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1981 DIGILAW 297 (BOM)

Khandelwal Engineering Co. v. Modern Usha Colony Co-operative Housing Society Ltd. and others

1981-11-16

B.LENTIN

body1981
JUDGMENT - Lentin B.N., J.-The petitioner a building contractor public limited company owned plot of land which was sub-divided into 4 plots at Borivali. The Company on 9th of November, 1971 entered into an agreement with the Co-operative Housing Society through its Chief Promoter for the sale of 4 plots of land and construction of 16 flats thereon at the price of Rs. 11,77,600 inclu­sive of the cost of development of 4 plots. A sum of Rs. 5,88,000 was paid as earnest money to the Company and it was provided by an agreement that the petitioner Company alone shall be entitled to construct the buildings con­taining flats to be allotted to the proposed members and the petitioner. Com-pany shall continue to be in possession of the plots until the buildings were completed and the price of the land and all the tenements were received by the petitioner Company and that a covenant to that effect shall be included in the Deed of Conveyance. The Society was registered on 21-3-1972 and the Chief Promotor was elected as the Chairman. On the 16th of April, 1972, the General Body Meeting authorised the Managing Committee to enter into a building construction agreement with the petitioner on the basis of a package deal for the construction of 16 buildings containing 256 flats on 4 plots of land. By a conveyance dated 16th May, 1972, in consideration of the sum of Rs. 5,88,000 paid to the petitioner as earnest and in consideration of the Society covenanting to pay the balance price of Rs. 5,89,600 on or before 31-12-1972, the petitioner conveyed the 4 plots of land to the Society. On 27-7-1973, an agreement was entered into between the petitioner and the Society for construction of 16 buildings containing 256 flats for Rs. 17,66,400. In 1973 the construction work was commenced on 3 out of the 4 plots and on 3rd December, 1974, the Society executed a Power of Attorney empowering the petitioner to enrol new members and to refund to outgoing members their contribution with interest. On the same date a further construction (Price escalation) agreement was executed between the petitioner and the Society. On 22-8-1976, a resolution was passed by the Society cancelling the Power of Attorney and calling upon the petitioner to stop construction. On the same date a further construction (Price escalation) agreement was executed between the petitioner and the Society. On 22-8-1976, a resolution was passed by the Society cancelling the Power of Attorney and calling upon the petitioner to stop construction. On 26th September, 1976, the Society elected a new Managing Committee to whom on 5-10-1976 the Chairman handed over charge. On 19-10-1976 a letter was addressed by the Society to the petitioner calling for the Power of Attorney and certain other documents. In reply, the petitioner stated that the Society's requisition to the petitioner was mis-directed as the petitioner had nothing to do with the items stated therein and that the Society should get in touch with the outgoing Managing Committee. On 13-1-1977, a letter was addressed by the Society to the petitioner calling for the documents listed therein on the ground that the petitioner's office was doing secretarial work and that the petitioner's Company Secretary who was also the ex-Chairman of the Society, had not handed over the said documents to the Society. On 19-1-1977 an application was made by the Society to the Assistant Registrar to take action under section 80 of the Maharashtra Co-operative Societies Act on the ground that at the instance of the petitioner Company, the Society's docu­ments would be suppressed, tampered with or were likely to be destroy­ed by the members of the ex-Managing Committee. A list of the docu­ments was annexed to that application. At the foot of the list under the heading “Land and Buildings”, was a description of the land and buildings, with the statement that possession of the land and structures thereon was with the petitioner, without however disclosing the lien and charge created in the petitioner's favour. On 15-2-1977, the Assistant Registrar, passed an order under section 160(2) of the Act stating that the Secretary of the Society had informed him that records, documents and property of the Society had not been handed over. By the said order the petitioner Company and the ex-Secretary were directed to handover the complete records of the Society as per list. On 15-2-1977, the Assistant Registrar, passed an order under section 160(2) of the Act stating that the Secretary of the Society had informed him that records, documents and property of the Society had not been handed over. By the said order the petitioner Company and the ex-Secretary were directed to handover the complete records of the Society as per list. This order was replied to by the petitioner's letter on 4-3-1977 wherein the petitioner brought to the pointed attention of the Assistant Regis­trar about the lien and charge created in his favour for the unpaid price of the land, the cost of construction and the amounts spent by the petitioner for and on behalf of the Society. The Assistant Registrar on 9-3-1977 after recording his satisfaction that books and records of the Society were likely to be suppres­sed, tampered with or destroyed or the funds of the Society would be mis­appropriated or mis-applied, authorised in exercise of the powers vested in him under section 80 the Society to apply to the Executive Magistrate for seizing and taking forcible possession of the records and property of the Society, including the land and structures thereon, described in the list. The Executive Magistrate at the behest of the Society passed an order on 7-4-1977 under section 80(2) directing the police to seize the records and property of the Society including the land and to hand over the same to the Society. This order was duly carried out the next day. The petitioner by his petition on 6th April, 1977 challenged the Assistant Registrar's order dated 15th February, 1977 and 9th March, 1977 and the Executive Magistrate's order dated 7-4-1977. On 25-4-1978, on an application made by the peti­tioner, the Court Receiver was appointed and in so far as the land and buildings were concerned the Society was permitted to carry on the construction on the land at its own cost and on its giving an undertaking to the Court not to contend that by reason of such construction work, the petitioner had be­come dis-entitled to relief. It was contended by the petitioner that the land and structures in the petitioner's possession were incapable of seizure as immovable property was not contemplated by section 160(2) or section 80(1) of the Act which according to the petitioner pertain only to movable property. JUDGMENT- [After giving the facts in paras 1 to 13 the judgment proceeds]. It was contended by the petitioner that the land and structures in the petitioner's possession were incapable of seizure as immovable property was not contemplated by section 160(2) or section 80(1) of the Act which according to the petitioner pertain only to movable property. JUDGMENT- [After giving the facts in paras 1 to 13 the judgment proceeds]. 14. The petitioner is not concerned with the seizure of the movables of the Society. The petitioner, however, takes umbrage to the seizure of the lands and structures from the petitioner's possession and over which it claims a charge and lien by virtue of the documents referred to earlier. The peti­tioner's grievance is that the land and structures in the petitioner's possession were incapable of seizure, as immovable property is not contemplated by section 160(2) or section 80(1) of the Act which according to the petitioner, pertain only to moveable property. It is not difficult to repel this contention. Section 160(1) provides for the retiring Chairman handing over records and property of the Society to the new Chairman of the Committee. Sub-sec­tion (2) on which great emphasis was laid on behalf of the petitioner, reads as under:- “If the retiring Chairman fails or refuses to hand over the papers and property of the society as aforesaid, the Registrar, or any person empowered by him in this behalf, may by order in writing direct him to forthwith hand over such charge and property.” The word ''property” must be read in its normal and ordinary sense as both moveable and immoveable property. To read the word “property” in this sub-section as moveable property only, would be contrary to the plain reading of the sub-section itself. It cannot be said that immoveable property is expressly or even by necessary implication excluded from the normal meaning, scope and ambit of the word “property” which embraces -both moveable and immoveable property. To construe the word “property” in this sub-section as “moveable property” only, would be doing violence to its language and placing an unnatural interpretation of the plain reading thereof. It is manifest that what the outgoing Chairman is obliged to hand over to the new Chairman is not only the Society's papers and charge of the Society, but also each and every bit of the Society's property, be it moveable or immoveable. It is manifest that what the outgoing Chairman is obliged to hand over to the new Chairman is not only the Society's papers and charge of the Society, but also each and every bit of the Society's property, be it moveable or immoveable. To put any other construction would be to defeat the very purpose for which this sub-section is enacted and would provide a loophole and a ready excuse to the outgoing Chairman to hand over to the new Chairman only papers and moveable property of the Society and sit tight on or otherwise deal with the immoveable property of the Society, to its detriment. The result would be a premium on malpractice, evasion and dishonesty. No such interpretation can even be contemplated, much less countenanced. 15. Likewise there is also nothing in section 80(1) to commend the petitioner's contention that the Society's immoveable property was incapable of seizure. Section 80 pertains to the Magistrate's powers of seizure. Sub­section (1) reads as under:- “Where the Registrar is satisfied that the books and records of a society are likely to be suppressed, tampered with or destroyed, or the funds and property of a society are likely to be misappropriated or mis­applied, the Registrar or the person authorised by him may apply to the Executive Magistrate within whose jurisdiction the society is functioning for seizing and taking possession of the records and property of the society.” A plain reading of this sub-section clearly reveals that no limitation has been placed on the word “property” so as to exclude expressly or by necessary implication immoveable property. It is manifest that the word “property” embraces both moveable and immoveable property as must appear from the plain reading of the sub-section itself. To place any other construction would result in violence to the language of this sub-section and in absurdity, inas­much as no immoveable property could be seized even though belonging to a Society despite the likelihood of its being mis-applied or mis-appropriated. I do not agree with the contention urged on behalf of the petitioner that the word's “misappropriated” and “misapplied” and “seizing” and “taking possession of” can only apply to moveable property and not to immo­veable property. They apply both to moveable and immoveable property. I do not agree with the contention urged on behalf of the petitioner that the word's “misappropriated” and “misapplied” and “seizing” and “taking possession of” can only apply to moveable property and not to immo­veable property. They apply both to moveable and immoveable property. Reliance was placed on the judgment of the Division Bench of the Punjab High Court in (Tikka Balbir Singh Bedi and others v. Bakhshi Saligram)1, where construing certain sections in the Punjab Co-operative Societies Act, similar to sections 80 and 160 of the Bombay Act, it was held that though the word “property” has a very wide significance and would ordinarily include both moveable and immoveable properties, a perusal of section 28 of that Act (which corresponds in pari materia to section 80(1) of the Bombay Act), left no doubt that it is confined only to moveable property. To start with, that decision was based on first impressions as is stated towards the end of that judgment itself. Be that as it may, the reasoning on which the Punjab High Court has come to its finding is that it is difficult to conceive how land can be misappropriated or misapplied or how land can be seized and handed over to anybody. With deep respect, I do not at all find it difficult to conceive other­wise. Moveable property as well as immoveable property is capable of being misappropriated or misapplied. Misapplication is to make wrong use of some­thing, be it moveable or immoveable. Surely, immoveable property can be-wrongly made use of just as moveable property can be. Similarly, immove­able property can as well be misappropriated as can moveable property. also fail to see why immoveable property cannot be seized and taken posses­sion of, as urged on behalf of the petitioner. To seize something is to take-suddenly and forcibly. Surely, immoveable property can be taken just as suddenly and forcibly as moveable property. Any property, moveable or immoveable, is capable of being seized and taken possession of, Sub-sec­tion (2) makes no distinction between moveable and immovable property and to hold that it does would, to my mind, be a mistake. 16. I hold that sub-section (2) of section 160 and sub-section (1) of sec­ tion 80 of the Act apply both to moveable and immoveable property. There is no warrant to give the word “property” the narrow and restricted meaning I am invited to do. 17. 16. I hold that sub-section (2) of section 160 and sub-section (1) of sec­ tion 80 of the Act apply both to moveable and immoveable property. There is no warrant to give the word “property” the narrow and restricted meaning I am invited to do. 17. The petitioner queried the invocation of section 160 (2) and sec- tion 80(1) on the ground that by virtue of the lien and charge created in the petitioner's favour by the documents referred to in paras 2 and 4 of this judg­ ment, the property in question did not fall within the mischief of those sub­ sections. This contention is fallacious. The word “property” in these sub­ sections must be read in its natural sense and must be given its natural meaning. Property is property, be it moveable or immoveable as held earlier,” or whether it is under a charge and lien. Neither of these sub-sections ex­ pressly or by necessary implication seek to make any such distinction. To read any such distinction would be unnatural and do violence to the plain reading of these sub-sections and would be tantamount to placing on the language an unwarranted construction not intended by the Legislature. (Rest of the judgment is not material for the report).