Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 05.11.2026
Bombay High Court Ruled Nominal Shop Members Cannot Claim Regular Society Membership
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her mob no- +91 8726929060 and email id jhamadhumita27@gmail.com .
The Bombay High Court has held that a shop occupant holding only nominal membership and permissive occupancy rights cannot be converted into a regular member merely because nominal membership is no longer recognised for housing societies under the 2019 amendments to the Maharashtra Co-operative Societies Act.
Court sets aside orders granting regular membership
In Vaitarna Bheema Worli Sagar CHSL v. State of Maharashtra & Ors., decided on 4 November 2026, the Bombay High Court allowed ten writ petitions filed by Vaitarna Bheema Worli Sagar Co-operative Housing Society. The Court set aside orders of the Deputy Registrar and Divisional Joint Registrar that had directed the society to issue share certificates and grant ordinary membership to a private company occupying ten commercial shops.
The company, which occupied Shop Nos. 7 to 16, had been admitted as a nominal member in relation to each shop. It sought regular membership after relying on deeds described as Deeds of Confirmation/Transfer. The Court found that these documents did not give the company any ownership or transferable interest in the shops.
Background: government land, residential housing and commercial shops
The original Worli Sagar Co-operative Housing Society had received government land on a 99-year lease under a policy intended to provide residential tenements to eligible members. The society was later permitted to use up to 15% of its total FSI for shops, subject to conditions imposed by the government.
A key condition was that the premises could be sub-let for commercial use and that the names of sub-lessees, the area let out, the purpose of use, and the consideration received had to be disclosed. The Court noted that the scheme did not permit the society to sell the shops or automatically treat shop occupants as regular members.
After the original society was subdivided in 2023, the ten shops fell within the petitioner societyβs building. The company continued as a nominal member and occupant of the shops.
Nominal membership is different from ownership
The Court examined the Maharashtra Co-operative Societies Act, the Rules and the model bye-laws to distinguish nominal membership from ordinary membership.
Under the former statutory framework and the societyβs bye-laws, a nominal member is generally a sub-lessee, licensee, caretaker or occupant who does not hold right, title or interest in the unit. Such a member does not ordinarily receive the rights, privileges, voting power or governance role of a regular member.
The shop allotment documents in this case expressly described the company as a nominal member. They also imposed significant restrictions, including:
- The shop could be used only for the permitted commercial purpose.
- The occupant could not sell, transfer, assign, encumber or create third-party rights without the societyβs consent.
- If the occupant wished to leave, the shop had to be surrendered to the society.
- Breach of the allotment conditions could result in cancellation of the arrangement and eviction.
The Court concluded that these terms created a conditional right to occupy, not ownership of the shops.
2019 amendment did not automatically upgrade existing nominal members
The Maharashtra Co-operative Societies (Amendment) Act, 2019 inserted Chapter XIII-B, which applies specifically to co-operative housing societies. Under the new framework, nominal membership is no longer included among the recognised forms of membership for housing societies.
However, the Court ruled that this legislative change operates prospectively. Existing nominal memberships granted before the amendment do not automatically end, nor are they automatically converted into regular memberships.
The judgment explained that the transitional provision preserves existing rules, bye-laws and arrangements until they are expressly repealed, modified or amended. Therefore, an existing nominal member may continue in that capacity, but cannot claim an automatic elevation to ordinary membership solely because the law has stopped permitting new nominal memberships in housing societies.
Private transfer deeds could not create rights in the shops
The company relied on a registered Deed of Confirmation/Transfer executed in 2024 with a former shop allottee. In relation to one shop, the former allottee had already surrendered his rights and nominal membership to the society in 2017. The society subsequently made a fresh allotment to the company.
The Court held that the former allottee had no rights left to transfer in 2024. There was no direct contractual relationship between the former allottee and the company that could support a transfer of the shop or its membership rights.
Accordingly, the Court found that the deed could not confer title, ownership or regular membership rights on the company. Registration of the document did not change its legal effect or turn an occupant into an owner.
Registrar could not be approached directly without a membership application
The Court also found a procedural defect in the companyβs attempt to obtain regular membership. Under Sections 22 and 23 of the Maharashtra Co-operative Societies Act, a person seeking membership must first apply to the society.
Only after the society either fails to decide the application within the prescribed period or rejects it can the Registrarβs jurisdiction arise. In this case, the company directly approached the Deputy Registrar without first filing a membership application with the society.
The Court held that this missing application was a jurisdictional flaw. The Deputy Registrar had no inherent power to directly decide or grant membership in the absence of an application, refusal or statutory deemed-membership situation.
Why an earlier ruling on shop purchasers did not apply
The company relied on an earlier Bombay High Court decision involving Viviana CHSL, where shop purchasers were granted regular membership. The Court distinguished that ruling on its facts.
In the earlier matter, the shop purchasers had purchased their units through registered agreements and the society had unjustifiably treated them differently from other unit holders. Here, by contrast, the company was granted only conditional occupancy rights, accepted nominal membership and had no title to the shops.
The Court clarified that the earlier decision did not establish a general rule that all nominal members must become regular members after the 2019 amendment, or that a person can bypass the society and directly seek membership from the Registrar.
Final outcome
The High Court set aside the Deputy Registrarβs order dated 30 June 2026 and the Divisional Joint Registrarβs order dated 9 October 2026. The company remains only a nominal member and shop occupant, subject to the terms of its allotment and occupancy arrangement.
The Court also rejected a request to stay its judgment for six weeks, noting that the disputed orders had sought only to elevate the companyβs status from nominal to regular membership.
Key legal takeaway
A commercial shop occupant in a co-operative housing society does not obtain regular membership merely through nominal membership, payment of consideration or a privately executed transfer document. Regular membership depends on a valid underlying right or title, compliance with the societyβs governing documents and the statutory membership process.
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Source: Bombay High Court
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