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.

JUDGMENT:

AMIT BORKAR, J.

1. The Petitioner assails the Order dated 25 June 2025 passed by Respondent No. 1 and the Order dated 9 December 2024 passed by Respondent No. 2 under Section 23 (2) of the Maharashtra Co operative Societies Act, 1960. By the impugned orders, the authorities have directed the Petitioner Society to admit Respondent No. 3 as a member.

2. Relevant facts as narrated by the petitioner are as under. The Petitioner is a co operative housing society registered under the MCS Act. One Ms. Praffulata Shah was the owner of Flat No. 602, referred to as the subject flat, in the building known as Banganga Anurag belonging to the Petitioner Society and was its member. Due to non payment of mortgage loan, possession of the subject flat was taken over by Kallappanna Awade Ichelkaranji Janta Sahakari Bank Limited, referred to as the Bank. By letter dated 10 November 2015, the Petitioner informed the Bank that the outstanding dues payable to the Society in respect of the subject flat were Rs. 9,00,000. Thereafter, the Bank assigned the mortgage loan along with the secured assets to Encore Assets Reconstruction Company Private Limited, referred to as EARC. The subject flat was purchased by Respondent No. 3 through an e auction conducted by EARC on 28 February 2023. Subsequently, Respondent No. 3 addressed an email dated 14 May 2023 to the Petitioner, informing that he intended to commence civil work in the subject flat. The Petitioner replied by email dated 20 May 2023 stating that certain formalities were required to be completed before granting permission for civil work and that details of outstanding dues had already been communicated. By email dated 22 May 2023, Respondent No. 3 admitted his liability to pay all legitimate dues in accordance with his purchase agreement. The Sale Certificate issued by EARC in favour of Respondent No. 3 expressly records that the subject flat was sold on an “as is where is”, “as is what is” and “whatever there is” basis and subject to all known and unknown encumbrances. It further records that the responsibility to clear all liabilities and statutory dues rests solely upon Respondent No. 3.

3. By email dated 22 May 2023, the Petitioner called upon Respondent No. 3 to clear the outstanding amount of Rs. 21,43,681, to submit the requisite forms for transfer of shares along with a letter from EARC, to obtain a no objection certificate from the Sales Tax Department, and to furnish a copy of the registered sale deed or sale certificate. Thus, the Petitioner Society had clearly intimated the quantum of outstanding dues to Respondent No. 3 well before he applied for admission as a member. Respondent No. 3, through his Advocate’s letter dated 31 May 2023, applied for membership of the Petitioner Society and furnished certain documents as called for. In the said letter, Respondent No. 3 alleged that the Society had demanded an amount of Rs. 21,43,681 without furnishing a bifurcation and, on that basis, disputed the demand.By Advocate’s letter dated 24 June 2023, the Petitioner recorded that the details of outstanding dues had already been furnished to Respondent No. 3 and were once again enclosed as Annexure A. By the same communication, the Petitioner conveyed its decision not to admit Respondent No. 3 as a member until compliance with the requisitions communicated by email dated 22 May 2023, including payment of outstanding dues.

4. After a lapse of nearly