The Supreme Court has held that cooperative housing societies should permit only those persons to become members who are in real need of accommodation.
The apex court also ruled that cooperative housing societies could expel a member who owns more than one property.
A bench, comprising justice MK Sharma and justice AR Dave, set aside a Delhi High Court judgment that restored the membership of a doctor in a cooperative society, despite his having residential accommodation in south Delhi.
It said cooperative societies suit the needs of the poor and the weak. As a cooperative society is a voluntary association, the bench held, its object cannot be to earn profit but to enable its members to improve their economic condition.
Upholding the termination of Parmanand Sharma's membership by Ishwar Nagar Cooperative Housing Building Society, the bench further held that possession of another residential premises is in violation of the society's by-laws.
In 1968, Sharma bought a property (A-19/A, Kailash Colony, New Delhi) in his family's name in. While the ground floor was being used to operate a nursing home, Sharma used the other floors as residence.
In 1978, however, the cooperative society terminated Sharma's membership because he owned another residential property. The Delhi High Court, however, quashed the termination, upon which the society moved the apex court.
Upholding the appeal, the Supreme Court said, "In the garb of a cooperative society, a person cannot be permitted to avoid the stress of market prices and take a concessional advantage in obtaining a plot."
The apex court rejected the doctor's plea that the law cannot be applied retrospectively, as at the time of purchasing the property, he was governed by the Bombay Co-operative Societies Act and there was no such prohibition. The Delhi Cooperative Societies Rules, he had pointed out, came into effect after his purchase of properties.