Appeal No. 1408 of 1990

11th February, 1993.

Petitioner Counsel: D. Y. Chandrachud, K. K. V. Kurup
Respondent Counsel: P. K. Thakore, H. K. Vardhane, M. H. Shah, S. M. Shah, Miss S. P. Daruwalla

JUDGMENT

M. L. PENDSE, J. :- This appeal is preferred to challenge legality of judgment dated October 26, 1990 passed by learned Single Judge summarily dismissing Writ Petition No. 2728 of 1990. It is necessary to set out facts which gave rise to the filing of the petition in detail as the issue involved is one of considerable importance.

2. The respondent No. 5 is a Co-operative Housing Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as the Act). The Society was desirous of constructing residential building for accommodation of members and requested Government of Maharashtra to allot Plot No. 125 of the layout of Survey No. 1 11-D-141-A of Village Ambvali, Taluka Andheri. The State Government allotted the plot in accordance with the Rules framed by the Government in respect of allotment of Government lands to Co-operative Housing Societies and the grant was on terms and conditions which are set out in Government Resolution dated May 12, 1983. The Government Resolution, inter alia, recites that the question of grant of Government land to Co-operative Housing Societies was under consideration in view of the acute shortage of available space and unusual demand from various sources. The Government, therefore, issued orders regarding grant of land to Co-operative Societies throughout the State of Maharashtra, in exercise of powers under section 40 of Maharashtra Land Revenue Code, 1966 read with Rule 27 of Maharashtra Land Revenue (Disposal of Government Lands) Rules, 1971. The policy decision of the State Government, inter alia, recites that Government land should be granted to Co-operative Societies for construction of residential tenements for the members belonging to various income groups. The Government decided to give priority while disposing of Government lands to freedom-fighters, retired or serving members of the armed forces and the State police and families of armed forces and State police who were killed while on duty. The Resolution recites that eligibility for membership in Co-operative Housing Societies seeking Government land on payment of concessional occupancy price/lease rent should be examined in the light of the qualifying conditions prescribed in Annexure 'A' to Resolution. The Resolution further provides that the allotment of land should only be to a registered Co-operative Housing Society and affairs of such Housing Society established on Government land should be managed in accordance with the provisions of the Act and the Rules framed therein and as per bye-law adopted by the Societies, subject to further conditions prescribed by Government in the land grant orders. The Resolution makes it clear that possession of Government land should be granted to Housing Societies only after such Societies are registered under the provisions of the Act.

3. Annexure 'A' to the Resolution sets out qualification for approval of members in Co-operative Housing Societies seeking Government lands on payment of concessional occupancy prices/lease rent. Some of the conditions are that a member should be resident of Maharashtra for at least 15 years; the members should have an independent source of income and the member should not have in his own name and possession or in the name and possession of his spouse or minor child or member of family dependent upon him any land, house, bungalow or flat in excess of 600 square feet carpet area in the area of operation of Housing Society. The member should also not hold any rental accommodation in excess of 600 square feet carpet area and in case such a member desires to join the Co-operative Housing Society, then, it can only be on condition of such person giving an undertaking to relinquish by surrender, sale or transfer of the existing accommodation. Annexure 'B' to the Government Resolution sets out the terms and conditions of grant of Government lands to Co-operative Housing Societies. The terms demand that a Society shall utilise the land only for the purpose of construction of residential tenements for its approved members. The terms demand that a Society shall not permit any of its members to lease or sub-let or to give on leave and licence basis or to transfer the tenement allotted to him without the prior permission of the Collector. Term No. (ix) provides that the Society shall not enrol any new member or substitute any member approved by the Collector/Commissioner/Government, under the provisions of its bye-law notwithstanding, without prior written permission of the said authority and the said authority shall have a right to approve or disapprove any such request, or to grant permission on such terms and conditions as the said authority considers fit. Clause (x) inter alia, provides that if any member does not occupy the tenement, then the Society shall place the tenement at the disposal of the Collector who shall arrange to pay the rent to the member holding the flat. Clause (ix) reads as under :-

"If any member of his wife/her husband or his/her minor child purchases at any time, any flat or house or bungalow of an area exceeding 600 sq.ft. carpet area or plot in the area of operation of the Society the said member shall stand disqualified and the house/flat in the Society shall be transferred, at price determined by Collector/ Government but not exceeding the cost paid to the Society to another member to be approved by Collector/Government and qualified to be a member."

Clause (xvi), inter alia, provides that the Society shall be liable to be evicted and the land and building resumed to Government without payment of compensation, in case there is any breach of conditions of grant or failure on the part of the Society to remedy the breach within a stipulated period. Term No. (xvii) demands that a Society shall be bound to take all necessary steps to compel any of its members, who has committed breach of any of the conditions of the grant to remedy the said breach and if the Society fails to take any action against the member, then it shall be deemed to be a breach committed by the Society itself. Clause No. (xix) of the terms and conditions requires the Society to execute an agreement embodying and agreeing to the terms and conditions set out in Schedule 'B' and any other conditions which the Collector may impose. It is not in dispute that respondent No. 5-Society had executed the requisite agreement in accordance with the terms and conditions set out in Government Resolution dated May 12, 1983.

4. The respondent No. 5-Society is duly registered under the Act and the provisions of the Act along with the Rules and bye-laws regulate the working and administration of respondent No. 5-Society. Chapter III of the Act deals with the subject of members and the rights and liabilities. Section 22 sets out the persons who can become members of a Society. Section 25 provides that a person shall cease to be a member of the Society on his resignation or on the transfer of the share and interest in the Society or on death, removal or expulsion. Section 25A provides that the Committee of the Society shall remove from the register the name of a person who has ceased to be a member or who stands disqualified by or under the provisions of the Act. Section 35(1) provides for expulsion of member and power is conferred upon a Society to expel a member for acts which are detrimental to the interest or proper working of the Society, by passing resolution by a majority of not less than three-fourths of the members entitled to vote and who are present at the general meeting held for that purpose. The proviso to sub-section (1) of section 35 sets out that resolution to expel a member shall not be valid unless (a) the member to be expelled is given an opportunity to represent his case to the general body and (b) the resolution of expulsion is approved by the Registrar.

5. In exercise of powers conferred by sub-sections (1) and (2) of section 165 of the Act, the Government of Maharashtra has framed Rules known as "Maharashtra Co-operative Societies Rules, 1961". Rules 28 and 29 deal with the subject of expulsion of members. Rule 28 provides that any member who has been persistently defaulting in payment of his dues or failing to comply with the provisions of the bye-laws or in the opinion of the Committee has brought disrepute to the Society or has done acts detrimental to the interest or proper working of the Society may be expelled in accordance with theprovisions of sub-section (1) of section 35 of the Act. Rule 28 further provides that expulsion from membership may involve forfeiture of the shares held by the member. Rule 29 provides for the procedure for expulsion of member and demands that the member proposed to be expelled shall be given a written notice and the subject shall be placed on the agenda of the next general meeting. The Rule further demands that a member proposed to be expelled should be given notice to remain present in the general meeting which should be held not earlier than a period of one month from the date of service of the show cause notice. The Rule demands that general body should hear the member proposed to be expelled and the resolution to expel may be passed only after taking into consideration what the member has to say.

6. The Registrar of Co-operative Societies has framed Model Bye-laws for various kinds of Societies including Housing Societies and unless different bye-laws duly approved by the Registrar are adopted by the Society, the Model Bye-laws are applicable to every Housing Society. Bye-law No. 53 of Model Bye-laws sets out the grounds on which a member could be expelled and bye-law 53 (ii) provides that a member can be expelled if he has wilfully deceived the Society by giving false information. Bye-law 53(v) provides that a member can be expelled if he has furnished false information or omitted to furnish the material information to the registering authority at the time of registration of the Society. With these statutory provisions, it would be convenient to turn to the facts which gave rise to the filing of Writ Petition before Single Judge.

7. The appellant had sought membership of the proposed Co-operative Housing Society and the application of the appellant was forwarded to the Government for approval. At the relevant time, the appellant was holding the office of Secretary of the proposed Society. The appellant filed affidavit on April 20, 1984 claiming that he was not in occupation of any tenement and he was in service as a Lecturer in SNDT University. On the strength of the information furnished by the appellant, the Government approved the membership and the appellant was enrolled as a member. The General Body of the Society convened meeting on April 10, 1988 and resolution was moved to expel the appellant on the ground that the information furnished at the time of seeking admission to the membership of the Society was false. The resolution sets out that the appellant was already holding accommodation on ownership basis in the tenements of Maharashtra Housing Board. The tenement was situated in Manisha Purti Co-operative Housing Society Ltd., Shastri Nagar, Goregaon (West), Bombay. The resolution further claimed that the appellant had a rental accommodation at Sharda Niwas, Goregaon (West), Bombay and the total carpet area of the two tenements was in excess of 600 square feet. The resolution further claimed that the appellant had acquired another flat in the name of his wife subsequent to the date of enrolment in respondent No. 5-Society. The resolution claims that the appellant had filed false affidavit suppressing the information and had also falsely asserted that he was in service, even though the service of the appellant was terminated. The appellant was served with a notice of the meeting. After deliberation, the resolution was passed by the general body to the effect that the Additional Collector should be moved for cancellation of the membership of the appellant on the ground of securing the membership by wilfully suppressing the true facts. The resolution requested the Additional Collector to initiate suitable proceedings against the appellant. The resolution was carried by 11 out of 13 members present, the appellant opposing and one Mr. Kale abstained from voting.

8. In pursuance of the resolution, the Secretary of the respondent No. 5-Society addressed letter dated May 8, 1988 to the Additional Collector, Bombay Suburban District, requesting to take action against the appellant. The Additional Collector served show cause notice dated June 13, 1988 on the appellant to explain why the membership should not be cancelled. The appellant filed reply explaining the allegations made by the Society but it is not necessary to set out the claim put up by the appellant, save and except observing that the appellant denied the allegations. The Additional Collector by order dated June 21, 1989 came to the conclusion that the appellant has submitted false affidavit containing untrue information, and on the strength of which the membership of the appellant in respondent No. 5-Society was approved. On the strength of the finding, the Additional Collector proceeded to cancel the membership of the appellant and directed that the Society should take immediate steps to recover possession of the flat in occupation of the appellant and if necessary, with police help. The appellant carried appeal before the Additional Commissioner, Konkan Division, Bombay under section 247 of Maharashtra Land Revenue Code but appeal ended in dismissal by order dated April 17, 1990. A further appeal to the State Government also met with the same fate by order dated August 13, 1990.

The appellant thereupon preferred Writ Petition under Article 226 of the Constitution on the Original Side of this Court to challenge legality of the orders passed by the Additional Collector, the Additional Commissioner and the State Government. The petition was summarily dismissed by speaking order dated October 26, 1990 by learned Single Judge. The learned Judge felt that the appellant had secured membership of the Society on the basis of affidavit which contained false statements and if the authorities have cancelled the membership, then the High Court cannot come to the rescue of the appellant. The decision of learned Single Judge is under challenge.

9. Mr. Chandrachud, learned Counsel appearing on behalf of the appellant submitted that orders under challenge before learned Single Judge were passed without any jurisdiction and, therefore, the appellant is entitled to the relief of quashing of the orders. Mr. Chandrachud did not challenge the findings recorded by the authorities but submitted that Additional Collector could not have directed cancellation of the membership of the appellant and permitted the Society to recover possession of the flat with police help in exercise of powers conferred under the Land Revenue Code. It was contended that Additional Collector had no jurisdiction to commence or entertain the proceedings and to pass impugned order and the subsequent orders passed by the appellate authority are also without jurisdiction. Mr. Thakore, learned Counsel appearing on behalf of the authorities and the State Government and Mr. Shah, learned Counsel appearing on behalf of Society submitted that the authorities below had jurisdiction to pass the impugned orders. In view of the rival contentions, the question which falls for determination is whether Additional Collector, in exercise of powers under the Land Revenue Code could direct that the membership of the appellant of a Co-operative Housing Society stands terminated and the Society can recover possession with police help, if necessary.

10. Maharashtra Co-operative Societies Act, 1960 was enacted by State Legislature to consolidate and amend the law relating to the Co-operative Societies in the State of Maharashtra. Legislature desired to consolidate and amend the law relating to Societies with a view to providing for the orderly development for the co-operative movement in the State of Maharashtra in accordance with the relevant directive principles of State policy enunciated in the Constitution of India. The Act is a self-contained Code for regulating the activities of Co-operative Societies and exhaustively provides for registration of the Society, enrolment of members, rights and liabilities of members, the incor-poration of duties and privileges of Societies, the management of Societies as well as settlement of disputes between Societies and the members. In City of Bombay and other parts of the State, several Co-operative Housing Societies are registered with the object of providing shelter to the members and the Housing Societies are classified as tenant-ownership Housing Society, tenant co-part-nership Housing Society and other Housing Societies. Tenant-ownership Housing Societies are those where land is held either on leasehold or freehold basis by Societies and houses are owned or are to be owned by members. Due to paucity of available land for construction of houses in City of Bombay, several applications were received by Government of Maharashtra for grant of Govern-ment lands for the purpose of promotion of Housing Societies. The Government decided to grant lands to Housing Societies in accordance with the provisions of Maharashtra Land Revenue Code, 1966. The lands are granted in favour of the Society with a condition that the lands, will not be alienated or transferred and would be used for the purpose of construction of houses to be occupied by members. The Government by Resolution dated May 12, 1983 took a policy decision that the grant of Government land to Housing Societies should be on certain terms and conditions. Section 48 of Land Revenue Code specifically provides that the State Government has a right to dispose of lands on such terms and conditions as it deemed fit. The terms and conditions set out by Government Resolution are with an object of ensuring that Government lands are used for the purpose of housing and only by those occupants who fulfil certain conditions. The anxiety of the State Government was to ensure that the few available Government lands should be put to the best use for the benefit of persons who genuinely need accommodation at a reasonable price. While allotting Government lands, the Resolution demands that the allotment should be only to Co-operative Housing Societies and not to individuals, with a view to prevent exploitation of the land and buildings to be erected thereon. The Government was also desirous of ensuring that members to be enrolled in such Housing Societies should be the genuine members and who fulfil the terms and conditions annexed to the resolution. The Government lands are not allotted unless the Society is duly registered under the Co-operative Societies Act. The Government Resolution dated May 12, 1983 is a policy decision and is not a statutory provision which creates any right in the Government to evict an occupier from the tenement of a Housing Society. The terms and conditions on which the land is allotted to the Society entitles the Government to resume both, the land and the building constructed thereon, in cases where the Society commits the breach of the terms and conditions and in cases where the Society fails to take action against the occupier in spite of breaches committed. The right of resumption vested in the State Government is to be exercised against the Society and not against an individual occupant of a tenement. The provisions of Maharashtra Land Revenue Code set out the right of the Government to dispose of Government lands and the power to resume in case of breach of terms and conditions but the Code nowhere provides that the Government can recover a tenement out of the building of the Society.

11. On registration of Co-operative Housing Society under the Act, the rights and liabilities of members qua the Society are to be determined with reference to the statutory provisions. Chapter III of the Act deals with the subject of members and the rights and liabilities and the right of a person to be enrolled as a member has to be determined with reference to the provisions of the Act and the bye-laws of the Society. For ascertaining whether a person should be enrolled as a member of a registered Housing Society, it is not permissible to refer to the terms and conditions of the grant unless those terms and conditions form part of the bye-laws. One of the terms of grant of Government lands is that a Society shall not enroll any new member or substitute any member without prior written permission of the said authority and this term is incorporated in Model Bye-law No. 17(c) which, inter alia, provides that admission of a person to membership of the Society directly or as a result of transfer shall be subject to the approval of the Collector of the District, if the Society has been given land by Government. In view of the specific bye-law, the condition of seeking prior approval provided in the terms and conditions at the time of allotment of Government land is to be strictly observed by the Society. The question which requires determination is when once the Society is duly registered under the provisions of the Act, is it open for the Collector to proceed to terminate the membership of an occupant and direct the Society to recover possession? In our judgment, it is not open for the Collector to by-pass the statutory provisions contained in the Societies Act and assume the right to terminate the membership and permit the Society to take possession. The Collector by assuming jurisdiction is obviously trespassing on the statutory powers conferred on the Society as well as on the Courts constituted under the Act to determine the disputes between the members and the Society.

12. Section 35 of the Act confers statutory right on Society to expel a member by resolution passed by majority of not less than three-fourths of the members entitled to vote and present at the general meeting. The power to expel a member is circumscribed by the provision that the member should be guilty of acts which are detrimental to the interest or proper working of the Society. The resolution to expel a member is not valid unless the member to be expelled is given opportunity of presenting his case to the general body and the resolution cannot be put to effect unless it is approved by the Registrar. Proviso to sub-section (1) of section 35 makes it clear that power to expel a member is available only to the Society and the power can be exercised only in the manner prescribed by the Act and the Rules. It is also not left to the exclusive determination of the Society as to whether a member is liable to be expelled for acts which are detrimental to the interest or proper working of the Society and the decision of the Society is subject to the approval of the Registrar of Co-operative Societies. The member who is to be expelled is provided with a right to file an appeal under section 152 of the Act to the State Government. The provisions of section 35 clearly indicate that a right to determine whether a member should be expelled for certain acts is available only to the Society and not to any other authority including the State Government. The power to expel a member is not available to the Collector merely because the building of the Society is constructed on the land allotted by the Government. It is not open for the Additional Collector to determine that a particular member should be expelled merely because the Society requests the Additional Collector to take proceedings. The consequence of expulsion of a member under section 35 is that the name of the member is struck off from the register of members. Even expulsion of a member and the fact that name of the member is struck off from the register will not automatically entitle the Society to recover possession. In case the member who is expelled declines to restore possession to the Society, then the Society is bound to adopt proceedings under Chapter IX of the Act. Section 91, inter alia, provides that any dispute between a Society and a member shall be referred to a Co-operative Court. Section 91-A provides for constitution of Co-operative Court to adjudicate upon all disputes. Section 97 of the Act provides that any party aggrieved by the decision of the Co-operative Court can prefer an appeal to Co-operative Appellate Court. These provisions unmistakably establish that the Act has created a forum which must be approached for resolving the dispute between Society on the one hand and members on the other and in view of the statutory provisions, it is not permissible for any authority howsoever high it may be, to interfere with the administration of Housing Society and direct that a member should be expelled or Society can recover possession from a member.

13. The action of Additional Collector in entertaining the request of respondent No. 5-Society and issuing show cause notice to the appellant and thereafter concluding that the membership of the appellant stands terminated and the Society should recover possession, if necessary with police help, clearly indicates the attitude to encroach upon the exclusive jurisdiction of the Society as well as Co-operative Court constituted under statutory provisions. The action of Additional Collector is fraught with serious consequences as it indicates the tendency to ignore statutory provisions and assume powers when none exists. It is not permissible for the officers of State Government to interfere with the administration and management of a Co-operative Housing Society and resolve disputes between the members and the Society merely because the buildings of the Society are constructed on the land allotted by Government under Land Revenue Code. In our judgment, the Additional Collector had no jurisdiction whatsoever to entertain the proceedings or to pass order directing that the membership of the appellant stands cancelled and the Housing Society should take immediate steps to recover possession by police help from the appellant. Such an order is entirely highhanded and cannot be sustained by reference to any authority flowing from provisions of any law. We disapprove the tendency of the Governmental authorities to encroach upon the jurisdiction of the statutory authority created by the Act passed by the Legislature.

14. Mr. Thakore on behalf of the State Government submitted that the terms and conditions, inter alia, provide that a Society shall not enrol any new member or substitute any member approved by the Collector without prior written permission of the Collector and this condition is also reflected in the bye-laws of the Society. The learned Counsel urged that what Additional Collector had done by the impugned order is merely to withdraw the approval and this action cannot be faulted. The submission is entirely misconceived. Once an approval is given and the Society enrols a member, then the removal of the member or the expulsion of the member is left entirely to the Society and the power to remove or expel a member cannot be exercised by the backdoor method by claiming that the Government was merely withdrawing the approval already given. The action taken by Additional Collector is obviously to expel or remove the member and that is not permissible. Mr. Thakore could not even defend the action of the Additional Collector in directing the Society to recover possession of the tenement of the appellant with police assistance. Such a direction, in our judgment, is wholly illegal and indicates the highhanded manner in which the authorities, who are not controlled by statutory provisions, are likely to act. The Additional Collector could not have given such direction in absence of any power flowing from statutory provisions. The provisions of Land Revenue Code do not entitle the Additional Collector to pass such orders nor source of power can be traced to the terms and conditions on which the allotment is made. In our judgment, the order of the Additional Collector and which is confirmed by the Additional Commissioner and further by the State Government is without any jurisdiction and consequently, all these orders are required to be struck down.

15. Mr. Shah on behalf of the Society submitted that there is dispute between the Society and the appellant as to the manner in which the appellant had secured possession of a tenement and the proceedings are pending under section 145 of Code of Criminal Procedure before Metropolitan Magistrate. Mr. Shah also submitted that the Society had passed resolution expelling the member for the reasons recorded in the resolution and the decision that the Additional Collector had no jurisdiction to pass the impugned order may affect the fate of resolution or 145 proceedings. We wish to make it clear that we are not expressing any opinion on the merits of the claim of the Society in the present appeal nor are we examining the claim of the Society that acts of the appellant were detrimental to the interests of the Society. Order passed by Additional Collector is struck down only on the ground that the authority lacked jurisdiction to entertain the proceedings and pass the impugned order. Mr. Shah sounded an apprehension that the power of expulsion to be exercised by the Society under section 35 of the Act may be challenged on the ground that for the purpose of expulsion also, prior approval of the Collector is required. The apprehension is without any basis as the right of the Society to expela member in exercise of powers under section 35 of the Act is not dependent upon the approval of the Collector. Indeed, it is wholly unnecessary for the Society to approach the Collector to give effect to the resolution of expulsion of member to be passed under section 35 of the Act. The Society is only required to comply with the requirement of the section and the requirement nowhere provides that the approval of the Collector should be obtained. The stage of securing approval of the Collector can arise only when the Society is desirous of enrolling new members and that stage may arise only when a vacancy occurs in respect of a tenement. In our judgment, the apprehension of the learned Counsel is without any basis.

16. Accordingly, appeal is allowed and order dated October 26, 1990 passed by learned Single Judge in Writ Petition No. 2728 of 1990 as well as orders dated June 21, 1981 passed by Additional Collector, Bombay Suburban District; order dated April 17, 1990 passed by Additional Commissioner, Konkan Division, Bombay and order dated August 13, 1990 passed by Minister (Revenue), Bombay are set aside. It is made clear that right of the Society to expel the appellant or to adopt proceedings for recovery of possession in a proper forum constituted under the Act are not affected by this decision. In the circumstances of the case, there will be no order as to costs.

Appeal allowed.