DOVER CO-OPERATIVE HOUSING SOCIETY LTD v. STATE OF WEST BENGAL
2007-06-18
BHASKAR BHATTACHARYA, RUDRENDRA NATH BANERJEE
body2007
DigiLaw.ai
BHASKAR BHATTACHARYA, J. ( 1 ) THESE two mandamus appeals were heard together as the appeals are preferred against the self-same judgment passed by the learned Single Judge. ( 2 ) THE appellant in F. M. A. No. 732 of 2007 filed a writ application under article 226 of the Constitution of India before the learned Single Judge thereby praying for a mandamus directing the respondent No. 3, the Deputy Registrar of Co-operative Societies, Kolkata Metropolitan Area Housing, to implement its earlier decision dated March 15, 2002 by which the said respondent No. 3 directed the respondent No. 7, the Co-operative Housing Society of which the appellant was previously a member, to return a sum of Rs. 59,175/- received by the respondent No. 7 as a condition of grant of permission to transfer the membership of the writ petitioner to a third party. ( 3 ) THE writ petition was contested by the respondent No. 7, the Co-operative housing Society, contending that the writ petitioner voluntarily paid the said amount and there was no illegality on the part of the respondent No. 7 in accepting such amount. According to the respondent No. 7, the by laws of the society itself permitted acceptance of such amount as transfer-fees in case any member intended to transfer his membership to a third party. Apart from the aforesaid point, the respondent No. 7 further contended that the writ application was not maintainable and the appropriate remedy of the writ petitioner lay by filing reference in terms of section 95 of the West Bengal Co-operative Societies act. ( 4 ) THE State-respondent, however, supported the writ petitioner. ( 5 ) THE learned Single Judge by the order impugned herein directed the Co-operative housing Society to immediately pay back the said amount received from the writ petitioner as transfer-fees. However, the prayer for interest on the aforesaid amount was refused. ( 6 ) THE writ petitioner is dissatisfied with the refusal of the prayer for grant of interest on the aforesaid amount and, thus, has preferred F. M. A. No. 732 of 2007 while the respondent No. 7, the Co-operative Society has preferred the other appeal being F. M. A. No. 828 of 2005 by challenging the direction of the learned Single Judge asking the respondent No. 7 to return the amount taken from the writ petitioner.
( 7 ) WE first propose to deal with F. M. A. No. 828 of 2005. ( 8 ) MR. Chatterjee, the learned senior Advocate appearing on behalf of the appellant vehemently contended before us that the writ petition was not maintainable against his client inasmuch as the alleged claim of the writ petitioner was barred by limitation on the date of presentation of the writ application. Mr. Chatterjee contends that it was the duty of the writ petitioner to raise dispute in terms of section 95 of the West Bengal Co-operative Societies act before the Registrar and in such a case, the Registrar could refer the matter to arbitration. According to Mr. Chatterjee, the period of limitation for raising such dispute having expired, the writ application was not maintainable for enforcing a barred claim of the writ petitioner. Mr. Chatterjee further contends that the society being not a "state" within the meaning of the Article 12 of the constitution of India, no mandamus could be issued against his client. ( 9 ) MR. Chatterjee lastly contends that under the West Bengal Co-operative societies Act and the Rules framed thereunder, the Registrar, Co-operative society has no power to give direction upon a Co-operative Society to refund any amount of money allegedly paid by a previous member. Mr. Chatterjee supports the action of his client on the ground that even according to Rule 142 (2) of the Rules framed under the West Bengal Co-operative Societies Act, at the relevant point of time, there was no restriction of taking transfer-fees as the State Government issued the notification for the first time in the year 2003 restricting the transfer-fees to 0. 5% of the consideration money whereas the transfer-fees in question were taken in the year 1998. Mr. Chatterjee, therefore, prays for setting aside the order passed by the learned Single Judge. ( 10 ) MR.
5% of the consideration money whereas the transfer-fees in question were taken in the year 1998. Mr. Chatterjee, therefore, prays for setting aside the order passed by the learned Single Judge. ( 10 ) MR. Bhattacharjee, the learned Advocate appearing on behalf of the state-respondent has on the other hand supported the order passed by the learned Single Judge and has contended that sections 32, 49 and 92 to 94 of the act specifically empower the State Government and the Registrar to exercise the power of superintendence over the activities of a Co-operative Society and if it appears to the State Government or the Registration that any Co-operative housing Society has illegally accepted any amount of money from its member as condition of transfer of membership in violation of mandatory statutory Rules, they have every right to pass necessary order for refund of such money notwithstanding the fact that the erstwhile member had not referred any dispute in terms of section 95 of the Act. Mr. Bhattacharjee in support of his contention relies upon a decision of the Supreme Court in the case of S. S. Rana vs. Registrar, co-operative Societies, reported in 2006 (11) SCC 634 . ( 11 ) MR. Roy, the learned Advocate appearing on behalf of the writ petitioner has adopted the submission of Mr. Bhattacharjee and in the other appeal preferred by his client, he has prayed for direction upon the Co-operative Society to pay interest on the aforesaid amount illegally retained by the Co-operative society from 1998. ( 12 ) THEREFORE, the first point that arises for determination in F. M. A. No. 828 of 2005 is whether the writ application filed by the former member was maintainable or not. ( 13 ) AFTER hearing the learned Counsel for the parties and after going through the materials on record we find that the dispute involved in the present case is whether the Co-operative Housing Society had the right to demand a particular sum of money as a condition of according permission to transfer of the membership. It is true that such a question is definitely a dispute within the meaning of section 95 of the Act and was referable before the Registrar.
It is true that such a question is definitely a dispute within the meaning of section 95 of the Act and was referable before the Registrar. If a former member of the Co-operative Society decides not to refer such dispute within the time fixed before the Registrar, his remedy for recovery of the money will, no doubt, for the time being become barred after the expiry of the time of reference. ( 14 ) HOWEVER, after considering the provisions contained in sections 32, 49 and 92 to 94 of the Act, we find that both the State Government and the Registrar of Co-operative Societies have been vested with the overall power of supervision over the affairs and working of a Co-operative Society under the Act and if it appears to the State Government or the Registrar that any of the Co-operative societies registered under the Act had contravened any of the mandatory statutory provisions, it can suo motu pass necessary direction for rectification of such illegal act notwithstanding the fact that the aggrieved party has not referred the dispute to arbitration in terms of section 95 of the Act. ( 15 ) IN the case before us, we find that according to Rule 142 (2) of the West bengal Co-operative Societies Rules, a Co-operative Housing Society may raise such fee or donation as may be specified by the State Government from time to time by notification for according consent for transfer by a member of his land, house or apartment to another person having eligibility to become a member of the society. There is no dispute that until the year 2003, no such notification was issued and in the notification of the year of 2003, the societies were for the first time permitted to accept by way of such transfer-fees an amount equivalent to 0. 5% of total consideration money. Therefore, prior to issue of the notification of the year 2003, a Co-operative Society was not authorized to accept any amount of money by way of transfer-fees. In the case before us, the money was received in the year 1988 when the State Government did not issue any notification but rule 142 (2) was very much in existence.
Therefore, prior to issue of the notification of the year 2003, a Co-operative Society was not authorized to accept any amount of money by way of transfer-fees. In the case before us, the money was received in the year 1988 when the State Government did not issue any notification but rule 142 (2) was very much in existence. For the purpose of construction of the true meaning of the said Rule, we propose to quote the same: "a Co-operative Housing Society may raise such fee or donation as may be specified by the State Government from time to time by notification for according consent for transfer by a member of his land, house or apartment to another person having eligibility to become a member of the society. " ( 16 ) IF we construe the provisions contained in Rule 142 (2) in the proper perspective, we find that up to the year 2003, nothing was specified by way of notification authorizing a Co-operative Society to raise by way of fee or donation any amount for according consent for transfer and therefore, up to the year 2003, a Co-operative Society was authorized to accept "nil" amount of money for giving consent and from the year 2003, for the first time, the State government has authorized the societies to accept something as transfer-fees or donation for the above purpose by limiting it to 0. 5% of the consideration money. We are unable to accept the contention of Mr. Chatterjee, the learned senior Counsel appearing on behalf of the Co-operative Housing Society that up to the publication of the notification in the year 2003 there was no restriction in accepting transfer-fees and that the restriction was imposed for the first time by publication in the notification. In our view, Rule 142 (2) prohibits the society from accepting any amount as transfer-fees unless sanctioned by the notification and that too, to the extent indicated in the notification. Therefore, in the year 1998, the society was not authorised to accept any amount as transfer-fees as in the absence of any notification, there was no sanction for such acceptance.
In our view, Rule 142 (2) prohibits the society from accepting any amount as transfer-fees unless sanctioned by the notification and that too, to the extent indicated in the notification. Therefore, in the year 1998, the society was not authorised to accept any amount as transfer-fees as in the absence of any notification, there was no sanction for such acceptance. ( 17 ) IT appears that the writ petitioner complained before the State government as well as the Registrar drawing their attention to such illegality committed by the society and on that basis, the State Government took decision directing the Co-operative Society to refund the amount and such order was sought to be implemented through the Deputy Registrar, Co-operative Society, which was the subject-matter of the writ application. The writ petitioner alleged inaction on the part of the State Government in implementing its own decision and prayed for direction upon the State to enforce its decision against the Society. ( 18 ) THE moment the State Government passed a direction upon the co-operative society to refund the amount in favour of the writ petitioner in exercise of its statutory power, a fresh right accrued in favour of the writ petitioner and by filing this writ application, he simply wanted to enforce that "existing legal right". We find no substance in the contention of Mr. Chatterjee, the learned senior Advocate appearing on behalf of the appellant that no writ can be issued against the Co-operative Society because we find that the writ petitioner really prayed for mandamus against the State-respondent for enforcing the decision of the State Government directing the society to return the money taken illegally in violation of the mandatory rule framed under the Act. There is no dispute with the proposition of law that a writ application is maintainable for enforcing a decision already taken by the State in favour of a citizen against a person who is under statutory obligation to do or not to do something compelling compliance of the statutory requirement based on public policy. ( 19 ) WE now propose to deal with the decisions cited by Mr. Chatterjee. ( 20 ) IN the case of State of Maharashtra vs. Karvanagar Sahakari Griha rachana Sanstha Maryadit and Ors.
( 19 ) WE now propose to deal with the decisions cited by Mr. Chatterjee. ( 20 ) IN the case of State of Maharashtra vs. Karvanagar Sahakari Griha rachana Sanstha Maryadit and Ors. , reported in 2000 (9) SCC 295 , under the maharashtra Co-operative Society Act, the State Government and the Registrar of the Societies were authorised to pass direction upon the Co-operative Society to amend the bye-laws in public interest. In exercise of such power, the Registrar passed a direction for amendment of the bye-laws of the 'society and such decision of the Registrar was challenged by the Co-operative Society by filing a writ application before the High Court. The High Court set aside the direction of the Registrar on the ground that the same was passed not in the public interest. On an appeal by the State Government, the Supreme Court held that the power of the State Government to issue direction in the public interest could not be exercised so as to be prejudicial to the interest of the society. According to the supreme Court, what was the interest of the society was primarily for the society to decide and the outside agency had no say in the matter. The Supreme court further held that where the Government or the Registrar exercises statutory power of issuing direction to amend the bye-laws, such direction should satisfy the requirement of the interest of the society and in the said case, according to the Supreme Court, having regard to the nature of the society and its objective and also having regard to the fact that the society had turned down the request of the respondent No. 5 for grant of permission by an overwhelming majority, the direction given by the Government could not be held to be in the interest of the society. We fail to appreciate how the said decision can be of any help to the respondent No. 7 where already Statutory rules have been enacted prohibiting acceptance of any money by way of transfer-fees unless sanctioned by notification and the State Government has passed a direction for return of the money accepted by the society in violation of the rules based on public policy.
( 21 ) IN the case of Zoroastrian Housing Co-operative Society Ltd. vs. Deputy registrar, reported in AIR 2005 SC 2306 , a Co-operative Society was formed under the Gujarat Co-operative Societies Act (10 of 1962), and its bye-laws restricted the membership to the members of Parsee community. The question before the Apex Court was whether such restriction of. membership to one community and prohibiting transfer of the membership to a different community was in violation of the public policy. In such a case, the Supreme Court held that the concept of 'public policy' under the Constitution could not be brought in to hold such restriction as invalid. In the case before us, the Statutory Rule prohibiting acceptance of transfer-fees at the relevant point of time has not been challenged as ultra vires and as such, a direction to refund the transfer fees in violation of the Statutory Rules at the instance of the Government was quite justified. The said decision, in our opinion, cannot have any application to the facts of the present case where the question is whether the State government can be asked to implement its own decision to direct a Co-operative housing Society to refund the transfer-fees taken from a member in violation of the Statutory Rules. ( 22 ) WE, consequently, find that those decisions cited by Mr. Chatterjee do not help his client in any way. ( 23 ) WE, therefore, find substance in the contention of Mr. Roy and Mr. Bhattacharjee, the learned Advocate for the writ petitioner and the State-respondent respectively that the writ application was maintainable for enforcing the right, which accrued in favour of the writ petitioner by virtue of the direction given by the State-respondent upon the Co-operative Society in exercise of its power under the Act. It may not be out of place to mention here that the Co-operative housing Society, in spite of the direction of the State Government, did not challenge such decision by approaching the appropriate forum. The learned Single Judge, it appears from the record, has directed the Co-operative society itself to pay the amount instead of passing direction upon the State to implement its earlier decision.
The learned Single Judge, it appears from the record, has directed the Co-operative society itself to pay the amount instead of passing direction upon the State to implement its earlier decision. In our view, the writ petitioner having prayed for implementation of the direction of the State against the society, the learned single Judge, instead of passing direction upon the society to pay the amount, ought to have passed direction upon the State Government to implement its own decision by appointing an administrator over the affairs of the society for realization of the amount from the assets of the society if the amount is not paid. ( 24 ) WE accordingly mould the relief granted by the learned Single Judge by directing that if the amount is not paid by the Co-operative Society within a month from today, the State Government will appoint an administrator over the functioning of the society by dissolving the Board of the society and will take step for payment of the amount from the assets of the society. ( 25 ) AS regards the other appeal being F. M. A. No. 732 of 2007 by which the writ petitioner claimed interest, we are of the opinion that the writ petitioner having prayed for implementation of the order of the State Government directing payment of a specified amount, there is no scope of passing any direction for payment of interest as the State had not passed any direction for payment of interest. We have already pointed out that the remedy of the writ petitioner to get back money became barred and his right accrued afresh when the State government passed a direction to refund of the money taken by the society in breach of the statutory provisions inasmuch as such act was prejudicial to public interest being detrimental to the interest of the co-operative movement in general and that of the writ petitioner, a former member of the society, in particular. We accordingly dismiss F. M. A. No. 732 of 2007.
We accordingly dismiss F. M. A. No. 732 of 2007. ( 26 ) WE, therefore, dispose of the appeal being FMA No. 828 of 2005 by recasting the relief granted by the learned Single Judge as indicated above by directing that if the entire amount is not paid within one month from today, the State Government will take necessary step for realization of the amount by appointment of an administrator over the affairs of the Society by dissolving the existing Board with the authority to realize the money from the assets of the society as indicated above. ( 27 ) THE appeals are disposed of in terms of the aforesaid order. In the facts and circumstances, there will be, however, no order as to costs. Appeals disposed of.