Home / Money / Personal Finance /  Can I buy land in a cooperative society without obtaining NOC?

Can I buy a plot of land in a cooperative society with a sale deed that mentions that it is mandatory to obtain no objection certificate? Will the co-operative society create any problem if I buy without the said form?

Please note, I do not wish to become the member of the society after the purchase.

—Name withheld on request

Any restriction imposed under an absolute sale deed which interferes in exercising ownership rights by purchaser, is not valid. Section 10 of the Transfer of Property Act, 1882 provides as follows:

‘Condition restraining alienation. — Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void...’

In the instant case, the requirement of taking no objection certificate from the cooperative society for transfer of the subject plot, will tantamount to an absolute restriction on sale as the cooperative society may refuse permission without any basis. Therefore, the said requirement is not valid and need not be complied with.

If there are any dues payable to the cooperative society by the allottee i.e., the purchaser of the property from the said society, the said society will have a lien on the property to the extent of the dues payable to it by the purchaser of the said property.

In providing this opinion, we have assumed that:

(i) the sale by the cooperative society to the present owner is by way of execution of an absolute sale deed, registered with the office of the jurisdictional sub-registrar; and (ii) the subsequent purchaser of the plot need not become a member of the said cooperative society.

However, if the sale of plot requires transfer of membership of the society to the new purchaser, the stipulation to obtain no-objection from the society, could be a valid requirement. Further evaluation of facts will be necessary in such context.

Srinivas BR is partner at DSK Legal.

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