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ANIL S/O WAMANRAO GAWANDE V/S MAHALAXMI RAILWAY KARMACHARI SAHAKARI & OTHERS, decided on Friday, October 4, 2013.
[ In the High Court of Bombay (Nagpur Bench), Letters Patent Appeal No. 113 of 2002 in Writ Petition No.3116 of 2001 (Decided). ] 04/10/2013
Judge(s) : A.B. CHAUDHARI & Z. A. HAQ
Advocate(s) : Anil Mardikar. R1, A.H. Patil, , R2 to R4, S.M. Ghodeswar, A.G.P.
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    Maharashtra Co-operative Societies Act 1960 - Section 35 91 -Maharashtra Co-operative Societies Rules 1961 - Rule 28 29 -Case Referred:K.V. Sundaram and anr. vs. Raj Rajeshwari Co-Op. Housing Society Ltd. and ors. 1980 Mh.L.J. 4 (Para 4).       1. Appellant is the original disputant before the Cooperative Court Amravati whose dispute against the respondents was registered as R. A. M. Case No.198/1992 and is challenging the judgment and order made by the learned Single Judge of this Court dated 18.06.2002 in Writ Petition No.3916/2001 by which it was held that the dispute filed by the appellant under section 91 of the Maharashtra Cooperative Societies Act (for short the 'MCS Act') was not maintainable.FACTS:2. The appellant being a member of the Cooperative Housing Society filed a dispute before the Cooperative Court Amravati stating therein that though he paid all the amounts to the society for getting a plot from the society he was not being given the plot and the possession thereof despite his repeated demands and despite making of the payments due. The Society however cancelled his membership and issued a letter to that effect received by him on 22.11.1991 and that the membership was cancelled for false reason and only due to the increase in prices of the plots. He therefore prayed for reliefs that he is a member of the society and the resolution passed by the Society to remove him from membership and consequent notice of removal dated 05.10.1991 be declared void with further relief to give vacant possession of the plot to him. The dispute was registered as R.A.M.Case No. 198/1992. The respondent no.1-housing society did not dispute that he was a member of the society but it is stated that action was taken against the appellant by resolution no.4 in annual general meeting held on 15.01.1989 and 19.03.1989 because he was defaulter in payment of money to the society and therefore he ceased to be a member. The society also raised objection as to the tenability of the Dispute under section 91 of the MCS Act. The Cooperative Court after hearing the parties dismissed the dispute filed by him by judgment and order dated 08.08.2000. The appellant carried an appeal before the cooperative appellate Court and the appellate court allowed the appeal preferred by him and issued necessary declaration and set aside the resolution dated 16.12.1990 and notice of expulsion dated 05.10.1991 and further directed to allot a plot after depositing the requisite amount demanded by the society from time to time. Feeling aggrieved thereby respondent no.1-society preferred Writ Petition No.3116/2001 in this Court.3. The learned Single Judge heard the writ petition and framed only one question namely; 'whether the dispute under section 91 against an action under section 35 of the MCS Act was maintainable or not?' After hearing the parties he held it to be not maintainable and allowed the writ petition by the impugned judgment and order which is under challenge in the instant intra-court appeal. Needless to say that the learned Single Judge did not go into the merits of the matter.SUBMISSIONS:4. Mr. Mardikar learned counsel for the appellant argued that the dispute under section 91 of the MCS Act was maintainable and the decision in the case of K. V. Sundaram and anr...vs..Raj Rajeshwari Co-Op. Housing Society Ltd. and ors.; 1980 Mh. L. J. 4 relied upon by the learned Single Judge is clearly distinguishable but the learned Single Judge wrongly applied the same with full force thereby holding that the dispute under section 91 of the MCS Act was not maintainable. The learned counsel further argued that the learned Single Judge did not decide the matter on merits obviously because he found that the dispute itself was not maintainable and the controversy about it was covered by the decision on K.V. Sundaram & anr. (supra). Mr. Mardikar learned counsel for the appellant placing reliance on section 91 and 35 of the MCS Act pointed out to us the distinguishing features and the limited area covered by section 35 and the area covered by section 91 of the MCS Act. He urged this Court to decipher the two provisions and argued that the learned Single Judge committed error of law in straightway relying on the decision in the case of K.V. Sundaram & anr. (supra) which was clearly distinguishable on facts. He therefore prayed for allowing the appeal by setting aside the impugned judgment made by the learned Single Judge.5. Per contra Mr. A. H. Patil learned counsel for the contesting respondent no.1 supported the impugned judgment and order and argued that the remedy provided under Section 35 of the MCS Act is an independent remedy and there is a forum provided to challenge the action or order if any made under section 35 of the Act. The jurisdiction of the Cooperative Court cannot extend to such proceedings or orders under section 35 of the Act nor the disputant would be in a position to challenge the legality or validity of the expulsion of the member when the validity can only be contested under section 35 of the MCS Act before the Assistant Registrar and thereafter in appeal. According to him the Legislature has clearly defined the powers of Assistant Registrar and provided further remedies against the proceedings or order against the same but the Co-operative Court could not entertain the dispute. There is thus a water tight compartment. Therefore the learned Single Judge was right in holding that the cooperative Court does not have jurisdiction to entertain a dispute under section 91 of the MCS Act. He therefore prayed for dismissal of the writ petition.6. The learned A.G.P. adopted the arguments advanced by Mr. A. H. Patil learned counsel for the respondent no.1.CONSIDERATION:7. We have carefully considered the submissions made by the learned counsel for the rival parties. We have gone through the impugned judgment and order made by the learned Single Judge so also the record and proceedings. It is not in dispute that the learned Single Judge has broadly relied upon decision in the case of K.V. Sundaram & anr. (supra) to come to the conclusion that the dispute under section 91 of the MCS Act was not maintainable in the subject matter. In the facts of the present case what we find is that the appellant-disputant was admittedly a member of the society but as was the stand taken by respondent no.1-Society he was given an opportunity but had defaulted the payments and that is why the society passed a resolution to remove him from the membership of the society. Accordingly pursuant to the resolution dated 16.12.1990 the respondent no.1 issued him the notice of removal dated 05.10.1991. The said resolution was sent to the Assistant Registrar for approval as per the provisions of Section 35 of the MCS Act. Mr. Patil learned counsel for respondent no.1-society then fairly made a submission before us that even till date there is no decision taken by the Assistant Registrar on the said resolution of expulsion i.e. from 16.12.1990. He however contended that even though the decision has not been taken by the Assistant Registrar the learned Single Judge had given liberty to the appellant to get said matter under section 35 of the MCS Act decided by the said authority. Therefore merely because Assistant Registrar has not decided the case of approval under section 35 of the MCS Act no cause of action could arise for the appellant to present the Dispute and at any rate the Dispute is not maintainable.8. At this stage it would be appropriate to reproduce the prayers made in the dispute.It is therefore most humbly prayed that this Hon'ble Court may kindly be pleased to pass an award 'by declaring that the disputant is a member of the opponent society' “and the action taken by the opponent society by passing the said resolution be declared as null and void and consequently the notice issued dtd 5.10.1991 be declared as void.” 'The opponent society may be directed to give vacant possession of the said plot.'9. Upon perusal of the above prayers particularly marked single inverted comma it is clear that the appellant/disputant prayed for a declaration that he is a member and the society should be directed to give him vacant possession of the plot. The prayer certainly falls within the parameters of section 91 of the MCS Act. Insofar as the other portion of the prayer marked double inverted comma is concerned the same deserves to be viewed in the light of the various provisions of the Act and the Rules. Section 35 of the MCS Act reads thus:“35.(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 expel 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 an opportunity of representing his case to the general body and no resolution shall be effective unless it is approved by the Registrar.”Rules 28 and 29 of the MCS Rules 1961 which are relevant  read thus:28. Expulsion of Members:- Any member who has been persistently defaulting payment of his dues or has been failing to comply with the provisions 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 or proper working of the society may in accordance with the provisions of sub-section (i) of Section 35 be expelled from the society. Expulsion from membership may involve forfeiture of shares held by the member.29. Procedure for expulsion of members:- (1) Where any member of a society proposes 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 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 inquiries 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.”10. Upon perusal of the above provisions it is clear that when the society passes a resolution for expulsion of a member the same has to be sent to the concerned Assistant Registrar for approval. Till it is actually approved by the Assistant Registrar such a resolution does not become effective and consequently a member does not stand removed but the member is entitled to exercise all the rights of membership as if he was not removed from the society or rather he continues to be a member of the society with full rights to which he is otherwise entitled to under the Act and Rules and the bye-laws. However reading of the above provisions clearly shows that the only forum where the validity or otherwise of the said resolution of expulsion can be decided or gone into is Assistant Registrar acting under section 35 of the MCS Act. Rules 28 and 29 of the Rules provide for carrying out object and purpose of section 35 of the MCS Act and also provide for procedure. Therefore the provision of section 35 r/w Rules 28 and 29 is a self contained Code providing for expulsion of a member and that is what has been held by Division Bench of this Court in the case of K.V. Sundaram & anr. (supra). Thus it is clear that the validity of resolution of expulsion of a member passed by a society cannot be questioned before any other court or authority except the Assistant Registrar under section 35 of the Act. In other words the Cooperative Court acting under section 91 of the Act will have no jurisdiction to adjudicate upon the validity of such a resolution of expulsion of a member. The reason is obvious namely; the Legislature has provided for an independent channel including appeals and revisions as interpreted by the Division Bench in the case of K.V. Sundaram & anr. (supra). To that extent to our mind the decision in the case of K.V. Sundaram & anr. (supra) has an apt application in the facts and circumstances of the present case. But then the matter does not end there.11. As earlier stated in the instant case and as submitted by Mr. Patil learned counsel for the contesting respondent after society sent resolution to the Assistant Registrar for approval under section 35 of the Act there is absolutely no action at the end of the Assistant Registrar either of approving or disapproving the resolution of the expulsion of the appellant. The submission made by Mr. Patil that the appellant should knock the doors of Assistant Registrar or should have knocked his doors for all these years does not impress us. Whether or not the Assistant Registrar has acted under section 35 of the MCS Act for approving or disapproving the resolution of expulsion becomes immaterial for the simple reason that the appellant continues to be a legal valid and regular member of the society having all rights and privileges which he is otherwise entitled to as a member till the time the Assistant Registrar approves validity of expulsion of the member i.e. the appellant. That is what is ordained by the proviso to section 35 of the MCS Act. This proviso must be held to be mandatory since the civil rights of a member of the cooperative housing society cannot be taken away without there being any adjudication about the validity of the resolution expelling him as a member and in this case the appellant. That is what is the force of the proviso to section 35 of the MCS Act.12. In the present case however the respondent no.1-society did not want to treat the appellant as a member who was removed from the membership of the society by virtue of resolution dated 16.12.1990 and by further communication dated 05.10.1991 informed him that the society did not want to treat him as a member and to allot and give the possession of the plot to him because he was removed from the membership of the society. Respondent no.1-Society ignored the force of the aforesaid proviso to section 35 of the MCS Act that till the time the resolution of removal of the membership of the appellant is approved he could not be deprived of any of the rights including allotment and possession of the plot to him. The remedies against the approval or disapproval of action under section 35 of the MCS Act are provided namely; appeal and revision; only if some decision is taken by the Assistant Registrar. Notably the Assistant Registrar does not have power to declare that the appellant-disputant continues to be a member and all the rights and privileges of the membership of the housing society including allotment of plot and possession thereof in favour of the member. In other words under Section 35 of the Act if the co-operative society does not extend the right and privileges of membership to a member only because it passed a resolution to expel him there is no power or authority in the Assistant Registrar to compel the society to follow the mandate of the proviso to Section 35. But it is the co-operative Court alone which possesses that power to issue declaration and the affirmative relief to grant him the right of membership and allotment of plot as well as possession subject to the decision of the Assistant Registrar.13. We therefore find that the prayers in the dispute under Section 91 of the MCS Act to the extent of declaration that he continues to be a member of the society and by affirmative relief the society should be directed to give him vacant possession of the plot were very well maintainable in the light of the proviso to section 35 of the MCS Act before the Co-operative Court. We further find and hold that prayer made in the dispute that the action taken by respondent no.1-society by passing resolution dated 16.12.1990 and consequent notice of removal of membership dated 05.10.1991 could not form the subject matter of challenge in a dispute under section 91 of the MCS Act before the Cooperative Court because the said issue could only be adjudicated by the authority namely the Assistant Registrar under section 35 of the MCS Act.14. The Division Bench decision in the case of K.V. Sundaram & anr. (supra) relied on by the learned Single Judge as well as Mr. Patil also lays down the legal position as analyzed by us above. In the said case the OSD (in place of Co-operative Court) passed an order on 15.10.1971 that challenge to the resolution of expulsion could not be made under section 91 of the Act and therefore he restricted the scope of proceedings under section 91 to the reliefs other than the relief against the resolution of expulsion and that the dispute would be tried only to the said limited extent. The Division Bench in para 7 first framed question as to whether a dispute challenging the resolution of expulsion could be the subject matter of proceedings under section 91. Since the OSD had not allowed the said issue under section 91 before him the Division Bench then referring to the proviso to section 35 of the MCS Act held thus:“The proviso is thus in two parts. First part deals with the validity of the resolution of expulsion and it gives effect to the principles of natural justice that a person must be heard before he is expelled from the society. It therefore provides that a resolution of expulsion shall not be valid unless the member concerned is given an opportunity of representing his case to the General Body. Under the second part of the Proviso the resolution so passed does not become operative or effective merely because the resolution has been passed by the General Meeting. The pre-condition of its effectiveness is that the resolution has to be approved by the Registrar....”The Court further found that section 35 (read with rules 28 and 29 of the Rules) and appeal preferred under section 152 and provisions under section 152 (4) provide for finality to those orders which obviously could not be challenged before the Co-operative Court.We quote extracted portion from para 11 of the said judgment.“11. Now the decisions under section 35 of the Act is made appealable under section 152 of the Act. Section 152 occurs in Chapter 13 of the Act which deals with ‘Appeals Review and Revision’. An appeal is provided against an order or decision under certain provisions of the Act and section 35 is one of them. If the impugned order or decision under the provisions mentioned in section 152 (1) is made or sanctioned or approved by the Registrar or Additional or Joint Registrar on whom powers of the Registrar are conferred an appeal lies to the State Government and if an order or decision impugned is made or sanctioned by a person other than the Registrar or the Additional or Joint Registrar on whom the powers of the Registrar are conferred an appeal lies to the Registrar. Section 152 (2) refers to order against which appeal lies to the Co-operative Appellate Court. Section 152 (4) which gives finality to the order or decision or award under the Acts...”The Court then reiterated the extracted portion of the said aspect in para 17 and finally in para 23 and gave the conclusion as under:“17. ...What we must find out is what is the effect of several other provisions under the Act which specifically and in particular deal with the expulsion of a member. Section 35 of the Act which we have referred to earlier provides that no resolution shall be effective unless it is approved by the Registrar. In other words even if a resolution of expulsion has been passed by a Co-operative Society merely passing of the resolution does not have the immediate effect of expelling that member. The resolution becomes operative only if it is approved by the Registrar. Therefore till the Registrar puts his seal of approval on the resolution the rights of a member are not in any way affected...18. to 22 .....23. .....We are not therefore able to find any infirmity in the order made by the Officer on Special Duty restricting the scope of the dispute before him only to the disputes which do not relate to the validity of the resolution of expulsion. The Assistant Registrar was also therefore clearly right in deciding to proceed with the inquiry relating to the validity of the resolution of expulsion by the Petitioner No.1. ”15. From the perusal of the above legal position we must conclude thus:“(i) The dispute under section 91 of the MCS Act as to the challenge to the resolution dated 16.12.1990 and notice of removal dated 05.10.1991 filed by the appellant was not maintainable under section 91 of the MCS Act before the Cooperative Court and the validity or otherwise of the said resolution and the notice of removal dated 05.10.1991 could be adjudicated only by Assistant Registrar acting under section 35 of the MCS Act.(ii) The dispute filed by the appellant for declaration that he is a member of the respondent no.1-society and being a member he was entitled to allotment and vacant possession of the plot was very well maintainable before the Cooperative Court under section 91 of the Act in the light of the proviso to section 35 of the MCS Act which is mandatory and provides for continuance of a member with all rights and privileges till the passing of orders of approval or disapproval by the authority under section 35 of the MCS Act.(iii) The upshot of the above discussion is that the learned Single Judge erred in holding that the dispute was not at all maintainable before the cooperative court.(iv) It is clear that the learned Single Judge has not dealt with the merits of the matter as was done by the learned Cooperative Appellate Court. The Cooperative Appellate Court however adjudicated upon resolution dated 16.12.1991 expelling the appellant-disputant from the membership of the society and also quashed and set aside the same so also the notice of expulsion dated 05.10.1991 which is illegal in view of the conclusions drawn by us above.16. We therefore pass the following order:ORDER(i) Letters Patent Appeal No. 113/2002 is partly allowed.(ii) Judgment and order in Writ Petition No. 3116/2001 dated 18.06.2002 is set aside.(iii) Proceedings of Writ Petition No. 3116/2001 are remitted to the learned Single Judge for hearing and fresh disposal on merits of the dispute.(iv) No order as to costs.