Bombay High Court
Makrand Shirkant Padalkar And Anr vs Monarch Orchid Co Op. Hsg. Soc. Ltd Thru. … on 14 July, 2026
2026:BHC-AS:28599
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 ...Applicants
In the matter between
Monarch Orchid Co-operative Housing
Ltd. ...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
1 2024 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
2 Writ 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.
4 2025(5) Mh.L.J. 525
5 2011 (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
Others7 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 demandingPage No.10 of 33
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Megha 905_WP_8034_2025_fc.odtoutstanding 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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Megha 905_WP_8034_2025_fc.odtFurther 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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Megha 905_WP_8034_2025_fc.odtwillingness 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 सदनिकेसाठी संबंधित सदनिकाधारक यांचेकडू न संस्थेस येणे
असले ल्या रकमेबाबत जाब देणार संस्थेने एनकेजीएसबी को.ऑप. बँक.
लि. याना अवगत केल्याचे दिसून येत नाही.
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:-
उक्त निरिक्षणे विचारात घेता आव्हानित आदेशाच्या अनुषंगाने संस्थेने फ्लॅट क्र
११०१ च्या थकीत देखभाल शुल्काकरीता मा को ऑप कोर्ट अलिबाग यांचेकडे
दावा दाखल केले ला असून तो प्रलं बित आहे. याचा अर्थ संस्थेने प्रतिवादी क्र १ यांचे
Page No.16 of 33
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Megha 905_WP_8034_2025_fc.odtआदेशाचे अंशतः पालन केले असल्याचे दिसून येत आहे त्यानुसार संबंधित
थकबाकी वसुली संस्थेस करता येणार आहे. प्रतिवादी क्र २, ३ यांनी अर्जदार
संस्थेतील फ्लॅट क्र ११०१ हा ई लिलावाव्दारे नोंदणीकृत दस्तानुसार खरेदी केल्याचे
दिसून येत आहे. नोंदणीकृत दस्तानुसार प्रतिवादी क्र २, ३ हे संस्थेचे सभासदत्व
मिळविणेस पात्र आहेत. संस्थेने प्रतिवादी क्र २, ३ यांना सभासदत्व नाकारल्याने
सदर प्रकरण कलम २३ (२) नुसार निर्णयीत करण्यात येत असल्याचे प्रतिवादी क्र १
यांनी त्यांचे आदेशात नमूद केले आहे. प्रतिवादी क्र १ यांनी संबंधितांना सुनावणीची
संधी देऊन दाखल कागदपत्रे विचारात घेऊन दि. ०४.०१.२०२४ रोजीचा आदेश
पारित केल्याचे दिसून येत 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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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
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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 Bihar9 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.]
Signed by: Megha S. Parab Page No.33 of 33
Designation: PA To Honourable Judge 14 July 2026
Date: 14/07/2026 15:27:40
