Right or Interest to occupy is a Species of Property and is not barred from transferability

A question arose before the Apex Court as to whether the property mortgaged to a Bank by shareholder of a Company can be attached and sold in execution of a decree obtained by Bank

A question arose before the Apex Court as to whether the property mortgaged to a Bank by shareholder of a Company can be attached and sold in execution of a decree obtained by Bank. 

It was contented before the Supreme Court that the share holder/member of a Company/Cooperative society is not the owner of the said flat and thus could not have mortgaged the flat with the banks for securing loans. The Supreme Court dismissed the plea of the Company by holding that multi storeyed flats are constructed either by Companies registered under Companies Act, 1956 or by Co-operative group housing societies. Where the Company is the builder, the flats may be sold by selling of a share of the company. Where the Co-operative society is the builder the flats may be purchased by becoming a member of co-operative group housing society. Flat owners have independent right as well as the collective right over the flat complex. The flat owners may mortgage their rights over the said flats by mortgaging the share certificate/membership certificate. It is not correct to say that the flat owners cannot sell, let, hypothecate or mortgage their flats for availing of loan without permission of the builder, society or the company. The right of the share holder over the said flat is always transferable and heritable. It was further held that neither the companies Act nor any other statute makes any provision prohibiting the transfer of species of interest to third parties or to avail of loan for the flat owner’s benefit.

Hill Properties Ltd. vs. Union Bank of India and others
(SC, 11.09.2013)