Gujarat High Court
Mazda Rise Cooperative Housing ... vs Deputy Secretary Appeal Cooperation ... on 26 November, 2018
Equivalent citations: AIRONLINE 2018 GUJ 250
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/7088/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7088 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA
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1 Whether Reporters of Local Papers may be allowed to Yes
see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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MAZDA RISE COOPERATIVE HOUSING (SERVICE) SOCIETY
Versus
DEPUTY SECRETARY APPEAL COOPERATION DEPARTMENT
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Appearance:
MR ISHAN MIHIR PATEL(6508) for the PETITIONER(s) No. 1
MR. RONAK RAVAL, ASST. GOVERNMENT PLEADER(1) for the
RESPONDENT(s) No. 1,2,3
MR CHIRAG B PATEL(3679) for the RESPONDENT(s) No. 4
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 26/11/2018
ORAL JUDGMENT
1. By this writ application under Article 226 of the Constitution of India, the writ applicant, a Cooperative Housing Page 1 of 42 C/SCA/7088/2015 JUDGMENT (Service) Society, has prayed for the following reliefs;
"(a) quash and set aside the order dated 18-12-2014 passed by the respondent no. 1-Dy. Secretary (Appeal), Sahkar Prabhag, Agriculture and Cooperation Department, Gandhinagar whereby the order dated 08-
02-2007 passed in Appeal No. 122/2006 by the respondent no. 2-Additional Registrar is confirmed;
(b) quash and set aside the order dated 08-02-2007 passed in Appeal No. 122/2006 by the respondent no. 2- Additional Registrar;
(c ) during the pendency of this petition, stay the operation and implementation of the orders dated 18-12- 2014 passed by the respondent no. 1-Dy. Secretary (Appeal), Sahkar Prabhag, Agriculture and Cooperation Department, Gandhinagar and the order dated 08-02- 2007 passed in Appeal No. 122/2006 by the respondent no. 2-Additional Registrar;
(d) Pass any further writ, order or direction as may be deemed necessary in the interests of justice."
2. The case of the Society, in its own words, as pleaded in the writ application, is as under;
"2.1 In accordance with Section 36 of the Gujarat Cooperative Societies Act, the petitioner-society had issued a show-cause notice dated 21-03-2006 to the respondent no. 4 (a member) giving opportunity to represent his case since the petitioner-society considered it necessary to expel him since his activities were extremely detrimental to the society. Thereafter, the respondent replied to the show-cause notice and also certain correspondence between the petitioner-society and the respondent no. 4 took place.
2.2 After considering the stand of the respondent no. 4 and after following due process of law and principles of natural justice, on 23-04-2006, the petitioner-society resolved to expel the respondent no. 4 vide Resolution Page 2 of 42 C/SCA/7088/2015 JUDGMENT No. 1. And according to the mandate of Section 36 of the Gujarat Cooperative Societies Act, the petitioner-society submitted its resolution to the District Registrar for his 'approval' received by him on 02-05-2006. For the sake of ready reference, Section 36 of the Act may kindly be allowed to be reproduced hereinbelow:
"36. Expulsion of members:-
1. A society may, by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society:
Provided that, no resolution shall be valid, unless the member concerned is given an opportunity of representing his case to the general body, and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him:
Provided further that, the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of such submission, and in the absence of such communication the resolution shall be effective.
2. ......."
2.3 Upon such receipt of resolution for approval, the District Registrar issued notice to the respondent no. 4; and after giving him an opportunity to be heard, approved the resolution passed by the petitioner-society vide order dated 28-07-2006. Reading this order dated 28-07-2006 passed by the ld. District Registrar, it can be observed as below:
2.3.1 The ld. District Registrar has taken into consideration that the respondent no. 4 has not produced the necessary documents as were required by the petitioner-society in connection with shop nos.
SA1, SA2, SA3, SB2 and SB4; and has also violated bye-law nos. 5(1) and 7(1)(1)(2)(6).
2.3.2 The ld. District Registrar has also taken into consideration that the respondent no. 4 has not Page 3 of 42 C/SCA/7088/2015 JUDGMENT paid maintenance amounts to the petitioner-society; and has thereby violated bye-law no. 5(3).
2.3.3 The ld. District Registrar has also taken into consideration that the respondent no. 4 has violated the judgment and order dated 30-12-1995 passed by the ld. Civil Judge, Umargaon in Civil Suit No. 32/1993 and the bye-laws of the petitioner-society by establishing and running commercial shops, including shop no. 3 in the name of Pappu Electricals despite the fact that the petitioner-society is solely for residential purposes.
2.3.4 The ld. District Registrar has, after taking the documentary evidence produced by the petitioner-society and the respondent no. 4 and also the submissions made by both into consideration, come to the conclusion that the respondent no. 4 has gravely violated the bye-laws and directions of the petitioner-society; and therefore, the resolution passed by the petitioner-society requires to be approved.
2.4 Aggrieved by the approval granted by the ld. District Registrar vide order dated 28-07-2006, the respondent no. 4 filed an appeal (being Appeal No. 122/2006) purportedly under Section 153 of the Gujarat Cooperative Societies Act before the respondent no. 2-ld. Addl. Registrar. This appeal was allowed by the respondent no. 2-ld. Addl. Registrar by order dated 08- 02-2007. This order allowing the appeal is founded on the following reasons:
(i) For recovery of maintenance amount, a separate Lavad Suit can be filed; and that Section 36 of the Gujarat Cooperative Societies Act cannot be resorted to;
(ii) While respondent no. 4 (being a Parsi) owns Flat no.
21 in the Parsi society, the dispute is not regarding his flat but, is instead, of the shops established by him on the ground-floor; and therefore, Section 36 of the Gujarat Cooperative Societies Act cannot be resorted to as the two issues are separate;
(iii) Though the ld. District Registrar has followed the Page 4 of 42 C/SCA/7088/2015 JUDGMENT mandate of Section 36, the petitioner-society has resorted to Section 36 only to end the disputes of non- payment of maintenance instead of filing a Lavad Suit.
(iv) That considering the case-law, the respondent no. 4 has not acted detrimental to the interests of the petitioner-society.
2.5 Aggrieved by this order dated 08-02-2007, the petitioner-society filed a Revision Application (being Revision No. 44/2007) (under Section 155 of the Act of 1961), which was dismissed by order dated 30-07-2007 passed by the respondent no. 1 - Dy. Secy. (Appeals). This order is founded on the reason that Section 36 of the Gujarat Cooperative Societies Act cannot be resorted to for the grievances against the respondent no. 4.
2.6 Being aggrieved by this order dated 30-07-2007, the petitioner-society had filed a writ-petition (being SCA No. 28830/2007); and the same was rejected by order dated 28-01-2008 passed by this Hon'ble High Court.
The petitioner-society, therefore, filed a Letters Patent Appeal (being LPA No. 483/2008) against the said order dated 28-01-2008; and the same was allowed by order dated 18-06-2014."
3. Submissions on behalf of the writ applicant;
3.1 Mr. Ishan Patel, the learned counsel appearing for the Society vehemently submitted that the respondents nos. 1 and 2 have gravely erred by failing to understand that on a conjoint reading of Sub-Section (1) of Section 36 of the Gujarat Cooperative Societies Act, 1961 and the two provisos thereunder, the legislative scheme that unfolds is that once the petitioner-society has complied with the requirement of granting an opportunity of hearing to the member concerned (respondent no. 4) and a resolution is passed at a meeting held for such purpose by the prescribed majority, the resolution is valid.
Page 5 of 42C/SCA/7088/2015 JUDGMENT 3.2 He submitted that the later part of the first proviso does not talk of the validity of the resolution being subject to approval by the Registrar. The said portion of the first proviso only requires and states that on being granted approval the valid resolution become effective.
3.3 He further submitted that what is provided on a conjoint reading of the first proviso and Sub-Section (1) of Section 36 of the Act is that once the requirements are complied with by the Society, a valid resolution comes into existence and only the implementation thereof stands deferred, awaiting approval or disapproval by the Registrar.
3.4 According to Mr. Patel, the respondents nos. 1 and 2 have also gravely misinterpreted Section 36 of the Gujarat Cooperative Societies Act, 1961 by failing to understand that the District Registrar has a mere role of approving/disapproving the resolution passed by the petitioner-society; and that the District Registrar's scope of intervention against the resolution of a cooperative society is only to the extent of ensuring that the requirements of Section 36 of the Act of 1961 are complied with by the petitioner- society.
3.5 He submitted that the requirements to be fulfilled by a society as per Section 36 of the Act can be enumerated thus:
a. The resolution has to be passed by a three fourth majority of the members present and voting at a general meeting.Page 6 of 42
C/SCA/7088/2015 JUDGMENT
b. The purpose of the meeting is to consider the
expulsion of a member for acts detrimental to the proper working of the society.
c. The member concerned is to be given an opportunity of representing his case to the general body.
3.6 He submitted that the plain reading of Section 36 with the first proviso indicates that the District Registrar is not required to sit in appeal and conduct the proceedings like an appellate authority and consider the merits of the matter; but has to act as an Approving Authority and, therefore, has a limited role to play. The order by the District Registrar per se does not result in the consequences insofar as an expelled member is concerned, but it is the decision of the Society.
3.7 Mr. Patel submitted that the object of the provision has to be borne in mind. The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including the resolutions passed in accordance with the Act, the Rules, and the Bye-laws have to be respected and implemented. The underlying idea of Section 36 of the Act is to give precedence to the collective rights of the members of the society when pitted against the individual rights of a solitary member. Of course, the provision has provided adequate safeguards. The section stipulates passing of a resolution by the prescribed majority, and after hearing the member concerned.
3.8 He submitted that the respondent nos. 1 and 2 have gravely erred by failing to understand that the respondent no.Page 7 of 42
C/SCA/7088/2015 JUDGMENT 4 has not raised a single objection qua the resolution passed by the petitioner-society to the effect that the resolution is either malafide or arbitrary or perverse or that there is violation of principles of natural justice. It is only then that the resolution can be disapproved.
3.9 Mr. Patel very vehemently submitted that the respondents nos.1 and 2 have gravely misinterpreted Section 36 of the Gujarat Cooperative Societies Act, 1961. The grievance raised and the difficulties faced by the petitioner-
society because of the respondent no. 4 squarely fall within the expression, "detrimental to the proper working of the society". Despite that, the respondent nos. 1 and 2 have held otherwise. The respondent nos. 1 and 2 have failed to understand that the act of the respondent no. 4 in dealing with and transferring the shops established in the society upon which there is an injunction order dated 30-12-1995 passed by the ld. Civil Judge, Umargaon in Civil Suit No. 32/1993 is clearly "detrimental to the proper working of the society" within the meaning of Section 36 of the Act.
3.10 Mr. Patel pointed out that the respondents nos. 1 and 2 have failed to understand that the respondent no. 4's carrying of commercial activities in a residential society meant exclusively for the Parsis is clearly "detrimental to the proper working of the society" within the meaning of Section 36 of the Act. The respondents nos. 1 and 2 have failed to understand that the respondent no. 4's transferring possession of shops established in and of the ownership of the petitioner-society to some third person is clearly "detrimental to the proper working of the society" within the meaning of Section 36 of the Act.
Page 8 of 42C/SCA/7088/2015 JUDGMENT 3.11 He submitted that the respondents nos. 1 and 2 have failed to appreciate that the respondent no. 4's obstinate attitude and not abiding by the instructions and bye-laws of the petitioner-society is clearly "detrimental to the proper working of the society" within the meaning of Section 36 of the Act.
4. In such circumstances, referred to above, Mr. Patel submits that there being merit in this petition, the same be allowed and the relief as prayed for be granted.
5. On the other hand, this application has been vehemently opposed by Mr. Patel, the learned counsel appearing for the respondent No.4. Mr. Patel would submit that no error, not to speak of any error of law, could be said to have been committed by the State Government in passing the impugned order.
6. The principal argument of Mr. Patel is that even if the entire case put up by the society is accepted as true, the case does not fall within the ambit of section 36 of the Act, 1961. According to Mr. Patel, what has been complained against his client does not amount to any act that could be said to be detrimental to the interest of the society. Mr. Patel would submit that his client, even as on date, is ready and willing to make good the dues payable at his instance to the Society provided the Society furnishes the correct and true information as regards the dues payable by his client. Mr. Patel has placed reliance on the averments made in the affidavit-in-reply filed by his client. According to Mr. Patel, there being no merit in this petition, the same be rejected.
Page 9 of 42C/SCA/7088/2015 JUDGMENT
7. Mr. Ronak Raval, the learned AGP appearing for the State submitted that no error, not to speak of any error of law, could be said to have been committed by the State Government in passing the impugned order. According to the learned AGP, no interference is warranted in the matter.
8. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the Government committed any error in passing the impugned order.
9. I take notice of the fact that this litigation, by now, has been a long drawn process. It all started with a show-cause notice issued by the Society to the respondent No.4, pointing out the various illegalities and irregularities entailing disqualification as a member of the Society. In the show-cause notice, the following has been stated;
"MAZDA RISE CO OP HSG [SERVICE] SOC LTD Sanjan- Nargol Road, Opp. Moon-Moon Talkies, Sanjan, 396 150 Gujarat Bombay Address Mazda Rise Co Op Hos Ser Soc Ltd C/o Mrs M R Banbost, 72-A, August Kranti Marg, Bombay- 400 036 Date: 21/03/2006 SHOW-CAUSE NOTICE By RPAD To, Shri E.G. Sabawala, Page 10 of 42 C/SCA/7088/2015 JUDGMENT Hosner Engineer Works, Metro Electric & Mechanical Engg Works A-21, SA 01002-03, SB 02, SB 04, Mazda Rise Apartment Sanjan Nargol Road Sanjan 396150 SUB: TO REMOVE FROM MEMBERSHIP UNDER BYELAWS OF ASSOCIATION AND UNDER SECTION 36 OF GUJARAT CO OP SOCIETY With reference to above mentioned subject, we are to state and submit that,
1. Registration No of Mazda Rise Co Op Housing Service Society Ltd is Sec 24691 dated 29/06/1992.
2. Builder of Society and Organizer had at the time of establishment of Society and at the time of construction work of flats, it was mentioned in the broacher and other places that this society is established for the purpose of Parsi Community. Similarly, at presently 99% of members of Society consist of Parsi Community.
3. Society did not want to make any member except Parsi meaning Zoroastrian. In matter of Zoroastrian, Hon'ble Supreme Court had on 15/04/2005 issued judgment in Civil Appeal No 1551 of 2000 accordingly; society is conferred rights and entitlements.
4. You had without paying any amount towards consideration to society, deliberately and willfully illegally entered into space of ownership of society, raised picture as of ownership of Shop no A-03 and B-02 not only that, both these shops were on illegal basis allocated to Shri Umesh K Patel and Shri Jaysinh Anna More and raising pressure upon Society and Committee members for transfer of said properties in name of them.
5. Notices on frequent basis since the year of 2003 were served for producing relevance and documentary evidence of Shop no A-03 and B-02 like copy of original Sale Deed, evidence of Registration, Stamp Duty paid but, there are Page 11 of 42 C/SCA/7088/2015 JUDGMENT neither such documents represented nor any legal compliance produced. Thus, despite of the fact that, you did not have any legal right ownership over shops of societies, by committing misdemeanor against interest of members of society, properties of society are seized.
6. In this connection, District Registrar Shri, Valsad did not provide any information.
7. You had by producing illegal and baseless allegations against Society and designation holder of society and thereby committed harm to prestige and Credit of Society and similarly, in connivance of antisocial elements outside local jurisdiction, seeking representations for removal of Administrative Committee of Society. Thus, despite of the fact that, members of society did not have any dissatisfaction about administration and management of society, you are committing misdemeanor against interest of society for your own interest.
8. You misled to some of the members of the Society and thereupon raised fake Complaint before Registrar Shri, Cooperative Societies, Gandhinagar against Society not only that by yourself initiated fake signature of a member who is in foreign nation thus by committing forgery, you committed misdemeanor against interest of society.
9. You had on illegal basis, allocated Shop properties of Society to one person in name of Jaysinh Anna More. Thus, you grabbed properties of society by producing any legal evidence relevance of shop and there upon tried to raise right and entitlements of a person who is of non- Parsi Community and thereby committed damages of Society.
10. Society was registered for residential purpose only and you had at relevant period of time, in connivance of then than Builder-Organizers, framed shops on front side. Civil Court Junior Division Court also passed Decreetal order in favor of Society that nobody would commence any Commercial activities in these shops despite of the fact you had put extra efforts to Page 12 of 42 C/SCA/7088/2015 JUDGMENT commence closed shops before Cooperative Associate by way of seeking false representation affecting right and entitlements of Societies. Thus, you are utmost trying to raise nuisance in the essential peaceful society and also seeking representation for capturing administration of Society from Committee and also to appoint Administrator thus, you misdemeanor is entirely against interest of society.
11. You have sought fake representations before Cooperative Associates and provoking to the District Registrar on illegal basis and thereby passed order against society and hence, Society has to incur huge expenditure and thus, you had raise atmosphere of anarchy chaos and without corporation in society.
12. You produced one address to Society and thereby on frequent basis committed breach of undertaking to enact byelaws of Society and thus, you committed violation of byelaw 4[2].
13. Despite of the fact that Notices on frequent basis were served for producing relevance and evidence of Shop no A-03 and B-02, you deliberately and willfully did not enact upon it and thus, you committed violation of byelaw 5[1].
14. You also violated notices issued by Assistant District Registrar about properties of Society and you did not furnish facts and information about notice served and you are providing assistance to the non-Parsi Community people by bringing them to the prosperities of society by raising their right and interest and similarly, did not pay any amount of taxes and amount of maintenance of said properties despite of the fact, you are threatening and bringing pressure for providing light electricity to the persons encroached to the properties of society.
15. On 21/02/2005 you had executed Sale Deed with Non-Parsi Community Person viz Umesh K Patel and Jaysinh Anna More without establishment of any legal right and entitlement of Shop No B-02 and Shop No A-02 in properties of Society. Thus, on 07/02/2005 by seeking misrepresentation before District Registrar, Cooperative Association Page 13 of 42 C/SCA/7088/2015 JUDGMENT Valsad, committed gesture for raising right and entitlement on properties of society by raising fake evidence on properties of Society You are given opportunity for seeking written reply submission within period of seven days in the context of above issues. In case of your compliance sought is not found sufficient and adequate or satisfactory or non-seeking any compliance, you would be exclusively provided opportunity for seeking compliance before Special Extra Ordinary Assembly of Committee of Society. Under section 36 of Cooperative Societies Act, you are exclusively provided opportunity for seeking compliance within period of seven days on receipt of this Show-Cause Notice, prior to seeking your compliance before Special Extra Ordinary.
Yours faithfully,
Mazda Rise Co Op Hsg [Service] Soc Ltd
Sd/- Sd/- Sd/-
Chairperson Vice-Chairperson Secretary
Copy to
By Courier Service
Shri E.G. Sabawala
30, Slater Road,
Mumbai-400007"
10. It appears that pursuant to the show-cause notice issued by the Society, referred to above, and having regard to the reply filed by the respondent No.4, the Society passed a resolution expelling the respondent No.4 as its member. The Society did so in exercise of its powers under section 36 of the Act, 1961.
11. The resolution passed by the Society was put forward Page 14 of 42 C/SCA/7088/2015 JUDGMENT before the District Magistrate for its approval. The District Magistrate, vide its order dated 28th July, 2006 approved the resolution. The operative part of the order passed by the District Registrar reads as under;
"I, A.A. Diwan, District Registrar, Cooperative Association, Valsad in exercise of the powers conferred to me as per Section 36 of Gujarat Cooperative Societies Act, 1961 and section 7[2] of byelaws of Society, for approving Resolution No.1 dated 23/4/2006 of Special Extra Ordinary Meeting of Mazda Rise Co Op Hos Ser Soc Ltd Sanjan, Taluka Umargaon District Valsad."
12. The respondent No.4, being dissatisfied with the order passed by the District Registrar, preferred an appeal before the Addl. Registrar (Appeals), Cooperative Societies, State of Gujarat under section 153 of the Act, 1961. The Appellate Authority, by its order dated 8th February, 2007, allowed the appeal and thereby quashed and set aside the order passed by the District Registrar approving the resolution passed by the Society. The relevant observations of the Appellate Authority are as under;
"5. This appeal is against order in dispute passed by District Registrar. In context of aforesaid preface, Flat No.21 is held by Appellate and said fact is considered as dispute by the Society but, when removed from membership at relevant period of time, it is resolved to be member. Membership of Appellate is due to holding of Flat No.21 but, Society claimed relevance evidence for holding of Flat No.21 in such circumstances, the fact of holding of Flat No.21 by appellate is not a subject matter of dispute but, Society considered it as dispute in dispute and emphasizing for producing evidence and relevant evidence produced are wrong and sought representations at all levels. Original Dispute is not Page 15 of 42 C/SCA/7088/2015 JUDGMENT about Flat No.21 but, as Flat No.21 is situated on ground floor and five shops were constructed and thereby executed Deed to other five persons.
5[1] By way of constructing shops in Flat No.21, executed deed to other persons for which as per analysis, said fact is in dispute about entering membership and finally matter is remand. Final decision of District Registrar is pending in such circumstances ; said dispute cannot be made issue for Section 36.
5[2] Considering dispute of Shops by Society, amount of maintenance is not accepted and said amount is sent through cheque despite of the fact, said amount is not accepted and such is allegation of Appellate. While there is representation from Respondent side before General Assembly and before District Registrar that, Shop possession holders and owner of Flat No.21 are not paying amount of maintenance for which arbitration suite on separate basis can be settled out but, due to which membership cannot be come to an end under section 36 of Act.
5[3] Main representations of Society are that, Society is established for Parsi Community and nobody except Parsi Community can be a member for which they produced citation of AIR 205 Hon'ble Supreme Court of India Page no 2306 it is fact that present appellate of from Parsi Community and he is holding Flat No 21. Matter is dispute is shop on ground floor and dispute is running on other issue same is not finalized in such circumstances , considering it; proceedings under section 36 cannot take place.
5[4] There is no faulty proceedings executed in this matter under section 36 either at Society level or District Registrar level but, the main fact is that, whether member is rendering activities against interest of Society? For the purpose of settlement of dispute and to legally maintain it, option of Section 36 is accepted. Instead of filing arbitration suite for amount of maintenance, option of removal from membership is accepted.Page 16 of 42
C/SCA/7088/2015 JUDGMENT In furtherance , by raising dispute about maintenance, essential facilities like light electricity, water facilities are cut out for which held responsible and for the purpose of end of litigation means tried to non-suited 5[5] Appellate produced following citations
1. SCA No 5541 of 2002 September 13, 2002 [Hon'ble J P.B. Majmudar]
2. 2003[1] GLR Page 117, Gordhanbhai N Vaghela V/s. Maruti Co OP Housing Soc & Others Considering above citations, it transpires that, appellate did not commit any misdemeanor against interest of Society and hence, I pass final order passed as under."
13. The Society, being dissatisfied with the order passed by the Appellate Authority preferred a Revision Application No.44 of 2007 before the State Government under section 155 of the Act, 1961. The State Government, by its impugned order dated 30th July, 2007, rejected the revision application and thereby affirmed the order passed by the Addl. Registrar (Appeals).
14. In view of the above, the Society had to come before this Court by filing the Special Civil Application No.28830 of 2007. The said writ application came to be rejected vide order dated 28th January, 2008. The order passed by the learned Single Judge of this Court reads as under;
"1. The petitioner has preferred the petition for challenging the order passed by the Additional Registrar, and its confirmation thereof by the State government, whereby approval granted by the District Registrar is cancelled for expulsion of the respondent No. 4 as the member of the society under Section 36 of the Gujarat Cooperative Societies Act.Page 17 of 42
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2. Heard Mr. Joshi learned Counsel appearing for the petitioner.
3. Upon hearing learned Counsel for the petitioner, it appears that the principal grievance on the part of the petitioner is that the respondent No. 4 did not pay any maintenance amount and sold certain shops for commercial purpose in contravention to the by-laws of the society and no details were supplied and therefore, the society after giving opportunity of hearing to the respondent No. 4, passed the resolution of expelling him as the member under Section 36 of the Act. It has been submitted that the District Registrar rightly granted approval, which has been wrongly reversed by the Additional Registrar.
4. Mr. Joshi learned Counsel appearing for the petitioner also submitted that before the State Government, the date was fixed for hearing of the revision, however, ex-parte date was preponed and without giving opportunity to the petitioner herein, the State government decided the revision and confirmed the order of the Additional Registrar, and it is under these circumstances, the present petition.
5. It appears that the Additional Registrar while setting aside the order passed by the District Registrar of granting approval to the action of the society for expulsion, did observe that the dispute appears to be of the maintenance and of non-production of certain documents, and also observed that the appropriate action under the relevant law can be taken, but the extreme step for expulsion is not proper. The State Government has also confirmed the same. Therefore, as such it cannot be said that in the matter of not granting approval to the action of the society under Section 36 of the Gujarat Cooperative Societies Act for expulsion, any error has committed apparent on the face of the record by the Additional Registrar while passing the impugned order. Therefore, as such on merits there is no substance in the contention of the petitioner that the action of expulsion can be sustained or that approval was rightly granted by the District Registrar.
6. In view of the above, I find that no useful purpose Page 18 of 42 C/SCA/7088/2015 JUDGMENT would be served in entertaining the contention of ex- parte preponing the date by the State Government and deciding the matter and reason being that when on merits this Court is not satisfied with the matter, no useful purpose would be served in issuing the writ of such type.
7. In view of the above, no case is made out for interference. Hence, rejected. It is clarified that the present order shall not operate as a bar to the society in pursuing the litigation between itself and the respondent No.4 before the appropriate forum, and the rights and contention of both the sides in such proceedings shall remain open."
15. The Society, being dissatisfied with the order passed by the learned Single Judge, preferred the Letters Patent Appeal No.483 of 2008. The said appeal came to be allowed with certain directions vide order dated 18th June, 2014. The order passed in the appeal by a Division Bench reads as under;
"By way of this appeal, the appellant has challenged the order dated 28.1.2008 passed by learned Single Judge in Special Civil Application No. 28830 of 2007 whereby learned Single Judge has rejected the petition.
2. Learned advocate for the appellant has contended that the Deputy Secretary had preponed the date of hearing of the matter for which no intimation was given to the appellant. Originally, the matter was fixed for hearing on 6.8.2007. However, the Deputy Secretary preponed the date of hearing to 11.7.2007. No notice was issued to the appellant in that regard.
3. Even otherwise, in this matter the Deputy Secretary has to find out some amicable solution and the dues of the member was required to be paid. In that view of the matter, we are of the opinion that the matter requires to be remitted to the Deputy Secretary with a view to consider the Revision Application and pass appropriate order.
4. Accordingly, we remit the matter to the Deputy Page 19 of 42 C/SCA/7088/2015 JUDGMENT Secretary with a direction that the Revision Application will be heard and decided on merits. The Deputy Secretary will hear the Revision Application either on 7.7.2014 or on any other convenient day. The parties will appear before the Deputy Secretary on 7.7.2014 and co- operate with the hearing of the Revision Application.
5. The appeal is allowed to the aforesaid extent. The order of learned Single Judge dated 28.1.2008 is quashed and set aside. It is made clear that this Court has not expressed anything on merits of the matter and the Deputy Secretary will not be influenced by any order passed by this Court. Direct service is permitted."
16. In view of the order passed by the Division Bench of this court in appeal, the State Government, once again, looked into the matter and passed the impugned order dated 18 th December, 2014. The last order passed by the State Government, which has been impugned in this petition, reads as under;
"Representations advanced by applicant and Opponent are taken into consideration and factual aspect of record is also taken into consideration, in the context of byelaws-5 of Applicant society in which motives/objects of Society are mentioned viz to provide various vital arrangements for roads, infrastructure, electricity, drainage sewerage and water facilitates for owners of Mazda Rise Apartment and also to carry out administration management of it. While members purchased said property from Developers than right of property which is assigned and applicable to member and when member is not provided with aforesaid essential facilities than member cannot stay in said property while, Additional Registrar Shri submits that, when society is claiming amount of maintenance from Opponent than provisions of section 36 is not applicable. For making member to the person who executed document for Flat No.21 in which Additional Registrar Shri remand the matter and District Registrar did not execute final decision and hence, said issue cannot be taken into Page 20 of 42 C/SCA/7088/2015 JUDGMENT section 36 and when Society is paid amount of maintenance by way of cheque which is not accepted by the Society and about representation of amount of maintenance is pending and section 36 is not applicable to Additional Registrar Shri and for making member to the persons other than Parsi Community, in which section 36 cannot be applicable and order is passed with such conclusion at relevant period of time it is not proven that, Opponent executed any misdemeanor against interest of Society and with such specific conclusion, order is passed while on this issue, there is no specific compliance sought by society in such circumstances, proceedings under section 36 about reference to shop is not suitable and similarly, it does not transpire that, Opponent No.1 executed any proceedings against interest of the Society and hence, in such circumstances, following order is passed."
17. Being dissatisfied with the order passed by the State Government, the Society is once again before this Court with this petition.
ANALYSIS
18. The entire controversy revolves around the true interpretation of section 36 of the Act, 1961, more particularly, the import of the words "acts which are detrimental to the proper working of the Society". The show-cause notice which has been referred to above would indicate or rather gives a fair idea about the acts alleged to have been committed by the respondent No.4, which according to the Society, are detrimental to the proper functioning of the Society.
19. Section 36 of the Act, 1961 has been duly considered by this Court in the case of Deepakkumar Keshavlal Patel & Anr. vs. State of Gujarat & Ors., 2003 (4) GLR 3184 and Page 21 of 42 C/SCA/7088/2015 JUDGMENT also in the case of Gordhanbhai N. Vaghela vs. Maruti Coop. Housing Society & Ors., 2003(1) GLR 117.
20. In Deepakkumar Keshavlal Patel (supra), a learned Single Judge of this Court has observed as under;
"Section 36 of the Gujarat Cooperative Societies Act, 1961 reads as under.:
Section 36 :
"(1) A society may, by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society;
Provided that, no resolution shall be valid, unless the member concerned is given an opportunity of representing his case to the general body, and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him; Provided further that, the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of such submission, and in the absence of such communication the resolution shall be effective.
(2) No member of a society who has been expelled under sub-section (1) shall be eligible for re-admission as a member of that society, or for admission as a member of any other society, for a period of two years from the date of such expulsion;
Provided that, the Registrar may, in special circumstances, sanction the re-admission or admission, within, the said period, of any such member as a member of the said society or of any other as the case may be." In view of the aforesaid provision, the said resolution comes into effect only after the same is approved by the Registrar as provided by the aforesaid provision. In that view of the matter, unless the resolution is approved, it cannot be implemented and it cannot be said to be a valid resolution. In view of the aforesaid provision, the Page 22 of 42 C/SCA/7088/2015 JUDGMENT resolution of respondent No.4 bank can come into effect after the same is approved by the District Registrar. Unless the resolution of respondent No.4 is approved by the District Registrar, it cannot be implemented and the decision of the District Registrar approving such resolution can be challenged before this Court. The petitioners are challenging the order of the District Registrar and the petition against the order of the District Registrar is certainly maintainable, and, therefore, I do not find any substance in the aforesaid argument of Mr.Jani about maintainability of the petition against respondent No.4 bank. The said contention is, therefore, rejected.
17. Considering the scheme of Section 36 of the Act, it cannot be said that, the approval of the Registrar is merely a formality and that the Registrar has to give approval moment the resolution is passed by the society. It, therefore, cannot be said that the duty of the Registrar is of a ministerial nature. A question regarding the powers of the Registrar, while giving approval in such cases, came up for consideration before the Bombay High Court in the case of Vishwajit Cooperative Housing Society Vs. P.P.Damle, reported in 1976 12 CLG page 14. A Division Bench of the Bombay High Court has considered the provision of Section 35(1) of the Maharashtra Cooperative Societies Act, 1970 and the said provisions are in pari materia with the provision of section 36 of the Gujarat Cooperative Societies Act, 1961. It is observed by the Bombay High Court as under.:
".....We have already referred to S. 35(i) of the Act, and the proviso to sub-s.(1) of s. 35 says that no resolution be effective unless it is approved by the Registrar. The question, therefore, is what is the meaning of the word "approval" used in the proviso to sub-s (1) of s. 35 of the Act. The dictionary meaning of the word "approve" given in the Concise Oxford Dictionary is this :
"....consider, good, (p.p.) pronounced satisfactory, (of persons, reasons, etc.)".
It is therefore, clear that before the Registrar can give approval, he is required to consider the resolution and after he is satisfied regarding the merits of the case, he is to give the necessary approval, which means either approbation or sanction. Surely, no sanction can be given to any proposal unless the authority giving sanction Page 23 of 42 C/SCA/7088/2015 JUDGMENT considers the reasons or the merits of a particular matter. Apart from this dictionary meaning; in Stroud's Judicial Dictionary, 4th Edition, Volume I at page 167, we find the meaning of the word "approval" stated thus:
"A thing done with the "approval" of means that, and only that, which he has, with full knowledge, approved."
In other words, there can be no approval of any matter unless the person giving approval has full knowledge of the thing which he is required to approve of. It is also needless to say that when one of the parties to a bargain writes "approved" at the end of the draft of the agreement and adds his signature, he thereby makes the draft a binding contract, and does not merely express approval of its form after the manner of conveyances. That being the position when the Registrar is expected to give approval to a resolution passed by a society under s. 35(1) of the Act, surely he is not only simply to look at the formalities but also to consider the merits of the case against the member sought to be removed under the resolution passed by the society."
21. In Gordhanbhai N. Vaghela (supra), the learned Single Judge of this Court observed as under;
"9. It is true that Section 36 applies to all Co-operative Societies irrespective of the fact that whether the same is Housing Co-operative Society or otherwise. However, it is apparent that expelling a person as the member is more serious action in comparison to admitting a person as the member in a Society. Further, if Section 36(2) of the Act is kept in mind, once a person is expelled as the member, he is debarred from becoming member in any other Co-operative Society for a period of two years. Therefore, there is no manner of doubt in arriving at the conclusion that action under Section 36 of the Act of expelling any person as a member of the Society is a serious action, which is rather a stigmatic action to be attached to that member who is sought to be expelled. Further, in a Housing Co-operative Society, after a person becomes member, a plot or a flat or a tenement is being allotted to him in his capacity as a member and may be that as against the allotment the person concerned when admitted as a member would be required to make payment to the society. However, the allotment of the Page 24 of 42 C/SCA/7088/2015 JUDGMENT plot/flat/tenement to a member in a Housing Co- operative Society is a valuable right, and therefore, right to property, even transfer of property and some interest, is created in the property namely, the plot/flat/tenement as the case may be on account of such allotment in capacity as member of the society. It may be that technically the Society is the owner of the said portion which is allotted to the member, but it cannot be said that the person has no valuable interest in the property. When the membership right of a person is coupled with the interest over the property which is allotted to him, his expulsion as a member becomes more serious action. Not only that, it is also a known fact that a plot or flat or tenement, which is allotted by the Society to a member concerned is like a shelter of the family of the member concerned possibly after investment of life savings, and therefore, the power under Section 36 of the Act, which may be exercised against the member by the Society cannot be lightly considered as consequently it results into deprivation of the property allotted to such member.
10. In view of the earlier discussion, I am of the view that in the matter of exercising the power under Section 36 of the Act in a housing co-operative society, the principles of natural justice must be extended to a larger extent with its fullest scope, so that before a person is expelled as a member and the property which is under his possession is taken back by the society, he must be given full opportunity of putting forward his case to the General Body of the Society. In any case, the society who takes the decision must consider all the aspects which are put forward by the member, including the facts and circumstances of the personal convenience/inconvenience and also rather an important fact that a shelter is to be lost by the member concerned when he is expelled as a member of (he Society in a housing Co-operative Society by the housing Co- operative Society. It should also be considered as to whether any other lesser action of imposing penalty or of recovering special cost etc. are possible or not. It appears that power under Section 36 for expulsion can be taken to only as a last resort in a housing Co- operative Society. Therefore, on true consideration of Section 36 of the Act, I am of the view that the principles of natural justice must be applied with its wide amplitude and scope, when the housing Co-operative Society has to Page 25 of 42 C/SCA/7088/2015 JUDGMENT exercise the power of expelling any person concerned as member. It is made clear that it is on account of the particular facts and circumstances in a matter of membership of housing Co-operative Society I am inclined to take such view. "
22. What can be deduced from the aforesaid two decisions of this Court, referred to above, is that before the power under section 36 of the Act is exercised for the purpose of expelling a person as the member of a cooperative society, there has to be adequate materials for coming to the conclusion that the member has acted contrary to the interest of the society. The view taken by this Court is that having regard to the scheme of section 36 of the Act, the approval of the Registrar should not be a mere formality. To put it in other words, the Registrar should not grant approval the moment resolution is passed by the Society. According to the ratio of the decision of this Court in the case of Deepakkumar (supra), the duty of the Registrar is not that of ministerial nature.
23. Besides the same, in the matter of exercising the power under section 36 of the Act, the principles of natural justice must be extended to a larger extent with its fullest scope. According to the ratio of the decision in the case of Gordhanbhai (supra), it should be considered by the Society whether any lesser action of imposing penalty or of recovering special cost etc. is possible or not. The power under section 36 for expulsion should be taken only as a last resort in a housing cooperative society.
24. In the case on hand, apart from the other disputes between the Society and the respondent No.4, the main Page 26 of 42 C/SCA/7088/2015 JUDGMENT grievance of the society appears to be the transfer of the premises by the respondent No.4 to a non-Parsi (a third party) and the premises being used for commercial purpose. It also appears that nothing is being paid by way of fees or tax to the society towards the maintenance past almost ten years
25. Having regard to the nature of the dispute and that too between the society and one of its members, I persuaded the learned counsel appearing for the parties to once again sit together and explore the possibility of some amicable settlement .
26. Mr. Patel, the learned counsel appearing for the respondent No.4, after taking instructions from his client, submitted that even as on date, his client is ready and willing to sit with the office bearers of the society and try to understand the accounts and would make good the payment of the dues towards the maintenance etc. As regards such a proposal, Mr. Ishan Patel, the learned counsel appearing for the Society submitted that his client has been able to calculate the accounts only for the period between 2013 till this date. The calculation as regards the dues payable prior to 2013 would take some more time. Once the exercise is undertaken the complete statement of accounts shall be given by the Society to the respondent No.4. It also appears as pointed out by Mr. B.S. Patel, the learned counsel appearing for the respondent No.4 that even the power supply has been disconnected. It is not clear as to who has disconnected the power supply. Whether the Society has done so or the GEB. However, it appears that there is no supply of power in the Page 27 of 42 C/SCA/7088/2015 JUDGMENT disputed premised.
27. This petition has raised many important issues to be looked into. It appears that what weighed with the Addl. District Registrar (Appeals) and the State Government, as a revisional authority, is that the District Registrar ought not to have approved the resolution passed by the Society without going into the merits of the matter. To put it in other words, the District Registrar has been criticized for being very mechanical in his approach. According to the Addl. Registrar (Appeals) and the State Government, the District Registrar should have probed into the matter in details and only thereafter could have approved the resolution passed by the Society expelling the respondent No.4 as its member.
28. On a plain reading it becomes apparent that Sub-Section (1) of Section 36 of the Act permits a Society to expel a member whose acts are found detrimental to the proper working of the society; the society has to expel the member by a resolution passed at the General Meeting of the Members held for the purpose, namely, the General Meeting of Members has to be held for the purpose of expulsion of a member; and such resolution has to be passed by atleast three fourth majority of all the members present and voting at such General Meeting. But, prior to the passing of the resolution, the first proviso enjoins that the Society must give an opportunity to the member concerned of representing his case to the General Body, and only thereafter, the resolution shall be valid. In absence of such an opportunity a particular resolution shall not be valid. The next requirement flows from the latter portion Page 28 of 42 C/SCA/7088/2015 JUDGMENT of the first proviso whereunder it is provided that no resolution shall be effective unless (a) the Society submits such resolution to the Registrar for his approval, and (b) the Registrar approves the resolution.
29. Going further, the second proviso provides an embargo along with a period of limitation for granting approval or disapproval by the Registrar. The second proviso stipulates that the approval or disapproval of the Registrar shall be communicated to the Society within a period of three months from the date of receipt of submission of the resolution by the Society, and in the event the Registrar fails to communicate within the specified period, the resolution shall be effective.
30. Thus on a conjoint reading of Sub-Section (1) of Section 36 of the Act and the two provisos thereunder the legislative scheme that unfolds is that once the society has complied with the requirement of granting an opportunity of hearing to the member concerned and a resolution is passed at a meeting held for such purpose by the prescribed majority, the resolution is valid. However, the latter part of the first proviso does not talk of the validity of the resolution being subject to approval by the Registrar. The said portion of the first proviso only requires and states that on being granted approval the valid resolution become effective. In other words, what is provided on a conjoint reading of the first proviso and Sub- Section (1) of Section 36 of the Act is that once the requirements are complied with by the Society a valid resolution comes into existence and only the implementation thereof stands deferred, awaiting approval or disapproval by the Registrar. It is necessary to note that the power of Page 29 of 42 C/SCA/7088/2015 JUDGMENT Registrar to grant approval or disapproval can be exercised only within the stipulated period of 90 days from the date of receipt of the resolution from the Society. Once the period of 90 days is over and the Registrar has failed to either record his approval or disapproval and communicate the same to the Society the Registrar is divested of his powers to grant approval or disapproval. In case of Balasinor Nagarik Co- operative Bank Ltd., the Apex Court was called upon to deal with the provisions of Section 36(1) of the Act with special reference to the second proviso in the following circumstances.
30.1 The Society before the Apex Court expelled a member and forwarded the resolution for approval to the Registrar. The resolution was dated 30th September, 1982, the Society forwarded it on 6th October, 1982 and in absence of any response, on 24th January, 1983 the Society wrote to the Registrar that the resolution had become effective as the Registrar had failed to communicate his approval or disapproval. The Registrar did not agree with the Society and after hearing the parties recorded his disapproval vide order dated 19.09.1983. The matter travelled upto Apex Court and this is what has been stated by the Apex Court :
"It is an elementary rule that construction of a section is to be made of all parts together. It is not permissible to omit any part of it. For, the principle that the statute must be read as a whole is equally applicable to different parts of the same section. Keeping that in view, we have no doubt in our mind as to the purport and effect of sub- s. (1) of S. 36 of the Act which deals with the power of expulsion of a member for acts which are detrimental to the proper working of the society. It also provides for the manner of the exercise of such power. The exercise of Page 30 of 42 C/SCA/7088/2015 JUDGMENT the power of expulsion of a member for his acts which are detrimental to the interests of the society conferred by sub-s. (1) of S. 36 is made subject to the fulfilment of the conditions prerequisite, namely, it has to be by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for that purpose. There is no doubt or difficulty as to the precise function of the two provisos appended to sub-s. (1) of S. 36 of the Act. The power of expulsion of a member by a society under sub-s. (1) of S. 36 is made subject to a defeasance clause engrafted in the first proviso. It interdicts that : (1) no such resolution for expulsion of a member passed under sub-s. (1) of S. 36 of the Act shall be valid unless the member concerned is given an opportunity of representing his case to the general body, and (2) unless it is submitted to the Registrar for his approval and approved by him. Condition No. 2 keeps the resolution for expulsion of a member in abeyance.
5. Just as the first proviso construed in the context of the substantive provision contained in sub-s. (1) of S. 36 of the Act is meant to accept (except) or qualify the power of expulsion of a member conferred in the main enacting part and presumed to be necessary, the second proviso is in the nature of a fetter on the power of the Registrar to accord his approval or disapproval. Such approval or disapproval in terms of the second proviso has to be communicated to the society within a period of three months from the date of submission of the resolution passed under sub-s. (1) of S. 36 of the Act for his approval. On a combined reading of the two provisos, the legal consequence that ensues is this. After the society communicates, a resolution for the expulsion of a member for acts detrimental to the working of the society passed in the manner required by sub-s. (1) of S. 36 to the Registrar for his approval under the first proviso, there is a duty cast on the Registrar to exercise his power of according approval or disapproval within a period of three months from the date of such submission, as provided by the second proviso. According to its plain terms, the second proviso places a limitation on the powers of the Registrar. It appears to us that the obvious intention of the Legislature was that once the period of three months stipulated expires. the Registrar becomes Page 31 of 42 C/SCA/7088/2015 JUDGMENT functus officio and his power to accord approval or disapproval to the resolution passed by the society for expulsion of a member under sub-s. (1) of S. 36 of the Act lapses. The District Registrar therefore had no jurisdiction to set aside the resolution passed by the appellant-society under subs. (1) of S. 36 for the expulsion of respondent No. 1 from the primary membership of the society after the expiry of a period of three months from October 6, 1982 i.e. the date of submission of the resolution. The construction placed by the learned single Judge on sub-s. (1) of S. 36 of the Act read with the two provisos thereto is patently erroneous and cannot be sustained."
31. Non assigning reasons per se would not vitiate an order of approval. But the order of approval must, at the same time, reflect that there was an application of mind by the Authority to the material available on record, namely, the resolution passed by the Society, the basis for passing such a resolution, and the explanation of the member concerned as to why such approval should not be granted. This is having regard to the distinction already noted hereinbefore between the validity of the resolution and effectiveness of the resolution.
32. But in a case where the Registrar records his disapproval, he has to assign reasons, howsoever brief. An order of disapproval would result in a situation when a valid resolution made by the Society might have to be taken up for reconsideration by the Society. Therefore, the Society must know as to why the resolution is not to become effective. This is also again subject to the statutory period of 90 days within which period Registrar can convey his disapproval. But on his failure to act within the period of 90 days during which the valid resolution has been kept in suspension, the resolution becomes effective and is required to be implemented, the Page 32 of 42 C/SCA/7088/2015 JUDGMENT Registrar having become functus officio as laid down by the Apex Court.
33. The object of the provision has to be borne in mind. The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the Bye-laws have to be respected and implemented. The underlying idea of Section 36 of the Act is to give precedence to the collective rights of the members of the society when pitted against the individual rights of a solitary member. Of course, the provision has provided adequate safeguards. The section stipulates passing of a resolution by the prescribed majority, and after hearing the member concerned.
34. When a member raises his objection qua a resolution passed by the requisite majority of the society the member must be in a position to show that the resolution is either malafide, or arbitrary or perverse in the fact situation of a case. Only then would the Registrar be empowered to undertake an exercise for the purposes of disapproving the resolution. There could be another situation where the registrar may intervene; in a case where there is violation of principles of natural justice. However, onus lies on the member concerned to establish such malafides, arbitrariness or perversity qua resolution. The reason is not far to seek. The section provides that once the resolution is passed by the requisite majority after hearing the member concerned the resolution is valid and only the implementation is kept in abeyance and that too for the limited period of 90 days.
Page 33 of 42C/SCA/7088/2015 JUDGMENT
35. Therefore, it is not necessary to assign reasons in every case where the registrar accords his approval merely because the consequence of the resolution is to affect the member concerned. To approve means to confirm, to sanction. Approval means the act of approving, granting sanction. Therefore, once the order of approval reflects that the Authority was alive to the issues raised and has considered the same, the Authority need not repeat reasons in the order of approval. In fact, the language employed by the provision does not warrant any passing of an order. The provision only stipulates that an approval has to be communicated to the society; an approval of a valid resolution / decision of the society so as to make it effective. (Paras 28-35 vide Jentibhai Chitabhai Patel vs. State of Gujarat SCA No.13484 of 2006 dated 15.3.2017)
36. The decision of this Court in the case of Deepak (supra) came to be considered in the case of Jentibhai Chitabhai Patel vs. State of Gujarat, Special Civil Application No.13484 of 2006, decided on 15th March, 2007. I would like to quote the observations made by the learned Single Judge as contained in paras-11,12 and 13;
"11. In this context, the contention raised on behalf of the petitioner by placing reliance on decision of this Court in the case of Dipakkumar Keshavlal Patel (supra) may be examined. It has been held that: "Since appropriate reasoning is not given by the District Registrar on the aforesaid aspect, and except, merely dealing with the procedural part of holding the meeting, place of meeting, giving opportunity to the petitioners to defend their case, nothing further has been considered on merits about availability of the material for coming to the conclusion about the alleged act of the petitioners, in my view, the matter is required to be sent back to the Page 34 of 42 C/SCA/7088/2015 JUDGMENT District Registrar to consider the aforesaid aspect.
12. The aforesaid decision cannot carry the case of the petitioner any further for the simple reason that in the first instance the Apex Court decision in case of Balasinor Nagarik Co-operative Bank Ltd. (supra) has not been cited before the Court and the Court had no occasion to consider the same; secondly the second proviso to Section 36(1) of the Act also has not been considered by the Court. This fact becomes evident when one considers what is referred to in paragraph No.17 of the Judgment. The Court has relied upon the observations made by the Bombay High Court in the case of Vishwajit Co-operative Housing Society V/s. P.P.Damle 1976 (12) CLG 14 and observed that provisions of Section 35(1) of the Maharashtra Co-operative Society Act, 1960 are pari materia with the provisions of Section 36 of the Act. This is only partly correct. When both the provisions are compared, it becomes evident that the Maharashtra Act does not contain the second proviso which is found in the Gujarat Act. Hence, the said decision rests on the facts of that case and does not operate as a precedent laying down the scheme of entire Section 36 of the Act as enunciated by the Apex Court.
13. The contention raised on behalf of the petitioner may be considered from a slightly different angle. If the matter is examined in context of the legislative scheme it becomes apparent that the provision cannot be read so as to provide for assigning of reasons by the Registrar when the approval is conveyed within the stipulated period of 90 days, while laying down that in the event period of 90 days has expired, as envisaged by the second proviso, the Registrar is not required to assign reasons because he is not empowered to pass an order. That cannot be the legislative intent. The legislature could not have provided for a situation where an authority should assign reasons when it passes an order but is not required to do so when the prescribed period is over and the resolution passed by the society becomes effective even though the Authority does not pass an order. The submission in relation to right of appeal, in this context, cannot support the stand of the petitioner.Page 35 of 42
C/SCA/7088/2015 JUDGMENT The appeal filed against a deemed approval on expiry of period of 90 days would be in the same position before the Appellate Authority as in a case where approval is granted without reasons when made within the period of 90 days. The legislature has not provided that there cannot be an appeal against such deemed approval. Thus there cannot be two different criteria for examining the validity of an order and a non-order. Both stand on the same footing. An interpretation which makes the provision workable in both eventualities should be favoured to an interpretation which breaks down in one of the eventualities, rendering a part of the provision redundant."
37. It is not in dispute that the respondent No.4 has inducted a third person in the premises and the premises are being used as shops for the commercial activities. Whether any commercial activity is going on as on date or not is a different matter. However, the fact remains that there has been transfer of possession by the respondent No.4 in favour of a third party and such third party is a non-Parsi. The bye-laws of the Society do provide that the member shall not sel or transfer, in any manner, or part with the possession of the property in favour of any non-Parsi as the entire Society is meant extensively for the Parsis. It is too late in the day for the respondent No.4 to even question the legality and validity of such a clause in the bye-laws after the decision of the Supreme Court in the case of Zoroastrian Coop. Housing Society Ltd. vs. District Registrar, Cooperative Societies (Urban), reported in (2005) 5 SCC 632.
38. In the aforesaid context, I may refer to and rely upon a decision of the Bombay High Court in the case of Shantiniketan Cooperative Housing Society Ltd. vs. Shivkant s/o Mulchandji Brijwasi & Ors., Writ Petition Page 36 of 42 C/SCA/7088/2015 JUDGMENT No.5826 of 2011, decided on 18.12.2013. Para 31 of the said judgment reads as under;
"31] The Supreme Court in the Zoroastrian Coop. Housing Society Ltd. vs District Registrar, Cooperative Societies (Urban), reported in (2005) 5 SCC 632 held that the concept of open membership, as envisaged by Section 24 of the Gujarat Cooperative Societies Act is not absolute on the very wording of the said Section. The by- laws are not given the go- by in spite of the introduction of the concept of open membership as indicated by the heading of the section. If the relevant bye-law of society places any restriction ::: Downloaded on - 23/12/2013 20:35:59 ::: 20 wp5826.11 on a person getting admitted to a cooperative society, that bye-law would be operative against him and no person,or aspiring member, can be heard to say that he will not be bound by that bye-law which prescribes a qualification for his membership. Therefore, it follows from the authoritative pronouncement of the Supreme Court that by giving go bye to the by-laws no membership can be conferred upon by the appellate authority, the provisions of Section 24 of the Gujarat Cooperative Societies Act, 1961 are pari materia to those of Section 23 (1) of the Maharashtra Cooperative Societies Act, 1960. The marginal note of the two Sections is "open membership".
Sub-section (1) of Section 23 of the Maharashtra Cooperative Societies Act, 1960 lays down that, no society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of the Act and the Rules and by- laws of the society. Therefore, on the interpretation of Section 24 of the Gujarat Cooperative Societies Act, 1961, the Supreme Court in the case of Zoroastrian Coop. Housing Society Ltd. (supra) has taken a view that by-laws are not given go bye in spite of introduction of the concept of the open membership. Therefore, the appellate authority was bound to consider that each criteria/condition/requirement laid down in the by-laws is fulfilled by the respondent no.1 so as to direct the petitioner society to enroll him as a member of the petitioner society. Though detailed reasons are not assigned in the resolution of the society for rejecting the application of the respondent no.1 for membership, nevertheless the resolution refers to the basic aims and Page 37 of 42 C/SCA/7088/2015 JUDGMENT objects of the society that the said society is tenant ownership society and the transaction entered between Ashokkumar Dhoot and the respondent no.1 is without prior permission of the petitioner society and also de hors the relevant by-laws and the provisions of the said Act and the Rules, and therefore, the ::: Downloaded on - 23/12/2013 20:35:59 ::: 21 wp5826.11 appellate authority was bound to pay attention to the said aspect. It is true that if all the criteria/conditions laid down in the by-laws are fulfilled by the desirous person for becoming a member of the society, in absence of fulfillment of each criteria laid down, the appellate authority was not correct in directing the petitioner society to confer the membership on the respondent no.1. Ultimately the Cooperative Housing Society and in the facts of the present case the petitioner society, is formed and registered with certain aims and objects and de hors said aims and objects, no contrary directions can be given by the appellate authority in as much as without fulfilling each and every criteria/requirement/condition, the appellate authority should not have given directions to enroll the respondent no.1 as a member of the society. "
39. The non-payment of dues of the Society is a very serious thing and it would certainly prove to be detrimental to the proper working of the Society. At times, the brazen attitude of a member may have to be dealt with strictly by the Society. In a given case, the Society may be justified in expelling a person as its member from the Society. Expelling a person as a member from the Society may cast a social stigma but that does not mean that the Society should keep on tolerating the nonsense of its member.
40. The Cooperative movement is both a theory of life and a system of business. It is a form of voluntary association where individuals unite for mutual aid in the production and distribution of wealth upon principles of equity, reason and common good. It stands for distributive justice and asserts the Page 38 of 42 C/SCA/7088/2015 JUDGMENT principle of equality and equity ensuring to all those engaged in the production of wealth a share proportionately commensurate with the degree of their contribution. It provides as a substitute for material assets, honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. The movement is thus a great Cooperative movement. Such being the nature of the Cooperative movement, there is no place in any Cooperative Society for any member who is not honest and who, as the Allahabad High Court observed in regard to the applicant, is a `liar', `trickster' and inclined to give false evidence. It is clearly in the interest of the Society that such a member should be expelled therefrom. In our opinion, having regard to the observations of the Allahabad High Court in regard to the petitioner, the Registrar rightly acted under rule 18(2) in expelling him from the various Cooperative Societies of which he was a member. (see Kamta Prasad vs. Registrar, Cooperative Societies, AIR 1967 MP 211).
41. The basic principles of cooperation are that the members join as human beings and not as capitalists. The Cooperative Society is form of organization wherein persons associate together as human beings on the basis of equality for promotion of economic interest of its members. This movement is a method of doing the business or other activities with ethical base. "Each for all and all for each" is the motto of the cooperation movement. This movement not only develops latent business capacities of its members but produces leaders; encourages economic and social virtues, honesty and loyalty, becomes imperative, prospects of better life, Page 39 of 42 C/SCA/7088/2015 JUDGMENT obtainable by concerted effort is opened up; the individual realises that there is something more to be sought than mere material gains for himself. So in fact, it being a business cum moral movement, and the success of the Cooperative Society depends upon the reality with which one of the members work for the achievement of its objects and purpose. The Committee on Cooperation in India emphasized the moral aspect of cooperation, to quote the words.
"The theory of co-operation is very briefly that an isolated and powerless individual can , by association, with others and by moral development support, obtain in his own degree the material advantages available to wealthy or powerful persons and thereby develop himself to the fullest extent of his natural abilities. By the Union of forces, material advancement is secured and by united action self reliance is fostered and it from the inter-action of these influences that it is hoped to attain the effective realisation of the higher and more prosperous standard of life which has been characterised as better business, better arming and better living; we have found that there is a tendency not only among the outside public but also among supporters of the movement to be little its moral aspect and to regard this as superfluous idealism. Cooperation in actual practice must often fall short of the standard aimed at and details inconsistent with co- operative ideals have often to be accepted in the hope that they may lead to better things. We wish clearly to express that it is the true co-operation alone, that is, to a co-operation which recognises the moral accept of the question that Government must look for the amelioration of the masses and not to a psudo co-operative edifice, however imposing, which is built in ignorance of co- operative principles. The movement is essentially a moral one and it is individualistic rather than socialistic. It provides as a substitute for material assets honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. Pages 5 and 6 of Theory and Practice of Co-operation in India and Abroad by Kulkarni, Volume 1. Co-operation is a mode of doing business, is at present applied as the solution of many economic problems. Co-operation is harnessed to almost Page 40 of 42 C/SCA/7088/2015 JUDGMENT all forms of economic activity. Though co-operation was introduced in this country as a remedy for rural indebtedness, it has been applied successfully in a wide range of activities such as production, distribution, banking, supply, marketing, housing and insurance. See Theory and Practice of Co-operation in India and Abroad by Kulkarni Volume 1 Page 2."
42. Though cooperation was introduced in this country as a remedy for rural indebtedness, it has been able to successfully widen range of activities such as production, distribution, banking, civil supplies, marketing, housing and insurance. This movement had got momentum and in the fields aforesaid, it is no doubt working throughout the nation. The aim, object and purpose of this Cooperative movement now to certain extent turns out as if it is to provide platform to the ambitious persons to have their political gains or some other gains. (see Uttar Bhartiya Nagar Cooperative Housing Society Limited vs. State of Gujarat, 2000 CTJ 699).
43. As the respondent No.4 has agreed and shown his readiness and willingness to make good the arrears towards the dues payable to the Society, I would like to give one last chance to the respondent No.4 to do so. The Society shall, at the earliest, prepare the statement of accounts as regards the dues payable by the respondent No.4 and forward the same to the respondent No.4. The respondent No.4, in turn, shall pay the dues at the earliest. Although, I am not convinced with the reasonings assigned by the Addl. Registrar (Appeals), as affirmed by the State Government as regards the decision of the Society to expel the respondent No.4 as its member, yet, having regard to the peculiar facts and circumstances of the case and the readiness and willingness shown by the Page 41 of 42 C/SCA/7088/2015 JUDGMENT respondent No.4 to clear all the dues towards the maintenance etc. I would not like to disturb the orders.
44. So far as the third person who has been wrongly and illegally inducted in the premises is concerned, it shall be open for the Society to take appropriate legal steps before the appropriate forum in accordance with law for the purpose of eviction.
45. I am sure that the respondent No.4 shall extend his full cooperation and see to it that the dispute is resolved with the Society.
46. With the above, this writ application is disposed of. Notice stands discharged.
(J.B.PARDIWALA, J) Vahid Page 42 of 42