Bombay High Court
Bhaskar Laxman Rane vs Shri Gurudev Nityanand Co-Operative ... on 18 June, 1998
Equivalent citations: 1998(4)BOMCR247
Author: S. Radhakrishnan
Bench: S. Radhakrishnan
ORDER A.V. Savant, J.
1. Heard all the learned Counsel; Shri Karlekar for the petitioner; Shri Godbole for respondent No. 1 and Shri D'gama, A.G.P. for respondent Nos. 2 and 3.
2. This is a petition seeking to challenge the two judgments and Orders namely (i) Order dated 11th April, 1989 passed by the Deputy Registrar, Co-operative Societies, Mumbai respondent No. 3 and (ii) Order dated 9th March, 1990 passed by the Divisional Joint Registrar, Co-operative Societies, Mumbai respondent No. 2 dismissing the petitioner's appeal. Under the first Order passed by the Deputy Registrar, approval has been granted by the Deputy Registrar to the resolution passed by the first respondent Safety in its annual general meeting held on 19th October, 1988, expelling the petitioner from the membership of Shri Gurudev Nityanand Co-operative Society respondent No. 1. The third respondent Deputy Registrar acted in exercise of his powers under section 35 of the Maharashtra Co-operative Societies Act, 1960. The petitioner's appeal to the second respondent Divisional Joint Registrar has been dismissed under Order dated 9th March, 1990. These two Orders are subject matter of this writ petition.
3. The petition was initially heard by this Court on 23rd August, 1990, when by an ad-interim order, the petitioner was given liberty to deposit Rs. 1,00,000/- in this Court. By order dated 26th October, 1990, this Court issued rule and directed the first respondent Society not to allot or part with possession of one flat admeasuring 700 sq. ft. in the building under construction till disposal of the petition. This interim relief was granted subject to the condition that, in addition to Rs. 1,00,000/- already deposited by the petitioner, he had to deposit a further amount of Rs. 2,00,000/- in this Court within four weeks from that date. Interim relief was to stand vacated in case the amount was not so deposited. The Registrar of this Court was directed to invest the amount deposited in a Nationalised Bank, which has accordingly been done. The first respondent Society approached the Apex Court against the interim order granted by this Court. Apex Court disposed of Civil Appeal No. 3166 of 1991 on 12th August, 1991 with the following order.
"The High Court has directed the appellant, Co-operative Society to keep a flat reserved for respondent No. 1. Apparently, the impression given to the High Court was that there was some flat available with the Co-operative Society. It has now been pointed out before us that there are no vacant flats. Learned Counsel for Co-operative Society, however, makes a statement that they are trying to get some more space and if this space is made available and if some flat is constructed therein they will keep that flat reserved to await the outcome of the writ petition before the High Court. In these circumstances, we have no option but to vacate the Order of the High Court with, however, the condition that in case the Cooperative Society gets some flat constructed or otherwise comes in possession of a vacant flat which can be allotted to respondent No. 1, they should not allot it to anybody else but keep it reserved to await the outcome of the writ petition before the High Court. It will be open to the respondent to seek Orders of the High Court for expediting the writ petition. We clarify that both parties will be fully at liberty to urge before the High Court all contentions that are open to them in law......"
4. The matter thereafter appeared for final hearing but was adjourned from time to time and has now been finally heard by us. In order to appreciate the controversy raised in the petition, a few relevant facts may be stated. Final Plot No. 922 T.P.S. 4, Mahim, Mumbai admeasuring 3728 sq. meters owned by the partnership firm Mahesh and Co. was having about 68 old tenements which were occupied. The owners wanted to develop the land and, therefore, gave an undertaking on 6th June, 1976 to the Bombay Municipal Corporation to give permanent accommodation to the occupants of the said tenements. On 3rd August, 1976 the owners of the said property executed an agreement for sale of 2245 sq. meters out of the above land in favour of the promoters of the proposed Shri Gurudev Nityanand Co-operative Housing Society for a total consideration of Rs. 19,20,000/-. The area of 2245 sq. meters consisted of two plots; plot A was for the building of the proposed Housing Society and plot B was for a separate building to house the old occupants. The total consideration of Rs. 19,20,000/- was to include the cost of both the plots. It is of relevance to note that on behalf of the proposed Society, the said agreement dated 3rd August, 1976 was signed by (1) the petitioner B.L. Rane, (2) T.S. Rane and (3) S.M. Kanvinde in their capacity as promoters of the Society. On 2nd February, 1977 the Society was registered in accordance with the provisions of the Maharashtra Co-operative Societies Act, 1960. The bye-laws were framed and approved. The petitioner was elected as the first Chairman of the Society, which mainly consisted of the employees of the Bombay Port Trust, petitioner being one of them. The tentative arrangement was that the employees of the Bombay Port Trust, who were the members of the first respondent Society, were to get 80% loan from the Bombay Port Trust towards cost of the flat and hence they were required to deposit only 20% of the cost of the flat as their initial contribution on or before 19th May, 1977. The flats were of two types. A flat having an area of 700 sq. ft. was to cost Rs. 84,000/- at the rate of Rs. 120/- per sq. ft. and a flat having an area of 540 sq. ft. was to cost Rs. 64,800/- rounded upto Rs. 65,000/-. As far as the members of the Society who were not the employees of the Bombay Port Trust, a tentative decision was arrived at that they should contribute 40% of the cost of the flat as their initial contribution before 19th May, 1977. The alleged resolution dated 2nd February, 1977 has, however, not been produced on record and this ratio of contribution has subsequently been varied to which resolution we will refer a little later.
5. Admittedly, the petitioner was taking the leading part in bringing about the agreement between the owners of the land and the promoters of the Society. He also took lead in the matter of getting the old occupants vacated, getting an alternate building constructed for them and accommodating them in the newly constructed premises. Knowing the problem of accommodation in this city, this was not an easy task. The General Body, therefore, in its meeting held on 29th October, 1978 recorded its appreciation at the progress achieved by the petitioner and it was mentioned that it was because of the untiring efforts of the petitioner that the Society had succeeded in getting the occupants evicted and accommodating them in the new structure. In doing so, the petitioner had been put to a great financial loss as he was on leave for over 20 months. It was, therefore, suggested that it would be ungrateful on the part of the Society if the herculian task performed by the petitioner was not appreciated in words and also in tangible form of financial reward for the services rendered by him. This was the view expressed by the then President Shri G.S. Mathkar. This view was endorsed by all the members and it was resolved as under:
"This Gen. Body resolves to record its deep appreciation for the excellent services rendered by Shri B.L. Rane, Secretary to the Society The Gen. Body further resolves that the quantum of payment to be made to Shri B.L. Rane in token of his services decided at the special Gen. Body to be called at the end of December 1978 to review the financial position of the Society."
6. On 14th January, 1979, the Managing Committee passed a resolution recording its appreciation of the services rendered by the petitioner to the Society. Pursuant to the above mentioned General Body Resolution dated 29th October, 1978 in appreciation of the services rendered by the petitioner, the Managing Committee resolved as under:
"Resolved, that in appreciation of the services rendered by Shri B.L. Rane and Shri S.M. Kanvinde for materialising the Society's project they be paid an aggregate amount of Rs. 65,520/- in proportion of 3/4th and 1/4th of it respectively. Resolved further that 50% of this amount be paid immediately and 25% of each year thereafter provided both of them carry out the work of the Society's bidding with the same zeal they have shown upto now."
It is thus dear from the resolution that the General Body had earlier, on 29th October, 1978, decided to reward the petitioner in token of the services rendered by him. The Managing Committee in its meeting held on 14th January, 1979 agreed upon the payment of an aggregate amount of Rs. 65,520/ in proportion to 3/4th to be payable to the petitioner and one fourth to be paid to Shri S.M. Kanvinde. It is true that the Managing Committee suggested that 50% of the amount should be paid immediately for the services rendered and remaining 50% should be paid in two yearly instalments of half each subject to the condition that both of them carry out the work of the Society building with the same zeal as they had shown till then.
7. On 28th January, 1979 the above resolution dated 14th January, 1979 passed by the Managing Committee was placed before the General Body in its Special General meeting. The deliberations at the meeting are very eloquent and it was as if everyone was keen to shower praise on the petitioner for the sacrifice made by him and the risk taken by him in bringing about the agreement for getting the old occupants evicted, constructing a new building and shifting them to the new building. In the meeting held on 28th January, 1979 two resolutions were passed. Earlier on 2nd February, 1977 the initial contribution of Bombay Port Trust members was tentatively fixed at 20% of the cost of the flat and that of non B.P.T. members was fixed at 40%. However, Part I of the Resolution No. 1 in the meeting of 28th January, 1979 provided that the B.P.T. members should initially contribute 40% of the cost of the flat whereas non B.P.T. members should initially contribute 70% of the cost of the flat. Thus, the initial contribution of the B.P.T. members was fixed at 40% instead of 20% and that of the non B.P.T. members was fixed at 70% instead of 40%. Part I of the resolution further provided that in the event of failure of a member to abide by this payment, he would forfeit his membership. Part II of the Resolution No. 1 further provided that the Managing Committee could admit new members in place of those who had forfeited their membership. Resolution No. 2 in the meeting held on 28th January, 1979 is very material for our purpose. The members spoke of the sacrifice made by the petitioner who had taken leave continuously since December 1977, since he was forced to take the same, as it was found difficult to settle the matter with all the occupants in the old tenements. It was the persuasion of the petitioner which had brought the settlement with the occupants in the least possible time and compliments were paid to the petitioner's tireless working day and night to bring about the settlement. Members like Sarvashri Peerjada, M.I. Fernandas, and President G.S. Mathkar spoke in praise of the petitioner's services and the fact that the situation in a plot where the occupants are occupying the old tenements was always explosive and it needed rare ability and skill to persuade them to agree to certain terms and make them shift to the new tenements. Smt. Hardikar also praised the services rendered by the petitioner and. insisted on adequate compensation being paid to him. Shri S.S. Kanvinde and Shri Bapat discussed the question of permissibility of payment of such a compensation and after that was ascertained, the matter was discussed further appreciating the excellent job and quality of construction of the tenants' building. Shri Ghatge also referred to the tireless efforts of the petitioner in getting the Registration of the Society and Government's No Objection Certificate under the Urban Land Ceiling and Regulation Act. Ultimately, an amendment was suggested which read as under:
"In the context of the mode of payment of Rs. 65,520/- proposed to be made to Shri B.L. Rane and Shri S.M. Kanvinde in the proportion of 3/4 and 1/4 proposed by the Managing Committee by its Resolution passed in the meeting held on 14-1-1979 this General Body resolves that instead of 50% of the said amount to be paid to them immediately and the 25% at the end of every year, the same should be as under:
i) 10% of the amount to be paid/adjusted on completion of the plinth of the Society's building.
ii) Balance every 10% on completion of each slab subject to condition that, the last 10% should be paid/adjusted after the occupation formalities are completed and that both of them to be exempted from the operation of resolution regarding payment of cost and deposits to the extent of 40%".
After the above amendment was passed, the General Body unanimously passed Resolution No. 2 which reads as under :
RESOLUTION NO. 2:
"This General Body unanimously sanctions the resolutions of the Managing Committee passed in its meeting held on 14-1-1979 and placed before this General Body regarding the payment of Rs. 65,520/ in proportion of 3/4 and 1/4 respectively to Shri B.L. Rane and Shri S.M. Kanvinde subject to the amendment that the actual payment of the aforesaid total amount be paid/adjusted against their dues as under:
i) 10% of the amount to be paid/adjusted on completion of the plinth of Society's building; and
ii) Balance every 10% on completion of each slab subject to condition that the last 10% should be paid/adjusted after the occupation formalities are completed. Both of them to be exempted from the operation of Resolution No. 1 passed in this meeting."
8. It is important to note that while the General Body unanimously sanctioned the resolution of the Managing Committee that was passed on 14th January, 1979, the only amendment that was suggested was that rather than making immediate payment of 50% and deferred payment of 50% in the next two years, the payment should be 10% slabwise. However, the concluding part of the resolution, which we have emphasised above makes it very clear that both, the petitioner and Shri S.M. Kanvinde, were exempted from the operation of Resolution No. 1. As indicated above part I of Resolution No. 1 had fixed the initial contribution of the B.P.T. members at 40% as the cost of the flat and failure to comply with this was to result in forfeiture of membership. This Resolution No. 1 passed in the meeting on 28th January, 1979 was, however, not to be made applicable to the petitioner and Shri S.M. Kanvinde. There is no controversy before us on these facts.
9. On 3rd September, 1990, the Managing Committee further enhanced the limit, upto which the petitioner, in his capacity as a Secretary, was allowed to spend the amount per month for the routine expenses. The limit of Rs. 500/- p.m. was raised to Rs. 800/- p.m. This shows the confidence which the Managing Committee had in the petitioner which was the result of the services rendered by him in achieving a very delicate task of getting the occupants on the plot in Mumbai vacated for the purpose of development. The usual experience in this matter is that if one tenant goes to the Court, the whole project is delayed for years, It is not uncommon that such a task involves risk to one's life.
10. At this stage, it is necessary to mention that the petitioner had initially contributed Rs. 9,175/- on 19th May, 1977 and a flat measuring 700 sq. ft. was to be allotted to him. It is true that the initial contribution of the B.P.T. members was fixed at 40% under Resolution No. 1 Part I passed on 28th January, 1979. However, under Resolution No. 2 passed on the same day, the petitioner and Shri Kanvinde were exempted from the payment of initial contribution of cost and deposit to the extent of 40%. The petitioner thus enjoyed total exemption from the initial contribution of 40% of the cost of the fiat and obviously this was in token of the services rendered by him.
11. We may, at his stage, refer to a Division Bench decision of this Court where such a practice prevalent in this city has met with the approval of this Court. In Kum. Jethi T. Sipahimalani v. The Maharashtra State Co-operative Tribunal, Bombay, 76 Bom.L.R. 179, this Court was called upon to consider a similar resolution where, as far back as on 28th October, 1973 the General Body of Navjivan Co-operative Housing Society Lamington Road, Mumbai had passed a resolution appreciating the professional services rendered by one Mangharam N. Thadani who was an Advocate and Hon. General Secretary of Navjivan Society. In appreciation of his great personal and professional sacrifice, the Society, resolved to pay him an initial amount of Rs. 70,000/ - and then a further amount of Rs. 40,000/-. Thus the amount of Rs. 1,10,000/ was to be paid to an Advocate who had acted as a Secretary of the Society. A dispute arose as to whether such a resolution was permissible under the scheme of the provisions of sections 64 and 65 of the Maharashtra Co-operative Societies Act. This Court discussed the scheme of the said provisions and powers of the General Body under section 72 of the Act, under which, the final authority of the Society vests in the General Body of the members in the general meeting. Holding the resolution as valid, this Court observed as under:
".....It is true that section 64 deals with remuneration and not with honorarium. Section 65(2) deals with payment of honorarium only out of net profits. None of these sections came in the way of the general meeting of the Society in passing the resolutions for payment of honorarium as part of the construction cost. It was for the majority of the members in the general meeting to decide how much was the value of the services of petition No. 6 and how and when it should be paid to him. Petitioner No. 6 who was Honorary General Secretary of the Society, is an advocate. He had sacrificed, all his time and energy and dedicated his services to the Society for ten years. Members who enjoyed the benefit of these services could decide to reward him. We do not think that section 64 was a stumbling block to the members of the Society who wanted to pass any resolution regarding honorarium to be paid in such a case as construction costs. Section 64 applied to division of the profits of the Society to any member qua member. Section 65 deals with appropriation of profits. All that section 65(2) lays down is that out of net profits honorarium also may be paid. Even section 65(2) does not prevent the general body of the Housing Society to pay honorarium to petitioner No. 6 as part of the construction cost. Construction cost was to be paid by members. Society was not paying it to him as a matter of division of funds. We, therefore, do not find any legal restriction whatsoever on the power of the general body under section 72 to pass a resolution to pay honorarium as part of the construction cost to a person like petitioner No. 6, for the services rendered by him to the Society."
This decision makes it clear that it is quite customary to make payment to a person who takes leading part in sorting out the problems faced by a co-operative society particularly in a city like Mumbai where the problem of accommodation is very acute and getting the old occupants vacated for developing the plot involves risk to one's life as also to the life of one's family members. Under Resolution No. 2 passed or) 28th January, 1979, the General Body had exempted the petitioner and Shri S.M. Kanvinde from making the initial contribution. Under the same resolution an amount of Rs. 65,520/- was sanctioned for being paid to the petitioner to the extent of 3/4th and to Shri kanvinde to the extent of 1/4th. The petitioner's 3/4th share worked out to Rs. 49,140/ - and Shri Kanvinde's 1/4th share worked out to Rs. 16,380/-. Since the petitioner had already paid Rs. 9,175/- and was entitled to be paid Rs. 49,140/ the balance to his credit would be Rs. 58,315/-. Over and above this he would get an exemption from payment of initial 40% of the cost of the flat. This assumes importance because the cost of the fiat had escalated and had to be revised and it appears that notices were sent to the members demanding further amounts. Such notices were also erroneously sent to the petitioner ignoring the resolution passed in the meeting of 28th January, 1979.
12. On 8th November, 1981 the petitioner resigned from the Secretary's post. In the meeting held on 10th November, 1981 the Managing Committee accepted the petitioner's resignation as a Secretary and elected Shri G.S. Mathkar as the new Secretary. In the year 1982 the Society was required to file a Suit No. 913 of 1982 for specific performance of the agreement of sale dated 3rd August, 1976 under which the vendors Mahesh and Co. had agreed to sell the property to the Society. Subsequently on 16th November, 1984, consent decree was passed in that suit and the vendors accepted the undertaking given by them to the B.M.C. and agreed to execute the necessary conveyance in favour of the Society.
13. In the meeting held on 3rd October, 1982 the General Body resolved to revise the cost of the flat at Rs. 250/- from Rs. 120/- per sq. ft. This would entail additional payment by the members of the Society subject to the exemption granted to the petitioner and Shri Kanvinde from the initial payment of 40%. On 22nd January, 1984 the General Body of the Society passed a further resolution revising the cost of the flat from Rs. 250/- to Rs. 330/- per sq. ft. For a fiat of 700 sq. ft which was to be allotted to the petitioner, the cost would work out to Rs. 2,31,000/-. The petitioner was exempted from paying the initial 40% thereof which worked out to Rs. 92,400/- Over and above this he had contributed Rs. 9,175/- on 19th May, 1977 and had earned a credit of Rs. 49,140/- though the actual payment of this amount of Rs. 49,140/- was deferred as per the resolution dated 28th January, 1979. In our view, therefore, apart from the initial exemption of Rs. 92,400/- the petitioner had to his credit Rs. 58,315/
- (Rs. 9,175/- as his initial contribution plus Rs. 49,140/- being a 1/4th of Rs. 65,520/
- as per the General Body Resolution dated 28th January, 1979.
14. Pursuant to the resolution dated 22nd January, 1984 revising the cost of the flat to Rs. 330/- per sq. ft, letters were sent to the members calling upon them to make certain payments depending upon their initial contribution and area of their flats, viz. 700 sq. ft. or 540 sq. ft. Without any application of mind to the petitioner's case and the facts mentioned above, such letters were sent to the petitioner as well on 7th February, 1984, 4th March, 1984, 15th April, 1984 and 16th May, 1984. In our view, if the Secretary of the Society were to apply his mind to the resolution passed on 28th January, 1979, no notices would have been sent to the petitioner and issuance of notices dated 7th February, 1984, 4th March, 1984, 15th April, 1984 and 16th May, 1984 shows total non application of mind on the part of the office bearers of the Society. In our view, there was total arbitrariness on the part of the office-bearers of the Society in issuing notices to the petitioner irrespective of the fact that he had been granted exemption from the initial contribution of 40% and further, that amount of Rs. 58,315/- was lying to his credit. At this juncture, if we peruse the Chart annexed to the Petition at Exhibit-12 setting out the contributions made by the members of the Society, as on June 1984 for a flat of 700 sq. ft., the maximum contribution is Rs. 89,200/- which is of the member at Sr. No. 6 viz.. Shri P. Radhakrishnan. As far as the petitioner's name at Sr. No. 50 is concerned, beyond the initial contribution of Rs. 9425/-, including the share money of Rs. 250/-, nothing further has been shown to have been contributed by him. In fact, deducting the share money of Rs. 250/- from Rs. 9,425/-, from 1979 onwards, the petitioner's contribution has been shown as Rs. 9,175. Even if we deduct Rs. 49,140/-, which was the amount due and payable to the petitioner under Resolution No. 2, dated 28-1-1979, the petitioner's contribution ought to have been Rs. 92,400/-+ Rs. 9,175/- = Rs. 1,01,575/- as on June, 1984. This would result in petitioner's contribution being the highest since amongst others, the highest was Shri P. Radhakrishnan, who had contributed Rs. 89,200/- by June 1964. Then? are others, who were eligible for a 700 sq. ft. flat, whose contribution was as less as Rs. 34,000/- in case of Smt. V.R. Hardikar and Rs. 44,900/- in case of Shri N.M. Peerjada. The contribution of Dr. B.N. Kavi at Sr. No. 43 by June 1984 was only Rs. 8,499/- for a 700 sq. ft. flat We have taken the position upto June 1984 since the Special Meeting of the General Body was held on 3rd June 1984 pursuant to the notice issued on 25th May 1984 and it was resolved that if a member had neglected to make the contributions due from him on or before 11th June 1984, his membership should be terminated.
15. On 2nd December 1984 the Annual General Body fixed the rate of Rs. 340/- per sq. ft. in case of new members as against Rs. 300/- for the old members. This appears to be ex-facie erroneous since by the earlier resolution dated 22-01-1984 the rate was raised to Rs. 330/- from Rs. 250/- per sq. ft Surprisingly, the resolution dated 2nd December 1984 proceeds on the footing that the earlier rate was Rs. 300/- for the existing members and a premium of Rs, 40/- per sq. ft. was fixed for new members in anticipation of the termination of membership of some of the members and the admission of new members.
16. On the 8th March 1985 the Managing Committee resolved that the petitioner was a defaulter and that action should be taken against him for expulsion under section 35 of the Act read with Rules 28 and 29 of the Rules. On the 15th March 1985 notice was issued to the petitioner setting out, in general terms, that he had committed breaches which were repeatedly brought to his notice orally, as also in writing. There is no reference to the exemption granted to the petitioner under Resolution dated 28-1-1979 passed by the General Body. There is no reference to the initial contribution made by him nor is there a reference to Resolution No. 2 in the meeting of 28th January 1979 recommending a payment of Rs. 49,140/- to the petitioner. The Notice dated 15th March 1985 gives no details of the alleged oral or written communications to the petitioner in respect of the amount alleged to have been defaulted by him. No amount is specified in the Notice dated 15th March 1985. Only reference is made to the meeting held on 8th March 1985 where the Managing Committee had passed a resolution recommending that the petitioner's case be placed before the General Body for expulsion. Even in the resolution dated 8th March 1985, there is no reference to any of the two resolutions passed on 28th January 1979. There are no details of the alleged oral or written communications in the resolution dated 8th March 1985, much less in the Notice dated 15th March 1985, The petitioner was threatened with expulsion under section 35 read with Rules 28 and 29 of the Rules.
17. On 16th/17th April 1985 the petitioner sent his reply denying the allegations in the Notice dated 15th March 1985 which was delivered to him as late as on 2nd April 1985. The petitioner contended that the notice was Illegal, invalid and bad in law. He referred to his contribution to the Society's project right from the initial stage of formation of the Society and the fact that the plot was occupied by a large number of occupants and he had got the plot vacated and housed them in the new building. He referred to the earlier Minutes of the meeting dated 29-10-1978 where his services were eulogised and praise was showered on him. He relied upon the resolution of 14th January 1979 under which he was to be paid 3/4th of Rs. 65, 520/- viz., Rs. 49,140/ - in appreciation of the sacrifice made by him and the services rendered by him. He also referred to the resolutions passed in the meeting of 28th January 1979. We have already referred to the details of the resolutions passed in the meeting held on 28th January 1979. The petitioner referred to all the resolutions in his reply dated 16th/17th April 1985. He, therefore, denied that he was a persistent defaulter. He denied that the breaches were brought to his notice, either orally or in writing. He contended that in view of the resolutions passed by the Society, in fact he had made over-payment. We have already indicated above that as on June 1984 an amount of Rs. 92,400/- (40% of Rs. 2,31,000) + Rs. 58,315/- (initial contribution of Rs. 9,175 + Rs. 49,140 being the 3/4th of Rs. 65,520/-), totalling to Rs. 1,50,715/- ought to have been shown to his credit. If the accounts of the Society had reflected the true position, faithful to the resolutions passed by the Society on 29-10-1978, 14-1-1979 and 28-1-1979, there is no doubt in our mind that the petitioner's contribution would have been the highest viz. Rs. 1,50,715/-. The petitioner, therefore, contended in his reply that he was not a defaulter, that there was no question of any breach on his part and there was no case for his expulsion. In the concluding portion of his reply in para 7, the petitioner specifically contended that having regard to the resolutions passed by the Society, to which we have made a reference above, he had contributed more than 3/4th of the cost of the flat and none of the members had so far paid 3/4th cost of the flat. He offered to pay the balance of 1/4th as soon as the other members had paid their 3/4th contribution.
18. At this juncture, it is important to note that the Work Order for the construction of the plinth and super structure of the building of the Society for the members was issued on 25th July 1985 in favour of M/s. Radhika Constructions. It is surprising that the Society was in a hurry to expel members, like the petitioner, even in June 1984 when Work Order was issued as late as on 25th July 1985. By their letter dated 18-11-1985 M/s. Radhika Constructions complained that though they wanted to start the work on 31st July 1985, there was no B.M.C. clearance to commence the work and this clearance was to be obtained by the Society. The position, therefore, which emerges from the letter dated 25th July 1985 issued by the Society and the letter dated 18-11-1985 issued by the Contractor is that the Work Order was issued even without obtaining the necessary clearances from the B.M.C. It is difficult to appreciate why the Society was in a hurry to expel the petitioner when no work had started. Indeed, no clearances were obtained to start the work, as is the complaint of the contractor. If plinth work had not been completed, it is difficult to appreciate as to how the petitioner could be called upon to make any contribution apart from the fact that he was already exempted from making the initial contribution of 40%. The second resolution passed in the meeting of 28th January 1979 recommends the payment of 10% of Rs. 49,140/- to the petitioner on the completion of each slab. This presupposes that the payments are due to be made to the Contractor on completion of the work slabwise. Without even having commenced the work or obtained the necessary clearances from the B.M.C. for commencement of the work, notices have been issued to the petitioner, ignoring the resolutions passed by the Society and arbitrarily proceeding on the footing that the petitioner was a defaulter.
19. Be that as it may. On 24th June 1986 a notice is alleged to have been sent to the petitioner informing him that a Special General Body meeting was to be held on 6th July 1986. Under Bye-law 37, notice convening a Special General Meeting has to be posted or sent to the registered address of the member not less than 5 days before the date of the meeting. Bye-law 37 reads as under :--
"37. Notice convening any General Meeting shall state the time and place of the meeting and the business to be transacted there at and shall be posted or sent to the registered addresses of the members in the case of the Annual General Meeting not less than 10 days before the date of the meeting and in the case of a Special General Meeting not less than 5 days before the date of the meeting unless in the case of an emergency the Committee unanimously direct shorter notice to be given. No General Meeting shall be invalidated by the non-receipt of any notice thereof by any member".
The petitioner categorically stated in his affidavit before the Deputy Registrar that no notice was served on him. His specific contention raised in this behalf is as under:-
"Secondly the General Body cannot revoke the amount 3/4th of the cost of the flat finally fixed unilaterally without notice to me unilaterally and according to the whim or humour of the brute majority of the General Body, which was acting with deep malice towards the throughout".
Admittedly, the petitioner was not present at the meeting held on 6th July 1986. There is no evidence produced before us as to how the notice was sent or whether it was posted and if so, in what manner. We repeatedly requested Shri Godbole to make available to us the record of the Society even in this petition. However, after taking repeated instructions, Shri Godbole expressed his inability to satisfy us as to the despatch of the Notice dated 24th June 1998 in respect of Special General Body meeting that was held on 6th July 1986. Needless to say that in view of the mandatory wording of Bye-law 37, the despatch had to be atleast 5 days before the date of the meeting, i.e. the despatch had to be before the 1st July 1996 since the meeting was to be held on 6th July 1986. Since there is no evidence before us about the despatch, much less of the service of the Notice dated 24th June 1986 in respect of the meeting to be held on 6th July 1986, we must proceed on the footing that there is no notice to the petitioner in respect of the meeting that was held on the 6th July 1986.
20. In the meeting which was held on the 6th July 1986, the concession of Rs. 49,140/- granted to the petitioner in the Special Meeting that was held on 28th January 1979 was revoked. Thus, the concession that was initially recommended by the General Body on 29-10-1978, approved by the Managing Committee on 14-1-1979 and finally, confirmed in the Special General Meeting on 28-1-1979 was revoked arbitrarily behind the back of the petitioner without notice to him as late as on the 6th July 1986. What is worse is that the resolution revoking the concession of Rs. 49,140/ - proceeds on a wholly erroneous assumption and shows total non-application of mind and arbitrariness. The resolution which is the subject matter of the third item in the meeting held on 6th July 1986 proceeds on the footing that the petitioner was a defaulter. The only reason given for revocation of the concession is that the petitioner had resigned from the Managing Committee on 8-11-1981 and had failed to pay his contribution. The exact wording of the resolution may be reproduced below :--
"This General Body resolves to revoke the concession of Rs. 49,140/- granted to Shri B.L. Rane in its special meeting held on 28-1-1979 in view of his resignation from the Managing Committee from 8-11-1981 and further failure to pay his contribution despite time concession granted to him to pay.
Proposed by G.S. Mathkar Seconded by V.G. Joshi".
It would be evident from the proceedings in the said meeting that the meeting did not consider the petitioner's reply dated 16th/17th April 1985 in which he had reiterated his case specifically with reference to the three earlier resolutions viz. 29-10-1978, 14-1-1979 and 28-1-1979. If the General Body in its meeting dated 6th July 1986 were to apply its mind to the petitioner's reply dated 16/17th April 1985 or to the three resolutions mentioned above, it is doubtful whether it could have proceeded to condemn the petitioner on the two grounds stated in the resolution. The two grounds are :-(i) the petitioner's resignation from the Managing Committee on 8-11-1981 and (ii) failure to pay his contribution despite time concession granted to him to pay. We find that the first ground is wholly irrelevant and extraneous. The reading of the resolutions dated 29-10-1978, 14-1-1979 and 28-1-1979 leaves no manner of doubt that the ex-gratia payment to him was in token of appreciation of the services rendered by him at the initial stages of the project and in particular, for getting the occupants evicted from the old tenements and accommodating them in the new building which the petitioner had got constructed. The petitioner had only ceased to be a member of the Managing Committee pursuant to his resignation on 8th November 1981. There was no condition in any of the resolutions of 29-10-1978, 14-1-1979 and 28-1-1979 that he should continue to be a member of the Managing Committee to be eligible to enjoy the concession of exemption from initial contribution of 40% plus Rs. 49,140/-Thus, the first ground for revocation of the concession is wholly irrelevant and extraneous. Coming to the second ground viz. his alleged failure to pay contribution despite time concession granted to him, this again shows total non-application of mind and arbitrariness on the part of the General Body. Resolution No. 1 passed on 28-1-1979 specifically exempted the petitioner from the initial contribution of 40% of the total cost of the flat and deposits. We have already worked out the same at Rs. 92,400/-on the basis of the cost of the flat being Rs.2,31,000/- (viz. 700 sq. ft. at the rate of Rs. 330/- per sq. ft.). In addition to this amount of Rs. 92,400/-, admittedly the petitioner had paid the initial contribution of Rs. 9,175/-, excluding the share money of Rs. 250/- and had earned a concession of Rs. 49,140/-. Nothing has been considered by the General Body white hurriedly passing the resolution on 6th July 1986, without notice to the petitioner and behind his back.
21. After having passed the resolution on 6th July 1986 in the manner indicated above, the Society issued a notice to the petitioner on 18-9-1986 informing him that the question of his expulsion from membership would be considered in the meeting to be held on 19-10-1986. The date of despatch of this notice has not been proved. But since the petitioner has admitted in the petition that he was served with this notice on 23rd September 1986, we do not wish to dilate on the subject of either despatch or service of this notice of the meeting convened for the purpose of the petitioner's expulsion. The petitioner has made a repeated grievance in the petition that the notice was served as late as on 23rd September 1986 and that he was entitled to 30 days' notice in terms of section 35 of the Act read with Rule 29 of the Rules. Since Rule 29 has a direct bearing on this contention, we may first reproduce Rule 29 of the Maharashtra Co-operative Rules, 1961 as under :--
"29. Procedure for expulsion of members.---(1) Where any member of a society proposed to bring a resolution for expulsion of any other member, he shall give a written notice thereof to the Chairman of the Society. On receipt of notice or when the Committee itself decides to bring in such resolution, the consideration of such notice or when the Committee itself decides to bring in such resolution, the consideration of such resolution shall be included in the agenda for the next general meeting and a notice thereof shall be given to the member against whom such resolution is proposed to be brought, calling upon him to be present at the general meeting to be held not earlier than a period of one month from the date of such notice and to show cause against expulsion to the general body of members. After hearing the member, if present, or after taking into consideration any written representation which he might have sent, the General Body of members shall proceed to consider the resolution.
(2) When a resolution passed in accordance with sub-Rule (1) is sent to the Registrar or otherwise brought to his notice, the Registrar may consider the resolution and after making such enquiries as he may deem fit give his approval and communicate the same to the Society and the member concerned. The resolution shall be effective from the date of such approval".
Admittedly, expulsion of a member has serious consequences and it casts a stigma on a person's image in the society. Section 35 of the Act requires a resolution to be passed by a majority of not less than three-fourths of the members entitled to vote who are present at a General meeting held for the purpose of expelling a member for acts which are detrimental to the interest or proper working of the Society. Section 35 reads as under:--
"35. Expulsion of members.---(1) A Society may, by resolution passed by a majority of not less than three-fourths of the members entitled to vote who are present at a general meeting held for the purpose of expelling a member for acts which are detrimental to the interest or proper working of the Society :
Provided that, no resolution shall be valid, unless the member concerned is given opportunity of representing his case to the General Body, and no resolution shall be effective unless it is approved by the Registrar.
(2) No member of a Society who has been expelled under the foregoing subsection shall be eligible for re-admission as a member of that Society, or for admission as a member of any other Society, for a period of one year from the date of such expulsion :
Provided that, the Registrar may, on an application by the Society and- in special circumstances, sanction the re-admission or admission, within the said period, of any such member as a member of the said Society or of any other Society, as the case may be".
22. It would be evident from the above that the resolution of expulsion is not valid unless the member concerned is given an opportunity of representing his case to the General Body and unless the resolution is approved by the Registrar. A person, who has been expelled, is not eligible for re-admission as a member in any Society for the period of one year from the date of expulsion. Rule 28 of the Rules is as under :---
"28. Expulsion of Members.--Any member who has been persistently defaulting payment of his dues or has been failing to comply with the provisjons of the By-laws regarding, sales of his produce through the Society, or other matters in connection with his dealings with the Society or who, in the opinion of the Committee has brought disrepute to the Society or has done other acts, detrimental to the interest of proper working of the Society may in accordance with the provisions of subsection (1) of section 35, be expelled from the Society. Expulsion from membership may involve forfeiture of shares held by the member".
A combined reading of the provisions of section 35 of the Act and Rules 28 & 29 of the Rules, leave no manner of doubt that expulsion is a serious matter. In the present case, we are concerned with the expulsion of the Chief Promoter, whose services were eulogised by the entire body of members, who were keen to shower praise on him and recognised the sacrifices made by him at a great personal cost, even risking his own life. This is abundantly clear from the tenor of the resolutions passed on 29-10-1978, 14-1-1979 and 28-1-1979.
23. On the question of mandatory requirement of Rule 29, Shri Karlekar has invited our attention to a decision of a learned Single Judge of this Court in Narayan Ramkrishna Embadwar v. Assistant Registrar, Co-operative Societies, Yavatmal and others, 1994 Maharashtra Law Journal, 822. That was a case where a notice dated 4-1-1986 was issued calling upon the members to pay arrears by 31st January 1986 and on their failure to do so, a Special General Body meeting was held on 1-2-1986 in which a resolution was passed terminating their membership. The Registrar had granted approval to the said resolution and the appeal was dismissed. When the matter came to this Court, it was contended that in view of the mandatory provisions of Rule 29, the meeting of expulsion could not have taken place before the expiry of one month from the service of the notice. Since, admittedly, the notice itself was dated 4-1-1986 and the meeting was held on 1-2-1986 this Court did not go into the question of service of notice. On the short point that the meeting was held within a period of one month from the date of notice it was held that the meeting was illegal on account of failure to comply with the mandatory provisions of Rule 29. Reliance was placed on a similar view taken by M.S. Deshpande, J., in Writ Petition No. 2601 of 1990, decided on 20-11-1990 and it was held that the meeting and the resolution passed therein was illegal.
24. We may now refer to the decision of a Division Bench of this Court in K.V. Sundaram and another v. Raj Rajeshwari Co-op. Housing Society Ltd. and others, 1980 Man. Law Journal 4. This Court referred to the serious consequences resulting from expulsion and in Para 9 of the judgment observed that -
"That notice must call upon the member concerned to be present at the General Meeting which cannot be held earlier than a period of one month from the date of the notice and the member has to be called upon to show cause against the expulsion to the General Body of members. It is only after this procedure has been followed and after hearing the member if he is present or after taking into consideration any written representation which he might have sent, that the General Body can proceed to consider the resolution".
In para 17 of the judgment, this Court referred to the fact that though Rule 29 contemplates the Registrar making a summary inquiry before giving his approval, having regard to the consequences which follow from a resolution of expulsion, the Registrar has to give notice and hear the person effected as to why the resolution of expulsion should not be approved. The decision contemplated by section 35 is not mechanical or an ideal formality. The Registrar has to consider the merits of the case of a particular member who is sought to be expelled. He is not merely to look at the formality of section 35 and Rule 29, but he must consider the merits of the case against the member who is sought to be removed under the resolution passed by the Society. We are referring to the details of this Division Bench decision since the petitioner's grievance is that both, the passing of the resolution of expulsion in the meeting held on 19-10-1986 and its approval by the Deputy Registrar has been in a mechanical manner without any application of mind to the resolutions passed by the Society from time to time and in particular, to the case of the petitioner, who was the Chief Promoter of the Society, whose services were eulogised repeatedly and who was then sought to be expelled arbitrarily. Admittedly the resolution dated 6th July 1986 revoking the concession granted to him earlier was passed without any notice of the said meeting to the petitioner since there is no evidence of either the despatch of the notice dated 24th June 1986. In the meeting held on 6th July 1986 resolution passed regarding revoking the concession granted to the petitioner proceeded on the two erroneous grounds elaborated in para 20 above. Bearing in mind the true approach and the gravity of the decision to expel a member, as indicated by this Court in K. V. Sundaram's case (supra) and the mandatory nature of the provisions of Rule 29, as indicated in Narayan Embadwal's case, we will consider the petitioner's grievance that the notice of the meeting that was held on 19th October, 1986 was invalid since it did not give him one month's time from the date of service of notice.
25. Shri Karlekar for the petitioner contended that if the metting dated 6th July, 1986 was illegally held, without even a notice being issued to the petitioner, the resolution of revocation of concession passed in the said meeting would ex facie be illegal. Admittedly, there is no evidence either of dispatch much less of the service of the notice dated 24th June, 1986 in respect of the meeting dated 6th July, 1986. Counsel further contended that if the concessions were illegally withdrawn on 6th July, 1986, that would be another infirmity in the resolution dated 19th October, 1986 which proceeded on the footing that the petitioner was a defaulter as a result of the concessions being withdrawn. On the other hand, Shri Godbole for the first respondent Society contended that both the resolutions namely, the one passed in the meeting held on 6th July, 1986 and the other passed in the meeting held on 19th October, 1986 were perfectly valid and legal. We will examine the contentions in the light of the material that has been placed before us.
26. On the question of interpretation of Rule 29 regarding the meeting being held not earlier than one month from the date of the notice Shri Karlekar conterids that the words "not earlier than a period of one month from the date of such notice" appearing in sub-rule (1) of rule 29 must be read to mean the date of service of the notice on the petitioner. Let us consider a case where the Society prepares the notice on 1st January, the Secretary signs it on 6th January, despatches it on 13th January which is served on the petitioner on 20th January, can it be said that the meeting held on 1st February was a validly held meeting. Can it be said that the member to be expelled had due notice and had sufficient time to show cause against his explusion? In short, the Counsel contends that the date of notice means the date of service of the notice on the petitioner who is sought to be expelled and who is called upon to show cause. In this behalf our attention has been invited to a decision of the Apex Court in Raja Harish Chandra Raj Singh v. The Deputy Land Acquisition Officer and anothet, . Dealing with the question of limitation for filing an application against the Award under the Land Acquisition Act, the Apex Court observed that when the rights of the person are affected by any order and limitation is prescribed for the enforcement of the remedy by the person aggrieved against the said order by reference to the making of the said order, the making of the order must mean either actual or constructive communication of the said order to the party concerned. So the knowledge of the party affected by award made by the Collection under section 12 of the Land Acquisition Act, 1894, either actual or constructive is an essential (a) requirement of fairplay and natural justice. Therefore, the expression "the date of the award" used in proviso (b) to section 18(2) of the Act must mean the date when the award is either communicated to the party or is known by him either actually or constructively. It was held that it would be unreasonable to construe the words "from the date of Collector's order" used in proviso to section 18 in a literal or mechanical way.
27. Similarly, in K. Narasimhiah v. H.C. Singri Gowda and others, , dealing with the proviso to section 27(3) of the Mysore Towns Municipalities Act of 1951, on the question as to when is giving of notice complete, the Apex Court observed in para 11 of the judgment at page 332 as under:
"Giving of anything as ordinarily understood in the English language is not complete unless it has reached the hands of the person to whom it has to be given. In the eye of law, however, "giving is complete in many matters where it has been offered to a person but not accepted by him.
Tendering of a notice is in law, therefore, giving of a notice even though the person to whom it is tendered refuses to accept it. We can find however no authority or principle for the proposition that as soon as the person with a legal duty to give the notice despatches the notice to the address of the person to whom it has to be given, the giving is complete.
We are therefore of the opinion that the High Court was wrong in thinking that the notices were given to all the Councillors on the 10th October. In our opinion, the notice given to five of the Councillors was of less than three clear days."
Relying the above two authorities of the Apex Court, Shri Karlekar contended that the words "not earlier than a period of one month from the date of such notice" appearing in sub-rule (1) of Rule 29 must be understood and read to mean "not earlier than a period of one month from the date of receipt of such notice by the member" who was called upon to show cause against the proposed expulsion.
28. As stated earlier, the notice dated 18th September 1986 was served on the petitioner on the 23rd September 1986 informing him that the meeting was to be held on 19-10-1986. Excluding the date of service viz. 23rd September 1986 and the date of meeting viz. 19-10-1996, the petitioner had 25 days' notice only i.e. 7 days of September and 18 days of October. When we come to the proceeding of the meeting held on 19-10-1986, we find that the petitioner, who attended the meeting, specifically made grievance that he had no notice of the Special General Body meeting held on 6th July 1986 in which the decision was taken to revoke the concession granted to him in 1978-79. This is the very first subject, discussed in the meeting held on 19-10-1986. We are not concerned with the other subjects from Sr. Nos. 2 to 8. Subject No. 9 deals with expulsion of the petitioner. Without considering the earlier resolutions dated 29-10-1978, 14-01-1979 28-01-1979 and the petitioner's reply dated 16/17th April 1985 a cursory reference is made in the resolution that the explanation submitted was not acceptable to the General Body. Finally, the General Body passed the resolution expelling the petitioner from the Society's membership. AH those who were present, excepting the petitioner, supported the resolution.
29. When this resolution was sent to the Deputy Registrar for his approval, he passed an order on 11th April 1989 granting his approval to the said resolution. A perusal of the said order shows that the question as to whether the petitioner was really a defaulter in view of the three resolutions dated 29-10-1978, 14-01-1979 and 28-01-1979 has not been considered by the Deputy Registrar. We have already indicated in para 24 above, the approach of this Court in K. V. Sundaram's case as to how should the Deputy Registrar proceed in the matter of granting approval to a resolution of expulsion. The Deputy Registrar was expected to consider the merits of the petitioner's case and the grounds on which the expulsion was sought to be justified. He did not consider the fact that the resolution dated 6th July 1986 was passed without any notice to the petitioner and what was the effect of such a resolution which was passed behind his back. The Deputy Registrar only relied upon the fact that in the meeting held on 6th July 1986 the concession granted to the petitioner was withdrawn. He only referred to some of the decisions, to which our attention was invited on behalf of the petitioner, including the decision of the Division Bench of this Court in Kumari Jethi T. Sipahimalani v. The Maharashtra State Cooperative Tribunal, Bombay, 76 Bom.L.R. 179. On the question of validity of ex-gratia payment being made to a member of the Society. The Deputy Registrar then referred to Bye-law No. 73 from the Model Bye-laws of a Co-operative Society. Undoubtedly, these Bye-laws apply only in the absence of The Bye-laws adopted by the Society. Admittedly, the first respondent Society has not adopted the Model Bye-law since it has framed its own bye-laws. Bye-law No. 73 referred to by the Deputy Registrar is not the Bye-law of the first respondent Society. If we look to Bye-law No. 73 in the Society's Bye-laws, it deals with the external repairs to the society's buildings being a charge on the revenue of the Society and the internal repairs being required to be done at the expense of the tenant to the satisfaction of the Committee. This Bye-law No. 73 has no relevance whatsoever to the issue that the Deputy Registrar was called upon to decide. The bye-law quoted by the Deputy Registrar is non-existent as far as the first respondent Society is concerned and had no application to the facts of the case before the Deputy Registrar. Neither Bye-law No. 72 nor Bye-law No. 73 of the Model Bye-laws has any application to the petitioner's case. However, without considering the matter in its proper perspective and without bearing in mind the caution sounded by Court in K. V. Sundaram's case, the Deputy Registrar has mechanically, without application of mind, granted approval to the resolution of expulsion. There is no consideration of the petitioner's case on merits anywhere in the order of granting approval. The fact that the Work Order was issued as late as on 25th July 1985 by the Society itself to M/s. Radhika Constructions and the further fact that the contractor had complained on 18-11-1985 that the Society had not even obtained the clearance from the B.M.C. for commencement of work has not been considered by the Deputy Registrar. The fact that Resolution No. 2 passed in the Special General Meeting of 28-01-1979 specifically granted exemption from payment of 40% of the cost and deposits to the petitioner has not been considered. The texts of the three resolutions dated 29-10-1979, 14-01-1979 and 28-01-1979, which have a bearing on the issue as to whether the petitioner was a defaulter and was, therefore, liable to be expelled, have not at all been considered. The Deputy Registrar has obviously acted in a mechanical way without any application of mind and had proceeded on the footing that the petitioner was a defaulter and has been properly expelled by the society. The arguments advanced on behalf of the petitioner have been summarily discarded and finally, approval has been accorded to the resolution of expulsion that was passed in the meeting held on 19-10-1986.
30. The order dated 11th April 1986 passed by the Deputy Registrar has been confirmed in appeal by the Divisional Joint Registrar on 9th March 1990. After setting out the facts in the first four paragraphs, in the fifth para, the Divisional Joint Registrar has proceeded on the erroneous footing that the concession granted to the petitioner in the meeting held on 28-01-1979 was conditional and whatever concession was granted to him was subsequently cancelled in the meeting held on 6th July 1986. On both the premises, the Order of the Divisional Joint Registrar proceeds on erroneous assumption and shows clear non-application of mind. The exemption from payment of 40% as the initial contribution towards the cost of the flat is not at all conditional. A bare reading of Resolution No. 2 in the meeting held on 28-01-1979 will conclusively establish this fact. The question as to what was the necessity of demanding the payments and as to whether the payments had fallen due, in the sense that monies were to be paid to the Contractor in June 1984, has not been considered either by the Deputy Registrar or by the Divisional Joint Registrar. We have already indicated above, the position of payment by the other members of the society. We have already indicated as to what should have been the contributions standing to the petitioner's credit in June, 1984. In the light of the three resolutions dated 28-10-1978, 14-01-1979 and 28-01-1979 , the petitioner's account ought to have been credited with Rs. 92,400/- (40% of Rs. 2,31,000) + Rs. 58,315/- (Rs. 9175/- + Rs. 49,140/-), totalling to Rs. 1,50,715/-. Nobody had contributed that much amount and, as indicated earlier, the highest contribution was by Shri P. Radhakrishnan, which was Rs. 89,200/- for a flat of 700 sq. ft. The petitioner's contribution has been wrongly shown only to be Rs. 9,175/- in June 1984. The contribution of Dr. B.N. Kavi, at Sr. No. 43 in the chart at Exh. 12 was only Rs. 8,499/-. But no action of expulsion was initiated against Dr. B.N. Kavi for reasons best known. Thus, proceeding on the erroneous assumptions and without bearing in mind the gravity of the consequences of the resolution of expulsion and the caution sounded by this Court in considering the question of grant of approval to the resolution of expulsion, the Divisional Joint Registrar dismissed the petitioner's appeal by his Order dated 9th March 1990.
31. In our view, the resolution of revocation of concession dated 6th July 1986 had been passed without giving the petitioner an opportunity of being heard and no notice of the said meeting was served on the petitioner. Indeed, there is no evidence even of a despatch of the Notice dated 24th June 1986 convening the meeting on 6th July 1986 in which the concession granted to the petitioner was erroneously withdrawn. We have already indicated above that the resolution passed on the 6th July 1986 proceeded on two extraneous and erroneous grounds viz. (i) that the petitioner has resigned from the Managing Committee. (This had no relevance to his having earned concession of Rs. 49,140/-) and (ii) his alleged failure to pay contribution, despite time concession granted to him. This again is an erroneous assumption which ignores the three resolutions mentioned above. It is relying upon such an illegal resolution dated 6th July 1986 that the petitioner has been expelled in the meeting that was held on 19-10-1986. Since the expulsion has serious consequence of a person being thrown out of the society and being disqualified for at least a period of one year and suffering a stigma, in our view, the notice of the meeting contemplated by Rule 29 ought to be served on the member against whom such resolution is proposed to be passed at least one month prior to the date of the meeting. In our view, the words "General Meeting to be held not earlier than a period of one month from the date of such notice" ought to be construed to mean "not earlier than a period of one month from the date of service of such notice." We are only confining this interpretation to the question of notice to the member against whom the resolution is proposed to be brought. That is the emphasis on sub-rule (1) of Rule 29, reproduced above. The whole purpose of the notice contemplated in Rule 29 is to give adequate opportunity to the member who is sought to be expelled on serious grounds such as persistent default, failure to comply with the provisions of the bye-laws, bringing disrepute to the society or acting in manner detrimental to the interests of the society. The resolution based on any of these grounds casts a stigma on the member concerned. He is also disqualified from becoming a member of that society or for admission as a member of that society or for admission as a member of any other society for a period of one year from the date of expulsion. This results in serious consequences on the member concerned. The notice contemplated by Rule 29 is only to that member who is sought to be expelled. He has to show cause. We are, therefore, inclined to take the view that if the petitioner was served with the notice dated 18th September 1986 on 23rd September 1986, the meeting held on 19-10-1986 was held earlier than a period of one month from the date of service of the notice on the petitioner. Such a meeting held on 19-10-1986 was therefore, held in violation of the mandatory provisions of sub-rule (1) of Rule 29 of the Co-operative Societies Rules, 1961 and would, in our opinion, be bad in law. It would, therefore, follow that any business transacted at such a meeting would be bad in law.
32. Shri Godbole for the respondents has invited our attention to some of the decisions, to which we will make a reference. There is no doubt, as held by this Court in Khalilulla Hasmiya Ghole and another v. Yesu Raghu Dhadvel and another, that if a provision of law is capable of two constructions, then it would be open to the Court adopt such a construction as would help the administration of the statute and avoid unreasonable consequences. Similarly, as held by the Apex Court in Shri Ram Narain Medho v. The State of Bombay, if the language of the enactment is clear and unambiguous, it would not be legitimate for the courts to add any word thereto and evolve therefrom some sense which may be said to carry out the supposed intentions of the Legislature. The intention of the Legislature is to be gathered only from the words used by it and no such liberties can be taken by the courts for effectuating a supposed intention of the Legislature, In Jai Charan Lal Anal v. The State of U.P. and others, it was held in the context of the provisions of the U.P. Municipalities Act (2 of 1916), dealing with the validity of the meeting fixed for 25-11-1966 under a notice sent by the District Magistrate on 17th November 1966, that there was no breach of the provisions of sub-section (3) of section 87-A of the Act as 7 clear days intervened between the date of despatch of the notice and the date of the meeting. The provisions of sub-section (3) have been reproduced by the Apex Court in para 3 of its Judgment at page 7 of the report. After having followed a particular procedure in the despatch of the notice by registered post, sub-section (3) ended with the presumption that "there upon every member shall be deemed to have received the notice". With such a clear mandatory provision the Apex Court held that the meeting was validly held. Unfortunately, in the present case, neither in section 35 of the Act nor in Rule 29 of the Rules nor in any bye-law of the society, there is any such clear mandate raising a presumption of service by a particular date which can be said to be one month's notice in the facts of the case, in the present case, Rule 29 contemplates the substantive procedure for expulsion and we are only concerned with the notice to be given to the member before expulsion unlike the notice to all the Councillors of the Municipality, which was the subject matter of the consideration before the Apex Court in Jai Charan Lal's case. Having regard to the gravity of the consequences of expulsion and the approach of this Court, as indicated in K.V. Sundaram's case, 1980 M.L.J. 4 and the view expressed in Narayan Embadwar's case, 1994, M.L.J., 822, we are of the view that as far as notice to the member who is to be expelled, casting a stigma on him, the meeting cannot be held earlier than one month from the date of service of such notice on him since he is called upon to show cause against his expulsion. The notice contemplated by Rule 29(1) is only to the member to be expelled. It may or may not be necessary for the other members to get one month's notice and they may be prepared to attend the meeting and express their views at a shorter notice. We are only concerned with the petitioner, who was expelled in the meeting held on 19-10-1986. In our view, the ratio of the decisions on which Shri Godbole has sought to place reliance would, with respect, be inapplicable to the facts of the case before us. We are, therefore, inclined to hold that the meeting held on 19-10-1986 was held within less than a month from the date of service of the notice on the petitioner to show cause against his expulsion since the petitioner was served on the 23rd September 1986 and the meeting was held on 19th October 1986. In this view of the matter, we have no hesitation in coming to the conclusion that the resolution passed in the meeting held on 19-10-1986 was illegal since the meeting itself was illegal.
33. Shri D'gama, A.G.P. fairly stated that having regard to the law laid down by this Court in K.V. Sundaram's case, it was difficult for him to support any of the two orders namely the order dated 11th April, 1989 passed by the Deputy Registrar or the Appellate Order dated 9th March, 1990 passed by the Divisional Joint Registrar. The result would, therefore, be that there is no valid approval to the resolution of expulsion that was passed on 19th October, 1986.
34. We may now sum up our conclusions as under:
i) The resolution of revocation of concession that was passed in the meeting held on 6th July 1986 was passed without notice to the petitioner and was passed behind his back. In absence of any notice to the petitioner, in respect of the meeting that was held on 6th July, 1986, the said resolution is hereby declared to be illegal, null and void.
ii) The resolution of expulsion that was passed in the meeting of 19th October, 1986 is also declared as illegal, null and void since the meeting was held earlier than a period of one month from the date of service of the notice dated 18th September, 1986 which was served on the petitioner on 23rd September, 1986. Consequently, the said resolution is illegal.
iii) The Order dated 11th April, 1989 passed by the Deputy Registrar, Co-operative Societies granting approval to the resolution of expulsion that was passed on 19th October, 1986 suffers from several errors of law apparent on the face of the record. The Deputy Registrar did not hold a proper enquiry as contemplated by section 35 read with Rule 29. None of the resolutions dated 29th October, 1978, 14th January, 1979 and 28th January, 1979 were considered by the Deputy Registrar. The peculiar facts of the petitioner's case were not borne in mind while considering the question of approval of expulsion. The approval has been granted arbitrarily, mechanically and without any application of mind which has vitiated the order dated 11th April 1989 and rendering the same bad in law.
iv) The Order dated 9th March, 1990 passed by the Divisional Joint Registrar dismissing the petitioner's appeal suffers from the same vice as the order of the Deputy Registrar dated 11th April, 1989. There is no consideration of the relevant material and facts of the petitioner's case and in particular the 3 resolutions referred to above. The Appellate Order also shows clear non application of mind and has been passed mechanically rendering the same illegal.
v) The petitioner would, therefore, be entitled to succeed in terms of prayer (a) of the petition.
35. It was contended before us by Shri Karlekar that in order to do substantial justice to the petitioner a flat of 700 sq. ft. ought to be allotted to him by cancelling the last allotment. We would have examined such a contention had proper amendments been moved at the appropriate time and necessary parties being brought before us. We are inclined to reject Civil Application No. 4952 of 1998 for amendment by a separate order for reasons which are to be indicated therein. In the absence of necessary pleadings and parties whose allotment is likely to be cancelled, it is not possible for us to consider such a prayer in this petition. We leave the petitioner to adopt appropriate remedy in that behalf before the proper forum.
36. When this petition was admitted, an amount of Rs. 1,00,000/- was deposited on 30th August, 1990 pursuant to the Order dated 23rd August, 1990. Thereafter a further amount of Rs. 2,00,000/- was deposited on 6th November, 1990 pursuant to the Order dated 26th October, 1990. The said amounts have been invested in fixed deposits and, as on 3rd December, 1998, the fixed deposit would mature with the maturity value of Rs. 6,64,466/ -, the principal amount being Rs. 6,16,882/- as per the report submitted by the Registry. In the view that we have taken, though the petition succeeds in terms of prayer (a), it is not possible for us to pass any further orders directing allotment of a flat to the petitioner. The petitioner may have his own remedy against the Society on the basis of this judgement. However, no useful purpose will be served by blocking the petitioner's deposit for a further period.
37. In the absence of an order for allotment of a flat, the petitioner, who is present in the Court, has expressed a desire that he would like to encash the fixed deposit at the end of this month. We therefore, direct the Registry to encash the said fixed deposits after the end of this month and pay the full amount with interest accrued due to the petitioner within a week of encashment .
38. In view of the above, rule is made absolute in terms of prayer (a) with costs which are quantified at Rs. 1,500/- to be paid to the petitioner by the first respondent Society and Rs. 750/- each to be paid by respondent Nos. 2 and 3 to the petitioner.
39. At this stage, Shri Godbole prays for stay of operation of the judgment. Prayer rejected.
40. Issuance of certified copy expedited.
41. Petition partly allowed.