1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE Writ Petition No.926 of 2008 Juhu Urvashi CHS Ltd. Petitioner Vs. Deputy Registrar, K/P-Wadrd and ors. Respondents Mr.J.S.Kini with Mr.Deepak Thakre for petitioner. Ms.V.S.Mhaispurkar, AGP for resp.nos.1 and 2. Mr.N.N.Bhadrashete for resp.nos.3 and 4. CORAM: B.H.MARLAPALLE, J. April 16, 2008 P.C. 1. Heard Mr.Kini with Mr.Thakre, the learned counsel for the petitioner - Society and Mr.Bhadrashete, the learned counsel for the respondent nos.3 and 4. The learned AGP appears for the respondent nos.1 and 2 who are formal parties. The respondent no.5 is also a formal party and is the predecessor of the respondent nos.3 and 4. 2. The respondent nos.3 and 4 have purchased flat no.2 on the ground floor of the petitioner - Society from the respondent no.5 as per the registered sale 2 deed dated 25th January 2006. Consequently they made an application to the petitioner-society for being admitted as members in place of respondent no.5. The Special General Body Meeting held on 21st July 2006 by a majority resolution rejected the membership application of respondent nos.3 and 4. In the mean while the petitioner - society approached the Co-operative Court at Mumbai in Dispute No.325 of 2006 for recovery from respondent no.5 and consequently from respondent nos.3 and 4. In the said dispute an interim relief application was filed which was partly allowed on 21/5/2007 directing the respondent no.5 to pay 50 per cent of Rs.1,97,780/- to the society within three months and the respondent nos.3 to 5 were restrained from changing the user of the suit flat during the pendency of the dispute. The said order has been challenged by the respondent nos.3 and 4 in an appeal before the Co-operative Appellate Court and the appeal is pending. 3. The resolution passed by the Society on 21st July 2006 thereby refusing membership to the respondent nos.3 and 4 came to be challenged by them in Appeal No.17 of 2006 before the Deputy Registrar of Co-operative Societies (K-West) and the said 3 appeal was allowed as per the judgment and order dated 13/2/2007. The Society challenged the said judgment further in Revision Application No.422 of 2007 before the Divisional Joint Registrar, Co-operative Societies, Mumbai Division, Mumbai and again the Revision came to be dismissed on 17/12/2007. Hence this petition. 3A. The Deputy Registrar referred to the resolution passed by the petitioner - society on 21/7/2006 and noted that the membership of the petitioners was refused on the following three grounds: (a) Despite giving opportunities, the appellants did not correct the sale deed and only Advocate’s notice has been given. (b) The requirements for transfer have not been completed and the dues of the society have not been paid by the members. (c) The necessary flat purchase agreement for the purpose of transfer has not been submitted to the society. 4 4. So far as the recovery of dues is concerned, it was noted that the same was a subject matter of appeal pending before the Co-operative Appellate Court and, therefore, it could not be a valid reason to deny the membership. About handing over of copy of the sale deed, the Deputy Registrar noted that on 11/3/2006 the present respondent no.5 handed over a copy of the registered sale deed to the society and, therefore, the third ground was unsustainable. On the allegations of unauthorised user change, the Deputy Registrar noted that there was no prima facie material to accept the said charge and in any case the resolution dated 21/7/2006 did not speak anything about such a reason. The Divisional Joint Registrar after hearing the parties concerned and on perusal of the record, agreed with the reasoning set out by the Deputy Registrar and, therefore, confirmed the order under challenge in Revision Application No.422 of 2007. 5. Mr.Kini, the learned counsel for the petitioner - Society submitted that when a vast majority of its members has decided against the respondent nos.3 and 4, they cannot be imposed by the 5 authorities below under Section 23 of the Maharashtra Co-operative Societies Act, 1960 and this foisting of membership is neither legal nor justified. He further submitted that respondent nos.3 and 4 do not have any respect to the Bye-laws of the petitioner - society and they have been acting in breach of the same from the day they occupied flat no.2. As per Mr.Kini, the Society believes that the respondent nos.3 and 4 are unwanted and the General Body has clearly expressed its opinion against them. He also submitted that the payment dues ought to have been paid by the respondent nos.3 to 5 by honouring the order passed by the Co-operative Court, more so when the Appellate Court has not stayed the said order. He also submitted that the sale deed signed between the respondent nos.3 and 4 on the one hand and the respondent no.5 on the other, does not set out the correct area of flat no.2 and, therefore, it was required to be corrected and submitted to the petitioner - society, which was not done despite the reminders and sufficient time having been granted. 6. So far as the deposit of the amount as directed by the Co-operative Court is concerned, Mr.Bhadrashete, the learned counsel for the 6 respondent nos.3 and 4 has fairly conceded that the said amount shall be deposited with the Co-operative Appellate Court within a period of two weeks from today and the said deposit shall be subject to the final outcome in the pending appeal. If there is any correction required in the area of the subject flat as set out in the registered sale deed, it shall be the responsibility of the petitioners to take appropriate steps within a fixed period. The other reasons set out by the petitioner - society in denying membership to the respondent nos.3 and 4 have not been supported by any material on record and just because a vast majority of the members have voted against the respondent nos.3 and 4, that by itself cannot be a reason to deny them membership. In the case of New Sion Co-operative Housing Society Ltd. Vs. State of Maharashtra & ors. [2007 (1) Mh.L.J. [2007 (1) Mh.L.J. [2007 (1) Mh.L.J. 416] 416] 416] this Court had referred to the earlier decisions on the interpretations of Section 23(1) of the Maharashtra Co-operative Societies Act and more particularly the following observations made in the case of President, Nagarpalika Prathamik Shala Shikshak Servants Co-operative Credit Society Ltd. Vs. Ramchandra Damodar Umalkar[1967 Mh.L.J. 473] [1967 Mh.L.J. 473] [1967 Mh.L.J. 473], 7 "It is common knowledge that healthy growth of Co-operative Societies is primarily dependent on mutual trust among others. If majority of members do not have a trust in the member, the best thing for everybody is that that person stays out. We therefore fail to see how the Assistant Registrar could take upon himself to foist a person whose membership was rejected by the overwhelming majority of the members, on the specious ground that the principle of open membership ought to be supported. It is true while on the one hand an institution like a Co-operative Society should not be allowed to be exploited by influential persons to form a caucus, it is equally necessary that elements considered undesirable by overwhelming majority of persons should not be foisted on unwilling members to destroy the homogeneity of the organisation by which the very basis of co-operative effort will be put in jeopardy." However, subsequently in the case of Zoroastrian Co-operative Credit Society Ltd. vs. District Registrar, Co-operative Societies (Urban) [2005 (3) [2005 (3) [2005 (3) 8 Bom.C.R. Bom.C.R. Bom.C.R. 515] 515] 515], the Supreme Court made the following observations: "Membership in a Co-operative Society only brings about a contractual relationship among the members forming it subject of course to the Act and the Rules. One becomes a member in a Co-operative Society either at the time of its formation or acquires membership in it on possessing the requisite qualification under the bye-laws of the society and on being accepted as a member. It is not as if one has a fundamental right to become a member of a Co-operative Society. But certainly, if the application of one for membership who is otherwise qualified to be a member under the Act, Rules and the bye-laws of the society, is rejected unreasonably or for frivolous reasons, the person may be entitled to enforce his claim to become a member in an appropriate forum or Court of law." 7. As noted earlier, none of the three reasons set out in the order of the Deputy Registrar speak about the ineligibility of the respondent nos.3 and 4 9 or otherwise they are disqualified to be a member under the Bye-laws of the society. When no such case was made out even in the resolution passed by the society, the action of the society in denying membership has been rightly found to be unsustainable by the Deputy Registrar and confirmed by the Divisional Registrar. Even before this Court, it was not the case of the petitioner-society that the membership is being denied to the respondent nos.3 and 4 because they are otherwise not qualified as per the Bye-laws of the society for being a member. In these obtaining circumstances, the challenge to the impugned orders is devoid of merits and hence the petition must fail at the threshold. 8. Petition is rejected summarily. However, it is directed that the respondent nos.3 and 4 shall deposit the amount as directed by the Co-operative Court with the Co-operative Appellate Court within a period of two weeks from today and the said deposit shall be subject to the final outcome in the pending appeal. In addition the corrections, if any, in the registered sale deed will be incorporated by the respondent nos.3 and 4 within a period of two months from today and the said respondents shall submit an 10 undertaking to the society that they will not change the user of the flat without following the Bye-laws. Undertaking to be furnished within two weeks from today. (B.H.MARL