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rangnath.kulkarni (nil)     28 April 2022

Sale of building and appruent land to Reality company.

I am member of a CHS in Mumbai.There are 20members.19members are willing to sale the assets of CHS to one Reality company at agreed price.One Members has not agreed to sale his share in CHS.What is the way out? Can 19members complete the sale of their shares ? What are the legal impediments in such deal ?.pl.advice.I can hire expert lawyer from Mumbai if suggested by expert to take forward the deal


 6 Replies

Advocate Y.K. Mehrotra (Advocate)     28 April 2022


  1. Is there any co-ownership in the concerned property?
  2. Does the 20th odd member hold individual shares?

If the answer to the first is NO and Answer to second is Yes then you are good to go subject to the terms of negotation.

I am an advocate based in Delhi and can take charge of this matter if you may advise so.

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Kishor Mehta (CEO)     29 April 2022

In Mumbai Maharashtra any registered CHS building can not be sold as a unit, the 19 members can sell their individual flats to the realty company. The style of the registered CHS remains unaltered, the member not desiring to sell his flat remains a member of the CHS. The purchaser of 19 flats becomes member of the CHS with power of only one vote, as in Maharashtra CHS a single purchaser of multiple flats gets right of one vote only.

rangnath.kulkarni (nil)     01 May 2022

kishorji, in the instant case,each member will sale and transfer his own flat individually and the members of the society by a resolution in SGM will agree to convey the assets and the plot of land in the name of single buyer and all members will collectively execute the conveyance. which law prohibits this transaction. My querry is if one member is not agreeing ,then what is the legal way out to complete the deal.

Kishor Mehta (CEO)     02 May 2022

A society can be dissolved by a) its members b) the Registrar c) the Court or d) the Government. Below is the procedure for dissolution.

  1. A special body meeting has to be called upon where it has to be decided if the society intends to dissolve forthwith or at a later time agreed upon by the members.
  2. A notice should be sent to the members, creditors, vendors, and to any associated societies and entities with which it may have entered into a contract.
  3. Such a resolution should be passed by 3/5th majority votes.
  4. As per the rules of the society, disposal and settlement of the society has to be undertaken. This includes settling claims and liabilities.
  5. Within 15 days of the authorized resolution at the meeting, the society should send a copy of it to the Registrar, as without their approval, the resolution cannot be considered valid. A report of the settlement has to be sent along with details of any surplus left over. If the State Government is a member/contributor/affiliate of the society in any form, its approval is needed for dissolution too.
  6. The Registrar inspects the case and if he is satisfied with the due process undertaken by the society and ensures that no liabilities or assets, he passes the order to dissolve the society and deletes the name of the society from the register of societies and issue a certificate of dissolution to the society.
  7. If the Registrar is not satisfied after review, he issues a notice in the official gazette (the cost of which is to be borne by the society) of the proposed dissolution, thereby inviting objections, appeals from members and for the disposal of unpaid dues towards claimants and creditors within 2 to 3 months.
  8. If no objection is raised and no member comes forth to appeal against the resolution, the order is considered passed after the expiry of the time period of 2-3 months. If an objection is raised during that period, the order is not considered in effect until the Appellate steps in and takes the process ahead.

Section 13 of the Societies Registration Act 1860 includes the following provision – “In case of any dispute relating to adjustment of affairs of a society in case of dissolution, the matter has to be referred to the Principal Court of Civil Jurisdiction of the District where the Registered Office of the society is situated.”

Once the society is dissolved, its activities come to a standstill, and even after the settlement of claims and pending dues, the profits (if any) are not distributed among the members. Instead, the law states explicitly that profits are handed over to ‘some other society, to be determined by the votes of not less than three-fifths of the members present personally or by proxy at the time of the dissolution’. Some states have a subsection clause which states that if the members decide by a majority, the property after settlement may be conferred to the State Government for utilisation in any other project.

rangnath.kulkarni (nil)     04 May 2022

very nicely explained Sir.Thank you. In case the 19out of 20 members desire to go forward for disolution,are you available to hold brief for society so that proper presentation of case is done before the Registrar for obtaining disolution certificate.

Kishor Mehta (CEO)     04 May 2022

Thank you for the offer,  currently I can not spare time for your matter. 

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