Abstract
Nowadays, due to urbanisation and migration of people to different cities and states for employment, education has increased due to which the demand for flats and apartments has also increased because people cannot always buy land or build their own houses, thus they prefer flats and apartments. These flats are generally managed by Cooperative Housing Societies, which is a group of individuals who voluntarily unite to manage and maintain residential properties. Thus, when a person wants to sell a flat, the society often asks for No Objection Certificate which is a certificate issued by a Cooperative housing society indicating that it has no objection to the transfer or sale of a flat. However, a society can refuse to issue a NOC only on reasonable and lawful grounds like unpaid dues, violation of society bye-laws. Disputes arise when a society refuses to issue a NOC without any reasonable ground, which creates obstacles for flat owners in exercising their property rights. This article examines the concept and role of cooperative housing societies, the validity and invalidity of refusal of NOCs and the legal remedies available to aggrieved flat owners.
Meaning and Concept of Cooperative housing society and NOC
According to Part IXB of the Constitution of India a “co-operative society” means a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any state. In simple words it is a voluntary association of persons who manage and maintains a residential property or complex. Its primary purpose is to provide proper maintenance and management of common area like lifts, parking, security, and water supply. It can make rules regarding maintenance, and transfer of flat but, its powers are limited and it cannot unnecessarily interfere with the owner’s rights to sell his or her flat. The cooperative society works according to bye- laws which are the set of rules and regulations that governs how an organisation internally manages its affairs..
Now, A No objection certificate is a document issued by cooperative housing society stating that it has no objection to the sale or transfer of a flat. Thus, it generally confirms that there are no pending dues related to the flat. However, the society cannot misuse this power to issue NOC by demanding unlawful charges, impose unreasonable conditions or unjustifiably delay the transfer process.
Article 300A of the Constitution of India states that no person shall be deprived of his property except by authority of law which means a cooperative housing society cannot impose arbitrary restrictions that unnecessarily interfere with owners property rights.
Whether NOC is legally mandatory or not?
No, an NOC isn’t legally mandatory for the transfer or sale of the flat which means the housing societies cannot stop a person from selling their flat just because they don’t have a prior NOC. Under cooperative societies act, there is no section which mandates or makes NOC compulsory for the flat sale or transfer.
Whereas under the standard Model bye-laws no.38(d) which is used by housing societies, it is clearly mentioned that a NOC from the society isn’t required to transfer shares and interest of a buyer.
Valid Grounds for refusal of NOC
A cooperative society can refuse to issue a NOC on the following grounds are;
1. Unpaid maintenance or other dues – If a flat owner hasn’t paid maintenance charges or other lawful charges to the society, then in such case the society can refuse to issue a NOC to the seller until the dues are cleared.
2. If the buyer is legally disqualified from becoming a member then the society can refuse approval.
3. Pending legal disputes over the flat – If there is a court dispute regarding the ownership of the flat or any court order stopping the transfer, the society may refuse the NOC until the matter is resolved.
4. Failure to submit the required document – If the seller does not provide documents required under the law or society bye-laws, then the society can delay or refuse the NOC until proper documents are submitted.
Also, if an authority refuses to issue a NOC, it must give written reasons supported by the relevant law. If the refusal is illegal or arbitrary, the affected person can approach the High Court and seek a Writ of Mandamus to compel the authority to act lawfully stated under Mohinder Singh Gill v. Chief Election Commissioner (1978)
Invalid Grounds for refusal of NOC
1. Asking for extra money or charges – A society cannot demand extra money or charges beyond what the law permits for issuing NOC.
2. Personal grudges – The society cannot refuse to issue a NOC because the member don’t like the buyer or don’t want a particular person to live in a society.
3. Delaying the NOC without any reason – The society cannot keep the application pending for months or refuse the NOC without giving a proper written reason.
Case laws and judicial interpretation
1. Mohinder Singh Gill v. Chief Election Commissioner (1978) – In this case, the court held that the administrative authority must justify and give reason for their decision. Therefore if a authority refuses to issue a NOC then it must provide a written reason supported by relevant laws. If the refusal is illegal or arbitrary then the person can appeal to high court and seek a Writ of mandamus to compel the authority to act according to law.
2. Punam Co-Operative Housing Society v. Pratap Issardas Bhatia and Others (2025) – In this case, the owners of Flat No. 1 wanted to sell their flat along with some additional areas, including an open garden area. They asked the Society to give an NOC for the transfer. However, the Society refused because it claimed that the garden was not the personal property of the flat owners but belonged to the Society. The Bombay High Court held that the garden area was indeed the property of the Society, and the flat owners had no legal right to sell or transfer it to another person. Therefore, the Society’s objection was justified. Thus, the key principle of this case was that the housing society can refuse an NOC when the transfer involves an area that doesn’t belongs to the flat owners legally. Such a refusal isn’t arbitrary because it protects society’s lawful rights.
3. Tanvis Diamoda Co-Op Hsg Society Ltd. v. State of Maharashtra( 2025 SCC OnLine Bom 4617) – In this case, the previous owner of the flat had some maintenance dues and others charges which were to be paid to cooperative society but the flat owner sold his flat to a new purchaser under SARFAESI act, and the purchaser applied for transfer of membership. The society refused to transfer the membership because the outstanding dues of the previous owner has not been cleared. Here, the Bombay high court held that the refusal was valid and justified.
4. Damodar G. Nagalia v. ACIT (ITAT Mumbai) 24(1) – In this case, the tribunal held that payment made to obtain the NOC from a cooperative housing society is a necessary part of completing the sale of flat and therefore is a valid expense.
5. Shri Girish Vinod Chandra Dhruva V. Smt. Neena Paresh Shah (2023) – In this case, two parties entered into a agreement for the sale of a flat. The buyer give some amount in advance but didn’t pay the remaining amount within the agreed time due to which the seller cancelled the sale agreement. The buyer went to the court and asked the judge to force the seller to complete the sale. The Bombay high court held that the buyer didn’t show the proper readiness and willingness to complete the payment on time and since the conditions agreed for sale weren’t followed the buyer cannot force the sale.
Legal remedies available to the flat owners
If a housing society refuses to issue a NOC to a flat owner without a proper notice then the flat owner can seek these following remedies;
1. Send a legal notice – The flat owner can send a legal notice to the society managing committee asking why the NOC has been refused and requesting the society to issue the NOC within a reasonable time.
2. Approach the registrar/deputy registrar of cooperative societies – If still the society does not issue the NOC, the owner can file a complaint before the registrar or deputy registrar, who supervises cooperative societies under section 79 of Maharashtra co-operative societies act.
3. File a case before the Consumer Commission – Under consumer protection act, If the society’s unfair action causes delay, inconvenience, or financial loss to the owner then the owner can approach the consumer commission and seek appropriate relief or compensation.
4. Approaching the civil court – If the managing committee threatens illegal eviction or cuts off the utility services unlawfully then the members can approach the civil court and ask for injunction (stay order) or tort compensation .
5. ADR mechanism -As per section 70 of the j&k cooperative societies act, 1989 the dispute can also be resolved through mediation, where both the owner and society discuss the issue with the help of a neutral third person and try to reach a mutual settlement.
Conclusion
A cooperative housing societies are established to ensure proper management and maintenance of residential property as per bye-laws of the society. However, they shouldn’t use their powers illegally or unlawfully to create obstacles in the lawful transfer of a flat. A society has the right to verify the pending dues but it cannot arbitrarily refuse to issue a No Objection Certificate or impose unreasonable conditions which means the society can only refuse to issue a NOC on the valid and reasonable grounds such as pending dues like maintenance dues, or any ongoing legal dispute, so these are some of the grounds on which the society can refuse to issue a NOC and is valid and legal.
References
The Constitution of India, Article 300A
The Jammu and Kashmir Cooperative Societies Act, 1989
Mohinder Singh Gill v. Chief Election Commissioner (1978)
The Real Estate (Regulation and Development) Act, 2016
Punam Co-Operative Housing Society v. Pratap Issardas Bhatia and Others (2025 SCC OnLine Bom 4085)
Tanvis Diamoda Co-Op Hsg Society Ltd. v. State of Maharashtra(2025 SCC OnLine Bom 4617)
Damodar G. Nagalia v. ACIT (ITAT Mumbai) 24(1)
Shri Girish Vinod Chandra Dhruva v. Smt. Neena Paresh Shah (2023)
Consumer Protection Act, 2019
The Maharashtra cooperative societies act, 1960
