Safiya Malik

The Bombay High Court Single Bench of Justice Amit Borkar allowed a writ petition by flat purchasers challenging the setting aside of their deemed membership in a co-operative housing society and restored the Registrar’s order granting deemed membership for the concerned unit. The Court held that the mere pendency of a civil suit between the purchasers and the promoters/developer over enforcement of an agreement for sale and recovery of consideration does not prevent the Registrar from deciding an application for membership or deemed membership under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960. It observed that where the society fails to discharge its duty on a membership application, the Act empowers the Registrar to decide and confer membership, subject to the outcome of the civil suit, which was directed to proceed independently.

The writ petition arose from a dispute concerning deemed membership of a co-operative housing society following execution of a registered agreement for sale. The petitioners, purchasers of a residential unit under a registered agreement executed in September 2013, applied for membership of the concerned housing society in November 2021. The society did not communicate any decision on the application. The petitioners thereafter invoked the statutory remedy under the Maharashtra Co-operative Societies Act, 1960, seeking deemed membership.

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An order granting deemed membership was passed by the competent authority in August 2022. As the society failed to implement the order, a further order was issued appointing an authorised officer to give effect to the grant of membership. Subsequently, the developer challenged the grant of deemed membership by filing a revision before the revisional authority. The revisional authority set aside the earlier orders primarily on the ground that a civil suit filed by the developer for enforcement of the agreement for sale was pending before the civil court.

The petitioners approached the High Court contending that the revisional authority lacked jurisdiction in view of a State notification transferring appellate powers, and that the pendency of a civil suit could not bar statutory conferment of deemed membership.

The Court examined the effect of the State notification transferring appellate and revisional powers to a different authority and recorded that “when the State Government changes the authority by issuing a valid Notification under Section 3, the old authority loses that power”. It observed that jurisdiction under the co-operative law “arises only from the statute and from the Notifications made under the statute” and that once jurisdiction is shifted, “there is no scope for the old authority to continue once the notification has shifted the power”.

While dealing with the reliance placed on precedent to justify continuance of jurisdiction, the Court stated that “the Waqf Tribunal case addressed a different situation” and clarified that the principle of continuance applies only “to prevent a legal vacuum”. It recorded that in the present case “the new authority exists in law after the Notification” and therefore the earlier authority could not exercise revisional powers.

On the issue of deemed membership, the Court noted that the agreement for sale was a registered agreement in the statutory form and observed that “when an agreement follows Form No.5 under MOFA, the law gives certain protections and rights to the flat buyer”. It stated that such a purchaser “steps into a special legal position” and that the statutory scheme treats such persons as having ‘taken’ flats for the purpose of society formation.

Addressing the argument based on unpaid consideration, the Court recorded that “any balance price remains unpaid, the developer has a remedy under property law or in a civil suit” and that unpaid dues cannot be used “as a weapon to block the purchaser from entering the society”.

On the pendency of the civil suit, the Court observed that “membership under the MCS Act involves a provisional determination” and that “A pending civil suit does not automatically stop society from acting. Only if the civil court passes an order restraining the society, then the administrative authority must hold back.”

The Court observed: “It is true that authorities under the Co-operative Societies Act should not decide pure questions of title. Those issues belong to civil courts. However, membership under the MCS Act involves a provisional determination. This does not finally decide ownership finally. It only recognises the applicant as a member for society purposes.”

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The Court directed that “the revisional order dated 25 November 2024 passed in Revision Application No. 409 of 2024 is quashed and set aside”. The Registrar’s order dated 18 August 2022 granting deemed membership to petitioner No.1 in respect of Unit No. 601 is restored”.

“The civil suit, being S.C. Suit No. 2225 of 2016, shall proceed in accordance with law uninfluenced by the observations made in the present judgment”. The writ petition stands disposed of accordingly” and that “there shall be no order as to costs. The request for stay of this judgment is rejected”.

Advocates Representing the Parties

For the Petitioners: Mr. Simil Purohit, Senior Advocate, with Mr. Yogi Joshi, Mr. Sachin Mandlik and Mr. Tanay Musale, instructed by Mandlik & Partners.

For the Respondents: Mr. Ashish Kamat, Senior Advocate, with Ms. Simantini and Mr. Anil R. Mishra; Mr. Abhishek C. Bhadang, AGP; Ms. Priyanka Bhadrashete, Advocate.

Case Title: Digant Parekh (HUF) & Anr. v. Akruti Kailash Construction & Ors.
Neutral Citation: 2026: BHC-AS:1750-DB
Case Number: Writ Petition No. 13583 of 2025
Bench: Justice Amit Borkar