Bombay High Court rules housing societies cannot act as arbitrators in ownership disputes

In a landmark ruling on housing society governance the Bombay High Court has clarified that cooperative housing societies cannot deny membership to legal heirs on technical grounds or adjudicate ownership disputesIn an order dated April 18 2026 Justice Amit Borkar upheld a 2014 decision granting deemed membership to Radheshyam Dhanuka stressing that societies must recognise heirs based on prima facie evidence under Section 30 of the Maharashtra Cooperative Societies Act MCS Act The court also held that procedural lapses cannot override legitimate succession claimsBackground of the disputegtgt The case relates to Flat No 31 in a Malad housing societygtgt The flat was purchased in 1970 by Ramlal Dhanukagtgt He died in 1989 disputes arose among his three sonsgtgt A 2007 civil suit claiming exclusive ownership was withdrawn unconditionally in 2012gtgt Radheshyam Dhanuka residing in flat then applied for membership as a legal heirWhen society did not act on his applicationgtgt His request was rejected in 2013gtgt The Divisional Joint Registrar overturned this in 2014 and granted membershipSocietyrsquos challengeThe housing society approached the HC citing procedural irregularitiesgtgt Application filed as ldquotransferrdquo instead of ldquotransmissionrdquogtgt No objections invited from other heirsgtgt Alleged lack of due processgtgt Questioning of the revisional authorityrsquos jurisdictionWider impactThe ruling reinforcesgtgt Societies must adopt a practical administrative approachgtgt Membership claims based on succession cannot be rejected on technical groundsgtgt Ownership disputes remain within domain of civil courtsgtgt Experts say judgment will have statewide implicationsCourtrsquos key findingsSocieties cannot decide ownershipThe court held that cooperative housing societies are administrative bodies not judicial authoritiesOwnership and inheritance disputes must be decided by civil courtsPrima facie recognition is enoughUnder the MCS Act societies are required only to identify the apparent legal heir on a prima facie basisgtgt This does not confer ownershipgtgt It does not extinguish competing claimsSubstance over technical errorsThe court rejected the societyrsquos objections on procedural groundsgtgt Minor errors in forms cannot defeat valid claimsgtgt Incorrect references to bylaws are not grounds for rejectiongtgt The intent of the applicant was clearThe court noted that the society had already processed the application showing it understood the nature of the claimTransfer vs transmission clarifiedThe court distinguished betweengtgt Transfer Voluntary transactiongtgt Transmission Succession after deathIt ruled that incorrect terminology does not change the nature of a claim based on inheritanceConduct of parties mattersThe court observedgtgt The earlier ownership dispute had been withdrawngtgt No substantial objections were raised by other heirsgtgt The society had accepted maintenance payments from the applicantgtgt These factors supported his claim for membershipJurisdiction issue settledThe court upheld the authority of the Divisional Joint Registrar to review the caseCiting Supreme Court rulings it heldgtgt Delegation of powers does not remove hierarchygtgt Officers remain subordinate to the Registrargtgt Revisional powers can be exercisedgtgt The 2014 order granting membership was therefore validFinal verdictgtgt The HC found no illegality in the 2014 ordergtgt The writ petition was dismissedgtgt No interim relief was grantedExpert view Advocate Shreeprasad Parab Expert Director Maharashtra State Housing Federation saysgtgt Societies must grant prima facie recognition to heirsgtgt Membership can be provisional subject to safeguards such as indemnity and public noticegtgt Final ownership must be determined by legal processesHe added ldquoSuch provisional membership confers no ownership rights The member holds the flat in trust for all legal heirs and cannot create thirdparty rights transfer or encumber the property until succession is conclusively establishedrdquo Parab said this ensures continuity in societyrsquos functioning while protecting the rights of all heirs