MUMBAI: The Bombay High Court has ruled that the rights of flat purchasers cannot be limited by a developer’s failure to fulfill obligations under a development agreement. This directive was issued to a housing society in Vile Parle (E), which was ordered to grant membership to 17 flat purchasers.
Justice Amit Borkar, in an order on Friday, emphasized that membership in a cooperative society should be determined solely according to the Maharashtra Cooperative Societies Act, MCS Rules, and the society’s bye-laws.
He dismissed 17 petitions from Jeevan Sarita CHSL, stating, “The eligibility of a purchaser to become a member must only be assessed based on these statutory provisions, rather than any external contractual arrangements.”
The redeveloped society had denied membership to flat purchasers from Arkade Developers. In March 2021, the deputy registrar of cooperative societies (K-east ward) instructed the society to offer them membership within 15 days. The society’s appeal against this order was rejected in December 2022 by the divisional joint registrar.
During the court proceedings, society advocates Kunal Bhanage and Akshay Pawar argued that the promoter-developer had wrongfully retained rights to open spaces, stilt parking, and floor space index in the sale agreements with purchasers, which belong to the society. They claimed this contravened a clause in the development agreement that mandates compliance from the promoter before admitting new members.
Justice Borkar noted, “It is established law that such obligations can be directly enforced by the society against the promoter.” He concurred with the purchasers’ advocate Ankit Lohia, stating, “This clause should not limit the rights of flat purchasers who are not parties to the development agreement.”
“The statutory right for a purchaser to seek membership cannot be contingent upon the promoter meeting their obligations, especially when such clauses exceed the limits set by the MCS Act, MCS Rules, and bye-laws.”
Bhanage claimed that the purchasers had not submitted membership applications in the prescribed format and had not paid maintenance fees and statutory dues despite accessing amenities. Lohia assured that they would settle arrears and formally apply for membership. Justice Borkar concluded that “no legal barrier remains to prevent their admission as members,” instructing them to apply within two weeks, and the society must admit them within four weeks thereafter.
