The Bombay High Court has clarified that cooperative housing societies cannot refuse membership to transferees by demanding transfer premiums beyond statutory limits. Justice Amit Borkar ruled that government directions under the Maharashtra Cooperative Societies Act take precedence over private lease conditions, dismissing a petition filed by Vallabhnagar Co-operative Housing Society in Vile Parle (West).
The dispute arose over Plot No. 26 in the JVPD Scheme, leased in 1963 for 999 years. The lease required prior consent and payment of a lease premium for transfers. In August 2024, Vijay Khetan and Meena Khetan executed a deed of assignment as part of a civil settlement and applied for society membership. The society rejected their application, citing breach of lease terms and non-payment of the premium.
The purchasers challenged this before the Deputy Registrar, who directed the society to enroll them. The Divisional Joint Registrar confirmed this order, prompting the society to approach the High Court. Senior advocate Venkatesh Dhond argued that the lease imposed mandatory conditions for consent and premium payment, which statutory authorities ignored.
On the other hand, senior advocate Surel Shah, representing the purchaser,s highlighted earlier correspondence from 2012–13, where the society had agreed to act upon proper documentation and payment of lawful transfer charges.
After reviewing the lease and statutory framework, the court noted that while prior consent and premium were conditions under the lease, they must align with statutory provisions. Section 79A of the Act mandates that government directions fixing ceilings on transfer premiums are binding on cooperative societies.
“The Act prevails over private contract in the form of lease,” Justice Borkar observed. Only amounts lawfully recoverable under the Act, Rules, and bye-laws can be treated as dues.
Finding that the purchasers complied with all documentary requirements and paid charges within statutory limits, the court held there was no reason to deny membership. Consequently, the petition by the society was dismissed.
This ruling reinforces that cooperative housing societies must adhere to statutory transfer limits and cannot use lease terms to impose excessive premiums on transferees.
Source: The Free Press Journal
