Bombay High Court

MOHANBHAI KHANCHANDANIversusTHE STATE OF MAHARASHTRA AND ORS.

Decided: 2 July 2026
Disposal: Disposed Off
Bench: SANDEEP V MARNE

Holding

Membership, possession of alternate accommodation, transit rent, and corpus distribution are to be determined based on the outcome of Commercial Suit No. 435/2021.

Summary

The petitioner, Mohanbhai Khanchandani, challenged the rejection of his application for membership in a cooperative society under Section 22(2) of the Maharashtra Co‑operative Societies Act, 1960, asserting that he had acquired ownership of Flat No. B‑3 through an agreement dated 17 September 2001. The respondent, the original owner, contended that the agreement was only a deed of hypothecation and filed a commercial suit (No. 435/2021) seeking a declaration of title. The court held that the Registrars are not competent to adjudicate the title dispute and that membership should be determined based on the pending suit’s outcome. Consequently, the earlier orders of the Assistant Registrar and Divisional Joint Registrar were left undisturbed, with directions that the petitioner be admitted as a member, given possession of an alternate flat (Flat 404), and paid transit rent only if the commercial suit is dismissed; otherwise, the respondent’s membership continues. The corpus amount remains with the society pending the suit, and the city civil court’s restraining order continues to apply. The writ petition and interim applications were disposed of, and the rule was partly made absolute.

Issues considered

The Registrar’s competence to decide membership when a title dispute is pending
Whether the petitioner is entitled to membership in the cooperative society
Entitlement to possession of alternate accommodation and transit rent following redevelopment
Disposition of corpus and other redevelopment proceeds pending the outcome of the title suit

Legislation cited

Maharashtra Co-operative Societies Act, 1960 — s. 22(2)

Subjects

co-operative society
membership
title dispute
redevelopment
alternate accommodation
transit rent
corpus
pending suit
Section 22
Maharashtra Co-operative Societies Act

Judgment

Neeta Sawant 904-WP-2900-2009.docx

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 2900 OF 2009
WITH
INTERIM APPLICATION NO. 13396 OF 2023
AND
INTERIM APPLICATION NO. 4589 OF 2026

Mohanbhai Khanchandani ...Petitioner
V/s.
The State of Maharashtra & Ors. ...Respondents
________________
Mr. Nitin Gangal a/w. Ms. Archana Khan, Ms. Namita Mestry, Ms. Prapti
Karkera and Mr. Saket Joshi, for the Petitioner.
Mr. Kishor Patil, a/w. Ms. Akshada Nagale, for Respondent No.5.
Mr. N.C. Walimbe with Ms. Vaishali Nimbalkar, AGP for State.
________________

CORAM: SANDEEP V. MARNE, J.
DATED: 2 JULY 2026.
P.C.:

1) The petition challenges order dated 11 March 2003 passed by
the Assistant Registrar, Co-op. Societies, H-East Ward, Mumbai rejecting
Petitioner’s application under Section 22(2) of the Maharashtra Co-
operative Societies Act, 1960 (M.C.S. Act) for membership qua Flat No.B-
3, situated in Neel Shantiniketan CHSL, Vidyanagari Marg, Kalina,
Santacruz (E). The order passed by the Assistant Registrar has been
confirmed by the Divisional Joint Registrar vide order dated 8 December
2008 which is also subject matter of challenge in the present petition.

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2) By order dated 27 March 2009, the petition has been
admitted. The Petitioner has taken out two Interim Applications in the
light of building of the Society being taken up for re-development. In
Interim Application No.13396/2023, the Petitioner has prayed for payment
of monetary compensation flowing from redevelopment of Flat No.B /3. In
Interim Application No. 4589/2026, Petitioner has sought inter-alia,
possession of permanent alternate accommodation (PAA) (Flat No.404, 4th
Floor of the reconstructed building 'Courtyard') constructed in lieu of Flat
No. B/3.

3) With the consent of the learned counsel appearing for parties,
the petition is taken up for final hearing.

4) I have heard Mr. Gangal, the learned counsel appearing for
the Petitioner, Mr. Patil, the learned counsel appearing for Respondent
No.5 and Mr. Walimbe, AGP appearing for State. I have considered their
submissions and have perused the records of the case filed with the
petition.

5) The dispute between the parties is essentially with regard to
the exact nature of Agreement dated 17 September 2001. Respondent No.5
is the original owner in respect of Flat No.B/3. He has executed
Agreement dated 17 September 2001 which records payment of
consideration of Rs.12.5 lacs by the Petitioner to Respondent No.5.
Petitioner believes that the document dated 17 September 2001 effects sale
of Flat No. B-3 in his favour. On the other hand, Respondent No.5 believes
that the document dated 17 September 2001 is merely a Deed of
Hypothecation which does not effect sale of the flat in favour of the
Petitioner. It appears that Respondent No.5 has already filed Commercial

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Suit No.435/2021 seeking declaration of title which is pending before the
City Civil Court.

6) On the strength of his belief that he has acquired ownership
in respect of Flat No.B/3, Petitioner claimed membership with the
Respondent No.4-society. Since the Society did not admit Petitioner as
member on account of objection raised by Respondent No.5, he took
recourse to the provisions of Section 22 of the M.C.S. Act and filed
application for directing Society to admit him as member. By order dated
11 March 2003, the Assistant Registrar has rejected Petitioner ’s
application and the order of the Assistant Registrar has been confirmed by
the Divisional Joint Registrar on 8 December 2008.

7) In my view, the Registrars under the M.C.S. Act are ill-
equipped to decide the issue of title in respect of Flat No.B/3. Ultimately,
the issue of title needs to be adjudicated in a pending Suit instituted by
Respondent No.5. As of now, Respondent No.5 continues to be the
member in respect of old Flat No.B/3. However, possession of flat No.B /3
was admittedly with the Petitioner. The building of the Society has been
demolished and the same has been reconstructed, which is named
'Courtyard'. In lieu of Flat No.B/3, the PAA available for allotment is Flat
No.404 on the 4th Floor of the reconstructed building 'Courtyard'.

8) In view of the above circumstances, it would be appropriate to
leave the issue of membership dependent on the outcome of Commercial
Suit No. 435 of 2021. It is well settled that membership in society does not
determine title in a flat. In the event, Respondent No.5 is unable to secure
declaration of title in respect of Flat in Commercial Suit No. 435/2021, the
Society will have to necessarily admit Petitioner as its member. If on the

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other hand, Respondent No.5 is in a position to secure declaration of title
in respect of the flat, his membership with the society can be continued.

9) So far as the re-development process is concerned, this Court
has repeatedly taken a view that redevelopment process cannot result into
loss of possessory rights. Merely because disputes are pending in relation
to title and possession, the person actually in possession of old premises
cannot suffer loss of possession only on account of redevelopment of the
building. This Court has consistently followed the practice of putting back
the person in possession of the old premises into possession of new
premises. Similarly, any person loosing possession of old premises needs
to scout for alternate premises during the process of redevelopment. The
transit rent therefore needs to be paid to the person actually in possession.
Reference in this regard can be made to the Division Bench judgment in
Ritesh Haldar Versus. Elite Housing LLP & Ors. 1 There is no dispute to the
position that possession of Flat No.B/3 was taken from the Petitioner for
redevelopment. Following this settled principle, similar arrangement needs
to be made in the present case where Petitioner needs to be put back in
possession of the reconstructed flat and even transit rent needs to be paid
over to the Petitioner.

10) So far as corpus is concerned, the amount of corpus is
deposited with the society. Since entitlement to corpus is linked with the
issue of title, it would be appropriate that the corpus amount remains
deposited with the Society, which needs to invest the same in interest
bearing deposits. The amount of corpus can be paid over to the party who
ultimately succeeds in the pending suit. In view of the above position, I
proceed to pass the following order :

1 Commercial Arbitration Appeal (L.) No. 14486/2025 dtd 24.6.2025
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(i)The orders passed by the Assistant Registrar and Divisional
Joint Registrar are not disturbed at this juncture. However, it is
directed that the issue of membership to the society shall be
decided depending on the outcome of Commercial Suit No.
435/2021.

(ii) In the event of dismissal of Commercial Suit No. 435 /2021,
the Society shall admit Petitioner as member.

(iii) If on the other hand, Respondent No.5 succeeds in
Commercial Suit No. 435/2001, its membership with the society
shall continue.

(iv) The Petitioner shall be put in possession of PAA (Flat No.404,
4th Floor of building 'Courtyard') subject to the outcome of
Commercial Suit No.435/2021.

(v) The transit rent in respect of Flat No.B-3 shall be paid over to
the Petitioner subject to the outcome of Commercial Suit No.
435/2001.

(vi) Any other amounts flowing out of the redevelopment process
including corpus shall remain deposited with the Society which
shall invest the same in interest bearing deposits. Depending on
the outcome of Commercial Suit No. 435/2001, the proceeds of
such invested amount shall be paid over to the successful party.

(vii) The Petitioner is already restrained by the City Civil Court
from alienating, encumbering, handing over or creating third
party rights in respect of Flat No.B/3. The said order shall
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continue to operate even qua the PAA (Flat No.404) except with an
exception that the Petitioner shall be permitted to create
temporary licenses in respect of the said PAA and shall maintain
records of rent and other amounts received through such license
agreements.

(vi) All rights and contentions of parties on merits on title issue
are expressly kept open. The City Civil Court shall decide the Suit
uninfluenced by any observations made by this Court.

11) With the above directions, both, the Writ Petition, as well as
the Interim Applications are disposed of. Rule is partly made absolute.

Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
[SANDEEP V. MARNE , J.]
2026.07.02
19:45:47
+0530

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