Deputy Registrar gave his own no-objection for a shop in a society flat: Bombay HC quashes it
Justice Sandeep V. Marne held that the Deputy Registrar of Co-operative Societies has no power to grant, or even direct, a no-objection for commercial use of a flat, and sent the owners to the co-operative court under Section 91.
A Deputy Registrar of Co-operative Societies wrote a one-paragraph letter saying his office had no objection to a ground-floor flat in a Khar housing society being used for business. He did not hear the society first. On 30 October 2026 the Bombay High Court held that he had no power to write it.
Justice Sandeep V. Marne set aside the letter of 8 December 2016 and the Divisional Joint Registrar’s order of 15 January 2018 upholding it. The flat’s owners are free to ask the co-operative court for the society’s no-objection, a route the judgment left open.
One flat, a membership fight and an undertaking
Surya Lok Co-operative Housing Society Ltd. in Khar West, Mumbai, is registered under the Maharashtra Co-operative Societies Act, 1960. Its building, the society said, holds only residential flats.
Flat No. 3 on the ground floor passed through several hands. On 11 January 2016 it was transferred to Fazal Abbas Sayed and Aafreen Fatima Fazal Abbas Sayed, who are Respondent Nos. 2 and 2(A) in the petition.
The society says they began commercial use and did not decide their membership application. They applied to the Deputy Registrar under Section 23(2) of the Act, and on 4 August 2016 he directed that they be admitted.
On 25 October 2016 Mr Sayed wrote to the society undertaking to use the flat for residential purposes and to withdraw disputes between them. The society then granted membership.
From the Registrar to the Corporation
Within weeks the owners wrote to the Deputy Registrar, on 10 November 2016, asking for a no-objection to commercial use. The Municipal Corporation needed the society’s NOC for a change of use, and the society was unwilling to give it.
The Deputy Registrar replied on 8 December 2016. His letter, addressed to the society’s chairman or secretary and to Mr Sayed, said his office had no objection to commercial use under the Municipal Corporation’s approval.
The Corporation permitted works for change of use on 27 July 2017. The society’s Revision Application No. 416 of 2017 was dismissed on 15 January 2018, and it filed its writ petition on 9 February 2018.
The society’s case
Mr Naushad Engineer, Senior Advocate, said the Deputy Registrar had no jurisdiction to issue an NOC for change of use. The letter named no provision of the Act, and he said Section 154B-27 does not extend to such NOCs. He cited four Bombay High Court rulings, among them *Siddharth Borivali* and *Oberoi Springs*.
He added that the owners were estopped by their undertakings and that no notice had been given to the society. A resolution of 16 April 2000 allowing commercial use of ground-floor flats had been withdrawn on 5 August 2007 and reaffirmed against commercial use on 14 September 2014.
The owners’ answer
Mr Anil Sakhare, Senior Advocate, said concurrent findings already held the society had wrongly withheld its NOC. Almost all ground-floor flats in the building, he said, are used commercially, as are the ground floors of neighbouring buildings.
He relied on electricity bills, municipal assessment records, stamp duty paid on a commercial valuation, and a transfer-deed recital that the earlier owner ran a tailoring boutique. He argued that the 4 August 2016 order had settled the question of use, and that the society had taken donation and transfer fees.
He also said the petition was driven by the society’s developer, who did not want to hand over commercial premises, and asked the court not to use Article 227 to help it.
Which section applied
The court first fixed the law. When the NOC was issued in 2016, Section 79 of the Act governed housing societies. Under Section 79(2) the Registrar could take any action the society failed to take under the Act, rules or bye-laws.
Chapter XIII-B came into force on 9 March 2019, and Section 154B-27 now carries that enforcement power for housing societies. It also lets a member appeal to the Registrar if the society sits on an application for a sale or mortgage certificate or for any other purpose.
What earlier benches had said
In *Shree Raghunandan CHS Ltd. v. State of Maharashtra*, an interim order of 5 August 2020 took the prima facie view that Section 79(2)(a) cannot be used to make a society issue an NOC for change of use. Such a dispute between member and society belongs under Section 91. Justice Marne agreed.
For the position after 2019, he reproduced *Siddharth Borivali Co-operative Housing Society*, which read that phrase narrowly. It covers certificates tied to rights under the Act, rules or bye-laws, not every purpose a member may have.
*Oberoi Springs* held that the Registrar’s power under Section 154B-27 is supervisory and does not reach structural changes decided by the planning authority. *Vaibhav Industrial Premises* held that the section is an enforcement tool and creates no forum to decide disputes.
No power to issue, no power to direct
Justice Marne found nothing in the Act, rules or bye-laws that obliges a society to issue an NOC for change of use. What a society is not obliged to do, he held, the Deputy Registrar cannot do directly (para 16).
The point is not only about issuing the NOC. The judge said the Registrar cannot even direct the society to issue one, and put it this way:
“The Deputy Registrar cannot be a machinery for securing NOC for change of user” (para 31)
The Deputy Registrar had gone further than directing the society to act. He had issued the NOC himself. The judge called that distinction fundamental. Even if a power to direct existed, issuing the NOC himself was beyond his jurisdiction (para 20).
He called it unfathomable that an officer would grant an NOC for particular use of the premises without hearing the society or checking whether the building had any commercial premises. He held the NOC arbitrary and void from the start.
No notice, and a misdirected letter
The NOC followed the owners’ letter of 10 November 2016 without any notice to the society. The court held that breached natural justice, a second ground for setting it aside.
The letter was also addressed to the society’s chairman or secretary as though the society had asked whether the Deputy Registrar objected. The judge read this as a misunderstanding and as complete non-application of mind. He added that the Divisional Joint Registrar had failed to notice these illegalities.
What the membership order left open
Mr Sakhare’s main plea was that the membership order had already settled commercial use. The court disagreed. The Deputy Registrar, it said, cannot decide use while passing orders under Sections 22(2) or 23(2).
That order held only that membership is a different matter from use of a flat. Its remarks on other commercial flats on the ground floor were stray observations and did not permit commercial use of Flat No. 3.
The court also noted that the society had told the Deputy Registrar it would grant membership if the owners gave a residential-use undertaking. Mr Sayed then gave one on 25 October 2016, and the court recorded that membership was granted on that basis.
Bills, stamp duty and selective resolutions
The court said municipal assessment at commercial rates does not convert a flat’s use. Neither does a commercial electricity connection. Stamp duty on a commercial valuation was a voluntary act of the owners and did not either.
The owners themselves knew this, the judge said, which is why they applied to the Municipal Corporation for a change of use and needed a society NOC. The society is a tenant co-partnership society that owns the land and building, and members only have the right to occupy their flats.
The owners had produced the 2000 resolution and left out those of 2007 and 2014. The court said it did not appreciate this conduct. It also noted notices displayed in the society barring commercial activity.
The developer argument fails on dates
The petition was filed on 9 February 2018. The redevelopment agreement with the developer is dated 12 November 2025. The court said a developer appointed seven years after filing could not have started a petition to protect its profits.
Order
The Deputy Registrar’s letter of 8 December 2016 and the Divisional Joint Registrar’s order of 15 January 2018 are set aside. The writ petition is allowed, the rule is made absolute and there is no order as to costs.
Respondent Nos. 2 and 2(A) may file a dispute under Section 91 of the Act to seek the society’s NOC for change of use. If they do, it is to be decided on its merits without being influenced by the observations in this judgment.
Whether the society was right to refuse commercial use is a question for that forum.