HEADNOTE
Digant Parekh (HUF) & Anr. v. Akruti Kailash Construction & Ors.
Court: Bombay High Court
Jurisdiction: Civil Appellate Jurisdiction
Bench: Justice Amit Borkar
Date of Judgment: January 16, 2026
Citation: 2026:BHC-AS:1750-DB
Laws / Sections Involved:
Maharashtra Cooperative Societies Act, 1960 – Sections 3, 22(2), 79(2)(b), 152, 154, 154B-1;
Maharashtra Ownership Flats Act, 1963 – Sections 4 & 10;
Transfer of Property Act, 1882 – Section 55
Keywords: Deemed membership, MOFA agreement Form V, Slum Rehabilitation Authority, jurisdiction transfer, pending civil suit, cooperative housing society
Summary
The Bombay High Court allowed a writ petition and restored deemed membership granted to flat purchasers under Section 22(2) of the Maharashtra Cooperative Societies Act, holding that a registered MOFA agreement in Form V is sufficient to treat purchasers as persons who have “taken” flats, entitling them to society membership notwithstanding unpaid balance consideration. The Court ruled that pendency of a civil suit for enforcement of the agreement does not bar conferment of deemed membership, absent any restraining order. Importantly, the Court quashed the revisional order passed by the Divisional Joint Registrar for lack of jurisdiction following a State Notification transferring appellate powers to the Joint Registrar (SRA). The judgment clarifies the immediate effect of jurisdictional transfer by notification and reinforces flat purchasers’ statutory rights under MOFA.
Court’s decision
The Bombay High Court quashed the revisional order dated 25 November 2024 passed by the Divisional Joint Registrar and restored the Registrar’s order granting deemed membership to the petitioners in respect of Unit No.601. The Court held that the revisional authority lacked jurisdiction after a State Notification transferred appellate powers to the Joint Registrar (SRA). It further held that purchasers under a registered MOFA agreement are entitled to membership and that civil suit pendency alone cannot defeat statutory membership rights.
Facts
The petitioners executed a registered agreement for sale dated 16 September 2013 (Form V under MOFA), later rectified in 2014. In 2016, the developers filed a civil suit seeking enforcement of the agreement. The petitioners applied for membership of the society in 2021; the society failed to act. The Registrar granted deemed membership in August 2022 and appointed an authorised officer for implementation. Developers challenged this in revision. In November 2024, the Divisional Joint Registrar set aside deemed membership citing pendency of the civil suit.
Issues
- Whether the revisional authority had jurisdiction after the State Notification dated 8 October 2024.
- Whether purchasers under a registered MOFA Form V agreement are persons who have “taken” flats for membership purposes.
- Whether pendency of a civil suit bars conferment of deemed membership under Section 22(2) of the MCS Act.
Petitioners’ arguments
The petitioners contended that the registered MOFA agreement conclusively establishes purchaser status and entitlement to membership. They argued that the revisional authority lost jurisdiction post-notification transferring appellate powers to the Joint Registrar (SRA). It was submitted that unpaid balance consideration, if any, gives the developer remedies as an unpaid seller and cannot be used to block society membership. Pendency of a civil suit, absent restraint, was said to be irrelevant to statutory membership.
Respondents’ arguments
The developers argued that full consideration had not been paid and, therefore, the petitioners had not “taken” the flats. They relied on contractual clauses and contended that until dues are cleared, membership should be denied. On jurisdiction, it was argued that the new SRA office was not operational immediately and that quashing the revisional order would revive an allegedly illegal initial order.
Analysis of the law
The Court analysed Sections 3, 22(2), 152 and 154 of the MCS Act and held that a valid notification transferring appellate powers operates immediately, ousting the earlier authority’s jurisdiction. Interpreting MOFA Sections 4 and 10, the Court held that a registered Form V agreement confers statutory rights enabling purchasers to participate in society formation and seek membership. The MCS Act recognises such purchasers as members once they join the formation/application process.
Precedent analysis
The Court distinguished Lal Shah Baba Dargah Trust v. Magnum Developers (2015), holding it applies only to avoid a legal vacuum where a new forum is not constituted. Here, jurisdiction was lawfully transferred by notification, and no vacuum existed. The Court reiterated principles protecting flat purchasers under MOFA and the limited role of cooperative authorities vis-à-vis title disputes pending before civil courts.
Court’s reasoning
The Bench held that membership is a provisional statutory determination and does not finally decide title; therefore, civil suit pendency cannot bar it absent a restraint order. The Court emphasised that unpaid consideration does not negate purchaser status for membership; the developer’s remedy lies under property law. Since the revisional authority acted without jurisdiction, its order was quashed, and the Registrar’s deemed membership order was restored.
Conclusion
The writ petition was allowed. The revisional order was set aside, deemed membership restored, and the civil suit directed to proceed uninfluenced by the judgment. No costs were awarded.
Implications
This ruling strengthens flat purchasers’ rights under MOFA, clarifies the immediate effect of jurisdictional transfer by notification, and curbs the use of pending civil suits as a tactic to block cooperative society membership. It provides certainty for SRA-area societies on the proper appellate forum and reinforces cooperative governance.
Case law references
• Lal Shah Baba Dargah Trust v. Magnum Developers (2015) 17 SCC 65
Holding: Old forum continues only to avoid a legal vacuum where the new forum is not constituted.
Application: Distinguished; no vacuum existed after statutory notification.
• Principles under MOFA (Form V agreements)
Holding: Registered MOFA agreements confer statutory purchaser rights, including society formation.
Application: Applied to uphold deemed membership.
FAQs
Q1. Does a pending civil suit bar society membership?
No. Membership can be granted unless a court restrains it.
Q2. Is full payment a precondition to deemed membership?
No. Unpaid balance gives the developer remedies as an unpaid seller but does not defeat membership.
Q3. When does jurisdiction shift after a notification?
Immediately from the notification date, unless the statute provides otherwise.
