Bombay High Court Ruling: No NOC from Registrars Needed for CHS Redevelopment

MUMBAI: In a significant move to curb corruption in the redevelopment of housing societies, the Bombay High Court ruled on Friday that district deputy registrars (DDRs) of co-operative societies can no longer insist that societies obtain their approval to proceed with redevelopment projects.

The case originated from a petition filed in mid-August by eight members of the Bandra Nisha Cooperative Housing Society. The redevelopment of the society's property had been stalled due to a lack of permissions from the DDR. In response to the petition, the court ordered that all DDRs in the state must only supervise the process of a society’s redevelopment and not insist on their approval.

Justice Amit Borkar noted that the Maharashtra Co-operative Societies Act and its rules do not mandate that societies must obtain a No-Objection Certificate (NOC) from the DDR regarding the redevelopment of their properties. Despite this, the Mumbai Grahak Panchayat (MGP), a non-profit cooperative for consumer rights, highlighted that DDRs often demanded ₹15,000 to ₹50,000 per flat for such NOCs. This practice became a public debate as many societies could not afford these sums, leading to developers paying up instead, the MGP stated in a press release on Saturday.

According to the MGP, DDRs had even begun interfering with a society’s redevelopment by selecting a developer of their choice who would facilitate large financial transactions before the society’s general body met to finalize the redevelopment plans.

In response to the petition, the court clarified the role of the DDR in the redevelopment of housing societies. The Registrar has no authority, either under statute or under the Government Resolution, to insist upon a “No Objection” before or after the society’s decision to redevelop its property, Justice Borkar said. The court emphasized that the general body of the housing society is the “supreme authority” in matters concerning the management and affairs of the society, including its redevelopment.

“His (the DDR’s) role, as laid down in the Government Resolution, is limited to ensuring that the process is transparent and that all members get a fair opportunity to participate,” the court stated. The DDR must nominate an authorized officer to oversee the selection of a developer, but the officer’s role is “purely supervisory.” The authorized officer is meant to observe the proceedings, confirm that the quorum (minimum number of people) is met, and ensure that the minutes, voting, and resolutions are properly recorded, the court added.

The court has also ordered the Commissioner of Cooperation to issue a circular regarding the order and upload it on the cooperative department’s website.

MGP welcomed the verdict, stating that the ruling will help curb the widespread and institutionalized corruption in DDR offices across the state. With this ruling, these corrupt practices are “expected to be buried for good,” the MGP said.

This decision by the Bombay High Court is a significant step towards ensuring transparency and fairness in the redevelopment process of housing societies, thereby protecting the rights of homeowners and reducing the financial burden on them.