2015(5) ALL MR 44
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ANOOP V. MOHTA, J.

Bandra Owners Court Co-operative Housing Society Limited Vs. The Divisional Joint Registrar of Co-operative Societies & Ors.

Writ Petition No.1011 of 2010

3rd February, 2015.

Petitioner Counsel: Mr. HARINDER TOOR i/by Mr. NANDU PAWAR
Respondent Counsel: Ms. LAKSHMI MURALI i/by LAKSHMI MURALI & ASSOCIATES

Maharashtra Co-operative Societies Act (1960), Ss.2(19)(a), 22(2), 23 - Membership of society - Society and/or Authority concerned before granting or refusing membership need to follow principles of natural justice by hearing all concerned and then pass a reasoned order.

Merely because someone has claimed membership, a Society is not under obligation to grant the same. The lawful occupation, their rights, title and interest in the property, permissible transfer of shares and/or property and/or interest as per the bye-laws and all related aspects, just cannot be overlooked by the concerned parties, including the Society, as well as, the Registrar/Authorities. [Para 8]

Isolated events cannot be the foundation to grant such membership. The Society having once done so and refused to grant admission with reasoned order, the interference by the Respondent-Authority in the present facts and circumstances of the case and specifically by not giving the reasons in support of their reversal order as contemplated and by overlooking the provisions and procedures so read and referred above, The Court is inclined to observe that both the orders passed by the Authorities are unsustainable, therefore, required to be interfered with. The jurisdiction of Registrar under Section 23, though nowhere contemplated to determine the validity and/or legality of the documents, which are executed in favour of the parties, but still the basic elements as contemplated under the scheme and the provisions as referred above, right from the bye-laws of the Society, need to be looked into before granting and/or refusing membership. The serious issue of validity and/or legality of the documents may be the matter of trial and/or inquiry before the appropriate forum, but that itself is not sufficient to deny the membership, if all the elements are available in support of the same. [Para 9,10]

Cases Cited:
Ishwar Nagar Cooperative Housing Building Society Vs. Parma Nand Sharma & Ors., (2010) SCC 230 [Para 7]
Zoroastrian Cooperative Housing Society Ltd. and Anr. Vs. District Registrar, Cooperative Societies (Urban) & Ors., 2005(5) ALL MR 731 (S.C.)=(2005) 5 SCC 632 [Para 7]
Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. Commissioner of Income Tax, Kolhapur & Ors., (2004) 12 SCC 1 [Para 7]
Harish Commercial Premises Cooperative Society Ltd. Vs. Smt. Varsha Dinesh Joshi & Ors., 2006(2) ALL MR 1=WP/5545/2004, Dt.1.12.2005 [Para 7,8]


JUDGMENT

JUDGMENT :- Called out from the final hearing board. Heard finally, by consent of the parties.

2. The Petitioner-Society has challenged orders dated 15 December 2009 passed by Respondent No.1the Divisional Joint Registrar, Cooperative Societies, Mumbai whereby, their Revision Application under Section 154 of the Maharashtra Cooperative Societies Act, 1960 (for short, "the MCS Act") was dismissed and thereby, order dated 13 April 2009 passed by the Deputy Registrar of Cooperative Societies, HWest Ward, Mumbai under Section 23(2) of the MCS Act, is confirmed.

3. The PetitionerSociety is a Tenant Cooperative Society, as contemplated under Rule 10 of the Maharashtra Cooperative Societies Rules, 1961 (for short, "the MCS Rules"). Respondent No.5 applied for the transfer of suit shares and suit flat from the name of Respondent Nos. 3 and 4the members of the Petitioner Society on 24 January 2004. Respondent No.3 was the Director of Respondent No.5 and also the Secretary of Petitioner Society. The Society declined to the said transfer for want of sufficient stamp and registration. The Society never accepted the payment on behalf of Respondent No.5, and even through Respondent Nos. 3 and 4, and communicated their inability to transfer the suit flat. The Application filed by Respondent No.5, therefore, rejected and the flat remained, so also the membership, in the name of Respondent Nos. 3 and 4. The Society returned the amount also. Respondent Nos. 6 and 7, on 15 August 2008, filed an Application for transfer of suit flat and suit shares from Respondent No.5 to them. On 26 August 2008, the same was rejected as Respondent No.5 was not the owner of the suit flat in the above back ground. Respondent Nos. 6 and 7, therefore, invoked Section 23(1) of MCS Act, 1960 before the Deputy Registrar of Cooperative Societies on 13 April 2009. The same was allowed and directed the Petitioner to admit them as members in respect of the suit shares and the suit flat. The Petitioner Society therefore, preferred the Revision Application and challenged the above order. Respondent No.1the Divisional Joint Registrar by impugned order dated 15 December 2009, rejected the Revision Application, therefore, the present Writ Petition by the Society.

4. The MCS Act and Rules made thereunder provides the provisions for members and membership and various classes of the same and the procedure to be followed for getting such membership. Mere filing of Application for getting membership, is not sufficient. The Society is governed and run by the byelaws, which is basic requirement to consider to grant and/or refuse such membership. Ultimately, the Registrar, after giving an opportunity to all the parties even decided the deemed membership and/or otherwise. Normally, the Society, needs to grant the membership if all other requisite elements and/or qualifications are available. Even for rejection, the Society must give sufficient reason and/or must show the grounds for such refusal of admission. In the present case, for the above stated case, the Society refused to accept the membership Application. Those admitted positions on record, in my view, ought not to have been overlooked by the Authorities.

5. It is relevant to note that, in view of above background, the basic scheme and procedure so prescribed under the MCS Act referring to "Member"/"Membership". Section 2(19)(a) provides the concept of "member". The concept "deemed member" as provided in Sections 22(2) and 23 is not defined. Section 22(2) deals with the members who became members and Section 23 provides a procedure for open membership. For deciding the membership issue, the aspect of restriction on transfer or charge of share or interest, as contemplated under Section 29 is also relevant, so also to maintain the register of members as contemplated under Section 38 of the MCS Act. Rule 38 of the byelaws definitely covers that the Society needs to follow the byelaws, which binds the Society, as well as, its members. Rule 19 deals with the conditions before admission for the membership. This also provides the detailed procedure to be followed by all the parties. Rule 24 deals with the procedure for transfer of shares, as no transfer of shares shall be effective unless the condition so provided under the Rules and the Act are fulfilled.

6. Above provisions, therefore, make the position very clear that for the transfer of membership and/or shares, the concerned parties need to follow the various procedure and the supporting material and documents. The Society needs to apply its mind to the law, as well as, the related record before granting and/or refusing admission. The statutory Authorities are also under obligation to consider this, if the Society refused the membership and/or any challenge is made to grant such admission. These, in my view, are essential elements before considering the rival case, as well as, contentions at every stage of admission of members and/or granting membership. This itself means the Society and/or the Authority concerned, need to follow the basic principles of natural justice also and so also grant equal opportunity to all the parties and this itself follows appropriate reasons for and/or against, while granting and/or rejecting such membership.

7. The learned counsel appearing for the parties read and referred the following Supreme Court Judgments and the Judgment of this Court:-

a) Ishwar Nagar Cooperative Housing Building Society Vs. Parma Nand Sharma & Ors. (2010) SCC 230

b) Zoroastrian Cooperative Housing Society Ltd. and Anr. Vs. District Registrar, Cooperative Societies (Urban) & Ors. (2005) 5 SCC 632 : [2005(5) ALL MR 731 (S.C.)]

c) Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. Commissioner of Income Tax, Kolhapur & Ors. (2004) 12 SCC 1

d) Harish Commercial Premises Cooperative Society Ltd. Vs. Smt. Varsha Dinesh Joshi & Ors. Writ Petition No. 5545 of 2004 dated 1 December 2005 : [2006(2) ALL MR 1]

8. By the impugned order, Respondent No.1 though read and referred a Judgment of this Court Harish, [2006(2) ALL MR 1] (Supra) and specifically para 12, but failed to take note of basic principles so laid down in the Supreme Court Judgments so referred and cited above. Merely because someone has claimed membership, a Society is not under obligation to grant the same. The lawful occupation, their rights, title and interest in the property, permissible transfer of shares and/or property and/or interest as per the byelaws and all related aspects, just cannot be overlooked by the concerned parties, including the Society, as well as, the Registrar/Authorities.

9. In view of above admitted position on record, all these facts are missing in favour of the Respondents and at least not reflected in the reasons so provided by the Authorities. Isolated events cannot be the foundation to grant such membership. The Society having once done so and refused to grant admission with reasoned order, the interference by the RespondentAuthority in the present facts and circumstances of the case and specifically by not giving the reasons in support of their reversal order as contemplated and by overlooking the provisions and procedures so read and referred above, I am inclined to observe that both the orders passed by the Authorities are unsustainable, therefore, required to be interfered with.

10. The fact that Respondent Nos. 6 and 7 have purchased the property and are in occupation of the same since 2008, their entitlement based upon the said transaction and/or related agreements need to be reconsider in accordance with law by the concerned Authorities afresh, by giving full opportunity to all the parties concerned. I am inclined to observe that the jurisdiction of Registrar under Section 23, though nowhere contemplated to determine the validity and/or legality of the documents, which are executed in favour of the parties, but still the basic elements as contemplated under the scheme and the provisions as referred above, right from the byelaws of the Society, need to be looked into before granting and/or refusing membership. The serious issue of validity and/or legality of the documents may be the matter of trial and/or inquiry before the appropriate forum, but that itself is not sufficient to deny the membership, if all the elements are available in support of the same.

11. Merely because the first Authority has granted the order and reversed the order of the Society, that itself is not sufficient for the higher Authority to maintain the order. In the present case, as recorded above, the Respondents ought to have given the reversal reasons in detailed before passing the order of granting the membership by overlooking the reasons of the Society. As the same is also missing and as that required detailed hearing and opportunity to all the parties, I am inclined to remand the matter back, by keeping all points open for the parties concerned and the Authorities to decide the same in accordance with law. Therefore, the following order:-

ORDER

a) Impugned orders dated 15 December 2009 passed by Respondent No.1Divisional Joint Registrar and 13 April 2009 passed by Respondent No.2 Deputy Registrar, are quashed and set aside.

b) Appeal filed by Respondent Nos. 6 and 7 is restored back to the file of Respondent No.2Deputy Registrar, Cooperative Societies, HWest Ward, Mumbai.

c) The matter be heard afresh by giving opportunity to both the parties, and the decision be taken as early as possible, preferably within 6 months.

d) All points are kept open.

e) The Writ Petition is allowed. There shall be no order as to costs.

Petition allowed.