Mumbai, Feb 03: The Bombay High Court has reiterated that cooperative housing societies cannot deny membership to transferees by insisting on transfer premiums beyond statutory limits, even where lease conditions impose financial obligations on the transfer of property.
HC upholds statutory limits over lease conditions
Justice Amit Borkar dismissed a petition filed by Vallabhnagar Co-operative Housing Society Limited in Vile Parle (West), which had challenged orders passed by cooperative authorities directing it to grant membership to purchasers of a leasehold plot.
The court held that the authorities acted within the framework of the Maharashtra Cooperative Societies Act and that statutory directions issued in public interest prevail over private contractual stipulations.
Dispute over JVPD leasehold plot
The dispute concerned Plot No. 26 at the JVPD Scheme, which was leased by the society in 1963 for a period of 999 years. The lease restricted transfer of the plot without prior written consent of the society and required payment of a lease premium.
In August 2024, a deed of assignment was executed in favour of the purchasers, Vijay Khetan and Meena Khetan, pursuant to a settlement in a civil suit. When they applied for membership, the society rejected the application, citing breach of lease conditions and non-payment of premium.
Registrar orders favour purchasers
The purchasers challenged the rejection before the Deputy Registrar, who allowed their appeal and directed the society to enrol them as members. This order was confirmed in revision by the Divisional Joint Registrar, prompting the society to approach the High Court.
Society’s arguments before the court
Senior advocate Venkatesh Dhond, appearing for the society, argued that the lease imposed “clear and mandatory conditions” requiring prior consent and payment of premium before any transfer. He submitted that authorities under the Act ignored these binding stipulations and wrongly compelled the society to grant membership.
Purchasers rely on past correspondence
On the other hand, senior advocate Surel Shah, representing the purchasers, relied on correspondence exchanged between the parties in 2012 and 2013.
He pointed out that the society had earlier informed the predecessors of the purchasers that it “will act on such documents being found in order” upon payment of transfer charges, which were then specified.
Court clarifies legal position
After analysing the lease clause and the correspondence, the court held that while prior consent and payment of premium were conditions precedent under the lease, they must be read harmoniously with the statutory scheme.
Referring to Section 79A of the Act, the court noted that directions issued by the State Government fixing ceilings on transfer premiums are binding on cooperative societies.
“The Act prevails over private contract in the form of lease,” the court observed, adding that only amounts lawfully recoverable under the Act, Rules and bye-laws can be treated as “dues”.
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Petition dismissed
Finding that the purchasers had complied with documentary requirements and paid charges permissible under statutory limits, the court held that there was no justification for denying membership. Holding that the impugned orders were not vitiated by any jurisdictional error, the court dismissed the petition.
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