Indian Kanoon - Search engine for Indian Law

386. Learned counsel further submits that the Apex Court in the case of the petitioner itself i.e. in Civil Appeal No.542/2005 has held that the covenant of the deed executed between the members and the society is binding on the members and, as such, covenant cannot be brushed aside.

8. Shri Govilkar, learned counsel appearing for respondent No.2, on the contrary, submits that reliance of the petitioner is only on the regulations framed by the Managing Committee of the Society. It is submitted that the bylaws are required to framed with the approval of General Body. However, nothing is placed on record that regulation- 6A is approved by the General Body. Learned counsel further submits that in any case, bylaws or regulations, if are in conflict with the directions issued by the State Government under section 79A of the said Act, will not have any legal effect in so far as it is inconsistent with the directions issued under section 79A. Learned counsel specifically submits that since the State Government vide notification dated 9 th August 2001 has put the maximum limit of Rs.25,000/- as a premium for transfer of membership, the demand of the petitioner for an amount of Rs.2 crore was not at all sustainable. It is submitted that from the perusal of the pleadings of the petitioner before various authorities it would reveal that the main ground of rejection of application of respondent No.2 by the petitioner society was nonpaymnt of Rs.2 crore as demanded by the society.

section (1) thereof provides that no society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of the Act and its by-laws. Sub-section (2) thereof provides for appeal to the Registrar against the decision of the society refusing him admission to its membership. Sub-section (3) of section 23 gives finality to the decisions of the Registrar in such appeal. Section 79A of the said Act speaks about Government's power to give directions in the public interest. Sub-section (1) thereof provides that the State Government in the public interest or for the purposes of securing proper implementation of co-operative production and other development programmes approved or undertaken by the Government or to secure the proper management of the business of the society generally or for preventing the affairs of the society being conducted in the manner detrimental to the interests of the members or skn 12/21 4567.07-wp of the depositors or creditors thereof, may issue directions to any class of societies generally or to any society or societies in particular as the case may be and the societies concerned shall be bound to comply with such directions.

The observations made by the Division Bench in the case of Mont Blanc Co-operative Housing Society (supra) would equally be applicable to the facts of the present case. In order to grab exorbitant money from the new members, who are trying to become member of the society, they are being subjected to exploitation at the hands of the society.

18. In so far as the contention of Shri Dani that since the Deputy Registrar has approved the by-laws of the society subsequent to the notification dated 9th August 2001, the by-laws will have to be given more weightage than the directions under section 79A is concerned, I am unable to accept the said contention. No doubt, Shri Dani is right in contending that when an official act is done by a senior officer of the State it should be presumed to be valid. However, such presumption cannot be to such an extent that the officer of the State in ignorance of statutory directions issued by the State Government under section 79A does something which is contrary to the directions issued by the State Government. As has been stated hereinabove, in view of the judgment of the Division Bench the directions issued by the State Government under section 79A are binding on all the societies including that of petitioner society.

22. In so far as judgment of the Apex Court in the case of State of Maharashtra v. Karvenagar Sahakari Griha Rachana Sanstha Maryadit, 2000 (Supp.) Bom.C.R. 864 is concerned, in the said case, the by-laws of the society provided that allottee can construct house on one tenement for his own use. There was specific provision restricting the use for any commercial purpose. However, it appears that since one of the members i.e. respondent No.5 in the appeal before the Apex Court was refused permission to construct multi storied building, orders were issued under section 79A to amend the by-laws so as to provide for construction of multi storied building on the plots who in turn will form co-operative societies of their own. The Apex Court found that directions under section 79A could be issued in the interest of society and since the directions issued were not in the interest of society, the Apex Court upheld the decision of this Court which had allowed the petition filed by the society. No doubt, while issuing directions under section 79A the interest of society has to be taken into consideration but at the same time the members of the society cannot be permitted to act in such a manner which would amount to exploitation of the persons who are applying to be the members of the society. In that view of the matter, the said judgment would not be applicable to the facts of the present case.