Co-operative Housing Societies

CA. Ramesh Prabhu, CA. D.A. Chougule

1. STRENGTH OF THE COMMITTEE IN CHS :

Bombay High Court in a Writ Petition Nos. 16085, 16087 & 16089 of 2025, held that Housing society committee becomes defunct once elected strength falls below two-thirds of sanctioned strength; co-option cannot rebuild foundation. Fresh elections mandatory.

1.1 Parties: Suresh Agarwal & Ors. (10 elected committee members) v. Sudhir Agarwal & Ors. (Splendor Complex CHS Ltd., Andheri (E), & Presiding/Returning Officer)

1.2 Background

  1. Splendor Complex CHS Ltd. – sanctioned strength: 19 members

  2. Elections (11.12.2022): 18 elected, 1 reserved seat vacant.

  3. Resignations: June 2023: 1 member resigned.Aug–Sept 2024: 7 members resigned (accepted individually).

  4. Co-option attempt: 2 vacancies filled, but elected strength fell to 12 (below statutory minimum of 13).

  5. Dispute filed seeking declaration that committee ceased to exist in law.

1.3 Key Issue

Whether a managing committee remains validly “constituted” after resignations reduce elected strength below two-thirds of sanctioned strength (Section 154B-19(2), MCS Act, 1960).

1.4 Court’s Findings

As per Section 154B-19(2): Committee stands constituted only if more than two-thirds of sanctioned strength are elected. For strength 19 minimum 13 elected members required. Court held that Constitution is not a one-time snapshot; it must exist throughout the tenure. A committee is a “living body,” not frozen at election day..

1.5 Ratio (Legal Principle)

A managing committee must at all times have more than two-thirds of sanctioned strength as elected members. Falling below this threshold committee ceases to exist in law. Co-option cannot revive a collapsed committee. Such a body cannot hold meetings, pass resolutions, or exercise powers until fresh elections are held.

1.6 Conclusion :HC upheld Co-operative Appellate Court’s restraint order. Splendor Complex CHS committee declared defunct once strength fell to 12. Writ petitions dismissed; parties to bear own costs.

2. MEMBERS IN THE CHS AS PER SANCTIONED PLANS:

Bombay High Court held that Only the sanctioned building plan determines how many flats and therefore how many members a society can have. No authority or general body can create an extra flat by private deeds, inspection reports or majority vote. Physical structures are irrelevant unless the sanctioned plan recognises them. Membership granted beyond the sanctioned plan is illegal.

2.1. Case: Uday Dalal & Ors. v. Divisional Joint Registrar & Ors. *Writ Petition Nos. 15089 & 15091 of 2025 Coram: Justice Amit Borkar Reserved: 26 Nov 2025 Pronounced: 05 Dec 2025

2.2 Background

  1. Dispute over membership under Section 23(2), MCS Act.

  2. Alleged “independent flat” created by splitting a servant room attached to Flat No.1 in Malboro House CHS.

  3. Petitioners: claim this room is not a flat, not in the sanctioned plan, and was illegally shown as a separate unit to gain extra voting strength.

  4. Authorities granted membership without verifying the sanctioned plan.

2.3 Key Issue

  1. Can a servant room/outhouse not shown in the sanctioned plan form the basis of membership?

  2. Did Registrar/Revisional Authority err by granting membership without verifying sanctioned plan as required under Sections 154B-1(13), 154B-2, 154B-3, 154B-5?

2.4 Key Facts

  1. Society registered in 1996 with six flats only.

  2. Flat No.5 included a 150 sq.ft servant room; no independent Flat No.8 existed.

  3. Administrator allegedly allowed splitting of premises.

  4. Servant room gifted to Respondent No.3; Registrar granted membership.

  5. AGM of 30.09.2025 approved membership using disputed new members

  6. Petitioners allege manipulation to create artificial majority.

  7. Authorities relied only on inspection reports & deeds, not sanctioned plan.

2.5 Key Legal Points

  1. Sanctioned plan = foundation of membership.

  2. Sec. 154B-2: Only flats “as per sanctioned plan” count.

  3. Sec. 154B-3: Promoters must place sanctioned plan before Registrar.

  4. Sec. 154B-5: Ceiling—members cannot exceed number of flats in sanctioned plan.

  5. Sec. 154B-1(13): “Flat” must be self-contained, but recognition depends on sanctioned plan.

  6. Registrar must verify sanctioned plan before confirming membership.

  7. AGM resolution cannot validate illegality.

  8. Gift deeds, sale deeds, municipal records cannot create flats absent in sanctioned plan.

2.6 Precedents & Principles

  1. Nahalchand Laloochand (2010): Garage can be flat only if definition met, but sanctioned plan prevails.

  2. Ramesh Himmatlal Shah (1975): Transfer ≠ automatic membership.

  3. Daman Singh (1985): Members cannot challenge lawful society decisions, but illegal expansion is not protected.

2.7 Principle: Membership arises only from flats in sanctioned plan. Private arrangements cannot expand society membership.

2.8. Ratio

  1. Membership valid only if premises appear in sanctioned plan.

  2. Physical existence or transfer cannot convert structure into legally recognized flat.

  3. Registrar’s failure to verify sanctioned plan = invalid order.

  4. General body resolution cannot override statutory limits.

2.9 Conclusion

  1. Court set aside orders of Dy. Registrar & Divisional Joint Registrar granting membership to Respondent No.3.

  2. Directed Dy. Registrar to:

    1. Re-verify sanctioned plan within 4 weeks.

    2. If premises part of existing flat & no sanctioned change → membership invalid.

    3. If sanctioned plan shows independent flat → Registrar may decide afresh.

    4. Complete exercise within 12 weeks with hearing to both sides.