Vaitara Bhema Worli Coopertive Housing Society vs State Of Maharashtra Thr Secretary Of Coopertion And Ors

CNR No : HCBM010528082026

Neeta Sawant WP-14533-2026& GROUP
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 14533 OF 2026
with
WRIT PETITION NO. 14534 OF 2026
with
WRIT PETITION NO. 14535 OF 2026
with
WRIT PETITION NO. 14536 OF 2026
with
WRIT PETITION NO. 14537 OF 2026
with
WRIT PETITION NO. 14538 OF 2026
with
WRIT PETITION (ST.) NO. 31181 OF 2026
with
WRIT PETITION (ST.) NO. 31183 OF 2026
with
WRIT PETITION (ST.) NO. 31224 OF 2026
with
WRIT PETITION NO. 14414 OF 2026

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Neeta Sawant WP-14533-2026& GROUP
...Petitioner
Vaitarna Bheema Worli Sagar CHSL
: Versus :
The State of Maharashtra & Ors. ...Respondents
Mr. Pradeep Thorat with Mr. Aniesh Jadhav, Mr. Nikhil V. Adkine & Mr.
Shubham B. Choudhari, for Petitioner in WP(ST)/31224/2026.
Mr. Mayur Khandeparkar with Mr. Aniesh Jadhav, Mr. Nikhil V. Adkine,
Mr. Shubham B. Choudhari & Mr. Somnath Kale, for Petitioner in
WP/14537/2026.
Dr. Abhinav Chandrachud with Mr. Aniesh Jadhav, Mr. Nikhil V. Adkine,
Mr. Shubham B. Choudhari & Mr. Somnath Kale, for Petitioner in
WP/14534/2026.
Mr. Aniesh Jadhav with Mr. Nikhil V. Adkine, Mr. Shubham B. Choudhari &
Mr. Somnath Kale, for Petitioner in WP/14414/2026, WP/14533/2026,
WP/14535/2026, WP/14536/2026, WP/14538/2026, WP(ST)/31181/2026 &
WP(ST)/31183/2026.
Mr. Drupad Patil with Mr. Priyank Daga & Mr. Malhar Vishwarupe, for
Respondent No. 4 in all the Petitions.
Ms. Ashwini Purav, AGP for State, Respondent.
CORAM: SANDEEP V. MARNE, J.
Judgment Resd. ON : 27 OCTOBER 2026.
Judgment Pron. On : 4 NOVEMBER 2026
JUDGMENT:
1) Rule in all the ten Petitions. Rule is made returnable
forthwith. The learned counsel for Respondent No. 4 and the learned
AGP waive service of Rule. At the request of the learned counsel
appearing for parties and with the consent of the learned counsel

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appearing for Respondent No. 4, the Petitions are taken up for final
disposal.
T HE C HALLENGE
2) Petitioner-society has filed these Petitions challenging the
orders passed by the Divisional Joint Registrar, Co-operative Societies,
Mumbai Division, Mumbai (Divisional Joint Registrar) dismissing the
Revision Applications filed by it and confirming the orders dated 30 June
2026 passed by the Deputy Registrar, Co-operative Societies, G/S Ward,
Mumbai ( Deputy Registrar ). By orders dated 30 June 2026, the Deputy
Registrar has allowed the Appeals preferred by Respondent No.4 and has
directed the Petitioner to grant membership to Respondent No.4 by
issuing share certificates to it in respect of the 10 shops occupied by it.
F ACTS
3) Briefly stated, facts of the case are that Worli Sagar CHSL
was formed and registered by the promoters thereof with the intention
of securing allotment of government land for construction of a
residential tenements as per the Government Resolution ( GR ) dated 12
May 1983 laying down a policy for grant of government land to co-
operative housing societies. Worli Sagar CHSL applied to the government
for allotment of the land. By GR dated 11 February 1987, a parcel of land
at Pochkanawala Road, Worli, Mumbai was allotted to Worli Sagar CHSL
for a tenure of 99 years. The society was mandated to admit only persons
eligible as per G.R. dated 12 May 1983 as its members. Though Worli

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Sagar CHSL was supposed to construct only residential building for
providing houses to its members, the society applied to the State
Government seeking grant of FSI for construction of shops in the
building. By letter dated 22 June 1987, the State Government granted
permission to Worli Sagar CHSL to use the BUA not exceeding 15% of
total FSI for shopping purposes. Accordingly, Worli Sagar CHSL
constructed a residential buildings in which about 53 shops were
constructed.
4)
Worli Sagar CHSL admitted several eligible persons as its
members and allotted residential flats to them. The allottees of the
residential flats were admitted as ordinary members of the society. So far
as shops are concerned, the society granted only occupancy rights by
admitting the occupants as its nominal members. This is how nominal
membership was granted to several persons in respect of the shops
constructed in the building of Worli Sagar CHSL.
5) Over a period of time, it appears that the original allottees
surrendered their respective shops, and new persons were inducted by
the Society by admitting such inductees as its nominal members.
Respondent No. 4 is a private limited company whose director is Mr.
Satish Chaturvedi, who is occupant of a residential flat in the building of
Petitioner society and who also functioned as Chairman thereof. Over
the period of time, Respondent No. 4 secured allotment of shops
surrendered by the original allotees. This is how Respondent No.4
became the allottee and nominal member of Worli Sagar CHSL in respect

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of 10 shops bearing Nos.7 to 16. Currently, Respondent No.4 is the
occupant and nominal member in respect of the 10 shops bearing Nos.7
to 16.
6) Worli Sagar CHSL was subdivided into 5 societies by order
dated 16 October 2023. One of the subdivided societies is Petitioner-
Vaitarna Bheema Worli Sagar CHSL. All the 10 shops, in respect of which
Respondent No.4 is the allottee, are located in the building of the
Petitioner-society which has admitted Respondent No.4 as its nominal
member qua each of the 10 shops.
7)
Respondent No.4 directly approached the Deputy Registrar
in May 2026 by filing Appeals under Section 22(2) of the Maharashtra
Co-operative Societies Act, 1960 (MCS Act) seeking ordinary
membership with the Petitioner-society in respect of the 10 shops
occupied by it. The appeals filed by Respondent No.4 were opposed by
the Petitioner-society by filing its replies. By order dated 30 June 2026,
the Deputy Registrar has allowed the Appeals preferred by Respondent
No.4 by treating the same as appeals filed under Section 23(2) of the
MCS Act. The Deputy Registrar has directed the Petitioner-society to
grant regular/ordinary membership to Respondent No.4 in respect of the
10 shops by issuing share certificates in its name. The Petitioner-society
filed Revision Application Nos. 291 to 300 of 2026 before the Divisional
Joint Registrar. By interim order dated 11 August 2026, the Divisional
Joint Registrar granted stay on Deputy Registrar's order. The revisions
were opposed by Respondent No.4 by filing its replies. By order dated 9

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October 2026, the Divisional Joint Registrar has dismissed the Revision
Applications preferred by the Petitioner-society.
8) Aggrieved by the orders passed by the Deputy Registrar and
the Divisional Joint Registrar, Petitioner-society has filed these ten
Petitions.
S UBMISSIONS :
9)
Mr. Thorat, the learned counsel appearing for the Petitioner
in Writ Petition (St.)31224 of 2026 submits that the Deputy Registrar has
grossly erred in entertaining direct Appeal filed before him in absence of
any application being made to the Petitioner-society for grant of
membership. He submits that the scheme of Sections 22 and 23 of the
MCS Act is such that Section 22(2) provides for deemed membership in
the event of society failing to decide the application for registration,
whereas, Section 23(2) provides for remedy of appeal before the Deputy
Registrar in the event of membership being rejected by the society. That
in the present case, Respondent No.4 did not file any application for
grant of membership and that therefore provisions of Sections 22 or 23
of the MCS Act do not come into play. That the impugned order passed
by the Deputy Registrar is without jurisdiction and liable to be set aside.
Mr. Thorat further submits that Respondent No.3 is a mere
lessee/licensee, who is permitted to occupy the shops subject to terms
and conditions. That he has not purchased the said shops. That there is
express prohibition under the GR to sell the shops. That Respondent
No.4 has acquired occupancy rights in respect of the shops from third

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parties after surrender thereof to the society. That it is impermissible to
transfer the occupancy rights in the shop. That occupant can be admitted
only as a nominal member of the society. He relies upon Bye-law No. 20
of the New Model Bye-laws of Co-operative Housing Societies ( Bye-
laws ) in support of his contention that nominal membership can be
granted only to a sub-lessee, licensee, caretaker or occupant. The very
fact that Respondent No. 4 has been admitted as a nominal member of
the Society makes it abundantly clear that he is merely a
licensee/occupant in respect of the shops in question. He submits that
amendment to MCS Act by insertion of Chapter-XIIIB in the year 2019
abolishing the concept of nominal membership does not mean that
nominal member automatically gets converted to an ordinary member.
He relies on Explanation to Section 154B-7 of the MCS Act in support of
his contention that membership cannot be granted to a occupant who is
a mere tenant/licensee. He prays for setting aside the impugned orders.
10) Mr. Khandeparkar, the learned counsel appearing for the
Petitioner in WP No.14537 of 2026 adopts the submission of Mr. Thorat.
Additionally, he submits that Bye-law-20 refers to Appendix-11 which is
a Form for application of nominal membership, which is to be filled only
by a sublettee, licensee/caretaker or a occupant. He draws the attention
of this Court to the provisions of Section 24 of the MCS Act in support of
his contention that a nominal member is neither entitled to any share in
the profits or assets of the Society nor does he enjoy any of the privileges
or rights available to a regular member of the Society. That society can
extend some of the rights and privileges to a nominal member as per its

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Bye-laws. That under Section 27(8) of the MCS Act, a nominal member
does not have a right to vote or become member of the committee or
representative of the society or any other society. That after the 2019
amendment to the MCS Act, the very concept of nominal membership is
deleted and provisions of Sections 2(19)(c), 24 and 27 of the MCS Act are
made inapplicable to co-operative housing societies. He refers to Rule
8(1)(f) of the Maharashtra Co-operative Societies Rules, 1961 ( MCS
Rules ) in support of his contention that bye-laws regulate the privileges,
rights and duties of nominal members. That under Rule 19, the
conditions stipulated therein need to be complied with for membership
and nominal membership can be granted even by an authorized officer of
the society without holding any General Body Meeting.
11)
Mr. Khandeparkar further submits that in the present case,
there is no source application on the basis of which the Deputy Registrar
could have exercised jurisdiction under Sections 22(2) or 23(2) of the
MCS Act. He submits that there is no concept of automatic elevation of
nominal member to that of ordinary member and the Deputy Registrar
does not have jurisdiction to change the class of membership. He
submits that membership was sought from the Deputy Registrar by
relying on Deed of Confirmation/Transfer executed with the person who
had no semblance of right in the shop. That occupancy of the shop was
surrendered by the previous occupant in the year 2017 and Respondent
No.4 executed agreement with that person in the year 2024 for the
purpose of converting his nominal membership into ordinary
membership. That in allotments made to Respondent No.4 by the

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society, specific conditions were imposed not to sell any rights in the
shops and to surrender the same to the society.
12) Mr. Khandeparkar distinguishes the judgment of this Court
1
in Viviana CHSL Versus. State of Maharashtra . He also relies on
judgment of this Court in Parimal H. Solanki Versus. Bhoumik CHSL
2
and another , in support of his contention that Section 154B-31 is a
transitional provision. He prays for setting aside the impugned orders.
13)
Dr. Chandrachud the learned Counsel appearing for the
Petitioner in WP No. 14534 of 2026 submits that Respondent No.4 can
never be admitted into regular membership of the Petitioner-society. He
submits that the Government Resolution dated 12 May 1983 envisages
the concessional allotment of Government land for the purpose of
providing houses to persons belonging to the economically weaker
sections of society or to specified categories of persons, such as
Government employees and public servants. That the allotment of
government land is made purely for residential purpose with express
prohibition on construction of commercial premises or admission of any
person into membership of the society for commercial purposes. That
the society had obligation only to admit persons who satisfy the
eligibility criteria specified in the GR dated 12 May 1983 and their
eligibility is required to be specified by the Collector. That by letter dated
22 June 1987, concession was granted for use of 15% of total FSI for
construction of shops with a specific condition that only sub-lessees can
be inducted in such shops. Therefore, shops can be allotted by the
1
WP No. 3938 of 2025 decided on 24.2.2025
2
Interim Application (L.) No. 25993 of 2002 decided on 6.10.2022

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society only on occupancy basis and that no occupant of the shop can
ever become regular member of the Petitioner-society. He submits that a
nominal member can never have title in the property and that
Respondent No.4 was fully aware of the same. That he applied for
nominal membership of the society knowing fully well that he was
merely permitted to occupy the shop premises. That society has absolute
authority to terminate the license. He relies on provisions of Section 11
of the Transfer of Property Act, 1882 in support of the contention that
when there are restrictions on enjoyment of the property, the same
cannot be treated as a transfer within the meaning of Section 11. In
support, he relies on judgment of the Calcutta High Court in Subal
3
Chandra Malty and others Versus. Usha Banarjee .
14)
Dr. Chandrachud further submits that what is effected to
MCS Act in the year 2019 is a substantive amendment, which can only
have prospective effect. The same is not a procedural amendment so as
to apply retrospectively. That therefore nominal membership already
granted to Respondent No.4 can continue despite deletion of provision
for nominal membership in a co-operative housing society under the
2019 Amendment Act. In support of the contention of prospective
application of substantive amendment, Dr. Chandrachud relies on
4
judgments of the Apex Court in District Collector Versus. K. Govindaraj
and Union of India and another Versus. Indusind Bank Limited and
5
another .
3
2009 SCC Online Cal 1503
4
2016 4 SCC 763
5
2016 9 SCC 720

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15)
Dr. Chandrachud further submits that Respondent No. 4 has
never asserted any claim to title in respect of the shops and has, at all
times, accepted his status as an occupant/licensee. He was, therefore,
content with being admitted as a nominal member of the Society. That
only after execution of the so-called Deed of Confirmation/Transfer, he
started claiming title in respect of the shops. Dr. Chandrachud relies on
Bye-law-1(xiv) of the Bye-laws in support of his contention that there is
a marked difference between the concept of nominal membership and
ordinary membership. Dr. Chandrachud accordingly prays for setting
aside the impugned orders.
16)
Mr. Drupad Patil has appeared for Respondent No.4 in all
ten Petitions. He opposes the Petitions submitting that both the
authorities have concurrently upheld grant of membership in favour of
Respondent No.4. He submits that there can be no difference between
persons occupying residential flats and persons occupying shops for the
purpose of grant of membership. He submits that the shops have also
been ‘allotted’ as is the case in respect of residential flats. That in respect
of shops, there is no mere ‘occupation’ like a licensee or lessee but an
‘allotment’ creating rights in the shops. That even ordinary members do
not have agreements under Section 4 of Maharashtra Ownership of Flats
(Regulation of the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 ( MOFA ) and that therefore mere absence of
registered sale-deed executed by the society cannot be a ground for
denying ordinary membership to shop allottees. He submits that the
Society cannot create an artificial distinction between the allottees of

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flats and the allottees of shops. He further takes me through the
arrangement initially put in place by the Society at the time of
construction of the shops, in support of his contention that the shop
allottees were also required to part with valuable consideration in order
to secure allotment of the shops. He submits that the society had
engaged M/s. Sri Estate Agents for procuring members for allotment of
shops. That the said agency paid amount of Rs.3 crores to the society and
in lieu, the agency was granted right to procure members for allotment
of shops. That therefore the case does not involve grant of mere license.
He submits that, since substantial amounts are collected by the Society,
both at the time of initial allotment and upon subsequent transfers, the
shop allottees are not required to pay any additional rent to the Society
and are liable to pay only the usual maintenance charges. He submits
that at the time of seeking transfer of allotment, Respondent No.4 has
paid valuable consideration to the previous allottee, as well as Rs.25 odd
lakhs to the society per shop. That therefore the case does not involve
grant of mere occupancy rights and Respondent No. 4 falls into the
category of ‘allottee’ on par with other residential flat allottees.
17) Mr. Patil further submits that Respondent No.4, as well as its
previous allottees have been issued share certificates by the society. That
society always treated Respondent No.4 as member of the society. That
only when decision was taken for carrying out redevelopment of society's
building, the Society decided not to recognize nominal membership to
Respondent No.4, which was a trigger point for Respondent No.4 to
approach the Deputy Registrar for grant of regular membership. That

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Deputy Registrar has rightly exercised jurisdiction in the facts and
circumstances of the present case.
18) Mr. Patil further submits that judgment of this Court in
Viviana CHSL squarely applies to the facts and circumstances of the
present case. That this Court has rejected the objection of direct
approach to Deputy Registrar without applying for membership in the
Viviana CHSL . That this Court has held that grant of occupancy right
cannot be a ground for denial of membership to shop owners. That this
Court has held that after 2019 amendment to the MCS Act, the concept
of nominal membership is discontinued and therefore the shopkeepers
are required to be treated as regular members. He submits that the
circumstances in the case of Vivina CHSL are exactly identical to the one
involved in the present case. That the SLP filed against the judgment of
this Court in Viviana CHSL has been dismissed. That therefore the law
enunciated in that judgments needs to be followed in the present case as
well. That the society is at an advanced stage of redevelopment of its
building since tenders are already invited for choosing the developer and
the last date for tender submission and opening was 25 October 2026.
Mr. Patil submits that the impugned order merely recognises the rights
of Respondent No. 4, who has already been admitted as a nominal
member of the Society. He submits that, since the concept of nominal
membership is no longer recognised in respect of co-operative housing
societies, the Deputy Registrar has rightly directed the Society to grant
regular membership to Respondent No. 4. He prays for dismissal of the
Petition.

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ONSIDERATION F UBMISSIONS EASONS ND NALYSIS
C O S , R A A
19)
Petitioner-society is aggrieved by the Orders passed by the
Deputy Registrar directing grant of membership to Respondent No.4 qua
Shop Nos.7 to 16. Respondent No.4 is already admitted into nominal
membership of the Petitioner-society. It occupies 10 shops bearing Nos.7
to 16 in the building of the Petitioner-society. Respondent No.4 is a
Private Limited Company and its Director, Mr. Satish Chaturvedi is
already a regular member of the Petitioner-society on the strength of
residential flat owned by him in Society’s building. Respondent No.4 has
acquired rights in respect of the 10 shops at different points of time.
Since Writ Petition (L) No. 31224 of 2026 ( relating to Shop No. 16 ) is
argued by all the learned counsel as the lead petition and since all the
learned counsels have referred to the documents and pleadings of Writ
Petition (L) No. 31224 of 2026 it would be apposite to quickly refer to the
manner in which Respondent No.4 acquired rights in respect of Shop
No.16:
(a) After construction of 53 shops by Worli Sagar CHSL in
accordance with permission granted by the State
Government to use 15% FSI for construction thereof, a
Resolution was adopted for allotment of shops to various
individuals. It appears that Shop No.16 was initially allotted
to Smt. Neeta Rupani. Ms. Rupani was admitted as nominal
member of Worli Sagar CHSL.

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(b) Ms. Neeta Rupani surrendered the rights in respect of Shop
No.16 to the society in the year 2007.
(c) Society allotted Shop No.16 to Mr. Vasudev N. Hemrajani in
the year 2007. Accordingly, Share Certificate was transferred
in the name of Mr. Hemrajani by admitting him into nominal
membership of the society. Mr. Hemrajani surrendered his
rights in respect of Shop No.16 in favour of the society by
executing Deed of Relinquishment/Surrender of nominal
membership/rights in respect of Shop No.16 on 17 January
2017.
(d) The then Worli Sagar CHSL thereafter allotted Shop No.16 to
Respondent No.4 vide agreement executed in the year 2017.
Accordingly, the Share Certificate was also transferred in the
name of Respondent No.4 who was admitted into nominal
membership of the Petitioner-society.
20) In the above background, Respondent No.4 acquired
occupancy rights in respect of Shop No.16. In similar manner,
Respondent No.4 appears to have secured rights in respect of 9 other
shops after surrender of rights by the previous allottees/occupants.
Respondent No.4 is granted mere nominal membership of the society.
21)
At the time of allotment of shops to Respondent No.4,
specific allotment letters were issued to him containing various terms
and conditions of allotment. Even in the Agreements executed with

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Respondent No.4 while allotting the shops, the society has imposed
various conditions on him. It would be apposite to reproduce some of the
conditions in the Agreement of allotment executed between the society
and Respondent No.4. The conditions read thus:
(D) By the Application dated 17.01.2017 to the Worlisagar Cooperative
Society Ltd. for the Nominal Membership , the said Society in its
Managing Committee Meeting held on 19.01.2017 has admitted
PROWESS FINANCIAL SERVICES PVT. LTD. as the said Nominal
Member of the Society with the Allotment letter dated 30.01.2017 and
has agreed to execute these presents in favour of the said Nominal
Member .
xxx
(F) In pursuance of the Resolution passed by the Managing Committee
Meeting as above, the Society has agreed to admit PROWESS
FINANCIAL SERVICES PVT. LTD. as the said Nominal Member and to
have the ownership / occupancy right in respect of the said Shop, being
said Shop No. 16 situated on the ground floor of The Bhima Vaitarna
Building of the said society shown surrounded by red colour boundary
line and thereon shown marked as Shop No. 16. 
xxx
1. The said Society do hereby admit and enroll the said Nominal
Member above named as the said Nominal Member of the said
Society with effect from the date of execution of these presents
together with right to hold the said Shop premises situated on the
ground floor of the said Society's building known as Bhima Vaitarna and
shown delineated by red colour boundary line and thereon shown
marked as Shop No.16 (hereinafter to be referred to as the said Shop).
xxx
(c) The said Nominal Member shall not sell, transfer and dispose
of, assign and/or otherwise encumber their Nominal Membership,
as also their right, title and interést in and shall not part with
possession of the said shop or any part thereof and/or shall not
create any third party rights in the said Shop or any part thereof
without prior written consent of the said Society;

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(e) The said Nominal Member do hereby agree and undertake to
pay to, Additional lease flat the said society proportionate amount
of lease rent, Additional lease rent and/or compensation in
respect of the said property described in the schedule hereunder
written as also the increases thereto the lease rent together with from
time to time as may be fixed by the authorities/Collector of Mumbai
City concerned as also all other charges, taxes including municipal
taxes, water charges, electricity charges, insurance premium, sinking
fund, service charges and all other charges and/or taxes as may be
levied by the Collector of Mumbai City, the Government or Semi
Government authorities as also by the said Society from time to time
without raising any objection of whatsoever nature and without
committing any delay and/or default of whatsoever nature;
xxx
3. The said Nominal Member do hereby agree that in the event of
the said Nominal Member committing breach of any of the terms
and conditions as mentioned hereinabove the said Society shall by
giving written notice of two weeks to the said Nominal member call
upon them to remedy the breach within the notice period and if the
said Nominal Member fail and/or neglect to remedy the said breach
within the notice period in that event after the expiry of the notice
period these presents shall be deemed to be automatically cancelled
and/or terminated and the said Nominal Member shall be liable to
be evicted from the said Shop .
4. The said Nominal Member do hereby agree that in the event of
said Nominal Member continuing the breach of any of the terms
and conditions as mentioned hereinabove, and as a result whereof
rendering this Agreement liable to be terminated , and as a result
whereof if the said Society is compelled to initiate any Legal
proceedings against the said Nominal Member for recovery of vacant
and. peaceful possession of the said Shop in that event the said
Nominal Member will be liable to bear and pay all the costs, charges
and expenses that might be incurred by the said Society for such
litigation as also the damages that might be sustained by the said
Society on account thereof.
(emphasis and underlining added)
22)
Thus as per the Agreement, the right to occupy the shop was
subject to observance of terms and conditions and the Society has right
to terminate the allotment and secure back possession of the shop. More

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importantly, there is a total prohibition of transfer of nominal
membership or of the occupancy rights. Even in the Allotment Letters,
issued to Respondent No.4, following conditions were imposed:
,
प्रती
मे . प्रोवेसफायनांनशि यलसर्व्हिसेसप्रा . लिल .,
ॉपक्र . 16
:
इमारत निनमा
वरळीसागरको - ऑप ौसिंसगसोसायटीलिल .
वरळीमुंबई - ४०००३०
म ोदय ,
आपणवरळीसागरसोसायटीलिल . याम - ऑपरेतीवअक्ट१९६०नुसारनोंदणीकृत
ाराष्ट्रको
(Nominal Member) .
केलेल्या संस्थेच्या नाममात्र सभासद आ ात आपणास
कळनिवण्यातयेतेनिक , आजनिदनांक 30/01/2017 रोजीआपणांससंस्थेचेनामात्रसभासद
करूनघेतलेअसूनआपणांससंस्थेच्याशिभमाह्याइमारतीतील 141.37 चौक्षेत्रफळाचीक्र 16,
.
या ॉपिंपगचागाळाअलॉटकरण्यातआलाआे सदर ूसोपिंपगगाळााकेवळांततापूणC
यापारीदुकानाकरिरता (Peaceful Commercial Purpose) आ ेयाचीनोंदघ्यावी .
आपणासंथेचेकेवलनाममात्रसभासदआ
ातवम्णूनआपणांससभासदत्वाचेकोणतेी
क्कवानिवेषअधिKकारनाीत . तसेचसंस्थेच्यानफ्यातपिंकवामालमत्तेतकोणता ीवाटा
मागण्याचाआपणांस क्कअसणारनाी .
.
वरनमूदकेल्याप्रमाणेज्याप्रयोजनाथC ॉपिंपगचागाळानिदलेलाआे त्याप्रयोजनासाठीतो
वापरावालागेल . त्याच्यावापरानिवषयीचा / कोणता ीबदलयवस्थापकसनिमतीच्यालेखीपूवC
परवानगीशि वायकेलाजाणारनाी .
संस्थेच्यादफ्तरीजोपयQतआपणनाममात्रसभासदआ ातवसादरॉपिंपगगालातुमच्या
नावावरआ ेतोपयQतसंस्थेच्याउपनिवKीतीलतरतुदीवसंस्थेच्यापुढीलनिनयम , अटीव तT
ह्यासअKीनरा . ह्यानिनयम , अटीव तT
ूनआपणांसॉपिंपगच्यागाळ्याचाउपभोगघेतायेईल
म् णजेॉपिंपगचागालापिंकवाकोणताीभागकोणत्याीपद्धतीनेइरातांसवापरासदेणेअथवा
कोणत्या ीपध्दतीनेगाळ्याचाकब्जासोडणे , तसेचनाममात्रसभासदानेगाळासुस्थिस्थतीत
ठेवणे , , गाळ्यातजादाबांKकामकरणेपिंकवाफेरफारकरणे , गाळ्यात
त्याचीदुरुस्तीकरणे

ज्वालाग्र ीपदाथC पिंकवाऊबगवनेपदाथC पिंकवाज्याच्यासाठवणीकरिरताकोणत्याीयोग्य
प्रKीकानाCचीपरवानगीलागतेअसाइतरमालठेवणेपिंकवासाठवणे , एकपेक्षाअधिKकगाळे .
, , ,
Kारणकरण्याबाबतचेनिनबंK संस्थेचीआकारणीदेणे ज्यासाठीगाळानिदलाआ े त्याच
प्रयोजनासाठीत्याचावापरकरणे , वापरातबदलकरणे , ह्यासंबंKीसंस्थेचेउपनिवKीवत्या
सोबतअसलेल्यानमुना " अ " मKीलअटी , थT वनिनयमह्यासवाCचेकाटेकोरपणेपालन
आपणांस ासनाच्याआशिणप्राधिKकाऱ्याच्यामागणीप्रमाणेवसंस्थेच्यायवस्थापकसनिमती
वेळोवेळीठरवीलत्याप्रमाणेभुईभाडे , म ानगरपालिलकाकर , सेवा ुल्क , रिरपेअसC वमेंटेनंस

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, , , ,
ुल्क वीजवपाणी ुल्क निवमा ुल्क सिंसकींगकुंड ुल्क इत्यादीमासिसकवगCणीच्यारकमा
निनयनिमतपणेठरवूननिदलेलेयामुदतीतभरणाकरा यालागतील .
ह्यापत्रा‌द्वारेत्यातनमूदकेलेल्याक्षेत्रफळाइतकाचगाळ्याचावापरकरण्यातमुभाआ े .
ह्या यधितरिरक्तगाळ्याच्याबाेरीलबाजूसवामागीलबाजूसकोणत्याीप्रकारचीजागा ,
कोणत्या ीकारणास्तव , संस्थेच्यालेखीपूवC परवानगीशि वायवापरतायेणारनाी .
आपणांससंबंधिKत ॉपिंपगगाळासोडूनजावयाचेअसल्याससदरूगाळाप्रथमयासंस्थेस
सरेंडरकरावालागेल .
संस्थेच्याउपनिवKीमKीलकोणत्या ीतरतुदींचा / तरतुदींचे / निनयमांचेवाअटीव थTचे
उल्लंघनकरण्याचे ( जेकृत्य / जीकृत्ये।जेसंस्थेच्या यवस्थापनसनिमतीलागंभीरस्वरूपाचे /

स्वरुपाचीवाटतीलत्यामुळेसंस्थेचेसभासदवगाCतूनकाढूनटाकलेजाण्यातवपयाCयाने
गाळ्यातून कालपट्टीकेलीजाण्यासआपणपात्ररााल .

(emphasis added)
23)
Thus, Respondent No.4 was fully aware of the fact that by
securing rights in respect of the shop, he would be admitted only as
nominal member of the society and that he would never secure ordinary
membership.
24) However, Respondent No. 4 executed a Deed of
Confirmation/Transfer dated 22 August 2024 with Mr. Vasudev
Hemrajani in respect of Shop No. 16. The said deed records a private
arrangement between Respondent No. 4 and the previous allottee,
whereby the latter agreed to sell and transfer the shop, along with the
associated membership, to Respondent No. 4 in consideration of
payment of the agreed consideration. In the Deed of
Confirmation/Transfer in respect of Shop No.16, amount of
Rs.1,74,00,000/- is shown to have been paid to the previous allottee, Mr.
Vasudev Hemrajani. The duo got the Deed of Confirmation/Transfer
registered in the office of the Sub-Registrar of Assurances. All this

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happened behind the back of the society as the society was not even
made aware about this kind of private arrangement between Respondent
No.4 and the previous allotee.
25)
On the strength of registered Deed of Confirmation/Transfer
executed in the year 2024, Respondent No.4, who was a mere nominal
member and allowed to occupy shops, started claiming title in respect of
the shops. On the strength of his claim of title, Respondent No.4 has
secured order from the Deputy registrar for grant of ordinary
membership in its favour. This is how Respondent No. 4 has upgraded
himself form nominal member to regular or ordinary member of the
society. Correctness of this upgradation through intervention of the
Deputy Registrar is the subject matter of challenge in the present
Petition.
26)
To examine the correctness of action of the Deputy registrar
in upgrading the status of Respondent No. 4 from a nominal member to
regular or ordinary member, it would be necessary to make a reference to
the statutory scheme under the MCS Act, MCS Rules and the Bye-laws
governing the subject matter of ‘membership’ in relation to cooperative
societies and cooperative housing societies. Section 2(19) defines the
word ‘member’ as under:
(19) (a) member means a person joining in an application for the
registration of a co-operative society which is subsequently registered,
or a person duly admitted to membership of a society after registration
and includes a nominal, for associate) member and any depositor or
financial service user of primary agricultural co-operative credit
society.

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(a-1) *
(b) "associate member" means a member who holds jointly a share of a
society with others, but whose name does not stand first in the share
certificate;
(c) "nominal member" means a person admitted to membership as
such after registration in accordance with the by-laws;
(e) *
(emphasis added)
27) Thus, under Section 2(19), a nominal member means a
person admitted to membership as such after registration in accordance
with the bye-laws. Under Section 24 of the MCS Act, there is a provision
for admission of a person as a nominal or associate member. Section 24
of the Act provides thus:
24. Nominal and associate member:
(1) Notwithstanding anything contained in section 22, a society may
admit any person as a nominal or associate member.
(2) A nominal member shall not be entitled to any share in any
form whatsoever in the profits or assets of the society as such
member. A nominal member shall ordinarily not have any of the
privileges and rights of a member. but such a member, or an associate
member, may, subject to the provisions of sub-section (8) of section 27,
have such privileges and rights and be subject to such liabilities of a
member, as may be specified in the by-laws of the society.
(emphasis added)
28) Thus, under Section 24(2), nominal member is not entitled
to any share in the profits or assets of the society, nor does he have any
rights or privileges of a member. However, it is competent for the society
to provide for certain rights and privileges to a nominal member in

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accordance with its bye-laws. Under Section 27 of the MCS Act, there is
express prohibition on a nominal member to vote or to be become a
member of the committee or to become representative of the society or
in other society. Section 27 (8) of the MCS Act provides thus:
27. Voting powers of members:
(8) No nominal member shall have the right to vote and no such
member shall be eligible to be a member of a committee or for
appointment as a representative of the society on any other society.
29) Under Rule 8(1)(f) of the MCS Rules, a registrar can require a
society to make bye-laws in respect of various enumerated matters
including the privileges, rights, duties and liabilities of members
including nominal members. Rule 8 provides thus:
8. Matters in respect of which Registrar may direct society to make
bye-laws or society may make bye-laws:
(1) The Registrar may require a society to make bye-laws in respect of
all or any of the following matters, that is to say-
(a)
(b)
(c)
(d)
(e) the terms and qualifications for admission to membership;
(f) the privileges, rights, duties and liabilities of members
including (nominal and associate members);
(g)
(g-1)
(h)
(i) in the case of credit societies-
(emphasis added)

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30)
Under Rule 19 of the MCS Rules, certain conditions are
specified for compliance for admission into membership of a society.
Rule 19 provides thus:
19. Conditions to be complied with for admission for membership,
etc:
No person shall be admitted as a member of a society unless,-
(i) he has applied in writing in the form laid down by the society or in
the form specified by the Registrar, if any, for membership;
(ii) his application is approved by the committee of the society in
pursuance of the powers conferred on it in that behalf and subject to
such resolution as the general body of members may in pursuance of
the powers conferred on it in that behalf from time to time pass and in
the case of '[nominal or associate) member, by an officer of the
society authorised in that behalf by the committee;
(iii) he has fulfilled all other conditions laid down in the Act, the rules
and the by-laws;
(iv) in case of a firm, company or body corporate, society registered
under the Societies Registration Act, 1860, a public trust registered
under any law for the time being in force relating to registration of
public trusts or a local authority, the application for membership is
accompanied by a resolution authorising it to apply for such
membership.
(emphasis added)
31) Thus, under Rule 19 of the MCS Rules, a person needs to
make an application in writing in the specified format for membership.
In relation to ordinary members, their applications need to be approved
by the Committee of the society in pursuance of powers conferred on it
in that behalf subject to resolution adopted by the general body.
However, in relation to a nominal member, membership can be granted
to him/her even by an officer of the society authorized by the committee.
Thus, admission into nominal membership does not even require any

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decision by Managing Committee or General Body of the society.
Nominal membership can be granted even by an authorized officer of the
society.
32) Since the MCS Act and the MCS Rules repeatedly make a
reference to bye-laws of the society for the purpose of admission of a
person into nominal membership, it would be necessary to make a
reference to the bye-laws. Bye-law 3(xxiv) defines the term ‘member’ as
under :
(xxiv) ' Member ' means a person joining in an application for the
Registration of a Co-operative Society which is subsequently registered,
or a person duly admitted to membership of a Society after Registration
and who holds the right, title and interest in the property individually
or jointly;
(a) ' Active Member' means:-
(i) One who has purchased and owns a Flat/Unit in the Society;
(ii) One who attends at least one General Body Meeting of the Society
in the previous five consecutive years:
Provided that nothing in this clause shall apply to the members whose
absence has been condoned by the General Body Meeting of the
Society.
(iii) Who has paid the Society Maintenance Service and other charges
regularly as per Bye-laws 22(c)(iii).
(b) 'Associate Member' means a Member who holds the right, title and
interest in the property individually or jointly with other, but whose
name does not stand first in the share certificate;
(c) 'Nominal Member' means a person who does not hold the
right, title and interest in the property individually or jointly
admitted to Membership as such after registration;
(emphasis and underlining added)

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33)
Thus, an active member is the one who has purchased or
owns a flat/unit in a society. Therefore, to become an active member,
ownership of flat/unit in the building of the society is a mandatory
precondition. On the other hand, nominal member has to be a person
who does not hold right, title and interest in the property, either
individually or jointly. Thus, only such person who does not have any
title in the society can be admitted into nominal membership. This
follows that non-ownership of title in any flat/unit in the building of the
society is a mandatory condition or a pre-requisite for becoming a
nominal member.
34)
Bye-law 20 provides for conditions of nominal membership
of the society and reads thus:
20. Conditions for Nominal Membership of the Society:
A sublettee, a licensee, a care-taker, or occupant who is eligible to
be a Nominal Member and who shall apply through Member for such
Membership in the prescribed form, applicable, along with entrance fee
of Rs. 100/- may be admitted as such Member by the Committee.
(emphasis and underlining added)
35) Thus, only a sublettee, licensee, a caretaker or an occupant
can be admitted into nominal membership of the society. This follows
that a person who owns a flat/unit in the building can never be admitted
as a nominal member. To paraphrase, nominal member has to be the one
who is a mere sublettee, licensee, caretaker or occupant. The moment
the person holds any rights higher than that of a sublettee, licensee,
caretaker or occupant, he cannot be admitted into nominal membership.

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36)
Bye-law 20 requires a person seeking nominal membership
to submit an application through an existing member of the Society by
duly filling in the prescribed form the application for nominal
membership. The prescribed form for nominal membership is set out in
Appendix 11 to the Bye-laws. The applicant seeking nominal
membership is required, under the prescribed format, to disclose the
document pursuant to which the lease, leave and licence, caretaker
arrangement, etc., has been entered into with a member who owns a
flat/unit in the Society's building. Thus, while applying for nominal
membership, the applicant is required to expressly declare that he is
merely a lessee, licensee, caretaker or occupant in respect of the flat/unit
in the Society.
37) A conjoint reading of the provisions of the MCS Act, the
MCS Rules and the bye-laws make it abundantly clear that only a person
owning a flat/unit in the building of the society can be admitted to
membership of the society. The flat/unit owner can never be admitted to
nominal membership of the society. Nominal membership envisages
occupation of flat/premises by a person as a mere
lessee/licensee/caretaker/occupant. Therefore, a nominal member can
never claim ownership in respect of the flat/unit and the very fact that he
applies for grant of nominal membership, pre-supposes that he expressly
admits that he is merely a licensee/caretaker or an occupant.
38)
Since certain provisions of the MCS Act were found
inadequate to effectively govern the matters relating specifically to co-
operative housing societies, the Legislature amended the MCS Act by

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Maharashtra Act No. 23 of 2019 and inserted Chapter XIII-B, which
exclusively deals with co-operative housing societies. Section 154-B
enumerates the provisions of the MCS Act that apply mutatis mutandis to
Housing Societies, as well as those provisions that are excluded from
their application. Section 154B provides thus:
154B. Application and non-application of provisions of this Act to
the housing societies:
(1) The following provisions of this Act shall apply mutatis mutandis to
the housing societies, namely
Section 1, clauses (5), (6), (7), (8), (10), (10-ai), (10-aii), (10-aiii), (13),
(14), (16), (17), (18), (20-A), (21), (24), (26), (27), (28), (29), (29A) and
(31) of section 2, sections 3, 3A, 4, 5, 7, 9, 10, 12, 13, 14, 15, 17, 18, 19, 20,
20A, 21, 21A, 22, sub-sections (1), (2) and (3) of section 23, sections 25,
25A, 31, 33, 34, 35, 36, 37, 38, 40, 41, 42, except proviso of sub-section
(1) of section 43, section 45 and sub. sections (1)(b), (2) and (3) of
section 47, section 50, clauses (a) (c), (d) and (e) of section 62, sections
64, 65, 66, 67, 68, 69, 70, 71, 71A, 72, 73, sub-sections (2) to (7) of
section 73-ID, sections 73C, 73CB, 73CC, 73F, 73-1, 75, 76, 77, 77A, 78A,
sub-sections, (1), (1-1A), (1A)], (1B), (2), (3) and (4) of section 79,
sections 79A, 79AA, 80, 81 to 89A, 91 to 100, 102 to 110, 145 to 148A,
149 to 154, 154A and 155 to 168.
(2) The following provisions of this Act shall not apply to the housing
societies, namely
Clauses (1)(a) and (b), (2)(a), (b) and (c), (4), (9), (10-aii-1), (10A), (11),
(11-A), (12), (14-A), (15), (16-A), [(19)(a), (b)] and (c) (19A), (22), (23)
and (25) of section 2, sections 6, 8, 11, 16, 18A, 18B, 18C, 23(4), 24, 24A,
26, 27, 28, 29, 30, 32, 32A, 39, 44, 44A, 46, 47(1)(a), 47(4), 48, 48, 49, 51,
52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62(b), 63, 69B, 72A, 73(1A)(b), 73A,
73AAA, 73B, 73CA, 73D, sub-section (1) of section 73-ID, sections 74,
78, 90, 101, 110A and sections 111 to 144-1A.
Thus, provisions of Section 2(19)(c) ( definition of the term ‘nominal
member ’), Section 24 and Section 27 do not apply to housing societies.

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39) In relation to housing societies, Section 154B-1(18) now
defines the term ‘member’ as under:
(18) " Member " means a person joining in an application for the
registration of a housing society which is subsequently registered, or a
person duly admitted to Membership of a society after its registration
and includes associate or joint or provisional Member;
(a) "Associate Member" means husband, wife, father, mother, brother,
sister, son, daughter, son-in-law, daughter-in-law, nephew, niece a
person duly admitted to Membership of a housing society on written
recommendation of a Member to exercise his rights and duties with his
written prior consent and whose name does not stand in the share
certificate;
(b) "Joint Member" means a person joining in an application for the
registration of a housing society jointly, which is subsequently
registered or a person who is duly admitted to Membership after its
registration and who holds share, right, title and interest in the flat
jointly but whose name does not stand first in the share certificate;
(c) "provisional Member" means a person who is duly admitted as a
Member of a society temporarily after death of a Member on the basis
of nomination till the admission of legal heir or heirs as the Member of
the society in place of deceased Member;
40)
Thus, there can be no nominal member in relation to a
housing society and a person can only either be a regular member, an
associate member or a joint member. The concept of nominal
membership is now removed on account of the position that the
legislature has now intended that in relation to a housing society,
membership cannot exceed number of flats in the building of the society.
This restriction is imposed under Section 154B-5 of the MCS Act, which
reads thus:

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154B-5. Limit on Membership:
A housing society shall not admit to its Membership persons exceeding
the number of flats or plots, as the case may be, available for allotment
in that co-operative housing society:
Provided that, a plot owners co-operative housing society may admit
to its Membership an organization (co-operative housing society,
company, association, etc.) of flat purchasers, in case the plot owner
had constructed and sold flats as per prevailing rules, in place of
original plot owner Member.
41)
Under Section 154B-7 of the MCS Act, certain restrictions
are imposed on transfer of share or interest by a member, Section 154B-7
of the MCS Act reads 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,-
(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.
(emphasis and underlining added)
42)
Thus, Section 154B-7 of the MCS Act, contemplates transfer
of share or interest of a member or occupancy right. However, with a

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view to prevent any misinterpretation of the term ‘occupancy right’,
Explanation to Section 154B-7 expressly provides that occupancy right
does not include right of a tenant or a licensee on leave and license basis.
Thus, what can be transferred under Section 154B-7 is only occupancy
right by the ‘owner’ of flat/unit and not by the tenant or a licensee.
43)
Chapter-XIII- B has been inserted in the MCS Act w.e.f. 9
March 2019. Section 154B-31 of the Act makes transitional provision as
under:
154B-31. Saving as to existing rules, orders, by-laws, etc. :
(1) The rules, orders, by-laws, circulars or instruments having the force
of law and existing on the date of commencement of the Maharashtra
Co-operative Societies (Amendment) Act, 2019, which are applicable to
the societies governed by this Chapter on the date of such
commencement, shall, until expressly repealed, modified or amended,
continue to apply to the said societies.
(2) Every proceedings by or against the society and pending before any
Court, tribunal or authority on the said date of commencement shall be
continued and decided as if the provisions of this Chapter are not made
applicable in respect of such societies.
44)
Under the provisions of Section 154B-31, there is a saving
clause under which the Rules, Orders, Bye-laws, Circulars or Instruments
having force of law and existing on the date of commencement of MCS
(Amendment Act) 2019 which are applicable to co-operative housing
societies continue to apply until expressly repealed, modified or
amended. Thus, by virtue of Section 154B-31 of the MCS Act, mere
deletion of provision for nominal membership under Chapter-XIII-B
relating to housing societies would not automatically bring to an end,

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nominal membership already granted prior to commencement of the
MCS Amendment Act, 2019. Thus, the Rules, orders, bye-laws, Circulars
or instruments existing as on the date of commencement of MCS
(Amendment) Act, 2019 continue to apply to such societies.
45)
Dr. Chandrachud is right in contending that what is effected
in MCS Act is a substantive amendment and not a procedural
amendment as held by the Apex Court in District Collector, Vellore
District Versus. K. Govindraj (supra) and Union of India Versus.
Indusind Bank Limited (supra). The amendment therefore would
operate prospectively. This would mean that nominal membership
granted by the housing societies prior to the coming into force of the
MCS (Amendment) Act, 2019 would not automatically cease to exist, but
would continue to remain in force. However, neither the Amendment Act
nor the provisions of Chapter XIII-B contain any provision, even
remotely suggesting that nominal membership granted in favour of a
person would automatically stand converted into ordinary membership
upon deletion of the provision relating to the admission of nominal
members in respect of housing societies. Thus, henceforth, no person
can be admitted to nominal membership of a society, which concept has
ceased to operate in relation to housing societies from 9 March 2019
onwards. However, those who are already admitted into nominal
membership would continue to remain nominal members on account of
prospective amendment effected by the 2019 Amendment Act. However,
under no circumstances can it be countenanced that the effect of the
2019 Amendment Act would be to convert or upgrade the status of a

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person from a nominal member to that of an ordinary or regular
member.
46) Having examined the statutory scheme under the MCS Act,
MCS Rules and the bye-laws, now I proceed to consider whether the
Deputy Registrar is justified in directing Petitioner-society to admit
Respondent No.4 as regular/ordinary member of the society. As observed
above, Respondent No.4 had no qualms about he being treated as a mere
nominal member. It was always aware that what was granted in his
favour were only occupancy rights in respect of the shops. The
occupancy rights granted to it were subject to various conditions as
quoted above. The conditions included impermissibility to sell, transfer
or dispose of or assign nominal membership and occupancy rights as
well as the authority of the society to cancel/terminate the nominal
membership upon commission of breach of any of the terms and
conditions. Even the allotment letters issued to Respondent No. 4 clearly
stipulated that the grant of nominal membership would not entitle
Respondent No. 4 to any rights or benefits admissible to regular
members. Respondent No. 4 was merely permitted to occupy the shop,
subject to various conditions. Upon commission of breach of conditions
of allotment, the nominal membership was liable to be cancelled, which
is not the case with ordinary members. To illustrate, if the nominal
member of Petitioner society encroaches upon space outside the shop
and changes the purpose of use, the society is entitled to cancel his
membership. On the other hand if a regular member commits a similar
folly, society needs to take other actions stipulated under the Act and
cannot straightaway proceed to terminate or cancel the membership.

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The allotment letter further stipulated that, in the event Respondent No.
4 desiring to vacate the shop, the same was required to be compulsorily
surrendered to the Society. Thus, it is impermissible for an allottee of the
shop in Petitioner’s building to directly enter into transfer arrangement
with the third parties. The shop allottee needs to surrender the
allotment to the society and society alone can make fresh allotment.
This is exactly what has happened in the present case the previous
allottee, Mr. Vasudev Hemrajani surrendered his nominal membership, as
well as his occupancy rights in respect of the shop to the society by
executing written document to that effect. After securing the surrender,
it is the society who made fresh allotment in respect of the shops in
favour of Respondent No.4. The case thus does not involve transfer, sale
or purchase of the shop by previous allottee in favour of Respondent
No.4.
47) Respondent No. 4 has secured the allotment and occupied
rights in respect of the shops with its eyes wide open to these peculiar
conditions. Its director is a regular member of the society ( in capacity as
owner of a residential flat ) and who functioned as the Chairman of the
society. His company has secured allotment of the shops after its
surrender by the previous allottes with a clear knowledge that there
could be no direct transfer arrangement between it and the previous
allottee. Despite the above position, Respondent No. 4 brought into
existence a document styled as a Deed of Confirmation/Transfer dated 22
August 2024. It is incomprehensible as to why the said document was
brought into existence by Respondent No.4. Mr. Vasudev Hemrajani had

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already surrendered his occupancy rights and nominal membership to
the society in the year 2017 itself. Mr. Hemrajani had not retained any
semblance of rights in respect of the shop. There is no privity of contract
between Mr. Hemrajani and Respondent No.4. The transaction was
surrender of occupancy rights and nominal membership in the society
and society creating fresh allotment in favour of Respondent No.4. The
privity of contract was thus between Mr. Hemrajani and the society and
between the society and Respondent No.4. There is no direct privity of
contract between Mr. Hemrajani and Respondent No.4. Despite this
position, a document titled as Deed of Confirmation/Transfer was
brought into existence by Respondent No.4, which is totally baseless and
has no existence in the eyes of law.
48)
There was nothing to be confirmed between Mr. Hemrajani
and Respondent No.4 as no transaction had taken place between them.
The Deed of Confirmation/Transfer falsely brands Mr. Hemrajani as the
Transferor and Respondent No.4 as the Transferee. In fact, no
transaction of transfer had ever taken place between the duo. The
document falsely paints a picture as if Respondent No.4 got Shop No.16
from Mr. Hemrajani. In my view therefore, the Deed of
Confirmation/Transfer is a document incapable of conferring any rights
in favour of Respondent No.4. Execution of that document is a
meaningless exercise and that document cannot be relied upon before
any Court or authority to recognize any rights in favour of Respondent
No.4 in respect of the Shops.

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49)
The Deputy Registrar has heavily relied on Deed of
Confirmation/Transfer for ordering membership in favour of Respondent
No.4, which essentially forms the basis on which the impugned order is
passed. The Deputy Registrar has erroneously assumed that in the year
2017 any agreement was executed between Respondent No.4 and
previous allottee and that Respondent No.4 had become owner in respect
of the society. This is clear from the following findings recorded by the
Deputy Registrar:
५ . अजCदारयांनी Deed of Confirmation निदनांक२२ / ०८ / २०२४रोजी
े . त्यामुळेअजCदारयांसमुळसभासदत्वदेण्यास रकतनाी ,
नोंदणीकृतकेलेआ
अ ीयाकायाCलयाचीKारणाआे .
६ . मुळसंस्थेचेवअजCदारयांचेसन२०१७चेकरारपत्रपा तात्यामध्येअजCदारयांस
मालकीक्क Ownership /Occupancy Rights , असल्याचेक्लॉज F ( पानक्र . २ ) मध्ये
नमुदआ े .
(emphasis added)
50) The above findings recorded by the Deputy Registrar are
perverse to the core. Neither there was any transaction of sale/transfer
between the previous allottee and Respondent No.4 in the year 2017 nor
the Deed of Confirmation/Transfer has the effect of conferring ownership
rights in respect of the shop in favour of Respondent No.4. Mere process
of ‘registration’ of the Deed does not elevate the status of Respondent
No. 4 from an occupier to that of an owner. As held above the Deed of
Confirmation/Transfer is a meaningless document, not even worth the
paper on which it is written and has no existence in the eyes of law. The
very basis on which the Deputy Registrar has passed his order is totally
flawed rendering the impugned orders dated 30 June 2026 unsustainable.

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51)
The Deputy Registrar has taken into consideration the
history of allotment of plot in favour of Worli Sagar CHSL, the manner of
construction of shops and allotments made to various allottees. The
Deputy Registrar has however totally failed to appreciate that there is
express prohibition on Petitioner-society from either selling the shops or
from admitting the occupants of the shop as its members. The GR dated
12 May 1983 envisages allotment of Government land for construction of
residential tenements to economically weaker sections of the society.
Various income criteria are laid down in the GR dated 12 May 1983 for
acquiring eligibility for becoming member of co-operative housing
society seeking allotment of Government land. Paras-3, 3a and 5 of the
GR dated 12 May 1983 provides thus:
3. Government Land should be granted to the Co-operative Housing
Societies for construction of residential tenements for their members
belonging to various income groups mentioned below on the following
principles.
Income Income group range Carpet area of flat Concessional occupancy
group (Total family income) allowed price/lease rent payable
( Percentage of market value
as on 1-2-1976). 
I upto Rs. 1000 300 sq.ft. 10%
II Rs. 1001 to 2000 450 sq.ft. 25%
III Rs. 2001 to 3000 650 sq.ft. 50%
IV Above Rs. 3000 900 sq.ft. 100%
A) The Fourth income group i.e. those whose total family monthly
income is above Rs. 3000 is exclusively to the persons under
Government employment, employee of public sector, corporation and
members of Central/ State legislature, Zilla Parishad, Municipal
Corporation and Municipal Councils.

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xxx
5. The eligibility for membership in Co-operative Housing Societies
seeking government lands on payment of concessional occupancy
price/ lease rent should be examined in the light of the qualifying
condition prescribed in Annexure A and those who qualify accordingly
should only be approved. The conditions on which the land should be
granted to Societies outside Bombay City limits should be as per these
specified in Annexure B. In the case of lands from Bombay City limits
land grant orders shall be subject to usual conditions pertaining to
lease hold grants within the city limits of Bombay. 
52)
Even when the allotment of land was made pursuant to GR
dated 11 February 1987, following conditions were imposed:
(i) The land is granted on lease hold basis for a period of 99 years on the
terms and conditions laid down in the Government Resolution,
Revenue and Forest Department No. LC-1083/1882/CR-222/G-4 dated
12 May 1983 suitable qualification keeping in view that the land in this
case has been granted on a lease hold basis.
(ii) The members of the Society should satisfy the requirements
regarding eligibility laid down in Government Resolution,
Revenue and Forest Department No. LC-1083/1882/CR-222/G-4
dated, 12.05.1983.
(vii) The lessee shall make a suitable provision in its bye laws for
expulsion of those members who do not prove to the satisfaction of the
Society, the adherence to the conditions subject to which their
membership has been approved. 
2. The Collector of Bombay should scrutinize eligibility of the members
as per the eligibility conditions given in the policy Government
Resolution, of 12 May 1983 and finally approve the same, under
intimation to this department. 
(emphasis added)
53) Thus, the allotment of plot was made only for construction
of residential tenements and persons satisfying the eligibility

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requirements laid down in GR dated 12 May 1983 alone could be
admitted into membership of the society.
54) Even when the Government granted concession in utilizing
15% BUA for shopping purposes, a specific condition was imposed that
the name of the sub-lessee in respect of the Shop, as well as the purpose
for which the premises are let out must be informed to the State
Government. Letter dated 22 June 1987 reads thus:
Chairman,
Worli Sagar Coop-Housing Society,
Room No.414, 4th floor,
Vidhan Bhavan, 
BOMBAY- 400 032.
SUBJECT:-Permission for shopping User.
Sir,
I am directed to refer to your letter dated the 9th December, 1986
addressed to the Minister for Revenue on the subject mentioned above,
and to state that Government agrees in principle to permit the
Worli Sagar Coop. Housing Society to use built up area not
exceeding 15% of the total F.S.I. for shopping purpose as
admissible under Development Control Rules, subject to the Society
agreeing to pay the addl.lease rent based on the current market price of
the land and to abide by the terms and conditions, as will be fixed by
Government. I am to request you to please furnish the following details
to the Collector of Bombay with a copy to Government in this respect.
i)Names of sub-lessees.
ii) Total built up area of the buildings and the actual built up area let
out.
iii) Purpose for which the premises are let out ;
iv) Annual consideration on which the premises are sub-let ;
(emphasis and underlining added)

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55)
Considering the terms and conditions on which land was
allotted as well as permission for utilizing 15% BUA for Shops was
granted, it is clear that it was impermissible for the society to admit any
person as member who did not satisfy the eligibility criteria specified in
the GR dated 12 May 1983. On the other hand, there was no restriction
on eligibility of person for letting out the Shops in favour of any third
persons. The only condition was to communicate to the State
Government the names of the lessees/subletees and the purpose for
letting out the premises. Thus, the restriction about eligibility applied
only to regular member and the said restriction had no application to a
lessee to be inducted into commercial shops. This is a reason why the
society admitted occupants/allottees of only shops of only nominal
members and consciously did not grant them regular membership.
56)
However, in the present case, Respondent No.4 who was
content with grant of mere nominal membership took a volte-face in the
year 2024 and brought into existence a totally baseless document in the
form of Deed of Confirmation / Transfer and on that basis applied for
membership with the Deputy Registrar. Such baseless appeal filed by
Respondent No.4 ought to have been rejected at the threshold by the
Deputy Registrar.
57)
There is yet another reason why the Appeal preferred by
Respondent No.4 before the Deputy Registrar was not maintainable and
deserves rejection at the threshold. The statutory scheme of grant of

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membership under the MCS Act is governed by the provisions of Sections
22 and 23 of the MCS Act which provides thus:
22. Person who may become member:
(1) Subject to the provisions of section 24, no person shall be admitted
as a member of a society except the following, that is to say-
(a) an individual, who is competent to contract under the Indian
Contract Act, 1872;
(b) a firm, company or any other body corporate constituted under any
law for the time being in force, or a society registered under the
societies Registration Act, 1860;
(c) a society registered, or deemed to be registered, under this Act;
(d) the State Government or the Central Government;]
(e) a local authority;
(f) a public trust registered under any law for the time being in force for
the registration of such trusts;
(g) the depositor or the financial service user:
Provided that, the provisions of clause (a) shall not apply to an
individual seeking admission to a society exclusively formed for the
benefit of students of a school or college:
Provided further that, subject to such terms and conditions as may be
laid down by the State Government by general or special order, a firm or
company may be admitted as a member only of society which is a
federal or urban society or which conducts or intends to conduct an
industrial undertaking:
Provided also that, any firm or company, which is immediately before
the commencement of this Act, a member of a society deemed to be
registered under this Act, shall have, subject to the other provisions of
this Act, the right to continue to be such member on and after such
commencement.
Explanation. For the purpose of this section "an urban society" means a
society the business of which mainly falls within the limits of a

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municipal corporation, municipality, cantonment or notified area
committee.
(1A) Notwithstanding anything contained in sub-section (1), the State
Government may, having regard to the fact that the interest of any
person or class of persons conflicts or is likely to conflict with the
objects of any society or class or societies, by general or special order,
published in the Official Gazette, declare that any person or class of
persons engaged in or carrying on any profession, business or
employment shall be disqualified from being admitted, or for
continuing, as members or shall be eligible for membership only to a
limited extent of any specified society or class of societies, so long as
such person or persons are engaged in or carry on that profession,
business or employment [as the case may be; and the question whether
a person is or is not so engaged in or carrying on any profession,
business or employment or whether a person belongs or does not
belong to such class of persons as declared under this sub-section and
has or has not incurred a disqualification under this sub-section shall
be decided by the Registrar under section 11.
(1B) Notwithstanding anything contained in sub-section (1), where the
Registrar has decided under section 11 that a person has incurred a
disqualification under sub-section (1A), the Registrar or the person not
below the rank of District Deputy Registrar of Co-operative Societies,
authorised by him in this behalf, may, by order, remove such person
from the membership of the society; and such person shall cease to be
a member of the society on expiration of a period of one month from
the date of receipt of such order by him.
(2) Where a person is refused admission as a member of a society,
the decision (with the reasons therefor) shall be communicated to
that person within fifteen days of the date of the decision, or
within three months [from the date of receipt of the application
for admission, whichever is earlier. If the society does not
communicate any decision to the applicant within three months
from the date of receipt of such application the applicant shall be
deemed to have been admitted as a member of the 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.

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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 bye-laws.
(1A) Where a society refuse 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.
(3) The decision of the Registrar in appeal, shall be final and the
Registrar shall communicate his decision to the parties within fifteen
days from the date thereof.
(4) Without prejudice to the foregoing provisions of this section, in the
case of agro-processing societies or any other society for which a
definite zone or an area of operation is allotted by the State
Government or the Registrar, it shall be obligatory on the part of such
society to admit, on an application made to it, every eligible person
from that zone or the area of operation, as the case may be, as a
member of such society, unless such person is already registered as a
member of any other such society, in the same zone or the area of
operation.
(emphasis added)

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58)
Thus, a person desiring to become a member of the society
submits an application for membership. The society is required to take
decision on the application within a period of 3 months from the date of
receipt of application or to communicate the decision of refusal to the
Applicant within 15 days of taking of the decision, whichever is earlier. If
the decision is not communicated within the prescribed time limit,
Applicant acquires deemed membership under the provisions of sub-
section (2) of Section 22 off the Act. On the other hand, when the
decision is taken by the society and membership is refused, Applicant
can file Appeal before the Registrar under Section 23(2) of the MCS Act.
Thus, for filing of proceedings either for seeking declaration of deemed
membership under Section 22(2) or for challenging of decision of refusal
of membership under Section 23(2), the act of making application for
membership is sine-qua-non. Making of application for membership and
its ‘non-decision’ or ‘refusal’ becomes a jurisdictional fact for the Deputy
Registrar to exercise jurisdiction. In absence of such ‘non-decision’ or
‘refusal’, the Deputy Registrar is without jurisdiction and needs to throw
out the appeal for membership. Deputy Registrar does not possess
plenary or inherent jurisdiction, being a creature of the statute. He needs
to exercise jurisdiction only as conferred by the statute under which he is
created. Therefore if no application is made to the housing society, there
is no occasions for the society to take a decision thereon. Therefore, the
provisions of Section 22(2) do not come into play. Since no decision can
be taken, even provisions of Section 23(2) cannot come into play.
Therefore, the Deputy Registrar does not get jurisdiction either under

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Section 22(2) or under Section 23(2) to make any order with regard to
grant of membership.
59)
The provisions of MCS Act do not confer direct jurisdiction
on the Deputy Registrar to decide membership application. Persons
seeking membership cannot directly approach the Deputy Registrar. In
the present case, the Deputy Registrar has erroneously entertained direct
application made by Respondent No.4 to him without first approaching
the society for membership. Since there is no source application,
therefore exercise of jurisdiction by the Deputy Registrar is totally
illegal. Thus, the impugned orders passed by the Deputy Registrar are
without jurisdiction and are therefore non-est. On this ground also, the
impugned orders passed by the Deputy Registrar deserves to be set aside.
60)
According to Mr. Patil, the present case is squarely covered
by the judgment of this Court in Vivina CHSL. He contends that even the
issue of direct entertainment of application for membership is answered
in favour of Respondent No.4 by this Court in Viviana CHSL. In that
case, the society had entered into Development Agreement with a
Developer in the year 1984 for redevelopment of its building. A suit was
filed in respect of the disputes between the society and the developer in
which Consent Terms were filed, under which the Society agreed for
developer to consume balance FSI of 3,000 sq.ft for construction of 16
shops. In the Consent Terms, Society agreed to admit purchasers of the
16 shops as its nominal members. In the year 2003, additional
Development Agreement was executed granting further rights in favour

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of the Developer to construct additional shops. In the agreements
executed under Section 4 of MOFA, it was agreed with the purchasers
that they would be admitted only as nominal members. However,
purchasers of society were not happy with nominal membership and
wanted to take part in decision making process relating to affairs of the
society. Accordingly, 12 shop purchasers filed application before the
Deputy Registrar seeking declaration that all 16 shop owners are
full/regular members of the society and sought direction for entrance of
their names in the ‘I’ and ‘J’ Registers. The Deputy Registrar allowed the
applications, and the Divisional Joint Registrar confirmed the decision of
the Deputy Registrar. The society petitioned this Court, and this Court
has held in paras-7 to 12 as under:
7) If the provisions of Sections 22 or 23 of the M.C.S. Act are perused,
the same refers to admission of a person as member of the Society. So
far as 12 out of 16 shop purchasers are concerned, the Society is not
averse to their admission as nominal members. The Deputy Registrar
appears to have proceeded on an assumption that the said 12 shop
purchasers are admitted as nominal members. However, Mr. Patil would
invite my attention to ground clause-(F) pleaded in the petition and
submit that Respondent Nos.4 to 15 are not admitted even to the
nominal membership of the Petitioner-Society. He would submit that
the then Secretary had erroneously issued Share Certificate in common
to the 12 shop purchasers, which itself was illegal. In my view, it is not
necessary to delve deeper into this aspect in view of the fact that
reliance of Mr. Patil on the Consent Terms as well as, Covenant No.11 of
shop purchase agreements clearly make the shop purchasers entitled
atleast to nominal membership. Even Mr. Patil has clarified that the
Society is willing to admit the 12 shop purchasers as nominal members.
Therefore, there is no dispute qua those 12 shop purchasers with regard
to admission to the membership of the Society. The only debate is
about the nature of membership. In that view of the matter, the
proceedings were not required to be instituted under the provisions of
Section 23 of the M.C.S. Act in strict sense. The limited grievance of the
said 12 shop purchasers was that the Society gave a discriminatory
treatment to them as compared to the other regular members by not
permitting them to participate in management of the affairs of the

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Society. In my view, therefore there is no jurisdictional error committed
by the Deputy Registrar in issuing directives to the Society to convert
the membership of the 12 said shop owners from nominal members to
regular members by inclusion of their names in Register-I and Register-
J. So far as rest of the 4 shop purchasers are concerned, the Deputy
Registrar correctly appreciated the fact that they were yet to be
admitted as nominal members of the Society and accordingly relegated
them to a remedy under Section 22(2) of the M.C.S. Act. I am therefore
not inclined to accept the objection of jurisdictional error on the part of
the Deputy Registrar sought to be raised by Mr. Patil.
8) Having quelled the technical objection of jurisdiction, I now proceed
to determine the main issue involved in the present petition as to
whether the 16 shop owners can be granted mere nominal membership
or regular membership of the Society.
9) It is Mr. Patil’s contention that what is purchased by the said 16 shop
owners is only occupancy rights in respect of their respective shops and
that the Society continues to remain the owner in respect of the land as
well as the structure. In respect of every ‘tenant co-partnership housing
society’ the land and the building is always owned by the Society and
what is held by a member is essentially occupancy right. So even in
respect of regular members of Petitioner-Society, what they own is
essentially the occupancy rights. In that sense, there is no difference in
the nature of ownership between the existing regular members of the
Society and the shop purchasers. Therefore, mere purchase of
occupancy rights by the shop purchasers cannot be a reason for
denying them regular membership of the Society.
10) The matter can be viewed from another angle as well. The provision
of M.C.S. Act were found to be unsuitable for formation, registration
and management of affairs of the housing societies and the Legislature
though it expedient to make special provisions relating to housing
societies. Accordingly by Maharashtra Act 23 of 2019, Chapter XIII-B
came to be inserted in the M.C.S. Act under the heading ‘Co-operative
Housing Societies’. The amendment came into effect from 9 March
2019. After the amendment of M.C.S. Act, the whole concept of nominal
membership qua co-operative housing society has been obliterated.
After insertion of Chapter XIII-B, no cooperative housing society can
admit any person as a mere nominal member. Under the provisions of
Section 154B-1(18) of the M.C.S. Act, the term ‘Member’ means and
includes only an associate member, joint member or provisional
member. Section 154B-1(18) provides thus :
(18) “Member” means a person joining in an application for the
registration of a housing society which is subsequently registered, or a

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person duly admitted to Membership of a society after its registration
and includes associate or joint or provisional Member,
(a)”Associate Member” means husband, wife, father, mother, brother,
sister, son, daughter, son-in-law, daughter-in-law, nephew, niece a
person duly admitted to Membership of a housing society on a written
recommendation of a Member to exercise his rights and duties with his
written prior consent and whose name does not stand in the share
certificate.
(b) “Joint Member” means a person joining in an application for the
registration of a housing society jointly, which is subsequently
registered or a person who is duly admitted to Membership after its
registration and who holds share, right, title and interest in the flat
jointly but whose name does not stand first in the share certificate;
(c) “Provisional Member” means a person who is duly admitted as a
Member of a society temporarily after death of a Member on the basis
of nomination till the admission of legal heir or heirs as the Member of
the society in place of deceased Member;
11) Thus, the intention of the Legislature post insertion of Chapter
XIII-B in the Act is that every person who has a right in respect of a
unit constructed in the building of the Society must be permitted to
take part in the management of the affairs of the Society. Here the
mischief rule would apply as the amendment is aimed at preventing the
mischief of keeping a unit purchaser out of management of Society
under the pretext of nominal membership. In the present case, the
impugned order has been passed by the Deputy Registrar on 14
September 2022, well after insertion of Chapter XIII-B in the M.C.S. Act.
12) Faced with the above situation, Mr. Patil would rely upon the
provisions of Section 154B-31 and submit that insertion of Chapter
XIII-B does not affect the Bye-laws of the Society which were adopted
prior to Amendment Act of 2019, unless they are expressly repealed,
modified or amended. As a matter of facts the bye-laws need to be
amended so as to bring the same on par with the amended provisions of
the Act. Also, if there is a conflict between the provisions of the Act and
the bye-laws, the provisions of the Act would prevail. In my view, once
the provision for admission of a nominal member under Chapter XIII-B
has been completely removed qua a co-operative housing society, it
would be inconceivable that the Society can be permitted to rely upon
its old Bye-laws and continue admitting persons as nominal members
contrary to the provisions of the Amended Act. Therefore Section 154B-
31 cannot be used for the purpose of enabling the co-operative housing
society to continue to admit a unit purchaser as a mere nominal

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member after deletion of provision of nominal membership in relation
to a co-operative housing society. Even if the contention of Mr. Patil is
to be momentarily accepted, the Bye-law No. 3(24) entitles a purchaser
of unit in Society’s building to become its member. The shop
purchasers have purchased the shops through registered agreements,
and they are not mere licensees, caretaker or occupant for being
admitted to nominal membership of the Society. The Deputy Registrar
has considered the Bye-laws of the Society in the impugned order.
61)
In my view, the ratio of the judgment of this Court in
Viviana CHSL is clearly distinguishable. In that case, there was no
prohibition on admission of flat purchasers as regular members of the
society. For some odd reason, the society insisted on grant of
discriminatory treatment to the shop owners by granting them only the
nominal membership. The shop owners had purchased the shops, and
they were the owners thereof. Despite this position, regular membership
was denied to them. It is in the light of peculiar facts of that case, this
Court upheld grant of regular membership to the shopkeepers. It is well
settled that judgment is an authority for what it decides and not what
can be logically deduced therefrom. The judgment cannot be construed
as laying down a principle that an application to the Society is
unnecessary and that a person may directly approach the Deputy
Registrar for conversion of membership from nominal membership to
regular membership. Nor can the judgment be treated as an authority for
the proposition that, upon the coming into force of the Maharashtra Act
No. 23 of 2019, whereby Chapter XIII-B was inserted into the Act, a
nominal member would automatically acquire the status of a regular
member. The judgment is rendered in the unique facts of that case
where society had unjustifiably discriminated between flat owner and
flat purchaser by keeping the flat purchasers at the bay with only

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nominal membership even though flat purchasers had purchased the
shops for valuable consideration.
62) As a matter of fact, a purchaser/owner of flats/shops can
never be admitted as a nominal member and only a
lessee/licensee/caretaker/occupant can be granted nominal membership.
In the present case, Respondent No.4 has not purchased the shops.
Society continues to be the owner in respect of the shops. What is
granted in favour of Respondent No.4 is mere license to occupy the
shops. The observations made by this Court in para-9 of the judgment in
Viviana CHSL cannot be misconstrued to mean as if a mere occupant
within the meaning of bye-law 20 or within the meaning of Explanation
to Section 154B-7 would be entitled to membership in the society. In
para-9 of the judgment in Viviana CHSL , this Court has compared the
rights of residential members and shop purchasers and has held that in a
tenant co-partnership society, the land and the building is always owned
by the society. The occupancy right discussed by this Court in para-9 of
Viviana CHSL is not the one covered by Explanation to Section 154B-7
of the MCS Act. Occupancy right of unit/flat purchasers is different than
occupancy rights granted to mere licensee/lessee/caretaker/occupant. In
my view therefore the ratio of the judgment in Viviana CHSL would have
no application to the facts and circumstances of the present case.
63)
Mr. Patil has made strenuous efforts to demonstrate that
shop allottees have paid valuable consideration at the time of securing
allotments in respect of the shops. He has placed reliance on a copy of
the Agreement dated 14 November 1988, executed by the Society with

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M/s. Sri Estate Agents. According to him, M/s. Sri Estate Agents was
authorised to procure members for allotment of shop premises upon
payment of a consideration of Rs. 3 crores. Mr. Patil contends that the
said Agreement envisaged grant of regular membership to the allottees
of the shop premises and not merely nominal membership. I have gone
through the Agreement dated 14 November 1988. In my view, the
Agreement executed by the society for scouting of persons interested in
allotment of shops cannot decide the contractual relationship between
the society and the shop allottees. What ultimately matters is the terms
and conditions on which the shops are allotted and the exact nature of
membership applied for by the allottee. In fact in respect of Shop No.16,
M/s. Sri Estate Agents had conveyed to the society by letter dated 20 June
1991 thereof that Shop No.16 was to be allotted to Mrs. Prerna and Ms.
Neeta Rupani and the Agency requested for grant of ‘nominal
membership’ to the duo. The letter dated 20 June 1991 reads thus:
Date - 20-6-1991
To,
The Chairman,
 Worli Sagar Co-op.Housing Society itd.. BOMBAY.
Sir, 
Re : Shop No.15/15 on the ground floor of the building entitled BHIMA-
VAITARNA on the Plot No.25, 27A, 27 and 28 of Worli Hill Estate
We have agreed to allot the above mentioned Shops to Mrs. Prerna
Hemrajani and Miss. Neeta Rupani and have received the full
consideration amount in respect thereof from him/her as the nominal
member of the society and handover the possession of the shops after
obtaining the Occupation Certificate,

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Please allow him/her to make some furniture and decoration In the
shops' pending the grant of Occupation Certificate.
Thanking you.
Yours Faithfully,

For SRI ESTATE AGENTS

64) Thus, even the Estate Agency on whose Agreement reliance
is placed by Respondent No.4, specifically informed the persons scouted
by it that they would receive only nominal membership and occupancy
rights in respect of the shops.
65)
As observed above, Respondent No. 4 never asserted any
claim of title in respect of the shops and was content with merely
holding a licence to occupy the said shops on the basis of nominal
membership. Merely because society has taken some decision in relation
to redevelopment, the same would not mean that Respondent No.4 can
claim ownership rights in respect of the Shops.
66) Under Section 11 of the Transfer of Property Act when
interest in the property is created absolutely, it is impermissible to
create repugnant interest. Section 11 of the Transfer of Property Act
provides thus:
11. Restriction repugnant to interest created:
Where, on a transfer of property, an interest therein is created
absolutely in favour of any person, but the terms of the transfer direct
that such interest shall be applied or enjoyed by him in a particular
manner, he shall be entitled to receive and dispose of such interest as if
there were no such direction.

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[Where any such direction has been made in respect of one piece of
immovable property for the purpose of securing the beneficial
enjoyment of another piece of such property, nothing in this section
shall be deemed to affect any right which the transferor may have to
enforce such direction or any remedy which he may have in respect of a
breach thereof.]
67)
Thus, for applying the provision of Section 11 to a
transaction, the first and foremost condition is that there must be
creation of absolute interest in favour of a person. It is only after
creation of such absolute interest that the bar on prescription of
restriction relating to user or enjoyment would apply. Dr. Chandrachud is
right in relying on judgment of Division Bench of Calcutta High Court in
Subal Chandra Malty in which it is held in para-19 as under:
19 . In order to apply Section 11 to a particular transaction, the first and
foremost condition is that there must be creation of absolute interest in
favour of a person. If such absolute interest is created in favour of a
person, no further restriction can be imposed regarding the manner of
user or enjoyment of such property. For instance, if by a deed of
transfer absolute right, title and interest are created in favour of a
person, after creation of such interest, the transferee cannot be
restrained from selling or transferring the property nor can such
transferee be directed to use the property only for a particular purpose
desired by the transferor. If such a restriction is created, the same
should be treated to be void. In the case before us, if we read the deed
as a whole, it will appear that by the deed itself, the donor has given the
interest in favour of her daughter, the remainder in favour of the three
sons of the said daughter and right of enjoyment of a portion of the
building in favour of her son and his heirs on specified condition.
Therefore, all those persons are beneficiaries in the deed and the
creation of right of enjoyment of garages cannot be ignored as the same
is conferred simultaneous with the creation of title in favour of the
grandsons through the daughter. Therefore, Section 11 cannot have any
application. But in a case, where the deed itself creates simultaneous
rights to different persons of different nature in a specific portion
thereof, all the lawful rights so created must be enforced. For instance,
by a deed, a donor can gift a portion to his elder son and another
portion to his younger son. Therefore, a person by a deed can even give

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absolute title to garages to his son and the remaining portion of the
building to his daughter. In case of apparent discrepancy, an attempt
should always be made to read the two parts of the document
harmoniously, if possible; it is only when this is not possible, e.g. where
an absolute title is given in clear and unambiguous terms and the later
provisions trench on the same, that the later provisions have to be held
to be void. (See :  Ramkishorelal  v.  Kamalnarayan , reported in AIR 1963
SC 890).
68)
In the present case, far from creating any absolute interest
in the shop in favour of earlier allottees or in favour of Respondent No.4,
specific restrictions are imposed on use and enjoyment of the shops.
Therefore, it cannot be contended by any stretch of imagination that
Respondent No.4 has any title in respect of the Shops in its occupation.
He is merely permitted to occupy the same on terms and conditions
specified in the Agreement and Allotment letter.
69) Mr. Patil’s contention about payment of valuable
consideration at the time of seeking allotment also does not appeal to
this Court. The Estate Agency had paid an amount of Rs.3 crores as fees
for scouting allottees in respect of 53 shops. The allottees may have paid
some consideration to the Estate Agency since the society was not to
charge any market rent for allotment of shops. Similarly, the allottees
may have also paid part of lease rent to the society as per the Agreement.
In the present case, while securing allotment of Shop No.16, Respondent
No.4 claims to have paid amount of Rs.25,00,000/- to the society. On
acceptance of Rs. 25,00,000/- the society has not granted ownership in
resect of the shop in favour of Respondent No. 4 who is permitted to
merely occupy the shop subject to observance of terms and conditions
and subject to payment of additional lease rent to the State Government.

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Mr. Patil claims payment of amount of Rs.1.74 crores to the previous
allottee. It is incomprehensible as to why the said amount was paid by
Respondent No.4 to the previous allottee. In any case, the said amount
has not gone into the pockets of the society. It is otherwise
incomprehensible to believe that by making such insignificant payment
to the society, Respondent No.4 can get ownership rights in respect of
the shops.
C ONCLUSIONS
70) The conspectus of the above discussion is that the impugned
order passed by the Deputy Registrar is not only without jurisdiction but
is otherwise unsustainable on merits. The Deputy Registrar has
erroneously offered on a platter regular membership to Respondent
No.4, although Respondent No. 4 is merely an occupant of the shops
under a licence or by virtue of permissive use granted by the Petitioner-
Society. The documents styled as Deeds of Confirmation/Transfer,
brought into existence by Respondent No. 4, do not have any existence in
the eyes of law and do not confer upon it any right, title or interest in
respect of the shops in question, nor does it make Respondent No. 4 the
title holder thereof. In my view therefore, Respondent No.4 would
continue to remain mere nominal member in respect of the Shops in its
occupation till the occupancy rights are terminated. With termination of
occupancy rights, his nominal membership would automatically cease to
exist. It cannot remain the member of the society forever. It has secured
the nominal membership and occupancy rights with its eyes wide open
to this position. It is not entitled to secure regular membership of

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Petitioner-society in absence of title/ownership in respect of the shops.
The impugned orders passed by the Deputy Registrar and by the
Divisional Joint Registrar are thus indefensible and liable to be set aside.
O RDER
71) The Petitions accordingly succeed. The Orders dated 9
October 2026 passed by the Divisional Joint Registrar and order dated 30
June 2026 passed by the Deputy Registrar are set aside. The Writ
Petitions are allowed in above terms. Rule is made absolute in each of
the Petitions. There shall be no order as to costs.
[SANDEEP V. MARNE , J.]
72) After the judgment is pronounced, the learned counsel
appearing for Respondent No.4 prays for stay of the judgment for a
period of six weeks. Request is opposed by the learned counsel appearing
for the Petitioners. Respondent No.4 is already a nominal member of the
Petitioner Society. By impugned orders, his status was sought to be
elevated to that of regular/ ordinary member. In that view of the matter,
request for stay of the judgment is rejected.
NEETA
SHAILESH
SAWANT
[SANDEEP V. MARNE , J.]
Digitally signed by
NEETA SHAILESH
SAWANT
Date: 2026.11.04
22:13:30 +0530

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