A Mumbai Society Built Extra Floors for Its Members. Four of the New Flats Went to the Contractor. The Bombay High Court Took Two Back.

In 1996 a housing society in Santacruz, Mumbai, resolved to buy TDR, build extra floors on its two buildings and give the new flats only to its own members, at cost. By 2000, four of the new flats had gone to the directors of its contractor, who were relatives of the family holding half the flats in the building. On 24 September 2026 the Bombay High Court held both sets of allotments arbitrary. It left two flats with the directors because it was too late to take them back, and ordered the other two handed to the members who had lost out, on payment of ₹2.50 crore.

The case

The petition is Writ Petition No. 751 of 2019, Dr. Omprakash B. Soniminde & Anr. v. Le Chateau Co-operative Housing Society Ltd. & Ors., with Interim Application No. 15802 of 2024, in the High Court of Judicature at Bombay, neutral citation 2026:BHC-AS:39093, CNR No. HCBM010477882018. It was heard by Sandeep V. Marne, J., reserved on 31 August 2026 and pronounced on 24 September 2026. The judgment runs to 39 pages.

It challenged a Co-operative Court award of 30 January 2017 dismissing the members' dispute, the Co-operative Appellate Court's order of 11 January 2018 upholding it, and the review order of 13 July 2018 (paragraph 2).

The facts

The land is Plot No. 14, TPS No. IV, Santacruz, 1,164 square metres, carrying the society's building Le Chateau (12 flats) and a tenanted building, Shamrock. The developer conveyed the land to the society (paragraph 3).

Paragraph 23 describes the membership. Of the 12 flats in Le Chateau, four were held by the Mankani family and two by the Harjanis, "who were NRIs and relatives of Mankani". Six of 12 flats were therefore with one extended family. The contractor's directors were also close relatives of the Mankanis.

The timeline, from paragraphs 4, 5, 21 to 32 and 34:

The society's letter of 26 August 1997, quoted at paragraph 27, records a detail NRI members will recognise: members flew in from Dubai and Singapore to attend the meeting on the unpaid contributions.

What the court held

The members were at fault on the money. Paragraph 33: the petitioners "are to be blamed for not making payments" despite repeated chances. Paragraph 45 calls their non-payment an "admitted position".

The society still could not hand the flats to the contractor. Paragraph 33: if members did not pay, "the society ought to have auctioned those flats", and the flats could have fetched a much higher price than the contractor's dues. Paragraph 36: the contractor's right was to payment under the 1996 agreement, and its remedy for unpaid bills was a suit for recovery. Its directors had no right to flats in the building.

The second pair of flats was worse. Paragraph 34 describes the decision to build and allot 801 and 802 to the same directors as "like adding premium to the illegalities already committed". Paragraph 48: the case "involves stealing of benefits meant for members of the society" by the contractor's directors.

The numbers. Paragraph 51 takes the contractor's own figures at the escalated rate of ₹4,800 per square foot: at most ₹6.24 crore payable, against about ₹4.62 crore paid by members, leaving a deficit of about ₹1.62 crore. For that deficit, the court said, the directors were "already rewarded" with flats 701 and 702. The contractor's counsel put the current value of 801 and 802 at ₹7.31 crore (paragraph 19).

A procedural point. The petitioners had filed a separate dispute over the eighth-floor resolution, which was dismissed for non-prosecution in 2018. Paragraphs 38 to 42 hold that this did not bar their claim to allotment of 801 and 802, because that separate dispute never asked for it.

The order

Paragraph 52:

• The Co-operative Court and Appellate Court orders are set aside, and the dispute is decreed in part.
• Flats 701 and 702 stay with the contractor's directors, who have occupied them for a long time (paragraph 45).
• The petitioners are entitled to flats 801 and 802, and the society must cancel the directors' allotment and enter the petitioners as members for those flats.
• The petitioners pay ₹2,50,00,000 to the two directors within six weeks, and get possession on payment. If the directors refuse the money, it goes to the society in an interest-bearing deposit and the petitioners can take possession with police help.
• No past maintenance is payable by the petitioners, only from the date of possession.
• If the petitioners do not pay within six weeks, the allotment goes back to the directors.

The court said the ₹2.50 crore was not the market price, because members were entitled to the extra flats at cost of construction and TDR, the same as every other member (paragraph 48). The flats are unfinished and will cost the petitioners more to complete (paragraph 49).

What it means for an NRI flat owner in a Mumbai society

An owner abroad with a flat in a Mumbai co-operative society can face the same questions of extra floors and TDR. Four points from this judgment apply.

A general body resolution defines who benefits. Here the 1996 resolution said the new flats were for members only, and the court used it to undo a later allotment to outsiders. Keep copies of the resolutions that decide your entitlement.

Pay on the schedule the society sets, or dispute it in writing and in time. The petitioners got two flats, but lost the two they were first allotted and must pay ₹2.50 crore for unfinished ones. Paragraph 47 says they "will get penalised" for not paying on time.

A family block can control a society. Six of 12 flats sat with one extended family, and the contractor was related to them. The petitioners said they never received notice of the 1998 meeting that gave their flats away (paragraph 5). An owner who does not follow general body meetings will not see such decisions coming.

A dispute of this kind is slow. The first dispute was filed in 1999 and decided in the High Court in 2026. Our earlier reports on a breakaway society's registration being cancelled and a society's conveyance being frozen cover other ways society decisions reach an absent owner. A specific dispute belongs with a lawyer who can read the society's minutes.

FAQ

Can a housing society allot flats in new floors to its contractor instead of paying the contractor's bills? Not on these facts. On 24 September 2026 the Bombay High Court held that the contractor's remedy was a suit for recovery of its dues, and allotting flats to its directors was arbitrary.

What should a society do when a member does not pay for an extra flat allotted to them? The court said the society ought to have auctioned the flats and paid the contractor from the proceeds, rather than hand them to the contractor's directors.

Did the members who did not pay get their flats back? Not the original ones. The court left flats 701 and 702 with the contractor's directors as it was too late to take them back. It gave the petitioners flats 801 and 802 instead, on payment of ₹2.50 crore within six weeks.

Did the court award the flats at market price? No. The court held members were entitled to the extra flats at cost of construction and TDR, the same as other members, and fixed ₹2.50 crore on the petitioners' own offer. The contractor had put the flats' value at ₹7.31 crore.

Were NRI members involved? The judgment records that two of the 12 flats were held by NRI members related to the family holding four others, and that members flew in from Dubai and Singapore for a 1997 meeting on the payments.

66 MG Road newsdesk

Sources

• Dr. Omprakash B. Soniminde & Anr. v. Le Chateau Co-operative Housing Society Ltd. & Ors., Writ Petition No. 751 of 2019 with Interim Application No. 15802 of 2024, High Court of Judicature at Bombay, 2026:BHC-AS:39093, CNR No. HCBM010477882018, Sandeep V. Marne J, reserved 31 August 2026, pronounced 24 September 2026, 39 pages. The court's own PDF was downloaded from the recent-judgments listing on 26 September 2026, 363,513 bytes, sha256 c4e9850a205c3d39eeb62731c692159d1c9d4524163ad5a18541bab9ebe7adcb, and read in full. The download link carries a session token, so we cite the listing: https://bombayhighcourt.gov.in/bhc/front/recentjudgment
• The 1996 and 1998 resolutions, the 1996 agreement and the 1997 letters are quoted as the judgment reproduces them at paragraphs 21, 24, 27 to 30 and 32. We did not see the society's records ourselves.