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2001 DIGILAW 885 (BOM)

TAJNAGAR CO-OPERATIVE HOUSING SOCIETY v. FATEH MOHAMMED MAULANA

2001-10-19

PRATIBHA UPASANI

body2001
ORAL JUDGMENT :- This writ petition is filed by the petitioner Tajnagar Co-operative Housing Society through its Chairman, being aggrieved by the order dated 6-1-1987 passed by the Minister of State, Co-operation, Government of Maharashtra, rejecting the revision application made by the Writ Petition No. 585 of 1987 of decided on 19-10-2001. (Aurangabad) petitioner - society and confirming the order dated 16-1-1982 passed by the Divisional Sub Registrar, Co-operative Societies, Aurangabad. This order of the Divisional Sub-Registrar dated 16-1-1982 was passed in appeal No. 589/81 filed by Munjaji Darbaji Godbule & 27 others, who are respondents No. 1 to 28 herein, under Section 152 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the Act"). 2. Factual matrix of the matter can be given as follows: Petitioner is a Cooperative Housing Society registered under the provisions of the Act. This petition is filed for and on behalf of the said society by its Chairman Shaikh Rasul Shaikh Satar. This society is comprising of the persons belonging to lower strata of the society in general. The members of the society consist of Coolies, Hama1s and persons engaged in similar vocations. The said society is formed with the sole object of providing shelter to these persons within the area of its operation i.e. persons residing in Nanded City who belong to Muslim and backward class categories. Petitioner society was established in the year 1977 vide Registration No. NND-HOC-20 1 of 1977. There are 100 members in the petitioner-society. The contention of the petitioner is that, to achieve its object, the petitioner society acquired land and for the purpose of conveyance which was to be executed with respect to the said land and after ascertaining the conveyance charges from the competent authority, served on all its members a notice requesting them to pay Rs. 165/- per member as his contribution towards the conveyance and registration of the land. The petitioner has submitted that it had purchased the land admeasuring 9 acres and 10 gunthas from out of Survey No. 35, situated at Aadullabad, Nanded. The vendees of the said land were one Hanuman Gad Agricultural Farm, which was a partnership firm consisting of two partners. An agreement for sale of the said land to the proposed petitioner society, which was being managed by the promoters, was entered into on 27th August, 1976. The vendees of the said land were one Hanuman Gad Agricultural Farm, which was a partnership firm consisting of two partners. An agreement for sale of the said land to the proposed petitioner society, which was being managed by the promoters, was entered into on 27th August, 1976. Thereafter registration certificate was issued in the name of the petitioner society by the competent authority. The land so agreed to be purchased was sold as agricultural land and it was further agreed between the parties to the agreement of sale that proceedings with respect to putting the said land to non agricultural use would be carried out by the petitioner society on its own and 100 plots, each measuring 50 feet x 60 feet were to be laid out with the price of Rs. 1800/- to each of them. Thus, the agreement of sale was for Rs. 1,80,000/-. In addition, it was agreed that rental at the rate of Rs. 50/- per plot for the said 100 plots, amounting to Rs. 5,000/- would be paid by the petitioner society to the vendees of the said plots before 15th of each month. In pursuance to this agreement of sale, the petitioner society was to execute the sale deed with the vendees of the said land and for the purpose of conveyance charges, it was necessary for every member of the petitioner society to contribute in addition to the plot price, an amount of Rs. 165/- towards the registration of the sale deed. The petitioner society, therefore, issued notices on various dates to its members calling upon them to pay to the petitioner society, an amount of Rs. 165/- per head. First such notice was sent on 10.02.1980, wherein it was stated that for registration of 100 plots, which the society had purchased from out of Survey No. 35, situated at Aadullabad, Nanded a conveyance for the sum of Rs. 1,80,000/- was to be executed and an amount of Rs. 16,000/- was necessary for the registration of the sale deed for which every member was required to pay Rs. 165/-. It was stated in the said notice that only thereafter allotment certificates and maps of the plot of individual members would be supplied to them. 1,80,000/- was to be executed and an amount of Rs. 16,000/- was necessary for the registration of the sale deed for which every member was required to pay Rs. 165/-. It was stated in the said notice that only thereafter allotment certificates and maps of the plot of individual members would be supplied to them. It is averred by the petitioner-society that this notice dated 10-2-1980 did not stipulate any specific date by which the said amount was to be paid by the members. Certain members did respond to this notice and paid the amount of Rs. 165/- each to the petitioner-society. However, all the members did not so respond. Therefore, second notice dated 19-3-1980 was issued to the members referring to the necessity for paying Rs. 165/- by each member. This notice dated 19-3-1980 made it explicitly clear that after inquiry with the Registrar by the Managing Committee of the petitioner society, it was learnt that stamp duty i.e. the registration charges could not be condoned though the petitioner was a housing society and as such concession was not available to them. By this notice, it was further informed to the members that if by 15th April, 1980, they failed to make the said payment towards the registration charges, the petitioner society would have a right to cancel the membership of the respective members. After reproducing the terms and conditions which govern the membership of the members of the petitioner society, the said notice reiterated the necessity for sticking to the stipulated date of 15-4-1980 for payment of registration charges. Copies of this notice dated 19-3-1980 were also given to the District Deputy Registrar, Cooperative Societies, Nanded and Assistant Registrar, Cooperative Societies, Nanded. It is further averred by the petitioner society that a third notice, on the lines of the earlier two notices, followed on 10th June, 1980. Wherein it was stated that out of 100 plot holder members, 40 plot holder members had paid their registration fees and registration of 28 plots was, therefore, done on 30-5-1980 and that those plots bore numbers 53 to 80. The said notice dated 10-6-1980 further informed that the petitioner society would be registering plots of second group and, therefore, called upon the members to pay the registration charges by 25-6-1980. The said notice dated 10-6-1980 further informed that the petitioner society would be registering plots of second group and, therefore, called upon the members to pay the registration charges by 25-6-1980. It was also warned that if this amount was not paid by the prescribed date i.e. 25-6-1980, the society would be cancelling the membership of those members and would be free to enroll new members in their place and the responsibility of the consequences would be of such concerned members only. It is further averred by the petitioner society that it was made clear in the last two notices that time was the essence of the said notice. It is further averred that though nearly 40 members responded positively to the said notice by paying their individual contributions, the respondents No.1 to 28 failed to comply with it and, therefore, by another notice-cum-circular dated 10-6-1980, they were directed to make good the default by 25-6-1980 with a warning that they would suffer cancellation of their membership if they failed to pay the amount of Rs. 165/- per head. The contention of the petitioner society is that in spite of this, the respondents No. 1 to 28 did not respond even to the second notice. In the meantime, as per the contention of the petitioner society, the conveyance was completed and was registered in respect of the land purchased by the society. Thus, it is the contention of the petitioner society that though sufficient opportunity was given to the respondents No. 1 to 28, they failed to comply with the said notices and they themselves thus incurred the position as "defaulting members" for non payment of necessary dues of the society, which was also prejudicial to the interests of the society. It is also pointed out by the petitioner society that bye-laws of the society provide for cancellation of membership of defaulting members. 3. It is further averred by the petitioner society that having been left with no alternative, the Managing Committee of the Society took a decision to cancel the membership of respondents No.1 to 28 and to expel them from the society. Accordingly the general body meeting was held on 09-11-1980, notice of which was sent to all the members including the respondents No. 1 to 28. The decision of the Managing Committee regarding expulsion of these members, viz. Accordingly the general body meeting was held on 09-11-1980, notice of which was sent to all the members including the respondents No. 1 to 28. The decision of the Managing Committee regarding expulsion of these members, viz. present respondents No. 1 to 28 was tabled and by majority of two-third of the members present and voting, the decision was confirmed and these respondents No. 1 to 28 stood expelled from the membership of the society. It is submitted by the petitioner that except respondent No. 10, other respondents failed to attend the said meeting held on 9th November, 1980 and in their absence and with the opposition of respondent No. 10, who was the only member present, the resolution regarding expulsion of respondents No. 1 to 28 was passed and the motion was carried out by two-third majority. Thereafter the petitioner through its Chairman informed the respondents No. 1 to 28 about the passing of this resolution. The resolution was also forwarded for approval as per Section 35 of the said Act to the Assistant Registrar, Cooperative Societies. The Assistant Registrar thereafter issued notices to the respondents No.1 to 28 to appear before him in regard to the said resolution and after hearing them and after going through the documentary evidence, accorded his approval to the said resolution dated 19th November, 1980 by his order dated 21-2-1981 in exercise of his powers under Sections 35 of the said Act read with Rules 28 and 29 of the Maharashtra Cooperative Societies Rules, 1961 (hereinafter referred to as "the Rules"). 4. Being aggrieved, the respondents No. 1 to 28 filed an appeal under Section 152 of the said Act before the respondent No. 29 i.e. the Divisional Sub-Registrar, Co-operative Societies, Aurangabad, who by his order dated 16-1-1982 allowed the said appeal, thus reversing the order passed by the Assistant Registrar - respondent No. 31 herein. The respondent No. 29, after hearing both the sides gave a finding in his reasoned order that the order passed by the respondent No. 31 was not correct. It was observed by him that, the respondent No. 31 had passed the order without giving opportunity to the respondents No.1 to 28 of being heard. The respondent No. 29, after hearing both the sides gave a finding in his reasoned order that the order passed by the respondent No. 31 was not correct. It was observed by him that, the respondent No. 31 had passed the order without giving opportunity to the respondents No.1 to 28 of being heard. It was also observed that it did not appear from the notice calling for annual general meeting as to when such notice was served on the respondents No. 1 to 28 and what was the duration of such notice. Respondent No. 29 further observed that the subject concerning the expulsion of defaulting members i.e. subject No.6 indicated that the membership was already cancelled and general body meeting was called to confirm the said decision after discussion, which was impermissible. He held that resolution expelling the members, if it was passed without hearing the affected persons, was invalid and thus reversed the decision of approval given by the respondent No. 31 - Assistant Registrar dated 21-2-1981. 5. Being aggrieved, the petitioner society approached the Minister for State, Cooperation, by filing a Revision under Section 154 of the said Act, who by his impugned order dated 6-1-1987 confirmed the order dated 16-1-1982 passed by the Divisional Sub-Registrar, Cooperative Societies, Aurangabad respondent No. 29 herein. Being aggrieved, the petitioner society has now approached this Court by way of filing the present writ petition. 6. I have heard Mr. Kakde. advocate appearing for the petitioner-society and Mr. N. P. Patil, advocate appearing for the respondents No.1 to 28; so also Mr. Kaldate, Assistant Government Pleader appearing for respondents No. 29, 31 & 32. I have also gone through the entire proceedings including the replies filed by the respondents and the impugned orders and in my opinion, this petition deserves to be dismissed for the following reasons. The very first contention which has been raised by the respondents No.1 to 28 is that no such resolution requiring each member of the petitioner society to pay Rs. 165/- towards the contribution of the sale deed, etc. was ever passed. It is their submission that all the members have paid to the petitioner society the registration charge at the rate of Rs. 50/- of the land, which was purchased by the petitioner society in addition to the plot price. 165/- towards the contribution of the sale deed, etc. was ever passed. It is their submission that all the members have paid to the petitioner society the registration charge at the rate of Rs. 50/- of the land, which was purchased by the petitioner society in addition to the plot price. According to them, the demand made by the Chairman of the petitioner society for Rs. 165/- from each member was per se illegal, without any authority and sanction from general body and in view of this the notices issued by the petitioner society were illegal. Apart from this, it is also their contention that these notices were not served upon them. There is a categorical denial of respondents No. 1 to 28 that none of the three notices, allegedly issued by the petitioner society dated 10-2-1980, 19-3-1980 and 10-6-1980 were served upon them. It is also pertinent to note that no rejoinder has been filed by the petitioner society to refute this contention of the respondents No.1 to 28. From the record also it appears that no proof was given by the petitioner society either before the Assistant Registrar or before the Divisional Sub-Registrar to substantiate their contention that such notices were indeed served upon the respondents No.1 to 28. It is also the contention of the respondents No.1 to 28 that since they had no knowledge about any proposed resolution, which was to be passed by the petitioner society expelling them from the membership of the society, the said resolution is bad in law. It is also their contention that the said resolution, if passed, was without hearing them and hence was illegal. According to them there was no opportunity given to them to represent themselves and to oppose the said resolution which culminated in expelling them. In view of this, it is the contention of the respondents No.1 to 28 that the order passed by the Divisional Sub Registrar dated 16-1-1982, which reversed the order passed by the Assistant Registrar dated 21-2-1981, whereby the approval was granted to the said resolution, was correctly passed and the order passed by the Minister for State, Cooperation, dated 6-1-1987, which is impugned in the present petition is also in accordance with law and that the writ petition filed by the petitioner society be dismissed. 7. 7. Respondents No. 29, 31 and 32 also have filed their affidavit-in-reply wherein they have supported the impugned order dated 6-1-1987. According to them, the petitioner society had not adopted fair policy with respect to respondents No. 1 to 28. It is also their contention that the procedure as laid down under Rules 28 and 29 read with Section 35 of the said Act was not properly followed. It is also pointed out by them that it was obligatory on the part of the petitioner society to give notice to all its members calling upon them to remain present in the general body meeting and that such notice was required to be given one month before the scheduled meeting. It is pointed out by the respondents No. 29, 31 and 32 that the notice of the general body meeting did not show the specific names of the members proposed to be expelled and the same also was not in the agenda of the general body meeting. It is further pointed out by them that the notice only mentioned as one of the subjects for expulsion of the members in item No.6 of the agenda and, therefore, notice was not in conformity with Rule 29 of the said Rules. They have, thus, supported the impugned order and prayed that the petition be dismissed. 8. Since the matter pertains to the expulsion of the members of cooperative housing society, it will be useful to refer to Rules 28 & 29 framed under the said Act as also Section 35 of the said Act. Section 35 of the said Act states as follows: 35. Expulsion of members. - (1)A society may, by resolution passed by a majority of not less than three-fourths of the members entitled to vote who are present at a general meeting held for the purpose expel a member for acts which are detrimental to the interest or proper working of the society. Provided that, no resolution shall be valid, unless the member concerned is given opportunity of representing his case to the general body, and no resolution shall be effective unless it is approved by the Registrar. (2)………. Rules 28 and 29 of the said Rules, read as follows: 28. Expulsion of Members. Provided that, no resolution shall be valid, unless the member concerned is given opportunity of representing his case to the general body, and no resolution shall be effective unless it is approved by the Registrar. (2)………. Rules 28 and 29 of the said Rules, read as follows: 28. Expulsion of Members. - Any member who has been persistently defaulting payment of his dues or has been failing to comply with the provisions of the bye-laws regarding sales of his produce through the society, or other matters in connection with his dealings with the society or who, in the opinion of the committee, has brought disrepute to the society or has done other acts detrimental to the interest or proper working of the society may, in accordance with the provisions of sub-section (1) of Section 35, be expelled from the society. Expulsion from membership may involve forfeiture of shares held by the member. 29. Procedure for expulsion of members.- (1) Where any member of a society proposes to bring a resolution for expulsion of any other member, he shall give a written notice thereof to the Chairman of the society. On receipt of notice or when the committee itself decides to bring in such resolution, the consideration of such resolution shall be included in the agenda for the next general meeting and a notice thereof shall be given to the member against whom such resolution is proposed to be brought, calling upon him to be present at the general meeting to be held not earlier than a period of one month from the date of such notice and to show cause against expulsion to the general body of members. After hearing the member, if present, or after taking into consideration any written representation which he might have sent, the general body of members shall proceed to consider the resolution. (2) When a resolution passed in accordance with sub-rule (1) is sent to the Registrar or otherwise brought to his notice, the Registrar may consider the resolution and after making such enquiries as he may deem fit, give his approval and communicate the same to the society and the member concerned. The resolution shall be effective from the date of such approval. 9. The resolution shall be effective from the date of such approval. 9. If one goes through Section 35 of the said Act so also Rules 28 & 29 which deal with the expulsion of the members of a cooperative society, it will be revealed that a specific procedure, which is a fair procedure, has been laid down in the eventuality of expelling a member of the cooperative society. If attempt is made to give go bye to this procedure, the outcome will naturally be unfair and hence illegal. In the order passed by the Assistant Registrar- respondent No. 31 dated 21-2-1981, it is specifically mentioned that the resolution expelling the Respondents No. 1 to 28 was passed by two-third majority of the members who were present and voting. The petitioners also have accordingly stated. This is a basic fallacy. As per Section 35 of the said Act, if a resolution is to be passed for expulsion of a member, it must be passed by a majority of not less than three-fourths of the members entitled to vote, who are present at a general body meeting held for the purpose of expelling that member for the acts which are detrimental to the interests or proper working of the society. It seems that this fallacy has gone unnoticed by both the parties as well as by the authorities who passed the respective orders. Thus, in view of the requirement contained in Section 35 of the said Act, the resolution allegedly passed under Section 35 was passed not by a majority of three-fourth of the members entitled to vote, but by two-third majority which itself was illegal. On this count alone, the whole exercise should be held to be illegal and the petition must fail on this count alone. It also appears from the proceedings that no resolution was ever passed as contended by respondents No. 1 to 28 which authorized the petitioner society to demand an additional amount of Rs. 165/- per member. It also appears that there is nothing to indicate that any notices demanding such an amount were served upon the respondents No.1 to 28. The contention of respondents No.1 to 28, therefore, that the demand of Rs. 165/- per member in addition to the original amount paid by them towards registration and plot price was not authorized and had no sanction of the general body, appears to be correct. The contention of respondents No.1 to 28, therefore, that the demand of Rs. 165/- per member in addition to the original amount paid by them towards registration and plot price was not authorized and had no sanction of the general body, appears to be correct. As far as the notice of general body meeting is concerned, it again appears that the said notice did not show the specific names of the members proposed to be expelled. The notice only mentioned expulsion of members as one of the subject at Sr. No.6 of the agenda. This certainly was not in conformity with the procedure laid down in Rule 29 of the said Rules. It is also not known as to whether the said notice was given one month in advance before the general body meeting was called. Thus, a complete go bye was given to Section 35 of the said Act and Rule 29. The mandatory procedure with respect to the notice was not followed and the resolution of expelling the members was allegedly passed by two-third majority of the members and not three-fourth majority of the members as required under Section 35 of the said Act. Thus the whole exercise was illegal and without any authority and sanction of law. Therefore, the petition is without any merit and deserves to be dismissed. 10. Hence the following order. Writ Petition is dismissed. Rule stands discharged. No order as to costs. Petition dismissed.