Bombay HC Calls Society's Flat Allotment to Contractor's Directors 'Arbitrary'

The Bombay High Court has ruled that a cooperative housing society in Santacruz, Mumbai, acted arbitrarily when it cancelled a member couple's allotment of additional-floor flats and gave them to the directors of its contractor. Justice Sandeep Marne partly allowed the couple's petition and set aside the orders of the Cooperative Court and the Cooperative Appellate Court. The ruling was reported on 26-27 September 2026.

What the case was about

In 1996 the society, whose buildings are Le Chateau and Shamrock, decided to build extra floors using TDR (transferable development rights, which allow additional construction area) and FSI (floor space index, the permitted built-up area on a plot). A general body meeting resolved that the new flats would go to existing members, who would bear the construction and TDR costs.

Dr Omprakash Soniminde and his wife were first allotted Flats 701 and 702. The society cancelled that allotment for non-payment of the required contribution and transferred the flats to Ramesh and Renu Mankani, directors of the contractor, Jet Speed Developers Pvt Ltd. The couple argued the directors were not members and had no independent right over the land or building.

What the court decided

The court called the allotment to the contractor's directors clearly arbitrary. It did not disturb possession of Flats 701 and 702, since the occupants had lived there for a long time and the petitioners had not paid their contribution for those flats. Instead, it directed that the Mankanis' allotment of the unfinished, unoccupied Flats 801 and 802 in Shamrock be cancelled and the Sonimindes' names be entered in the membership register. The couple must pay Rs 2.5 crore to the existing allottees within six weeks, failing which the existing allotment revives.

What this means for housing societies

• Flats created from extra FSI or TDR should be allotted in line with the general body's resolution, which here reserved them for existing members.
• Allotting flats to a contractor or its directors, who are not members, can be struck down as arbitrary.
• Cancelling a member's allotment for non-payment should follow a transparent, documented process, because courts will examine it.
• Orders of the Cooperative Court and Appellate Court can still be corrected by the High Court in a writ petition.

Managing committees handling old or pending additional-floor projects should review the original general body resolutions and allotment records. The order sets a six-week payment window for the parties, after which the earlier allotment revives.