The Bombay High Court has clarified that a cooperative housing society cannot deny membership on grounds unrelated to statutory eligibility, such as alleged misuse of common areas. This ruling reinforces the limited scope of authority under Section 23(2) of the Maharashtra Co-operative Societies Act, 1960, and directs parties to pursue proper dispute resolution mechanisms.
Background & Facts
The Dispute
The petitioner, Shabnoor Ayub, applied for membership in the Pathan Society Ltd., a cooperative housing society in Mumbai. The society refused her application, not on grounds of non-payment of fees, non-compliance with bye-laws, or lack of qualification, but because she and other members were allegedly preventing other residents from using the building’s common terrace. The society claimed exclusive rights to the terrace based on an alleged allotment by the developer.
Procedural History
- The petitioner filed an application under Section 23(2) of the Maharashtra Co-operative Societies Act, 1960, seeking recognition as a member.
- The Joint Divisional Registrar of Cooperative Societies rejected the application, accepting the society’s objection regarding terrace usage.
- The petitioner challenged this order before the Bombay High Court through a writ petition.
Relief Sought
The petitioner sought a direction to the society to admit her as a member, arguing that the refusal was arbitrary and beyond the statutory mandate of Section 23(2). She also sought clarification that membership does not confer exclusive rights over common areas.
The Legal Issue
The central question was whether the authority under Section 23(2) of the Maharashtra Co-operative Societies Act, 1960, can refuse membership based on disputes concerning the use of common areas, such as a terrace, when the applicant satisfies all statutory and bye-law requirements for membership.
Arguments Presented
For the Petitioner
The petitioner argued that Section 23(2) only permits the authority to examine whether the applicant meets the minimum eligibility criteria: payment of share capital, compliance with bye-laws, and absence of disqualifications. She contended that allegations of terrace misuse are unrelated to membership eligibility and must be addressed under Section 91, which provides a specific forum for disputes concerning rights over common property. She relied on the principle that statutory authorities must act within their defined jurisdiction.
For the Respondent
The society and the developer respondents argued that the petitioner’s alleged obstruction of terrace access constituted a breach of the society’s peace and harmony, and that exclusive use had been granted by the developer. They claimed that admitting her would legitimize unlawful possession and disrupt the social fabric of the society. They urged the court to defer to the society’s internal governance.
The Court's Analysis
The Court examined the statutory framework under Section 23(2) and emphasized its narrow scope. It held that the authority’s role is purely administrative and limited to verifying compliance with the Act, rules, and bye-laws. The Court rejected the society’s attempt to transform a membership application into a forum for adjudicating property rights.
"The objection relates to alleged misuse or exclusive use of the terrace. This objection does not concern the eligibility of the respondents to be admitted as members. It concerns alleged interference with common areas."
The Court further clarified that membership is a legal status recognizing the relationship between the individual and the society; it does not create or extinguish rights over common property. Any claim of exclusive terrace use by the developer must be tested in a proper civil or cooperative proceeding under Section 91, where evidence can be recorded and rival claims adjudicated.
The Court also noted that allowing such objections under Section 23(2) would open the floodgates for societies to weaponize membership denials against dissenting or assertive members, undermining the very purpose of cooperative housing.
The Verdict
The petitioner succeeded. The Court held that membership cannot be denied under Section 23(2) for disputes concerning common areas, and directed that the society admit the petitioner as a member. It clarified that no member may unilaterally restrict access to common facilities, and that exclusive use claims must be resolved through appropriate legal channels.
What This Means For Similar Cases
Membership Decisions Must Be Based on Statutory Criteria
- Practitioners must ensure that cooperative societies do not use membership applications to settle unrelated disputes.
- Any refusal under Section 23(2) must be grounded in failure to meet statutory or bye-law requirements - never in interpersonal or property conflicts.
- Societies that deny membership on non-statutory grounds risk judicial intervention and costs.
Common Area Disputes Require Separate Adjudication
- Disputes over terrace, parking, or other common areas must be filed under Section 91 of the MCS Act, not as objections to membership.
- Alleged developer allotments of common areas are not binding without formal registration or approval under the Act.
- Oral claims or unregistered agreements cannot override the statutory definition of common property.
Membership Does Not Confer Exclusive Rights
- Admission as a member confers no greater right to common areas than any other member.
- Any attempt to lock, fence, or otherwise restrict access to common facilities is unlawful and actionable.
- Societies must enforce equal access through bye-law compliance mechanisms, not by excluding members.
