In a significant ruling clarifying the rights of outgoing members of co-operative housing societies, the Maharashtra State Co-operative Appellate Court has held that a past member can directly file a dispute against the society challenging a resolution that demanded payment as a condition for issuing No Objection Certificate (NOC) for sale of a flat and seeking refund of the amount paid. The court ruled that no authorisation from the current members (purchasers of the flat) is required in such cases.
The revision application filed by Charkop Sangli Bhavan Co-operative Housing Society Ltd., Kandivali (West), Mumbai was dismissed by President Sau. S.S. Sapatnekar on 10 June 2026. The court upheld the 1 July 2025 order of the Co-operative Court No.4, Mumbai rejecting the society’s application under Section 9A of the CPC seeking to frame a preliminary issue of jurisdiction.
Background of the Dispute
Mr. Mahesh Bhimrao Rakte, the original disputant, was a member of the society holding Flat No.302. The society had undertaken additional construction, extension and alteration work in the building and allotted him an extra area of 340 sq.ft. The society levied a total of Rs.13,42,000/- towards the cost of this additional construction and modern amenities.
Mr. Rakte had paid Rs.6,75,000/- till 2011-12. The balance amount of Rs.6,67,000/- became payable at the time of transfer of the flat. In September 2014, when he decided to sell the flat and shift to Pune due to his job, he applied for the society’s NOC. According to his case, the society informed him that it had passed a resolution requiring any member intending to sell to pay back Rs.4,86,000/- plus an additional Rs.1,81,000/- (totalling exactly Rs.6,67,000/-) as a condition for granting NOC. He claimed he paid the amount under constraint to expedite the sale, obtained the NOC, and transferred the flat along with share certificates to Mrs. Gauri Bhagat and Mrs. Prachi Bhagat.
After the transfer, Mr. Rakte filed Dispute No.CC/IV/16/2016 before the Co-operative Court seeking a declaration that the society’s resolution was null and void and for refund of Rs.6,67,000/- along with interest.
Society’s Preliminary Objection on Jurisdiction
During the pendency of the dispute, the society filed an application under Section 9A of the CPC contending that Mr. Rakte had ceased to be a member after transferring his flat and shares. It argued that under Section 91 of the Maharashtra Co-operative Societies Act, a past member can file a dispute only by claiming through a present member and must obtain prior authority from the existing members. Since no such authority was obtained from the Bhagat family, the Co-operative Court lacked jurisdiction to entertain the dispute. The society therefore prayed that a preliminary issue on jurisdiction be framed and the dispute be dismissed at the threshold.
Trial Court and Appellate Court Decisions
The Co-operative Court No.4 rejected the Section 9A application on 1 July 2025, holding that the dispute was maintainable. Aggrieved, the society filed Revision Application No.9 of 2026 before the State Co-operative Appellate Court.
After hearing both sides, the Appellate Court dismissed the revision and confirmed the trial court’s order. The court held that the dispute squarely falls under Section 91 of the MCS Act because:
- The cause of action arose while Mr. Rakte was still a member of the society.
- The grievance pertains to alleged financial loss caused by the society in the matter of granting NOC for sale of the flat — an act that forms part of the business of a co-operative housing society.
- The claim for refund is personal to the disputant in respect of amounts paid by him during his membership. The present members (purchasers) have no concern whatsoever with the said amount or the resolution under challenge.
The Appellate Court categorically observed that “by no stretch of imagination, it can be said that disputant requires authorisation from the present members… for filing the dispute.”
Precedents Distinguished
The society had relied upon Bharatiya Bhavan Co-operative Housing Society Ltd. vs. Smt. Krishna H. Bajaj (Writ Petition No.1094/2004, Bombay High Court) and O.N. Bhatnagar vs. Smt. Rukibai Narsingdas (AIR 1982 SC 1097). The Appellate Court distinguished both judgments, noting that the facts were entirely different — one involved a voluntary donation and the other concerned eviction proceedings against a licensee/nominal member. Neither case laid down any proposition that would bar a past member from directly approaching the Co-operative Court in the present circumstances.
Current Status and Implications
The Appellate Court has only decided the preliminary jurisdictional issue. The main dispute on the legality of the society’s resolution and the disputant’s entitlement to refund is still pending adjudication on merits before the Co-operative Court No.4, Mumbai.
This ruling is significant for members of co-operative housing societies across Maharashtra. It clarifies that where a grievance arises during the period of membership — particularly concerning conditions imposed by societies for granting NOCs or transfer of flats — the outgoing member can directly approach the Co-operative Court even after ceasing to be a member. Technical objections regarding locus standi of past members are unlikely to succeed if the dispute touches the business of the society and the claim is personal in nature.
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