Refusal of Membership in Cooperative Housing Societies

August 9, 2019

Team MyGate

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Say you have found your dream home in a housing society, followed the application procedure with due diligence and have already started picking out furniture for your new home. Much to your chagrin, the society denies you a membership. Do they have the right to do that? Let’s understand the scenarios under which you can and cannot be refused membership.

Who is eligible to join a co-operative housing society?

Co-operative Societies Acts and model bye-laws have clearly defined the eligibility of membership which state that any individual who is competent to contract under the Indian Contract Act, 1872 (which essentially means someone who is of legal age and a sound mind) is allowed to join a housing society.

What are the grounds for refusal?

If the society does a background check and finds that you have a criminal history and have exhibited sketchy and suspicious conduct, they may refuse membership. If that’s not you, you can produce legitimate character certificates from authorities. The same may be the decision if there is a stay order on that society. One common ground for refusal is that there are simply no units to assign to the member, in which case the applicant can do little. To quote from a decision cited by the larger bench in a legal case – “In our opinion, a society can, on valid ground, refuse membership, where the new membership will be prejudicial to the interest of the society. For example, if in spite of having the requisite qualifications based on the bye-laws of the society, a person who is guilty of an offence involving moral turpitude applies for admission, the society can be justified in refusing to admit such a person as a member on the ground of protection of the existing members of the society. Similarly, if it appears from the bio-data supplied by the prospective member that the income of such person is so meagre that he will not be able to even pay the monthly maintenance amount payable by the members of the society or future maintenance, the society, to avoid unpleasant situation and impediment in smooth running of the society, may decide to refuse admission.”

You can always confirm your financial capacity with the necessary proofs. However, there should be no discrimination on the basis of race, gender, religion or social status in allowing membership. Some societies have been taken to the court by applicants when they have denied membership due to their religious beliefs or caste/community discrimination. Flimsy and prejudiced reasons are invalid and not recognised by the Indian Constitution.

What should be done if you are refused membership?

There is a definitive procedure with an application form which the prospective member has to submit along with an entrance fee, tendering of shares, property declaration, etc. The Secretary is required to review and respond within 7 days of receiving the application and communicate to the member if any for further documentation is needed for review. All the paperwork is then presented to the Managing Committee for its perusal and final decision.

Once you apply for membership in a housing society and they decide to refuse membership, they are required to communicate the decision with reason within fifteen days of the date of the decision, or within three months from the date of receipt of the application for admission, whichever is earlier. If there is no response, it means that you have been accepted as a member. The Maharashtra Co-operative Societies Act 1960 states that – No society shall, without sufficient cause, refuse admission to membership to any person duly qualified under the provisions of this Act and its bye-laws.

If the society refuses to accept your application and payment, you have the right to apply to the Registrar u/s 23 (1A) in the prescribed H-1 form and payment for membership. The Registrar forwards the application and the amount to the society (within thirty days from the date of receipt) and if within 60 days (from the date of receipt of such application and the amount ), the society doesn’t communicate a decision, you are accepted as a member. In essence, this means that the society is required to respond appropriately and in a timely manner to the applications and provide members with payment acknowledgements as well.

In cases where there is an explicit written refusal from the society and if you are not in agreement with their decision, you can approach the Registrar with an appeal. But note that the decision of the Registrar in such matters is final and he communicates his decision to the society as well as the applicant within 15 days. Such appeals from the applicants are usually addressed by the Registrar within three months of receipt. If not, the Registrar records and communicates the reason for delay.

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