ash 1 wp-2049.93n4564.04.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION WRIT PETITION NO.2049 OF 1993 WITH WRIT PETITION NO. 4564 OF 2004 WP NO.2049 OF 1993 Smt. Tara Ambadas Saraf, ) Adult, residing at – Ghodnadi, ) Taluka – Shirur, District – Pune. ).. Petitioner Vs 1. Shri Kantilal Zumbarlal Mutha, ) Adult, residing at – Ghodnadi, ) Taluka – Shirur, District – Pune. ) 2. Yashwant Sahakari Griharachana ) Sanstha Maryadit, ) Ghodnadi, Taluka – Shirur, ) District – Pune. ).. Respondents -- Shri V.S. Talkute for the Petitioner. Shri Deepak Patil for the Respondent No.1. -- WP NO.4564 OF 2004 Shri Kantilal Zumbarlal Mutha, ) R/o.20-A Yashwant Sahakari Griha Rachana) Sanstha Maryadit, Ghodnadi, ) Taluka – Shirur, District – Pune. ).. Petitioner ash 2 wp-2049.93n4564.04.sxw Vs 1. Yashwant Sahakari Griha Rachana ) Sanstha Maryadit, ) Ghodnadi, Taluka – Shirur, ) District – Pune. ) 2. Smt. Tara Ambadas Saraf, ) Adult, residing at – Ghodnadi, ) Taluka – Shirur, District – Pune. ) 3. The Assistant Registrar, ) Co-operative Societies, ) Pune Division, Pune. ) 4. The Joint Registrar, ) Co-operative Societies, ) Pune Division, Pune. ).. Respondents -- Shri Deepak Patil for the Petitioner. Shri V.S. Talkute for the Respondent No.2. Shri S.D. Rayrikar, AGP for Respondent Nos.3 and 4. Shri S.V. Pitre for Respondent No.1. -- CORAM : A.S. OKA, J SUBMISSIONS WERE HEARD ON : 25TH AUGUST, 2011 JUDGMENT PRONOUNCED ON : 9TH NOVEMBER, 2011 JUDGMENT : . The contesting parties in these two petitions under Article 227 of the Constitution of India are the same and, therefore, the same are taken up together for final disposal. For the sake of convenience, ash 3 wp-2049.93n4564.04.sxw the parties are referred to in this judgment with reference to their status in Writ Petition No.2049 of 1993. 2. The Petitioner is admittedly a Member of the second Respondent-Co-operative Society. It is not in dispute that by virtue of membership, the second Respondent Co-operative Society allotted Plot No.20-A to the Petitioner. 3. The Petitioner filed a Dispute under Section 91 of the Maharashtra Co-operative Societies Act, 1960 ( hereinafter referred to as “the said Act”) against the first and the second Respondents in the Co-operative Court. In the Dispute, it was contended that from the year 1969 onwards, the Petitioner has paid installments regularly to the second Respondent Society for the purposes of construction of a house of Plot No.20-A. The said plot and the house is hereinafter referred to as the suit property. It is alleged in the Dispute that till the year 1978, a part of the construction of the house was completed. It is alleged that the first Respondent used to give hand loan to various persons. The Petitioner was in need of money for the purposes of payment of installments to the second Respondent – Society. Therefore, the Petitioner had requested the first Respondent to advance a sum of Rs. 7,000/-. It is alleged that the first Respondent agreed to advance the amount but insisted on the Petitioner executing a document by way of ash 4 wp-2049.93n4564.04.sxw security. It is alleged that on 8th March, 1978, the first Respondent got executed from the Petitioner a document by way of co-lateral security for repayment of the loan. It is alleged in the Dispute that the said document was not to be acted upon and the first Respondent was not entitled to claim any right in respect of the suit property on the basis of the said document. It is alleged that after execution of the said document, the petitioner regularly paid installments to the second Respondent Society and even municipal taxes were paid by the Petitioner. 4. It is alleged in the Dispute that after three years, the first Respondent started claiming rights on the basis of the document dated 7th March, 1978. It is alleged that the Petitioner offered to repay the amount advanced against cancellation of the document but the first Respondent avoided to do so. It is alleged that on 29th October, 1981 the first Respondent made an application to the second Respondent for grant of membership of the second Respondent Society. As the second Respondent society denied membership to the first Respondent, he preferred an Appeal under Section 23(2) of the said Act to the Assistant Registrar of the Co-operative Societies. The said Appeal was allowed. Being aggrieved by the said decision, both the Petitioner and the second Respondent preferred separate Revision Applications which were allowed by the Joint Registrar of the Co-operative Societies and the ash 5 wp-2049.93n4564.04.sxw order of the Assistant Registrar was set aside. 5. The suit property is situated at Ghodnadi, Taluka-Shirur, District – Pune. It is alleged in the Dispute that in the year 1981, as the wife of the Petitioner’s brother who was at Pune was seriously ill, the Petitioner was required to stay at Pune. At that time, the first Respondent started occupying the suit property for residence. It is alleged that the first Respondent stated that he was in need of the premises and, therefore, he may be permitted to stay. According to the Petitioner, the first Respondent stated that interest payable by the Petitioner shall be adjusted against the rent in respect of the suit property. In the Dispute, it is alleged that the first Respondent and the second Respondent are acting in collusion with each other. The prayer was made directing the first and the second Respondents to deliver the possession of the suit property to the Petitioner and for grant of mesne profits. 6. The first Respondent filed a written statement contending that the Co-operative Court has no jurisdiction to entertain the Dispute as the first Respondent was not a member of the second Respondent Society. It is contended that the possession of the first Respondent was protected under Section 53-A of the Transfer of Property Act, 1882 ( hereinafter referred to as “the said Act of 1882”). It was alleged that ash 6 wp-2049.93n4564.04.sxw by the document dated 7th March, 1978, the Petitioner agreed to transfer her membership to the first Respondent. It is alleged that out of a sum of Rs.12,501/- paid by the Petitioner to the second Respondent Society, a sum of Rs.7,000/- was paid by the first Respondent to the Petitioner. It is alleged that as per the terms of the document, the first Respondent was placed in possession of the suit property and the Petitioner informed the first Respondent to pay installments payable to the Society. It is alleged that the Petitioner authorized the first Respondent to get the construction completed and agreed to transfer the suit property to the first Respondent. It is alleged that the first Respondent has paid a sum of Rs.13,470/- to the second Respondent towards the installments and has spent a sum of Rs.12,532/- on construction. It is alleged that the first Respondent has paid the entire amount of Rs.12,001/- to the Petitioner payable as per the said Agreement. 7. The second Respondent filed a Written Statement and contended that the said Respondent was not aware about the transaction with the Petitioner and the first Respondent. It is contended that the second Respondent is not bound by the said transaction. It is alleged that as the Petitioner had never expressed a desire to resign from the membership, the second Respondent declined to grant membership to the first Respondent and informed him that the first ash 7 wp-2049.93n4564.04.sxw Respondent would be kept on waiting list. It is alleged that the first Respondent was illegally occupying the suit property and in view of the pendency of the Dispute, the second Respondent has not taken any action. 8. The learned Judge of the Co-operative Court held that the first Respondent is not entitled to protection of his possession and, therefore, directed the first and the second Respondents to hand over vacant and peaceful possession of the suit property to the Petitioner. However, the prayer for mesne profits was negatived. An Appeal was preferred by the first Respondent before the Co-operative Appellate Court. The Co-operative Appellate Court interfered with the Award of the Co-operative Court and by allowing the Appeal has dismissed the Dispute. The Petitioner has challenged the judgment and order passed by the Co-operative Court by filing a Writ Petition No.2049 of 1993. 9. The first Respondent has filed the Writ Petition No.4564 of 2004 for challenging the order of the Revisional Authority by which the order of the Assistant Registrar granting membership to the first Respondent has been set aside. 10. The learned counsel appearing for the Petitioner has filed an additional compilation containing the photocopies of the relevant ash 8 wp-2049.93n4564.04.sxw documents, pleadings and the notes of evidence. He submitted that the document dated 7th March, 1978 is not an Agreement but is merely a receipt. He pointed out that under the said document, a sum of Rs. 7,001/- was allegedly paid by the first Respondent to the Petitioner and there is no evidence regarding payment of the said amount. He submitted that in any event out of the agreed amount of Rs.12,501/-, only a sum of Rs.7,001/- was allegedly paid by the first Respondent. The learned counsel pointed out that though the case made out by the first Respondent was that he had paid the balance amount of Rs.5,500/- to the Petitioner and he was in possession of the temporary receipt for the said amount, the said receipt was not produced and there is no document produced on record to show the payment of the said amount. He submitted that even assuming that the document is of an agreement for sale, as the first Respondent did not perform his part of the contract, he is disentitled to protection under Section 53-A of the said Act of 1882. He submitted that the first Respondent has not proved that he had complied with the terms and conditions of the alleged Agreement and there is no suit filed by him for a specific performance of the alleged Agreement. He stated that the Petitioner deposed before the Court that she had offered to return the amount of Rs.7,001/- to the first Respondent and the same was not accepted. He pointed out that there is no cross-examination of the Petitioner made on this aspect. He submitted that the document records that the first Respondent was ash 9 wp-2049.93n4564.04.sxw placed in possession only for the purposes of completion of the work of construction. He submitted that the Co-operative Appellate Court has completely brushed aside the aspect that the first Respondent was seeking to protect his possession only under Section 53-A of the said Act of 1882 and the said Court held that the said aspect is not relevant. He submitted that as the Petitioner had never tendered his resignation, the Divisional Joint Registrar has rightly denied the membership to the first Respondent. The learned counsel appearing for the first Respondent submitted that the first Respondent got the work of construction completed at his own costs and has paid all the installments of the loan to the second Respondent Society. He submitted that the case made out by the Petitioner regarding possession in the pleadings and in the evidence is totally inconsistent. He pointed out that in the evidence for the first time the Petitioner came out with a case that the second Respondent had not handed over the possession of the house on the plot to her. He submitted that no such averment has been made in the Dispute. He submitted that the Petitioner had never terminated the Agreement dated 7th March, 1978. He submitted that the specific case made out by the first Respondent is that the entire amount payable has been paid to the Petitioner and the second Respondent Society and nothing further is required to be done by the first Respondent under the said Agreement. His submission is that the first Respondent is entitled to protection of his possession under Section 53-A of the said Act of ash 10 wp-2049.93n4564.04.sxw 1882. He submitted that as the document reflects the Agreement to transfer the membership, the Assistant Registrar rightly granted membership to the Petitioner. He submitted that the Revisional Authority has exceeded its jurisdiction by interfering with the order of grant of membership. 11. I have carefully considered the submissions. Perusal of the document dated 7th March, 1978 shows that it is styled as a receipt. About the execution of the document, there is no dispute. The contention of the Petitioner is that it was executed by way of collateral security for repayment of the amount advanced by the first Respondent to the Petitioner. The first paragraph of the document recites that the Petitioner has deposited a sum of Rs.12,501/- with the second Respondent Society. It is alleged therein that the Plot No.20-A has been allotted to the Petitioner and the house thereon is owned by the Petitioner as a member of the second Respondent. The Agreement provided for transfer of the suit property and the membership to the first Respondent. The Agreement records that the first Respondent agreed to pay the sum of Rs.12,501/- to the Petitioner and to pay installments of loan to the second Respondent together with the taxes. It records that the house has been handed over to the first Respondent for the purposes of getting the work of construction completed with an authority to carry out the remaining work. The document records that ash 11 wp-2049.93n4564.04.sxw after the entire loan is repaid by the first Respondent, the Petitioner shall transfer ownership to the first Respondent. Clause (4) of the document recites that out of the sum of Rs.12,501/-, the first Respondent has paid a sum of Rs.7,001/- to the Petitioner. It is stated that a sum of Rs.6,000/- is required for completing the construction which should be borne and paid by the first Respondent. The document purports to transfer the membership to the first Respondent. As far as the payment of the amount in terms of the said document is concerned, the case made out by the Petitioner is that the document was executed by way of collateral security for repayment of the sum of Rs.7,000/- advanced by the first Respondent to the Petitioner. The Petitioner stated that she went to the first Respondent for refunding the loan amount but the same was not accepted. Her case in the deposition is that as her brother’s wife was ill in the year 1980-81, she was required to stay at Pune. At that time, the work of construction was going on and some work including the work of painting was remaining. She stated that by taking the advantage of the situation, the first Respondent entered the suit property. In the deposition, the Petitioner has come out with the case that the second Respondent had never placed the Petitioner in possession. In the cross-examination, she admitted that the construction was completed in the year 1981. She stated that the construction was to be carried out by the second Respondent Society. She admitted that the said fact was not stated in ash 12 wp-2049.93n4564.04.sxw the dispute. She reiterated that the possession of the Plot No.20-A was not handed over to her by the second Respondent Society. She admitted that she had never requested the second Respondent to hand over possession of the suit property. She denied the correctness of the suggestion that the first Respondent paid all the installments of loan. As far as the possession is concerned, the witness Vasant Gangadhar Khare, who was the Secretary of the second Respondent Society from 1968 to 1985 stated that every member received the loan of Rs. 12,500/- from the Maharashtra Finance Co-operative Housing Society. He stated that the possession of the plots was with the respective members. 12. As far as the evidence of the first Respondent is concerned, he stated that he paid a sum of Rs.13,700/- to the second Respondent. He stated that he paid a sum of Rs.5,500/- to the Petitioner in cash and though the Petitioner executed a temporary receipt, he has not produced the said receipt. It must be noted here that there was no document produced by the first Respondent to show that the amount of Rs.5,500/- was paid by him to the Petitioner which was the balance amount payable under the Agreement. Though the first Respondent claimed that he had paid municipal taxes in respect of the suit property and though he was possessing the receipts, he has not produced the same. The first Respondent corrected himself by stating that he is not ash 13 wp-2049.93n4564.04.sxw in possession of the receipts. He admitted that he never called upon the Petitioner to execute a document of transfer in respect of the suit property. Going by the evidence of the first Respondent himself, it is very clear that there is no evidence on record to show that he has paid the sum of Rs.5,500/- to the Petitioner. There is no evidence of all the installments of loan being paid by the first Respondent to the second Respondent Society. 13. Now, the question is whether the protection under Section 53-A of the said Act of 1882 is available to the first Respondent ? 14. Before answering the said question, it must be stated here that during the pendency of the Dispute, an issue of jurisdiction of the Co-operative Court to entertain the Dispute was framed. The issue was decided by the Co-operative Court by holding that the said Court had jurisdiction to entertain and try the Dispute. The first Respondent preferred an Appeal before the Co-operative Appellate Court which was dismissed. It appears that the matter was no carried further by the first Respondent. There is no Petition filed by the first Respondent for challenging the finding on the issue of jurisdiction of the Co-operative Court. Therefore, issue of jurisdiction of the Cooperative Court cannot be gone into. In any event, the first Respondent is claiming though the Petitioner, who is admittedly a member of the second Respondent ash 14 wp-2049.93n4564.04.sxw Society. 15. Perusal of the receipt/agreement dated 7th March, 1978 shows that the Petitioner had paid a sum of Rs.12,501/- to the second Respondent Society out of which the sum of Rs.7,001/- was paid by the first Respondent to the Petitioner. Apart from the said amount, it is recorded that the installments of loan were to be paid by the first Respondent to the second Respondent Society. It provides that after the loan was repaid, the legal ownership shall be transferred to the first Respondent. As pointed out earlier, the case made out by the first Respondent in the Written Statement is that the balance amount of Rs. 5,500/- was paid to the Petitioner and a sum of Rs.13,470/- has been paid to the second Respondent Society. 16. For availing the protection of Section 53-A of the said Act of 1882, the first Respondent will have to establish that he was put in possession of the suit property in part performance of an Agreement for sale. The other condition which is required to be proved by the first Respondent is that he was always ready and willing to perform his part of the suit Agreement. Assuming that the writing dated 7th March, 1978 can be construed as an Agreement for sale, the Clause (3) thereof records that the house was handed over to the first Respondent for the purposes of getting the construction completed. Moreover, apart from ash 15 wp-2049.93n4564.04.sxw repaying the loan, the first Respondent was liable to pay a sum of Rs. 5,500/- to the Petitioner. It is already pointed out that the first Respondent in his cross-examination stated that he paid a sum of Rs. 5,500/- in cash to the Petitioner and the Petitioner executed a rough receipt on a piece of paper. However, the first Respondent admitted that though he was in possession of the said receipt, he has not produced the same. After having stated that there was a receipt issued by the Petitioner which was in the custody of the first Respondent, the same ought to have been produced before the Court by the first Respondent. The specific case of the Petitioner is that the balance amount of Rs.5,500/- was not paid by the first Respondent and in fact the Petitioner had offered to repay the sum of Rs.7,000/-. There is no other evidence adduced by the first Respondent to prove the payment of the sum of Rs.5,500/-. The Co-operative Court held that as the sum of Rs.5,500/- was not paid by the first Respondent, the receipt-cum- agreement was not acted upon. Therefore, the Co-operative Court held that the first Respondent had no protection under Section 53-A of the said Act of 1882 on the ground of failure of the first Respondent to prove the payment of Rs.5,500/- to the Petitioner. In absence of any evidence of payment of a sum of Rs.5,500/-, it will have to be held that the first Respondent was not ready and willing to perform his part of the Agreement. Hence, the first Respondent has not entitled to protection of Section 53-A of the Act of 1882.. ash 16 wp-2049.93n4564.04.sxw 17. There is one more aspect of the matter. In the cross- examination, the first Respondent admitted that he was not aware whether the entire loan repayable in respect of the house was paid or not. He admitted that between himself and the Petitioner, the value of the house was not determined. Though it is claimed that the document dated 7th March, 1978 is an Agreement for sale, the first Respondent admitted that the value of the house was not determined. Perusal of the document dated 7th March, 1978 shows that the first Respondent was to pay the amount which was already paid by the Petitioner to the second Respondent Society and that the first Respondent was under an obligation to repay the loan and get the construction completed. 18. The first Respondent is claiming through the Petitioner who was admitted the member of the second Respondent Society. The first Respondent claimed to be in possession on the basis of the alleged Agreement for sale. The first Respondent has not filed any proceeding for enforcing the alleged agreement for sale. Therefore, the first Respondent could have protected his possession only on the basis of Section 53-A of the said Act of 1882. However, the Co-operative Appellate Court has observed that Section 53-A was not relevant when no declaration has been sought in respect of the document. There is also an observation made by the Co-operative Appellate Court that the ash 17 wp-2049.93n4564.04.sxw Petitioner has not proved that the document was only by way of collateral security of the amount advanced. After holding as aforesaid, the Co-operative Appellate Court observed that as no declaration was sought by the Petitioner as regards the said document, unless and until the document is declared as illegal and void, the right acquired by the first Respondent under the said document cannot be disturbed. The Co-operative Appellate Court completely ignored the fact that in Paragraph 4 of the Written Statement, the first Respondent specifically claimed protection under Section 53-A of the said Act of 1882. Though no specific issue was framed on this aspect, the Co-operative Court has noted the specific submission made by the first Respondent based on Section 53-A of the said Act of 1882 and has recorded the finding on the said submission. 19. Therefore, the Award of the Co-operative Court directing the first Respondent to hand over possession was correct. The case made out by the Petitioner in the Dispute is that the Petitioner offered to repay the sum of Rs.7,000/- to the first Respondent. However, the specific date of the offer has not been set out in the Dispute or in the examination-in-chief of the Petitioner. Before the Petitioner executes the Award of the Co-operative Court, the Petitioner will have to deposit the sum of Rs.7,001/- with interest thereon at the rate of 6% per