Unauthorized Occupants Cannot Be Singled Out In Redevelopment: Bombay HC

The Bombay High Court restricted housing societies practicing selective discrimination, ruling that a society cannot deny membership benefits to a basement occupant while shielding unauthorized flat owners on upper floors. The Bench established that where a society has actively participated in regularization efforts and granted membership to similarly situated unauthorized occupants, it is legally estopped from resiling against a specific member to deprive them of redevelopment rights.

A single-judge bench of Justice Sandeep V. Marne heard the challenge brought by a cooperative housing society against an order of the Deputy Registrar, which had granted deemed membership to a developer's transferee in respect of basement premises. The society contended that the basement was a common amenity and not a 'flat' as per Section 154B-1(13) of the Maharashtra Co-operative Societies Act, 1960.

Key Takeaways

Parity in Regularization Status

Courts will not permit societies to discriminate between occupants of unauthorized premises (like upper floors) and basement occupants if both stand on the same pedestal regarding lack of final sanctions.

Estoppel by Conduct

A society that issues NOCs for electricity meters, structural changes, and TDR loading for a specific unit cannot later claim that the same unit is a 'common amenity' to deny membership.

Reconstruction Rights

In cases of building reconstruction, all members holding valid stamped agreements are entitled to redevelopment benefits, regardless of whether their original units were fully regularized at the time of the old building's existence.

Statutory Definition of 'Flat'

Premises sanctioned as storage space or godowns in a municipal plan qualify as a 'flat' for membership purposes under the Maharashtra Co-operative Societies Act, 1960, provided there is some level of planning authority approval.

Selective Discrimination by Society

The Bombay High Court observed a significant shift in the Petitioner-society's stance, noting that it had previously complied with membership orders for nine years before filing a revision. The Bench highlighted that the society's Secretary, who himself occupied an unauthorized flat on the 6th floor, was seeking to deny benefits to the Respondent while reaping them himself. The Bombay High Court observed that "The deponent is himself an occupier of unauthorised flat on the 6th floor of the building. He wants to selectively reap the benefits of redevelopment process while denying similar benefit to Respondent No.1... Such conduct on the part of deponent of the Petitioner-society not only deserves serious deprecation, but also imposition of costs."

Interpretation of Sanctioned Plans and Membership

The Bombay High Court analyzed the sanctioned plans and noted that while the entire 2700 sq. ft. claimed by the Respondent was not sanctioned, an area of 59.02 sq. m. was indeed sanctioned as 'storage space'. Drawing a parallel with Ashwini Heights CHSL vs. Jyoti Nitin Lunia and Ors., the Bench noted that basement premises sanctioned for individual use are not universal common amenities. It also referred to Kamla Spaces Premises Co-op Society Ltd. vs. Divisional Joint Registrar, Co-op. Societies, Mumbai Division to emphasize that during the pendency of regularization, a Registrar need not undertake a detailed inquiry into the title if the purchaser is armed with a stamped agreement.

Regarding the Maharashtra Co-operative Societies Act, 1960, the Bombay High Court clarified that although Section 154B-5 limits membership to the number of available flats, this case was unique due to the 2009 membership grant and the existence of sanctioned storage space.

Ratio

A cooperative housing society is prohibited from practicing selective discrimination between members occupying unauthorized premises. If a society recognizes and grants membership to occupants of unauthorized upper floors, it cannot deny membership to a basement occupant who holds a stamped agreement and whose premises have partial sanction as storage space, especially when the society has historically consented to the occupant's exclusive possession and regularization.

Background

The dispute originated from a development by M/s. Bhati Homes Pvt. Ltd., where a building was constructed up to the 7th floor despite sanctions only up to the 5th floor. Respondent No.1 purchased basement premises via an agreement in 2004. While the building lacked an Occupation Certificate, the society and its members (including those on the unauthorized 6th and 7th floors) collaborated with Respondent No.1 to purchase TDR for collective regularization.

In a previous round of litigation, ALJ Residency Co-operative Housing Society Limited vs. Gehlot Development Services Pvt. Ltd., the High Court had remanded the matter to the Deputy Registrar to determine if the basement premises met the character of a 'flat'. Relying on Nahalchand Laloochand Pvt. Ltd. vs. Panchali Cooperative Housing Society Ltd. ( "(2010) 9 SCC 536": 2010 CaseBase(SC) 1068) and Dheeraj Dreams Building No.1 CHS Ltd. vs. Divisional Joint Registrar, Co-operative Societies, the Petitioner argued that basements are always common amenities. However, the Bombay High Court found that the society's own conduct, issuing NOCs to the Respondent for electricity and TDR loading, and the partial sanction in the 1998 plan justified the grant of membership. The Bombay High Court ultimately dismissed the Writ Petition but restricted the membership area to the sanctioned 59.02 sq. m.

Case Details:
Case No.: WRIT PETITION NO. 10241 OF 2026
Neutral Citation: 2026:BHC-AS:40763
Case Title: ALJ Residency Co-operative Housing Society Limited Versus Gehlot Development Services Pvt. Ltd. and Others
Appearances:
For the Petitioner(s): Mr. Mayur Khandeparkar with Mr. Shanay Shah, Mr. Aman Saraf, Mr. Deepak Singh and Ms. Krina Kothari i/b. SL Partners
For the Respondent(s): Mr. Ankit Lohia with Mr. Akash Loya, Ms. Sonal Awasthi, Mr. Ronish Mehta, Mr. Manee Vishwakarma and Mr. Jerome Stephen i/b. Vinod Mistry & Co.
For the State: Ms. Savina R. Crasto, AGP

Source: 2026 CaseBase(BOM) 6520