Bombay HC Upholds Basement Occupant’s Membership and Redevelopment Rights Against Housing Society

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 08.10.2026

Bombay HC Upholds Basement Occupant’s Membership and Redevelopment Rights Against Housing Society

The Bombay High Court has held that a co-operative housing society cannot adopt inconsistent positions to selectively deny membership and redevelopment benefits to a basement occupant while extending similar benefits to members occupying unauthorised flats in the same building.

In ALJ Residency Co-operative Housing Society Limited v. Gehlot Development Services Pvt. Ltd. & Others, Justice Sandeep V. Marne dismissed a writ petition challenging the Deputy Registrar’s decision granting society membership to a company claiming rights over basement premises.

The Court found that the housing society had previously supported regularisation of the basement along with the unauthorised sixth and seventh floors, but subsequently sought to deny the basement occupant membership and participation in the proposed redevelopment.

Significantly, the High Court clarified that not every basement must necessarily constitute a common amenity. Whether basement premises can be recognised as a separate unit depends upon the sanctioned building plans, the nature of the premises and the surrounding circumstances.

While upholding the basement occupant’s membership, the Court restricted the recognised area to 59.02 square metres, approximately 637 square feet, corresponding to the storage space sanctioned in the original building plan.

The Court further directed that this area be treated as residential premises for the limited purpose of determining redevelopment benefits, thereby enabling the occupant to receive a residential flat in the reconstructed building on terms applicable to other eligible society members.

The judgment is significant for co-operative housing societies, developers, flat purchasers and property owners involved in disputes concerning basement premises, unauthorised construction, membership rights and redevelopment entitlements.

Background and Facts of the Case

• The dispute concerned a residential building situated at Plot No. 49-C, Pali Mala Road, Pali Naka, Bandra (West), Mumbai.
• The property was originally developed by M/s Bhati Homes Pvt. Ltd.
• The Municipal Corporation for Greater Mumbai (MCGM) issued an Intimation of Disapproval on 4 August 1994 and subsequently sanctioned construction plans on 16 October 1998.
• Under the sanctioned plans, construction was permitted up to the fifth floor.
• The basement included an area measuring 59.02 square metres sanctioned for storage purposes, while the remaining basement area was apparently intended for vehicle parking.
• However, the developer constructed the building up to the seventh floor, exceeding the sanctioned permissions.
• The building remained incomplete in several respects and did not receive an Occupation Certificate.
• The basement also lacked a proper ramp or staircase providing access.
• Despite these irregularities, purchasers of flats from the ground floor through the seventh floor formed and registered ALJ Residency Co-operative Housing Society Limited.

Acquisition of Basement Premises by Gehlot Development Services

• Respondent No. 1, Gehlot Development Services Pvt. Ltd., claimed to have acquired basement premises measuring approximately 2,700 square feet through an Agreement for Sale dated 2 August 2004 executed with the original developer.
• The agreement was initially unregistered.
• Subsequently, stamp duty was paid and a Deed of Declaration was registered concerning the transaction.
• The company sought recognition of its rights in the basement and applied for membership of the housing society on 7 February 2009.
• Since the society did not decide the application, the company approached the Deputy Registrar under Section 22(2) of the Maharashtra Co-operative Societies Act, 1960.
• By order dated 21 August 2009, the Deputy Registrar granted deemed membership to the company.
• The society complied with the order and issued Share Certificate No. 21 on 14 October 2009.
• However, after approximately nine years, the society challenged the membership order before the Divisional Joint Registrar.
• The revision application was dismissed on 20 July 2022.
• The society thereafter approached the Bombay High Court through Writ Petition No. 1057 of 2023.
• By order dated 14 November 2025, the High Court set aside the earlier orders and remanded the matter to the Deputy Registrar for reconsideration.
• The Deputy Registrar was specifically required to determine whether the basement premises qualified as a “flat” under the applicable statutory provisions or constituted common areas and facilities belonging to the society.
• Following remand, the Deputy Registrar again granted membership to Gehlot Development Services by order dated 7 May 2026.
• The society challenged that order through the present writ petition.

The Dispute Over Regularisation of Unauthorised Construction

• An important feature of the case was the attempt to regularise unauthorised portions of the building.
• The developer had constructed the sixth and seventh floors without the necessary planning permissions.
• The basement also contained construction and proposed uses not fully covered by the sanctioned plans.
• To address these irregularities, proposals were submitted to MCGM for regularisation of the basement and the upper floors through the utilisation of Transferable Development Rights (TDR).
• Gehlot Development Services claimed to have financed the acquisition of TDR required for the proposed regularisation.
• The society had actively participated in this process.
• In particular, the society issued a letter dated 3 April 2008 expressing no objection to loading TDR for regularising the basement and the sixth and seventh floors.
• The society also issued correspondence supporting the proposed exclusive use of the basement and permitting the construction of access steps.
• However, although the regularisation proposal progressed substantially, it was never finally sanctioned by MCGM.
• This distinction became important because the basement, sixth floor and seventh floor remained affected by the absence of final municipal approval.

Arguments Advanced by the Housing Society

The petitioner society challenged the Deputy Registrar’s order on several grounds.

1. Basement Was a Common Amenity

• The society argued that the basement formed part of the common areas and facilities intended for the collective use of all members.
• It contended that the sanctioned building plan did not permit the basement to be treated as an independently saleable unit.
• According to the society, the developer could not create individual ownership rights over common parking and storage areas merely by executing a sale agreement.

2. Proposed Data Processing Unit Was Never Sanctioned

• The society submitted that the Deputy Registrar had wrongly relied upon a plan dated 25 April 2008 showing the basement as a Data Processing Unit.
• It argued that the document represented only a proposed amendment and had not received final approval from the municipal planning authority.
• The society further contended that a no-objection certificate issued by the Chief Fire Officer could not substitute for a sanctioned building plan.

3. Basement Did Not Qualify as a Statutory Flat

• The society relied upon Section 154B-1(13) of the Maharashtra Co-operative Societies Act, 1960, which defines the expression “flat”.
• It submitted that the basement did not satisfy the statutory definition because it was neither an approved independent residential unit nor a duly sanctioned commercial unit.
• The society also relied upon Section 154B-5, which restricts membership in housing societies in relation to the number of flats or plots available for allotment.

4. No Estoppel Against Statutory Requirements

• The society argued that its earlier participation in the regularisation process could not prevent it from enforcing statutory restrictions.
• It submitted that there could be no estoppel against law and that an unauthorised basement could not acquire legal recognition merely because the society had previously supported regularisation.

5. Deputy Registrar Exceeded the Scope of Remand

• The society further contended that the Deputy Registrar had failed to comply with the High Court’s earlier directions dated 14 November 2025.
• According to the society, the authority should have confined its examination to the sanctioned plans and the legal character of the premises.
• Instead, it had relied upon documents concerning proposed regularisation and fire-safety approval.

Arguments Advanced by Gehlot Development Services

Gehlot Development Services opposed the writ petition and supported the Deputy Registrar’s decision.

1. Statutory Revisional Remedy Was Available

• The company argued that the society had directly approached the High Court without exhausting its statutory remedy under Section 154 of the Maharashtra Co-operative Societies Act.
• It submitted that the Deputy Registrar’s order was revisable before the Divisional Joint Registrar.

2. Society Had Previously Recognised Basement Rights

• The company relied upon the society’s earlier conduct, including the issuance of a share certificate and various no-objection certificates.
• It contended that the society had previously recognised the basement as a separately occupied premises and supported its regularisation.

3. Unauthorised Sixth and Seventh Floors Were Treated Differently

• The company argued that the society had granted membership to occupants of flats on the sixth and seventh floors despite those floors also lacking municipal sanction.
• It submitted that the society could not extend membership and redevelopment benefits to those occupants while denying comparable treatment to the basement occupant.

4. Basement Could Be Recognised as an Independent Unit

• The company relied upon the statutory definition of “flat”, which includes certain separate and self-contained premises used for commercial purposes, including offices, godowns and other units.
• It argued that the basement premises were capable of being recognised as an independent unit.

5. Society Had Supported TDR-Based Regularisation

• The company further submitted that the society had expressly supported the proposed regularisation of the basement and upper floors.
• It argued that the society could not subsequently disown its earlier position when redevelopment benefits became relevant.

Principal Legal Issues Before the Bombay High Court

The High Court considered several interconnected questions:

1. Whether the writ petition was maintainable despite the availability of a statutory revisional remedy under Section 154 of the Maharashtra Co-operative Societies Act.
2. Whether the Deputy Registrar had exceeded the scope of the earlier remand order.
3. Whether basement premises could qualify as a “flat” for the purpose of society membership.
4. Whether the absence of final municipal sanction necessarily prevented recognition of membership in the circumstances of the case.
5. Whether the society could deny membership to the basement occupant while retaining members occupying unauthorised sixth- and seventh-floor flats.
6. Whether the basement occupant was entitled to participate in the proposed redevelopment and, if so, to what extent.

Bombay High Court’s Findings and Legal Reasoning

1. Statutory Revisional Remedy Should Ordinarily Be Exhausted

• The High Court first considered the maintainability of the writ petition.
• Justice Sandeep V. Marne observed that the Deputy Registrar’s order was revisable under Section 154 of the Maharashtra Co-operative Societies Act.
• The Court noted that the society had previously followed the statutory revisional route in the earlier round of litigation.
• It therefore found no sufficient justification for bypassing that remedy in the present proceedings.
• The Court referred to the Supreme Court’s decision in Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority, 2023 SCC OnLine SC 95, and the established exceptions to the alternative-remedy rule.
• Nevertheless, because the matter had already been heard on several occasions and the society insisted upon a decision on merits, the High Court proceeded to determine the dispute.
• The ruling thus reiterates that direct invocation of writ jurisdiction should not ordinarily replace an available statutory remedy.

2. Deputy Registrar Had Not Exceeded the Scope of Remand

• The society contended that the Deputy Registrar had travelled beyond the earlier remand directions.
• The High Court rejected this contention.
• The Court observed that the Deputy Registrar had examined the documentary material and determined that the basement premises were capable of falling within the statutory definition of a flat.
• Accordingly, the authority had addressed the question entrusted to it.
• However, the High Court clarified an important factual aspect.
• The document dated 25 April 2008 relied upon by the Deputy Registrar was a no-objection approval issued by the Chief Fire Officer concerning proposed amendments.
• It was not a finally sanctioned municipal building plan.
• The Court therefore distinguished between the existence of a regularisation proposal and the grant of actual municipal sanction.

3. Every Basement Is Not Necessarily a Common Amenity

• One of the most significant findings concerned the legal character of basement premises.
• The society argued that a basement must always be treated as a common amenity incapable of separate ownership or membership.
• The High Court declined to accept this proposition as a universal rule.
• The Court observed that the character of basement premises depends upon the applicable sanctioned plans and the facts of the particular case.
• A basement may contain areas reserved for common parking or other common facilities.
• However, planning authorities may also sanction independently identifiable basement premises for storage, commercial or other permissible uses.
• The Court referred to its earlier decision in Ashwini Heights Co-operative Housing Society Ltd. v. Jyoti Nitin Lunia & Others, 2026:BHC-AS:34441, concerning a separately sanctioned basement godown.
• The High Court therefore recognised that basement premises are not automatically excluded from individual use or society membership merely because of their location below ground level.
• At the same time, the judgment does not authorise developers to sell common parking areas or other common amenities as independent units.

4. Original Sanctioned Plan Recognised 59.02 Sq. M. as Storage Space

• The Court examined the sanctioned building plan dated 16 October 1998.
• It found that an area measuring 59.02 square metres in the basement had been sanctioned for storage purposes.
• This was a decisive distinction.
• Although the basement as a whole had not received the approvals contemplated under the later regularisation proposal, a portion of it already possessed recognition under the original sanctioned plan.
• The Court observed that the entire basement could therefore not be characterised as parking space.
• The existence of sanctioned storage space provided a factual foundation for recognising membership in respect of that limited area.

5. Sixth and Seventh Floors Were Also Unauthorised

• The High Court found that the sixth and seventh floors had been constructed without municipal sanction.
• Despite this, their occupants had been admitted as members of the housing society.
• The Court observed that the society’s argument concerning the absence of municipal sanction could equally affect those members.
• If the absence of sanction were applied as an absolute disqualification in the circumstances of the case, the membership of occupants of the sixth and seventh floors would also come under question.
• The Court therefore considered it impermissible for the society to apply different standards to the basement occupant and the occupants of the upper floors without a legally sustainable distinction.
• The finding was particularly significant because the original sanctioned plan recognised at least some basement storage area, whereas the sixth and seventh floors lacked corresponding sanction.

6. Society Could Not Adopt Contradictory Positions

• The High Court closely examined the society’s conduct over several years.
• The record demonstrated that the society had actively supported regularisation of the basement along with the sixth and seventh floors.
• The society had issued no-objection certificates concerning TDR utilisation, electricity connection and access arrangements.
• It had also relied upon the possibility of regularisation in earlier proceedings concerning deemed conveyance and protection against demolition.
• However, when the issue of membership and redevelopment benefits arose, the society sought to characterise the basement as an unauthorised common area incapable of individual recognition.
• The Court strongly disapproved of this change in position.
• It observed that the society could not seek the benefit of the basement occupant’s participation in the regularisation process while subsequently denying that occupant comparable treatment.
• The Court also clarified that there can ordinarily be no estoppel against law.
• However, since basement premises were not universally prohibited from being regularised, the society’s earlier conduct was relevant to determining the equities and the consistency of its position.

7. Section 154B-5 Does Not Automatically Resolve Every Historical Membership Dispute

• The Court examined Section 154B-5 of the Maharashtra Co-operative Societies Act, which restricts membership beyond the number of flats or plots available for allotment.
• The provision seeks to discourage the sale of common amenities by developers.
• The High Court acknowledged the importance of this statutory restriction.
• However, it also noted that Section 154B-5 was introduced in 2019, whereas Gehlot Development Services had applied for and initially secured membership in 2009.
• The Court therefore considered the timing of the statutory amendment relevant to the dispute.
• The judgment should not be interpreted as permitting the admission of purchasers of unauthorised common amenities in disregard of Section 154B-5.
• The relief granted arose from the particular history of the membership, the sanctioned storage area and the society’s conduct.

8. Redevelopment Benefits Must Be Considered on an Equitable Basis

• The High Court noted that the society had obtained deemed conveyance of the land and building through an earlier judgment dated 25 November 2024.
• The society was taking steps towards demolition and reconstruction of the existing building.
• Consequently, the earlier proposal for regularisation of the basement and upper floors was no longer the operative route for addressing the building’s deficiencies.
• The Court observed that the occupants of the sixth and seventh floors were expected to receive redevelopment benefits notwithstanding the absence of sanction for their existing flats.
• In these circumstances, the Court found no justification for completely excluding Gehlot Development Services from the redevelopment process.
• The Court sought to balance the competing interests of the society and the basement occupant without recognising the entire area originally claimed.

9. Membership Restricted to 59.02 Sq. M. Instead of 2,700 Sq. Ft.

• Although Gehlot Development Services claimed approximately 2,700 square feet of basement premises, the High Court did not accept that the entire claimed area should form the basis of membership.
• The Court noted that the actual constructed basement area was smaller than the area claimed and that the original sanctioned plan recognised only 59.02 square metres as storage space.
• Accordingly, it restricted the membership entitlement to 59.02 square metres, approximately 637 square feet.
• This limitation was important because it preserved the distinction between the sanctioned storage area and the remaining basement space, part of which was intended for common use.

10. Sanctioned Basement Area to Be Treated as Residential for Redevelopment Benefits

• The High Court issued a further direction concerning the treatment of the recognised basement area during redevelopment.
• It directed the society to consider the 59.02 square metres as residential premises for the purpose of granting redevelopment benefits.
• The Court explained that the basement occupant’s claimed area had been substantially reduced from approximately 2,700 square feet to 637 square feet.
• It also considered that the society had earlier supported regularisation of the basement for commercial IT use.
• Since the reconstructed building might not contain comparable commercial premises, the Court considered residential treatment necessary to balance the equities.
• Accordingly, the recognised basement area was directed to be treated as residential for redevelopment purposes, enabling the occupant to receive a residential flat with such additional area as may be sanctioned under the redevelopment process.
• Importantly, this direction was confined to determining redevelopment benefits. It was not a declaration that the entire basement had been lawfully converted into residential premises under municipal planning law.

Important Judicial Precedents Considered

Judicial precedent	Citation	Legal relevance
Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority	2023 SCC OnLine SC 95	Exceptions to the rule requiring exhaustion of alternative statutory remedies
Whirlpool Corporation v. Registrar of Trademarks	(1998) 8 SCC 1	Circumstances permitting writ jurisdiction despite an alternative remedy
Nahalchand Laloochand Pvt. Ltd. v. Panchali Co-operative Housing Society Ltd.	(2010) 9 SCC 536	Rights relating to parking areas and common amenities
Ashwini Heights CHSL v. Jyoti Nitin Lunia & Others	2026:BHC-AS:34441	Recognition of membership in respect of separately sanctioned basement premises
Kamla Spaces Premises Co-operative Society Ltd. v. Divisional Joint Registrar	WP (L) No. 2579 of 2024, decided 27 March 2024	Membership issues involving premises undergoing regularisation
Dheeraj Dreams Building No. 1 CHS Ltd. v. Divisional Joint Registrar	2026:BHC-OS:7221	Restrictions on membership where common or refuge areas are sold as independent premises
S. N. Choudhary v. Dongre Park Co-operative Society Ltd.	2025 SCC OnLine Bom 4386	Scope of authority in remanded proceedings
Mistry Park CHS Ltd. v. Dr. Bharat Prem Shivdasani	2023 SCC OnLine Bom 3002	Membership concerning independently identifiable premises

Final Decision of the Bombay High Court

After considering the statutory provisions, sanctioned building plans, previous proceedings and conduct of the parties, the Bombay High Court dismissed the housing society’s writ petition.

The Court passed the following operative directions:

1. Deputy Registrar’s order upheld: The order dated 7 May 2026 granting membership to Gehlot Development Services Pvt. Ltd. in respect of the basement premises was confirmed.
2. Membership area restricted: The membership was confined to premises measuring 59.02 square metres, approximately 637 square feet.
3. Residential treatment for redevelopment: The recognised basement premises were directed to be treated as residential premises for determining redevelopment benefits.
4. Writ petition dismissed: The petition was dismissed subject to the clarification concerning the area and its treatment for redevelopment.
5. No costs imposed: Although the Court strongly criticised the conduct of the society and its secretary, it refrained from imposing costs.
6. Stay refused: The Court rejected the society’s request for an eight-week stay of the judgment.

The decision therefore preserved the basement occupant’s membership while limiting the extent of the recognised premises and protecting its participation in the redevelopment process.

Legal Significance of the Judgment

The ruling has important implications for Maharashtra’s co-operative housing societies and redevelopment projects.

• First, basement premises cannot automatically be treated as common amenities in every case. Their legal character must be examined with reference to sanctioned plans and applicable statutory requirements.
• Second, society membership disputes require careful consideration of historical facts. Existing membership, previous orders, documentary recognition and the timing of statutory amendments may materially affect the outcome.
• Third, housing societies must maintain consistency in their legal positions. A society that has supported regularisation of particular premises may face difficulty in subsequently asserting a contradictory position when redevelopment benefits arise.
• Fourth, redevelopment rights may require equitable treatment of similarly situated members. Selective exclusion of one occupant while extending benefits to others with comparable planning irregularities may attract judicial scrutiny.
• Fifth, membership recognition does not necessarily extend to the entire area claimed by an occupant. Courts may distinguish sanctioned portions from unauthorised or common areas and restrict relief accordingly.
• Sixth, deemed conveyance and redevelopment do not automatically legalise unauthorised construction. The judgment addressed membership and redevelopment benefits without granting retrospective municipal approval to the unauthorised portions of the existing building.

Practical Implications for Housing Societies and Developers

• Housing societies contemplating redevelopment should carefully review the sanctioned plans, existing membership records, conveyance documents and the legal status of all occupied premises.
• Where disputes involve basements, godowns, parking spaces or other non-residential units, the society should determine whether those premises are independently sanctioned or form part of common amenities.
• Developers should avoid representing common facilities as independently saleable units unless the applicable law and municipal approvals permit such treatment.
• Societies should also maintain consistent records concerning regularisation proposals, no-objection certificates, TDR utilisation and correspondence with planning authorities.
• Where redevelopment involves premises with disputed legal status, the treatment of such premises should be examined before finalising the redevelopment agreement, area entitlements and allocation of replacement units.
• The judgment demonstrates that earlier conduct and documentary representations can become significant when determining membership and redevelopment disputes.

Conclusion

The Bombay High Court’s judgment in ALJ Residency Co-operative Housing Society Limited v. Gehlot Development Services Pvt. Ltd. & Others provides important guidance on the relationship between society membership, sanctioned building plans, common amenities and redevelopment entitlements.

The Court rejected the society’s attempt to deny membership to the basement occupant while continuing to recognise members occupying unauthorised flats on the sixth and seventh floors.

At the same time, the Court carefully limited the basement occupant’s recognised entitlement to the 59.02 square metres sanctioned as storage space under the original building plan.

By directing that this area be treated as residential premises for redevelopment benefits, the Court sought to balance the equities between the parties without recognising the entire basement as an independently sanctioned unit. The judgment reinforces the principle that co-operative housing societies must act consistently and fairly, while also recognising that common amenities cannot be indiscriminately converted into private property.

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Source: Bombay High Court

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