Housing societies may restrict membership, buying and selling to “particular class,” rules SC

New Delhi – In a landmark decision, the Supreme Court of India has recently ruled that a cooperative housing society may restrict its membership to a particular class of people and the same principle may be applied while selling or buying a flat in the society by an existing member.

The special Bench, comprising Justice B N Agarwal and Justice P K Balasubramanian, delivered the judgment, declaring, "We... uphold the right of the society to insist that the property has to be dealt only in terms of the bye–laws of the society and assigned either wholly or in parts only to persons qualified to be members of the society in terms of its bye–laws."

The matter came up before the Supreme Court when a Cooperative Housing Society of the Parsi community had challenged the Gujarat High Court verdict that the restriction in byelaws of the society to the effect that the membership would be limited only to persons belonging to the community would be an unfair restriction.

Former Attorney General of India and noted senior advocate, Soli J Sorabjee, appearing for the Society, contended that under Article 19 (1)(c) of the Constitution, Parsis had a fundamental right of forming an association and there was nothing illegal in agreeing to restrict the membership in it or to exclude the general public.

"Unless appropriate amendments are brought to various Cooperative Societies Acts incorporating a policy that no society shall be formed or if formed, membership in no society will be confined to a persons of particular persuasion, religion, belief or region, it could not be said that a society would be disentitled to refuse membership to a person who is not duly qualified to be one in terms of its bye–laws," the Bench ruled.

With this judgment, housing societies may restrict their membership to exclusively to particular religious, ethnic, social or cultural identities.