Housing Society Cannot Deny Membership To Occupier Of Sanctioned Basement Area While Admitting Occupiers Of Unauthorized Upper Floors: Bombay High Court

"The Petitioner-society cannot now be permitted to take a volte face and question possibility of regularisation of basement. If Petitioner is denied membership of the society, the membership will have to be denied even to all the occupants of 6th and 7th floors." Bombay High Court, in a significant ruling dated 7 October 2026, held that a co-operative housing society cannot selectively deny membership to an occupier of basement premises when the society has previously recognized the user and granted membership to occupants of other unauthorized floors within the same building.

A bench of Justice Sandeep V. Marne observed that where a society has actively participated in a common regularization proposal for the basement, 6th, and 7th floors, it cannot be permitted to "approbate and reprobate" by discriminating against the basement occupier.

The dispute arose between ALJ Residency Co-operative Housing Society and Gehlot Development Services Pvt. Ltd. concerning the society’s refusal to grant membership for basement premises purchased by the Respondent. While the building was sanctioned only up to the 5th floor, the developer constructed up to the 7th floor and sold units therein. The Petitioner-society, despite knowing the unauthorized nature of the building, granted membership to flat purchasers on the 6th and 7th floors while challenging the membership of the Respondent in the basement.

The primary question before the court was whether the Respondent was entitled to membership under Section 22(2) of the MCS Act, 1960, in respect of basement premises that lacked a formal Occupation Certificate. The court was also called upon to determine if the Petitioner-society was estopped from denying membership to the basement occupier given its own previous conduct and the contemporaneous admission of unauthorized flat owners into the society.

Society’s Conduct and Estoppel

The court noted a stark inconsistency in the society’s stand. The Petitioner had previously issued a No Objection Certificate (NOC) for the Respondent to obtain an electricity meter for the basement and had actively supported the regularization of the basement along with the 6th and 7th floors by loading Transferable Development Rights (TDR). The court held that the society’s conduct in treating the basement and the 6th/7th floors on a similar pedestal for years precluded it from now claiming the basement is a "common amenity" solely to deny membership.

No Universal Rule Against Basement Membership

The court rejected the argument that basement premises are per se common amenities that can never be regularized for individual use. Referring to precedents like Ashwini Heights CHSL, the court clarified that if the premises are identified as a separate unit or godown in sanctioned plans, they can qualify as a "flat" under Section 154B-1(13) of the MCS Act. In the present case, the court noted that 59.02 sq.m. of the basement was indeed sanctioned as "storage space" in the original 1998 plan.

Equality of Treatment Among Occupiers

A pivotal observation of the bench was that the society cannot maintain a "double standard." Since the society admitted occupants of the 6th and 7th floors—which are also unauthorized and lack sanctioned FSI—it cannot deny membership to the basement occupier whose premises have a partial foundation in the original sanctioned plan. The court emphasized that if the Petitioner’s logic were applied strictly, the membership of the 6th and 7th-floor residents would also be invalid.

"If premises located in the basement are incapable of being regularised for any purposes for individual use, the Municipal Corporation would have rejected the proposal at the threshold. In the present case, it appears that regularization was required because there was deficit BUA/FSI."

Balancing Equities in Redevelopment

The court recognized that as the building is slated for redevelopment, all existing occupants should be treated equitably. To balance the equities, the court directed that the Respondent’s membership be restricted to the sanctioned 59.02 sq.m. area. Furthermore, to avoid future disputes during the redevelopment process, the court ordered that this specific area be treated as a "residential unit," ensuring the Respondent receives comparable benefits to other members despite the original commercial or storage designation.

The court confirmed the Deputy Registrar’s order granting membership to the Respondent, subject to the limitation of 59.02 sq.m. The court dismissed the society’s writ petition, noting that the deponent of the petition—himself an occupier of an unauthorized flat—was attempting to selectively benefit from the redevelopment process while denying the same to others. The court refused a stay on the operation of the judgment.

Date of Decision: 07 October 2026