A high court judgment has ruled that the guidelines under Section 79A of the Maharashtra Co-operative Societies Act, 1960 are not mandatory:
Explanation
The Bombay High Court ruled that substantial compliance with the guidelines is sufficient, and that decisions made by a majority of society members are binding on the minority. The court also held that the guidelines are not mandatory because no consequences are provided for non-compliance.
Purpose
The guidelines were created to provide guidance when there were problems with re-development of societies. The court said that the guidelines are important to prove that there was no malpractices in the selection of the developer.
Exceptions
The court said that decisions made by a society cannot be interfered with unless they were made through fraud or misrepresentation.
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A High Court judgment in the case Abhanga Samata Co-op. Housing Society Ltd., Mumbai v. Parag S/o Arun Binani states that the directives under Section 79-A of the Maharashtra Co-Operative Societies Act (MCS Act) are not mandatory. The judgment also states that the directives do not bind third parties.
Here are some other points from the judgment:
The General Body is the supreme authority, and the majority’s view will bind the minority.
Decisions made in accordance with democratic principles cannot be interfered with unless it is shown that they were sanctioned by fraud or misrepresentation.
Section 79-A of the MCS Act is related to the public interest, the implementation of cooperative production, and the proper management of the society’s business.
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