Vaitarna Bheema Worli Sagar CHSL vs The State Of Maharashtra & Ors.

Rule in all the ten Petitions. Rule is made returnable forthwith. The learned counsel for Respondent No. 4 and the learned AGP waive service of Rule. At the request of the learned counsel appearing for parties and with the consent of the learned counsel appearing for Respondent No. 4, the Petitions are taken up for final disposal.

Petitioner-society has filed these Petitions challenging the orders passed by the Divisional Joint Registrar, Co-operative Societies, Mumbai Division, Mumbai (Divisional Joint Registrar) dismissing the Revision Applications filed by it and confirming the orders dated 30 June 2026 passed by the Deputy Registrar, Co-operative Societies, G/S Ward, Mumbai (Deputy Registrar). By orders dated 30 June 2026, the Deputy Registrar has allowed the Appeals preferred by Respondent No.4 and has directed the Petitioner to grant membership to Respondent No.4 by issuing share certificates to it in respect of the 10 shops occupied by it.

Briefly stated, facts of the case are that Worli Sagar CHSL was formed and registered by the promoters thereof with the intention of securing allotment of government land for construction of a residential tenements as per the Government Resolution (GR) dated 12 May 1983 laying down a policy for grant of government land to co-operative housing societies. Worli Sagar CHSL applied to the government for allotment of the land. By GR dated 11 February 1987, a parcel of land at Pochkanawala Road, Worli, Mumbai was allotted to Worli Sagar CHSL for a tenure of 99 years. The society was mandated to admit only persons eligible as per G.R. dated 12 May 1983 as its members. Though Worli Sagar CHSL was supposed to construct only residential building for providing houses to its members, the society applied to the State Government seeking grant of FSI for construction of shops in the building. By letter dated 22 June 1987, the State Government granted permission to Worli Sagar CHSL to use the BUA not exceeding 15% of total FSI for shopping purposes. Accordingly, Worli Sagar CHSL constructed a residential buildings in which about 53 shops were constructed.

Worli Sagar CHSL admitted several eligible persons as its members and allotted residential flats to them. The allottees of the residential flats were admitted as ordinary members of the society. So far as shops are concerned, the society granted only occupancy rights by admitting the occupants as its nominal members. This is how nominal membership was granted to several persons in respect of the shops constructed in the building of Worli Sagar CHSL.

Over a period of time, it appears that the original allottees surrendered their respective shops, and new persons were inducted by the Society by admitting such inductees as its nominal members. Respondent No. 4 is a private limited company whose director is Mr. Satish Chaturvedi, who is occupant of a residential flat in the building of Petitioner society and who also functioned as Chairman thereof. Over the period of time, Respondent No. 4 secured allotment of shops surrendered by the original allotees. This is how Respondent No.4 became the allottee and nominal member of Worli Sagar CHSL in respect of 10 shops bearing Nos.7 to 16. Currently, Respondent No.4 is the occupant and nominal member in respect of the 10 shops bearing Nos.7 to 16.

Worli Sagar CHSL was subdivided into 5 societies by order dated 16 October 2023. One of the subdivided societies is Petitioner-Vaitarna Bheema Worli Sagar CHSL. All the 10 shops, in respect of which Respondent No.4 is the allottee, are located in the building of the Petitioner-society which has admitted Respondent No.4 as its nominal member qua each of the 10 shops.

Respondent No.4 directly approached the Deputy Registrar in May 2026 by filing Appeals under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) seeking ordinary membership with the Petitioner-society in respect of the 10 shops occupied by it. The appeals filed by Respondent No.4 were opposed by the Petitioner-society by filing its replies. By order dated 30 June 2026, the Deputy Registrar has allowed the Appeals preferred by Respondent No.4 by treating the same as appeals filed under Section 23(2) of the MCS Act. The Deputy Registrar has directed the Petitioner-society to grant regular/ordinary membership to Respondent No.4 in respect of the 10 shops by issuing share certificates in its name. The Petitioner-society filed Revision Application Nos. 291 to 300 of 2026 before the Divisional Joint Registrar. By interim order dated 11 August 2026, the Divisional Joint Registrar granted stay on Deputy Registrar's order. The revisions were opposed by Respondent No.4 by filing its replies. By order dated 9 October 2026, the Divisional Joint Registrar has dismissed the Revision Applications preferred by the Petitioner-society.

Aggrieved by the orders passed by the Deputy Registrar and the Divisional Joint Registrar, Petitioner-society has filed these ten Petitions.

Mr. Thorat, the learned counsel appearing for the Petitioner in Writ Petition (St.)31224 of 2026 submits that the Deputy Registrar has grossly erred in entertaining direct Appeal filed before him in absence of any application being made to the Petitioner-society for grant of membership. He submits that the scheme of Sections 22 and 23 of the MCS Act is such that Section 22(2) provides for deemed membership in the event of society failing to decide the application for registration, whereas, Section 23(2) provides for remedy of appeal before the Deputy Registrar in the event of membership being rejected by the society. That in the present case, Respondent No.4 did not file any application for grant of membership and that therefore provisions of Sections 22 or 23 of the MCS Act do not come into play. That the impugned order passed by the Deputy Registrar is without jurisdiction and liable to be set aside. Mr. Thorat further submits that Respondent No.3 is a mere lessee/licensee, who is permitted to occupy the shops subject to terms and conditions. That he has not purchased the said shops. That there is express prohibition under the GR to sell the shops. That Respondent No.4 has acquired occupancy rights in respect of the shops from third parties after surrender thereof to the society. That it is impermissible to transfer the occupancy rights in the shop. That occupant can be admitted only as a nominal member of the society. He relies upon Bye-law No. 20 of the New Model Bye-laws of Co-operative Housing Societies (Bye-laws) in support of his contention that nominal membership can be granted only to a sub-lessee, licensee, caretaker or occupant. The very fact that Respondent No. 4 has been admitted as a nominal member of the Society makes it abundantly clear that he is merely a licensee/occupant in respect of the shops in question. He submits that amendment to MCS Act by insertion of Chapter-XIIIB in the year 2019 abolishing the concept of nominal membership does not mean that nominal member automatically gets converted to an ordinary member. He relies on Explanation to Section 154B-7 of the MCS Act in support of his contention that membership cannot be granted to a occupant who is a mere tenant/licensee. He prays for setting aside the impugned orders.

Mr. Khandeparkar, the learned counsel appearing for the Petitioner in WP No.14537 of 2026 adopts the submission of Mr. Thorat. Additionally, he submits that Bye-law-20 refers to Appendix-11 which is a Form for application of nominal membership, which is to be filled only by a sublettee, licensee/caretaker or a occupant. He draws the attention of this Court to the provisions of Section 24 of the MCS Act in support of his contention that a nominal member is neither entitled to any share in the profits or assets of the Society nor does he enjoy any of the privileges or rights available to a regular member of the Society. That society can extend some of the rights and privileges to a nominal member as per its Bye-laws. That under Section 27(8) of the MCS Act, a nominal member does not have a right to vote or become member of the committee or representative of the society or any other society. That after the 2019 amendment to the MCS Act, the very concept of nominal membership is deleted and provisions of Sections 2(19)(c), 24 and 27 of the MCS Act are made inapplicable to co-operative housing societies. He refers to Rule 8(1)(f) of the Maharashtra Co-operative Societies Rules, 1961 (MCS Rules) in support of his contention that bye-laws regulate the privileges, rights and duties of nominal members. That under Rule 19, the conditions stipulated therein need to be complied with for membership and nominal membership can be granted even by an authorized officer of the society without holding any General Body Meeting.

Mr. Khandeparkar further submits that in the present case, there is no source application on the basis of which the Deputy Registrar could have exercised jurisdiction under Sections 22(2) or 23(2) of the MCS Act. He submits that there is no concept of automatic elevation of nominal member to that of ordinary member and the Deputy Registrar does not have jurisdiction to change the class of membership. He submits that membership was sought from the Deputy Registrar by relying on Deed of Confirmation/Transfer executed with the person who had no semblance of right in the shop. That occupancy of the shop was surrendered by the previous occupant in the year 2017 and Respondent No.4 executed agreement with that person in the year 2024 for the purpose of converting his nominal membership into ordinary membership. That in allotments made to Respondent No.4 by the society, specific conditions were imposed not to sell any rights in the shops and to surrender the same to the society.

Mr. Khandeparkar distinguishes the judgment of this Court in Viviana CHSL Versus. State of Maharashtra^{11.WP No. 3938 of 2025 decided on 24.2.2025}. He also relies on judgment of this Court in Parimal H. Solanki Versus. Bhoumik CHSL and another^{22.Interim Application (L.) No. 25993 of 2002 decided on 6.10.2022}, in support of his contention that Section 154B-31 is a transitional provision. He prays for setting aside the impugned orders.

Dr. Chandrachud the learned Counsel appearing for the Petitioner in WP No. 14534 of 2026 submits that Respondent No.4 can never be admitted into regular membership of the Petitioner-society. He submits that the Government Resolution dated 12 May 1983 envisages the concessional allotment of Government land for the purpose of providing houses to persons belonging to the economically weaker sections of society or to specified categories of persons, such as Government employees and public servants. That the allotment of government land is made purely for residential purpose with express prohibition on construction of commercial premises or admission of any person into membership of the society for commercial purposes. That the society had obligation only to admit persons who satisfy the eligibility criteria specified in the GR dated 12 May 1983 and their eligibility is required to be specified by the Collector. That by letter dated 22 June 1987, concession was granted for use of 15% of total FSI for construction of shops with a specific condition that only sub-lessees can be inducted in such shops. Therefore, shops can be allotted by the society only on occupancy basis and that no occupant of the shop can ever become regular member of the Petitioner-society. He submits that a nominal member can never have title in the property and that Respondent No.4 was fully aware of the same. That he applied for nominal membership of the society knowing fully well that he was merely permitted to occupy the shop premises. That society has absolute authority to terminate the license. He relies on provisions of Section 11 of the Transfer of Property Act, 1882 in support of the contention that when there are restrictions on enjoyment of the property, the same cannot be treated as a transfer within the meaning of Section 11. In support, he relies on judgment of the Calcutta High Court in Subal Chandra Malty and others Versus. Usha Banarjee^{33.2009 SCC Online Cal 1503}.

Dr. Chandrachud further submits that what is effected to MCS Act in the year 2019 is a substantive amendment, which can only have prospective effect. The same is not a procedural amendment so as to apply retrospectively. That therefore nominal membership already granted to Respondent No.4 can continue despite deletion of provision for nominal membership in a co-operative housing society under the 2019 Amendment Act. In support of the contention of prospective application of substantive amendment, Dr. Chandrachud relies on judgments of the Apex Court in District Collector Versus. K. Govindaraj^{44.2016 4 SCC 763} and Union of India and another Versus. Indusind Bank Limited and another^{55.2016 9 SCC 720}.

Dr. Chandrachud further submits that Respondent No. 4 has never asserted any claim to title in respect of the shops and has, at all times, accepted his status as an occupant/licensee. He was, therefore, content with being admitted as a nominal member of the Society. That only after execution of the so-called Deed of Confirmation/Transfer, he started claiming title in respect of the shops. Dr. Chandrachud relies on Bye-law-1(xiv) of the Bye-laws in support of his contention that there is a marked difference between the concept of nominal membership and ordinary membership. Dr. Chandrachud accordingly prays for setting aside the impugned orders.

Mr. Drupad Patil has appeared for Respondent No.4 in all ten Petitions. He opposes the Petitions submitting that both the authorities have concurrently upheld grant of membership in favour of Respondent No.4. He submits that there can be no difference between persons occupying residential flats and persons occupying shops for the purpose of grant of membership. He submits that the shops have also been ‘allotted’ as is the case in respect of residential flats. That in respect of shops, there is no mere ‘occupation’ like a licensee or lessee but an ‘allotment’ creating rights in the shops. That even ordinary members do not have agreements under Section 4 of Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA) and that therefore mere absence of registered sale-deed executed by the society cannot be a ground for denying ordinary membership to shop allottees. He submits that the Society cannot create an artificial distinction between the allottees of flats and the allottees of shops. He further takes me through the arrangement initially put in place by the Society at the time of construction of the shops, in support of his contention that the shop allottees were also required to part with valuable consideration in order to secure allotment of the shops. He submits that the society had engaged M/s. Sri Estate Agents for procuring members for allotment of shops. That the said agency paid amount of Rs.3 crores to the society and in lieu, the agency was granted right to procure members for allotment of shops. That therefore the case does not involve grant of mere license. He submits that, since substantial amounts are collected by the Society, both at the time of initial allotment and upon subsequent transfers, the shop allottees are not required to pay any additional rent to the Society and are liable to pay only the usual maintenance charges. He submits that at the time of seeking transfer of allotment, Respondent No.4 has paid valuable consideration to the previous allottee, as well as Rs.25 odd lakhs to the society per shop. That therefore the case does not involve grant of mere occupancy rights and Respondent No. 4 falls into the category of ‘allottee’ on par with other residential flat allottees.

Mr. Patil further submits that Respondent No.4, as well as its previous allottees have been issued share certificates by the society. That society always treated Respondent No.4 as member of the society. That only when decision was taken for carrying out redevelopment of society's building, the Society decided not to recognize nominal membership to Respondent No.4, which was a trigger point for Respondent No.4 to approach the Deputy Registrar for grant of regular membership. That Deputy Registrar has rightly exercised jurisdiction in the facts and circumstances of the present case.

Mr. Patil further submits that judgment of this Court in Viviana CHSL squarely applies to the facts and circumstances of the present case. That this Court has rejected the objection of direct approach to Deputy Registrar without applying for membership in the Viviana CHSL. That this Court has held that grant of occupancy right cannot be a ground for denial of membership to shop owners. That this Court has held that after 2019 amendment to the MCS Act, the concept of nominal membership is discontinued and therefore the shopkeepers are required to be treated as regular members. He submits that the circumstances in the case of Vivina CHSL are exactly identical to the one involved in the present case. That the SLP filed against the judgment of this Court in Viviana CHSL has been dismissed. That therefore the law enunciated in that judgments needs to be followed in the present case as well. That the society is at an advanced stage of redevelopment of its building since tenders are already invited for choosing the developer and the last date for tender submission and opening was 25 October 2026. Mr. Patil submits that the impugned order merely recognises the rights of Respondent No. 4, who has already been admitted as a nominal member of the Society. He submits that, since the concept of nominal membership is no longer recognised in respect of co-operative housing societies, the Deputy Registrar has rightly directed the Society to grant regular membership to Respondent No. 4. He prays for dismissal of the Petition.

Petitioner-society is aggrieved by the Orders passed by the Deputy Registrar directing grant of membership to Respondent No.4 qua Shop Nos.7 to 16. Respondent No.4 is already admitted into nominal membership of the Petitioner-society. It occupies 10 shops bearing Nos.7 to 16 in the building of the Petitioner-society. Respondent No.4 is a Private Limited Company and its Director, Mr. Satish Chaturvedi is already a regular member of the Petitioner-society on the strength of residential flat owned by him in Society’s building. Respondent No.4 has acquired rights in respect of the 10 shops at different points of time. Since Writ Petition (L) No. 31224 of 2026 (relating to Shop No. 16) is argued by all the learned counsel as the lead petition and since all the learned counsels have referred to the documents and pleadings of Writ Petition (L) No. 31224 of 2026 it would be apposite to quickly refer to the manner in which Respondent No.4 acquired rights in respect of Shop No.16:

In the above background, Respondent No.4 acquired occupancy rights in respect of Shop No.16. In similar manner, Respondent No.4 appears to have secured rights in respect of 9 other shops after surrender of rights by the previous allottees/occupants. Respondent No.4 is granted mere nominal membership of the society.

At the time of allotment of shops to Respondent No.4, specific allotment letters were issued to him containing various terms and conditions of allotment. Even in the Agreements executed with Respondent No.4 while allotting the shops, the society has imposed various conditions on him. It would be apposite to reproduce some of the conditions in the Agreement of allotment executed between the society and Respondent No.4. The conditions read thus:

Thus as per the Agreement, the right to occupy the shop was subject to observance of terms and conditions and the Society has right to terminate the allotment and secure back possession of the shop. More importantly, there is a total prohibition of transfer of nominal membership or of the occupancy rights. Even in the Allotment Letters, issued to Respondent No.4, following conditions were imposed:

Thus, Respondent No.4 was fully aware of the fact that by securing rights in respect of the shop, he would be admitted only as nominal member of the society and that he would never secure ordinary membership.

However, Respondent No. 4 executed a Deed of Confirmation/Transfer dated 22 August 2024 with Mr. Vasudev Hemrajani in respect of Shop No. 16. The said deed records a private arrangement between Respondent No. 4 and the previous allottee, whereby the latter agreed to sell and transfer the shop, along with the associated membership, to Respondent No. 4 in consideration of payment of the agreed consideration. In the Deed of Confirmation/Transfer in respect of Shop No.16, amount of Rs.1,74,00,000/- is shown to have been paid to the previous allottee, Mr. Vasudev Hemrajani. The duo got the Deed of Confirmation/Transfer registered in the office of the Sub-Registrar of Assurances. All this happened behind the back of the society as the society was not even made aware about this kind of private arrangement between Respondent No.4 and the previous allotee.

On the strength of registered Deed of Confirmation/Transfer executed in the year 2024, Respondent No.4, who was a mere nominal member and allowed to occupy shops, started claiming title in respect of the shops. On the strength of his claim of title, Respondent No.4 has secured order from the Deputy registrar for grant of ordinary membership in its favour. This is how Respondent No. 4 has upgraded himself form nominal member to regular or ordinary member of the society. Correctness of this upgradation through intervention of the Deputy Registrar is the subject matter of challenge in the present Petition.

To examine the correctness of action of the Deputy registrar in upgrading the status of Respondent No. 4 from a nominal member to regular or ordinary member, it would be necessary to make a reference to the statutory scheme under the MCS Act, MCS Rules and the Bye-laws governing the subject matter of ‘membership’ in relation to cooperative societies and cooperative housing societies. Section 2(19) defines the word ‘member’ as under:

Thus, under Section 2(19), a nominal member means a person admitted to membership as such after registration in accordance with the bye-laws. Under Section 24 of the MCS Act, there is a provision for admission of a person as a nominal or associate member. Section 24 of the Act provides thus:

Thus, under Section 24(2), nominal member is not entitled to any share in the profits or assets of the society, nor does he have any rights or privileges of a member. However, it is competent for the society to provide for certain rights and privileges to a nominal member in accordance with its bye-laws. Under Section 27 of the MCS Act, there is express prohibition on a nominal member to vote or to be become a member of the committee or to become representative of the society or in other society. Section 27 (8) of the MCS Act provides thus:

Under Rule 8(1)(f) of the MCS Rules, a registrar can require a society to make bye-laws in respect of various enumerated matters including the privileges, rights, duties and liabilities of members including nominal members. Rule 8 provides thus:

Under Rule 19 of the MCS Rules, certain conditions are specified for compliance for admission into membership of a society. Rule 19 provides thus:

Thus, under Rule 19 of the MCS Rules, a person needs to make an application in writing in the specified format for membership. In relation to ordinary members, their applications need to be approved by the Committee of the society in pursuance of powers conferred on it in that behalf subject to resolution adopted by the general body. However, in relation to a nominal member, membership can be granted to him/her even by an officer of the society authorized by the committee. Thus, admission into nominal membership does not even require any decision by Managing Committee or General Body of the society. Nominal membership can be granted even by an authorized officer of the society.

Since the MCS Act and the MCS Rules repeatedly make a reference to bye-laws of the society for the purpose of admission of a person into nominal membership, it would be necessary to make a reference to the bye-laws. Bye-law 3(xxiv) defines the term ‘member’ as under :

Thus, an active member is the one who has purchased or owns a flat/unit in a society. Therefore, to become an active member, ownership of flat/unit in the building of the society is a mandatory precondition. On the other hand, nominal member has to be a person who does not hold right, title and interest in the property, either individually or jointly. Thus, only such person who does not have any title in the society can be admitted into nominal membership. This follows that non-ownership of title in any flat/unit in the building of the society is a mandatory condition or a pre-requisite for becoming a nominal member.

Bye-law 20 provides for conditions of nominal membership of the society and reads thus:

Thus, only a sublettee, licensee, a caretaker or an occupant can be admitted into nominal membership of the society. This follows that a person who owns a flat/unit in the building can never be admitted as a nominal member. To paraphrase, nominal member has to be the one who is a mere sublettee, licensee, caretaker or occupant. The moment the person holds any rights higher than that of a sublettee, licensee, caretaker or occupant, he cannot be admitted into nominal membership.

Bye-law 20 requires a person seeking nominal membership to submit an application through an existing member of the Society by duly filling in the prescribed form the application for nominal membership. The prescribed form for nominal membership is set out in Appendix 11 to the Bye-laws. The applicant seeking nominal membership is required, under the prescribed format, to disclose the document pursuant to which the lease, leave and licence, caretaker arrangement, etc., has been entered into with a member who owns a flat/unit in the Society's building. Thus, while applying for nominal membership, the applicant is required to expressly declare that he is merely a lessee, licensee, caretaker or occupant in respect of the flat/unit in the Society.

A conjoint reading of the provisions of the MCS Act, the MCS Rules and the bye-laws make it abundantly clear that only a person owning a flat/unit in the building of the society can be admitted to membership of the society. The flat/unit owner can never be admitted to nominal membership of the society. Nominal membership envisages occupation of flat/premises by a person as a mere lessee/licensee/caretaker/occupant. Therefore, a nominal member can never claim ownership in respect of the flat/unit and the very fact that he applies for grant of nominal membership, pre-supposes that he expressly admits that he is merely a licensee/caretaker or an occupant.

Since certain provisions of the MCS Act were found inadequate to effectively govern the matters relating specifically to co-operative housing societies, the Legislature amended the MCS Act by Maharashtra Act No. 23 of 2019 and inserted Chapter XIII-B, which exclusively deals with co-operative housing societies. Section 154-B enumerates the provisions of the MCS Act that apply mutatis mutandis to Housing Societies, as well as those provisions that are excluded from their application. Section 154B provides thus:

In relation to housing societies, Section 154B-1(18) now defines the term ‘member’ as under:

Thus, there can be no nominal member in relation to a housing society and a person can only either be a regular member, an associate member or a joint member. The concept of nominal membership is now removed on account of the position that the legislature has now intended that in relation to a housing society, membership cannot exceed number of flats in the building of the society. This restriction is imposed under Section 154B-5 of the MCS Act, which reads thus:

Under Section 154B-7 of the MCS Act, certain restrictions are imposed on transfer of share or interest by a member, Section 154B-7 of the MCS Act reads thus:

Thus, Section 154B-7 of the MCS Act, contemplates transfer of share or interest of a member or occupancy right. However, with a view to prevent any misinterpretation of the term ‘occupancy right’, Explanation to Section 154B-7 expressly provides that occupancy right does not include right of a tenant or a licensee on leave and license basis. Thus, what can be transferred under Section 154B-7 is only occupancy right by the ‘owner’ of flat/unit and not by the tenant or a licensee.

Chapter-XIII- B has been inserted in the MCS Act w.e.f. 9 March 2019. Section 154B-31 of the Act makes transitional provision as under:

Under the provisions of Section 154B-31, there is a saving clause under which the Rules, Orders, Bye-laws, Circulars or Instruments having force of law and existing on the date of commencement of MCS (Amendment Act) 2019 which are applicable to co-operative housing societies continue to apply until expressly repealed, modified or amended. Thus, by virtue of Section 154B-31 of the MCS Act, mere deletion of provision for nominal membership under Chapter-XIII-B relating to housing societies would not automatically bring to an end, nominal membership already granted prior to commencement of the MCS Amendment Act, 2019. Thus, the Rules, orders, bye-laws, Circulars or instruments existing as on the date of commencement of MCS (Amendment) Act, 2019 continue to apply to such societies.

Dr. Chandrachud is right in contending that what is effected in MCS Act is a substantive amendment and not a procedural amendment as held by the Apex Court in District Collector, Vellore District Versus. K. Govindraj (supra) and Union of India Versus. Indusind Bank Limited (supra). The amendment therefore would operate prospectively. This would mean that nominal membership granted by the housing societies prior to the coming into force of the MCS (Amendment) Act, 2019 would not automatically cease to exist, but would continue to remain in force. However, neither the Amendment Act nor the provisions of Chapter XIII-B contain any provision, even remotely suggesting that nominal membership granted in favour of a person would automatically stand converted into ordinary membership upon deletion of the provision relating to the admission of nominal members in respect of housing societies. Thus, henceforth, no person can be admitted to nominal membership of a society, which concept has ceased to operate in relation to housing societies from 9 March 2019 onwards. However, those who are already admitted into nominal membership would continue to remain nominal members on account of prospective amendment effected by the 2019 Amendment Act. However, under no circumstances can it be countenanced that the effect of the 2019 Amendment Act would be to convert or upgrade the status of a person from a nominal member to that of an ordinary or regular member.

Having examined the statutory scheme under the MCS Act, MCS Rules and the bye-laws, now I proceed to consider whether the Deputy Registrar is justified in directing Petitioner-society to admit Respondent No.4 as regular/ordinary member of the society. As observed above, Respondent No.4 had no qualms about he being treated as a mere nominal member. It was always aware that what was granted in his favour were only occupancy rights in respect of the shops. The occupancy rights granted to it were subject to various conditions as quoted above. The conditions included impermissibility to sell, transfer or dispose of or assign nominal membership and occupancy rights as well as the authority of the society to cancel/terminate the nominal membership upon commission of breach of any of the terms and conditions. Even the allotment letters issued to Respondent No. 4 clearly stipulated that the grant of nominal membership would not entitle Respondent No. 4 to any rights or benefits admissible to regular members. Respondent No. 4 was merely permitted to occupy the shop, subject to various conditions. Upon commission of breach of conditions of allotment, the nominal membership was liable to be cancelled, which is not the case with ordinary members. To illustrate, if the nominal member of Petitioner society encroaches upon space outside the shop and changes the purpose of use, the society is entitled to cancel his membership. On the other hand if a regular member commits a similar folly, society needs to take other actions stipulated under the Act and cannot straightaway proceed to terminate or cancel the membership. The allotment letter further stipulated that, in the event Respondent No. 4 desiring to vacate the shop, the same was required to be compulsorily surrendered to the Society. Thus, it is impermissible for an allottee of the shop in Petitioner’s building to directly enter into transfer arrangement with the third parties. The shop allottee needs to surrender the allotment to the society and society alone can make fresh allotment. This is exactly what has happened in the present case the previous allottee, Mr. Vasudev Hemrajani surrendered his nominal membership, as well as his occupancy rights in respect of the shop to the society by executing written document to that effect. After securing the surrender, it is the society who made fresh allotment in respect of the shops in favour of Respondent No.4. The case thus does not involve transfer, sale or purchase of the shop by previous allottee in favour of Respondent No.4.

Respondent No. 4 has secured the allotment and occupied rights in respect of the shops with its eyes wide open to these peculiar conditions. Its director is a regular member of the society (in capacity as owner of a residential flat) and who functioned as the Chairman of the society. His company has secured allotment of the shops after its surrender by the previous allottes with a clear knowledge that there could be no direct transfer arrangement between it and the previous allottee. Despite the above position, Respondent No. 4 brought into existence a document styled as a Deed of Confirmation/Transfer dated 22 August 2024. It is incomprehensible as to why the said document was brought into existence by Respondent No.4. Mr. Vasudev Hemrajani had already surrendered his occupancy rights and nominal membership to the society in the year 2017 itself. Mr. Hemrajani had not retained any semblance of rights in respect of the shop. There is no privity of contract between Mr. Hemrajani and Respondent No.4. The transaction was surrender of occupancy rights and nominal membership in the society and society creating fresh allotment in favour of Respondent No.4. The privity of contract was thus between Mr. Hemrajani and the society and between the society and Respondent No.4. There is no direct privity of contract between Mr. Hemrajani and Respondent No.4. Despite this position, a document titled as Deed of Confirmation/Transfer was brought into existence by Respondent No.4, which is totally baseless and has no existence in the eyes of law.

There was nothing to be confirmed between Mr. Hemrajani and Respondent No.4 as no transaction had taken place between them. The Deed of Confirmation/Transfer falsely brands Mr. Hemrajani as the Transferor and Respondent No.4 as the Transferee. In fact, no transaction of transfer had ever taken place between the duo. The document falsely paints a picture as if Respondent No.4 got Shop No.16 from Mr. Hemrajani. In my view therefore, the Deed of Confirmation/Transfer is a document incapable of conferring any rights in favour of Respondent No.4. Execution of that document is a meaningless exercise and that document cannot be relied upon before any Court or authority to recognize any rights in favour of Respondent No.4 in respect of the Shops.

The Deputy Registrar has heavily relied on Deed of Confirmation/Transfer for ordering membership in favour of Respondent No.4, which essentially forms the basis on which the impugned order is passed. The Deputy Registrar has erroneously assumed that in the year 2017 any agreement was executed between Respondent No.4 and previous allottee and that Respondent No.4 had become owner in respect of the society. This is clear from the following findings recorded by the Deputy Registrar:

The above findings recorded by the Deputy Registrar are perverse to the core. Neither there was any transaction of sale/transfer between the previous allottee and Respondent No.4 in the year 2017 nor the Deed of Confirmation/Transfer has the effect of conferring ownership rights in respect of the shop in favour of Respondent No.4. Mere process of 'registration' of the Deed does not elevate the status of Respondent No. 4 from an occupier to that of an owner. As held above the Deed of Confirmation/Transfer is a meaningless document, not even worth the paper on which it is written and has no existence in the eyes of law. The very basis on which the Deputy Registrar has passed his order is totally flawed rendering the impugned orders dated 30 June 2026 unsustainable.

The Deputy Registrar has taken into consideration the history of allotment of plot in favour of Worli Sagar CHSL, the manner of construction of shops and allotments made to various allottees. The Deputy Registrar has however totally failed to appreciate that there is express prohibition on Petitioner-society from either selling the shops or from admitting the occupants of the shop as its members. The GR dated 12 May 1983 envisages allotment of Government land for construction of residential tenements to economically weaker sections of the society. Various income criteria are laid down in the GR dated 12 May 1983 for acquiring eligibility for becoming member of co-operative housing society seeking allotment of Government land. Paras-3, 3a and 5 of the GR dated 12 May 1983 provides thus:

Even when the allotment of land was made pursuant to GR dated 11 February 1987, following conditions were imposed:

Thus, the allotment of plot was made only for construction of residential tenements and persons satisfying the eligibility requirements laid down in GR dated 12 May 1983 alone could be admitted into membership of the society.

Even when the Government granted concession in utilizing 15% BUA for shopping purposes, a specific condition was imposed that the name of the sub-lessee in respect of the Shop, as well as the purpose for which the premises are let out must be informed to the State Government. Letter dated 22 June 1987 reads thus:

Considering the terms and conditions on which land was allotted as well as permission for utilizing 15% BUA for Shops was granted, it is clear that it was impermissible for the society to admit any person as member who did not satisfy the eligibility criteria specified in the GR dated 12 May 1983. On the other hand, there was no restriction on eligibility of person for letting out the Shops in favour of any third persons. The only condition was to communicate to the State Government the names of the lessees/subletees and the purpose for letting out the premises. Thus, the restriction about eligibility applied only to regular member and the said restriction had no application to a lessee to be inducted into commercial shops. This is a reason why the society admitted occupants/allottees of only shops of only nominal members and consciously did not grant them regular membership.

However, in the present case, Respondent No.4 who was content with grant of mere nominal membership took a volte-face in the year 2024 and brought into existence a totally baseless document in the form of Deed of Confirmation / Transfer and on that basis applied for membership with the Deputy Registrar. Such baseless appeal filed by Respondent No.4 ought to have been rejected at the threshold by the Deputy Registrar.

There is yet another reason why the Appeal preferred by Respondent No.4 before the Deputy Registrar was not maintainable and deserves rejection at the threshold. The statutory scheme of grant of membership under the MCS Act is governed by the provisions of Sections 22 and 23 of the MCS Act which provides thus:

Thus, a person desiring to become a member of the society submits an application for membership. The society is required to take decision on the application within a period of 3 months from the date of receipt of application or to communicate the decision of refusal to the Applicant within 15 days of taking of the decision, whichever is earlier. If the decision is not communicated within the prescribed time limit, Applicant acquires deemed membership under the provisions of sub-section (2) of Section 22 off the Act. On the other hand, when the decision is taken by the society and membership is refused, Applicant can file Appeal before the Registrar under Section 23(2) of the MCS Act. Thus, for filing of proceedings either for seeking declaration of deemed membership under Section 22(2) or for challenging of decision of refusal of membership under Section 23(2), the act of making application for membership is sine-qua-non. Making of application for membership and its ‘non-decision’ or ‘refusal’ becomes a jurisdictional fact for the Deputy Registrar to exercise jurisdiction. In absence of such ‘non-decision’ or ‘refusal’, the Deputy Registrar is without jurisdiction and needs to throw out the appeal for membership. Deputy Registrar does not possess plenary or inherent jurisdiction, being a creature of the statute. He needs to exercise jurisdiction only as conferred by the statute under which he is created. Therefore if no application is made to the housing society, there is no occasions for the society to take a decision thereon. Therefore, the provisions of Section 22(2) do not come into play. Since no decision can be taken, even provisions of Section 23(2) cannot come into play. Therefore, the Deputy Registrar does not get jurisdiction either under Section 22(2) or under Section 23(2) to make any order with regard to grant of membership.

The provisions of MCS Act do not confer direct jurisdiction on the Deputy Registrar to decide membership application. Persons seeking membership cannot directly approach the Deputy Registrar. In the present case, the Deputy Registrar has erroneously entertained direct application made by Respondent No.4 to him without first approaching the society for membership. Since there is no source application, therefore exercise of jurisdiction by the Deputy Registrar is totally illegal. Thus, the impugned orders passed by the Deputy Registrar are without jurisdiction and are therefore non-est. On this ground also, the impugned orders passed by the Deputy Registrar deserves to be set aside.

According to Mr. Patil, the present case is squarely covered by the judgment of this Court in Vivina CHSL. He contends that even the issue of direct entertainment of application for membership is answered in favour of Respondent No.4 by this Court in Viviana CHSL. In that case, the society had entered into Development Agreement with a Developer in the year 1984 for redevelopment of its building. A suit was filed in respect of the disputes between the society and the developer in which Consent Terms were filed, under which the Society agreed for developer to consume balance FSI of 3,000 sq.ft for construction of 16 shops. In the Consent Terms, Society agreed to admit purchasers of the 16 shops as its nominal members. In the year 2003, additional Development Agreement was executed granting further rights in favour of the Developer to construct additional shops. In the agreements executed under Section 4 of MOFA, it was agreed with the purchasers that they would be admitted only as nominal members. However, purchasers of society were not happy with nominal membership and wanted to take part in decision making process relating to affairs of the society. Accordingly, 12 shop purchasers filed application before the Deputy Registrar seeking declaration that all 16 shop owners are full/regular members of the society and sought direction for entrance of their names in the ‘I’ and ‘J’ Registers. The Deputy Registrar allowed the applications, and the Divisional Joint Registrar confirmed the decision of the Deputy Registrar. The society petitioned this Court, and this Court has held in paras-7 to 12 as under:

In my view, the ratio of the judgment of this Court in Viviana CHSL is clearly distinguishable. In that case, there was no prohibition on admission of flat purchasers as regular members of the society. For some odd reason, the society insisted on grant of discriminatory treatment to the shop owners by granting them only the nominal membership. The shop owners had purchased the shops, and they were the owners thereof. Despite this position, regular membership was denied to them. It is in the light of peculiar facts of that case, this Court upheld grant of regular membership to the shopkeepers. It is well settled that judgment is an authority for what it decides and not what can be logically deduced therefrom. The judgment cannot be construed as laying down a principle that an application to the Society is unnecessary and that a person may directly approach the Deputy Registrar for conversion of membership from nominal membership to regular membership. Nor can the judgment be treated as an authority for the proposition that, upon the coming into force of the Maharashtra Act No. 23 of 2019, whereby Chapter XIII-B was inserted into the Act, a nominal member would automatically acquire the status of a regular member. The judgment is rendered in the unique facts of that case where society had unjustifiably discriminated between flat owner and flat purchaser by keeping the flat purchasers at the bay with only nominal membership even though flat purchasers had purchased the shops for valuable consideration.

As a matter of fact, a purchaser/owner of flats/shops can never be admitted as a nominal member and only a lessee/licensee/caretaker/occupant can be granted nominal membership. In the present case, Respondent No.4 has not purchased the shops. Society continues to be the owner in respect of the shops. What is granted in favour of Respondent No.4 is mere license to occupy the shops. The observations made by this Court in para-9 of the judgment in Viviana CHSL cannot be misconstrued to mean as if a mere occupant within the meaning of bye-law 20 or within the meaning of Explanation to Section 154B-7 would be entitled to membership in the society. In para-9 of the judgment in Viviana CHSL, this Court has compared the rights of residential members and shop purchasers and has held that in a tenant co-partnership society, the land and the building is always owned by the society. The occupancy right discussed by this Court in para-9 of Viviana CHSL is not the one covered by Explanation to Section 154B-7 of the MCS Act. Occupancy right of unit/flat purchasers is different than occupancy rights granted to mere licensee/lessee/caretaker/occupant. In my view therefore the ratio of the judgment in Viviana CHSL would have no application to the facts and circumstances of the present case.

Mr. Patil has made strenuous efforts to demonstrate that shop allottees have paid valuable consideration at the time of securing allotments in respect of the shops. He has placed reliance on a copy of the Agreement dated 14 November 1988, executed by the Society with M/s. Sri Estate Agents. According to him, M/s. Sri Estate Agents was authorised to procure members for allotment of shop premises upon payment of a consideration of Rs. 3 crores. Mr. Patil contends that the said Agreement envisaged grant of regular membership to the allottees of the shop premises and not merely nominal membership. I have gone through the Agreement dated 14 November 1988. In my view, the Agreement executed by the society for scouting of persons interested in allotment of shops cannot decide the contractual relationship between the society and the shop allottees. What ultimately matters is the terms and conditions on which the shops are allotted and the exact nature of membership applied for by the allottee. In fact in respect of Shop No.16, M/s. Sri Estate Agents had conveyed to the society by letter dated 20 June 1991 thereof that Shop No.16 was to be allotted to Mrs. Prerna and Ms. Neeta Rupani and the Agency requested for grant of ‘nominal membership’ to the duo. The letter dated 20 June 1991 reads thus:

Thus, even the Estate Agency on whose Agreement reliance is placed by Respondent No.4, specifically informed the persons scouted by it that they would receive only nominal membership and occupancy rights in respect of the shops.

As observed above, Respondent No. 4 never asserted any claim of title in respect of the shops and was content with merely holding a licence to occupy the said shops on the basis of nominal membership. Merely because society has taken some decision in relation to redevelopment, the same would not mean that Respondent No.4 can claim ownership rights in respect of the Shops.

Under Section 11 of the Transfer of Property Act when interest in the property is created absolutely, it is impermissible to create repugnant interest. Section 11 of the Transfer of Property Act provides thus:

Thus, for applying the provision of Section 11 to a transaction, the first and foremost condition is that there must be creation of absolute interest in favour of a person. It is only after creation of such absolute interest that the bar on prescription of restriction relating to user or enjoyment would apply. Dr. Chandrachud is right in relying on judgment of Division Bench of Calcutta High Court in Subal Chandra Malty in which it is held in para-19 as under:

In the present case, far from creating any absolute interest in the shop in favour of earlier allottees or in favour of Respondent No.4, specific restrictions are imposed on use and enjoyment of the shops. Therefore, it cannot be contended by any stretch of imagination that Respondent No.4 has any title in respect of the Shops in its occupation. He is merely permitted to occupy the same on terms and conditions specified in the Agreement and Allotment letter.

Mr. Patil’s contention about payment of valuable consideration at the time of seeking allotment also does not appeal to this Court. The Estate Agency had paid an amount of Rs.3 crores as fees for scouting allottees in respect of 53 shops. The allottees may have paid some consideration to the Estate Agency since the society was not to charge any market rent for allotment of shops. Similarly, the allottees may have also paid part of lease rent to the society as per the Agreement. In the present case, while securing allotment of Shop No.16, Respondent No.4 claims to have paid amount of Rs.25,00,000/- to the society. On acceptance of Rs. 25,00,000/- the society has not granted ownership in resect of the shop in favour of Respondent No. 4 who is permitted to merely occupy the shop subject to observance of terms and conditions and subject to payment of additional lease rent to the State Government. Mr. Patil claims payment of amount of Rs.1.74 crores to the previous allottee. It is incomprehensible as to why the said amount was paid by Respondent No.4 to the previous allottee. In any case, the said amount has not gone into the pockets of the society. It is otherwise incomprehensible to believe that by making such insignificant payment to the society, Respondent No.4 can get ownership rights in respect of the shops.

The conspectus of the above discussion is that the impugned order passed by the Deputy Registrar is not only without jurisdiction but is otherwise unsustainable on merits. The Deputy Registrar has erroneously offered on a platter regular membership to Respondent No.4, although Respondent No. 4 is merely an occupant of the shops under a licence or by virtue of permissive use granted by the Petitioner-Society. The documents styled as Deeds of Confirmation/Transfer, brought into existence by Respondent No. 4, do not have any existence in the eyes of law and do not confer upon it any right, title or interest in respect of the shops in question, nor does it make Respondent No. 4 the title holder thereof. In my view therefore, Respondent No.4 would continue to remain mere nominal member in respect of the Shops in its occupation till the occupancy rights are terminated. With termination of occupancy rights, his nominal membership would automatically cease to exist. It cannot remain the member of the society forever. It has secured the nominal membership and occupancy rights with its eyes wide open to this position. It is not entitled to secure regular membership of Petitioner-society in absence of title/ownership in respect of the shops. The impugned orders passed by the Deputy Registrar and by the Divisional Joint Registrar are thus indefensible and liable to be set aside.

The Petitions accordingly succeed. The Orders dated 9 October 2026 passed by the Divisional Joint Registrar and order dated 30 June 2026 passed by the Deputy Registrar are set aside. The Writ Petitions are allowed in above terms. Rule is made absolute in each of the Petitions. There shall be no order as to costs.

After the judgment is pronounced, the learned counsel appearing for Respondent No.4 prays for stay of the judgment for a period of six weeks. Request is opposed by the learned counsel appearing for the Petitioners. Respondent No.4 is already a nominal member of the Petitioner Society. By impugned orders, his status was sought to be elevated to that of regular/ ordinary member. In that view of the matter, request for stay of the judgment is rejected.