In a significant ruling impacting cooperative housing societies across Maharashtra, the Bombay High Court has reaffirmed that purchasers of flats or commercial spaces cannot be admitted as members unless all outstanding dues tied to their premises are fully cleared. The decision was delivered by Justice Amit Borkar, whose observations reinforced that membership in a cooperative society must be treated as a conditional privilege rather than an automatic entitlement.
The judgement was issued after previous orders from the deputy registrar and the divisional joint registrar were brought before the court for review. These earlier directives had required a Dahisar-based cooperative housing society to accept a new commercial unit purchaser as a member, even though arrears amounting to ₹58 lakh had been left unpaid by the previous owner. The High Court ruled that such directions had been improperly issued and were therefore liable to be set aside.
The dispute had originated from an auction conducted in April 2021 by Indian Overseas Bank, through which T&M Services Consulting Pvt Ltd had acquired a commercial tenement within Tanvi’s Diamoda Cooperative Housing Society. After taking possession, an application for transfer of membership had been submitted by the firm in June 2021. The request had been declined by the society on the grounds that significant arrears related to maintenance and property tax were still outstanding in the name of the earlier owner, Saroj Mehta. It had been conveyed to the purchaser that membership would be considered only after the dues were settled.
Subsequently, the purchaser had approached cooperative society authorities, where favourable orders had been issued in its support. These decisions had eventually prompted the society to seek relief through the High Court.
While delivering the final ruling, reference was made to Section 154B(7) of the Maharashtra Cooperative Societies Act. It was clarified that transfers of premises, whether voluntary or through auction, cannot take effect without the clearance of outstanding dues linked to those premises. The provision was described as having been enacted to ensure that societies do not incur financial losses created by members who exit without paying long-standing arrears.
It was additionally observed that societies depend heavily on timely payment of maintenance and related charges for their functioning. It was stated that permitting membership transfers without recovery of earlier dues would disrupt the financial structure of societies and unfairly burden existing members. Through this judgement, the High Court emphasized that responsibility for clearing arrears in such situations rests with the incoming purchaser, ensuring continuity and financial stability within the cooperative housing system.
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