In a landmark ruling that could reshape the landscape of cooperative housing in Maharashtra, the Bombay High Court has dismissed restrictions on companies owning multiple units in housing societies. Delivered on December 24, 2025, by Justice Amit Borkar, the judgment paves the way for real estate developers and firms to become members of housing societies without the old share-holding caps, potentially boosting investment and development in urban residential projects. This decision, stemming from a decade-long dispute in Thane, signals a more flexible era for property ownership amid evolving cooperative laws.
The Dispute: A Thane Housing Society vs. a Realty Firm
The case revolves around Shivraj Nagar Cooperative Housing Society Ltd., a residential complex in Thane with 15 bungalows, and Mextech Realty Pvt. Ltd. (formerly Nandivardhan Constructions Pvt. Ltd.), a Mumbai-based real estate company. Back in 2008, Mextech purchased five bungalows from individual owners through registered sale deeds. The company then sought membership in the society, claiming “deemed membership” after the society failed to respond within the stipulated time under the Maharashtra Cooperative Societies (MCS) Act, 1960.
The society fiercely opposed this, arguing that owning five units—equating to more than one-fifth of the society’s total share capital—violated Section 28 of the MCS Act. This section caps any member’s shareholding at one-fifth (unless it’s the government or another society). The society even challenged the sale deeds themselves, calling them “opposed to public policy” under the Indian Contract Act. What followed was a protracted legal battle: disputes filed in 2008, appeals, revisions, and prior writ petitions that dragged on for years.
In February 2024, the High Court intervened, setting aside earlier orders and allowing Mextech to file fresh membership applications. The company did so promptly, but the society rejected them again in May 2024. Appeals to cooperative authorities favored Mextech, leading to the society’s writ petitions (Nos. 10949 to 10952 of 2025) before the Bombay High Court.
Key Arguments: Old Laws vs. Modern Amendments
The society’s counsel, A.R. Gole, contended that Section 28’s cap made the 2008 purchases invalid from the start. He argued the transactions breached public policy and that since the dispute began before 2019 amendments to the MCS Act, the old rules should apply via a saving clause (Section 154B-31). Additionally, he pointed to conditions in the Act’s model bye-laws requiring companies to amend their charters for employee housing and residential-only use.
On the flip side, Mextech’s advocate, Pradeep Thorat, emphasized that Section 28 only restricts share allotment by the society—not property purchases. He highlighted the 2019 introduction of Chapter XIII-B in the MCS Act, a dedicated framework for housing societies that explicitly excludes Section 28 (under Section 154B-2). Since the fresh applications were filed post-2024, the amended law governs, removing the share cap. Mextech also pledged to comply with all regulatory conditions, like those in the society’s rejection order (clauses O, P, and Q).
The Court’s Ruling: A Clear Win for Flexibility
Justice Borkar dismissed all four petitions, upholding the lower authorities’ decisions to grant membership to Mextech. The court clarified that Section 28 doesn’t bar property sales; it only kicks in during share issuance. More crucially, Chapter XIII-B’s exclusion of Section 28 means housing societies—focused on residential management rather than capital control—no longer face this limit.
The judge rejected the society’s reliance on the saving clause, noting that the 2024 court order reset the proceedings as “fresh” under the current law. The sale deeds were deemed valid, not violating public policy, and the court mandated membership upon Mextech’s compliance with conditions. This pragmatic approach ensures regulation without outright exclusion, making the ruling a balanced step forward.
Implications: A Game-Changer for Real Estate and Homeowners
This verdict is electrifying for developers eyeing bulk investments in cooperative housing, potentially accelerating redevelopment and urban projects in cities like Mumbai and Thane. For common homeowners, it means societies can’t arbitrarily block corporate members if they meet usage rules—fostering inclusivity but raising concerns about influence from big players.
Experts say it aligns with Maharashtra’s push for modern cooperative governance, but societies may need to update bye-laws to safeguard resident interests. As real estate booms post-pandemic, this could spark more such cases, urging stakeholders to navigate the amended MCS Act carefully.
The full judgment, pronounced just before Christmas 2025, underscores the judiciary’s role in adapting old laws to new realities. For anyone in property dealings, it’s a reminder: flexibility wins, but compliance is key.
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