In a significant order concerning Prathamesh Co-operative Housing Society Ltd. in Dadar East, the Co-operative Court No. 3, Mumbai, has directed the society to recalculate and reconcile the property-tax component charged to eligible members after giving effect to the BMC’s telescopic property-tax concession.

However, the Court stopped short of ordering an immediate refund of the specific amount claimed by the members, holding that the exact monetary liability had not been independently established through sufficient documentary evidence.

The judgment was delivered on August 10, 2026, by Smt. V. R. Kulkarni, Judge, Co-operative Court No. 3, Mumbai, in Dispute No. CC/III/83/2013. The dispute had been pending since July 2013, making it a case that remained before the Cooperative Court for more than 13 years.

The central issue: Can an AGM override a BMC property-tax concession?

At the heart of the dispute was a question relevant to thousands of cooperative housing society members: if BMC grants a property-tax concession to particular eligible flats, can the housing society determine its maintenance and property-tax recovery through its General Body without passing that concession on to those members?

The Court’s answer, on the facts of this case, was clear.

The Society can determine maintenance charges under its governing framework. But that power does not permit it to ignore or alter the incidence of a property-tax concession specifically granted by the competent municipal authority.

The Court made it clear that the issue was not whether the Society could generally levy maintenance charges. The question was whether, while recovering the property-tax component through maintenance, the Society had correctly applied the BMC concession to the members whose tenements were eligible.

What was the dispute about?

The disputants were members of Prathamesh Co-operative Housing Society Ltd., located at M.M.G.S. Marg, Dadar East, Mumbai.

They approached the Cooperative Court under Sections 91 to 96 of the Maharashtra Co-operative Societies Act, 1960, challenging the manner in which the Society was levying and recovering property-tax and maintenance charges.

Their case was that BMC had granted a telescopic concession in property tax for the redeveloped property, but the Society was recovering property-tax amounts without properly extending the benefit of that concession to eligible members.

The Society disputed the claim.

It argued, among other things, that BMC was the authority responsible for levying property tax, whereas the determination of monthly maintenance and its recovery from members fell within the Society’s domain.

The Society also relied upon resolutions of its General Body concerning maintenance charges and contended that the amounts recovered were within the applicable property-tax liability after taking the concession into account.

What was the BMC concession?

The Court examined the BMC’s records relating to the property.

A BMC circular dated September 7, 2006 provided for a telescopic property-tax concession for specified residential tenements in reconstructed or redeveloped buildings.

The concession was structured to reduce gradually over time.

More importantly, a BMC communication dated October 15, 2011 specifically concerning the property recorded that the telescopic concession had been sanctioned with effect from August 1, 1998.

The applicable rates were:

• 80% concession from August 1, 1998 to July 31, 2008;
• 50% concession from August 1, 2008 to July 31, 2013;
• 20% concession from August 1, 2013 to July 31, 2018; and
• full property tax from August 1, 2018.

The Court treated this communication as direct official evidence that BMC had sanctioned the concession for the property.

But the concession did not apply to every flat

This is a crucial qualification to the judgment.

The building contained 46 tenements.

A subsequent BMC communication dated July 9, 2012 distinguished between:

• 36 rehabilitation/original tenements that were eligible for the telescopic concession; and
• 10 tenements that were not eligible.

Therefore, the Court did not hold that every member of the Society was entitled to the concession.

The entitlement was specifically linked to the 36 tenements identified by BMC as eligible.

The Court’s final order similarly refers specifically to members whose respective tenements fell within the category of 36 eligible tenements identified by BMC.

Society’s defence: maintenance was decided by the General Body

The Society argued that its General Body had passed a resolution on June 17, 2012 increasing monthly maintenance by ₹200 retrospectively from October 2008 towards the enhanced property-tax component and by another ₹100 towards other expenses.

This resulted in monthly maintenance of ₹1,000, including ₹350 towards property tax.

The Society maintained that this recovery mechanism was within the framework of the BMC concession.

It also argued that BMC determines property tax payable by the Society, while the Society and its General Body determine how maintenance is recovered from individual members.

The Court did not reject the general proposition that a cooperative society can determine maintenance.

Instead, it drew a line between the Society’s power to fix maintenance and its obligation to respect a municipal concession applicable to particular tenements.

Court finds Society failed to prove that concession was actually passed on

One of the strongest findings against the Society was evidentiary.

The Society claimed that the property-tax component had been correctly calculated after taking the concession into account.

However, the Court noted that the Society did not produce its accounts, individual assessment calculations or other evidence demonstrating that the benefit attributable to the 36 eligible tenements had actually been passed on to those members.

The Court also noted that the Society had not entered the witness box or produced evidence in rebuttal to establish its calculations.

This was significant because the Society’s defence depended heavily on its assertion that the amounts recovered were correct.

Members’ evidence also had an important advantage

The disputants examined Satish Bandekar as their witness.

He filed his affidavit and produced documentary evidence.

The Society had the opportunity to cross-examine him but did not do so.

The Court therefore recorded that his testimony remained unchallenged in cross-examination.

However, the Judge did not treat this alone as sufficient to automatically decide the dispute in favour of the members. The Court also examined the documentary evidence before reaching its conclusions.

Assistant Registrar had also asked Society to give effect to the concession

The Court found further support for the members’ case in a communication issued by the Assistant Registrar, Cooperative Societies, F/N Ward.

The communication referred to the distinction between the 36 eligible and 10 non-eligible tenements and called upon the Society to give effect to the concession and make appropriate adjustments where excess recovery had occurred.

This meant that the members’ grievance was not merely a claim made by them privately; the issue had also been considered by the Cooperative Department.

Society can fix maintenance, but cannot use that power to defeat the concession

The Court’s reasoning on this point is likely to be the most relevant part of the judgment for cooperative housing society members.

The Court accepted that the Society may determine maintenance charges in accordance with its governing framework.

But it held that such power does not permit the Society to alter the effect of a property-tax concession specifically granted by BMC.

In other words, an AGM or General Body resolution fixing maintenance does not, by itself, answer the separate question of whether the BMC concession has been correctly applied to eligible members.

The Court therefore focused on the property-tax component embedded in the maintenance charges.

Members did not get the specific refund they claimed

While the Court accepted the underlying entitlement to the concession, it rejected the members’ claim for recovery of the specific monetary amount sought.

The reason was not that the members were ineligible for the concession.

The problem was that the exact amount allegedly refundable to each member had not been sufficiently proved.

The members had produced calculation sheets containing figures for property-tax arrears and contributions, but the Court found that complete municipal bills, Society ledger entries, member-wise liability and payment histories were not available in a sufficiently proved form to permit the Court to safely issue a quantified money decree.

Thus, the Court made an important distinction:

Entitlement to concession was proved, but the precise amount of refund was not.

Court orders recalculation instead of awarding a lump-sum refund

Rather than awarding the amount claimed by the members, the Court directed the Society to conduct a proper member-wise reconciliation.

For every eligible tenement, the Society has been directed to:

• calculate the property-tax component according to the applicable BMC concession;
• give credit for amounts already paid or recovered;
• determine whether there has been an excess recovery or a lawful shortfall;
• adjust any excess against outstanding Society dues;
• where there are no dues, credit the excess to the concerned member’s Society account; and
• recover any lawful shortfall in accordance with law.

The Society has been given three months from the date of the Award to complete this exercise.

It must also provide an individual reconciliation statement to every concerned disputant.

Court rejects allegation that Society retained property tax instead of paying BMC

The members had made another allegation: that the Society collected property tax from them but instead of depositing it with BMC, retained or deposited the money in its own account.

The Court rejected this allegation.

Evidence showed that the Society had received property-tax bills totalling ₹16.54 lakh for the relevant period and had already paid ₹13.07 lakh to BMC, with ₹3.47 lakh remaining.

The Society had even sought permission to temporarily use the Sinking Fund to pay the balance and avoid municipal penalties.

The Court therefore distinguished between two separate allegations.

One was that the Society had incorrectly apportioned or applied the BMC concession.

The other was that the Society had collected property tax but failed to remit it to BMC.

The Court found the first allegation sufficiently established, but the second was not proved.

Final order: dispute partly allowed

The Cooperative Court ultimately partly allowed the dispute.

It declared that members occupying the 36 BMC-identified eligible tenements were entitled to the telescopic property-tax concession for the relevant periods and at the rates sanctioned by BMC.

The Society was directed to recalculate and reconcile the accounts of those members and provide individual statements within three months.

At the same time, the Court rejected:

• the claim for a specific quantified monetary recovery; and
• the allegation that the Society had retained property-tax collections instead of remitting them to the statutory authority.

The parties were directed to bear their own costs.

What this means for housing society members

The judgment does not mean that housing societies cannot determine maintenance charges.

They can.

But where the property-tax component of those charges is affected by a concession granted by a competent municipal authority, the Society cannot simply treat its General Body resolution as overriding that concession for members to whom the concession applies.

The more precise takeaway from this order is:

A housing society can decide how maintenance is structured and recovered, but it must calculate the property-tax component in accordance with a BMC concession applicable to the individual eligible tenement.

The judgment also shows why member-wise accounts are important.

If a Society says it has already passed on a concession, it should be able to demonstrate that through its accounts, assessment calculations and member-wise reconciliation.

At the same time, members seeking a refund must also be able to establish exactly how much they overpaid.

In this case, the Court found enough evidence to establish the members’ entitlement but not enough evidence to award the specific refund they had claimed.

Case details

Case: Dispute No. CC/III/83/2013

Court: Co-operative Court No. 3, Mumbai

Presiding Judge: Smt. V. R. Kulkarni

Society: Prathamesh Co-operative Housing Society Ltd., Dadar East

Date of judgment: August 10, 2026

Nature of dispute: Property tax, maintenance charges and BMC telescopic concession

Final outcome: Dispute partly allowed

Key direction: Recalculation and reconciliation for eligible 36 tenements within three months

Also Read: Redevelopment Sites Not Tax-Free: Bombay HC Clarifies Property Tax Rules

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