Case Note & Summary
The matter arose from a writ petition filed by Brightland Co-operative Housing Society Ltd. challenging the orders of the co-operative authorities directing it to admit respondents 3 and 4 as members. The dispute concerned Flat No.11 in the society, originally owned by Mr. Kanayalal Merani and Mrs. Rakhi Merani, who had mortgaged it to Punjab National Bank. The bank enforced its security interest under SARFAESI and sold the flat by e-auction on 30 August 2018 to respondents 3 and 4 on an 'as is where is' basis. Possession was delivered on 30 December 2018. Respondents applied for membership and transfer of shares on 28 September 2018, but the society did not admit them. The society contended that respondents had not paid outstanding maintenance and society charges, including arrears accrued from 2009 before their purchase, and that their application was not in the prescribed form. Respondents contended they had paid charges from November 2018, and the society made an unreasonable demand of Rs.9,50,000. The Deputy Registrar, on an application under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960, by order dated 4 December 2023, directed the society to admit respondents as members, make entries, and issue share certificate. The society's revision before the Divisional Joint Registrar was dismissed on 2 September 2024, which held that the society could pursue remedies under Sections 91, 101 or 154B-29 to recover dues. The society then filed the present writ petition. The High Court examined Section 22(2), which provides that if a society does not communicate its decision on a membership application within three months, the applicant is deemed admitted as a member; this deeming fiction was introduced by Maharashtra Act No.20 of 1986. The court noted the Registrar's role in deciding any question of deemed membership after hearing. It considered the petitioner's argument based on Section 154B-7 regarding restrictions on transfer without payment of dues, and observed that the society had separate statutory remedies to recover dues, so refusal of membership on that ground was questionable. The court also noted the requirement under Rule 19 for an application in prescribed form, and that the petitioner's objection in this regard appeared faint. The core controversy concerned the liability for pre-purchase dues of the previous owners. The text of the judgment provided ends mid-sentence at paragraph 20, before any final operative order is recorded. Therefore, no final decision is available from the provided excerpt.
Headnote
A) Co-operative Societies - Deemed Membership - Section 22(2), Maharashtra Co-operative Societies Act, 1960 - If a society fails to communicate its decision on a membership application within three months, the applicant is deemed admitted as a member; this deeming fiction was introduced by Maharashtra Act No.20 of 1986, reversing earlier policy - Question was whether deeming fiction operated where society neither admitted nor communicated decision; court analyzed provisions and Registrar's role as arbiter - Held that society's inaction triggers deemed membership, subject to Registrar's determination after hearing (Paras 13-17).
B) Co-operative Societies - Restrictions on Transfer of Shares/Interest - Section 154B-7, Maharashtra Co-operative Societies Act, 1960 - Payment of society dues before transfer of share or interest - Petitioner argued that membership cannot be granted without clearing dues; court noted that society has separate remedies under Sections 91, 101 and 154B-29 to recover maintenance and other charges, and such dues cannot be a ground to deny membership - Held that refusal of membership on ground of dues is not sustainable when statutory recovery mechanisms exist (Paras 3, 6, 12).
C) Co-operative Societies - Conditions for Membership - Rule 19, Maharashtra Co-operative Societies Rules, 1961 - Application in prescribed form is a condition for admission - Petitioner contended respondents had not applied in prescribed form; court observed this was a 'faint effort' and that deeming fiction under Section 22(2) may still operate if society failed to communicate decision - Held that compliance with Rule 19 may be required, but society's failure to communicate decision cannot be excused (Paras 8, 18-20).
D) Co-operative Societies - Recovery of Dues and Membership - Sections 91, 101, 154B-29, Maharashtra Co-operative Societies Act, 1960 - Society can recover outstanding maintenance and other charges through statutory remedies - The Divisional Joint Registrar had observed that society was at liberty to invoke these remedies; petitioner contended this was erroneous - Held that availability of recovery mechanisms did not justify refusal to admit members; membership and dues recovery are distinct matters (Paras 3, 6, 12).
Issue of Consideration
The main questions of law considered were whether the deeming fiction under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960 operated to deem respondents 3 and 4 as members of the petitioner society due to non-communication of decision within three months; whether the society could refuse membership on ground of unpaid dues under Section 154B-7; and whether respondents had complied with the mandatory application requirements under Rule 19.
Law Points
- Deemed membership under Section 22(2) upon failure to communicate decision within three months
- Registrar's jurisdiction to decide deemed membership disputes
- Society cannot refuse membership solely due to outstanding dues
- Separate statutory remedies under Sections 91
- 101
- 154B-29 for recovery of dues
- Conditions for membership under Rule 19 of Maharashtra Co-operative Societies Rules
- 1961
- Deeming fiction inserted by Maharashtra Act No.20 of 1986
Case Details
2025 LawText (BOM) (07) 133
Writ Petition No. 3466 of 2025
Mr. Ashok Satpute, Mr. P. V. Nelson Rajan, Mrs. Aarti Gunjikar (Respondent No.3-in-person)
Brightland Co-operative Housing Society Ltd.
1. The Divisional Joint Registrar, Co-op. Societies, Mumbai Division; 2. The Deputy Registrar, C.S. H-West Ward, Mumbai; 3. Mrs. Arati Satish Gunjikar; 4. Ms. Aditi Satish Gunjikar
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the order of the Divisional Joint Registrar, Co-operative Societies, which affirmed the Deputy Registrar's direction to admit respondents 3 and 4 as members of the petitioner housing society.
Remedy Sought
The petitioner society sought quashing of the orders directing it to admit respondents 3 and 4 as members, make entries in the register of members, and issue share certificates, and contended that membership could not be granted without payment of outstanding society dues.
Filing Reason
The society challenged the Deputy Registrar's order dated 4 December 2023 and the Divisional Joint Registrar's revisional order dated 2 September 2024, contending that respondents 3 and 4 had not paid outstanding maintenance and society charges and had not complied with mandatory membership application requirements; hence the orders directing admission were erroneous.
Previous Decisions
The Deputy Registrar, by order dated 4 December 2023, allowed the application under Section 22(2) and directed the society to admit respondents 3 and 4 as members and issue share certificates. The society filed Revision Application No.38 of 2024 before the Divisional Joint Registrar, who dismissed the revision on 2 September 2024, holding that the society could pursue remedies under Sections 91, 101 or 154B-29 to recover dues.
Issues
Whether respondents 3 and 4 became deemed members of the petitioner society under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960, due to the society's failure to communicate its decision on their membership application within three months.
Whether the petitioner society could refuse to admit respondents 3 and 4 as members on the ground of unpaid maintenance and society dues, particularly those accrued before the purchase of Flat No.11, in view of Section 154B-7 of the Act.
Whether respondents 3 and 4 complied with the mandatory requirement of applying for membership in the prescribed form under Rule 19 of the Maharashtra Co-operative Societies Rules, 1961.
Whether the Deputy Registrar and Divisional Joint Registrar correctly applied the law in directing admission of respondents 3 and 4 as members.
Submissions/Arguments
Petitioner argued that the authorities erred in directing admission contrary to Section 154B-7 which requires payment of society dues before transfer of share or interest; the society was willing to admit respondents if they cleared outstanding dues, and respondents' stance that they are not liable for pre-2018 arrears was untenable.
Petitioner further contended that respondents 3 and 4 had not submitted the membership application in the prescribed form, so no question of deemed membership arose.
Respondents 3 and 4 argued that they had paid maintenance charges from November 2018, the society made an unreasonable demand of Rs.9,50,000 to transfer shares without breakup, and the society did not appear before the Deputy Registrar; the dues objection was an afterthought.
Ratio Decidendi
Under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960, if a society does not communicate its decision on a membership application within three months from receipt, the applicant is deemed admitted as a member; the deeming fiction was introduced by Maharashtra Act No.20 of 1986 reversing the earlier policy. The Registrar has jurisdiction to decide any question regarding deemed membership after hearing parties. A society cannot refuse membership solely on the ground of outstanding dues, as it has separate statutory remedies under Sections 91, 101 and 154B-29 to recover such amounts; however, compliance with Rule 19 conditions, including application in prescribed form, may be necessary.
Judgment Excerpts
If the society does not communicate any decision to the applicant within three months from the date of receipt of such application the applicant shall be deemed to have been (admitted) as a member of the society.
The legislature, thus, consciously chose to confer deemed membership upon the failure to communicate the decision by reversing the legislative policy diametrically.
In the latter part of sub-section (2) of Section 22, the Registrar comes in the frame as an arbiter.
The core controversy between the parties revolves around the extent of the dues to the society for the period prior to the purchase of the subject flat by Respondent Nos.3 and 4 (owed by the previous holders) and the liability of the Respondent Nos.3 and 4 to pay the same.
Procedural History
Punjab National Bank enforced security interest over Flat No.11 and sold it by e-auction under SARFAESI; respondents 3 and 4 purchased the flat on 30 August 2018 on 'as is where is' basis, and possession was delivered on 30 December 2018. Respondents 3 and 4 applied for transfer of the flat in their names on 28 September 2018. The petitioner society did not admit them as members. In April 2023, respondents filed Application No.10 of 2023 under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960 before the Deputy Registrar. The Deputy Registrar passed order dated 4 December 2023 directing the society to admit respondents as members, make entries in register, and issue share certificate. The society filed Revision Application No.38 of 2024 before the Divisional Joint Registrar, who dismissed it on 2 September 2024, affirming the Deputy Registrar's order, and observing that the society could invoke remedies under Sections 91, 101 or 154B-29 to recover dues. The society then filed Writ Petition No.3466 of 2025 before the High Court.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: Section 22, Section 22(2), Section 91, Section 101, Section 154B-7, Section 154B-29, Chapter XIII-B
- Maharashtra Co-operative Societies Rules, 1961: Rule 19
- Security Interest (Enforcement) Rules, 2002 (SARFAESI Rules): Rule 9(6)
