The Supreme Court has ruled that delayed payment of contribution cannot, by itself, be used to deny membership in a cooperative housing society when the occupant’s entitlement had already been recognized and possession of the flat was undisputed.
The bench of Justice Vikram Nath and Justice Sandeep Mehta partly allowed appeals and set aside portions of a Bombay High Court judgment that had refused membership to the legal heirs of a flat occupant and invalidated the subsequent transfer of the property.
The case concerned a residential building in Mumbai where tenants had collectively formed a cooperative housing society in the 1990s to acquire ownership of the property during liquidation proceedings of the original owner. One tenant, whose heirs later pursued the case, remained in possession of a flat but had not deposited his share of the contribution at the time. However, the society had issued communications offering membership upon payment and had even passed a resolution in 2005 to admit him subject to payment.
Years later, the legal heirs deposited the required amount with interest and sought membership through statutory remedies under the cooperative law framework. A revisional authority ordered their admission as members, but the Bombay High Court later set aside that order and directed the society to reconsider the matter through a general body meeting.
Before the Supreme Court, the appellants argued that the earlier resolution and continuous possession created a legitimate entitlement that could not be defeated merely due to delay in payment. They also contended that denial of membership would create an anomalous situation where occupants would continue to reside in the flat without formal status in the society.
Opposing members argued that the original occupant had failed to contribute when required and that permitting membership after decades would unfairly benefit him, especially given the rise in property values.
The Supreme Court observed that the occupants’ possession had never been disputed and that the society’s offer of membership and subsequent resolutions recognizing entitlement had never been withdrawn. In such circumstances, refusing membership solely due to delay would be inequitable and would perpetuate disputes within the society.
The Court therefore restored the entitlement of the heirs to membership and recognized the validity of the subsequent transfer of the flat to a purchaser, noting that the society’s general body had already ratified these actions. At the same time, the Court clarified that other members could seek determination of additional interest or compensation for the delayed payment through appropriate proceedings.
Case Details
Case Title: Shashin Patel And Anr. Versus Uday Dalal And Ors.
Case No.: SLP (Civil) No(s). 36106 of 2025
Date: 05/02/2026
