Nagpur General Merchants Co-operative Market-cum-Housing Society Ltd. . , Gandhibaugh Nagpur, through its Secretary v. Kamalkishore s/o Premlal Sahu and others
1996-04-03
V.S.SIRPURKAR
body1996
DigiLaw.ai
JUDGMENT - V.S. SIRPURKAR, J. :---The petitioner, Nagpur General Merchants Co-operative Market-cum-Housing Society Ltd (hereinafter called 'the Society' for the sake of brevity) has filed this petition challenging the order passed by the Judge, Co-operative Court as also the confirming judgment passed by the Maharashtra State Co-operative Appellate Court (Bombay), Nagpur Bench, Nagpur. 2. This litigation has a chequered history. The petitioner Society is a Housing Society and respondents 1 to 3 are the persons desirous of getting a status of members of that Society. These members filed a dispute bearing No. 173 of 1984 before the Co-operative Court praying for declaration that they were the members of the Society and as such had all the rights and liabilities of the members. They also prayed therein for a direction to the Society to enter their names into the partnership register and to issue them share certificates. Their case was that they were the dealers in medicines and having their shops in the General Market of the Society and they were duly qualified under the provisions of the Maharashtra Co-operative Societies Act, 1960 (hereinafter called 'the Act' for the sake of brevity), to hold the membership. One of the objects, according to them, of the Society was to provide market for the purpose of dealing in general goods including medicines in Nagpur and with that object, to acquire land and build shops and to distribute on instalment or on hire purchase or to let the same to its members. They claimed that they applied for the membership to the Secretary of the Society with necessary share amount and the entrance-fee, in the year 1975, but the Society did not give any reply to them and, therefore, they preferred an appeal under section 23(2) of the Act before the Assistant Registrar of Co-operative Societies, Nagpur, which appeal was allowed by order dated 2-6-1976, whereby the Assistant Registrar, Co-operative Societies, directed the Society to admit the appellants therein as members of the Society within one month from the date of the order. This order, according to the disputants was confirmed in a revision preferred by the Society, by the Divisional Joint Registrar, and ultimately, the Society preferred a Special Civil Application No. 1492 of 1978 in this Court. However, that writ petition was also dismissed.
This order, according to the disputants was confirmed in a revision preferred by the Society, by the Divisional Joint Registrar, and ultimately, the Society preferred a Special Civil Application No. 1492 of 1978 in this Court. However, that writ petition was also dismissed. This judgement, which decided the Special Civil Application on 19-8-1982, was challenged before the Supreme Court in Special Leave Appeal (Civil) No. 9997 of 1982. However, that Special Leave Appeal was also dismissed by the Supreme Court on 8-11-1982. 3. It was also pointed out in the dispute that the respondent No. 4 had also filed such a similar appeal before the Deputy Registrar, Co-operative Societies, under section 23(2) of the Act which was allowed and the respondent No. 4 was directed to be admitted as member of the Society. The said order was also challenged by the Society in a revision before the Divisional Joint Registrar, who, by his order dated 26-4-1983, confirmed the order passed by the Deputy Registrar. A writ petition, bearing No. 1683/83 was filed by the Society before this Court. However, the said writ petition came to be withdrawn by the Society. It was contended that thereafter respondent Nos. 1 to 3 remitted Rs. 105/- each being the share money and entrance-fee. Thus, they were deemed to be the members, so also the respondent No. 4 who was admitted to the membership by the Society from 5-2-1983 as he had also remitted the said amount by cheque to the Society vide letter dated 15-3-1983. The disputants claimed that in spite of all this, their names were not entered in the Membership Register and they were not issued the share certificates and, thus, they were illegally deprived of the rights and liabilities as members of the Society, though they were entitled to the same. They claimed that they had sent number of letters to the Society but on some pretext or the other, the Society refused to discharge its legal obligations in this behalf, and they were also not given the notice of the annual general meeting which was to be held on 11-3-1984. 5.
They claimed that they had sent number of letters to the Society but on some pretext or the other, the Society refused to discharge its legal obligations in this behalf, and they were also not given the notice of the annual general meeting which was to be held on 11-3-1984. 5. This dispute filed before the Co-operative Court came to be stiffly opposed by the Society who claimed that the disputants had never applied for the admission of membership and the membership was open only to those who came within the purview of Bye-laws No. 9-A and who desired to acquire a shop or a house in the portion of the area of the Society. It is alleged that there was no category of the deemed members in the Bye-laws. Therefore, the disputants could not be said to be the deemed members of the Society. It was pointed out by the Society that it had passed an order that the disputants could be enrolled as nominal members and the nominal membership was not acceptable to the disputants and as such they were not entitled to any claim, muchless as claimed in the dispute. It is in the light of these averments that the Society claimed that the disputants may not be entitled to claim right of full membership. 6. Evidence was led on behalf of both the sides and after the consideration, the learned Co-operative Court by its award dated 30-9-1988 directed the Society to enter the names of the disputants in the Membership Register and issue the share certificates to them. It was also declared that the disputants had all the rights and liabilities as the members of the Society. The Society was also directed to issue the notices of the concerned General Body Meeting and other General Body Meetings and allow the disputants to exercise the rights of the members of the Society. This order was appealed against before the Co-operative Appellate Court which, by its impugned judgment dated 28th April, 1989 dismissed the appeal and confirmed the order passed by the Co-operative Court. These two judgments of the Co-operative Court and the Appellate Court are impugned here in this writ petition. 7.
This order was appealed against before the Co-operative Appellate Court which, by its impugned judgment dated 28th April, 1989 dismissed the appeal and confirmed the order passed by the Co-operative Court. These two judgments of the Co-operative Court and the Appellate Court are impugned here in this writ petition. 7. Shri P.N. Chandurkar, learned Counsel appearing on behalf of the petitioner, mainly challenged the orders on the ground that after the dismissal of its special leave petition by the Apex Court, the Society had offered the nominal membership to the four respondents as per the provisions of section 24 of the Act, as the Society had no other option but to offer the nominal membership, as the Society had no shops/units/godowns to offer to the four respondents/disputants and, in fact, the authorities under the Act had taken serious objection to having such members who cannot be provided with the shops/units/godowns. Thus, according to him, it was not possible for the Society to offer the membership and only a nominal membership could be offered. He pointed out that the General Body of the Society had passed the resolution in the year 1959 to the effect that no new additional members could be enrolled as the petitioner Society had no plot of land and nor did it have any immediate plan for the new constructions. Shri Chandurkar submits that the grant of nominal membership was in keeping with the spirit of the orders passed earlier and, in fact, there was no occasion for the disputants/respondents 1 to 4 to make a grudge regarding the same. He also asserted further that it was a right of the Society to consider the suitability of the new members and also to consider whether the entry of any such new members would be in the interest of the Society and as such no person could be forced upon the Society as a member. He, therefore, seriously questioned the judgments by both the courts below by which the new membership was granted to the respondents 1 to 4. 8. Miss S.J. Dave, learned Counsel appearing on behalf of the respondent Nos. 1 to 4, supported the judgments and pointed out that there was no question of offering any nominal membership to these respondents/disputants.
He, therefore, seriously questioned the judgments by both the courts below by which the new membership was granted to the respondents 1 to 4. 8. Miss S.J. Dave, learned Counsel appearing on behalf of the respondent Nos. 1 to 4, supported the judgments and pointed out that there was no question of offering any nominal membership to these respondents/disputants. She pointed out that in the first round of the litigation, when the membership was refused to the concerned members, all the authorities under the Act, namely, Assistant Registrar and the Divisional Joint Registrar unequivocally accepted the case of the disputants and had directed the Society to admit them as the members of the Society. The decisions of the concerned officers in the Co-operative Department were thereafter endorsed by this Court in a Special Civil Application which was filed by the Society to challenge the said decisions, and the judgment of this Court was ultimately confirmed by the Apex Court. She, therefore, contended that there was absolutely no scope for the Society to wreck the issue again by refusing the membership and, in fact, the membership of the disputants/respondents was of the fait accompllie because of the orders passed by the authorities under the Act, and more particularly the Assistant Registrar and the Divisional Joint Registrar. She drew my attention to the order passed by the Divisional Joint Registrar and more particularly para 2 of the operative order which is somewhat like this:--- "Consequent upon the above orders, the non applicants to this revision shall be deemed to be the members of the appellate Society as provided vide impugned order dated 2-6-1976 provided that they deposit initial share amount and entrance fee etc." She pointed out that the said amount was immediately paid thereafter by all the disputants and as such there was no question of the Society offering any nominal membership as that was patently incorrect as per the orders passed by the Assistant Registrar and the Divisional Joint Registrar. She also pointed out that the Society had absolutely no bona fides when it suggested that the authorities under the Act had directed restrictions on the membership, or that only a nominal membership could be offered to the disputants. She pointed out that there was absolutely no scope for creation of an unnatural class like 'nominal membership', as the Bye-laws of the Society nowhere provided for such nominal membership.
She pointed out that there was absolutely no scope for creation of an unnatural class like 'nominal membership', as the Bye-laws of the Society nowhere provided for such nominal membership. She further pointed out that in refusing the status of membership to the respondents 1 to 4, the Society was, in fact, committing contempt of this Court as also the Supreme Court of India. 9. Considering the rival contentions, the Appellate Court very clearly upheld the contentions raised by the respondents/disputants. The Appellate Court recorded a finding that the orders passed under section 23(2) as also in revision under section 154 of the Act by the Assistant Registrar and the Divisional Joint Registrar respectively had attained finality as the same remained undisturbed even despite their being challenged in the Special Civil Application before this Court and further in S.L.P. before the Apex Court. On facts, the Appellate Court came to the conclusion that the respondents/disputants had made the payments of the share money and entrance fee, which were the only formalities to be done by them and such they were deemed to be the members of the Society. The Appellate Court also held that once the formalities were completed by the respondents/disputants, there was no question of the Society treating them as the nominal members, as there was no provision in the Bye-laws at all to do so. 10. Shri Chandurkar, however, strenuously urged that the Bye-laws could not be in derrogation to the provisions of the Act and could not over-ride the provisions of the Act. According to Shri Chandurkar, once the provisions of the Act themselves provided for a category of the nominal members, merely because the Bye-laws did not provide for the same category, it could not be said that such category of members could not be created by the Society. According to him, the logic that the Bye-laws did not provide for the category of the nominal members and, therefore, such category cannot be created, is faulty as it directly bristles against the provisions of the Act. The argument is clearly incorrect. There is really speaking no conflict between the Bye-laws of the Society and the provisions of the Act.
According to him, the logic that the Bye-laws did not provide for the category of the nominal members and, therefore, such category cannot be created, is faulty as it directly bristles against the provisions of the Act. The argument is clearly incorrect. There is really speaking no conflict between the Bye-laws of the Society and the provisions of the Act. Really speaking, the Society could not have invented the category of the nominal members as the issue regarding the membership was finally decided by the Assistant Registrar, Co-operative Societies, under section 23(2) and by the Divisional Joint Registrar in revision, under section 154, of the Act. Both these orders unequivocally declared the status of the respondents/disputants as the members of the Society. This view was also endorsed by this Court and also the Apex Court. The Society thereafter could not have created such a category to by-pass these decisions. Merely because the provisions of the Act provided for a class of membership like 'nominal members', that will not give the handle in the hands of the Society to treat some particular members as the nominal members for whatever reasons. The authorities below were right in holding that there was no provision for there being such members in the Bye-laws and as such the Society, for the first time, could not create such a category. The Bye-laws of the Society are on the record of this petition and have been closely examined. They do not in any manner suggest any such category as the nominal members. Merely because the Act provides that such a membership, it does not spell out a right in favour of the Society to treat, as per its whims, some members as the nominal members. The provision in the Act for the category of nominal members is only an enabling provision and by dint of those provisions, the Society is entitled to enrol some members as the nominal members. However, that has to be strictly in terms of the Bye-laws, and where the Bye-laws are completely silent about such category being there, the Society cannot whimsically and capriciously create such a category, muchless on the factual background as is present in this case. 11.
However, that has to be strictly in terms of the Bye-laws, and where the Bye-laws are completely silent about such category being there, the Society cannot whimsically and capriciously create such a category, muchless on the factual background as is present in this case. 11. Shri Chandurkar relied upon a decision reported in (Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad)1, A.I.R. 1970 Supreme Court 245 wherein the Apex Court had held that the Bye-laws of a Co-operative Society framed in pursuance of the provisions of the Act cannot be held to have the force of law. The Apex Court further held that the Bye-laws that are contemplated by the Act can be only those which govern the internal management, business of administration of the Society. They are of the natural of the Articles of Association of a company incorporated under the Companies Act. They may be binding between the persons affected by them, but they do not have the force of a statute. Relying on these observations in Para 10, Shri Chandurkar submitted that merely because the Bye-laws did not provide for the category of the 'nominal members', the Society was not prevented from creating a class of 'nominal members'. I am afraid, the observations by the Supreme Court are being read out of context. There can be no dispute about the law laid down by the Apex Court. However, it has to be borne in mind that the Society has treated the respondents 1 to 4 alone as the nominal members, when there is not a single nominal member in that Society, nor is there any provision in the Bye-laws for treating any member as a nominal member. The Bye-laws undoubtedly govern the internal management, and if the Bye-laws provide only for a particular type of membership, then the Society cannot whimsically and capriciously create some other class of membership as has happened in this case. In this case, what was directed earlier by the officers was to grant a membership of the Society and at that time such nominal membership was unknown to the Society as the Bye-laws were completely silent. For its internal management also the Society had provided specific conditions for a full-fledged membership. The category of nominal membership was not there at all.
For its internal management also the Society had provided specific conditions for a full-fledged membership. The category of nominal membership was not there at all. Therefore, when earlier the authorities under the Act had directed to grant the membership to the respondents/disputants, which decisions were endorsed by this Court and the Apex Court, it has to be held that it was only the kind of membership that was in existence then, which was directed to be granted to the respondents/disputants. The Society, therefore, could not be allowed to spring a surprise at the respondents by offering them a nominal membership and, thus, drastically cut their rights as the regular members. The nominal members, it need not be mentioned, have practically no rights as would be seen from the provisions of the Act. It will be well to remember that the respondents had claimed all the rights of the membership including the right to take part in the election. In refusing that kind of membership and offering only a nominal membership which would always be sans the rights claimed by the respondents/disputants, the Society was running away from the parameters of the decisions given by the authorities under the Act, which decisions were also endorsed by this Court as well as the Supreme Court of India. The argument of Shri Chandurkar has, therefore, to be necessarily rejected. 12. In the result, the petition has no substance and is ordered to be dismissed with costs. Petition dismissed with costs.