Synopsis

The petitioners were allotted flats in a cooperative housing society after membership was transferred to them from their brothers/father. A complaint alleged that the original members (transferors) owned a residential property in Shalimar Bagh along with their wives, attracting disqualification under Rule 25(1)(c)(i) of the Delhi Cooperative Societies Rules, 1973. The Registrar cancelled the membership, and the Financial Commissioner upheld the order. The Delhi High Court set aside the orders, holding that: (i) the property was owned by the wives in their own capacity as evidenced by Wealth Tax returns; (ii) there was no evidence that the wives lacked independent resources; (iii) the share of each original member was less than 66.72 sq. metres, falling under the proviso exemption; and (iv) following the Division Bench judgment in J.K. Gupta v. Registrar of Coop. Societies, the disqualification was not attracted. The court directed the society to recommend the petitioners’ names to the DDA for allotment.

Court: High Court of Delhi at New Delhi

Coram: Justice Prathiba M. Singh and Justice Madhu Jain

Date of Judgment: 16th April 2026

Citation: W.P.(C) 6843/2024 & 6845/2024 (2026:DHC:3208-DB)

Core Law: Delhi Cooperative Societies Act, 1972; Delhi Cooperative Societies Rules, 1973 – Rule 25 (disqualification of membership)

2. Legal Framework

Major laws and provisions involved

• Delhi Cooperative Societies Act, 1972 – Section 80 (revision to Financial Commissioner), Section 115 (review)

• Delhi Cooperative Societies Rules, 1973 – Rule 25 (disqualification for membership of housing society), specifically Rule 25(1)(c)(i) and proviso (exemption for share less than 66.72 sq. metres)

Key legal principles applied

• Disqualification under Rule 25(1)(c)(i) – interpretation of “in the name of”: The phrase “owns a residential house… in his own name or in the name of his spouse” means the ownership must be of the member, though it may stand benami in the name of the spouse. However, if the spouse purchases the property from her own funds and it stands in her own name as an independent legal entity, the disqualification is not attracted.

• Burden of proof on the Registrar: To invoke disqualification, the authority must prove that the property is owned by the member (benami). Mere suspicion or speculation is insufficient. Wealth Tax returns and Income Tax returns are relevant evidence.

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