Megha 905_WP_8034_2025_fc.odt

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.8034 OF 2025

Monarch Orchid Co-operative Housing

Ltd. ...Petitioner

V/s.

1) The State of Maharashtra

2) Joint Registrar of Co-operative

Societies (CIDCO)

3) Assistant Registrar of Co-operative

Societies (CIDCO)

4) Makrand Shrikant Padalkar

5) Smt. Leena Makrand Padalkar ...Respondents

WITH

INTERIM APPLICATION (STAMP) NO.32945 OF 2025

WITH

INTERIM APPLICATION (STAMP) NO. 36725 OF 2025

IN

WRIT PETITION NO.8034 OF 2025

1) Makrand Shrikant Padalkar

2) Smt. Leena Makrand Padalkar

In the matter between

Monarch Orchid Co-operative Housing

Ltd.

…Applicants

...Petitioner

V/s.

1) The State of Maharashtra

2) Joint Registrar of Co-operative

Societies (CIDCO)

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3) Assistant Registrar of Co-operative

Societies (CIDCO)

4) Makrand Shrikant Padalkar

5) Smt. Leena Makrand Padalkar

...Respondents

________________

Mr. Vaibhav Ugle with Ms. Kalpana Pandey i/b. Mr. Vikas Somawanshi for

the Petitioner.

Mr. S.A. Jabbar with Mr. Yash Bangar i/b. Mr. Akash Tayade for

Respondent Nos.4 and 5 and for Applicants in IAST/32945/2025 &

36725/2025.

Mr. P.V. Nelson Rajan, AGP for Respondent-State.

________________

CORAM: SANDEEP V. MARNE, J.

Judgment reserved on: 2 JULY 2026.

Judgment pronounced on: 14 JULY 2026.

JUDGMENT:

1)The issue for consideration in this Petition is whether membership

to a cooperative housing society can be denied to an auction purchaser,

who refuses to pay the past maintenance dues of the previous owner.

2)Rule. Rule is made returnable forthwith. Since pleadings in the

Petition are complete the same is taken up for final hearing with the

consent of the learned counsel appearing for parties.

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3)The Petitioner-Society has filed the present Petition challenging

the Order dated 4 January 2024 passed by the Assistant Registrar, Co-

operative Societies (CIDCO), Navi Mumbai, (Assistant Registrar) under

Section 23(2) of the Maharashtra Co-operative Societies Act, 1960 (the

MCS Act), allowing the Application of Respondent Nos.4 and 5 for their

admission as society members and directing the society to make entries

of admission in the records (in Forms I & J) of the Society and to issue

share certificate to them. The order of Assistant Registrar is confirmed by

the Joint Registrar, Co-operative Societies (CIDCO), Navi Mumbai (Joint

Registrar) by dismissing Revision Application No.96 of 2024 preferred by

the Petitioner-Society.

4)The Petitioner is a co-operative housing society formed by

occupiers of units of the building-Monarch Orchid situated at plot No.94

and 95, Sector No.19, Kharghar, Navi Mumbai (the Society) and

registered under the provisions of the MCS Act. Mr. Milind Purohit and

Minal Purohit (Purohits) purchased Flat No.1101 (the Flat) in the

building of the Society by availing mortgage loan from North Kanara

Goud Saraswat Brahmin Co-operative Bank Limited (the Bank). The

Purohits had mortgaged the flat in favour of the Bank. The Purohits

stopped paying monthly maintenance in respect of the Flat and by 12

November 2017, an amount of Rs.1,91,813/- was due and payable by

Purohits towards arrears of maintenance. It appears that Purohits also

defaulted in repayment of the loan of the Bank. With passage of time,

the arrears of maintenance escalated and by 5 March 2020 an amount of

Rs.4,53,789/- became due and payable by Purohits, for which the Society

issued letter dated 5 March 2020. Since the Flat was mortgaged with the

Bank and since the Bank had initiated recovery proceedings against

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Purohits, the Society communicated to the Bank by letter dated 7

February 2021 that amount of Rs.5,46,719/- was due and payable in

respect of the maintenance of the Flat. By letter dated 12 February 2021,

the Bank requested the Society to register its lien in its record against

the Flat and not to permit Purohits to sell the flat without Bank’s

permission.

5)The Bank issued possession notice dated 1 March 2021 under sub-

section (4) of Section 13 of the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002 (the

SARFAESI Act) to Purohits for taking over possession of the Flat with a

copy thereof to the Society. It appears that the Bank took over possession

of the Flat and proceeded to conduct auction of the Flat for recovery of

its dues. The auction was conducted on 17 March 2023 and Respondent

Nos.4 and 5- Mr. Makarand Shrikant Padalkar and Smt. Leena Makarand

Padalkar (Padalkars) turned out to be the successful bidders. On the

same day, they wrote to the Society for waiving off the dues payable by

Purohits but agreed to abide by the Society’s rules and regulations. After

learning from Padalkars that they had purchased the Flat in auction

conducted on 17 March 2023, the Society immediately wrote to the Bank

on 19 March 2023 calling upon the Bank to direct Padalkars to clear

Society’s dues and not to handover possession of the Flat till the dues

were cleared by them. The Bank replied on 28 March 2023 intimating to

the Society that in terms of the E-auction, the auction purchaser had

undertaken to pay pending and future dues such as maintenance of the

Society, etc. and that the said condition has been accepted by the

Padalkars. It appears that the Bank handed over possession of the Flat to

Padalkars on 28 March 2023. The Bank issued Sale Certificate in respect

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of the Flat in the name of Padalkars on 28 March 2023, which was

registered in the office of Sub-Registrar, Assurances, Panvel-5. On 9 April

2023, Padalkars wrote to the Society that they were liable to pay

Society’s maintenance charges only from possession of the Flat since 28

March 2023. The Society wrote to Padalkars on 3 May 2023 calling upon

them to pay outstanding dues in respect of the Flat. The Society issued

Demand Notice dated 10 October 2023 demanding an amount of

Rs.8,05,925/- from Padalkars.

6)Since the Petitioner-Society did not admit Padalkars as members,

they filed Application dated 26 October 2023 under Section 23 (2) of the

MCS Act before the Assistant Registrar. The Society resisted the

Application by filing its reply. After hearing both the sides, the Assistant

Registrar passed order dated 4 January 2024 allowing the Application

filed by the Padalkars and directing the Society to admit them as

members and to issue to them share certificate. The Petitioner- Society

filed Revision Application No.96 of 2024 before the Joint Registrar.

During pendency of the Revision Application, Padalkars moved the

Assistant Registrar, who issued order under Section 154B-7 of the MCS

Act directing the Society to implement the order dated 4 January 2024 by

making the entries into Forms I and J registers and to issue share

certificate to Padalkars. The Revision Application No.96 of 2024 was

thereafter heard by the Joint Registrar and by order dated 4 April 2024,

the Revision Application has been rejected. Aggrieved by rejection of the

Revision, the Petitioner-Society has filed the present Petition. By order

dated 24 June 2025, this Court has stayed the order of the Assistant

Registrar dated 4 January 2024.

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7)The Padalkars have appeared in the Petition and have filed

affidavit-in-reply bringing on record inter-alia the fact that the

Petitioner-Society has filed Dispute under Section 91 of the MCS Act for

recovery of maintenance dues in the Cooperative Court at Alibag and the

order dated 18 July 2025 rejecting the Dispute under the provisions of

order VII Rule 11 of the Code of Civil Procedure, 1908 (the Code).

Padalkars also brought on record order passed by the Co-operative

Appellate Court on 12 January 2026 setting aside the order of the

Cooperative Court dated 18 July 2025. The Padalkars have also filed

Interim Application (Stamp) No.36725 of 2025 for vacation/ setting aside

of interim order in the light of the judgment of the Apex Court in High

Court Bar Association Allahabad V/s. State of Uttar Pradesh

1

. Instead of

deciding the Interim Applications, which are aimed mainly at vacating

the ad-interim stay, this Court has proceeded to hear the Petition finally

with the consent of the learned counsel appearing for the parties.

8)Mr. Ugle, the learned counsel appearing for the Petitioner -Society

submits that the Assistant Registrar and Joint Registrar have grossly

erred in allowing the Application of Padalkars for admission as members

of the Society. That Padalkars have purchased the flat in auction with full

knowledge of past dues of previous owner-Purohits in respect of the Flat.

That Sale Certificate issued by the Bank to Padalkars is also subject to

condition of payment of past dues in respect of the Flat. That the

impugned orders of the Assistant Registrar and Joint Registrar are in the

teeth of provisions of Section 154B -7 of the MCS Act under which no

transfer of share or interest of a member can be effective unless the dues

of the housing society are paid. That therefore, Padalkars cannot secure

12024 6 SCC 267

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membership in respect of the Flat without first clearing the dues of the

Society. In support, he relies on judgment of this Court in Tanvi’s

Diamoda Cooperative Housing Society Ltd. V/s. State of Maharashtra

2

.

9)Mr. Ugle relies on letter dated 17 March 2023 of Padalkars under

which they had agreed to abide by Society’s rules and regulations. He

also invites attention of this Court to the email dated 16 October 2023,

under which Padalkars had agreed to pay the principal amount payable

by Purohits to the Society. He submits that mere filing/ rejection of

Dispute by the Petitioner-Society for recovery of maintenance dues

against Padalkars cannot be a reason for directing their admission as

members of the Society. That Society is entitled not to admit Padalkars

as members till all the Society’s dues are cleared by them. He therefore,

prays for setting aside the impugned orders.

10)Mr. Jabbar, the learned counsel appearing for Respondent Nos. 4

and 5-Padalkars opposes the Petition. He submits that the Petition

suffers from gross suppression since the Petitioner-Society has not

disclosed in the Petition filing of the Dispute before the co-operative

Court. That the Society has not approached this Court with clean hands

and is attempting to recover the dues by indulging in arm twisting tactics

even though the Dispute filed by it before the Co-operative Court for

recovery of maintenance dues is pending. That since vital information is

suppressed, Petition deserves to be dismissed as held by the Apex Court

in K.D. Sharma V/s. Steel Authority of India Limited and Others

3

and by

this Court in Ambada Seva Sahakari Sanstha V/s. Special Recovery

Officer and Sales Officer (CB.), Amravati District Central Co-operative

2Writ Petition No.8631 of 2025, decided on 20 November 2025.

3(2008) 12 SCC 481

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Bank Ltd. And Others.

4

He also relies on the judgment of the Apex Court

in Amar Singh V/s. Union of India and others

5

in support of his

contention that parties, who approach the Court with intent to deceive

and mislead it are not entitled to be heard on merits of the case.

11)Mr. Jabbar further submits that filing of the present Petition is

gross abuse of process of law. That the Petitioner is enforcing parallel

remedies in respect of the same cause of action. That in the light of

pendency of Dispute before the Co-operative Court for the same cause of

action, the Petitioner cannot be permitted to maintain the present

Petition. That in any case, conduct of the Petitioner is such that this

Court need to be loathe in exercise of jurisdiction under Article 227 of

the Constitution of India as held by the Apex Court in Garment Craft V/s.

Prakash Chand Goel

6

.

12)Mr. Jabbar further submits that dues of the past member can at

best constitute a charge on the Flat as per Section 154B-14 of the MCS

Act. That the same cannot constitute personal liability for Padalkars.

That it was Society’s responsibility to recover dues of Purohits from the

Bank. That Padalkars cannot be forced to pay maintenance charges in

respect of the period when they never occupied the Flat. That the real

remedy of the Petitioner is to pursue recovery proceedings under Section

154B-29 of the MCS Act. That the Society has not exercised the summary

remedy under Section 154B-29 since there are serious disputed

questions and hence it has adopted remedy under Section 91 of the MCS

Act. That since there is dispute between the parties, Section 154B-7

cannot be invoked for denying membership due to existence of past dues.

42025(5) Mh.L.J. 525

52011 (7) SCC 69

6(2022) 4 SCC 181

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He relies on judgment of this Court in Brightland Cooperative Housing

Society Ltd. V/s. Divisional Joint Registrar, Cooperative Societies and

Others

7

in which it held that when there is dispute about past dues,

membership of the Society cannot be denied under Section 154B -7 of

the MCS Act. He relies on judgment of this Court in Banganga Anurag

Co-operative Housing Society Limited V/s. The Divisonal Joint Registrar,

Mumbai & Ors.

8

submitting that the judgment discusses the ratio of the

judgments in Brightland as well as in Tanvi’s Diamoda (supra) and held

that unless the dues are adjudicated in a Section 91 proceedings, non-

payment of the same cannot be a reason for denial of membership. He

accordingly prays for dismissal of the Petition.

13)Rival contentions urged on behalf of the parties now fall for my

consideration.

14)The issue that arises for consideration in the Petition is whether

the membership to an auction purchaser of a flat in a cooperative

housing society can be withheld on the ground of non-payment of

maintenance dues of previous owner in respect of the Flat. To

paraphrase, whether a purchaser can be made liable to pay the

maintenance dues unpaid by previous owner and whether clearance of

such maintenance dues can be made a pre-condition for grant of

membership by the Society.

15)Since the Society refused to admit Padalkars as its members, they

invoked jurisdiction of Assistant Registrar under sub-section (2) of

Section 23 of the MCS Act and accordingly the impugned order has been

7 2025 SCC OnLine Bom 2795.

8 2026(3) ALL MR 71

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passed by the Assistant Registrar on 4 January 2024 directing the Society

to admit Padalkars as its members. Section 23 of the MCS Act, under

which jurisdiction is exercised by the Assistant Registrar provides thus:

23. Open membership.

(1) No society shall without sufficient cause, refuse admission to

membership to any person duly qualified therefor under the provisions

of this Act and its by-laws.

(1A) Where a society refuses to accept the application from an eligible

person for admission as a member, or the payment made by him in

respect of membership, such person may tender an application in such

form as may be prescribed together with payment in respect of

membership, if any, to the Registrar, who shall forward the application

and the amount, if any so paid, to the society concerned within thirty

days from the date of receipt of such application and the amount; and

thereupon if the society fails to communicate any decision to the

applicant within sixty days from the date of receipt of such application

and the amount by the society, the applicant shall be deemed to have

become a member of such society. If any question arises whether a

person has become a deemed member or otherwise, the same shall be

decided by the Registrar after giving a reasonable opportunity of being

heard to all the concerned parties.

(2) Any person aggrieved by the decision of a society, refusing him

admission to its membership, may appeal to the Registrar, within a

period of sixty days from the date of the decision of the society. Every

such appeal, as far as possible, be disposed of by the Registrar within a

period of three months from the date of its receipt :

Provided that, where such appeal is not so disposed of within the said

period of three months, the Registrar shall record the reasons for the

delay.

16)In the present case, Padalkars have apparently purchased the Flat

in E-auction conducted by the Bank with full knowledge of past dues

payable by previous owners-Purohits. As observed above, Purohits had

mortgaged the Flat with the Bank and the Bank was required to sell the

same with a view to recover the loan amount through E-auction. The

Society sent four communications to Purohits on 12 November 2017, 25

January 2018, 5 February 2020 and 5 March 2020 demanding

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outstanding maintenance dues. The Society also informed the Bank by

letter dated 7 February 2021 that there were dues to the tune of

Rs.5,46,719/- payable by Purohits in respect of the Flat. The Bank

thereafter proceeded to take possession of the Flat from Purohits on 12

March 2021 by issuing intimation to the Society vide letter dated 1

March 2021. The Bank apparently conducted E-auction of the Flat on 17

March 2023 and Padalkars were the successful auction purchasers. It

appears that Padalkars had bid Rs.86,20,000/- for purchase of the Flat in

E-auction.

17)As observed above, Padalkars were fully aware of pending

maintenance dues of Purohits towards the Society and this is the reason

why on 17 March 2023 (date of auction) Padalkars wrote to the Society

asking for waiving of unpaid society charges of Purohits. Padalkars

however, undertook to abide by Society’s rules and regulations by

cooperating in all procedures pertaining to transfer of ownership.

Relevant part of Padalkars’ letters dated 17 March 2023 reads thus:-

This is to inform you that I undersigned have been allotted for flat

1101 in Auction held today. I have heard that tte first owner Mr.

Milind Purohit has not paid society charges for long time. Also I see

further procedures where I have to get society shares & owner file on

my name in which society may demand or recover those due charges

from me as a new buyer of that property.

It will lbe quite difficult for me to cater/bear other pending dues not

paid by first owner Mr. Milind Purohit. Therefore, I kindly and humbly

request you to this matter across society authorities & General body

of Society to consider my application & writ off/waive off due society

charges not paid by the first owner. I assure you that I will abide by

society rules & regulations followed by co-operate in all procedure

pertaining to transfer of ownership.

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18)Immediately after notice of conduct of auction through letter

dated 17 March 2023, the Society once again wrote to the Bank on 19

March 2023 in which it is stated as under:-

We came to know vide the letter dated 17/03/2023 written by Mr.

Makarand Shrikant Padalkar that he has got the above flat on E-

AUCTION dated 17/03/2023. AS of now wer are not aware about the

transaction held by the NKGSB Bank and Mr. Makarand Shrikant

Padalkar.

Earlier telephonic discussion with the Society Chairman Sh. Manish

Desai, it was discussed that the bank shall not provide the possession

fo the flat until the dues are cleared. It is once again requested to you

to convey the message to the proposed buyer Sh. Makarand Shrikant

Padalkar to clear the dues.

Further, we proposed to call a Special General Body Meeting in First

week of April 2023 to discuss the application received from Sh.

Makarand Shrikant Padalkar to partially waiving off of interest

amount. After the resolution is passed in the SGM the Society will

issue a No Objection Certificate to the proposed owner (Sh. Makarand

Shrikant Padalkar) for the possession of the flat and copy to the Bank.

Therefore, you are requested to keep the possession of the flat 1101,

Monarch Orchid CHS Ltd. On hold till our next intimation.

19)The Society has requested the Bank to direct Padalkars to clear

the dues. It also referred to Padalkar’s letter dated 17 March 2023 and

communicated to the Bank that Special General Meeting was proposed

to be held in April 2023 to discuss Padalkars’ request for partially

waiving off the interest amount. The Bank responded on 28 March 2023

informing the Society that full purchase price was paid by Padalkars and

that the Sale Certificate was registered on 28 March 2023. The Bank also

communicated to the Society that it could not hold back the possession

and that the possession was also handed over to Padalkars on 28 March

2023. The Bank however, stated in the letter dated 28 March 2023 as

under:

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Further as per the clause of Terms of E-Auction the auction purchaser

has to undertake to pay pending & future dues such as, maintenance

of the Society dues, Local Assessment Taxes, Electricity Bills, any

other dues and transfer fees to effect the Transfer of said Flat in name

of Auction Purchaser and the same was accepted by Mr. Makarand

Padalkar & Mrs. Leena Padalkar.

Hence considering all of the above from now onwards society may

communicate directly with Mr. Makarand Padalkar & Mrs. Leena

Padalkar for any request/demand/explanation in terms of pending

dues/fees.

(emphasis added)

20) Perusal of the Certificate of Sale executed by the Bank in

favour of Padalkars would indicate that the same was made subject to

Padalkars undertaking to pay pending and future dues of maintenance

to the Society. This is clear from following covenants in the Certificate of

Sale:

The sale of the scheduled property was made on ‘As is Where is Basis

& What Is As Is Basis’ on the terms and conditions of E-Auction Sale

Notice published in daily newspaper ‘The Free Press Journal’ &

‘Navshkti’ on 22/02/2023 and hence the auction purchaser undertake

to pay pending & future dues such as, maintenance of the Society

dues, Local Assessment Taxes, Electricity Bills, any other dues and

transfer fees to effect the Transfer of said Flat in name of Auction

Purchaser.

(emphasis and underlining added)

21) Thus, purchase of the Flat by Padalkars was not only with

full knowledge of pending maintenance dues of Society but is made

subject to Padalkars paying pending maintenance dues of the Society.

However, contrary to the conditions of sale, Padalkars refused to pay

past dues of Purohits vide letter dated 9 April 2023 and communicated

to the Society that maintenance would be paid w.e.f. 28 March 2023,

when possession of the Flat was taken by them. The Society did not

agree and by referring to the condition in the Sale Certificate, called

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upon the Padalkars to pay all past dues of the Purohits in respect of the

Flat by letter dated 3 May 2023.

22) The Petitioner has also brought on record a document in the

form of email dated 16 October 2023, which contains a forwarded

message of Mr. Makrand Padalkar, which reads thus:-

Please refer to our request letter attached herewith dated 09/04/2023

for subjected formalities pending at your end.

This is to inform you that it has been more than two weeks since we

have approached you for completion of subjected formalities. But

there is no response from your side in writing till today. Shall we

consider that society is not willing to co-operate & complete these

formalities moreover delaying it intentionally? If yes then we need to

know the reason in writing so that we can appeal/complain to the

Society Registar in this case.

We still intend to complete remaining formalities of Society

Membership on Top priority i.e. share transfers & NOC for CIDCO

transfer. As mentioned earlier, we are ready to pay first owners

principal due amount on payment against documents basis.

Kindly let us know when we can proceed for the same so that relevant

documents & payment can be arranged. You can reach us on below

contact details...

(emphasis and underlining added)

23)Email dated 16 October 2023 was apparently sent by Mr. Makrand

Padalkar to his Advocate and there is a forwarded message attached

thereto, which is apparently not sent to any particular person. Upon

being queried, it is clarified by Mr. Jabbar (after taking instructions from

Mr. Padalkar, who was personally present before the Court) that what

was forwarded to the Advocate was a mere draft prepared by Mr.

Makrand Padalkar. However, it appears that in that draft email,

Padalkars had apparently agreed to pay principal amount due from

Purohits ‘as mentioned earlier’. Thus, there appears to be some

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willingness on the part of Padalkars to pay at least the principal amount

of maintenance dues in respect of the period prior to taking over

possession of the Flat.

24) The Assistant Registrar has however recorded a virtually

incorrect finding that the Bank did not communicate to Padalkars about

pending maintenance dues of Purohits in respect of the Flat. This is

clear from following findings in the Assistant Registrar’s order:-

सदर सदनिके साठी संबंधित सदनिकाधारक यांचेकडूनसंस्थेस येणे

असलेल्या रकमेबाबत जाब देणार संस्थेने एनके जीएसबी को

.ऑप. बँक.

लि.

याना अवगत के ल्याचेदिसूनयेतनाही

.

25) From the discussion made above, it is more than apparent

that Padalkars were fully aware of past maintenance dues in respect of

the Flat and in any case, became aware of the same while conduct of

auction on 17 March 2023. The sale was not complete on 17 March 2023

and therefore it cannot be assumed that Padalkars were not aware of the

past maintenance dues when they decided to purchase the Flat in the E-

auction.

26) Assistant Registrar has recorded further perverse finding

that the Society did not initiate any action against Purohits for recovery

of maintenance dues and failed to perform its statutory duty. This

finding is contrary to the factual position where the Society wrote as

many as four communications to Purohits during 12 November 2017 to 5

March 2020. The Society issued Demand Notice dated 5 February 2020

and also issued a reminder letter dated 5 March 2020. Thereafter Covid-

19 Pandemic possibly prevented the Society from initiating any action

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for recovery of maintenance dues from Purohits and the Bank thereafter

started recovery proceedings and took over possession of the Flat in

March 2021. The Bank had already issued notice under Section 13(2) of

the SARFAESI Act to Purohits on 12 April 2018. In these circumstances it

is unfair to accuse the Society of not performing statutory duty as

erroneously held by the Assistant Registrar.

27) The Assistant Registrar has further erred in holding that the

maintenance dues became part of disputed amount and that therefore

dispute relating to the same was outside his Jurisdiction and could only

be adjudicated by the Co-operative Court under Section 91 of the MCS

Act. As a matter of fact, there is absolutely no dispute about amount of

maintenance dues payable. The dispute is only about Padalkars’ liability

to pay the same. While repeatedly referring to Sale Certificate dated 28

March 2023, the Assistant Registrar has conveniently ignored specific

stipulation therein that the sale was subject to payment of pending

maintenance dues to the Society. The Assistant Registrar has further

ignored the provisions of Section 154B-7 of the MCS Act, which are

discussed in the latter portion of the judgment. The order passed by the

Assistant Registrar is thus clearly erroneous.

28)The Joint Registrar ought to have set aside the order of the

Assistant Registrar. However, instead of doing so, the Joint Registrar

proceeded to dismiss the Revision Application by merely narrating facts

of the case, recording submissions of parties and by making following

observations:-

उक्तनिरिक्षणेविचारात घेता आव्हानित आदेशाच्या अनुषंगाने संस्थेने फ्लॅ ट क्र

११०१ च्या थकीत देखभाल शुल्काकरीता मा को ऑप कोर्टअलिबाग यांचेकडे

दावा दाखल के लेला असूनतो प्रलंबित आहे

.

याचा अर्थसंस्थेने प्रतिवादी क्र १ यांचे

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आदेशाचे अंशतः पालनके ले असल्याचेदिसूनयेत आहे त्यानुसार संबंधित

थकबाकी वसुली संस्थेस करता येणार आहे

.

प्रतिवादी क्र २

,

३ यांनी अर्जदार

संस्थेतील फ्लॅ ट क्र ११०१ हा ईलिलावाव्दारेनोंदणीकृत दस्तानुसार खरेदी के ल्याचे

दिसूनयेत आहे

.

नोंदणीकृत दस्तानुसार प्रतिवादी क्र २

,

३ हे संस्थेचे सभासदत्व

मिळविणेस पात्र आहेत

.

संस्थेने प्रतिवादी क्र २

,

३ यांना सभासदत्वनाकारल्याने

सदर प्रकरण कलम २३

(२)

नुसारनिर्णयीत करण्यात येत असल्याचे प्रतिवादी क्र १

यांनी त्यांचे आदेशातनमूद के ले आहे

.

प्रतिवादी क्र १ यांनी संबंधितांना सुनावणीची

संधी देऊनदाखल कागदपत्रेविचारात घेऊनदि

. ०४.०१.

२०२४ रोजीचा आदेश

पारित के ल्याचेदिसूनयेत आहे

.

त्यामुळे सदर आदेश कायम करणे योग्य होईल या

निर्णयाप्रत मी आले आहे

.

29)The Joint Registrar has thus put a premium on errors already

committed by the Assistant Registrar. The Joint Registrar has merely

referred to the act of the Society in filing dispute before the Co-

operative Court under Section 91 of the MCS Act and has proceeded to

uphold the order passed by the Assistant Registrar. In my view therefore,

even the order passed by the Joint Registrar, being wholly erroneous,

deserves to be set aside.

30)Coming to the statutory scheme of the MCS Act, special provisions

therein are made relating to Co-operative Housing Society by inserting

Chapter XIII-B vide Maharashtra Act 23 of 2019 w.e.f 9 March 2019. The

special provisions relating to Co-operative Housing Societies are made

taking into consideration the special needs of housing societies. Section

154B-7 is inserted into the MCS Act making a special provision in

relation to transfer of share or interest of a member. Section 154B-7 puts

a restriction on transfer of share and interest of a member and provides

thus:-

154B-7. Restriction on transfer of share or interest of a Member.—

Subject to the provisions of this Act, in case of a housing

society, no transfer of share or interest of a Member or the occupancy

right, except the transfer of his heir or a nominee, shall be effective

unless,—

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(a) the dues of housing society are paid ;

(b) the transferee applies and acquires Membership of the co-operative

housing society in due course of time :

Provided that, the transfer of share or interest in respect of lease hold

properties shall be governed by the terms of the lease, which are not

inconsistent with lease of land to the co-operative housing society or

with lease by housing society to its Members.

Explanation.— For the purpose of this section, occupancy right shall

not include right of a tenant or a licensee on leave and license basis

31) Thus under Section 154B-7 of the MCS Act, no share or

interest of a member becomes effective unless dues of the housing

society are paid. Provisions of Section 154B-7 are in negative form,

which ensures that the transaction of transfer of share or interest of a

member does not take place unless the dues of the housing society are

paid. Section 154B-7 is inserted in the MCS Act keeping in mind special

circumstances relating to housing society where unpaid dues of

maintenance by a member makes other members of the Society suffer.

Housing society maintenance charges are mandatory contributions that

fund essential daily services like security, water supply, and lift

operations, while also building reserves for major repairs. Timely

payment ensures uninterrupted facilities and prevents property value

depreciation.

32)Cooperative Housing societies have long since shunned their role

of a mere collective body for looking after common basic needs of the

building. They now function as sophisticated, democratic, financial, and

legal entities. The housing societies are now akin to service providers to

the residents of the building. They now undertake myriad activities than

restricting their role as a collective body looking after basic common

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needs of the building. Nowadays modern buildings have several facilities

such as gardens, clubhouse, swimming pool, play-areas, mechanical

parkings, high speed elevators, etc. Many societies have also adopted

sustainable practices such as recycling of water via STP plants, solid

waste management facilities, rainwater harvesting, etc. The planning

authorities have been encouraging the housing societies to adopt such

sustainable practices. Modern housing societies in cities like Mumbai,

Thane, Pune, etc have evolved into self-contained micro-townships,

focusing on luxury, wellness, and digital convenience. They need to

employ large number of staff for security, house-keeping, club-house,

operation of office, for maintaining accounts, etc. There are also

statutory requirements of maintaining sinking fund, repairs fund, etc.

These activities undertaken by housing societies require substantial

expenses and most of the societies are dependent only on contributions

made by members for meeting that expenditure.

33)In such circumstances, if members stop paying monthly

maintenance charges, such action puts strain on the finances of the

Society, which finds it difficult to maintain the building. Defaults in

payment of monthly maintenance charges many times force the other

members to contribute extra amounts in order to ensure that the

building and its facilities are maintained. It is keeping in mind these

special circumstances relating to a co-operative housing societies that

the legislature has consciously incorporated provisions of Section 154B-

7 in the MCS Act.

34)The objective behind provisions of Section 154B-7 of the MCS Act

has been considered by this Court in Tanvi’s Diamoda (supra). This

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Court has dealt with the situation of auction purchaser’s liability to pay

the past maintenance dues. It is held in paragraphs 12 to 17 of the

judgment as under:

12. Section 154B 7 is mandatory. The requirement in Section 154B 7

that no transfer becomes effective unless dues are paid is mandatory.

The Legislature has used a negative form to show that it is compulsory.

It states that a transfer does not take effect unless the dues are paid.

This rule applies to all transfers, whether voluntary or through auction.

When the amount payable is indisputable or undisputed , the

transferee must satisfy this condition. The law requires that statutory

conditions must first be fulfilled. Section 154B 7 imposes a specific

condition. It states that a transfer becomes effective only when all dues

of the society are paid. It also states that the purchaser must apply for

membership and the society must process that application in

accordance with law. These conditions are equally important. The

Legislature intended that societies should not suffer financial loss

because a member leaves behind arrears. If societies are compelled to

accept transfers without clearance of dues, they will not be able to

recover common expenses. This will affect all existing members. The

provision therefore protects the financial stability of the society. A

cooperative housing society survives on the timely collection of

maintenance charges. Members enjoy common facilities because every

member contributes. When arrears remain unpaid for years, the society

and its members suffer. The law protects the society in such

circumstances. 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.

13. Membership in a cooperative society is not an unconditional right.

It is governed by the Act and the by laws. The society must act fairly

and within the framework of law. It cannot impose conditions that the

law does not permit. However, it also cannot ignore conditions that the

law expressly requires. If Section 154B 7 says that dues must be paid

first, the society is duty bound to insist on it. The purchaser’s

ownership of the flat remains unaffected. What remains incomplete is

the entry of his name in the membership register until dues are settled.

14. Section 154B 12 deals with transfer through a registered document.

It gives a member the right to transfer his interest by following

required legal procedure. This right is recognized. However, this right is

not absolute. It must be read together with Section 154B 7. Both

provisions work together. Section 154B 12 explains the process of

transfer between individuals. Section 154B 7 explains when such

transfer becomes effective in the records of the society. A transfer may

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be valid between the parties, but it becomes effective in the society

only when dues are cleared.

15. When a flat is sold in execution proceedings, the auction purchaser

receives a lawful title to the flat. That title cannot be questioned.

However, the Cooperative Societies Act still requires that membership

must follow the statutory procedure. The auction purchaser cannot

skip this legal step. If arrears exist, the society has a right to insist on

their payment. The law applies equally to voluntary and involuntary

transfers. The statute does not exempt auction purchasers. Its purpose

is to ensure that the society is not deprived of legitimate dues.

16. An auction purchaser may say that he is not responsible for unpaid

dues of the previous member. This argument may be accepted only to

the extent that he is not personally liable for the earlier default.

However, this does not remove the statutory condition. The law does

not force him to pay. It only states that the society is not required to

record the transfer until dues are cleared. If the purchaser wants

membership, he must clear the dues as part of the burden attached to

the property. This approach is supported by the language of the

statute.

17. In this background, the legal position becomes clear. The auction

purchaser may apply for membership. The society must examine the

application in accordance with law. The society may insist on payment

of arrears because Section 154B 7 mandates it. Once dues are paid and

the application meets the requirements of the Act, the society must

admit him as a member. In this manner, the law maintains a balance

between the right of the purchaser and the collective interest of the

society.

35) In Tanvi’s Diamoda, this Court has considered interplay

between provisions of Sections 154B-7 and 154B-12 of the MCS Act,

under which a member is entitled to transfer his share, right, title and

interest of his property in the Society by way of registered document by

following due procedure provided in the Rules or bye laws.

36) Provisions of Section 154B-7 are also considered by this

Court in Brightland (supra) in which this Court has dealt with a

situation where there was a serious dispute about the maintenance dues.

This Court held as under:

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29. Since Section 154B-7 is expressly made subject to the provisions of the

Act. The provisions contained in Sections 22 and 23 of the Act, would govern

the aspect of membership of the housing societies. However, as noted above,

Rule 19 of the Rules, 1961, mandates that the person seeking membership of

the society shall fulfill all other conditions laid down in the Act, 1960, the Rules

and the by-laws. Thus, a harmonious construction of the provisions contained

in Sections 22 and 23, on the one part, and Section 154B-7, on the other part, is

required to be made. The legislature's anxiety in insisting for the payment of

the dues of the housing society before the transfer of interest of the member is

appreciable. If the dues of the society are not paid, it would have cascading

effect on the orderly management of the affairs of the housing society. Thus,

the provisions contained in Section 154B-7 deserve adequate weight.

30. At the same time, the attendant facts of the case cannot be lost sight of.

Where the dues of the housing society are not in dispute or indisputable, the

requirement to pay the same before seeking membership can hardly be

contested. However, in cases where there is a serious dispute as to what are

‘the dues’ of the society, the matter cannot be left to the sweet will of the

managing committee of the society. Lest the said provision would operate

onerously and may be abused to seek unjustified sums from the transferor or

transferee disguised as dues of the housing society. Where there is a genuine

dispute as regards the dues of the housing society owed by the erstwhile or

prospective member of the housing society, determination by the authorities

under the Act, 1960, would be warranted. In such a situation, the attendant

circumstances, acts and omissions on the part of the parties assume

importance.

37) In Brightland this Court considered the effect of sale of a flat by a

secured creditor on ‘As is where is’ and ‘whatever there is’ basis and

rejected the contention that the said expressions refer to only physical

condition of the property. This Court held that a greater responsibility is

cast on the person who purchases the property with express

superimposed conditions of “As is where is” and “Whatever there is”

basis to carry out due diligence and find out for himself not only the

condition of the subject property, but also the vulnerability of the title

thereto and the obligations in relation to such property. It is held thus:

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33. I am afraid, the aforesaid stipulation in the sale certificate is of determinitive

significance, especially in the face of the express term of the bargain that the

sale of the subject flat was on “As is where is” and “whatever there is” basis.

The import of the superimposed conditions of “As is where is” and “Whatever

there is” basis is not confined to the physical condition of the property which

is the subject matter of the sale. Such conditions, in given circumstances, may

extend to the quality of title to the subject property and the claims against

such property. A greater responsibility is cast on the person who purchases the

property with express superimposed conditions of “As is where is” and

“Whatever there is” basis to carry out due diligence and find out for himself

not only the condition of the subject property, but also the vulnerability of the

title thereto and the obligations in relation to such property.

34. A useful reference, in this context, can be made to a three Judge Bench

judgment of the Supreme Court in the case of K.C. Ninan v. Kerala State

Electricity Board wherein the Supreme Court, after a survey of precedents,

enunciated the position in law, as under:

“143. Thus, the implication of the expression “as-is-where-is” or “as-is-

what-is-basis” or “as-is-where-is, whatever-there-is and without recourse

basis” is not limited to the physical condition of the property, but extends

to the condition of the title of the property and the extent and state of

whatever claims, rights and dues affect the property, unless stated

otherwise in the contract. The implication of the expression is that every

intending bidder is put on notice that the seller does not undertake any

responsibility to procure permission in respect of the property offered for

sale or any liability for the payment of dues, like water/service charges,

electricity dues for power connection and taxes of the local authorities,

among others.”

(emphasis supplied)

35. The aforesaid being the position in law, the question as to whether the

Respondent Nos. 3 and 4 were required to discharge the liability to pay the

outstanding maintenance/service charges qua the subject premises cannot be

determined solely on the basis of the stipulation in the sale certificate that, to

the best of the knowledge of the secured creditor (PNB), the subject property

was free from all encumbrances. Therefore, the broad submission sought to be

canvassed by Respondent No. 3 that the Respondent Nos. 3 and 4 were not

liable to pay outstanding dues towards the maintenance/service charges for

the period prior to purchase cannot be readily acceded to.

(emphasis added)

38)Thus in Brightland this Court did not accept the contention raised

by the auction purchaser that they were not liable to pay outstanding

dues towards the maintenance/service charges for the period prior to

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purchase. However, this Court found that there were disputes about the

exact amount payable by the past owners. Also, this Court found that the

Society had not demanded the past dues from the purchasers. The

Society in that case had not refused to admit the purchasers as

members. These were the peculiar circumstances why this Court in

Brighland upheld the order of the authorities directing admission of

purchasers as members.

39)In Tanvi’s Diamoda (supra) this Court has considered the ratio of

the judgment in Brightland and has held in paragraphs 18 to 23 of the

judgment as under:-

18. I now consider the judgment in the Brightland case cited by the

respondent. I examine it only to see whether its reasoning applies to

the present facts. I do so keeping the focus on what the evidence

shows and what the statute requires.

19. In this case, there is no dispute about the amount owed to the

housing society. The dues are admitted. The single question is

whether an auction purchaser can seek membership without paying

these dues, keeping in view Sections 154B 7 and 154B 12.

20. The judgment relied upon by the respondent was delivered in very

different circumstances. In that case, the society claimed arrears

going back many years. The auction purchasers questioned both the

existence and the calculation of those dues. They repeatedly asked

the society to provide a clear break up. The society did not respond.

The record showed uncertainty about the actual amount payable.

Because of this uncertainty, the Court held that Section 154B 7 could

not be applied without first determining the dues through proper

legal proceedings under Section 91 or Section 154B 29. The Court

noted that if Section 154B 7 is used without clarity of dues, societies

may misuse the provision to demand amounts that are not supported

by evidence. It was for this reason that the Court permitted deemed

membership under Section 22(2).

21. This factual foundation does not exist here. The dues are

admitted and undisputed. There is no confusion about the amount. In

the Brightland judgment itself, the Court made it clear that when

dues are definite, the requirement under Section 154B 7 must be

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followed. Paragraph 30 of that judgment states that if the amount

claimed by the society is not in dispute, then payment of the dues

before seeking membership cannot be avoided. This principle applies

squarely to the present case.

22. In the Brightland case, this Court intervened because the society

had failed to crystallise dues, failed to respond to repeated requests,

and failed to issue a proper communication. That case turned on

uncertainty and prolonged inaction. None of those elements are

present here. The dues are admitted. The society communicated its

refusal within time. The statutory mandate must therefore prevail.

23. In these circumstances, Sections 154B 7 and 154B 12 do not

permit an auction purchaser to demand transfer of membership

without clearing the dues. The society’s insistence on prior payment

is lawful. The judgment relied upon by the respondent does not

support his case because the reasoning in that judgment depended

on facts that are entirely absent here.

40)Thus, in Tanvi’s Diamoda (supra) this Court has dealt with almost

similar case where the Flat was purchased in an auction and there were

past dues of the ex-member. This Court has held that auction purchaser

cannot seek membership without paying past dues of maintenance. It is

held that SARFAESI Act does not water down the obligations to clear

past maintenance dues. Even in Brightland (supra) this Court has not

accepted the contention raised by the auction purchaser that they were

not liable to pay outstanding dues towards the maintenance/service

charges for the period prior to purchase.

41)Mr. Jabbar has relied on Banganga Anurag (supra), which

considers ratio of both the judgments in Brightland and Tanvi’s

Diamoda (supra). It is held by this Court in Banganga Anurag as under:-

28. This very question came up in the decision of this Court in Tanvi’s

Diamoda Cooperative Housing Society Ltd. In that case, the buyer had

not disputed the dues. He had accepted the amount and did not

question the society’s calculations. The Court held that when there is

no dispute about the dues, then Section 154B-7 must be applied

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strictly. The buyer cannot seek membership without first clearing the

outstanding amounts. Payment of dues is a legal precondition and

cannot be avoided.

29. In contrast, in the earlier case of Brightland Cooperative Housing

Society Ltd., the Court dealt with a situation where the dues were

seriously disputed. There was no clarity from the society. No proper

details were given, and the amounts were questionable. In that

background, the Court held that if there is a real and serious dispute

about the amount or the legality of the dues, then the society cannot

use Section 154B-7 as a weapon to indefinitely block membership. In

such a case, the law expects the Registrar or the concerned authority

to first examine the correctness of the dues, either in a Section 91

dispute or Section 154-B-29. Only when the dues are determined and

no longer disputed can the society insist on full payment before

admitting the buyer as a member.

42)Thus, in Banganga Anurag this Court has held that where the

buyer has not disputed the dues, the case would fall within the ratio of

the judgment in Tanvi’s Diamoda. However, where dues are seriously

disputed and there was no clarity from the Society, the case would fall

within the ratio of the judgment in Brightland. This Court thereafter

proceeded to hold in Banganaga Anurag that case fell within the

framework of law laid down in Tanvi’s Diamoda. It is held in paragraphs

35 to 38 as under:-

35. Unlike in Brightland, the present case does not show any delay or

silence from the Society. In Brightland, the society did not provide any

clear break-up of dues despite repeated requests, and it was only much

later that a large amount was suddenly demanded. That conduct was

found to be unreasonable and the Court, therefore, protected the buyer

from arbitrary treatment. In contrast, in this case, the Society issued

the demand within the 90- day period. It clearly explained the reasons

for refusal and listed out the dues with supporting documents. There

was no inaction or casual behaviour from the Society. This places the

case squarely within the framework laid down by this Court in Tanvi’s

Diamoda. There too, the purchaser had bought a flat in auction and

dues were outstanding. The Society refused membership until the dues

were cleared. The Court upheld that refusal, stating that society dues

survive the auction and must be paid before seeking membership. The

Court clearly laid down that SARFAESI auction purchasers are not

exempt from society dues and cannot rely on the auction to defeat the

statutory protection granted to societies under Section 154B-7.

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36. Further, in Tanvi’s Diamoda, the Court rejected the argument that

refusal of membership should be overlooked due to a pending dispute.

It noted that unless the dispute is genuine and raised promptly, and

unless the buyer approaches proper legal forums like the Registrar or

cooperative court under Section 91, the society cannot be blamed.

Respondent No. 3, in the present case, never initiated any such

proceeding. He never sought an official determination on what portion

of the dues was illegal or excessive. Instead, he refused to pay and

demanded membership.

37. In the present case, the Society has made it clear that the amount

demanded from Respondent No. 3 consists of four well- identified

categories: unpaid maintenance charges, unpaid repair charges,

unpaid conversion charges (for converting the society’s land from

leasehold to freehold), and interest on the delayed payments. This

detailed break-up, often referred to as “bifurcation,” was formally

shared by the Society with R3 before his membership application was

rejected. This bifurcation shows exactly how the total dues are made

up. The Society has given proper communication, explaining the basis

of each head of demand. What is most important to note is that

Respondent No. 3 has not challenged the accuracy or computation of

these charges. He has not pointed out any mathematical error or any

illegality in the categories themselves. He has not said that the

maintenance or repair charges are wrongly calculated or that the

conversion charges were never approved. His only argument is that

these dues should be recovered from the previous flat owner and not

from him. However, this argument cannot be accepted in law. Once

Respondent No. 3 purchased the flat under an “as-is-where-is” and

“whatever-there-is” condition through an auction, he stepped into the

shoes of the previous member. The dues are not personal to the earlier

member; they are linked to the flat. Therefore, whoever becomes the

new owner inherits the liabilities attached to the flat unless there is a

contract to the contrary or the society has waived the dues. Hence, the

facts of this case align completely with Tanvi’s Diamoda and not with

Brightland.

38. This Court’s decision in Tanvi’s Diamoda is recent, authoritative,

and directly applies to auction purchasers like Respondent No. 3. It

emphasises that the rights of housing societies to recover their dues

cannot be bypassed by citing auction purchases or vague disputes. The

Court made it clear that both the rights of financial institutions under

SARFAESI and those of cooperative societies under the MCS Act must

be respected. One cannot override the other. The situation here

reflects Tanvi’s Diamoda such as an auction purchase, known society

dues, detailed communication by the society, and refusal of

membership based on unpaid charges. Accordingly, the legal position

is settled. Membership cannot be claimed unless the dues are cleared.

The alleged dispute lacks merit and was never taken to the proper

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forum for determination. In conclusion, the facts of the present case

fit squarely within the pattern laid down in Tanvi’s Diamoda. The

protection of Section 154B-7 applies in full force. The reliance on

Brightland is misplaced and does not help Respondent No. 3. The

Society’s refusal of membership was lawful, justified, and in strict

compliance with the law.

(Emphasis added)

43)In my view, the judgments of this Court in Brightland, Tanvi’s

Diamoda and Banganga Anurag provide direct answer to the issue

involved in the present case. In all the three cases, the sale was on ‘As is

Where is Basis & What Is As Is Basis’. Thus, Padalkars have inherited the

liability attached to the Flat. In that sense, the charge created on the

Flat by virtue of provisions of Section 154B-14 gets attached to

Padalkars as well. Section 154B-14 provides thus:-

154B-14. Charge of society in respect of share and interest of

Member.—

A society shall have a charge upon share and interest of a Member or

past Member or deceased Member to the extent of dues payable by

such Member to the society.

44)In my view, provisions of Section 154B-14, far from assisting the

case of Padalkars, actually militates against them. Once the dues

payable by the member forms charge of the society on the flat, with

purchase of the Flat by Padalkars, the liability gets transferred to them.

45)In view of the above discussion, Padalkars cannot escape the

liability to pay maintenance dues in respect of the Flat in respect of the

period prior to taking over possession thereof. The Assistant Registrar

and Joint Registrar have grossly erred in not appreciating the statutory

schemes of the MCS Act and in ignoring specific stipulations of Sale

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Certificate as well as the provisions of Section 154B-7 of the MCS Act.

Their orders are clearly unsustainable and are liable to be set aside.

46)I am not impressed by the submissions of Mr. Jabbar that filing of

a Dispute under Section 91 of the MCS Act by the Society for recovery of

maintenance dues would disentitle it from relying on provisions of

Section 154B-7 of the MCS Act. Even if Padalkars are not admitted as

members of the Society, the society is entitled to recover maintenance

dues pending in respect of the Flat. The Society has both remedies open.

It can oppose grant of membership to Padalkars and can also initiate

action for recovery of dues in respect of the Flat. If submissions of Mr.

Jabbar about exercise of parallel remedies is accepted, the same would

result in an absurd situation where the purchaser may continue to

occupy the Flat in absence of membership but the Society would be

prevented from taking any action for recovery of dues. As per Section

154B-14 of the MCS Act, unpaid maintenance dues form a charge of the

society on the Flat and the Society is accordingly entitled to recover the

same by selling the Flat. For sale of the Flat, the Society can initiate

action for adjudication of the dues either under Section 154B-29 or

under Section 91 of the MCS Act. Merely because the Society chooses

the remedy under Section 91 of the MCS Act, it does not mean that dues

get converted into disputed amount thereby making the provisions of

Section 154B-7 inapplicable.

47)I am also not impressed by the submission of Mr. Jabbar that by

filing a Dispute under Section 91 of the MCS Act, the Petitioner-Society

has impliedly admitted that Padalkars have become members of the

Society. Admission as members of the Society needs to be a conscious

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act and the Society has specifically declined to admit Padalkars as its

members. Admission to membership in such circumstances cannot be

inferred merely on account of exercise of remedy under Section 91 of the

MCS Act. Padalkars claim to be the members of the society and under

clause (b) of Sub-section 1 of Section 91, ‘a person who claims to be a

member of the society’ is also included in the enumerated list against

whom the society can file a Dispute. Therefore mere filing of Dispute

under Section 91 of the MCS Act does not automatically confer

membership on Padalkars. Also, in the peculiars facts of the case,

Purohits are no longer owners of the Flat and since the Society is

entitled to recover dues by selling the Flat occupied by Padalkars, they

are impleaded in the Dispute. However, their impleadment as parties to

the Dispute would not automatically elevate them to a status as

members.

48)I am also not inclined to dismiss the Petition only on account of

allegation of suppression. True it is that the Petitioner-Society ought to

have disclosed the factum of filing of Dispute under Section 91 of the

MCS Act in the memo of the Petition. It appears that the Dispute was

filed during pendency of the Revision before the Joint Registrar. In

ordinary circumstances suppression of material fact by the litigant

disqualifies such litigant from obtaining any relief. Reliance by Mr.

Jabbar on judgment of the Apex Court in K. D. Sharma (supra) and of

this Court in Ambada Seva Sahakari Sanstha (supra) in that regard is

apposite. However, it is equally well settled that the suppression must be

of a material fact. As held above, pendency of the Dispute has no

relevance to the issue of membership and in that sense, non-disclosure

of filing of those proceedings before the Cooperative Court is not really

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fatal to the case of the Petitioner. It is held in S.J.S. Business

Enterprises (P) Ltd. v. State of Bihar

9

as under:

13. As a general rule, suppression of a material fact by a litigant

disqualifies such litigant from obtaining any relief. This rule has been

evolved out of the need of the courts to deter a litigant from abusing

the process of court by deceiving it. But the suppressed fact must be a

material one in the sense that had it not been suppressed it would have

had an effect on the merits of the case. It must be a matter which was

material for the consideration of the court, whatever view the court

may have taken [R. v. General Commrs. for the purposes of the Income

Tax Act for the District of Kensington, (1917) 1 KB 486 : 86 LJKB 257 :

116 LT 136 (CA)] ….

(emphasis added)

49)In State (NCT of Delhi) v. BSK Realtors LLP

10

, the Apex Court has

held that the fact suppressed must be material which would have effect

on the merits of the case. It is held that the principle is not intended to

arm one party with a weapon of technicality over its adversary but rather

serves as a crucial safeguard against the abuse of the judicial process. It

is held thus:

37. Law is well settled that the fact suppressed must be material in the

sense that it would have an effect on the merits of the case. The

concept of suppression or non-disclosure of facts transcends mere

concealment; it necessitates the deliberate withholding of material

facts—those of such critical import that their absence would render any

decision unjust. Material facts, in this context, refer to those facts that

possess the potential to significantly influence the decision-making

process or alter its trajectory. This principle is not intended to arm one

party with a weapon of technicality over its adversary but rather serves

as a crucial safeguard against the abuse of the judicial process.

50)In the facts and circumstances of the present case, I am not

inclined to decline exercise of jurisdiction under Article 227 of the

Constitution of India only on account of omission on the part of the

Petitioner-Society in disclosing filing of Dispute under Section 91 of the

MCS Act before the Co-operative Court.

9 (2004) 7 SCC 166

10 (2024) 7 SCC 370

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51)Reliance by Mr. Jabbar on the judgment of the Apex Court in

Garment Craft (supra) is also inapposite. This Court is not satisfied with

the ultimate conclusions reached by the Assistant Registrar and Joint

Registrar and therefore error of fact and law committed by them in the

impugned orders cannot be ignored. On the contrary, this Court has

arrived at a conclusion that Padalkars are not entitled to be admitted as

members of the Society without first clearing the past maintenance

dues. Therefore, exercise of jurisdiction under Article 227 of the

Constitution of India in the present case is clearly warranted.

52)Before parting, it would be necessary to take note of a fair stand

taken by the Society where it has offered to waive off interest on

maintenance dues payable upto the date of purchase of the flat by

Padalkars and has offered to accept only the principal amount of dues

upto the date of purchase. This is on account of offer made in the letter

dated 19 March 2023 (for partial waiver of interest). However the society

has suggested that it would charge interest on that principal amount of

maintenance dues from the date of purchase. Accordingly a statement

has been submitted by the Society towards the offer which indicates that

the dues before purchase along with interest comes to Rs. 7,22,079/-, but

the society is willing of waive interest amount of Rs. 3,30,837/-. This

proposal, when put across by the Court to Padalkars during the course of

hearing, was however declined by them. Though the Petition is being

allowed, in my view, it would be in interest of justice to keep this offer of

the society open for being opted by Padalkars. It is for Padalkars to take

a call on the offer.

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53)Conspectus of the above discussion is that the impugned orders

passed are indefensible and are liable to be set aside. Petition

accordingly succeeds and I proceed to pass the following order:-

(i)Impugned order dated 4 January 2024 passed by the

Assistant Registrar and order dated 7 April 2025 passed by

the Joint Registrar are set aside.

(ii)In view of the readiness expressed by the Petitioner-

Society, if Padalkars pay the principal amount of past dues

without interest upto the date of purchase, but with

interest post the date of purchase, within 6 weeks, the

Society shall admit Padalkars as its members.

(iii)The proceedings for recovery of society dues shall be

decided uninfluenced by the observations made in the

judgment.

54)Writ Petition is allowed in above terms. Rule is made absolute.

There shall be no orders as to costs. In view of the disposal of the Writ

Petition, Interim Applications do not survive and stand disposed of.

[SANDEEP V. MARNE, J.]

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