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Section 28 of the MCS Act – Purchase of Five Bungalows by the Company in the Housing Society

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Section 28 of the MCS Act – Purchase of Five Bungalows by the Company in the Housing Society

Respondent No.1 applied for membership of the petitioner society, after purchase of five bungalows on 7.4.2008.

In the second round of litigation, the appeals of the respondent no.1 were allowed.   The revisions of the Society were dismissed vide order dated 18.7.2025.

The contention of the Society is that the respondent no.1 had purchased five out of fifteen bungalows i.e. more than one-fifth of the total share capital of the society.   Section 28 places clear cap that no member can hold more than one-fifth of the total share capital.

HELD that Section 28 of the MCS Act does not operate on the execution of a sale deed. It comes into play only when shares are transferred or allotted by the society. On the date of execution of the sale deeds, there was no transfer of shares. There was only transfer of immovable property. Further, once Section 28 itself stands excluded in its application to housing societies by virtue of Section 154B(2), the question of treating the sale deeds as unlawful does not arise. What the statute expressly permits cannot be labelled as opposed to public policy by indirect reasoning.

The authorities have correctly examined the scope of Section 28 in the context of housing societies and concluded that it does not operate as a bar to conferment of membership in the present facts.

Bombay HC Backs Company’s Entry into Housing Society – Section 28 of MCS Act

Bombay HC Allows Enrolment of Company as Members of Housing Society – Section 28 of the MCS Act

Judicial Clarification on Enrolment of Company as Member of the Housing Society – Section 28 MCS Act

Bombay HC Upholds Company’s Right to Membership in Cooperative Housing Society

Judgment dated 24.12.2025 of the High Court of Bombay in Writ Petition Nos.10949, 10950, 10951 and 10952 of 2025 of Shivraj Nagar Cooperative Housing Society Ltd   Vs.  Mextech Realty Pvt Ltd and others

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