Case at a Glance
The purchasers of a ground-floor residential flat in a housing society obtained a no-objection certificate for commercial use directly from the Deputy Registrar of Co-operative Societies, without the society being heard, and then secured municipal permission on its strength. The Bombay High Court held that neither Section 79(2) nor Section 154B-27 of the Maharashtra Co-operative Societies Act empowers the Registrar to issue such an NOC, and called it “completely arbitrary and ab-initio void”. The NOC and the revisional order upholding it were set aside, leaving the purchasers free to raise a dispute under Section 91.
Flat No. 3 on the ground floor of Surya Lok Co-operative Housing Society was a residential flat. In January 2016 it was transferred to the respondent purchasers, and on 4 August 2016 the Deputy Registrar, under Section 23(2) of the Maharashtra Co-operative Societies Act, directed the society to admit them as members. On 25 October 2016 one of the purchasers gave an undertaking that the flat would be used for residential purposes. Barely weeks later, on 10 November 2016, the purchasers applied to the Deputy Registrar for an NOC for commercial use.
On 8 December 2016 the Deputy Registrar issued an NOC stating that his office had no objection to commercial use of the flat, subject to municipal sanction, and on 27 July 2017 the Municipal Corporation granted permission for change-of-use works on that basis. The society’s revision was dismissed by the Divisional Joint Registrar on 15 January 2018, and it filed this writ petition in February 2018. The society pointed out that its 2000 resolution permitting commercial use had been withdrawn in 2007 and reaffirmed in 2014, which the purchasers had not disclosed.
The Key Question Before the Court
Does the Deputy Registrar of Co-operative Societies have power to issue a no-objection certificate permitting a member to change the use of a flat from residential to commercial?
An enforcement tool, not a forum for NOCs
The purchasers argued that most ground-floor flats were already commercial, that the flat had been used commercially since 2001 as shown by electricity bills, municipal assessment and commercial stamp duty, that the bye-laws did not bar commercial use and that the petition was developer-driven. Justice Sandeep V. Marne first held that Section 79(2), which governed when the NOC was issued, is not an enabling provision for NOCs for change of user, agreeing with the prima facie view in Shree Raghunandan CHS Ltd. v. State of Maharashtra. Section 154B-27, introduced from 9 March 2019, is likewise “an enforcement tool” that does not create a forum for deciding disputes, as explained in Vaibhav Industrial Premises Cooperative Society Ltd. v. Divisional Joint Registrar, Siddharth Borivali Cooperative Housing Society Ltd. v. State of Maharashtra and Oberoi Springs Cooperative Housing Society Ltd. v. Deputy Registrar.
The Court drew a sharp line between directing a society to issue an NOC and the Registrar issuing one himself, the latter being wholly beyond jurisdiction. The NOC had also been issued without notice to the society. The earlier membership order did not decide the question of use, since membership and use are different concepts, and the purchasers had suppressed the 2007 and 2014 resolutions. Electricity bills, municipal assessment and stamp duty do not by themselves convert use: “The Deputy Registrar cannot be a machinery for securing NOC for change of user.” The developer argument failed because the redevelopment agreement of November 2025 came long after the 2018 petition.
What the Court Actually Held
- The Deputy Registrar’s NOC dated 8 December 2016 permitting commercial use was held to be wholly without jurisdiction, arbitrary and void, and was set aside.
- The Divisional Joint Registrar’s order of 15 January 2018 dismissing the society’s revision was also set aside.
- Neither Section 79(2) nor Section 154B-27 of the MCS Act empowers the Registrar to issue an NOC for change of user.
- The purchasers may raise a dispute under Section 91 of the MCS Act to seek the society’s NOC, to be decided on merits uninfluenced by the judgment; the petition was allowed with no order as to costs.
Why This Judgment Matters
- It protects housing societies from having residential flats converted to commercial use through the Registrar’s office without their consent or hearing.
- It confirms the limited, enforcement-only nature of Section 154B-27 of the Maharashtra Co-operative Societies Act.
- It warns municipal authorities that change-of-user permissions should not rest on NOCs the Registrar had no power to issue.
What Should Advocates Take Away From the Judgment?
For Housing Societies and Members
- A Registrar’s NOC cannot override the society’s own decision on change of user of a flat.
- Commercial electricity bills or property tax assessment do not by themselves make a residential flat commercial.
- Members seeking change of use must approach the society, and if refused, raise a dispute under Section 91.
For Counsel
- Challenge Registrar-issued NOCs for change of user as without jurisdiction, citing this judgment and Siddharth Borivali.
- Distinguish membership orders under Section 23 from questions of use.
- Place prior society resolutions on record; suppression weighs heavily against the other side.
Key Takeaways
- The Deputy Registrar has no power to issue an NOC for converting a society flat from residential to commercial use.
- Section 154B-27 is an enforcement tool and does not create a forum for deciding such disputes.
- Membership and use of a flat are different concepts; an order on one does not decide the other.
- The proper remedy for a member seeking the society’s NOC is a dispute under Section 91.
Frequently Asked Questions
Can I convert my residential society flat to a shop or office without the society’s NOC?
Under this judgment, the Registrar cannot issue an NOC in place of the society. The member must seek the society’s NOC, and if it is refused, raise a dispute under Section 91 of the Maharashtra Co-operative Societies Act.
Does paying commercial property tax or electricity charges make a flat commercial?
No. The Court held that municipal assessment, electricity bills and stamp duty do not by themselves convert the use of a flat, and without the society’s NOC the Municipal Corporation cannot sanction change of user.
What is Section 154B-27 of the MCS Act?
It was introduced with effect from 9 March 2019. The Court held it is an enforcement tool for statutory obligations and does not create a forum to decide disputes such as change of user.
Conclusion
The judgment reinforces that a co-operative housing society’s collective decision on how its flats may be used cannot be bypassed through the Registrar’s office. Any member wanting a change of use must persuade the society or litigate the issue in the proper forum.
Practical takeaway: If a Registrar has issued an NOC for change of user without the society’s consent, challenge it as without jurisdiction; if you are the member, file a Section 91 dispute instead of seeking a Registrar’s NOC.
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