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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]
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.103 in the petitioner society belonged to one Mrs. Saroj Mehta. She was a member of the petitioner society. She did not pay maintenance charges and property taxes for a long period. The petitioner society issued several notices to her calling upon her to clear the dues. She did not comply. The default continued and the arrears remained unpaid.
3. Indian Overseas Bank took physical possession of Gala No.103 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner society, by letter dated 25 May 2017, informed the Bank that an amount of Rs.57,96,197 was outstanding towards maintenance in respect of the said premises up to 30 June 2012. Indian Overseas Bank ther
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.
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.
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....
Society's membership refusal upheld if prior rejection communications record sufficient cause like unregistered transfer documents; appellate and review authorities confined to original reasons, read....
Valid agreements under the Maharashtra Ownership Flats Act entitle purchasers to society membership, and a pending civil suit does not bar membership conferment absent a restraining order.
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