The Delhi High Court on 30 September held that a cooperative housing society cannot deny flat buyers membership and thereby deprive them of their rights in the property merely because the sale documents executed by a bank contain an incorrect description of the flat's area.

A Division Bench comprising Justices Prathiba M. Singh and Dinesh Bhatt directed the cooperative society to issue the petitioners' membership certificate within one week, forward it to the Registrar of Cooperative Societies (RCS), and make their membership operational from 2 July 2025. The judges observed:

“After hearing the Society, the Court is clearly of the opinion that the Society cannot deprive the Petitioners of their rights in the property by not giving them the membership. Firstly, the Petitioners cannot be blamed for the wrong description of the area of the flat in the registration documents executed by the Bank of Baroda. Secondly, the Petitioners having purchased the property in the bank auction proceedings, such errors appear to have crept in the sale deed.”

The petitioners had purchased Flat E-304 in Ispat Apartment, Dwarka, for Rs. 1.91 crore in a Bank of Baroda auction on 28 March 2024 under SARFAESI proceedings. The sale documents described the flat as measuring 95.54 square metres instead of the actual area of 113 square metres.

The RCS directed the Society to grant membership to the petitioners on 2 July 2025. However, the Society continued to withhold membership, relying on a claim by former owner Lalit Kumar Jha over 18 square metres of the property.

The Court noted that the auction notice correctly identified the Society and, therefore, there was no dispute regarding the identity of the flat. The only discrepancy concerned its floor area ratio (FAR). It noted that the petitioners had paid Rs. 1.91 crore for the flat and held that Jha's claim over 16% of the property was an attempt to obstruct the petitioners from obtaining membership. It added:

“The auction notice described the property with the correct name of the Society and hence the identity of the Flat is not in dispute. The only issue remains is the FAR. The Petitioners have paid a huge amount of consideration of Rs.1,91,00,000/- for purchasing the flat in the bank auction. The claim of Lalit Kumar Jha to 16% of the flat is a completely dishonest attempt to create spokes in the wheel for the Petitioners who are running from pillar to post for obtaining membership.”

Further, the Bench noted that the RCS had directed the Society to grant membership on two occasions, on 2 July 2025 and 25 May 2026. It criticised the Society for continuing to support Jha's claim despite these directions. It said the Society ought to have granted membership subject to an indemnity bond and held that its conduct was not bona fide.

Accordingly, the High Court directed the Society to issue the membership certificate within one week, forward it to the RCS and make the membership operational from 2 July 2025. It also directed the Society to pay Rs. 25,000 as costs to the petitioners within two weeks.

For Petitioners: Devender Mudgal, in person

For Respondents: Advocates . Shashi Pratap Singh, Niwas Kumar

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Case Title :  DEVENDER MUDGAL & ANR. versus REGISTRAR OF COOPERATIVE SOCIETIES & ORS.Case Number :  W.P.(C) 13715/2026CITATION :  2026 LLBiz HC (DEL) 1070
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