The judgment, delivered on 15 October 2026 by Judge J. A. Zari in Dispute No. 316/2005, ends a case that was filed in December 2005 and remained pending for more than 20 years.

Background of the Dispute

The disputants, members of the Parekh family, were record members of the society and held Plot No. 46 measuring about 617 square yards under a lease deed dated 22 November 1975. They had sought the society’s permission to demolish the existing structure and reconstruct a building using Transferable Development Rights (TDR) for residential use by family members. In the process, they paid a performance deposit of ₹11,15,528 in November 2001 and gave written undertakings restricting the use of the premises to residential purposes and prohibiting transfer without the society’s prior written consent.

In May 2005, they executed a deed of assignment transferring their leasehold interest in the plot to Gautam Adhikari of SAB TV Network and later submitted their resignation from membership. Shortly afterwards, they filed the dispute seeking recovery of various amounts from the society.

The Claims Raised

The disputants sought a total of ₹31,07,333.34 (up to 31 December 2005) along with future interest at 12% per annum. The claims included:

• Refund of the performance deposit of ₹11,15,528 with interest, which they said was payable after compliance with conditions decided in the society’s 56th Annual General Meeting.
• Annual benefits of ₹19,000 for 2004-05.
• Excess transfer premium of roughly ₹9.27 lakh, contending that the society had earlier agreed to charge ₹2,000 per square yard but later demanded a higher rate when the plot was sold.
• Flood relief of ₹3 lakh, which the general body had decided to pay to eligible plot-holding members.
• Value of three gold coins (150 grams) worth ₹1.2 lakh, allegedly distributed to all other members except them.

Society’s Defence

The society contested every claim. It stated that the performance deposit was forfeited because the disputants had committed breaches of the lease deed and the undertakings given by them. These included transferring the leasehold rights without prior written permission and concerns over possible commercial or educational use of the premises, contrary to residential-only conditions and an undertaking given to the court.

The society further maintained that benefits such as flood relief and annual amounts were meant only for eligible resident members. The disputants, it said, were not residing in the premises at the relevant time and had ceased to be members. It also denied that any resolution had been passed for distribution of gold coins and asserted that the full transfer premium was payable under the lease terms.

Why the Court Rejected the Claims

The court first held that the dispute was maintainable under Section 91 of the Maharashtra Co-operative Societies Act, 1960, because past members are expressly covered under the provision and the claims related to the society’s business and management.

On merits, however, the court found that the disputants had failed to prove any of their claims. They could not produce any document showing that the society had agreed to charge transfer premium at the lower rate of ₹2,000 per square yard. Their own admissions in cross-examination established that they were not resident members when the flood-relief and other benefits were decided, and that such benefits were for eligible resident members.

On the performance deposit, the court accepted the society’s evidence that it had been forfeited due to breaches of the lease and undertakings. Significantly, the disputants did not cross-examine the society’s witness on these material aspects. Applying the settled principle that failure to cross-examine a witness on material points amounts to acceptance of that evidence, the court held that the society’s case on forfeiture stood unchallenged.

The claim for gold coins was also rejected because the society’s witness stated that no such resolution had been passed, and the disputants neither challenged this evidence nor produced any resolution supporting their assertion.

Final Outcome and Significance

The court answered the issues on entitlement to the amounts and interest in the negative and dismissed the dispute in full. No amount is payable by the society to the former members, and the award is to be drawn up accordingly.

The judgment underscores the importance of documentary proof and effective cross-examination in co-operative court disputes. It also highlights that performance deposits linked to undertakings can be forfeited when breaches are established, and that member-only benefits such as flood relief are generally restricted to eligible resident members. For housing societies and members alike, the case serves as a reminder that claims based on past membership must be supported by clear evidence of entitlement and compliance with society rules and resolutions.

Also Read: Housing Society Committees Cannot Be Removed Arbitrarily by Cooperative Officials: Bombay High Court

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