Bombay High Court dismisses plea to cap membership of housing society in Malabar Hills on community basis

The Bombay High Court recently upheld orders denying permission to a housing society in Mumbai's plush Malabar Hill area to amend its bye-laws so as to cap membership of each community at 5 percent of the society's total membership [Blue Haven Co-op. Housing Society Ltd. vs State of Maharashtra].

Singe-judge Justice Rajesh Patil turned down the argument of Blue Haven Co-op. Housing Society Ltd. that capping membership of each community at 5 percent will ensure that there is no dominance by any single community in the society.

"In my opinion, if the proposed amendment is approved, it will divide the society on community basis," the judge said in the order passed on March 20. 

The building, the judge noted, was not constructed on community basis and since its inception there were no such bye-laws of mathematical division of 5 percent per community.

"Therefore, if the proposed amendment is approved, and in a situation where a member wants to sell his flat, and the community to which he belongs already has 5 per cent membership out of 100 per cent, in that situation he would have to search for a buyer of his community only. In such a situation, the sale is likely to be a distress sale. Therefore, the proposed amendment is not in the interest of the society," the judge held. 

As per the petition, the society was registered in 1963 and since then it had adopted its own bye-laws at the time of its registration and thereafter, in the year 1989, it adopted model bye-laws. 

In the year 2008, the society by a resolution passed in the special general body meeting, proposed to amend its bye-laws by putting a cap of 5 percent on membership of every community.

By this, the society intended that the membership of any community should not go beyond 5 percent of the total membership of the society. 

By an order dated November 17, 2008, the Deputy Registrar, Co-operative Societies “D” Ward, Mumbai rejected the proposed amendments.

The same was upheld by Divisional Joint Registrar, Co-operative Societies, Division, Mumbai on April 30, 2011.

The society then filed the present plea before the High Court.

"The purpose of amending the bye-laws is on the ground that there will not be domination by any particular community, in the society," Justice Patil noted. 

However, the judge said that the proposed amendments were against Section 22(1) of the Maharashtra Co-operative Societies Act which lays down the qualification to be a member of the society. 

"The society by proposed amendment to the Bye-laws wants to defeat the section itself, as it wants to insert a condition whereby even though a person who is otherwise qualified under section 22 (1) to be a member, cannot become a member if the proposed amendment to bye-laws is allowed," the bench opined.

It, therefore, dismissed the plea.

Advocate NN Bhadrashete appeared for the Society. 

[Read Judgment]