From Arrears of Previous Owner to Admission of new Member in Housing Society – Bombay HC Ruling

The flat of a member of the petitioner was taken over by the Bank for non payment of mortgage loan.   By the letter dated 10.11.2015, the petitioner informed the outstanding dues of Rs. 9 lakhs of the society to the Bank.

Respondent No.3 had purchased the said flat in the e-auction on 28.2.2023, subject to all known and unknown encumbrances.

By the letter dated 22.5.2023, the petitioner informed the respondent no.3 to pay Rs.21,43,681/-, to submit requisite forms for transfer of shares, etc.

However, the respondent no.3 disputed the said amount and applied for membership on the ground that it cannot be made a pre-condition for transfer of flat and that the Society failed to recover said dues from previous member.

Thereafter, the respondent no.2 allowed the appeal of the respondent no.3 and granted membership vide order dated 15.5.2024.

The Act draws a clear line that if the dues are admitted or not seriously contested, they must be paid before seeking membership. But if there is a genuine dispute supported by the reasons and documents then the society cannot demand full payment without proper determination.

Applying the test, it was found that the respondent no.3 had paid Rs.4.79 lakh at the initial stage without protest. Thus, he was aware that there was outstanding dues.  It is only after the Society refused the membership that the respondent no.3 started raising objections.

The contention of the respondent no.3 auction purchaser that the Society should have recovered the dues from the previous owner is legally unsustainable.   The sale in his favour was made under “as-is-where-is” and “whatever there is” basis.

Judgment dated 16.12.2025 of the High Court of Bombay in Writ Petition No.12289 of 2025 of Banganga Anurag Cooperative Housing Society Limited    Vs.   The Divisional Joint Registrar and others