Gujarat High Court
The Tolak Co-Operative Housing Society ... vs The State Of Gujarat Served Thro' The ... on 21 October, 2022
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13725 of 2006
With
R/SPECIAL CIVIL APPLICATION NO. 5129 of 2009
With
R/SPECIAL CIVIL APPLICATION NO. 15519 of 2005
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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THE TOLAK CO-OPERATIVE HOUSING SOCIETY LTD.,
Versus
THE STATE OF GUJARAT SERVED THRO' THE SECRETARY & 12 other(s)
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Appearance:
MR PRAKASH JANI, SENIOR ADVOCATE WITH MR PUSHPADATTA
VYAS(1296) for the Petitioner(s) No. 1
DELETED for the Respondent(s) No. 11,8
GOVERNMENT PLEADER for the Respondent(s) No. 1
MR BAIJU JOSHI(1207) for the Respondent(s) No. 12,13
MR VH DESAI(298) for the Respondent(s) No. 4
MR ANKIT SHAH WITH MR.D K.PUJ(3836) for the
Respondent(s) No. 9
MS TEJAL A VASHI(2704) for the Respondent(s) No. 6,7
RULE SERVED for the Respondent(s) No. 10,2,3,5
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Page 1 of 58
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C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 21/10/2022
CAV JUDGMENT
Heard learned Senior Advocate Mr.Prakash Jani with learned advocate Mr.Pushpadatta Vyas for the petitioner-Society, learned advocate Mr.Baiju Joshi for respondent Nos.12 and 13-Babubhai Joshi and Smitaben Babubhai Joshi respectively and learned advocate Mr.Ankit Shah with learned advocate Mr.D.K.Puj for the respondent Trust.
1. Special Civil Application No.13725 of 2006 and Special Civil Application No.5129 of 2009 are filed by the Tolak Co-operative Housing Society Limited, whereas, Special Civil Application No.15519 of 2005 is filed by Shri SamyagnanShibir Public Charitable Trust.
2. Dispute between the parties pertains to Plot No.17 of the Tolak Co-operative Housing Society Page 2 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Limited (for short 'the Society') which is alleged to have been purchased by Shree Samyak Gnan Shibir Public Charitable Trust (for short 'the Trust') for the purpose of its activities for the Library and Study of Jain religion.
3. The factual matrix giving rise to this litigation dates back to the year 1980. 3.1. The Society is a Co-operative Housing Society registered under the provisions of the Bombay Co- operative Societies Act, 1925, as applicable then in the bilingual State of Bombay in the year 1927.
3.2. The respondent No.12 namely Babubhai M. Joshi in Special Civil Application No.13725 of 2006 had inherited the Plot No.17 admeasuring 1084 Sq. Meters of the Society. Thereafter, on application given by the said Babubhai M. Joshi to the Society to bifurcate the Plot No.17 into two Sub- Page 3 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 plot Nos.17A and 17B, the same was accepted by the Society and the name of the Babubhai Joshi was recorded as owner of Plot No.17A and name of his wife-Shrimati Smitaben Babubhai Joshi who is respondent No.13 in Special Civil Application No.13725 of 2006 was recorded as owner of Plot No.17B.
3.3. Babubhai M. Joshi and Smitaben Babubhai Joshi entered into an agreement to sale dated 09.03.1980 in respect of entire plot comprising of Plot Nos.17A and 17B together with its superstructure for Rs. 1,00,001/- in favour of one Kumarpal Amichand (Shah) Bagrecha-respondent No.5 in Special Civil Application No.13725 of 2006 who was one of the Trustees of the Trust- respondent No.4 in the said Special Civil Application. The possession of the said plot was handed over to the Trust on 09.03.1980. Page 4 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 3.4. Babubhai Joshi, Smitaben Joshi and Kumarpal Amichand submitted an application to the Society to become members. However, the Society rejected the application in the meeting held on 30 th May, 1980.
3.5. Being aggrieved by the decision of the Society to reject the application to become member, a Lavad Suit No.176 of 1980 was filed before the Board of Nominees at Ahmedabad which was dismissed on 21.05.1987.
3.6. Thereafter, Civil Suit No.5076 of 1987 was filed before the City Civil Court, Ahmedabad by Babubhai Joshi and Smitaben Joshi against the respondent No.5 for cancellation of the agreement to sale dated 09.03.1980 between the parties. There was a compromise between the parties in the said Civil Suit in the year 1989 and as per the terms of the compromise, the sale deed dated 12.10.1990 was executed between the parties in Page 5 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 favour of the Trust and its trustee Kumarpal Amichand Bagrechaby Babubhai Joshi and Smitaben Babubhai Joshi.
3.7. The Trust submitted an application on 27th February, 1989 before the Society through its Trustee-Navinchandra Gandhi with a request to enter the name of the Trust as a member of the Society stating the share certificates for Plot Nos.17A and 17B be transferred in name of the Trust. The Trust also signed a cheque of Rs.5,000/- towards transfer fees to the Society. 3.8. The Society in its meeting held on 12.03.1989 rejected the application of the Trust on the ground that the request of the Trust was made on the basis of the agreement dated 09.03.1980 and the Society had already in its meeting held on 30th May, 1980 rejected the said request and therefore, repeated requests made on the basis of the said agreement could not be accepted. Page 6 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 3.9. Feeling aggrieved and dissatisfied with the decision of the Society, rejecting the application of the Trust to enter as member of the Society, the Trust filed an Appeal before the District Registrar Co-operative Societies under provisions of the Gujarat Co-operative Societies Act,1961, which was dismissed by order dated 23.04.1990.
3.10. The Trust thereafter being aggrieved by the order of the District Registrar preferred a Revision Application under Section 155 of the Act, 1961 before Additional Registrar Co- operative Societies being Revision Application No.13 of 1990 which was also dismissed by order dated 27th July, 1990.
3.11. The Trust thereafter preferred another Appeal under Section 155 of the Act, 1961 before the Deputy Secretaries, Co-operative Department. Page 7 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 The said Appeal was allowed by order dated 17.05.1991 whereby, the Society was ordered to accept the application filed by the Trust and entered its name as member of the Society. 3.12. The petitioner feeling aggrieved and dis- satisfied with the order dated 17.05.1991 passed by the Deputy Secretary (Appeals) preferred Special Civil Application No.5817 of 1991 before this Court with a prayer to quash the order dated 17th May, 1991, seeking further direction that the Trust cannot be admitted as a member of the Society. The Society also challenged the vires of Section 22 of the Act, 1961 in the said petition. The Division Bench of this Court granted interim- relief by staying the operation of the order dated 17th May, 1991.
3.13. The Society along with Krutharth, son of Babubhai Joshi preferred Lavad Case No.1576 of 1993 against the Trust and its Trustees before Page 8 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 the Board of Nominees to cancel the sale-deed dated 12thOctober, 1990 and further to declare that such sale-deed is not binding upon the Society. The said Lavad Suit was renumbered as Lavad Case No.1179 of 1995. The Board of Nominees by order dated 31.08.1999 and further amended order dated 07.09.1999 decreed the said Lavad Suit holding that the sale-deed dated 12.10.1990 in favour of the Trust is not binding upon the Society and Trust has no right title or interest in the property mentioned in the sale-deed. 3.14. Krutarth, son of Babubhai Joshi also filed Lavad Case No.1624 of 1995 on the basis of the Resolution No.4 dated 19.08.1995 passed by the Society to enter his name in the ancestral property wherein it was prayed by him to declare that Society has no right to enter the name of any other member for transfer of the share of Plot Nos.17A and 17B without giving opportunity to him. The Board of Nominees by order dated Page 9 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 12.02.1996 allowed the prayers made in Lavad Case No.1624 of 1995.
3.15. The Trust being aggrieved by the aforesaid order judgment and order dated 12.02.1996 passed by the Board of Nominees in Lavad Case No.1624 of 1995 preferred belated Appeal with a Misc. Application No.36 of 2001 for condonation of delay of more than two years before the Tribunal. The Tribunal by the judgment and order dated 17.06.2005, rejected the Misc. Application No.36 of 2001 refusing to condone the delay. The Trust feeling aggrieved by the said order has preferred Special Civil Application No.15519 of 2005. 3.16. The said Special Civil Application No. 15519 of 2005 was admitted and the order dated 17.06.2005 passed in Misc. Civil Application No.36 of 2001 by the Tribunal was stayed and was further ordered to be heard with Special Civil Application NO.5817 of 1991 which was pending Page 10 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 before this Court as narrated hereinabove. 3.17. The Special Civil Application No.15519 of 2005 was thereafter dismissed for non-prosecution by order dated 09.04.2010, however, the same was restored vide order dated 18.07.2013 passed by this Court. Thereafter again the Special Civil Application was dismissed for non-prosecution on 26.06.2015 which was again restored by the order dated 28.07.2015 by this Court.
3.18. In the year 2003, the Society filed another Special Civil Application No.8417 of 2003 before this Court seeking writ of mandamus, more particularly, against the Municipal Commissioner and the Police Commissioner with respect to the decision of the Trustees of the Trust to perform the last religious ceremonies (funeral ceremonies) of Muni Shri Mitranand Vijaysurishwarji Maharaj Saheb who had attained Kaldharma (heavenly adored) on 08.04.2003 in the Page 11 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 premises of Plot No.17.
3.19. However, as there was no ad-interim orders sought against the Trustees, the followers of the late respected Muni Shri Mitranand Vijay Surishwar Shri Maharaj Saheb performed the last rights in Plot No.17 of the Society by placing the body of late Maharaj Saheb on the funeral pyre and burning the same on the said plot itself.
3.20. This Court (Hon'ble Mr. Justice M.R.Shah, As His Lordship was then) by order dated 08.08.2004 did not entertain the said Special Civil Application No.8417 of 2003 on the ground that before approaching this Court, the Society did not make appropriate representation before the concerned Authorities for performing their statutory duties. As the issue raised in this petition with regard to the above litigation is only for the purpose of drawing the attention of Page 12 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 the Court about the activities of the trust and hence no further deliberation is made with regard thereto.
3.21. Thereafter, the Society did not press the vires of Section 22 of the Act, 1961 and therefore, the Division Bench of this Court (Coram: Hon'ble Mr. Justice R.S.Garg and Hon'ble Mr.Justice M.R.Shah, As Their Lordships were then) passed the following order on 03.07.2006 and dismissed the Special Civil Application No.5817 of 1991 with liberty in favour of the Society to challenge the action of the Authority in accordance with law reserving the liberty in favour of the Society to file appropriate proceedings in accordance with law:
"Mr.AshishH.Shah, learned Counsel for the petitioner, submits that he has instructions to inform the Court that the petitioner is not desirous of challenging the vires of Section-22 of the Gujarat Cooperative Societies Act.Page 13 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022
C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 In view of the said statement, we dismiss the petition with liberty in favour of the petitioner to challenge the impugned action of the authority in accordance with law. It is, however, made clear that if a fresh petition is filed and the Court feels that interference on the merits is called for, then, the question of limitation or delay would not be a ground to reject the petition. The interim order granted earlier shall continue to be effective till 17th July, 2006, enabling the petitioner to approach the appropriate forum. It is, however, made clear that on expiry of the said date, this interim order shall lose its efficacy. Rule is discharged. No costs."
3.22. The Society has therefore filed this petition challenging the order dated 17.05.1991 which was earlier challenged in Special Civil Application No.5791 of 1991 as the liberty was reserved by the order dated 03.07.2006 passed by the Division Bench of this Court.
3.23. This Court (Coram: Hon'ble Mr.Justice Akil Kureshi, As his Lordship was then) by order dated 17.07.2006 passed the following order and the interim-relief granted earlier, was continued: Page 14 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022
C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 "Notice returnable on 31st July, 2006. Learned advocate Shri Desai waives service of notice on behalf of respondent no.4.
In the meantime, order dated 17-5-1991 shall stand stayed."
3.24. Special Civil Application No.5129 of 2009 is filed by the Society challenging the order dated 18.04.2006 in Appeal No.332 of 2004 (Old Appeal No.562 of 1999) passed by the Tribunal allowing the Appeal filed by the Trust against the judgment and award dated 31.08.1999 and amended order dated 07.09.1999 passed by the Board of Nominees in Lavad Case No.1179 of 1995 (Old No.1576 of 1993) filed by the Society. The Tribunal by the order dated 18.04.2006 while allowing the Appeal filed by the Trustee held that the sale-deed was executed on 12.10.1990 on the basis of the agreement to sale dated 09.03.1980 pursuant to the compromise arrived at between the parties in the Civil Suit, the Society has a limited scope for refusal of Page 15 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 admission of Membership only on the ground of disqualification prescribed under By-laws. The Tribunal thereafter observed that the Society has not given any deposition and there was no evidence of disqualification either in averment of the Plaint of the Suit for the resolutions passed by the Society and therefore, the judgment and award passed by the Board of Nominees allowing the aforesaid Lavad Suit was quashed and set aside.
4.1. Learned Senior Advocate Mr.Jani for the Society submitted that the Trust cannot become the member of the Society on the basis of the agreement to sale dated 09.03.1980 which was executed between Babubhai Joshi, Smitaben Joshi-
owner of Plot Nos.17B in favour of Kumarpal Amichand (Shah) Bagrecha who happens to be the Trustee of the Trust and also and sale deed dated 12.10.1990.
Page 16 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 4.2. Learned Senior Advocate Mr.Jani referred to the following by-laws of the Society to submit that the Society cannot enter the name of the Trust as its members in view of the by-law No.2 which specifies the objects of the Society read with by-law No.7 pertaining to membership, by-law No.14 with regard to the powers of the Society to expel any member, by-law No.16 with regard to transmission of interest, by-law No.17 with regard to proceedings on death of member, by-law No.21 with regard to the holding of share of the Society by member and the registration of the transfers, by-law No.53 pertaining to the powers of the Managing Committee of the Society to conduct the management of the business of the Society together with by-law No.54(a) with regard to the power to dispose of the application for membership, and by-law Nos.65 to 67 for being a tenant of the Society. The aforesaid by-laws are reproduced hereinbelow:
"2. The objects of the society shall be to Page 17 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 carry on the trade of building, and of buying, selling, hiring, letting and developing land in accordance with Co- operative principles end to establish and carry social, re-creative and educational work in connection with its tenants and the Society shall have full power to do all things it deems necessary or expedient for the accomplishment of all objects specified in its by-laws, including the power to purchase, hold, sell exchange, mortgage, rents, lease, sub-lease, surrender, accept surrenders of and deal with lands of any tenure and to sell by installments and subject to any terms or conditions and to make and guarantee advances to Members for building or purchasing property and to create pull down, repair, alter or otherwise deal with any building thereon.
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7. All persons who have signed the application for registration are original members. Other members shall be elected by the Committee provided that all member to the Brahmin Caste. Two adverse votes are sufficient to exclude an applicant. Every person shall pay Rs.5/- on applying for admission for which he shall receive a copy of the by-laws, in cases where the application is refused the entrance fee shall be returned.
xxx 14(1) A member may be expelled from the Society by the vote of not less than two- thirds of the members present and voting at a General Meeting of the Society on a motion (Which shall be final and conclusive) that in the opinion of the Page 18 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Meeting such member has
(a) been a persistent defaulter,
(b) will fully deceived the Society by false statements,
(c) been bankrupt or legally disabled,
(d) been criminally convicted,
(e) intentionally done any act likely to injure the credit of the Society
(f) gravely misused the dwelling rented by him from the Society or habitually acted in it in a disgraceful manner or a manner which has caused serious offence to his neighbors, or
(g) will fully disobeyed any decision of the Committee or any properly appointed Officer of the Society, (2) The Committee shall give a member 15 days' written notice of the proposal to expel him.
(3) To a member so expelled shall be refunded the amount (less a deduction therefrom of 5 per cent.) received by the Society in response of the shares held by him at the date of the resolution for his expulsion.
(4) Re-admission of expelled Members. No expelled member shall be readmitted except by a vote of two-third of the members Page 19 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 present and voting at any General Meeting on a motion of which notice has been given.
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16. Transmission of Interest:- (1) How Nomination is to be made - A member may, by a writing under his hand deposited with the Society during his life-time or by a statement made in any book kept thereat, nominate, any person to whom under section 27 of the Act his share or interest in the Society or so much thereof as is specified in such nomination shall be transferred at his decease, or the moneys referred to in section 22(2) of the Act or so much thereof as is specified in such nomination shall be paid.
(2) How it is to be revoked or varied. -A nomination so made may be revoked or varied by any similar writing or statement under the hand of the nominator deposited or made as aforesaid.
(3) Fees on Nomination or Revocation. - A nomination made at the time of applying for membership shall be recorded free of charge, But for the recording of every nomination subsequently made or of a revocation or variation a fee of four shall be paid.
17. Proceedings on Death of a Member:-
(1) If nomination made.- On receiving satisfactory proof of the death of a nominator the Society may transfer the share or interest of the nominator to the person nominated in accordance with the Page 20 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 rules made in this behalf or if there is no person so nominated to such person as may appear to the Committee to be the heir or legal representative of the nominator or pay to such nominee heir or legal representative a sum representing the valve of such nominator's share or interest as ascertained in accordance with the rules or by-laws after deducting all sums due to, the Society from the nominator, Provided that the Society shall transfer the share or interest of the nominator to such nominee heir or legal representative as the case may be being qualified in accordance with the rules and these by-laws for membership of the Society or on his application within one month of the death of the nominator to any person specified in the application who is so qualified.
(2) The Society may pay all other moneys due to the nominator from the Society to such nominee heir or legal representative as the case may be.
(3) All transfers and payments made by the Society in accordance with this by-law shall be valied and deffectual against any demand made upon the Society by any other person.
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21.(1) Any share held by a member of the Society may, subject to By-law 20, be sold to any other member, provided that no such sale may take place without the previous sanction of the Committee, who shall have full discretion in granting or with holding such sanction. Transfers may be in Page 21 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 the for set out in the by-laws or in any other form approved by the Committee. (2) Registration of Transfers-Until the transfers of a share is registered no right shall be acquired against the society by the transferee, nor shall any claim of the Society upon the transferor be affected.
53. The management of the business of the society shall be vested in the Committee who in addition to the powers and authorities by the rules and these by-laws or otherwise expressly conferred upon then may exercise all such powers and do all such acts and things as may be exercised or done by the Society, and are not hereby or by statute expressly directed or required to be done by the Society in General Meeting, but subject nevertheless to the provisions of the act the rules, the by-laws and to any regulations from time to time made by the society in General Meeting, provided that no regulation so made shall invalidate any prior act of the Committee which would have been valid if such regulation had not been made.
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54. Without prejudice to and not so as to limit or restrict the general powers conferred by the last preceding by-law and the other powers conferred by the rules and these by-laws it is hereby expressly declared that the Committee tall have the following powers that is to say, power:- Page 22 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022
C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022
(a) to dispose of applications for membership;
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65. No member shall be a tenant of the Society unless he holds at least five shares.
66. No dwelling offered on lease shall be taken by persons who are not members of the Society unless no member is willing to take it.
67. All external repairs shall, unless otherwise determine by the Committee, be a charge on the revenue of the Society, but internal repairs must be done by and at the expense of the tennts to the satisfaction of the Committee except in such ceases as it may determine otherwise, When such repairs have in the opinion of the Committee become essential; they my order them to be done, and if not paid for by the tenant, may charge the cost of same against his share capital, loan stock or deposit account. In case of a tenant leaving, the same rule shall apply." 4.3. It was submitted that on conjoint reading of the above by-laws together with the provisions of the Act, 1961 wherein, Section 2(13) which defines the "member" to mean a person joining in an application for registration of a Co-operative Page 23 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Society as a member, Section 22(f) states that a public trust registered or deemed to have been registered under Bombay Public Trust Act, 1850 can be a member of the Society but the admission of the Trust as member can be considered as Sub- section (2) of Section 22 of the Act, 1961 authorising the Society to take decision on the application to be made as member. Reliance was also placed on the provisions of Section 24 of the Act, 1961 which deals with open membership limiting the power of the Society to refuse the admission to membership without sufficient cause and procedure to communicate such decision in writing to the such persons within the stipulated time. He therefore submitted that once the Managing Committee of the Society has decided not to enter the Trust as a member of the Society, such Trust cannot insist for being a member of the Society. It was further submitted that Form-A of the by-laws contains regulations relating to tenancies to be granted by the Society to members Page 24 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 in respect of house held by the Society. Reliance was placed on the following clauses of Form-A :
"1. The member making an application for a tenement under these Regulations shall hold not less then five fully paid up shares in the Society.
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5. No tenant shall assign, under let, vacate or part with the possession of the tenement or any part thereof without the previous consent in writing of the Society.
6. Each tenant will comply with and satisfy all regulations, by-laws, rules and conditions and execute all such works as may be required to be done by every public, local or other authority.
xxxx
8. No tenant shall bring on the tenement any dirt, dust, refuse, soil, clay or waste whatsoever nor burn or manufacture thereon any ballast, bricks, tile, clay, cement or other articles nor erect or set up any flue, steam engine or machinery thereon.
9. No tenant will make or permit to be made any alteration in or addition to the tenement nor erect or place or maintain or permit to de erected, placed or maintained thereon any building, shed, boarding, or Page 25 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 erection of any kind without the previous consent in writing of the Society or cut, main or injured any wall or timber thereof and not to erect or permit to remain on the tenement any fence exceeding four feet in height.
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15. No tenant would do or suffer anything to be done on the tenement which in the Society's opinion may cause a nuisance, annoyance or inconvenience to the occupiers adjacent houses or the neighborhood or be prejudicial to the Society's Estate.
16. That if any tenant shall at any time make default in the Performance of the regulations herein contained for or relating to the repair or maintenance of the tenement or any Part thereof it shall be lawful (without prejudice to any other regulation) for the Society with cr without workman and others at any tine and from time to time to enter upon the tenement and repair and maintain the same at the expense of the tenant in accordance with the regulations and the expenses of such repairs and maintenance shall be repaid by the tenant, to the Society on demand.
Xxxx
20. The tenant will at all times observe and perform the by-laws for the time being of the said Society."
Page 26 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 4.4. Learned Advocate Mr.Jani also referred to Clause 6 of Form-B which contains Regulations relating to lease to be granted by Society to the members desiring to purchase their houses which reads as under :
6. the member shall not assign, under let or part with the possession of the property or any part thereof without the previous consent in writing of the Society.
6a. On every permitted disposition or devolution of or dealing wit the said plot and buildings or any part thereof under or by virtue of these regulations the member shail pay to the society, half the premium received ty him from the purchaser member in respect of the said plot and shall also pay to the society in case of the said plot and building half of the amount received by him over and above the capital cost with interest at 5 percent, per anumm upto a limit of one-third of the capital cost and such payments received py the society shall belong to the society absolutely."
4.5. It was submitted that Babubhai Joshi and Smitaben Joshi could not have parted with the possession by entering into the agreement to sale Page 27 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 or by entering into the compromise with Kumarpal Amichand (Shah) Bagrecha to transfer the Plot Nos.17A and 17B, possession of which was handed over to the Trust. It was submitted that in the compromise decree for the first time, it is mentioned that Kumarpal Amichand Shah has entered into agreement to sale in fiduciary capacity of the Trust as a Trustee of the Trust. It was submitted that the sale deed executed on the basis such compromise decree obtained by the parties is not binding upon the Society and therefore the Society has rightly rejected the application made by the Trust to enter its name as member of the Society vide resolution passed in the meeting of the Society held on 18.11.1990. 4.6. It was submitted that the District Registrar and the Additional Registrar have rightly rejected the Application and the Revision Application No.13 of 1990 filed by the Trust. However, it was submitted that Deputy Secretary Page 28 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 (Appeals) by the impugned order dated 17.05.1991 has committed an error in allowing the Revision Application filed by the Trust and its Trustees on extraneous consideration relying upon the provisions of Section 24 of the Act, 1961. It was submitted that the Revisional Authority has ignored the by-laws of the Society and further erred in exercising the jurisdiction under Section 155 of the Act, 1961 inasmuch as the order passed by the authorities namely District Registrar and Additional Registrar of the Co- operative Societies did not suffer from any illegality or irregularity.
4.7. It was further submitted that object of the petitioner-Society as per the by-laws is to trade and develop land in accordance of the Co- operative principles for the benefits of its members and the by-laws of the Society further provides that the member shall not assign or part with possession of the property without previous Page 29 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 consent in writing of the Society but in the facts of the case, the possession of the Plot No.17 is handed over to the Trust by Kumarpal Amichand Shah pursuant to the agreement for sale dated 09.03.1980 and such act is therefore contrary to the by-laws of the Society. 4.8 It was submitted that by Resolution dated 25.03.1989, the Society was justified to reject the application of the Trust as the Trust was not a party to the agreement to sale. The respondent- Trust along with the application dated 27.02.1989 did not submitted the consent of Babubhai Joshi and Smitaben Joshi for transfer of the membership. It was pointed out that Krutarth Babubhai Joshi has also filed Lavad Suit No.1624 of 1995 opposing the request of the Trust to enter its name as member of the Society. 4.9. It was further submitted that the Trust cannot contend that agreement dated 09.03.1980 Page 30 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 was entered into by Kumarpal Amichand in fiduciary capacity of the Trust as there is no agreement to suggest that the said agreement was entered in fiduciary capacity by Kumarpal Amichand. It was for the first time in the compromise entered into between the parties it was contended that Kumarpal Amichand entered into agreement to sale dated 09.03.1980 in fiduciary capacity.
4.10. It was submitted by learned Senior Advocate Mr.Jani that the impugned order dated 17.05.1991 is passed by the Deputy Secretary (Appeals) arising from the rejection of the Application dated 27.02.1989 by the Society to enter the name of the Trust as a member of the Society and at the relevant point of time, there was neither a compromise decree or any other document to show that Kumarpal Amichand executed the agreement to sale in fiduciary capacity as trustee of the Trust. It was therefore submitted that the name Page 31 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 of the Trust cannot be entered into as member of the Society.
4.11. It was submitted that the Deputy Secretary (Appeals) came to conclusion on irrelevant consideration by observing that the activities of the Trust would be beneficial to the people of the Society at large and therefore, the name of the Trust is required to be entered as a member of the Society. It was submitted that such observation made by the Deputy Secretary are contrary to the provisions of the Act, 1961 as well as the by-laws of the Society. It was submitted by learned Senior Advocate Mr.Jani that the Division Bench of this Court in case of MulshankarKunverjiGor Versus JuivansinhjiShivubha Jadeja reported in 1979 (1) GLR 878 has held that transfer of shares carries with it transfer of member's interest in immovable property. It was submitted that the Division Bench referring to Section 30 of the Act, 1961 observed that the Page 32 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 member of Co-operative Housing Society to whom the Society has allotted a house is not an absolutely free agent to transfer the property allotted to him without holding the share or interest in the capital or the property of the Society. It was therefore submitted that the name of the Trust cannot be entered as member of the Society by transferring the share held by Babubhai Joshi and Smitaben Joshi on the basis of the agreement to sale dated 09.03.1980 entered into between the members of the Society i.e.Babubha Joshi and Smitaben Joshi in favour of Kumarpal Amichand Shah.
4.12. Learned Senior Advocate Mr.Jani referred to and relied upon the decision in case of Zorastrian Co-operative Housing Society Limited versus District Registrar, Co-operative Housing Societies (Urban) and others reported in 2005 (2) GLR 1530 wherein it is held that at the time of accepting the membership of Society, member is Page 33 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 bound by its By-laws and has to follow strictly. It was therefore submitted that as per the By- laws of the Society, Babubhai Joshi and Smitaben Joshi could not have transferred the Plot Nos.17A and 17B in favour of Kumarpal Amichand and executing a sale-deed in favour of the Trust in the year 1990by inviting a compromise decree. 4.13. Learned Senior Advocate Mr.Jani also referred to and relied upon the decision of the Apex Court in case of New India Co-operative Housing Society Limited versus Municipal Corporation of Greater Mumbai reported in 2008 (9) SCC 694 wherein the Apex Court held that the member of Society could not be permitted to put constructions beyond By-laws of the Society for raising construction and Municipal Authority has no power to sanction construction plan on such land without approval of the Society. Reference was also made to the decision of this Court in case of Sarjan Co-operative Housing Society Page 34 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Limited versus Surat Municipal Corporation reported in 2012 (1) GLR 261 wherein relying upon the decision of the Zorastrian Co-operative Housing Society (supra) as well as the New India Co-operative Housing Society Limited (Supra), it was held by this Court that sanction of the plan by Municipal Corporation for the purpose of putting up the construction on the land in question cannot be granted without the prior approval of the Society.
4.14. Learned Senior Advocate Mr.Jani submitted that in case of Ambika Nagar Co-operative Housing Society Limited versus State of Gujarat1this Court, after considering the entire case law on the subject of supremacy of By-laws of the Society, held that the plot, house constructed by the Society for member for residence has to be used as per the provisions of the By-laws for residence only and such plot or construction 1 2013 (5) GLR 3740 Page 35 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 thereon, cannot be converted for any other use including any commercial activity. Learned Senior Advocate Mr.Jani also referred to and relied upon the Full Bench decision of this Court in case of Laxminivas Co-operative Housing Society Limited versus District Registrar reported in 2014(3) GLR 2201 wherein, it is held that the Society validly constituted under the provisions of the Act has the right to admit any new member provided such member is duly qualified under the provisions of Act, Rules and By-laws of such Society and the decision of the Society being subject to Appeal before a statutory authority and being subject to further judicial review before the concerned High Court under Article 226 of the Constitution of India cannot be said to be arbitrary. The Full Bench of this Court further held that a Society can on valid ground refuse membership where the new membership will be prejudicial to the interest of the Society. It was submitted that the Trust is using the Plot Nos.17A and 17B since Page 36 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 1980 for its religious activities causing nuisance to the members of the Society and other residents of nearby societies and complaint is received by the Society for such nuisance. It was submitted that even the said plot was used as cremation place of the late Maharaj Saheb in the year 2003 which otherwise is not permissible in the residential locality.
4.15. Reference was also made to the decision in case of Madhavnagar Co-operative Housing Society Limited versus Joint Registrar and member, Board of Nominees, Surat reported in 2020 (2) GLR 1437 wherein it is held that member of Co-operative Society has no legal right to use the land for commercial purpose contrary to the By-laws and a member of a Society is obliged in law to strictly abide By-laws and other Rules and Regulations of the Society and the use of the land of the Society for residential purpose cannot be converted for any other purpose.
Page 37 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 5.1. On the other hand, learned advocate Mr.Ankit Shah for the Trust submitted that the Trust is in possession of the Plot Nos.17A and 17B since 1980 and is also having the registered sale-deed dated 12.101990 pursuant to the compromise decree passed by the City Civil Court, Ahmedabad in the year 1990.
5.2. Learned advocate Mr.Shah invited the attention of the Court to the Resolution dated 01.03.1980 passed by the Trust in the year 1980 authorising the Kumarpal AmichandShah to enter into an agreement to sale with Babubhai Joshi for purchase of the plot no.17 in the Society for the library and study purpose of the Trust. It was further pointed out that by another Resolution dated 31.03.1980 passed by the Trust, Kumarpal Amichand Shah was permitted to open a Bank Account in his name wherein the fund of the Trust was transferred for purchase of the Plot No.17 of Page 38 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 the Society. It was therefore submitted that Kumarpal Amichand Shah entered into an agreement for sale under the Authority of the Trust in fiduciary capacity right from the beginning. It was also submitted that along with Application dated 27.02.1989 made by the Trust to the Society to transfer the Plot No.17 in name of the Trust, copies of Resolution dated 01.03.1980 and 31.03.1980 and the compromise Purshis at Exhibit 46 and 47 were also forwarded and therefore, the Society could not have refused to transfer the Plot No.17 in name of the Trust.
5.3. It was submitted that the Society has given up the challenge the vires of the provisions of Section 22 of the Act, 1961 and therefore the Trust can also become a member as per Section 22(f) of the Act, 1961. It was submitted that the Trust, at present is using the Plot No.17 for the purpose of library and study and there is no nuisance as alleged by the Society. It was also Page 39 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 submitted that the Trust is ready to file an undertaking before this Court that the activities of the Trust shall be carried out without causing any hindrance to the other members of the Society by the Trustees.
5.4. It was further submitted that the Plot No.17A and 17B is being used by the Trust since last more than 42 years and considering the same, no interference may be made in the impugned order dated 17.05.1991.
5.5. It was submitted by learned advocate Mr.Shah that reading Section 22 of the Act, 1961 along with the provisions of Section 11 of the Indian Contract Act, it is amply clear that a person who is competent to enter into a contract as per the Contract Act can be a member of the Co-operative Society. It was therefore submitted that a Trust, which is a Public Charitable Trust registered under the Bombay Public Trust Act, 1950 is Page 40 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 competent to enter into a contract and therefore, the Deputy Secretary (Appeals) has rightly allowed the Revision Application of the Trust in the year 1991. Reliance was placed on the following decisions:
1) Judgment of the Apex Court in case of W.O. Holdsworth and others v. The State of Uttar Pradesh reported in 1957 AIR 887
2) Judgment of this Court in case of VikrambhaiDhirajibhai Patel v. A.S. Jog and another reported in 1989 (1) GLR 690
3) Judgment of this Court in case of Shantiniketan Cooperative Housing Society Limited v. District Registrar, Cooperative Societies reported in 2002 (2) GLR 1768.
5.6. It was submitted by learned advocate Mr.Shah that the Special Civil Application No.15519 of Page 41 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 2005 preferred by the Trust is with regard to the rejection of the application to condone the delay in challenging the judgment and award passed by the Board of Nominees in Lavad Case No.1624 of 1995 and the same is therefore required to be allowed as there was sufficient cause shown by the Trust for delay caused in challenging the said order.
5.7. It was submitted that the Tribunal has also rightly allowed the Appeal No.332 of 2004 by quashing and setting aside the judgment and award of the Board of Nominees in Lavad Case No.1179 of 1995 by giving cogent reasons to transfer the shares in name of the Trust by the Society. 5.8. It was further submitted that in view of the order passed by the Deputy Secretary (Appeals) in the year 1991 together with order dated 18.04.2006 passed by the Tribunal allowing the Appeal No.332 of 2002 in favour of the Trust, the Page 42 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Special Civil Application Nos.13725 of 2006 and 5129 of 2009 filed by the Society are liable to be dismissed and in such eventuality, the Special Civil Application No.15519 of 2005 will become infructuous.
6. Learned advocate Mr.Baiju Joshi who appears for Babubhai Joshi and Smitaben Babubhai Joshi submitted that the agreement to sale was entered into in the year 1980 and possession of the Plot Nos.17A and 17B was handed over to the Trust on the same day as it was agreed with Kumarpal Amichand Shah that the agreement for sale and sale deed would be executed in his name in fiduciary capacity of the Trust. It was pointed out that sale consideration of Rs.1 Lakh is also paid from the funds of the Trust and therefore, in view of the Resolutions passed by the Trust on 1stMarch, 1980 and 31.03.1980 as well as the Compromise Decree passed by the City Civil Court, Ahmedabad which has achieved finality, the Page 43 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Society is required to enter the name of the Trust as member by transfer of the shares. It was therefore submitted that Deputy Secretary (Appeals) as well as the Tribunal in the respective proceedings have rightly directed the Society to transfer the shares in name of the Trust.
7. Having heard the learned advocates for the respective parties and having considered the submissions made on behalf of the Society, Trust and the erstwhile members of the Society-Babubhai Joshi and Smitaben Joshi, it appears that Kumarpal Amichand Shah entered into agreement to sale in a fiduciary capacity of the Trust as per the Resolution dated 01.03.1980 with Babubhai Joshi and Smitaben Joshi on 09.03.1980 by payment of Rs.99,001/- towards sale consideration and the possession of the property was handed over to the Trust on the same day.
Page 44 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022
8. It is true that the Society has refused to transfer the shares in name of the Trust and entered the Trust as a member of the Society in the year 1989 and the Deputy Commissioner (Appeals) has allowed the Revision Application on general observations without considering the bye- laws of the Society but at the same time, it is required to be noted that the Trust is in possession of the Plot Nos.17A and 17B since 1980 i.e. for more than four decades. Therefore, when the Trust made application dated 27.02.1989, only the agreement to sale was executed and compromise purshish was filed in the Civil suit. The Trust could not have made an application to enter its name as member of the Society in the year 1989.
9. Reliance placed on behalf of the Society on relevant By-laws and the Regulations together with the decision of the Supreme Court in case of Zoroastrian Co-operative Housing Society Limited (Supra) would be applicable in the facts of the Page 45 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 case to decide as to whether the impugned order dated 17.05.1991 can be sustained or not.
10. At the same time, the hard reality is also required to be taken into consideration that Trust being a Public Charitable Trust is not prohibited to become the member of the Society under Section 22(f) of the Act, 1961 read with Section 11 of the Indian Contract Act, 1882 which read as under:
The Gujarat Co-operative Societies Act,1961:
"22. Person who may become member:-(1) Subject to the provisions of section 25, no person shall be admitted as member of a society except the following, that is to say-
****
(f) a public trust registered or deemed to have been registered under Bombay Public Trusts Act, 1850;
Indian Contract Act
11. Who are competent to contract. --Every person is competent to contract who is of the age of majority according to the law to which he is subject,1 and who is of sound mind and is not disqualified from contracting by any law to which he is Page 46 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 subject."
11. The Apex Court in case of Zoroastrian Co- operative Housing Society Limited (Supra) on the contrary held in favour of the Trust as in the said case that the right to form a Society as guaranteed under Article 19(1)(C) of the Constitution of India is recognised holding that the By-laws of the Society would prevail. The Apex Court has held as under:
"33. The appellant Society was formed with the object of providing housing to the members of the Parsi community, a community admittedly a minority which apparently did not claim that status when the Constituent Assembly was debating the Constitution. But even then, it is open to that community to try to preserve its culture and way of life and in that process, to work for the advancement of members of that community by enabling them to acquire membership in a society and allotment of lands or buildings in one's capacity as a member of that society, to preserve its object of advancement of the community. It is also open to the members of that community, who came together to form the co-operative society, to prescribe that members of that community Page 47 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 for whose benefit the society was formed, alone could aspire to be members of that society. There is nothing in the Bombay Act or the Gujarat Act which precludes the formation of such a society. In fact, the history of legislation referred to earlier, would indicate that such coming together of groups was recognized by the Acts enacted in that behalf concerning the co-operative movement. Even today, we have Women's co-operative societies, we have co-operative societies of handicapped persons, we have co-operative societies of labourers and agricultural workers. We have co-operative societies of religious groups who believe in vegetarianism and abhore non-vegetarian food. It will be impermissible, so long as the law stands as it is, to thrust upon the society of those believing in say, vegetarianism, persons who are regular consumers of non- vegetarian food. May be, in view of the developments that have taken place in our society and in the context of the constitutional scheme, it is time to legislate or bring about changes in Co- operative Societies Acts regarding the formation of societies based on such a thinking or concept. But that cannot make the formation of a society like the appellant Society or the qualification fixed for membership therein, opposed to public policy or enable the authorities under the Act to intervene and dictate to the society to change its fundamental character.
34. Another ground relied on by the Authorities under the Act and the High Court to direct the acceptance of respondent No.3 as a member in the Society Page 48 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 is that the bye-law confining membership to a person belonging to the Parsi community and the insistence on respondent No.2 selling the building or the flats therein only to members of the Parsi community who alone are qualified to be members of the Society, would amount to an absolute restraint on alienation within the meaning of Section 10 of Transfer of Property Act. Section 10 of the Transfer of Property Act cannot have any application to transfer of membership. Transfer of membership is regulated by the bye-laws. The bye-laws in that regard are not in challenge and cannot effectively be challenged in view of what we have held above. Section 30 of the Act itself places restriction in that regard. There is no plea of invalidity attached to that provision. Hence, the restriction in that regard cannot be invalidated or ignored by reference to Section 10 of the Transfer of Property Act.
35. Section 10 of the Transfer of Property Act relieves a transferee of immoveable property from an absolute restraint placed on his right to deal with the property in his capacity as an owner thereof. As per Section 10, a condition restraining alienation would be void. The Section applies to a case where property is transferred subject to a condition or limitation absolutely restraining the transferee from parting with his interest in the property. For making such a condition invalid, the restraint must be an absolute restraint. It must be a restraint imposed while the property is being transferred to the transferee. Here, respondent No.2 became a member of the Page 49 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 Society on the death of his father. He subscribed to the bye-laws. He accepted Section 30 of the Act and the other restrictions placed on a member. Respondent No.2 was qualified to be a member in terms of the bye-laws. His father was also a member of the Society. The allotment of the property was made to appellant in his capacity as a member. There was really no transfer of property to respondent No.2. He inherited it with the limitations thereon placed by Section 31 of the Act and the bye-laws. His right to become a member depended on his possessing the qualification to become one as per the bye-laws of the Society. He possessed that qualification. The bye-laws provide that he should have the prior consent of the Society for transferring the property or his membership to a person qualified to be a member of the Society. These are restrictions in the interests of the Society and its members and consistent with the object with which the Society was formed. He cannot question that restriction. It is also not possible to say that such a restriction amounts to an absolute restraint on alienation within the meaning of Section 10 of the Transfer of Property Act.
36. The restriction, if any, is a self- imposed restriction. It is a restriction in a compact to which the father of respondent No.2 was a party and to which respondent No.2 voluntarily became a party. It is difficult to postulate that such a qualified freedom to transfer a property accepted by a person voluntarily, would attract Section 10 of the Act. Moreover, it is not as if it is an Page 50 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 absolute restraint on alienation. Respondent No.2 has the right to transfer the property to a person who is qualified to be a member of the Society as per its bye-laws. At best, it is a partial restraint on alienation. Such partial restraints are valid if imposed in a family settlement, partition or compromise of disputed claims. This is clear from the decision of the Privy Council in Mohammad Raza v. Mt. Abbas Bandi Bibi, ALR 59 I.A. 236 and also from the decision of the Supreme Court in Gummanna Shetty and others v. Nagaveniamma, AIR 1967 SC 1595. So, when a person accepts membership in a cooperative society by submitting himself to its bye-laws and secures an allotment of a plot of land or a building in terms of the bye-laws and places on himself a qualified restriction in his right to transfer the property by stipulating that the same would be transferred back to the society or with the prior consent of the society to a person qualified to be a member of the society, it cannot be held to be an absolute restraint on alienation offending Section 10 of the Transfer of Property Act. He has placed that restriction on himself in the interests of the collective body, the society. He has voluntarily submerged his rights in that of the society.
37. The fact that the rights of a member or an allottee over a building or plot is attachable and saleable in enforcement of a decree or an obligation against him cannot make a provision like the one found in the bye-laws, an absolute restraint on alienation to attract Section 10 of the Transfer of Property Act. Of course, it is Page 51 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 property in the hands of the member on the strength of the allotment. It may also be attachable and saleable in spite of the volition of the allottee. But that does not enable the Court to hold that the condition that an allotment to the member is subject to his possessing the qualification to be a member of the cooperative society or that a voluntary transfer by him could be made only to the society itself or to another person qualified to be a member of the society and with the consent of the society could straight away be declared to be an absolute restraint on alienation and consequently an interference with his right to property protected by Article 300A of the Constitution of India. We are, therefore, satisfied that the finding that the restriction placed on rights of a member of the Society to deal with the property allotted to him must be deemed to be invalid as an absolute restraint on alienation is erroneous. The said finding is reversed.
38. In view of what we have stated above, we allow this appeal, set aside the judgments of the High Court and the orders of the Authorities under the Act and uphold the right of the Society to insist that the property has to be dealt by respondent No.2 only in terms of the bye- laws of the Society and assigned either wholly or in parts only to persons qualified to be members of the Society in terms of its bye-laws. The direction given by the authority to the appellant to admit respondent No.3 as a member is set aside. Respondent No.3 is restrained from entering the property or putting up any Page 52 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 construction therein on the basis of any transfer by respondent No.2 in disregard of the bye-laws of the Society and without the prior consent of the Society."
12. In view of the above dictum of law, it would be necessary to analyse the By-laws of the Society as referred to and relied upon by learned Senior Advocate Mr.Jani. By-law No.2 provides for object of the Society which cannot be said to be anyway violated by entering the Trust as a member. However, By-law Nos.7, 14, 16, 17, 21 which refer to the shares, membership and transmission of membership and the shares held by such members of the Society which in opinion of this Court would be violated if the Trust is entered as a member of the Society by transfer of shares on the basis of the application dated 27.02.1989 preferred by the Trust, hence, the society has rightly rejected the application dated 27.02.1989 made by the Trust to transfer the shares of the Plot No.17 in its name. Page 53 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022
13. It also emerges from the record that Babubhai Joshi and Smitaben Joshi have sold their right, title and interest in the membership of the Society in favour of Kumarpal Amichand Shah who executed the sale-deed dated 12.10.1990 in fiduciary capacity of the Trust subsequent to the application of the trust made on 27.02.1989. The Trust therefore, cannot be said to be a tenant or lessee of the Society and the Trust cannot be said to have any right, title and interest towards the land in question prior to 1990.
14. Therefore, there is clear violation of By- laws as contended on behalf of the Society because the application for membership was made by the Trust in the year 1989 on the basis of the agreement to sale where the Trust was not a party and there was no consent of the original owners. In view of such findings, reliance placed on behalf of the society on the various case laws that the By-laws of the Society would prevail in Page 54 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 the facts of the case. The decisions relied on by the society therefore, are not considered in detail in view of settled legal position as per the decision in case of Zorastrian Co-operative Housing Society Limited(supra), relevant extract of which is reproduced here-in-above. Therefore, the impugned order dated 17.05.1991 passed by the Deputy Secretary (Appeals) directing the society to enter the name of the trust in its records on the basis of the application of the trust in the year 1989 cannot be sustained as the same is in violation of the bye-laws of the society.
15. However, it is pertinent to note that Krutarth, son of Babubhai Joshi has filed further affidavit in Special Civil Application No.15519 of 2005 along with the affidavit of consent to transfer the Plot Nos.17A and 17B along with the affidavits of Babubhai Joshi and Smitaben Joshi and affidavits of Devangi Darshan Pathak and Zarna Kartik Pathak and JagrutiKrutarth Joshi Page 55 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 dated 11.12.2005 to the effect that they have no objection if Plot Nos.17A and 17B is transferred in name of the Trust as per sale-deed dated 12.10.1990. A letter dated 27.12.2005 is also addressed to the Society to that effect.
16. Therefore, in view of the facts of the case and in view of affidavits filed by the original owners of the plot no.17A and 17B, the Trust and its Trustees are permitted to submit fresh applications for consolidation of plot nos. 17A and 17B and transfer of shares of plot no.17 in name of the trust before the society. Moreover, the Trustees of the Trust are also required to see that the Plot Nos.17A and 17B of the Society is used only for the purpose of residence for saints of the Jain community and Library and study without causing any disturbance, hindrance or nuisance to the members of the Society or nearby residents of other societies.
17. The Trustees of Trust, therefore, shall file Page 56 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 an undertaking before this Court to the effect that the plot no. 17(17A and 17B) and building constructed thereon shall be used only for the purpose of residence for saints of the Jain community and library and study purpose without causing any disturbance, hindrance or nuisance to the members of the Society or nearby residents of other societies within a period of four weeks from the date of receipt of copy of this order and shall abide by the undertaking forever and on that condition only, the Society to consider the application which may be filed by the Trust along with original owners in accordance with provisions of the Act,1961, Rules and Bye-laws of the Society to consolidate and to transfer the shares of plot no.17( 17A and 17B ) in name of the Trust and to enter the Trust as a member of the Society in its record.
18. Considering the above facts and for the foregoing reasons, the Special Civil Application Page 57 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022 C/SCA/13725/2006 CAV JUDGMENT DATED: 21/10/2022 No.13725 of 2006 is allowed and impugned order dated 17.05.1991 passed by Deputy Secretary (Appeals) is hereby quashed and set aside and Rule is made absolute to that extent.
19. Special Civil Application No.15519 of 2005 and Special Civil Application No. 5129 of 2009 arising out of decisions in Lavad cases filed by original owners would not survive as the entire procedure with regard to transfer of the shares in the name of the trust is required to be made afresh denovo in accordance with law as directed here-in-above.
20. Subject to the above observations, Rule is discharged in both the petitions. There shall be no order as to cost.
(BHARGAV D. KARIA, J) PALAK Page 58 of 58 Downloaded on : Fri Oct 21 20:49:14 IST 2022