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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
AMIT BORKAR
Tanvi’s Diamoda Cooperative Housing Society Ltd. – Appellant
Versus
State of Maharashtra, Office of Ld. Government Pleader – Respondent
The petitioner housing society invoked writ jurisdiction under Articles 226 and 227 of the Constitution of India, challenging orders confirming denial of membership due to unpaid dues. (!) (!) [1]
Mrs. Saroj Mehta, previous member, failed to pay maintenance charges and property taxes despite multiple notices from the society. [2]
Indian Overseas Bank took possession under SARFAESI Act and sold the premises to respondent No.4 via auction without society's no objection certificate; society had informed bank of outstanding dues of Rs.57,96,197 up to 30 June 2012. [3]
Respondent No.4 applied for membership on 19 June 2021; society issued notice on 15 September 2021 (within 90 days) refusing membership until clearance of all outstanding dues. [4]
Respondent No.4 appealed under Section 22(2), which was allowed by respondent No.3; society's revision before respondent No.2 was dismissed on 14 January 2025, leading to the writ petition. [5]
Society argued refusal was within 90 days under Section 23(2), appeal unmaintainable; Section 154B-7 mandates payment of dues before effective transfer, applicable even to auction purchasers under SARFAESI. [6]
Respondent No.4 argued auction purchaser not liable for previous dues. [7]
In rejoinder, society distinguished facts where dues were undisputed here, unlike cases with disputed quantum. [8]
Core issue: whether society's refusal within 90 days was lawful given admitted arrears. [9]
Section 154B-7 restricts transfer of share/interest unless society's dues are paid and transferee acquires membership; mandatory condition using negative language. (!) (!) (!) (!) (!) [10][11][12]
Section 154B-12 allows transfer by registered document following procedure, but subject to Section 154B-7 conditions. (!) [11][12][14]
Ownership of flat transfers via sale/auction, but society membership requires statutory compliance, including dues clearance; protects society's financial stability. [11][12][13][15][16][17]
Auction purchaser gets title but must clear undisputed dues for membership; not personally liable but statutory condition attaches to property. [15][16][17]
No exemption for auction sales under SARFAESI; society's dues claims remain enforceable alongside creditor rights. [23][24][25]
Dues here undisputed; society communicated refusal on 87th day, satisfying Section 23(2); no deemed membership under Section 22(2) where timely refusal exists. [4][6][9][26][27][28]
Writ petition allowed; lower orders set aside; refusal restored; membership upon dues clearance, no costs. [29][30][31][32][33]
| Table of Content |
|---|
| 1. writ petition jurisdiction invoked. (Para 1) |
| 2. factual background of the case. (Para 2 , 3 , 4 , 5) |
| 3. arguments regarding membership dues. (Para 6 , 7 , 8) |
| 4. procedural clarity on refusal. (Para 9 , 10) |
| 5. mandatory payment of dues for membership. (Para 11 , 12) |
| 6. membership governed by statutory conditions. (Para 13 , 14) |
| 7. transfer obligations remain. (Para 15 , 16) |
| 8. legal position of auction purchaser clarified. (Para 17 , 18 , 19) |
| 9. previous judgments analyzed for applicability. (Para 20 , 21 , 22) |
| 10. sarfaesi act does not override dues. (Para 23 , 24 , 25) |
| 11. proper communication and action taken by society. (Para 26 , 27 , 28) |
| 12. court's orders and final decision delivered. (Para 29 , 30 , 31 , 32 , 33) |
JUDGMENT :
Amit Borkar, J.
1. The petitioner housing society has invoked the writ jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. The challenge is to the Judgment and Order dated 14 July 2025 passed by respondent No.2. By the said order, respondent No.2 confirmed the Judgment and Order passed by respondent No.3 under Section 23(2) of the Maharashtra Cooperative Societies Act, 1960.
2. The material facts are as follows. Gala No
The mandatory condition for membership in a cooperative housing society requires that all dues be cleared before any transfer of membership is effective, regardless of the buyer's prior obligations.
Membership in co-operative housing societies is contingent upon the clearance of all outstanding dues, including those of previous owners, as established in the Maharashtra Co-operative Societies Act....
Membership in co-operative housing societies cannot be denied without timely communication of the decision, and disputes regarding dues do not preclude admission.
Co-operative society cannot refuse membership under Section 23 of MCS Act on grounds of non-residential use, lease prior consent breach, or unauthorised construction unless expressly disqualifying un....
A nominee of a deceased member in a co-operative housing society must be admitted as a member under mandatory statutory provisions, provided there are no competing claims.
Housing society lease premiums capped by Section 79A directions; excess demands not enforceable 'dues'; membership grantable on statutory compliance despite conditional prior consent letter.
The main legal point established in the judgment is that the impugned notices issued by the Society were valid, as the petitioner failed to fulfill the obligation to undertake construction within the....
The court determined that membership restrictions under Section 28 of the Maharashtra Co-operative Societies Act do not bar property ownership by a member and were excluded for housing societies, all....
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