Zoroastrian Co-operative Housing Society Ltd v. District Registrar (2005) 5 SCC 632

Quick Summary

This case is about a housing society formed by Parsis. Its byelaw allowed only Parsis to be members and to buy property inside the society. The member’s son later tried to involve a non-Parsi builder and move towards transfers that would break the byelaw. Lower forums struck down the restriction as unfair and against the Act and the Constitution. The Supreme Court, however, restored the society’s right to follow its approved byelaw, and said such policy changes must come from the legislature, not by stretching “public policy” beyond the statute.

Issues

• Can a housing society validly restrict membership and transfers to members of one community (Parsis) through its approved byelaw?
• Is such a byelaw hit by “public policy” or any provision of the Co-operative Societies Act?
• Does the son, who became a member after his father’s death, remain bound by these byelaws?

Rules

• Under the Co-operative Societies Act, societies should not, without sufficient cause, refuse admission to a person duly qualified under the Act and its byelaws.
• Housing societies often rely on a shared bond—habits, culture, and common use—especially in India’s community-based living patterns.
• “Public policy” must be located within the Act’s framework. If the Act does not label a byelaw as against public policy, courts should be cautious before doing so.

Arguments

Judgment

The Supreme Court allowed the appeal and set aside the contrary decisions. It held that an approved byelaw limiting membership and transfers to Parsis could stand unless the statute clearly prohibits it.

• The society cannot be forced to amend its basic membership rule through litigation alone.
• Constitutional goals like non-discrimination must be advanced by legislation that amends the governing Act.
• The son, becoming a member only after his father’s death, accepted the byelaws and is bound by them.

Ratio

Public policy must be drawn from the statute. Where the Co-operative Societies Act does not brand a byelaw as invalid, courts should not strike it down merely because it seems inconsistent with broad constitutional ideals. Members who join a private society accept its approved byelaws, and those rules govern unless the law says otherwise.

Why It Matters

• Autonomy of private co-operatives reaffirmed, subject to the Act.
• Sets limits on using public policy as a free-floating tool outside the statute.
• Signals that social-equality goals in private associations need legislative action.

Key Takeaways

• Approved byelaws are binding on members.
• Public policy review must track the statute, not general ideals alone.
• Courts will not rewrite membership rules of private co-ops without statutory backing.
• Succession into membership carries the same obligations as original membership.

Mnemonic + 3-Step Hook

Mnemonic: “PARSI-BYE = PASS-BYE”

• Policy from the Act, not air.
• Restriction part of approved byelaw.
• Society autonomy respected.
• Inherting member is bound.

3-Step Hook:

1. Find the source of policy: the Act.
2. Check if the byelaw is approved and within the Act.
3. Ask if members accepted it—then it binds them.

IRAC Outline

Glossary

Byelaw

A rule adopted by a society that binds its members.

Public Policy

Legal principles the law promotes; here, it must be found within the Co-op Act.

Board of Nominees

Special forum under co-operative law for disputes involving societies.

FAQs

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