Legal Question in Banking Law in India

19.02.2015

Dear Sir / Madam,

If the outgoing member has paid and settled all the Society Maintenance dues till date, the Society can only refuse to admit the new member if his / her bonafides and credentials are suspect, and if the Society is convinced that the incoming member is not going to use the flat for purposes as permitted by the bye-laws and rules and regulations of the Society. For example, if the Society is purely for residential purposes, and if the Society has reason to believe that the incoming member is going to use the flat for purely commercial usage, the Society is entitled to refuse / reject membership to the incoming member. But it is binding on the Society to issue a letter to the outgoing member clearly mentioning the reason(s) for refusal to grant the No Objection Certificate (NOC) for sale. Should this not be the case and it just be sheer harassment, you should file a representation before the Dy. Registrar of Co-operative Housing Societies to intervene and issue directives to the Society to immediately issue the NOC. Since the issue is primarly between the member and the Society, the Bank granting the home loan cannot issue a legal notice to the Society.

Regards,