Terrace Leakage and Repair Rights: Affirming the Society’s Responsibility to Members

 

Sunil Mahadev Dali v. Hirji Baug Co-operative Housing Society Ltd.

Co-operative Court No. III, Mumbai; Dispute No. CC/III/230/2021

 Introduction

Whether a co-operative housing society is liable for damage caused by leakage from its terrace has repeatedly arisen before courts in Maharashtra. The issue becomes particularly contentious where the leakage originates from a common terrace but the consequential damage occurs inside a member’s flat. Societies frequently contend that repairs inside the flat constitute “internal repairs” and are therefore the responsibility of the individual member.

The judgment dated 10 August 2026 of the Co-operative Court No. III, Mumbai in Sunil Mahadeo Dali v. Hirji Baug Co-operative Housing Society Ltd., Dispute No. CC/III/230/2021, provides a useful application of the bye-law framework to this recurring problem. The Court held that where damage inside a top-floor flat is established to have resulted from seepage or leakage through the Society’s terrace/common portion, the Society is liable to undertake the consequential repairs.

The decision is particularly significant when read with the Bombay High Court judgments in Humble Home Co-operative Housing Society Ltd. v. Sham Balani and Rakesh Talwar v. Cosmopolitan-1 (Safal Complex) Co-operative Housing Society Ltd., as well as the Supreme Court’s jurisprudence concerning the legal character and binding effect of co-operative society bye-laws.

The Facts in Sunil Mahadev Dali

Sunil Mahadeo Dali was a member of Hirji Baug Co-operative Housing Society Ltd. and occupied Flat No. 92 on the fourth floor of Sumantinath Apartment, Sewree, Mumbai. The terrace of the building was situated immediately above his flat.

According to the member, rainwater seepage and leakage from the terrace caused damage to the ceiling of his flat. Complaints had been made to the Society from 2015 onwards. Proceedings followed before the Assistant Registrar, who issued directions concerning repairs to the terrace and the affected portions of the flat. A licensed structural engineer engaged by the Society also inspected the premises.

The Society disputed liability. Its principal contention was that whatever damage existed inside Flat No. 92 constituted an internal repair for which the member was responsible. It further disputed the contention that the leakage originated from the terrace.

The member therefore approached the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960, seeking a direction to the Society to undertake the repairs at its own cost, with reimbursement sought alternatively.

An important feature of the evidence was that although the member entered the witness box and deposed that the damage was caused by terrace leakage, the Society did not cross-examine him. It also did not examine the structural engineer or any other witness to establish that the leakage originated from an internal source.

The Governing Bye-law

The principal provision considered was Bye-law 160(a)(xvii), which specifically deals with damage caused by rainwater leakage through the terrace.

As recorded in the judgment, the provision covers damage to:

“the damaged ceiling and plaster thereon in the top floor flats, on account of the leakage of the rain water through the terrace.”

The importance of the provision is immediately apparent. It does not stop at imposing upon the Society an obligation to repair the terrace itself. It expressly contemplates consequential damage to the ceiling and plaster of top-floor flats caused by terrace leakage.

The bye-law must therefore be distinguished from provisions dealing with repairs arising from sources exclusively within the individual flat, such as internal plumbing, toilets or sinks.

The legal question consequently cannot be answered merely by asking where the repair is physically required. The source of the damage must first be identified.

Source of Damage, Not Merely Location of Damage

The Co-operative Court rejected the Society’s argument that the expression “internal repair” automatically made the member liable.

The Court observed that where damage inside a flat is caused by an independent internal source, the Society may not be liable. However, where the damage is consequential upon leakage from the terrace or a common structural portion under the control of the Society, the fact that the damage is physically inside the flat does not by itself transfer responsibility to the member.

On the evidence before it, the Court found that the member’s flat was immediately below the terrace, complaints regarding terrace leakage had admittedly been made, the Society had itself undertaken terrace repairs and had engaged a structural engineer, while no affirmative evidence had been produced to establish an alternative internal source.

The Court accordingly held, on the preponderance of probabilities, that the damage was consequential upon terrace/common-area leakage and that the Society was responsible for the necessary repairs.

The Bombay High Court in Humble Home

The principle is not new.

In Humble Home Co-operative Housing Society Ltd. v. Sham Balani & Anr., W.P. No. 7231 of 2002, decided on 28 June 2006, the Bombay High Court considered a dispute concerning leakage and repairs to portions of a flat situated below a terrace.

The Society sought to rely upon the status and use of the terrace. The High Court, however, focused upon the repair obligations created by the applicable bye-laws. The relevant bye-law placed responsibility upon the Society for repairs concerning the terrace, parapet walls and roof, including provisions dealing with damage to the ceiling and plaster of top-floor flats arising from rainwater leakage.

The decision is important because it demonstrates that private or exclusive use of a terrace does not necessarily determine the incidence of repair liability. The governing bye-laws remain central to the inquiry.

Cosmopolitan-1 (Safal Complex): The Recent Bombay High Court Authority

The most directly relevant recent authority is Rakesh Talwar & Ors. v. M/s Cosmopolitan-1 (Safal Complex) Co-operative Housing Society Ltd. & Ors., W.P. No. 10183 of 2018, decided on 2 September 2025.

The Society had incurred expenditure on repairs involving cracks, leakage and seepage and sought to recover expenditure relating to internal repairs from members. Several members whose flats were on the top floor resisted the recovery, relying upon Bye-law 160(a)(xvii). (indiankanoon.org)

The Bombay High Court examined the applicability of the bye-law and upheld the directions requiring implementation of the bye-laws. The Court specifically observed:

“Once Model Bye-Laws are adopted by the Society they have to be followed.”

The Court further held that if members in a Special General Meeting resolved to collect repair funds contrary to Bye-law 160(a), such a resolution could not be permitted. In the case of the terrace flats, the Society could not impose upon the members expenditure which fell within the specific scope of Bye-law 160(a)(xvii).

This decision provides an important complement to Sunil Mahadev Dali. While Cosmopolitan-1 concerned the recovery of repair expenditure from terrace-flat owners, Dali concerned the Society’s obligation to undertake the consequential repairs inside the flat. Both decisions proceed from the same underlying proposition: the repair liability must be determined by the applicable bye-laws and the factual source of the damage.

The Supreme Court and the Status of Bye-laws

There is, however, an important qualification concerning the legal status of bye-laws.

In Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, (1969) 2 SCC 43, the Supreme Court held that bye-laws of a co-operative society do not have the force of statute. They regulate the internal management, business and administration of the Society and may be binding upon persons affected by them, but they are not equivalent to statutory provisions.

This principle does not mean that bye-laws can simply be ignored.

The correct position is that the Society and its members are governed by the statutory framework constituted by the Maharashtra Co-operative Societies Act, the Rules and the validly adopted bye-laws. A General Body resolution must operate within that framework.

Thus, the proposition emerging from Cosmopolitan-1 is not that a bye-law is itself “a statute”, but that a Society cannot ordinarily use an ordinary resolution to impose upon its members an obligation which its applicable bye-laws expressly allocate to the Society.

This distinction is important in understanding the jurisprudence correctly.


--AI Assisted

Comments

Post a Comment

Popular posts from this blog

The International Games and ESports Tribunal (IGET) and the RIOT Games Dispute Resolution Initiative

Image
  THE INTERNATIONAL GAMES & ESPORTS TRIBUNAL & RIOT GAMES DISPUTE RESOLUTION INITIATIVE   1.        Introduction The International Games and Esports Tribunal (IGET) is an independent, not-for-profit body that resolves disputes within the global video game and esports industries. Established by the Esports Integrity Commission (ESIC) and the World Intellectual Property Organization (WIPO), IGET offers mediation and arbitration services for issues related to contracts, intellectual property, economics, and competition. Its mission is to provide a transparent, fair, and accessible process for resolving conflicts while supporting industry growth.   2.       Purpose Mediation and arbitration in gaming and esports provide faster, cost-effective, and confidential alternatives to court, helping resolve disputes like commercial and IP issues through expert-led processes. IGET offers specialized services...
Read more

Permanent Establishment arising out of "Exploration of Natural Resources"

Permanent Establishment arising out of “Exploration of Natural Resources” In the absence of a specific clause pertaining to “exploration for mineral oils, natural resources” in DTAA between India and other countries in Article 5 as an exemption from being a Permanent Establishment (“PE”) through duration, the income arising from providing services related to “exploration of natural resources” in high seas or land shall be considered as a “business income” in India.   Klaus Vogel in his Commentary on Double Taxation Conventions, Third Edition(para 44, pg294)states with regard to Article 5(2),while referring to exploration of natural resources as mentioned at subparagraph (f) , that since this sub para does not include exploration and only refers to extraction of natural resources, and since it has not been possible to arrive at a common view on the basic questions of attribution of taxation rights and of the qualification of the income from exploration activities, the con...
Read more

Shailaja Krishna v. Satori Global Ltd.: Reinforcing NCLT Jurisdiction in Corporate Fraud Disputes

Image
In "Shailaja Krishna v. Satori Global Ltd. (2025)", the Supreme Court set aside the NCLAT's order, reinstating the NCLT's 2018 ruling that restored Shailaja Krishna as majority shareholder and director, finding her 2010 resignation and 98% share transfer via a fraudulent gift deed, procured through coercion and blank signatures, void ab initio under the Companies Act. The Court affirmed NCLT's plenary jurisdiction to investigate fraud in oppression and mismanagement petitions when intrinsic to the dispute, nullifying subsequent board actions. This ruling underscores robust safeguards against mala fide ousters in closely held companies, reinforcing Krishna's control. Case summary is divided into 2 parts. Part A summarises the Judgement of Supreme Court of India and Part B summarises the Order of NCLAT.  A.     SUPREME COURT OF INDIA Case Brief: Mrs. Shailja Krishna v. Satori Global Limited & Ors. Case Details: Citation: (2025) INSC 1065 Court: Sup...
Read more