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2003 DIGILAW 737 (BOM)

Apni Co-operative Housing Society Limited v. State of Maharashtra & others

2003-07-18

R.M.S.KHANDEPARKAR

body2003
JUDGMENT - KHANDEPARKAR R.M.S., J.:---Heard the learned Advocates for the parties. Perused the records. 2. The petitioners are challenging the judgment and order dated 20-4-2000, passed by the Divisional Joint Registrar, Co-operative Societies, Mumbai, dismissing the revision application filed by the petitioners against the order dated 30-3-1996 of the Deputy Registrar, Co-operative Societies, N-Ward, Mumbai. By order dated 30-3-1996 the Deputy Registrar of the Co-operative Societies had allowed the appeal filed by the respondent Nos. 4 and 5 against the decision of the petitioner-society, taken in its meeting dated 23-9-1995 and communicated to the respondent No. 4 about refusal of their application for admission of the respondent No. 4 as the member of the petitioner-society and for transfer of the Flat No. 16 in the building called "Prachi", belonging to the petitioner-society. 3. The decisions of the authorities below are sought to be challenged, firstly, on the ground that the issue of admission of the respondent No. 4 as a member of the society can be decided only after necessary approval in that regard by the Collector and, admittedly, in the case in hand, there is no approval obtained for such admission of the respondent No. 4 as member of the society prior to the application in that regard by the respondent No. 4 to the petitioner-society, and secondly, that 5% quota reserved for non-residential membership has already been exhausted by the petitioners and the respondent No. 4 being a non-residential member could not have been ordered to be accepted as a member of the petitioner-society. It is also sought to be contended that though the guidelines issued by the Government extends quota from 5% to 50% in cases of non-residential membership of any registered co-operative housing society, fact remains that the bye-laws of the petitioner-society have not been amended in accordance with the said guidelines and it still discloses the maximum quota of 5% for non-residential membership. 4. 4. A plot of land came to be allotted to the petitioner-society for the purpose of construction of building for its members and in that regard an agreement was entered into between the society and the Government represented by the Collector of the Mumbai Suburban District and two of the terms of the agreement were to the effect that the society should use the land only for building purposes, secondly, that the society shall not enrol any additional member or substitute any member in place of those approved by the Government except with the previous written approval of the Government, and thirdly, the society would be liable to be evicted and the lands and buildings resumed by the Government without payment of any compensation in case of any breach of any of the conditions for grant of the land and failure on the part of the society to remedy any such breach within six months from the date of issuance of the notice by the Additional Collector, Mumbai Suburban District communicating the breach to the society. The respondent No. 5 was one of the members of the petitioner-society and was allotted the Flat No. 16 and even the possession thereof was handed over to the respondent No. 5. On 21-9-1990 the respondent No. 5 informed the society about his intention to transfer his shares and rights in the Flat No. 16 in favour of M/s. Beardsell Limited, the respondent No. 4 herein, for a consideration of Rs. 8 lakhs, and also produced the necessary consent letter for such transfer from the said transferee. By reply dated 4-10-1990 the petitioners informed the respondent No. 5 that as per the Government Notification, the petitioners were not able to admit any firm or company as a member of the society since the quota of 5% reserved for such membership had already been exhausted and therefore the request for transferring the flat in the name of the respondent No. 4 was rejected in view of the decision of the society in its meeting held on 2-10-1990 and further the respondent No. 5 was advised to approach the proper authorities, if he so desired. By letter dated 10-4-1991 the respondent No. 4, referring to the letter dated 21-9-1990 by the respondent No. 5 disclosing his intention to transfer his shares and the rights in the Flat No. 16 in favour of the respondent No. 4 and further to the letter dated 4-10-1990 by the petitioner-society suggesting the respondent No. 4 to approach the proper authorities for waiving of the condition restricting the membership to the firm and companies to 5% of the total members, it was informed that the respondent No. 4 had been pursuing the matter with the competent authorities for necessary approval, however, the petitioners were requested to communicate to the respondent No. 4 the society's willingness to accept the respondent No. 4 as a member of the society subject to approval of the Government, in order to enable the respondent No. 4 to proceed with the matter. The fact that the respondent No. 4 had approached for necessary consent of the petitioner-society for its acceptance as the member of the society was informed by the petitioner-society to the respondent No. 5 by letter dated 16-4-1991. Further by letter dated 10-5-1991 the petitioners informed to the respondent No. 4 that its letter dated 10-4-1991 having placed before the Managing Committee of the petitioner-society, it was unanimously decided that the society had no objection for accepting the respondent No. 4 as the member and for transferring the shares of Flat No. 16 to the said firm, provided the firm should comply with all the required formalities under the existing bye-laws of the petitioner-society. It was also informed that the said communication was in confirmation with the A.G. Meeting of the society held on 2-10-1990. Thereafter, by letter dated 15-9-1995, the respondent No. 5 informed the petitioner-society that he had signed the sale agreement dated 15-9-1995 for conveying Flat No. 16 in favour of the respondent No. 4 and that thenceforth all the bills, documents, circulars and other correspondence relating to the said flat and his shares be sent to the respondent No. 4 on the address disclosed in the said letter. However, by letter dated 20-11-1995 the petitioner-society informed the respondent No. 4 that the firm's request for admission as the member of the society and transfer of the flat was rejected as no new person can be admitted as a member without the previous approval of the Collector. However, by letter dated 20-11-1995 the petitioner-society informed the respondent No. 4 that the firm's request for admission as the member of the society and transfer of the flat was rejected as no new person can be admitted as a member without the previous approval of the Collector. Secondly, the State Government having prescribed certain conditions regarding the admission of a company or firm as member of the society, according to which only 5% of the total membership can be allotted in favour of the companies and/or firms and the said quota had been already exhausted. Thirdly, that the transferror-respondent No. 5 had not obtained previous permission of the society by a notice, as was required under the Rule 24 of the Maharashtra Co-operative Societies Rules, 1961. Fourthly, considering the correspondence exchanged earlier, it was not possible to admit the firm as a member of the society. Consequently to rejection of the request for transfer of the shares and the flat, the respondent Nos. 4 and 5 filed appeal before the Deputy Registrar of Co-operative Societies which came to be allowed by the order dated 30-3-1996 directing the petitioner-society to admit the respondent No. 4 to the membership of the said society with reference to the application of the respondent for membership dated 15-9-1995 with effect from 23-9-1995 subject to approval by the Collector, Mumbai Suburban District, as contemplated under the Bye-law No. 17(c) of the petitioner-society. The revision application preferred by the petitioner-society against the said order of the Deputy Registrar was dismissed by the order dated 20-4-2000. Efforts to prefer second revision application before the lower authorities proved futile as it was dismissed considering the decision of this Court in Writ Petition Nos. 732 to 735 of 1991, dated 22-4-2000 wherein it was held that under section 154 of the said Act the revisional jurisdiction cannot be exercised twice in relation to the same order passed by the authorities under the said Act. 5. 732 to 735 of 1991, dated 22-4-2000 wherein it was held that under section 154 of the said Act the revisional jurisdiction cannot be exercised twice in relation to the same order passed by the authorities under the said Act. 5. Perusal of the judgment passed by the Appellate Authority i.e. by the Deputy Registrar discloses that the appeal was allowed mainly on two counts, firstly, that the petitioner-society itself had admitted companies and firms as the members of the society in excess of 5% quota even prior to the application filed by the respondent No. 4 for the membership of the society and there was no justification for discrimination in relation to the claim of membership by the respondent No. 4 and secondly that the quota of 5% was already modified by the Government and it was extended to 50% of the total membership. The revisional authority i.e., the Divisional Joint Registrar in its judgment has observed that the petitioner-society itself had accepted in past about 15 transferees without prior approval of the Collector and there is no justification for insisting for prior approval only in case of respondent No. 5 and viewed from that angle, the revision application was rejected. Bare reading of both the judgments would disclose that the reasonings, by both the authorities to arrive at the ultimate decision, do not appear to be sound, nevertheless, the ultimate decision which has been passed does not appear to be contrary to any provision of law. 6. As regards the first ground of challenge, undoubtedly, Clause 3 of the terms of the grant of land to the petitioner-society reads that:- "3. That the society shall not enrol any additional members or substitute any member in place of those approved by Government, except with previous written approval of Government." Plain reading of this clause would disclose that there is an embargo on the rights of the society to enrol any additional member or substitute any member, albeit subject to prior written approval of the Government in that regard. The clause nowhere prescribes any restriction upon the members of the society to enter into any agreement for transfer of shares or transfer of the flat. The clause nowhere prescribes any restriction upon the members of the society to enter into any agreement for transfer of shares or transfer of the flat. Very fact that to enable the society to enrol any additional member or substitute any member, it will require previous written approval of the Government, it would disclose that the proposal in that regard will have to be placed before the Government for the purpose of its approval. In order to enable the parties to place before the Government such a proposal, it would require to disclose the name of the transferror as well as of the transferee. In order to enable the parties to have the name of the proposed transferee, it will require necessary arrangement being arrived at between the parties whereby the transferor should disclose his intention and willingness to transfer the shares and the flat and the transferee should disclose its willingness to purchase the shares and the flat. This entire exercise will apparently disclose the necessity of agreement in that regard between the transferor and the transferee. Being so, deal between the transferor and the transferee, subject to finalisation by the society and the approval in that regard by the Government, is not prohibited under the said Clause 3. On the contrary, in order to enable the Government to take appropriate decision in that regard, such a deal is essentially necessary prior to such approval. Being so, merely because a member enters into an agreement with a stranger for transferring his share or the flat and in that regard put forth a proposal before the society that cannot be a justification for the society to refuse its consent for such transfer, unless there are other justifiable reasons to reject such proposal. 7. The question of grant of approval by the Government for enrolment of additional member or substitution of any member cannot arise unless a proposal in that regard is placed before the Government either by the society itself or by its member or the person or the firm desiring to be a member of the society. 7. The question of grant of approval by the Government for enrolment of additional member or substitution of any member cannot arise unless a proposal in that regard is placed before the Government either by the society itself or by its member or the person or the firm desiring to be a member of the society. In any of such situation, the society or the member or such person will require the necessary documentation to place the same before the Government in order to enable the authorities in the Government to apply their mind to the issue as regards the approval or disapproval for the membership of society to such person or firm. Being so, the contention of the petitioners that since there was already an agreement arrived at between the respondent No. 4 and the respondent No. 5 for the necessary transfer of share and the flat without the prior permission or approval that itself is a justification for rejection of the application by the respondent No. 4 for the membership of the society cannot be accepted. 8. Added to this, the records apparently disclose that the petitioner-society itself by letter dated 10-5-1991 had informed the respondent No. 4 in clear terms that :- "Your letter was placed before the Managing Committee meeting held on 30-4-91. The members present unanimously decided that the society has no objection in accepting you as a member and transferring the shares in respect of Flat No. 16 to you provided you should comply with all the required formalities under the existing bye-laws of the Co-op. Housing Society." Apparently, the society in May, 1991 had correctly understood the scope of the Clause 3 of the terms and conditions relating to prior approval of the Collector for the purpose of admission of a person or firm as a member of the petitioner-society. The question of granting approval by the Government for admission of a person or a firm as a member of the society cannot arise unless the society itself is willing to accept such a person or firm as a member of the society. The question of granting approval by the Government for admission of a person or a firm as a member of the society cannot arise unless the society itself is willing to accept such a person or firm as a member of the society. Being so, the society itself under letter dated 10-5-1991, having correctly understood the scope and implication of the Clause 3 of the terms and conditions, having granted its consent for acceptance of the respondent No. 4 as a member of the society and also had expressed it willingness for transfer of the shares in its name, it is too late in the day for the petitioner-society to contend that in the absence of approval, the society will not accept the decision of the authorities regarding the direction for enrolment of the respondent No. 4 as the member of the society, albeit subject to approval by the Government. 9. As regards the second ground of challenge, undisputedly, the contest of the proceedings before the lower authorities by the petitioners in that regard was on the ground that the quota reserved for the membership in favour of the firm and companies is to the extent of 5% pursuant to the direction in that regard by the Government. This is apparent from the judgments passed by the lower authorities as well as the pleadings of the petitioners in their written statement. Para 8 of the written statement to which attention was drawn by the learned Advocate for the petitioners themselves, clearly disclose the defence of the petitioners in that regard to the effect that:- "The respondent state that the question of admission of the appellant No. 1 was placed before the General Body meeting held on 2-10-1990. At the material time, the society was not permitted to admit companies in excess of limits prescribed by State Government. The respondent society had already exceeded the limit." Apparently, the defence was that since the Government had prescribed limit of 5% membership to firms and companies in the petitioner-society, and the said limit was already exceeded, the request by the respondent No. 4 being a company was not acceded to. The respondent society had already exceeded the limit." Apparently, the defence was that since the Government had prescribed limit of 5% membership to firms and companies in the petitioner-society, and the said limit was already exceeded, the request by the respondent No. 4 being a company was not acceded to. Once it is not in dispute that the Government has extended the limit to 50%, and it is not the case of the petitioners that even the limit of 50% has been exceeded, the challenge by the petitioners on the ground of 5% quota restriction to firms and companies by the Government does not stand. 10. It was sought to be contended that even though the Government might have extended the limit to 50% the bye-laws of the petitioner-society restricts the limit to 5% quota. Firstly, that was not the defence raised in the matter nor the claim for membership of the respondent was objected to on the said ground. It was specific defence in relation to the direction given by the Government and not in relation to the quota disclosed in the bye-laws. In any case, in view of the direction given by the Government to extend the limit to 50%, the petitioners are bound to cause necessary amendment in their bye-laws. Undisputedly, there is no provision in law whereby the petitioner-society can restrict the quota contrary to the direction given by the Government in that regard. In any case, the question of interference by this Court in the impugned order in writ jurisdiction on the alleged ground which was never raised before the authorities below does not arise. 11. For the reasons stated above, no fault can be found with the ultimate decisions arrived at by both the authorities in the matter as the same does not disclose any illegality and therefore the petition fails and is hereby dismissed. The rule is discharged with costs. Petition dismissed. -----