1. Purchaser of bank-auctioned flat seeks membership of cooperative housing society under Section 91, DCS Act. (Para 2 , 3 , 4 )
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2026 Supreme(Online)(Del) 22053
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Dinesh Bhatt, JJ
Devender Mudgal – Appellant
Versus
Registrar of Cooperative Societies – Respondent
W.P.(C) 13715/2026
Advocates:
For the Appellants/Petitioners: Devender Mudgal, Shashi Pratap Singh
For the Respondents: Niwas Kumar
For the Appellants/Petitioners: Devender Mudgal, Shashi Pratap Singh
For the Respondents: Niwas Kumar
Minor clerical errors in a sale deed resulting from a statutory bank auction cannot be used by a cooperative society to deny membership, and any increase in FAR of a mortgaged property belongs to the auction purchaser, not the previous owner.
Headnote:(A) Cooperative Societies - Membership - Refusal based on clerical errors in sale deed - Where a property is purchased in a statutory bank auction, minor errors in the description of the property or area in the sale deed do not entitle the society to deny membership, especially when the identity of the property is clear. (Para 26)
(B) SARFAESI Act - Mortgage and FAR - Rights of former owner - Once a property is mortgaged in its entirety and sold under SARFAESI proceedings, any increase in Floor Area Ratio (FAR) accrues to the purchaser; the previous owner cannot claim residual ownership of the increased area. (Para 32)
(C) Jurisdiction - Civil Court vs DRT - Challenges to auction proceedings under SARFAESI Act are barred from civil court jurisdiction under Section 34 and must be addressed before the Debt Recovery Tribunal (DRT). (Para 20)
Issues: Whether the Society can deny membership to auction purchasers due to discrepancies in the sale deed regarding the property's area and name.
Result: Petition allowed; membership granted.
Legal Category Hierarchy
- property law
- banking and finance
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practice and procedure
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civil procedure code
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rejection of plaint
- order 7 rule 11 (Para 20)
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rejection of plaint
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civil procedure code
Table of Contents
2. Society contends title discrepancies in sale deed; purchaser argues errors are not its fault and membership must be granted. (Para 26 )
3. Society cannot deprive purchaser of membership due to bank's errors; claimed residual rights of former owner are mala fide. (Para 26 , 27 , 28 , 29 , 30 )
4. Mortgaged flat includes increased FAR; increase enures to purchaser of flat, not to former owner. (Para 32 )
5. Society directed to issue membership with immediate effect; membership operational from date of first RCS order; costs awarded. (Para 33 , 34 , 35 )
6. Can a cooperative society refuse membership to a purchaser of a bank-auctioned flat due to descriptive errors in the sale deed?
No. The society cannot deprive the purchaser of membership for errors in the sale deed that were not caused by the purchaser. (Para 26 )
7. Does a former owner retain any rights over a portion of a flat after the entire unit was mortgaged and auctioned under SARFAESI?
No. Once the entire unit is mortgaged and auctioned, the former owner retains no residual ownership over any portion. (Para 29 , 32 )
8. Is an increase in floor area ratio (FAR) after mortgage a benefit for the mortgagee or the auction purchaser?
An increase in FAR after mortgage enures to the benefit of the auction purchaser of the flat, not the former owner. (Para 32 )
9. What is the effect of a civil suit challenging the area discrepancy in a SARFAESI auction sale?
Such a suit is barred under Section 34 of the SARFAESI Act as the DRT has exclusive jurisdiction; plaint is rejected. (Para 20 )
10. Can a claimant challenge a SARFAESI auction by filing a civil suit for partition after the sale is concluded?
No. A civil suit for partition of a portion of an auctioned property is a collateral challenge barred by the SARFAESI Act. (Para 20 )
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioners under Article 226 of the Constitution of India seeking execution of order dated 02nd July, 2025 passedbytheRegistrarofCooperativeSocieties(hereinafter ‘RCS’)directing issuance of membership.
3. ThePetitionersarethepurchasersofFlatno.E-304,IspatikaApartment CGHS, Plot 29, Sec-4, Dwarka, New Delhi-110078 (hereinafter ‘flat’), who unfortunately continue to struggle to obtain membership of the Society.
4. The Petitioners had purchased the said flat for Rs. 1,91,00,000/- on 28th March, 2024 in an auction conducted by the Bank of Baroda, Dwarka, Sector 12, New Delhi 110075 branch in SARFAESI proceedings which was commenced by the Bank, against the earlier owner Mr. Lalit Kumar Jha who had mortgaged the said flat in favour of the Bank.
5. In the sale certificate dated 05thJune, 2024 issued with respect to the auction proceedings, the property was described with two errors. The description of the property for the auction is as under:
“DESCRIPTION OF THE IMMOVABLE PROPERTY Equitable mortgage property of Property Flat No. E-304, 3rd Floor, Ispatika Apartments, Ispat CGHS ltd, HIG Category, Plot No. 29, sector 4, Dwarka, New Delhi-110075 admeasuring 95.54 sq. Mtrs. in the name of Mr. Lalit Kumar Jha s/o Sh. Shesh Narayan Jha, vide reg. no. 10954 dated 26/09/2012”
6. The two errors in the above description are as follows -
(i) The name of the Apartments instead of Ispat is mentioned as Ispatika;
(ii) The area of the flat is mentioned as 95.54 sq. mtrs. whereas in fact, due to increase in the Floor Area Ratio (hereinafter ‘FAR’) after the initial mortgage, the flat was admeasuring 113 sq. mtrs.
7. The bank may have obviously not been aware of the increase in the FAR or must have inadvertently not mentioned the new FAR. It had gone ahead and given the description of the property in the the sale certificate by mentioning the name of the Society as Ispatika CGHS.
8. The Petitioners had paid a sum of Rs. 1,91,00,000/- for purchasing this flat in the auction and the sale deed dated 11th June, 2024 was duly executed in favour of the Petitioners, however, in the said sale deed as well, the two errors relating to the FAR and the name of the Society, continued to be perpetuated.
9. The purchase of the flat became the point of beginning of the harassment for the Petitioners who have not been able to get the membership of Ispat Co-operative Group Housing Society Ltd. (hereinafter ‘Society’) till date.
10. The events which have transpired would show that after the sale deed was executed, the Petitioners applied to the Society for transfer of membership on 23rd August, 2024.
11. Thereafter, the Society vide its letter dated 16th September, 2024 directed the Petitioners to submit the required documents i.e., Copy of the Conveyance Deed, Copy of Registry, Share Certificate in original of flat No.E-304, Particulars of the owners, prescribed affidavit as per DCS Rules, Residential Proof & Receipts of Rs.610/- towards Membership Transfer Fee.
12. On10thOctober,2024,thePetitionerssubmittedtherequireddocuments to the Society except the original Share Certificate, which had not been provided yet by the Bank of Baroda in original.
13. Despite this, the membership was not granted to the Petitioners which led to the Petitioners approaching the RCS office vide application dated 20th January, 2025.
14. The RCS office took cognizance of the matter and called upon the Society to furnish comments. Thereafter, the Petitioner submitted all the documents except the original Share Certificate which was not in the possession of the bank also.
15. The matter was referred under Section 91 of the Delhi Co-operative Societies Act, 2003 (hereinafter ‘DCS Act’) but the Society did not appear in the said proceedings. The reason the Society gave for not appearing is that it had submitted its written comments.
16. On 2nd July, 2025, an orde
