In a significant ruling that clarifies the limited jurisdiction of the Deputy Registrar in cooperative housing society membership disputes, the Bombay High Court on 4 November 2026 set aside orders that had directed Vaitarna Bheema Worli Sagar CHSL to grant ordinary membership to Prowess Financial Services Pvt. Ltd. in respect of 10 shops. Justice Sandeep V. Marne held that the Deputy Registrar has no power to entertain a direct application for membership under the Maharashtra Co-operative Societies Act, 1960, when the society has not first been approached and has either refused the application or failed to decide it. The Court quashed the Deputy Registrar’s order of 30 June 2026 and the confirming order of the Divisional Joint Registrar dated 9 October 2026, restoring the position that the company remains only a nominal member with occupancy rights.
Background of the Dispute
Worli Sagar CHSL (later subdivided, with Vaitarna Bheema Worli Sagar CHSL being the relevant society) was allotted government land at Pochkanawala Road, Worli, under a 1983 Government Resolution for construction of residential tenements for eligible persons. The government later permitted use of up to 15% of FSI for shops on a restricted basis. Residential flat allottees were admitted as ordinary members. Shop occupants, however, were granted only nominal membership with occupancy rights subject to strict conditions: no transfer or creation of third-party rights without consent, compulsory surrender to the society if the occupant wished to leave, and power of the society to terminate on breach.
Respondent No. 4 (Prowess Financial Services Pvt. Ltd., whose director Mr. Satish Chaturvedi already owns a residential flat in the building and had earlier been Chairman) secured nominal membership and occupancy rights in Shop Nos. 7 to 16 after earlier allottees surrendered them to the society. In 2024 the company executed a registered Deed of Confirmation/Transfer with a previous allottee (who had surrendered rights in 2017) and claimed ownership. It then directly approached the Deputy Registrar seeking ordinary membership. The Deputy Registrar treated the matter as an appeal under Section 23(2) and directed the society to issue share certificates. The Divisional Joint Registrar confirmed the order. The society challenged both orders in ten writ petitions.
Statutory Scheme: Why Direct Approach to the Deputy Registrar is Invalid
The Court carefully examined Sections 22 and 23 of the Maharashtra Co-operative Societies Act, 1960.
Section 22 lays down who may become a member. Sub-section (2) provides that if a society refuses admission, the decision must be communicated within fifteen days or within three months from receipt of the application, whichever is earlier. If no decision is communicated within three months, the applicant is deemed to have been admitted. Any question of deemed membership is decided by the Registrar after hearing the parties.
Section 23 deals with open membership. Sub-section (2) allows a person aggrieved by a society’s refusal of membership to appeal to the Registrar within sixty days of the decision.
The Court held that the act of making a written application to the society is a jurisdictional prerequisite. Only after the society has either refused the application or failed to decide it does the Deputy Registrar acquire jurisdiction—either under Section 22(2) (deemed membership) or under Section 23(2) (appeal against refusal). In the absence of any such prior application to the society, neither provision is attracted. The Deputy Registrar, being a creature of the statute, has no plenary or inherent power to entertain a direct request for membership. The orders were therefore held to be without jurisdiction and non-est.
Nature of Rights and Nominal Membership
The Court further held that the company was always only a nominal member holding occupancy rights under a licence-like arrangement. The society retained ownership of the shops. Allotment agreements and letters expressly barred sale, transfer or assignment and allowed the society to terminate membership on breach. The 2024 Deed of Confirmation/Transfer was declared meaningless: the previous allottee had already surrendered all rights to the society in 2017 and retained nothing that could be transferred. There was no privity of contract between the previous allottee and the company. Mere registration of the deed did not create title.
Under the Model Bye-laws and the pre-2019 statutory scheme, nominal membership is meant for sub-lessees, licensees, caretakers or occupants—not for owners. The 2019 amendment (Maharashtra Act No. 23 of 2019, Chapter XIII-B) deleted the concept of nominal membership for housing societies with effect from 9 March 2019. This was held to be a substantive amendment operating prospectively. Existing nominal memberships granted earlier continue by virtue of the saving provision in Section 154B-31, but they are not automatically upgraded to ordinary membership.
The Court distinguished its earlier decision in Viviana CHSL, where shop owners had purchased the shops through registered agreements under the Maharashtra Ownership of Flats Act and were true owners who were being unfairly restricted to nominal membership. In the present case, only occupancy rights had been granted.
Government Land Restrictions and Other Findings
The original 1983 GR and the land allotment were for residential housing of eligible persons. Shop permission was limited and on a sub-lease basis. Ordinary membership was never intended for shop occupants who did not satisfy the eligibility criteria applicable to government land. Payment of consideration to an estate agent, to a previous allottee, or even some amount to the society did not convert occupancy rights into ownership. No absolute interest having been created, principles under Section 11 of the Transfer of Property Act also did not assist the company.
Outcome
The writ petitions were allowed. The orders of the Deputy Registrar and the Divisional Joint Registrar were set aside. The company continues as a nominal member only, with occupancy rights subject to the original conditions, which the society can terminate on breach. The judgment reaffirms that membership disputes must first go to the society; the Deputy Registrar cannot be approached directly.
Also Read: Registrar Cannot Decide Ownership Disputes or Force Housing Societies to Issue Maintenance Bills
