November 29, 2025: The Bombay High Court has ruled that buyers of flats or commercial units cannot gain membership in a cooperative housing society without first clearing outstanding dues linked to their premises. Justice Amit Borkar observed that “membership in a cooperative society is not an unconditional right,” while striking down orders issued by the divisional joint registrar and the deputy registrar of cooperative societies, R/N ward. These earlier orders had directed a Dahisar cooperative society to admit a commercial tenement buyer as a member even though the dues of Rs 58 lakh owed by the previous owner remained unpaid.
The matter began in April 2021 when T&M Services Consulting Pvt Ltd purchased a commercial unit in Tanvi’s Diamoda Cooperative Housing Society through an auction conducted by Indian Overseas Bank. In June 2021, the company applied for a transfer of membership. The society refused, stating that the former owner, Saroj Mehta, had left behind unpaid maintenance charges and property tax worth Rs 58 lakh. The society informed the firm that membership would be granted only after these dues were cleared.
T&M Services Consulting then appealed to the deputy registrar, who ruled in its favour in July 2022. The society challenged this before the divisional joint registrar, who, on July 14, 2025, dismissed the society’s plea. The society subsequently approached the high court.
On Thursday, the HC set aside both registrar orders, holding that, under Section 154B(7) of the Maharashtra Cooperative Societies Act, a transfer does not take effect unless all dues related to the premises have been settled. “This rule applies to all transfers, whether voluntary or through auction,” Justice Borkar said. “When the amount payable is indisputable or undisputed, the transferee must satisfy this condition.”
The court noted that the provision aims to protect societies from financial loss caused by members leaving arrears behind. It emphasised that cooperative housing societies rely on timely maintenance collection, and prolonged unpaid dues burden other members. “The law protects society in such circumstances,” the court said. “Section 154B(7) ensures that the financial structure of the society is not disturbed by transfers that leave arrears behind. It places the responsibility upon the transferee to clear dues when the earlier member defaults.”
Source: Hindustan Times
