Bombay High Court
Apna Sahakari Bank Ltd. And Anr vs Matulya Centre Premises Co-Op. Society ... on 16 April, 2019
Equivalent citations: AIRONLINE 2019 BOM 264, (2020) 2 ALLMR 204
Author: G.S.Kulkarni
Bench: G.S. Kulkarni
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.468 OF 2010
1.Apna Sahakari Bank Ltd.
2.Hemant Shinde, The Deputy General Manager of
Apna Sahakari Bank Ltd. .. Petitioners
Vs.
1.Matulya Centre Premises Co-op.Soc.Ltd.
2. The Deputy Registrar, Co-op.Societies.
3. The Div.Joint Registrar, Co-op. Societies
4. The State of Maharashtra. ...Respondents
-----
Dr.Virendra Tulzapurkar, Senior Advocate with Sandeep Parikh, Kirtida
Chandarana & Nandini Chittal I/b. Mahernosh Humranwala, for the
Petitioners.
Mr.G.S.Godbole with Mr.Mayur Khandeparkar & Aditya Shiralkar I/b.
Vijay Kakwani, for Respondent No.1.
Mr.Hemant Haryan, AGP for Respondent Nos.2 to 4.
-----
CORAM : G.S. KULKARNI, J.
RESERVED ON : 7 January 2019
PRONOUNCED ON: 16 April 2019
---
JUDGMENT
1. A short but important question which arises for consideration in this petition is that when indisputedly the petitioner has a registered sale deed of 30th December 2002 executed in its favour by one Capstan Trading ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 2 wp468-10.doc Pvt.Ltd. (for short 'Capstan') selling the premises in question to the petitioner, and when there is no dispute that the petitioner is unimpeachingly in possession of the premises since 2003, can the society refuse to accept the petitioner as its member by not issuing a share certificate at the instance of the developer.
2. This petition under Article 226 of the Constitution of India challenges an order dated 23 November 2009 passed by the Divisional Joint Registrar, Co-op. Societies, Mumbai (the Revisional Authority) whereby an order passed in favour of the petitioners by the Deputy Registrar under Section 23(2) of the Maharashtra State Cooperative Societies Act 1960 (for short "the MSC Act") directing respondent No.1 - Matulya Centre Premises Co-op. Society Ltd. (for short, "the society") to grant the petitioner society's membership stands set aside. The society had initially rejected petitioners' application for membership of the society.
3. A brief summary of the facts will aid the discussion:-
By a memorandum of understanding (MOU) one Capstan agreed to sell the entire first floor bearing Unit No.1 admeasuring 3216 sq.ft. (built up area) ("the premises") in the building known as "Matulya Centre ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 3 wp468-10.doc Annexe "C" constructed on sub-plot "A", CTS No.249 (part) of Lower Parel Division to petitioner no.1 (for short 'petitioner'), for a total consideration of Rs.1,65,00,000/-. Thereafter a registered sale deed dated 30 December 2002 was executed by Capstan in favour of the petitioner under which the petitioner acquired the said premises from Capstan. The petitioner was also put in possession of the premises. The petitioner also commenced renovation work as the premises were to be used for banking activities of the petitioner's Lower Parel Branch. The petitioner's branch in the said premises was formally inaugurated on 19 April 2003. It is not in dispute that since 2003 and till date banking business is being conducted by the petitioner from the said premises.
4. It is the petitioner's case that when the renovation work of the premises was being undertaken one Mr.R.S.Bajaj claiming to be a secretary of the society approached the petitioner and called upon the petitioner to remove itself from the premises and that the petitioner would not be allowed to carry its banking business from the said premises. This was the first occasion when the petitioner learnt that the developer had formed a co-operative society of the said premises. On 3 February 2003 a representative of the petitioner and Capstan met the office bearers of the ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 4 wp468-10.doc society and were informed that the society was formed in May,2002. The representative of the petitioner informed the office bearers of the respondent-society that Capstan had purchased the said premises in November 1996 from one Ferani Hotels Pvt.Ltd. (for short 'Ferani') who was the builder-developer of the said premises and also expressed surprise as to why Capstan was not informed about formation of the Co-operative Society.
5. After the above said meeting, Capstan addressed a letter dated 25 February 2003 to the Society forwarding certified true copies of the relevant documents pertaining to the said premises, including the agreement dated 30 November 1996 entered between Ferani and Capstan. Capstan also recorded that as Capstan was not earlier aware of the formation of the society, the society was requested to admit Capstan as a member of the society and issue a share certificate in its favour.
6. At this stage, it is necessary to take note of a letter dated 25 February 2003 addressed by the Society to Ferani, informing Ferani that the society has received a request from Capstan claiming ownership of the premises. This is revealed from a letter dated 19 March 2003 of Ferani ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 5 wp468-10.doc addressed to the society, as placed on record alongwith the counter- affidavit of the society. By this letter dated 19 March 2003 Ferani informed the society that the transaction in regard to the premises between Ferani and Capstan is not complete and Capstan is not entitled to the membership of the premises, and therefore, the said premises is shown as unsold by Ferani. Ferani merely said that the transaction is not complete however it did not say that there was no transaction between Ferani and Capstan.
7. The Society addressed a letter dated 26 March 2003 to Capstan acknowledging receipt of Capstan's letter dated 25 February 2003 received together with the copy of the lease agreement dated 30 November 1996 and recorded that the society was incorporated in May 2002 and that as per the details provided by the developer-Ferani (Ferani Hotels Pvt.Ltd.) the petitioner's unit was shown as unsold and that a share certificate was already issued in favour of the developer-Ferari qua the said premises. It was also recorded that on a reference to the developer, the developer informed the society that Capstan was yet to comply certain obligations under the agreement. The society therefore asked Capstan to do the needful in the matter.
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8. Capstan in turn by its letter dated 10 April 2003 addressed to the society, inter-alia informed the society that Ferani had misrepresented the society and had wrongly obtained share certificate in its name. It was recorded that Capstan had purchased the said premises from Ferani under a registered document and hence Ferani's contention about non compliance by Capstan of certain obligation was not correct. It was recorded that when the premises were held by Capstan under a registered agreement dated 30 November 1996 as the possession was handed over to Capstan, since the date of the said agreement, Capstan was in continuous use, occupation and possession of the suit premises being owner of the suit premises. Capstan stated that Capstan was willing to comply with the society's bye-laws. Capstan also stated that Capstan had further sold the premises to petitioner no.1 under a sale deed dated 30 December 2002, and documents to this effect would be submitted to the society for complying with all the formalities for transfer of the premises in favour of the petitioner. It was also informed that Capstan could have approached the society earlier if the Capstan was to have the knowledge of registration of the society. The society was thus requested to extend co-operation and resolve the issues.
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9. Now Ferani addressed a letter dated 24 April 2003 to the society replying to the society's letter dated 26 March 2003 reiterating the contents of its earlier letter dated 19 March 2003 wherein Ferani recorded that the transaction between Ferani and Capstan was yet to be completed. It was also informed that the agreement dated 30 November 1996 was also not lodged for registration and Capstan Trading Pvt.Ltd. had not acquired any right of ownership and the said unit was thus not entitled to the membership of the society. It was recorded that the deed of confirmation in regard to the said agreement was unilaterally executed by Capstan, and Mr.Ashok Raheja had no authority to give Ferani's consent/no objection to Capstan for selling/leasing out the said premises to the prospective transferees. The relevant contents of the said letter need to be noted and read thus:
"The photocopies furnished by you to us also reinforce what we have stated hereinabove and in our letter dated 19 th March,2003 e.g. we find that:-
(a) Document titled Deed of Confirmation dated 29 th June,2001 furnished to you by Capstan Trading Pvt.Ltd.:
The Agreement dated 30th November,1996 is annexed to the said Deed of Confirmation. The said Deed of confirmation has been unilaterally executed by Capstan Trading Pvt.Ltd. Without our consent or knowledge and got registered. The said Deed of Confirmation makes it ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 8 wp468-10.doc clear that the said Deed of Confirmation has not been signed or admitted by us and the said Agreement dated 30th November,1996 has not been confirmed by us. The said Deed of Confirmation also makes it clear that the said Agreement dated 30th November,1996 has not been registered as also noted by the Sub-Registrar himself. The said Agreement dated 30 th November,1996 continues to be unregistered and the transaction between ourselves and Capstan Trading Pvt.Ltd. Continues to be incomplete which may kindly be noted.
(b) Capstan Trading Pvt.Ltd. have further furnished (I) a Resolution dated 30th May,1990 of the Board of Directors of our Company under which Mr.Ashok Girdharidas Raheja had been authorised to sign and execute Ownership Agreements in respect of flats, shops, units, garages, car parking spaces etc. constructed by Ferani Developers in the normal course of business and to admit execution thereof; (ii) a letter dated 30 th November 1996 purportedly signed by Mr.Ashok Girdharidas Raheja wherein he has stated that Capstan Trading Pvt. Ltd. Shall not require any further consent/NOC from us to sell/lease the said Unit to any prospective transferee.
Originals of the above were not available for verification. The said letter is dated 30 th November 1996 i.e. the same date as of the said Ownership Agreement signed by our Director. Clause 15 of the said Ownership Agreement makes it very clear that Capstan Trading Pvt.Ltd. shall not let, sub-let, sell, transfer, assign the said Unit without or previous consent in writing. The said Mr.Ashok Girdharidas Raheja had no authority to give any such confirmation and the said letter has neither any validity and nor do we admit its genuineness and existence. Notwithstanding the above in view of the Capstan Trading Pvt.Ltd. Having as late as 29th June,2001 confirming the said Ownership Agreement including the said Clause No.15 thereof, Capstan Trading Pvt.Ltd. Is not entitled to transfer or sell the said Unit.
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pvr 9 wp468-10.doc In the circumstances, no cognizance can be taken of the request of Capstan Trading Pvt.Ltd. However, when the transaction is completed and/or a decision is taken vis-a-vis the said transaction, the same would be communicated to you."
10. Thereafter as the society prevented the petitioners from parking its vehicles in its compound as also attempted to obstruct the entry of its employees, customers and visitors, and sought to interfere with the petitioner's possession of the suit premises, the petitioners were required to file Civil Suit no.2118 of 2003 against the society in the City Civil Court at Bombay interalia for a permanent injunction against the society and its managing committee members restraining them from disturbing and interfering with the business of the petitioners being carried out in the premises and from preventing its staff and customers from entering the premises without due process of law.
11. On 5 May 2003 Capstan addressed a letter to the Registrar of Co- operative Societies interalia forwarding copies of all the relevant documents and requested the Registrar to direct the society to incorporate the name of Capstan, in the society's record as its member. ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 :::
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12. The petitioner has stated that the Registrar of Co-operative Societies passed an order directing the society to consider the application of Capstan. Thereafter Capstan by its letter dated 13 May 2003 brought to the notice of the society the Registrar's order directing the society to consider Capstan's application and requested that accordingly steps be taken by informing Capstan of the outstanding dues payable including compliance of other formalities as may be required. A similar letter was addressed by Capstan to the society on 29 October 2003, however, the society failed to respond to this letter. Capstan therefore addressed another letter dated 6 February 2004 to the society interalia recording that under the provisions of the MCS Act, Capstan had acquired deemed membership and again requested to accept Capstan as its member. The society however by its letter dated 12 February 2004 informed Capstan that Capstan should contact Ferani and sort out all issues with Ferani.
13. As the petitioners had already purchased the said premises under a registered sale deed dated 30 December 2002 from Capstan, the petitioner in its capacity as the purchaser of the premises by its letter dated 24 October 2005 applied to the society for its membership by submitting a "duly filled application form" together with all the relevant documents and ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 11 wp468-10.doc fees for membership to the society. The petitioner has averred that the civil suit filed in the City Civil Court by the petitioner came to be decreed on 29 October 2005 whereby the society was permanently restrained from causing obstruction to the occupation of the said premises by the petitioners. It is stated that this decree is not challenged by the society and accordingly, the petitioners continue to enjoy unobstructed possession and occupation of the suit premises.
14. The petitioner states that despite the above clear background, the Society by its letter dated 29 November 2005 rejected the petitioner's membership application interalia for the following reasons:
" In connection with the above, we would like to inform you as under:-
As already known to you that the said Unit is owned by M/s.Ferani Developer and sell between them and your Vendor M/s.Capstan Trading Pvtr.Ltd. is not completed.
In view of the above your request for the membership of the society cannot be considered. We are therefore, returning herewith all the documents enclosed with your above letter No.APN/1002/357/2005-06 dated 24th October,sent by you.
You are requested to contact your Vendor M/s.Capstan Trading Pvt.Ltd. and request them to contact M/s.Ferani Developers to complete the sale."
15. On 28 March 2007 the petitioner being aggrieved by the society's rejection of the petitioner's application for membership, filed an appeal no.3 of 2007 under Section 23 of the MCS Act before the Deputy ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 12 wp468-10.doc Registrar, Co-operative Societies (Respondent no.2), praying for an order that the petitioner be admitted as a member of the society. The society appeared, and filed its reply dated 23 July 2007, interalia contending that the petitioner is not entitled for membership, as the petitioner's vendor Capstan itself did not have any right, title and interest in the said unit, and therefore, the petitioners cannot assert any right, title and interest in the said unit. It was contended that membership of the said premises was already issued in favour of the builder (Ferani) and therefore, there was no question of admitting the petitioner as a member qua the said premises. It was contended that the petitioner had not produced any document executed between the petitioner and Ferani and thus the appeal was required to be dismissed.
16. The Deputy Registrar considering the rival pleas and the documents on record passed an order dated 2 January 2008 directing the society to admit the petitioner as a member of the society and issue a share certificate to the petitioner. The Deputy registrar held that the society has not specified any provision under the Act and rules which dis-entitles the petitioner to the membership of the society. It was held that the reasons which were set out by the society in its communication dated 29 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 13 wp468-10.doc November 2015 to the petitioner, were completely irrelevant to deny the membership of the society to the petitioner. It was observed that it was not appropriate for the society to form an opinion that the sale deed as executed in favour of the petitioner was not valid and that such issues lie within the jurisdiction of civil court. The Deputy Registrar held that the document / agreement by which Ferani transferred the said premises to Capstan, was not declared to be invalid by any court. The Deputy Registrar held that not only that the petitioner is not granted benefit under Section 23(2) of the MCS Act, but to deprive the petitioner its benefits under Section 23(2) of the MCS Act, the society had issued share certificate in favour of Ferani.
17. The society challenged the above order of the Deputy Registrar by filing a revision application no.37 of 2008 before the Divisional Joint Registrar of the co-operative societies (respondent no.3). The petitioner contested the said revision by filing a reply dated 14 March 2008.
18. By the impugned order dated 23 November 2009 the Divisional Joint Registrar set aside the order dated 2 January 2008 passed by the ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 14 wp468-10.doc Deputy Registrar and allowed the society's revision application interalia observing that although Ferani sold the premises executing the agreement dated 30 November 1996 in favour of Capstan and that Capstan had sold the suit premises to the petitioner by an agreement of sale dated 30 December 2002, however, Capstan had failed to apply for membership/transfer of the suit premises, in the records of the society and thus the name of Ferani appeared in the Society's record as a member in respect of the said premises. It was observed that as per Rule 24 of the MCS Rules and the bye-laws, due process is not followed by the Capstan and the petitioner. It was observed that the Deputy Registrar has failed to consider the said factual position and hence, the transfer between Capstan and the petitioner of the said premises cannot be considered for membership as per the records of the society. It was observed that the Dy.Registrar has not considered that Capstan had not applied for the membership as also Ferani had not given consent for transfer of the said premises in favour of the petitioner and hence due process as per the MCS Act, rules and bye-laws was not followed for obtaining membership of the applicant-society by the petitioner and Capstan and hence, the revision was liable to be allowed. The petitioner has challenged the legality of this order in the present proceedings.
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19. Dr.Tulzapurkar, learned Senior Counsel for the petitioner in assailing the impugned order would submit that the petitioner having purchased the suit premises under a registered sale deed dated 30 December 2002 from Capstan was eligible under law, the provisions of the MCS Act, the rules and the bye-laws for grant of membership of the society. Even under the provisions of the MOFA [The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963], there are clear binding obligations on the developer, when premises are sold to the flat purchasers. It is submitted that the impugned order is contrary to the provisions of Section 23 of the MCS Act which would entitle the petitioner for membership being duly qualified. The reasons as set out in the impugned order clearly indicate that the Divisional Joint Registrar has overstepped his jurisdiction by entering into the controversy in regard to the title of the petitioner by not accepting the registered sale deed. The Deputy Registrar in his order dated 2 January 2008 had clearly held that the petitioner's application was legal and valid. The issue as raised by the society denying membership is an issue which the society could agitate only in a civil suit. It is submitted that the Deputy Registrar had rightly held that the basic requirement of ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 16 wp468-10.doc the petitioner to obtain membership of the society under the statutory provisions and bye-laws stood fully satisfied. It is submitted that the petitioner's possession of the suit premises since the year 2002 was undisputed as also the documents under which the petitioner was put in possession namely the sale deed as entered with Capstan, was not challenged by Ferani at any point of time. It is submitted that Ferani had never assailed Capstan's ownership of the suit premises and had not asserted its rights in respect of the suit premises at any point of time, much less any assertion of the transfer of the premises to the petitioners and its possession. It is submitted that merely because Ferani was the developer it could not exploit its position and confer upon itself, the membership rights of the said premises de hors the document of sale of the suit premises executed in favour of Capstan and sale of the said premises by Capstan to the petitioner, when admittedly the possession of the premises was handed over to Capstan and further to the petitioner in the year 2002 and till date the petitioner in its own right is enjoying the occupation and possession of said premises. It is submitted that the society also cannot be oblivious to the clear factual position of a registered sale deed being entered by Capstan with the petitioner and also that the possession of the petitioner is recognised by virtue of a decree dated 29 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 17 wp468-10.doc October 2005 passed by the City Civil court in the suit filed by the petitioner. In support of the above contentions, Dr.Tulzapurkar has placed reliance on the decision of the learned Single Judge of this Court in Harish Commercial Premises Co-op. Society Ltd. vs. Smt.Varsha V. Joshi & Ors1; (ii) Videocon Appliances Ltd. vs. Maker Chambers V. Premises Co-op.Socy.Ltd & Ors"2; and (iii) Janardan Daji Naik Vs. Mahim Causeway Machhimar Co.op Housing Society Ltd. & Ors. 3.
20. On the other hand Mr.Godbole, learned Counsel for the society in opposing the petition would make the following submissions:-
(i) It is submitted that the petition deserves to be dismissed for non joinder of the parties as Ferani is not impleaded as a party to the petition.
Unless Ferani is impleaded as a party, the dispute inter-se between Ferani and Captsan cannot be agitated.
(ii) It is submitted that the action of the society in refusing the membership of the petitioner, was valid and legal inasmuch as in the absence of transfer of the ownership rights/title of the premises by Ferani in favour of Capstan, the petitioner cannot claim to have legal and valid title to the said premises.
1 2006(2) All MR 1;
2 2006(1) BCR 6
3 2012(2) BCR 810
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(iii) It is submitted that the agreement dated 30 November 1996
executed between Ferani and Capstan was registered by deed of confirmation dated 29 June 2001 and therefore, cannot be accepted as a valid document, as a unilateral registration is not recognized under the Registration Act.
(iv) It is submitted that the society had already issued a share certificate in respect of the said premises to Ferani who was the developer and that if the order passed by the Deputy Registrar was to be implemented and not to be reversed by the impugned order, then the said premises would have two share certificates, which is ill-conceivable. It is submitted that in fact the disputes between Ferani and Capstan is already a subject matter of Suit No.232 of 2014 and a notice of motion is already filed by Capstan in the said suit for reliefs in respect of the said premises. It is submitted that thus the proper remedy for the petitioner is to file a dispute under Section 91 of the MCS Act, before the Co-operative Court for determination as to whether the petitioner is the owner or Capston or Ferani is the owner of the premises. To support this contention, a reference is made to the definition of "member" under Section2(19)(a) of MCS Act which would define a member to be a person who is duly admitted to membership of a society after registration, who can only be a "Member" in the present ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 19 wp468-10.doc context. He submitted that considering the provisions under Section 17 read with Section 49 of the Registration Act,1908, no sanctity can be conferred on the deed of confirmation dated 29 June 2001 which unilaterally confirmed the agreement dated 30 November 1996 between Ferani and Capston. Referring to Section 25 of the MCS Act it is submitted that Ferani's membership can cease in law only on Ferani resigning from its membership or on transfer of whole of its share or interest in the society to another member, or on his death, or removal or expulsion of Ferani from the society or on dissolution of Ferani. It is therefore submitted that as none of the events as contemplated under Section 25 having taken place, the membership of Ferani cannot be said to have ceased. It is submitted that Section 27(1) of the MCS Act also provides for a principle that no member of any society shall have more than one vote, and thus if the petitioners' arguments are accepted, the situation would be that for one premises there would be two votes and this would be contrary to the provisions of Section 27 of the MCS Act. Referring to Section 29 of the MCS Act, it is submitted that there cannot be two share certificates in respect of one premises and this would be prohibited under Section 29 which imposes restrictions on transfer or charge of share or interest.
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pvr 20 wp468-10.doc (v) It is submitted that the Maharashtra Co-operative Societies Rules,
1961 in Rule 19 provides for conditions to be complied with for admission for membership and further Rule 24 would provide for procedure for transfer of shares. Sub-rule (1)(b) of Rule 24 contemplates a fifteen days notice be given to the society indicating the name of the proposed transferee, his consent, his application for membership, where necessary, and the value proposed to be paid by the transferee. It is submitted that the petitioner/vendor has not given any such notice and in view of failure to undertake this exercise, a legal transfer in favour of the petitioner cannot be effected. It is then submitted that the reasoning as set out in paragraph 3 of the order of the Deputy Registrar was a perverse reasoning where the Deputy Registrar observed that the agreement between Ferani and Capstan and further agreement between Capstan and the petitioner, are not declared as invalid by any court and therefore, the petitioner is entitled to a membership. In supporting his contentions, Mr.Godbole has relied on the bye-laws of the society and on the decision of the learned Single Judge of this Court in "Arun Wamanrao Shinde Vs. Prakash Bhagwan Dalvi & Ors."4.
4 1990 Mh.L.J. 923
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21. In rejoinder on behalf of the petitioner it is submitted that none of the contentions as urged on behalf of the society are tenable inasmuch as the society has not rectified the mistake in its membership register and has made the petitioners to suffer. It is submitted that the society cannot be oblivious of the position that the petitioner is in possession of the premises for last sixteen years under a duly registered agreement between Capstan and the petitioner and that Ferani has never come forward to assert any rights in respect of the said premises either against Capstan or against the petitioners.
22. Having heard the learned Counsel for the parties and having perused the record at the outset it needs to be noted that it is the petitioner's case that the petitioner is entitled to a membership of the society on the basis of a registered sale deed dated 30 December 2002 held by it, under which the petitioner has purchased the premises from Capstan and whether the petitioner is correct in so contending in the facts and circumstances of the present case.
23. The legislative scheme under the MCS Act dealing with membership of a co-operative society is principally contained in Sections 22, 23 and 25 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 22 wp468-10.doc of the MCS Act. Section 22(2) provides for as to who can become a member which would also include apart from individual, a firm, company or society, State Government or the Central Government or a local authority etc. Section 22 provides for a "person who may become a member". Section 22(2) provides for deemed membership. Section 22 reads thus:-
"S.22. Person who may become member:
(1) Subject to the provisions of section 24, no person shall be admitted as a member of a society except the following, that is to say--
(a)an individual, who is competent to contract under the Indian Contract Act, 1872;
(b)a firm, company or any other body corporate constituted under any law for the time being in force, or a society registered under the societies Registration Act, 1860;
(c)a society registered, or deemed to be registered, under this Act;
d) the State Government or the Central Government;
(e) a local authority;
(f) as public trust registered under any law for the time being in force for the registration of such trusts;
Provided that, the provisions of clause (a) shall not apply to an individual seeking admission to a society exclusively formed for the benefit of students of a school or college:
Provided further that, subject to such terms and conditions as may be laid down by the State Government by general or special order, a firm or company may be admitted as a member only of society which is a federal or urban society or which conducts or intends to conduct an industrial undertaking:::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 :::
pvr 23 wp468-10.doc Provided also that, any firm or company, which is immediately before the commencement of this Act, a member of a society deemed to be registered under this Act,shall have,subject to the other provisions of this Act, the right to continue to be such member on and after such commencement.
Explanation.--For the purpose of this section "an urban society"means a society the business of which mainly falls within the limits of a municipal corporation, municipality, cantonment or notified area committee.
(1A) Notwithstanding anything contained in sub-section (1), the State Government may, having regard to the fact that the interest of any person or class of persons conflicts or is likely to conflict with the objects of any society or class or societies, by general or special order, published in the Official Gazette, declare that any person or class of persons engaged in or carrying on any profession, business or employment shall be disqualified from being admitted, or for continuing, as members or shall be eligible for membership only to a limited extent of any specified society or class of societies, so long as such person or persons are engaged in or carry on that profession, business or employment [as the case may be; and the question whether a person is or is not so engaged in or carrying on any profession, business or employment or whether a person belongs or does not belong to such class of persons as declared under this sub-section and has or has not incurred a disqualification under this sub-section shall be decided by the Registrar under section 11].
(1B) Notwithstanding anything contained in sub-section (1), where the Registrar has decided under Section 11 that a person has incurred a disqualification under subsection(1A), the Registrar or the person not below the rank of District Deputy Registrar of Co-
operative Societies, authorised by him in this behalf, may, by order, remove such person from the membership of the society; and such person shall cease to be a member of the society on expiration of a period of one month from the date of receipt of such order by him. (2) Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months (from the date of receipt of the application for admission, whichever is earlier. If the society does not communicate any decision to the applicant within three months from the date of receipt of such application the applicant shall be deemed to have been "[admitted] as a member of the society]. [If ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 24 wp468-10.doc any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.]"
24. Section 23 provides for "Open Membership", which reads thus:-
"S.23 Open membership:
(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its bye-laws.
(1A) Where a society refused to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person, may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any, so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and thereupon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application, and the amount by the society, the applicant shall be deemed to have become a member of such society] [If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.] (2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar [within a period of sixty days from the date of the decision of the society]. [Every such appeal, as far as possible, be disposed of by the Registrar within a period of three months from the date of its receipt:
Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay].
(3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof.
(4) Without prejudice to the foregoing provisions of this section, in the case of agro- processing societies or any other society for which a definite zone or an area of operation is allotted ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 25 wp468-10.doc by the State Government or the Registrar, it shall be obligatory on the part of such society to admit, on an application made to it, every eligible person from that zone or the area of operation, as the case may be, as a member of such society, unless such person is already registered as a member of any other such society, into the same zone or the area of operation.
25. It is well settled that when an application for membership is filed, the society is not required to enter into a realm of investigation of title of the transferor.
26. It is not in dispute that Ferani was the developer/builder of the premises of the society and that Ferani had sold several premises in the society to the respective purchasers. There is no escape from the fact that when Ferani intended to construct the said building and sell the tenements, Ferani was governed by the provisions of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act,1963 (for short "MOFA"), which confers certain obligations on Ferani. Section 4 of the MOFA provides that promoter before accepting advance payment or deposit would be under an obligation to enter into an agreement and agreement would be required to be registered. Sections 4(1) and 4(2) of the MOFA read thus:
"4(1) Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 26 wp468-10.doc of flats, all or some of which are to be taken or are taken on ownership basis, shall, before, he accepts any sum of money as advance payment or deposit, which shall not be more than 20 per cent, of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken, such flats, and the agreement shall be registered under [the Registration Act, 1908 (hereinafter in this section referred to as "the Registration Act"
[and such agreement shall be in the prescribed form.] .........
[(2) Any agreement for sale entered into under sub-section (1) shall be presented, by the promoter or by any other person competent to do so under section 32 of the Registration Act, at the proper registration office for registration, within the time allowed under sections 23 to 26 (both inclusive) of the said Act and execution thereof shall be admitted before the registering officer by the person executing the document or his representative, assign or agent as laid down in sections 34 and 35 of the said Act also within the time aforesaid:
Provided that, where any agreement for sale is entered into, or is purported to be entered into, under sub-section (1), at any time before the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and Validating Provisions) Act, 1983, and such agreement was not presented for registration or was presented for registration but its execution was not admitted before the registration officer by the person concerned, before the commencement of the said Act, then such document may be presented at the proper registration office for registration, and its execution may be admitted, by any of the persons concerned referred to above in this sub-section, on or before the 31st December 1984, and the registering officer shall accept such document for registration, and register it under the Registration Act, as if it were presented, and its execution was admitted, within the time laid down in the Registration Act:
Provided further that, on presenting a document for registration as aforesaid if the person executing such document or his representative, assign or agent does not appear before the registering officer and admit the execution of the document, the registering officer shall cause a summons to be issued under section 36 of the Registration Act requiring the executants to appear at the registration office, either in person or by duly authorized agent, at a time fixed in the summons. If the executants fails to appear in compliance with the summons, the execution of the document shall be deemed to be admitted by him and the registering officer may ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 27 wp468-10.doc proceed to register the document accordingly. If the executants appears before the registering officer as required by the summons but denies execution of the document, the registering officer shall, after giving him a reasonable opportunity of being heard, if satisfied that the document has been executed by him, proceed to register the document accordingly.]"
27. Section 4A of the MOFA provides for the effect of non- registration of agreement required to be registered under Section 4 of the Act. Section 10 provides for obligation on the promoter to take steps for formation of co-operative society or company which reads thus:-
"10. Promoter to take steps for formation of co-operative society or company:
(1) As soon as a minimum number of persons required to form a Co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisaton of persons who take the flats as Co-operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a Co-
operative society or as the case may be, of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act:
(Provided that, if the promoter fails within the prescribed period to submit an application to the Registrar for registration of society in the manner provided in the Maharashtra Co-operative Societies Act,1960, the Competent Authority may, upon receiving an application from the persons who have taken flats from the said promoter, direct the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar concerned, to register the society;
Provided further that, no such direction to register any society under the preceding proviso shall be given to the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar, by the Competent Authority without first verifying authenticity of the applicants' request and giving the concerned ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 28 wp468-10.doc promoter a reasonable opportunity of being heard.) [(2) If any property consisting of building or buildings is constructed or to be constructed [and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act,1970, by executing and registering a Declaration as provided by that Act] then the promoter shall inform the Registrar as defined in the Maharashtra Co-operative Societies Act,1960, accordingly; and in such cases, it shall not be lawful to form any co-operative society or company."
28. The legislative scheme in regard to purchase/transfer of the premises in a proposed co-operative Housing Society is thus reflected firstly under the provisions of the MOFA which interalia deals with the rights and obligations of the promoters, sale of tenements by the promoters, formation of society etc. After the society is formed, the provisions of MCS Act in relation to the membership interalia Section 22, 23 and 25 read with Rules become applicable. These are the basic legal parameters in the context of which the rights of flat purchasers in a society are required to be considered and examined. Thus, on first principles the controversy in the present petition would be required to be considered in the light of the provisions of both these statues, as the facts clearly indicate that the society has asserted that the share certificate in respect of the premises of the petitioner has been retained/ remained or is conferred on the promoter, and whether in the context of the issue of membership falling under Section 22 and 23 of MCS Act such a plea of the membership ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 29 wp468-10.doc of the said premises being conferred on the promoter, can at all be accepted.
29. As noted above there are several obligations as conferred by law on the promoter when the promoter indulges in the sale of the premises in the proposed building which includes obligation on the promoter to get the agreement registered with the purchaser of the premises. This clearly at the time before the promoter accepts any sum of money as advance payment or deposit which shall not be more than 20% of the sale price and get the agreement registered as provided under Sub-section (2) of Section 4. In case the agreement remains unregistered, Section 4A provides that notwithstanding anything contained in any law for the time being in force, or in any judgment, decree or order of any Court, it may be received as evidence of a contract before the Court as provided under Section 4A of the MOFA. The law has conferred such sanctity for such document to be received in evidence. Under Section 10 of the MOFA it is an obligation on the promoter to register a society.
30. In the light of the above clear statutory scheme certain admitted facts are required to be noted these are:
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(i) Ferani in no proceedings has challenged the agreement entered by Ferani and Capstan dated 30 November 1996 and the deed of confirmation dated 29 June 2001 by which the execution of the said agreement dated 30 November 1996 is confirmed.;
(ii) Ferani had put Capstan into possession of the premises;
(iii) by a registered sale deed dated 30 December 2002 Capstan transferred the premises in favour of the petitioner, which is neither questioned nor assailed by Ferani in any proceedings and no proceedings for declaration of the said document to be illegal, are instituted;
(iv) That the petitioner is in unobstructed possession of the said premises since the year 2002 and is in occupation of the premises and that at no point of time either Ferani or Capstan has challenged the possessory and occupancy rights of the petitioner;
(v) There is a decree of perpetual injunction in favour of the petitioner of the City Civil Court at Bombay dated 29 October 2005 restraining the society from disturbing the possession of the petitioner;
(vi) That the petitioner is conducting its banking activities since 2003 from the said premises and which is completely to the knowledge of Ferani and the Society;
(vii) Even the society has not filed any proceedings to challenge the ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 31 wp468-10.doc registered sale deed dated 30 December 2002 executed by Capstan;
(viii) Thus prima-facie the petitioners occupy the premises in question on the basis of a lawful document, and is in full use and occupation of the premises since 2003 conducting its banking business, its possessory rights even being recognized by the civil court in a suit filed by it against the society.
31. The question on this above conspectus is whether the Society under the provisions of Section 22 read with Section 23 of the MCS Act would still deny the petitioner, the right of membership.
32. The basic requirement of Section 23 of the MCS Act which provides for "Open Membership" is that no society shall without sufficient cause, refuse admission to membership to any person under the provisions of the MCS Act and its bye-laws. The society also cannot refuse membership to a person who is in lawful occupation of the premises in the society. This would tantamount to denying the legitimate entitlements and benefits to a person who is in lawful occupation of the premises. The word "sufficient cause" as contained in Section 23(1) is required to be understood in the facts and circumstances of each case, to ascertain whether there is ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 32 wp468-10.doc sufficient cause for the society to deny membership. In the present case there were overwhelming circumstances of the petitioner having a registered agreement purchasing the premises from Capstan, this coupled with possession of the premises since 2003. The possessory and occupancy rights also being confirmed against the society by a decree of the civil court. Most glaringly petitioner's registered document of transfer of the premises was not being questioned by any third party. The petitioner on the basis of such unquestioned registered agreement having applied for membership, in my opinion, it must be regarded that there was "no sufficient cause" for the society to deny the petitioner right to membership. Such denial would be against the very spirit and object of Section 22 and 23 of the MCS Act. Once a society is registered it cannot act at the dictates of the developer, whose role comes to an end after the formation of the society. It is a matter of common knowledge that it is the developer who on forming a society distributes share certificates to the purchasers of the flats and can also retain the share certificates when for some reason he does not want to part with the same. There is no question of ipsi dixit of the developer and the premises can be retained in accordance with law and the rules when it comes to the records of the society. In this situation it is the statutory duty of the managing committee ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 33 wp468-10.doc of the society to objectively and carefully consider the facts before denying the right of membership to a legitimate purchaser of premises. The managing committee cannot compromise its independence and its obligation to adhere to the principles of co-operation firmly intended in the provisions of the MCS Act, Rules and the Bye-laws. In the present case there is nothing on record that Ferani had applied to the society in a manner known to law and was conferred a membership.
33. In the present case the managing committee has precisely overlooked these basic attributes, and possibly has acted upon the dictates of the developer- Ferani. In what manner, considering which documents it accepted Ferani as a member, is nowhere brought on record by the Society. A builder retaining the share certificate before handing over the records to the newly formed society would be no ground, as once a society is formed, the premises belong to the society, the same yardstick on the basis of which every flat purchaser occupies the flat, would become applicable to a builder. The society is not precluded from examining all such independent registered documents executed in favour of a developer so as to ascertain whether a share certificate lawfully can be issued and is entitled to a builder/developer. Necessarily there has to be a document of ownership qua the flat/premises as known to law. As general retention of the unsold premises with the developer under a development agreement may not ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 34 wp468-10.doc suffice when flats are constructed and they are required to be occupied and possessed as a member of a society which has to be on same yardstick of an independent rights in law to occupy and possess the premises on the basis of which a share certificate can be issued qua such premises. This for the reason that for all purposes and requirements of the MCS Act, Rule and the Bye-laws, such premises as retained by the developer form an integral part of the premises of the society. It is the society which definitely has a say on membership of such premises. In regard to such premises documents showing lawful entitlement to such premises to hold such premises in the capacity of a member of the society are required to be reflected from the records of the society. This does not mean that the society will discard a legitimate registered document of transfer of the premises in favour of a person as in the present case. It is a matter of common knowledge that the developer having retained some premises even after forming a society has generated large scale litigation.
34. In Harish Commercial Premises Co-op. Society Ltd. (supra) as a statement of law the Court held that membership of the society is an open membership and if a person is in lawful possession of a premises of the society then the membership cannot be refused to such a person. The Court in paragraph 11 and 12 has observed thus:-
"11. .. .. ... .. Membership of the society is an open membership and if a person is in lawful possession of a premises of the society ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 35 wp468-10.doc then the membership cannot be refused to such a person. By not adding the respondent as a member of the society would amount to denying the benefits of the membership under the Act conferred on each and every person who is the occupier of the premises of the building. In any event I do not find any compelling reason that the respondents should not be made the members of the petitioner society. The rights of the respondents prima facie cannot be held illegal under the said agreement nor a structure can be considered as unauthorized when there is a permission from the Corporation.
12. In any event I am of the opinion that in the proceedings arising under section 23 of the Maharashtra Co-operative Societies Act what is required to be considered is prima facie whether the respondents who are claiming to be the member are the lawful occupants and have right, title and interest in the said property on the basis of which he is seeking membership of the society. The jurisdiction of the Registrar under section 23 does not extend to determine the validity and/or otherwise the documents which are already executed in favour of the concerned person because that is the jurisdiction of the civil court and if any person raising any challenge to the said agreement is required to file appropriate civil suit." (emphasis supplied)
35. In "R.N.A. Classic CHS Ltd. Vs. Deputy Registrar, Co-operative Societies & Ors.". a learned Single Judge of this Court considering the decisions in Harish Commercial Premises Co-op. Society Ltd. (supra) and Videocon Appliances Ltd.(supra), in paragraph 14 has observed as under:-
"14. ... ... ... There is therefore merit in the submission of the learned Senior Counsel appearing on behalf of the Respondent No.2 that the Petitioner-Society whilst considering the application for membership was entering into the realm of enquiry into the title of the Respondent no.2 to the flat/shop in question. In the said context, it is required to be noted that by the judgments in Harish Commercial Premises (supra), and Videocon Appliances Ltd. (supra) the scope of inquiry whilst considering the application for membership has been enunciated by a learned Single Judge of this Court. It would therefore, apposite to refer to the said Judgements ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 36 wp468-10.doc at this stage. In Harish Commercial Premises (supra) case, the agreement on the basis of which the membership was claimed was sought to be questioned by the society concerned therein. The learned Single Judge of this Court held that the society has not taken any steps by filing civil proceedings or civil suit challenging the said arrangement and seeking cancellation thereof. The learned Single Judge whilst so holding held that the jurisdiction of the Registrar under Section 23 does not extend to determine the validity and/or otherwise of the documents which are already executed in favour of the concerned person because that is the jurisdiction of the civil court and if any person seeks to raise any challenge to the said agreement he is required to file appropriate civil suit. In so far as Videocon Appliances (supra) case is concerned, the membership of the society was denied to the applicant on the ground that the flat in respect of which the membership was sought was constructed contrary to and in breach of Section 7 of Maharashtra Ownership Flats Act,1963 as the consent of the existing unit holders was not obtained by the builder. In the said context, the learned Single Judge held that whether the construction is authorized or unauthorized is a matter which is a civil dispute and has to be determined by the Civil court and neither the co-operative society nor the Deputy Registrar nor the higher authority is empowered to go into the aspect for determining whether an person is entitled to be a member or not.
The learned Single Judge has further held that the aspect as to whether a person has to be granted membership has to be considered on the touchstone of the rules, regulations and bye-laws and not on the basis of external factors such as whether the construction of the premises which is sought to be purchased by him is legal, illegal or authorized or unauthorized. In the light of the aforesaid pronouncements the scope of an inquiry pursuant to an application for membership is enunciated. The Petitioner- Society in my view, could not deny the membership to the Respondent No.2 on the ground that there was non-compliance in the matter of providing the chain of agreements as was sought by the letter dated 22/9/2011. In requisitioning the said information the Petitioner-Society was virtually embarking upon an exercise of investigation into the title of the flat/shop in respect of which the membership was claimed by the Respondent No.2 which it was not entitled to it. Hence, in so far as the said aspect is concerned, the orders passed by both the authorities below cannot be faulted with."
(emphasis supplied)
36. Considering the above position in law in the context of Section 22 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 37 wp468-10.doc and 23 of the MCS Act it thus becomes clear that it would not be lawful for the society to investigate and/or to make an inquiry in the perfection of the title of the applicant who is seeking a membership. In the present case, the basic requirements which would entitle the petitioner to obtain a transfer of shares in its favour, were very much present namely a registered sale deed dated 30 December 2002 executed in its favour by Capstan. In the absence of any proceedings to challenge Capstan's entitlement to transfer the suit premises to the petitioner by virtue of which the petitioner was to be in possession in the year 2002, it was surely not open for the society to overlook these glaring facts and deny the petitioner's membership of the society.
37. The nature of the objection as raised by the society is clearly an inquiry by the society questioning the registered documents entered between the petitioner and Capstan, and in fact it would amount to defeating the rights created under the said document in favour of the petitioner by the society, more particularly when none of the third party including Ferani who claimed to have some relation to the suit premises, had never come forward to assail the said document. The society was thus acting patently contrary to the statutory provisions of Section 22 and 23 of ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 38 wp468-10.doc the Act thereby is defeating the rights of open membership when valid documents were presented to the society by the petitioner with Capstan-its vendor.
38. In my opinion, it was manifestly illegal for the society to act upon the letter dated 19 March 2003 of Ferani merely stating that Capstan has not perfected its title. When Ferani took this position, Ferani did not deny that there was a transaction of sale of the premises in favour of Capstan but merely said that the transaction is not complete. Ferani never disputed that the possession was handed over to Capstan and never adopted any proceedings to dispute petitioner's agreement with Capstan. In fact it was obligatory for the society in such a situation not to issue share certificate to Ferani as Ferani has failed to produce any registered agreement conferring right, title and interest in respect of the said flat in favour of Ferani if the society says that it was issued by the society. Further as to under what transaction and registered sale deed Ferani claimed the share certificate is also not disclosed/asserted by Ferani. The society has also failed to disclose as to on what basis the share certificate was issued to Ferani. The following statement in the affidavit of the society is clear, which amplifies the above position:- ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 :::
pvr 39 wp468-10.doc "(iii) By letters dated 19.3.2003 and 24.4.2003 Ferani Hotels Pvt.Ltd. informed Respondent No.1 Society that the said Unit No.1 has not been sold or transferred to Capstan Trading Pvt.Ltd. And that the transaction between Ferani Hotels Pvt.Ltd. And Capstan Trading Pvt.Ltd. is not complete."
39. A perusal of the impugned order passed by the Divisional Joint Registrar clearly shows that the Divisional Joint Registrar has embarked upon an inquiry and investigation into title which cannot be the jurisdiction of the Divisional Joint Registrar under Section 23 of the MCS Act. The following basic reason as given by the Divisional Joint Registrar in the impugned order clearly violates the mandate of law as noted above:-
"Hence transaction between M/s.Capstan Trading Pvt.Ltd. and respondent no.2 Bank in respect of the said premises/unit cannot be considered for membership as per the records of the applicant- society. The Respondent Dy. Registrar ought to have considered that M/s.Capstan Trading Pvt.Ltd. has not applied for membership, so also M/s.Ferani Hotels Pvt.Ltd. Has not given consent for transfer of the said premises/unit in the name of the Respondent No.2 Bank."
The above reasoning fails to take into account the several facets of the petitioner's lawful occupation as enumerated in paragraph no.30 above.
40. As regards the argument as advanced on behalf of the society that the petitioner should seek declaration against Capstan and Ferani in ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 40 wp468-10.doc dispute under Section 91 of the Maharashtra Co-operative Societies Act, is not well founded in the facts of the case. The petitioner has a registered agreement in its favour, the petitioner is indisputedly in occupation of the premises since year 2002 conducting banking business. Neither Ferani nor any other party has come forward to assail either the possession of the petitioner or the sale deed on which the petitioner is in possession of the premises. In these circumstances, it would be wholly untenable for the society to ask the petitioner to knock the doors of the Co-operative Court and establish its rights against Ferani and/or Capstan. If Ferani was never bothered to assert that the premises lawfully belonged to it as against the petitioner and not bothered about any of its so called rights and possession of the said premises, it is palpably erroneous for the society to contend that the petitioner should now indulge into such litigation and only thereafter the membership issue qua the petitioner can be considered. In fact the Deputy Registrar in my opinion is correct when he observes that the society is helping Ferani in the disputes which Ferani has against Capstan while denying the legitimate rights of the petitioner to be a member of the society. As regards the contention in regard to unilateral registration of deed of agreement of sale dated 30 November 1996, this argument would not lie in the mouth of the society, when Ferani itself is ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 41 wp468-10.doc not asserting this position.
41. In so far as the contention of the society that there would be two share certificates, this contention is required to be rejected. This is for two fold reasons, firstly Ferani has not denied the sale of the suit premises to Capstan. Ferani merely by letter has asserted that the transaction is not complete. Further Ferani has never asserted that the agreement for sale dated 30 November 1996 between Ferani and Capstan as confirmed by the deed of confirmation dated 29 June 2001 is illegal and not binding on Ferani. Ferani has also not assailed the registration of sale deed entered by Capstan in favour of the petitioner. If this be the clear position on record, then Ferani retaining the share certificate without the possession and occupation of the premises with Ferani and that too admittedly from the year 2002, how such a share certificate purportedly held by Ferani can have any sanctity. It was thus obligatory on the society as rightly directed by the Deputy Registrar in the order dated 2 January 2008 that the transfer of the said premises be recorded in the register of membership in favour of the petitioner and a share certificate be issued qua the said premises in favour of the petitioner so that the benefit of the membership is not denied to the petitioner as required by law. The specious argument ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 42 wp468-10.doc on behalf of the society that the order as passed by the Deputy Registrar would create situation that two share certificates would be required to be issued for the same premises, is totally misconceived. The order of the Deputy Registrar cannot be read in the manner which is sought to be projected by the society.
42. The contention as urged on behalf of the society referring to the provisions of Section 25 of the MCS Act which provides for cessation of membership of a society on the resignation of a member, or on the transfer of the share or interest in the society to another member, or on his death, or removal or expulsion from the society, or where a firm, company, any other corporate body, society or trust, in no manner would be relevant in the context of the present dispute. Similarly, the contention as urged on behalf of the society referring to Section 27 which pertains to voting powers of members is totally outside the present controversy. The reference to the said provisions in the context of the present proceedings completely is a hairsplitting argument. In the facts of the present case, there is no need to delve or any contingent consequence in regard to voting powers which may be attached to a share certificate. Further the respondent's contention referring to Section 29 which provides for ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 ::: pvr 43 wp468-10.doc restrictions on transfer or charge of share or interest also cannot be accepted. In the clear facts of the case, Section 29 would have no application.
43. In the light of the above discussion, it is quite clear to me that the Divisional Joint Registrar has acted in total disregard to the mandate of law as Sections 22 and 23 of the MCS Act would provide, in denying benefits of membership to the petitioner. There is a clear and patent error in exercise of the revisional jurisdiction as vested in the Divisional Joint Registrar in setting aside the order passed by the Deputy Registrar dated 2 January 2008 who directed the society to grant membership to the petitioner.
44. Resultantly, the petition needs to succeed. The impugned order dated 23 November 2009 passed by the Divisional Joint Registrar is quashed and set aside and the order passed by the Deputy Registrar dated 2 January 2008 is held to be legal and valid. The Society is directed to implement the orders of the Deputy Registrar within two weeks from today.
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45. The petition is accordingly allowed in the above terms. No costs.
46. At this stage Mr.Godbole, learned Counsel for Respondent no.1 seeks continuation of the ad-interim orders passed by this Court. Considering the facts and circumstances of the case, the request is rejected.
(G.S.Kulkarni, J.) ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:25 :::