Mumbai, November 02, 2026: The Mumbai Co-operative Court, in its order passed on October 29, declared a resolution passed at a Special General Meeting of the Jagruti Co-operative Housing Society in Mahim in 2009 unlawful and not binding on the disputants, Pradeep and Beena Sabnis.
The resolution had sought to increase members’ contributions towards major repairs by introducing an area-based calculation of Rs 1,741.86 per square metre. The Sabnis couple, who reside in the Jagruti Society, had objected to the resolution in a case filed before the court in November 2009.
The court has permanently restrained the society from recovering the revised contribution and consequential interest from the two members, holding that the society had relied on a proposed amendment to its bye-laws that had not received approval.
“The opponent society, acting through its committee, officers or agents, is permanently restrained from demanding or recovering from the disputants the revised contribution and consequential interest solely on the strength of the resolution specified in clause,” the order copy reads.
Court Examines Repair Expenditure And Dispute
In its order, Judge V. R. Kulkarni partly allowed a dispute filed by Pradeep and Beena Sabnis, who had challenged the society's repair expenditure and resolutions passed at a Special General Meeting on September 13, 2009.
The society had initially approved major repairs at an estimated cost of Rs 51 lakh in 2004, with each member required to contribute Rs 1 lakh. The estimated expenditure was subsequently increased to Rs 80.45 lakh.
While the society attributed the escalation to delays, rising material and labour costs and additional structural work, the members alleged irregularities in the appointment of contractors, expenditure and utilisation of society funds.
The court, however, did not find sufficient evidence to establish that the increase in repair costs was caused by negligence or misappropriation. It noted that additional structural damage, plumbing work, waterproofing and other repairs had contributed to the revised estimate.
The court also declined to set aside the resolutions approving the contractors and vendors and the revised repair estimate.
Area-Based Contribution Formula Declared Unlawful
However, it found fault with the third resolution, which replaced the earlier contribution of Rs 1 lakh per flat with a uniform rate of Rs 1,741.86 per square metre. The society had calculated the revised rate using the contribution applicable to the smallest two-bedroom flat as its benchmark.
“The final resolution uses Rs.1,741.86 per square meter for all flats. The fact that the resulting rate is expressed per square meter does not answer how that rate was lawfully determined. Its benchmark remains Rs.1,00,000/- for the smallest two-bedroom flat, as proposed in item No.3. No material alteration between the proposal and the final resolution is shown which removes the admitted objection to that benchmark. The Court therefore cannot distinguish the notice from the resolution merely because the final wording refers to all flats,” the order copy reads.
The court noted that the society's own meeting minutes recorded that its proposed amendment to the bye-laws had been rejected by the Divisional Joint Registrar in 2008. Despite this, the society proceeded with the revised contribution formula.
“Its case cannot be accepted on the footing that an unregistered or rejected amendment itself authorised the levy,” the court observed.
Holding that a proposed or rejected amendment could not be treated as an operative bye-law, the court declared the third resolution unlawful and not binding on the two members.
It clarified that the ruling did not validate the earlier equal-contribution formula or exempt members from contributions lawfully determined under the applicable bye-laws.
Society Directed To Submit Accounts Within 90 Days
Separately, the court directed the society to furnish a detailed account of the major repair project within 90 days. The statement must include member-wise contributions, transfers from various society funds, contractor-wise expenditure, outstanding liabilities and the treatment of earnest money and retention money paid in connection with contractor M/s Supercoats.
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The society has also been directed to reconcile the expenditure of Rs 80.27 lakh mentioned in its final completion report with the audited expenditure of Rs 78.22 lakh reflected in its accounts.
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