Bombay HC: Managing Committee Must Register Share Transfer If Bye-Laws Are Met

What happened

The Bombay High Court has directed the managing committee of a Mumbai co-operative housing society to register a transfer of shares and issue share certificates it had been sitting on, ruling that a committee cannot withhold registration once a transfer meets the society's bye-laws and the Maharashtra Co-operative Societies Act, 1960.

The order came in Writ Petition No. 10587 of 2025, decided by the Bombay High Court on 25 September 2025 (citation 2025:BHC-AS:40415). Five members of Jal Ratan Deep Co-operative Housing Society Ltd., Mumbai, who had acquired their shares through valid transfers from the original allottees, moved the court under Article 226 of the Constitution after the society's managing committee neither registered the transfers nor issued them share certificates. The State of Maharashtra, the Deputy Registrar of Co-operative Societies (P-Ward) and the Divisional Joint Registrar, Co-operative Societies, Mumbai Division, were also made respondents.

Who hits, and why

This lands on every managing committee handling a flat sale or a member-to-member transfer, not just the society named in the case. The petitioners' case was that they had done what the bye-laws required, and the committee simply did not act. The society's side argued procedural non-compliance, but the court was not persuaded on the facts before it, allowing the petition and directing the respondents to complete registration and issue the share certificates.

What the court held

Reading the bye-laws together with Section 22 of the MCS Act, the court held that once a transfer is in order under the bye-laws and the Act, registering it and issuing the certificate is not discretionary — it is a duty. Refusal on grounds outside the bye-laws or the Act, the court found, is arbitrary and amounts to a violation of the transferee-members' statutory rights. The ruling restates, in a fresh case, a settled point: bye-laws carry the force of law and bind the committee as much as they bind members.

The bye-law backbone this rests on

SocietySeWA's own bye-laws dataset already carries the provisions the court is applying. Bye-law 39 requires a committee or general body meeting not to "ordinarily refuse" a transfer application except for non-compliance with the Act, Rules or bye-laws — no other ground will do. If the decision is not communicated to the applicant within three months, Section 22(2) of the Act deems the transfer accepted and the transferee deemed admitted, without the committee having to do anything further. Separately, once a transfer is registered, bye-law 40 makes the transferee eligible to exercise membership rights on receipt of the society's letter or a Registrar's order under Section 22 or 23.

So what should a committee do

• •Decide transfer applications within three months of receipt, in writing, with reasons if refusing — silence past three months is deemed acceptance under Section 22(2), whether or not the committee meant it that way.
• •Refuse only on a bye-law or Act ground, never on an unrelated dispute (a parking claim, a maintenance arrear best pursued separately, a personal grievance with the transferee).
• •Issue the share certificate promptly once registration is done — bye-law 9 requires a certificate within six months of allotment, and the same discipline should apply once a transfer is registered.
• •Committees currently sitting on transfer files should treat this ruling as the cue to clear the backlog before a member has to go to court to get what the bye-laws already entitle them to.