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The Bombay High Court has ruled in the favour of 12 shop buyers, supporting their right to be considered full members of a cooperative housing society. The court rejected appeals made by the Bhandari Association Housing Society against the orders of the divisional joint registrar in October 2023 and the deputy registrar in September 2022, which ordered the inclusion of the shopkeepers as regular members. The court upheld that mutual housing societies have no right to discriminate between domestic and commercial owners of units on the grounds of decision-making roles, guaranteeing equal membership opportunities. This case is consistent with earlier judicial decrees, e.g., that in September 2023 accepted membership of the owner of a garage converting part of it as a clinic and a September 2024 order that reaffirmed the entitlement of a widow for inheriting the membership of society.
The Bombay High Court has reiterated the principle that cooperative housing societies need to be run collectively so that all unit buyers both residential and commercial can contribute to decision-making. It sustained two orders, a divisional joint registrar order issued in October 2023 and the deputy registrar's order passed in September 2022, where it stated that 12 purchasers of the shops would have to be given treatment as fully paid-up members of a housing society cooperative. According to the ruling of the court, the society cannot differentiate shop owners and residence members concerning administration and governing of the company. Advertisement
The case originated from a petition by Vivina Cooperative Housing Society, objecting to the order of the deputy registrar to include the 12 shopkeepers as members. The court rejected the petition, holding it "devoid of merit." The shopkeepers, led by advocates Nilkant Bhadrashete and Harsh Malhotra, claimed they were unjustifiably excluded from the management of the society and relegated to nominal membership in terms of an understanding with the builder.
Senior advocate Vijay D. Patil, representing the housing society, contended that the developer had been permitted to construct 16 shops using 3,000 sq. ft. of unutilised FSI during redevelopment. Initially, the society had agreed to grant shop owners only nominal membership. But Justice Sandeep Marne, in his order, said it was illogical to permit commercial units in the society but deprive their owners of the opportunity to take part in management decisions. He pointed out that if the society decided to charge the shops exorbitant maintenance charges, the owners of the shops would have no forum to oppose such decisions at the general body meetings.
This is consistent with earlier judgments wherein the Bombay High Court has upheld the rights of other non-residential property owners in cooperative housing societies. In September 2023, the court decided in favour of a garage owner who transformed the space into a clinic and granted them complete society membership despite not being a residential unit owner. In the same vein, in September 2024, a court rejected a plea by Bima Nagar Co-operative Housing Society, which had sought to prevent the transfer of membership to a widow following her husband's death. The court reiterated the rule that cooperative societies have to be run in an inclusive manner, so rightful stakeholders are not excluded from decision-making unfairly.
The ruling, issued on February 24 and made public earlier this week, reaffirmed that every person who holds a unit in the complex residential or commercial has to be extended the same rights in the management of the society.
The Bombay High Court decision makes a significant precedent for cooperative housing societies, and commercial unit owners are not left out of decision-making. With this confirmation of rights of the 12 shopkeepers, the court has strengthened the cooperative housing aspect of equal rights for all the unit holders. The ruling falls in line with previous judgments where the rights of non-residential property owners, including shopkeepers and clinic proprietors, had been upheld to govern society. These judgments taken together confirm that housing societies can't restrict membership rights arbitrarily and thereby ensure governance in cooperative groups on a just basis.
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