In a significant ruling impacting leasehold properties across Mumbai, the Bombay High Court has dismissed a petition filed by Vallabhnagar Co-operative Housing Society Ltd., Vile Parle (West), holding that the society cannot deny membership to purchasers by insisting on lease premium exceeding the statutory ceiling fixed by the State Government.
Justice Amit Borkar, while delivering judgment in Writ Petition No. 461 of 2026, upheld the orders passed by the Deputy Registrar and Divisional Joint Registrar, Co-operative Societies, Mumbai, directing the society to admit the purchasers as members.
Dispute Over JVPD Scheme Plot
The dispute concerned Plot No. 26, located in the JVPD Scheme, N.S. Road No. 4, Vile Parle (West), Mumbai. The plot forms part of Vallabhnagar Co-operative Housing Society, which was registered under the Maharashtra Co-operative Societies Act.
The plot was originally leased by the society in July 1963 for a period of 999 years to Jayantilal Vadilal Gandhi and Pramila Jayantilal Gandhi. The lease deed contained restrictive clauses requiring:
- Prior written consent of the society before any transfer, and
- Payment of lease premium calculated as a share of the consideration received on sale.
Transfer Following Court Settlement
In August 2024, the plot was assigned to Vijay S. Khetan and Meena Vijay Khetan, residents of J.B. Nagar, Andheri (East), pursuant to a settlement recorded in Suit No. 224 of 2021. A registered Deed of Assignment dated 1 August 2024 was executed in their favour.
Following the assignment, the Khetans applied for membership of Vallabhnagar Co-operative Housing Society on 11 October 2024.
Society Refuses Membership
The society rejected their application, contending that:
- No prior written No Objection Certificate (NOC) had been issued before execution of the assignment, and
- The purchasers had failed to pay lease premium as required under Clause 14 of the 1963 lease deed.
The society maintained that the transfer was in breach of lease conditions and therefore invalid for the purpose of granting membership.
Buyers Approach Co-operative Authorities
Aggrieved, the Khetans filed Appeal No. 33 of 2024 before the Deputy Registrar, Co-operative Societies, K/W Ward. The Deputy Registrar allowed the appeal on 8 May 2025, directing the society to grant membership.
The society challenged this order before the Divisional Joint Registrar, Mumbai Division, by filing Revision Application No. 192 of 2025. However, on 15 October 2025, the revision was dismissed.
High Court Proceedings
The society then approached the Bombay High Court under Article 227 of the Constitution.
- Senior Advocate Venkatesh Dhond, appearing for the society, argued that the lease conditions were mandatory and binding and that authorities had no power to dilute them.
- Senior Advocate Surel Shah, appearing for the purchasers, countered that the society’s own correspondence showed willingness to process transfer on payment of statutory charges, and that any demand beyond the government-prescribed ceiling was illegal.
- Dr. Dhruti Kapadia, AGP, appeared for the State authorities.
Court’s Findings
The High Court examined:
- The 1963 lease deed
- Correspondence dated 28 October 2012 and 5 April 2013, where the society indicated transfer charges of ₹250 per square yard
- Sections 79A and 154B(7) of the Maharashtra Co-operative Societies Act
Justice Borkar held that:
- Lease conditions cannot override statutory directions.
- Under Section 79A, the State Government has fixed a ceiling on transfer/lease premium (₹25,000 in Mumbai).
- Any demand beyond this ceiling cannot be treated as “dues” under the Act.
- The proviso to Section 154B(7) allows enforcement of lease terms only if they are consistent with the Act.
- The purchasers had complied with all legal requirements and paid permissible charges.
Final Order
The Court found no jurisdictional error in the orders passed by the co-operative authorities and dismissed the society’s petition.
“A co-operative housing society cannot refuse membership by insisting on payment of charges beyond what is permitted under statutory directions,” the Court held.
The writ petition was dismissed with no order as to costs.
Why This Judgment Is Important
The ruling has wide implications for:
- Leasehold societies in Mumbai’s JVPD, Juhu, Andheri, and Bandra areas
- Societies relying on decades-old lease deeds to demand large premiums
- Buyers facing membership denial after registered transfers
The judgment reinforces that statutory protection under Section 79A prevails over private lease arrangements.
Also Read: No NOC Needed From Housing Society to sell or rent a flat
