Calcutta High Court (Appellete Side)
Benoy Krishna Chowdhury vs The State Of West Bengal & Ors on 17 February, 2009
Author: Pratap Kumar Ray
Bench: Ashim Kumar Banerjee, Pratap Kumar Ray
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
(APPELLATE SIDE)
Present:
The Hon'ble Justice Pratap Kumar Ray
And
The Hon'ble Justice Manik Mohan Sarkar.
M.A.T. No. 3926 of 2004
C.A.N. No. 8180 of 2007
With
F.M.A. No. 597 of 2005
+
W.P. No. 111 (W) of 2004
Benoy Krishna Chowdhury
Versus
The State of West Bengal & Ors.
For Appellant in MAT 3926 of : Mr. T.H. Sengupta
2004 and for respondent no.1 Mr. Shamit Sanyal
in F.M.A. 597 of 2005.
For Respondent no.5 in MAT : Mr. Tapabrata Chakborty
3926 of 2004 Mr. Md. Sadeque
For Respondent no.4 in MAT : Mr. Anupam Chatterjee
3926 of 2004 and for the Mr. Kali Bhusan Chakraborty
Appellant in FMA 597 of 2005 Mr. Asit Kr. Chakraborty.
For the State : Mr. Keshab Bhattacharjee
Mrs. Gouri Mukherjee.
Heard On :
Judgment On : 17TH FEBRUARY, 2009.
Pratap Kumar Ray,J.
Challenging the judgment and order dated 24th September, 2004 passed in W.P. No. 6354 (W) of 2004 those two appeals have been preferred by the writ petitioner and the Co-operative Housing Society respectively. The writ petitioner- appellant breathed last and a substitution application was filed seeking substitution of the legal heirs, namely, the wife, Smt. Tara Chowdhrury and two daughters, namely, Rupa Chowdhury and Soma Chowdhury. By the order dated 4th January, 2007, Division Bench (Coram: Ashim Kumar Banerjee and Sankar Prasad Mitra,JJ.) allowed the substitution application, which read such:
"The original writ petitioner approached the writ court ventilating his grievance as according to him, his fundamental right had been infringed. The learned single Judge dismissed the writ petition.
Being aggrieved by and dissatisfied with the judgment and order of the learned single Judge, the appellant filed the present appeal.
During the pendency of the appeal the appellant died leaving him surviving his widow and two unmarried daughters. The widow has now come up for substitution. The unmarried daughters have authorized their mother, the applicant to make the application on their behalf as would appeal from page 15 of the application.
The substitution application is now being opposed by Mr. Ganguly, learned Counsel appearing for the private respondent. Mr. Ganguly submits that the application should have been made by all the heirs of the appellant. In absence of the daughters this application is not maintainable. Moreover, ninety days have passed from the date of filing of the appeal. Hence, even the prayer for substitution of the daughters as well made today, would be barred by laws of limitation.
The appeal is continuation of the writ proceeding. The appellant approached this court ventilating his grievance on the ground that his fundamental right had been infringed. He was unsuccessful before the learned single Judge. He preferred the appeal. During the pendency of the appeal, he died.
In this backdrop, it would not be proper for us to dismiss the application for substitution on the ground as canvassed by Mr. Ganguly. The applicant Smt. Tara Chowdhury and her two daughters namely, Rupa Chowdhury and Soma Chowdhury, all residing at no. 71, Raha Raj Ballav Street, Kolkata be substituted as appellants in place and stead of the deceased appellant.
CAN 2883 of 2006 is disposed of accordingly without any order as to costs."
These appeals have checkered history. The factual matrix has been detailed in short by the learned trial Judge by rejecting the writ application.
Both appeals have been opposed by the respondent no.5, Smt. Krishna Mukherjee, wife of late Dr. Arup Mukherjee. Dr. Arup Mukherjee was the promoter-member of the Housing Society and was allotted with the plot no. C-1 i.e. the ground floor flat of the concerned Housing Society. On death though Smt. Krishna Mukherjee got a right to be the member of the Housing Society, same was not implemented by the Housing Society following their bye-laws and the West Bengal Co-operative Societies Act, 1983 and Rules, 1987. Learned trial Judge discussed that even the valuation of the flat was not done before canceling the claim of heritable right of Smt. Krishna Mukherjee under Section 85 of the West Bengal Co-operative Societies Act. Initially, Smt. Krishna Mukherjee raised a dispute case but failed to get any order on the main reasoning that she did not agree to be the member despite repeated letters send by the Co-operative Housing Society and on the other reasoning that one Sri Plaban Basu already got allotment of the flat by approval of Deputy Registrar, Co-operative Societies, West Bengal on the basis of the requisition send by the Housing Society. Learned trial Judge discussed that issue of allotment of flat to Sri Plaban Basu as an exercise of fraud by a positive finding that the Society misrepresented the fact by sending the papers contending, inter alia, that Dr. Mukherjee resigned from the membership and on that score, the permission was accorded by the Deputy Registrar, Co-operative Society. Learned trial Judge held the said action as nullity in the eye of law and entry of Sri Plaban Basu into the flat in question was vitiated due to the fraud exercised by the Society. The relevant portion whereby Deputy Registrar, Co-operative Society approved the application for membership of Sri Plaban Basu supports the misrepresentation issue as it is held therein that the vacancy was caused due to resignation of Dr. Mukherjee. The relevant portion of said approval decision as quoted by learned trial Judge reads such:
"Permission is hereby accorded to admit the following persons as a member of the Space Co-operative Housing Society Ltd. in the vacancy caused by resignation whose name is noted against:
1. Sri Plaban Basu S/o. Sri S. Basu in place of late Arup Mukherjee under the following conditions:
Provision of the WBCS Act, 1972 and rules thereunder are to be observed before giving effect of new membership."
Thereafter, said Sri Plaban Basu desired a change of allotment of flat from ground floor to top floor of the said Housing Society and it was allowed by exchange with Sri M.P. Pal, another member of the Society. Sri M.P. Pal thereafter intended to sale the flat no. C-1 to one Sri Benoy Krishna Chowdhury since deceased and applied for necessary permission of Co-operative Society and the Registrar, Co-operative Society. The Co-operative Society referred the papers to Deputy Registrar, Co-operative Society. As there was delay to dispose it, said Sri Benoy Krishna Chowdhury moved a writ application registered as W.P. No. 111 (W) of 2004 seeking a direction to Deputy Registrar, Co-operative Housing Societies, Calcutta Metropolitan Area Housing to dispose of his application seeking permission of sale of the flat in question. In this writ application Smt. Krishna Mukherjee was not made as a party. Pranab Kr. Chattopadhyay,J.
dispose of the writ application by the order dated 28th January, 2004 directing to dispose of the representation being annexure "P-11" by the said Officer, which was a lawyers letter filed before the said Deputy Registrar on behalf of the writ petitioner, Sri Benoy Krishna Chowdhury. The order dated 28th January, 2004 passed in W.P. No. 111 (W) of 2004 reads such:
"Having heard the learned counsel appearing for the parties and considering the facts and circumstances of this case, I dispose of this petition by directing the Deputy Registrar of Co-operative Housing Societies, Calcutta Metropolitan Housing to decide the claim of the petitioner for approval of his membership in the Space Co-operative Housing Society Limited after considering the written representation made on behalf of the said petitioner being Annexure - P-11 to the writ petition without any further delay but positively within a period of four weeks from the date of communication of this order and after granting an opportunity of hearing to the petitioner and other necessary parties.
Needless to mention that said Deputy Registrar will pass a reasoned order in the matter and will communicate a copy of the same to the petitioner within a week from the date of such order.
Learned advocate of the petitioner is directed to communicate the gist of this order together with a copy of the written representation dated 15th July, 2001 being Annexure - P-1 to the writ petition to the said Deputy Registrar, Co-operative Housing Society immediately.
There will, however, be no order as to costs.
Urgent xerox certified copy, if applied for, be handed over to the parties on usual undertaking."
The said Officer in pursuance of a direction aforesaid passed a decision on 12th March, 2004, which reads to this effect:
"On the basis of hearing held on 4.3.2004, Shri Plaban Basu the Secretary of the society has submitted a written statement as per his oral submission of the said date of hearing, but as directed he has set submitted the documents along with his written statement i.e. (i) position of membership in detail since inspection (ii) a report regarding the allotment of facts and (iii) report of regarding Krishna Mukherjee along with supporting documents as such this office records a long with a report on enquiry conducted earlier vide this office Memo No. 1829/KMSN dt. 15.7.03 into the gross irregularities in the affairs of the Secy. as well as its membership the representation of the petitioner as referred to by the Hon'ble High Court the statements of petitioner submitted on the date of hearing and on subsequent date and the aforesaid written statement of the Secretary of the society are taken into consideration for the disposal of the petitions as referred to by the Hon'ble High Court against W.P. No. 111 (W) of 2004.
The observation as per the Security of the aforesaid records and documents are noted hereunder:
(i) The affairs of admission to the membership of space COOP Housing Society Ltd has been stood very much complicated due to arbitrary activities of the management of the society since the demise of Dr. Arup Mukherjee a promoter member.
(ii) In his life the said Dr. Mukherjee nominated Smt. Krishna Mukherjee his wife as legal nominee.
(iii) The society managed to get the membership of Sri Plaban Basu approved from this office in the vacancy in membership a risen out of death of Dr. Mukherjee by suppression of the fact of nomination etc. willfully and in indulging in total violation of the relevant provisions of Section in 79 of W.B.C.S. Act, 1983 and Rules framed thereunder.
(iv) It is also observed that a mortgage loan to the tune of Rs. 80,000/- was accommodated in favour of Dr. Mukherjee for the construction of the project of the Society by the West Bengal State Coop. Housing fed Ltd.
and after his death the Secy. without demortgaging the same from the said financing organization and also without having any no objection certificate from the organization had filled up the aforesaid vacancy in the membership and the entire fast was not taken to the knowledge of the office.
(v) In such way the society denied the legition to claim of Smt. Krishna Mukherjee the nominee of Late Dr. Mukherjee had transmitted a cheque amounting to Rs.
41,629.40 to Mr. Mukherjee for the purpose of cancellation of membership. This set of transmission of the cheque was one arbitrarily on 24.5.99 and the matter was raised in the Board of Directors meeting of the Secy. on 28.5.99.
(vi) Anomalies are also found in the matter of allotment of flats Dr. Arup Mukherjee has allotted a flat marked C in the ground floor measuring 967 sq.ft. at a cost of Rs.
123,137.78. Similarly Sri M.P. Pal a promoter member was also allotted a flat in the top floor without approval of general body the management of the society got the privilege or relloting the flat of Dr. Mukherjee in the event of his death to Sri M.P. Pal and the flat of Sri M.P. Pal in the top floor was given to Sri Plaban Basu the newly inducted member. This activity of management of the society is quit contrary to the provisions so laid down in rule 134 of W.B.C.S. Rules 1987. At present the very flat C in the Ground floor which was originally to late in the ground floor which was originally to late Mr. Mukherjee is being sold by Sri M.P. Pal to the petitioner Sri Benoy Krishna Chowdhury.
(vii) On the basis of the above it is obvious that the claim for membership of the nominee of late Dr. Arup Mukherjee i.e. Mrs. Krishna Mukherjee is required to be taken into consideration by the society. But there stands only one vacancy arisen out of resignation from membership by Sri M.P. Pal if the Membership of the petitioner be considered the rightful claim of Smt. Mukherjee will be denied. Moreover it is clearly spelt out in the rules 135(2) of W.B.C.S. Rules 1987 the number of members shall not exceed the total number of flats/apartments at as such the society should here to the above provisions strictly.
Therefore from the above observations I have enough reasons to some conclusions and pass order that:
(a) To claim for membership as well as flat of Smt. Krishna Mukherjee has been arisen on and from the very date of death of her husband i.e. on 3.4.94 and sufficiently before the submission of application for membership made by Sri Benoy Krishna Chowdhury the petitioner and as such a flat shall be kept reserved first for Smt. Mukherjee by providing her membership on the basis of nomination and observing necessary formalities.
(b) The application of Sri Benoy Krishna Chowdhury for membership is to be considered by the society as and when a further vacancy in the membership as well as flat arises, subject to the fulfillment of relevant provisions of W.B.C.S. Act and Rules.
(c) The orders along with proceedings be communicated to the petitioner within a week from the date of such order. The above order is passed in conformity with good conscience equity justices and fair play under my seal and signature."
Said Deputy Registrar held that Sri Plaban Basu was not lawfully inducted and it was a case of misrepresentation of fact that Dr. Mukherjee resigned from the membership but in fact he was dead and on application of Section 79 of the WBCS Act, 1983 and Rules framed thereunder nominee Smt. Krishna Mukherjee became a member automatically. Challenging the said order this writ application was moved by Sri Benoy Krishna Chowdhury, which stood dismissed by the learned trial Judge against which this appeal.
The Co-operative Society has supported this appeal. Before dealing with the points as raised, the Court has to consider whether the appeal itself is maintainable by the legal heirs irrespective of the fact that they were substituted by the order as referred to passed by earlier Division Bench allowing the substitution application. To deal with that question, the relevant provision of the West Bengal Co-operative Societies Act, 1973 and the connected Rules and the Bye-laws of the Society will lead us to an answer.
That under Section 85 sub-section (9) of said Act, 1983, for transfer of any flat by a member allottee to a person eligible to be member of Housing Society, it could be done after written consent of Housing Society and performance of formalities prescribed in Rule 135 Sub-rule (3) of said Rules, 1987. Under that provision of Act and Rule aforesaid, this application is required to be considered seeking membership on transfer of the flat due to purchase from member owner by the Board of Directors of the Co-operative Housing Society by a resolution that gentleman applicant is eligible to be the member of the Co- operative Housing Society. Under Section 85 Sub-section (12) read with Rule 135 Sub-rule 3(b) in the event of refusal to accord consent by the said Board, an appeal may lie to the Registrar, Co-operative Societies who will dispose of the issue. Relevant provisions, namely, Section 85 Sub-section (9) and (12) of said Act and Rule 135 Sub-rule 3(a) and (b) reads such:
"S.85. Membership or promotership of co-operative housing society.-(1).............................
(9) A member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a [.....] building has been allotted may transfer such plot or house or apartment, as the case may be, with the written consent of the co-operative housing society, under such terms and conditions and in such manner as may be prescribed, to any other person eligible to be a member of the co-operative housing society under sub-section (1). If the co-operative housing society refuses to give its consent to such transfer, it shall record the reasons for such refusal in writing and communicate the same to the member within one month from the date of receipt of his application in this regard and the member shall have a right of appeal to the Registrar within such period as may be prescribed.
(12) A member of a co-operative housing society shall not make any alteration or addition or repair to any house or apartment in a [...] building in his possession except with the previous approval of the co-
operative housing society. The member shall apply to the co-operative housing society for the aforesaid purpose in the prescribed manner. The co-operative housing society shall consider the application in a meeting of the board and communicate to the member its decision thereon within one month from the date of receipt of the application, failing which the application shall be deemed to have been approved.
Provided that if the board decides to refuse the application, the member shall have a right to make an appeal against such decision to the Registrar within fifteen days from the date of communication of the decision and the Registrar shall decide the appeal within fifteen days from the date on which the appeal is made.
R. 135. Membership.-(1).......................
(3)(a) For the transfer of land or house or apartment a member shall obtain a written consent of the society and before giving such consent the society shall satisfy itself that -
(i) the transferee is eligible for being a member of the society;
(ii) the transferee has genuine need for residential accommodation;
(iii) the transferor has paid off his outstanding liabilities to the society or, the transferee has undertaken to take over such liabilities of the transferor;
(iv) the transferee formally applies for membership of the society.
(b) Where a society refuses or fails to give consent to the transfer referred to in clause (a) and the member intends to appeal to the Registrar against such refusal by or failure of the society, an appeal may be preferred within thirty days from the date of communication of the refusal or within sixty days from the date of receipt of the proposal by the society."
Even consent of the Board of Directors aforesaid, ipso facto will not entitle a person to be the member of the Co-operative Housing Society to transact the transfer, but decision/resolution of said Co-operative Society is required to be approved by way of permission by the Deputy Registrar, Co-operative Societies dealing with the matter under Rule 142, particularly in case of transfer of plot/land or flat. Rule 142 reads such:
"142. Transfer and letting out by members of a co-
operative housing society.-(1) In all cases of transfer and letting out of land, house or apartment, prior permission of the Registrar shall be obtained in addition to written consent of the society:
Provided that in no case permission of the Registrar or the written consent of the society shall be withheld arbitrarily where the ground or grounds enumerated in sub-rule (3) of this rule have been satisfactorily made out and the conditions set forth in rule 135(2)(a) have been fulfilled.
(2) A co-operative housing society may raise such fee or donation as may be specified by the State Government from time to time by notification for according consent for transfer by a member of his land, house or apartment to another person having eligibility to become a member of the society.
(3) A member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a multistoreyed building has been allotted may transfer by way of sales or usufructuary mortgage as defined in the Transfer of Property Act, 1882 (4 of 1882) such plot or house or apartment, as the case may be, on one or more of the following grounds-
(i) that the member has been involved in debts and the transfer by way of sale or usufructuary mortgage is necessary to pay off his creditors;
(ii) that the member is compelled to shift from the locality due to unavoidable circumstances beyond the control of the member;
(iii) that the member is in urgent need of money to meet the expenses of marriage or of education of his son or daughter or that the member is in urgent need of money to meet urgent medical expenses of any of the members of his family or any person fully dependent on him;
(iv) such other grounds analogous to those mentioned above as the Registrar might consider reasonable and justifiable."
After the approval is accorded by way of permission, the other formality starts, namely, transfer by way of sale under Transfer of Property Act, 1882 under said Rule 142 Sub-rule (3).
In the instant case it appears that Sri Benoy Krishna Chowdhury, since deceased, only applied for being member of the Housing Society as a prospective purchaser of flat no. C-1, ground floor, from one Sri M.P. Pal who was allegedly holding the flat and the Housing Society by its resolution dated 10th February, 2002 recommended the eligibility of Sri Benoy Krishna Chowdhury for being taken as a member in place and in lieu of existing member Sri M.P. Pal on performance of formalities under the Co-operative Act and Rules. While this proposal was pending for approval by way of prior permission under Rule 142(1) aforesaid before the Deputy Registrar, Co-operative Societies (Calcutta Metropolitan Area Housing), hereinafter referred to as "concerned DRCS", said Sri Benoy Krishna Chowdhury moved the Writ Court seeking early disposal of his approval issue by the said Officer by filing a writ petition being W.P. No. 111 (W) of 2004, which stood disposed of by the order dated 28th January, 2004 by Pranab Kumar Chattopadhyay,J., the order of which is already quoted, whereby direction was given to the said Officer to decide the issue of approval. The said Officer did not accord approval of the resolution of the Managing Committee dated 10th February, 2002 and on the contrary he held otherwise that the concerned ground floor flat C-1 on application of law of inheritance and the nomination made by Dr. Mukherjee, since deceased, stood automatically vested to his wife, Smt. Krishna Mukherjee. Challenging the decision dated 12th March, 2004 of said DRCS, the present writ application W.P. No. 6354 (W) of 2005 was moved seeking quashing of the said order and praying relief to this effect:
"(a) A writ of and/or in the nature of Mandamus directing the respondent Nos. 2, 3 and 4 to immediately allot the Flat No. C-1 or any comparable flat under the space Cooperative Housing Society Ltd. to the petitioner who is a senior citizen with servere cardiac ailment but eligible in law to be a member of the society and completed all formalities including down payment of the total flat cost of Rs. 5.5 lakh for enrolment as a member, duly approved by the Society at their managing committee meeting dated 10.2.2002 and recommended on 8.4.2002 to the respondent No.3 for approval;
(b) A writ of and/or in the nature of Mandamus commanding the respondent Nos. 2 and 3 not to recognize the claim of respondent No.5 which was rejected in the award dated 5th December, 2001 in Dispute Case No. 16/RCS of 2000-2001 because of violation of the provisions of the Act and the Rules, default of her nominator to pay the construction cost of the flat in full, negligence of the nominee and respondent No. 5 to prefer appeal if any, before the Tribunal against the award dt. 5.12.2001 within the stipulated period, and because of approval of Membership of Probal Kumar Basu in place of late Arup Kumar Mukherjee by the Dt. RCS under his order No. 2031/CMAH dt.
24.11.99 long before to the order dt. 12.3.2004 of the Dy. RCS being Annexure P-5 to the petition was passed;
(c) A writ of and/or in the nature of prohibition commanding the respondents particularly, respondent No. 2, 3 and 4 not to give effect of further effect to the order dt. 12.3.2004 of Dy. RCS being Annexure P-5 to the petition, as also not to transfer any flat of the respondent society except to the petitioner till disposal of the writ petition.
(d) A writ of and/or in the nature of certiorari commanding the respondents, particulars respondent no. 3 to testify & transmit all records pertaining to the case to this Hon'ble Court for fair adjudication of the matter;
(e) Ad-interim order in terms of prayer (c) above;
(f) Such other order or orders, direction or directions as deem fit and proper."
Learned trial Judge did not grant relief in the writ application, allowing the prayers and did not interfere with the impugned order of DRCS, which prompted the writ petitioner, Sri Benoy Krishna Chowdhury, to move appeal being MAT 3926 of 2004. The appeal was filed by Sri Benoy Krishna Chowdhury. But during pendency of the appeal, unfortunately, gentleman breathed last and substitution application was filed to proceed with the appeal by the legal heirs, which was allowed by the Division Bench (Coram: Ashim Kumar Banerjee and Sankar Prosad Mitra,JJ.), the order of which is already quoted above. While considering the substitution application, the Division Bench aforesaid did not consider the issue of maintainability of the appeal by the substituted legal heirs but simply allowed the substitution so that the substituted appellants may proceed with the appeal, which as per our understanding and our reading, cannot be considered as an adjudication of the maintainability question as it appears on perusal of the records.
From the very nature of the aforesaid Co-operative Act, concerned Rule and by-laws relating to its provision for membership of a Co-operative Society and transfer of flat of a Co-operative Housing Society to a prospective purchaser, it appears that until a prospective purchaser of the flat is eligible to be the member of the Co-operative Housing Society by considering his application by the Board of Directors of the Co-operative Housing Society and thereafter same requires approval by the decision of Deputy Registrar, Co-operative Societies, granting necessary permission to transfer, accepting the intending purchaser as eligible to be a member of Housing Society. After necessary direction and approval of the DRCS, the other formalities when are completed, namely, execution of sale deed by the owner member retiring to the prospective purchaser, an eligible member as proposed and share certificates are issued, till then, there is no passing of any title of the property in question, namely, the flat in question. In the instant case, as such, it appears before us that the writ petitioner since deceased, practically did not acquire any right, title and interest on the flat C-1 upon being properly admitted as a member of the Housing Society on performing all formalities thereof, including execution of sale deed in his favour and transferring of the shares of Co-operative Societies. Membership of a Co-operative Society in terms of the said statutory provision, is a contingency/action relates to the individual person concerned who intends to be the member on dealing his eligibility particulars in his application, which scrutiny his eligibility, would lead a result to accept him as a member of the Co- operative Housing Society subject to permission by DRCS. Hence, so long a person is not properly admitted as a member of Housing Society following the procedural laws and complying with the mandatory provisions of Co-operative Act and Rule thereof, namely, resolution of the Co-operative Society deciding his eligibility to be the member, permission of the Deputy Registrar, Co-operative Societies to proceed with the deal and thereby compliance of formalities, namely, execution of sale deed to purchase the flat by way of transfer from the retiring member and transfer of share certificates of the Co-operative Society in favour of the purchaser member, deal is not complete and no right is accrued in respect of the property in question. In the instant case, the writ petitioner's application seeking membership did not even reach its finality with reference to his prayer to transfer the flat C-1, which was the subject matter of lis of the writ application as well as in this appeal. The legal right as per law of inheritance of the heirs in respect of a flat would accrue, when deceased member of society already accrued right, title and interest over the flat in question as per law. Here the law in the field for the transfer of property i.e. flat no. C-1 is the West Bengal Co-operative Societies Act, 1983 read with West Bengal Co-operative Societies Rules, 1987 and the Transfer of Property Act. As the writ petitioner/appellant was a proposed person for being admitted as a member, which got no legal finality by approval with reference to the flat in question and no right accrued to have the transfer of the flat in his favour and his appeal challenging the impugned judgment was for the relief of his right of entry in a Co-operative Housing Society as a member thereof, a personal right, which did not mature but was in the proposed stage, it does not carry any heritable character to vest a right to the legal heirs similar to the right of legal heirs of an deceased member of a Co-operative Housing Society conferring them right to the property in question held by deceased member under Section 87(3) of said Act. Section 87 reads such:
"87. Member's right of ownership.-[(1) Any allotment (including re-allotment) of a plot of land or a house or an apartment in a building made by a co-operative housing society to its member in accordance with its by-laws shall entitle such member to hold such plot of land, house or apartment, as the case may be, with such title or interest as may be granted under the prescribed conditions, and, subject to the provisions of sub-section (2) of section 6-0, an instrument of transfer in accordance with the provisions of the Transfer of Property Act, 1882 (4 of 1882) and the Registration Act, 1908 (16 of 1908), shall be the conclusive evidence of such title or interest in favour of such member.] (2) A member of a co-operative housing society shall not be entitled to any title or interest in any plot of land or house or apartment in a [......] building until he has made such payment as may be prescribed towards the cost of such plot of land or construction of such house or apartment or both, as the case may be, to the co-operative housing society.
(3) A plot of land or a house or an apartment in a [.....] building (including the undivided interest in the common areas and facilities) shall constitute a heritable and transferable immovable property within the meaning of any law for the time being in force:
Provided that notwithstanding anything contained in any other law for the time being in force, such heritable and transferable immovable property shall not be partitioned or sub-divided for any purpose whatsoever.
(4) Every member of a co-operative housing society shall be entitled to an undivided interests in the common areas and facilities pertaining to the plot of land or house or apartment allotted to him.
(5) Every member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a [.......] building has been allotted shall have the right to use the common areas and facilities as aforesaid for the purpose for which they are intended without interfering with or encroaching upon the lawful rights of other members in whose favour similar allotment has been made.
(6) The work relating to the maintenance, repair and replacement of the common areas and facilities (including additions or improvements thereto) shall be carried out in accordance with the by-
laws of the co-operative housing society and the building rules of the concerned municipality, notified area authority or competent authority, as the case may be and the costs thereof shall be apportioned amongst the members of the co-operative housing society in such manner as may be prescribed."
The Apex Court in the judgement passed in the case Gayatri De vs. Mousumi Co-operative Housing Society Ltd. & Ors., reported in (2004) 5 SCC 90, also held that right of nominee to have transfer of share and interest of any deceased member is automatic by action of society, which requires to be performed.
Having regard to that situation appellant's case in the appeal for adjudication is limited in respect of his application seeking membership and his right to purchase flat by way of transfer under Transfer of Property Act, 1882, which though decided by the Co-operative Housing Society in his favour, but it did not reach finality by approval/permission of DRCS under said Rule 142. Hence, the lis in this appeal is absolutely to a limited point as to whether the decision impugned in the writ application refusing to accord permission in favour of Sri Benoy Krishna Chowdhury, since deceased, was proper or not. That goes to the point of membership issue and right to purchase by way of transfer of flat of a person who is already dead and as those rights are exclusive personal right of a particular person is concerned and it cannot be a heritable right to the legal heirs of said person in case of death of the person in the meantime, naturally, legal heirs have no right to maintain this appeal for a decision on merit. We hold accordingly that appeal on that ground is not maintainable by the substituted legal heirs as under the law no relief could be granted to the legal heirs.
Now we proceed with the merit of the case, as the issue has been argued, by assuming that appeal is maintainable for argumendo.
It is an admitted fact that Dr. Mukherjee, a promoter member of the Co- operative Society upon having proper allotment of the flat breathed last. Smt. Krishna Mukherjee, his wife was the nominee. Dr. Mukherjee breathed last on 3rd April, 1994. The provision of law as existing at the material time will guide the vesting of interest of such deceased member. Even the law as existed in the year 1994 and also at the present moment provides that under Section 79 of the said Act subject to by-laws, a member of a Co-operative Society may nominate any person in whose favour the Society will dispose of the share or interest of such member on his death. Section 79 reads such:
"79. Nomination of transferee.-Subject to the by-laws of a co- operative society, and member of such co-operative society may in accordance with the rules nominate a person in whose favour the co- operative society shall dispose of the share or interest of such member on his death."
Section 80 is the provision regarding disposal of deceased member's share and interest, which reads such:
"80. Disposal of deceased member's share of interest.-(1) On the death of a member of a co-operative society [other than a central society,] his share or interest in the co-operative society shall, subject to the provisions of sections 57 and 78 and to the further provisions of this section, be transferred-
(a) to the person, if any, nominated under section 79; or
(b) if there is no nominee or if the existence or residence of the nominee cannot be ascertained by the board or if, for any other cause, the transfer cannot be made without unreasonable delay, to the person, who (subject to the production by such person of probate, letter of administration or succession certificate) appears to the board to be entitled in accordance with the rules to the possession of such share or interest as part of the estate of the deceased member; or
(c) on the application of the person referred to in clause (b) within three months from the date of death of the member, to such person as may be specified in the application. (2) If the share or interest of a deceased member cannot be transferred in accordance with the provisions of sub-section (1) or if the person to whom such share or interest is payable under that sub-
section claims payment of the value of such share or interest or if the co-operative society in accordance with the rules and its by-laws decides to proceed under this sub-section,-
(a) the share shall be transferred to a person qualified to be a transferee of the share under section 78 on receipt of the value of the share from such person; and
(b) the value of the share or the interest of the deceased member determined in accordance with the rules shall be paid to the person nominated under section 79 or to the person referred to in clause (b) of sub-section (1) of this section after deducting the amount payable under this Act to the co-operative society from the estate of deceased member."
Under Section 80 Sub-section (1)(a) on the death of a member of the Society, his/her nominee is entitled to have transfer of share or interest in the Society automatically and Society had the responsibility to take step to transfer the share. In the instant case it appears that Society did not take any steps to transfer the share, which was an automatic process under Section 80 in favour of Smt. Mukherjee.
The West Bengal Co-operative Societies Rule, 1987 also provides the scope of nomination as well as disposal of deceased member's share or interest including procedure for calculation of value of shares. The relevant provision of Rule 127 and 128 of West Bengal Co-operative Rules, 1987 reads such:
"127. Nomination of transferee.-(1) A member of a co- operative society may in accordance with the provision of section 79, nominate in writing any person belonging to his family to whom the share or interest or the value of such share or interest shall, on his death, be paid or transferred under the provision of the Act:
Provided that if a member has no family he may nominate any person to whom such share or interest or the value of such share or interest shall be paid or transferred:
Provided further that such member may, from time to time, revoke such nomination and made a fresh nomination.
(2) Every co-operative society shall keep a register of all persons so nominated.
(3) In case the nominee of a member dies, the member shall report the death to the society/and make a fresh nomination if he so desires.
Explanation.- For the purpose of this rule a family shall have the same meaning as given in the Explanation to sub-section (2) of section 13 and shall include major sons and daughters.
128. Disposal of deceased member's share or interest and procedure for calculation of value of shares.-(1) When upon the death of a member of a co-operative society, the question of transferring the share, or paying interest of such deceased member arises, and the board of such society finds that the deceased member did not make any nomination in accordance with the provisions of section 79, or that the existence or residential address of the person nominated cannot be ascertained, or that for any other sufficient cause such transfer or payment cannot be made without unreasonable delay, the board may transfer the share or pay interest of such deceased member in favour of or to any person who presents in writing his or her claim for the said share or interest and produces, in support of such claims, probate, letter of administration or succession certificate issued by a competent court having jurisdiction, and makes a written declaration in an affidavit before a Magistrate that he or she is the rightful claimant, being the legal heir or representative of the deceased.
(2)(a) Where a co-operative society has to make a refund of the value of a share, the value of the share shall be deemed to be equal to the amount paid upon the share:
Provided that where a portion of the assets is estimated to be bad or doubtful in the latest audited balance sheet, and is not covered by funds created out of profits, the board may, for the purpose of such payment, reduce the value of the share, in the same proportions as the aggregate amount of assets which are not bad or doubtful, less the amount of outside liabilities, bears to the paid up share capital.
(b) Where a transfer of share or interest is made, the value of the share or interest shall be deemed to be the sum actually paid by the member for the acquisition of such share or interest."
From the facts of the case it appears that due to contingency of such a situation of death of a member, when his share or interest was required to be transferred in favour of nominee by the Society, an action, which was required to be done by the Society itself, it was not done accordingly, though under the statutory provision the nominee acquired a right to have the transfer of interest and share of the Society, which means in the instant case interest and share in the Housing Society so far as the flat allotted to her deceased husband being promoter member. Cessation of membership of a Co-operative Society could be construed under Rule 123. It provides different situation/contingency for its applicability, namely, member's death/resignation/transfer of share/adjudged as insolvent/bankrupt/ lunatic etc. The Rule 123 of the said Rule, 1987 reads such:
"123. Cessation of membership of a co-operative society.-A member of a co-operative society shall cease to be such member, if he -
(i) dies,
(ii) resigns in accordance with the Act, these rules and the by-laws,
(iii) transfers his share in favur of some other person in full,
(iv) is adjudged an insolvent,
(v) is adjudged bankrupt,
(vi) turns a lunatic."
Provision of Section 87 prior to the substitution by new provision effective from 13th October, 1995, was different so far as acquiring of title in the property. Section 87 of West Bengal Co-operative Societies Act, 1983 deals with member's right of ownership. Section 87 was substituted by Act XX of 1995 effective from 13th October, 1995. Pre-substitution and Post-substitution provision of Section 87 reads such:
"Pre-substitution:
87. Member's right of ownership.-(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882) or the Registration Act, 1908 (16 of 1908), any allotment (including re-
allotment) of a plot of land or a house or an apartment in [.....] building made by a co-operative housing society of its member in accordance with its by-laws shall entitle such member to hold such plot of land or house or apartment with such title or interest as may be granted under the prescribed conditions, and the certificate of allotment shall be the conclusive evidence of such title or interest in favour of such member.
(2) A member of a co-operative housing society shall not be entitled to any title or interest in any plot of land or house or apartment in a [.....] building until he has made such payment as may be prescribed towards the cost of such plot of land or construction of such house or apartment or both, as they case may be, to the co-operative housing society.
(3) A plot of land or a house or an apartment is a [......] building (including the undivided interest in the common area and facilities) shall constitute a heritable and transferable immovable property within the meaning of any law for the time being in force:
Provided that notwithstanding anything contained in any other law for the time being in force, such heritable and transferable immovable property shall not be partitioned or sub-divided for any purpose whatsoever.
(4) Every member of a co-operative housing society shall be entitled to an undivided interests in the common areas and facilities pertaining to the plot of land or house or apartment allotted to him.
(5) Every member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a [..............] building has been allotted shall have the right to use the common areas and facilities as aforesaid for the purpose for which they are intended without interfering with or encroaching upon the lawful rights of other members in whose favour similar allotment has been made.
(6) The work relating to the maintenance, repair and replacement of the common areas and facilities (including additions or improvements thereto) shall be carried out in accordance with the by-
laws of the co-operative housing society and the building rules of the concerned municipality, notified area authority or competent authority, as the case may be and the costs thereof shall be apportioned amongst the members of the co-operative housing society in such manner as may be prescribed.
Post-substitution:
87. Member's right of ownership.-[(1) Any allotment (including re-allotment) of a plot of land or a house or an apartment in a building made by a co-operative housing society to its member in accordance with its by-laws shall entitle such member to hold such plot of land, house or apartment, as the case may be, with such title or interest as may be granted under the prescribed conditions, and, subject to the provisions of sub-section (2) of section 6-0, an instrument of transfer in accordance with the provisions of the Transfer of Property Act, 1882 (4 of 1882) and the Registration Act, 1908 (16 of 1908), shall be the conclusive evidence of such title or interest in favour of such member.] (2) A member of a co-operative housing society shall not be entitled to any title or interest in any plot of land or house or apartment in a [......] building until he has made such payment as may be prescribed towards the cost of such plot of land or construction of such house or apartment or both, as the case may be, to the co-operative housing society.
(3) A plot of land or a house or an apartment in a [.....] building (including the undivided interest in the common areas and facilities) shall constitute a heritable and transferable immovable property within the meaning of any law for the time being in force:
Provided that notwithstanding anything contained in any other law for the time being in force, such heritable and transferable immovable property shall not be partitioned or sub-divided for any purpose whatsoever.
(4) Every member of a co-operative housing society shall be entitled to an undivided interests in the common areas and facilities pertaining to the plot of land or house or apartment allotted to him.
(5) Every member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a [.......] building has been allotted shall have the right to use the common areas and facilities as aforesaid for the purpose for which they are intended without interfering with or encroaching upon the lawful rights of other members in whose favour similar allotment has been made.
(6) The work relating to the maintenance, repair and replacement of the common areas and facilities (including additions or improvements thereto) shall be carried out in accordance with the by-
laws of the co-operative housing society and the building rules of the concerned municipality, notified area authority or competent authority, as the case may be and the costs thereof shall be apportioned amongst the members of the co-operative housing society in such manner as may be prescribed."
Dr. Mukherjee breathed last in the year 1994, so the provision of the law, namely, Section 87 as was existing prior to 13th October, 1995, is the guiding provision in this case.
Section 81 of the West Bengal Co-operative Societies Act, 1983 came into effect from 22nd July, 1991, which stipulates disposal of share or interest of member on expulsion or resignation or on becoming insane. Said Section reads such:
"81. Disposal of share or interest of member on expulsion or resignation or on becoming insane.-When a member of a co- operative society is expelled or resigns in accordance with the rules or the by-laws of the co-operative society or becomes insane, his share or interest in the capital of the co-operative society shall be transferred to a person qualified to be a transferee of such share or interest under section 78, and the value thereof shall be paid to the member or, in the case of his becoming insane, to such person as may be appointed to manage his properties under the Mental Health Act, 1987 (35 of 1987), within two years from the date on which the member is expelled or resigns or the person as aforesaid is appointed, as the case may be."
On analysis of Section 81 of West Bengal Co-operative Societies Act, 1983 it appears that in the case of death of a member, his share and interest of the Co-operative Society vests to the nominee and if there is no nomination then to the legal heirs who will claim and in the event of nomination automatically to the nominee. Act further provides under said Section 80 Sub-section (2) that when share or interest of a deceased member could not be transferred in accordance with the provision of Sub-section (1), the provision as laid down therein to be followed for the transfer of shares to a qualified transferee under Section 78 of the said Act. Whereas under Section 81, there is different provision due to resignation of a member where is no scope for automatic transfer of share to a nominee and/or to the legal heirs. Said two provisions are discussed for the reason that the Co-operative Societies Act, 1983 had taken care of different treatment under different contingency, namely, in the case of death of member, a non-voluntary action, being act of God and other in the case of resignation of the member from the Housing Society, a voluntary action of the member himself.
It is an admitted fact as it appears from the permission accorded by the Deputy Registrar, Co-operative Society that the Housing Society referred the matter to him, seeking transfer of membership in favour of Sri Plaban Basu by allotment of the flat, which was allotted to Dr. Mukherjee since deceased by using the word "resignation of Dr. Mukherjee from the Housing Society". Hence, it was an action under Section 81 of the said Act about disposal of the share of a member due to his resignation and not an action under Section 80 of the said Act. The Co-operative Housing Society, hence, misrepresented the fact while seeking permission to transfer the flat to Sri Plaban Basu and such misrepresentation of fact was deliberate, which satisfy the exercise of fraud. Co- operative Housing Society when under the statute was bound to transfer the share and interest of Dr. Mukherjee, a deceased member, to his wife Mrs. Krishna Mukherjee, a nominee, did not do such but on the other hand took a decision to transfer it in favour of Sri Plaban Basu on the ground of resignation of Dr. Mukherjee from the membership of the Society and Deputy Registrar, Co- operative Societies on such fact and believing such fact as true accorded permission. On that basis the Society transferred the share and interest of the concerned flat, which earlier was allotted under Section 87 of the old provision in favour of Dr. Mukherjee to Sri Plaban Basu. Such action due to exercise of fraud, goes to the root of the matter and it has vitiated the action of the Society entertaining the application of Sri Plaban Basu to allot the flat as already allotted to the deceased member Dr. Mukherjee and on his death when it automatically vested to his wife. Subsequent action of Deputy Registrar, Co-operative Societies also is accordingly vitiated. Sri Plaban Basu accordingly got no right, title and interest over the flat in question due to exercise of such fraud and all those actions were nullity in the eye of law.
In the award as passed by the learned Arbitrator on application of Smt. Krishna Mukherjee, such fact of fraud was not considered and as such, the award had no binding effect and due to fraud the same could be the subject matter of challenge in any co-lateral proceeding irrespective of the fact that a statutory appeal laid by Smt. Krishna Mukherjee stood dismissed on the ground of limitation as the appeal was not preferred within time. Learned trial Judge accordingly discussed the issue that on the ground of fraud all action was vitiated.
It is settled legal position that the fraud vitiates all action, reliance may be placed to the judgment passed in the case Smith vs. East Elloe Rural District Council & Ors., reported in (1956) 1 All. E.R. 855. "No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything" as observed in the case by Lord Denning,LJ. in Lazarus Estates Ltd. Vs. Beasley, reported in (1956) 1 All. E.R. 341. In the said case Lord Parker,CJ. observed "fraud vitiates all transactions known to the law of however high a degree of solemnity". Similar view echoed by Apex Court in the case Ram Chandra Singh vs. Savitri Devi & Ors., reported in (2003) 8 SCC 319 in paragraph 15-18 and 23-25 and in the case Vijay Shekhar & Anr. Vs. Union of India & Ors., reported in (2004) 4 SCC 666, a judgment of three Judges Bench. It is also a settled legal position that any judgment/order obtained by fraud is a nullity and all subsequent proceeding also will be nullity. Reliance may be placed to the judgment passed in the case T. Vijendradas & Anr. Vs. M. Subramanian & Ors., reported in (2007) 8 SCC 751. Even in the case of a fraud, the Apex Court held that second review by the High Court was permissible, reliance is placed to the judgment passed in the case Hamza Haji vs. State of Kerala & Anr., reported in (2006) 7 SCC 416. In the said case, an order was procured by appellant from a Forest Tribunal by fraud on submitting a statement that the concerned land was under self-cultivation (though the fact was not true), to have an order under Section 3(3) of Kerala Private Forests (Vesting of Assignment) Act, 1971 for retaining the land. High Court dismissed the appeal of State Government at admission stage. A statutory review before Tribunal failed on the ground that the order of Tribunal merged with the order of High Court in appeal. Thereafter a review application in High Court was dismissed on the ground of long delay, which was about 8 years. Order of dismissal again placed for review along with review of original order. A body of citizens filed the writ application assailing Tribunal's order pointing out fraud. High Court quashed the order of Tribunal and its earlier order on hearing second review application and writ application analogously. Order of High Court confirmed by the Apex Court.
Learned trial Judge proceeded on that view and it has been rightly held that due to the fraud committed by the Housing Society by misrepresentation of fact that Dr. Mukherjee resigned though Dr. Mukherjee's membership was ceased due to his death and Smt. Krishna Mukherjee, his nominee got an automatic right to inherit it. Right of nominee and its effect has been considered by Apex Court in the case Gayatri De (supra), wherein it is held that nominee is automatically entitled to have the transfer of share and interest of the Society in the event of death of the member and it is the duty and responsibility of Society to transfer it, in terms of statute.
Learned advocate Mr. Chatterjee has strongly emphasized on the new provision of Section 87 of the said Act. New provision of Section 87 came into effect from 13th October, 1995 after the death of Dr. Mukherjee and as such, the new provision of Section 87 Sub-section (1) has no applicability. Under the new provision of Section 87 Sub-section (1), for the purpose of conclusive evidence of any title and interest in favour of such member, it requires execution of an instrument under the Transfer of Property Act read with the Registration Act, 1908, which earlier was not in the provision of Section 87 when Dr. Mukherjee was admitted as promoter member. At the relevant time of admission of Dr. Mukherjee, Section 87 of the said Act stipulated that the right, title and interest would be in terms of the letter of allotment and there was no need of execution of any instrument under the Transfer of Property Act read with Registration Act to identify the said right.
In the instant case Dr. Mukherjee got a letter of allotment of the flat issued by the Housing Society, which was the conclusive evidence of his right, title and interest upon the flat in question irrespective of the fact that full cost of the flat was not cleared. It is also a fact on record, which is admitted that Dr. Mukherjee, deceased member, paid the initial amount and balance amount was arranged by the Society with the Apex Housing Society by way of loan in favour of the promoter member, Dr. Mukherjee, which even after being sanctioned while awaiting for final disposal in the hand of the Housing Society, unfortunately, Dr. Mukherjee breathed last. Such fact does not lead the conclusion that the right, title and interest over the flat was not vested to Dr. Mukherjee in terms of the letter of allotment issued by the Housing Society. The argument of Mr. Chatterjee to that effect cannot be considered as legally sustainable in view of the provision of the law as was existing, namely, Section 87 of the said Act prior to 13th October, 1995. Prior to 13th October, 1995, letter of allotment was the only proof of right, title and interest in favour of a member of a Society in respect of property in question allotted.
Furthermore, from the facts as it appears from the respective affidavits that after allotting the concerned flat to Sri Plaban Basu on exercising fraud aforesaid, wherein the nominee Smt. Krishna Mukherjee already had accrued a right to have the transfer of share and interest of the flat in her favour by the Society, an action, which was required to be done by the Society, the Society exchanged the said ground floor flat with one Sri M.P. Pal who was an existing allottee of a flat on the top floor of the premises. Under the statutory provision, namely, said Co-operative Societies Act and Rules thereof, there is no such provision authorizing the Society to exchange any property without following the procedures laid down thereto, namely, preparation of instruments in terms of Section 87 Sub-section (1) following the Transfer of Property Act and the Registration Act, with prior permission of DRCS under Rule 142 of the said Rule.
Since the initial entry of Sri Plaban Basu was on exercise of fraud, Sri Plaban Basu got no right, title and interest in the flat in question, which already vested to Smt. Krishna Mukherjee automatically by dint of nomination and application of Section 80 of the West Bengal Co-operative Societies Act before it was allotted to Sri Plaban Basu. In view of such state of affairs, Sri M.P. Pal accordingly did not accrue any right, title and interest over the ground floor flat over which a vested right accrued under Section 80 by nominee Smt. Krishna Mukherjee and as a resultant effect Sri Benoy Krishna Chowdhury got no right to file any application seeking transfer of share, title and interest of Sri Pal with reference to the ground floor flat, which vested to Smt. Krishna Mukherjee. Hence, on merit, there is no substance in the writ application to set aside and quash the decision reached by Deputy Registrar, Co-operative Society impugned in the writ application.
Having regard to such, writ application has no merit and it stands dismissed. Appeal also stands dismissed on merit as well as on maintainability ground. It is ordered accordingly that Smt. Krishna Mukherjee will be entitled to hold/posses with right, title and interest of the ground floor flat in terms of the decision reached by the Deputy Registrar, Co-operative Societies. Housing Society is directed to take all steps for transfer of interest and share of deceased member Dr. Mukherjee in favour of Smt. Krishna Mukherjee by making necessary instruments/documents/letter of allotment etc. as per law by three weeks from this date. It has been submitted by the parties that Smt. Krishna Mukherjee is already now in occupation of the flat, hence, she will continue in such occupation. Appeal and connected CAN 8180 of 2007 both stand dismissed.
On the findings of present appeal, so far as merit, as decided by holding that the appeal has no merit and on the same reasoning discussed in said appeal, the appeal FMA 597 of 2005, accordingly, stand dismissed on merit.
(Pratap Kumar Ray,J.) I agree, (Manik Mohan Sarkar,J.)