Observing that a co-operative housing society is not a body meant to decide title disputes, the Bombay High Court recently directed a housing society in suburban Malad to grant membership to a man whose application had been rejected because there were multiple legal heirs of his parents.

Justice Amit Borkar affirmed the order dated November 13, 2014, passed by the Divisional Joint Registrar, which had directed Malad Cooperative Housing Society Limited to grant membership to Radheshyam Dhanuka.

Case background

According to the facts of the case, one Ramlal Dhanuka had purchased three separate flats in the society, each of which was allotted to his three sons—Deokinandan, Radheshyam, and another son.

Ramlal and his wife Bhagirathi resided with Radheshyam in the disputed flat. Following their demise in 1989, Deokinandan’s wife filed a suit in 2007 claiming exclusive ownership of the flat occupied by Radheshyam. She sought a declaration from the court to declare that Radheshyam had no right or interest in the property.

Suit Withdrawn:

However, after her death in 2008, her legal heirs—two daughters and three sons—unconditionally withdrew the suit. This meant that all claims relating to title, possession, membership rights, nomination, maintenance, and all allegations made against Radheshyam in connection with the flat were given up.

Membership Denied:

With the doubts surrounding the title having been cleared, Radheshyam approached the society seeking membership. However, his request was denied, prompting him to approach the Divisional Joint Registrar of the Co-operative Societies Tribunal, which led to the passing of the impugned order.

Before Justice Borkar, the housing society challenged the order passed by the Divisional Joint Registrar and raised several arguments. It said that Radheshyam had not submitted a proper application with the required documents. It also argued that since other legal heirs of Ramlal Dhanuka were still alive, he could not be given membership.

Court on Society’s Role:

The bench held:

“Such an approach proceeds upon a misunderstanding of the role assigned to a co-operative housing society under the scheme of the Maharashtra Co-operative Societies Act. A co-operative housing society is not a forum constituted for adjudicating title disputes, succession claims, partition matters or proprietary entitlements between legal heirs. It is not vested with powers akin to a civil court. The society’s function is confined to management of its affairs, regulation of membership, maintenance of internal records and recognition of persons for purposes connected with administration of the premises and collection of dues,”

Membership vs Ownership:

The judge said that the society does not need to decide who owns the flat. Its role is only to decide who should be recorded as a member and deal with the society for matters related to the flat.

“This distinction between adjudication of title and recognition for society purposes is of importance. The recognition granted by the society neither creates title nor extinguishes title. It enables the society to function and maintain administration in relation to the property. If any question of beneficial ownership or succession survives amongst the heirs, such question must be adjudicated by a civil court in appropriate proceedings instituted for that purpose. The society cannot convert itself into a tribunal of title and cannot refuse to discharge its statutory function merely because multiple heirs may exist. Mere existence of more than one legal heir is not sufficient to indefinitely postpone recognition of any claimant,” the bench observed.

Law Explained:

Referring to the Maharashtra Co-operative Societies Act, especially Section 30, the Court said that after a member’s death, the society must transfer the share or interest to the nominee, if there is a valid nomination. If there is no nomination, the law requires the transfer to be made to a person who appears to the committee to be the heir or legal representative of the deceased.

Prima Facie Role:

“The wording employed does not provide that the society must transfer the share only after conclusively determining who is the owner. Nor does it direct the society to undertake adjudication of succession. Instead, the legislature has employed the phrase ‘such person as may appear to the committee to be the heir or legal representative.’ The committee is required to form an opinion as to who appears to be the heir or legal representative. The statute thus contemplates prima facie satisfaction. It does not contemplate a conclusive declaration,” the judge held.

In his detailed order, Justice Borkar also noted that shortly after the impugned order of the Divisional Joint Registrar, Deokinandan—who had retired as a High Court judge in 1996, wrote a letter dated December 8, 2014 to the society. In this letter, he said that he did not plan to file any appeal or start any case against Radheshyam and asked the society to follow the impugned order.

“Though the said letter may not be treated extinguishing any proprietary entitlement of any person in the flat, nevertheless the same cannot be brushed aside as irrelevant. When such person, after passing of the impugned order, communicates that he does not intend to challenge the said order and does not desire litigation against Radheshyam, that fact assumes relevance while appreciating whether opposition in fact existed to his claim,” the judge opined.

Final Order:

With these observations, the Court dismissed the revision application filed by the housing society.

Case Details: The Malad Cooperative Housing Society Limited vs State of Maharashtra (Writ Petition No. 1927 of 2015)