and its office bearers (respondents) applied for rejection of the dispute under Order VII Rule 11 of the Code of Civil Procedure, 1908. The Co-operative Court rejected both the injunction application and the rejection application. The Co-operative Appellate Court, however, allowed the society's appeal, setting aside the rejection of their application and thereby rejecting the petitioners' dispute. The petitioners filed two writ petitions challenging these orders: one against the dismissal of their injunction application and the other against the rejection of their dispute.

Held

The Court held that for a dispute challenging redevelopment decisions to be maintainable under Section 91 of the MCS Act, two conditions must be met: (i) the society's bylaws must have been amended post-2019 to include redevelopment as its business, and (ii) no right, title, or interest should have been created in favour of a third party in the society's property. The Court found that in the present case, there was no averment in the dispute application that redevelopment was included as the society's business through bylaw amendments. Furthermore, rights, title, and interest were created in favour of the Development Manager and Financer by virtue of agreements dated 8 October 2024 and 31 March 2025, and the dispute was filed on 13 February 2026, after the creation of these third-party interests. Consequently, the Court held that the dispute was not maintainable before the Co-operative Court. The Co-operative Appellate Court had rightly allowed the respondents' application under Order VII Rule 11 of the Code of Civil Procedure, 1908, and dismissed the petitioners' dispute. The writ petition challenging the dismissal of the injunction application was rendered infructuous as the underlying dispute was not maintainable.

Key Issues

1. Whether the dispute filed under Section 91 of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) challenging decisions relating to redevelopment is maintainable before the Co-operative Court, considering the amendments to the MCS Act in 2019 and the creation of third-party rights, as per Order VII Rule 11 of the Code of Civil Procedure, 1908? Petitioners' arguments: The petitioners contended that the redevelopment process was irregular and that the agreements entered into were void. They sought to challenge these actions and obtain an injunction. Respondents' arguments: The respondents argued that the dispute was not maintainable under Section 91 of the MCS Act because the society's bylaws had not been amended to include redevelopment as its business after the 2019 amendments, and crucially, third-party rights had already been created through development and finance agreements. They relied on the judgments in *Parimal Solanki*, *Baliram Misal*, *Anthony Carneiro*, and *Margret Almeida*.