Case: Ramesh Himmatlal Shah Vs. Harsukh Jadhavji Joshi

2. We may briefly note the facts: The appellant is the decree-holder. He obtained a money decree against the respondent judgment-debtor and took a warrant of attachment of flat No. 9 of Paresh Co-operative Housing Society Limited at Santacruz, Bombay. This flat (described as ownership flat in common parlance) was attached on August 8, 1970 and a warrant of attachment was served on the judgment-debtor while he was in jail in Rajkot. In due course a sale proclamation was also issued in respect of the flat while the judgment-debtor was yet in jail. At this stage of the proceedings, the judgment-debtors brother, Hasmukh J. Joshi (for brevity Hasmukh) took out a chamber summons challenging the execution on the ground that the flat did not belong to the judgment-debtor but belonged to him and to the judgment-debtors wife and that the attachment should be raised. His chamber summon was made absolute but in appeal the order was set aside and the matter was remanded. The aforesaid chamber summons was, however, finally dismissed, on September 30, 1971. Hasmukh did not take any further action against the rejection of his claim to the property. After coming out of the jail, the judgment-debtor filed a suit some time in 1972 to set aside the decree. He, however, could not secure an order for injunction to prevent the execution of the decree and the suit is pending. The flat was offered for sale and was purchased in auction by one Bhupendra N. Shah for a sum of Rs. 24,000/-. The sale, however, is not yet confirmed. Subsequently a new plea was taken by the judgment-debtor. This time he filed a chamber summons on March 28, 1972, praying for the dismissal of the execution petition filed by the decree-holder and for setting aside the warrant of attachment and proclamation of sale on the ground that the flat being a flat in a cooperative housing society was not liable to attachment and sale. It was also stated that he had no saleable interest in the said property under Section 60.Civil Procedure Code, and therefore, it was not liable to attachment. The Judge, City Civil Court, Bombay, dismissed the chamber summons. The learned single Judge, Bombay High Court, however, in appeal allowed the claim and made the summons absolute by directing that the attachment and sale of the flat being illegal be set aside. The appellant preferred a Letters Patent Appeal before the Bombay High Court without success and the decision of the learned Single Judge was affirmed. Hence this appeal by special leave.

Reasoning:
It is not disputed before us and it has been so held by the Court in the claim case by the judgment-debtors brother that the respondent purchased the flat benami in the name of his brother Hasmukh and his wife Shashikala, Although, therefore, the respondent is not a registered holder of the flat, it is clear that the flat is held by his brother and his wife on behalf of the respondent. This is to be noted as Section 60, Civil Procedure Code, reaches a benamihowever, we did not hear Mr. Sanghi, as we are concerned in this appeal only with the question of attach ability and saleability which is a condition prior to the purchase of the property by Bhupendra N. Shah, Mr. Sanghi, therefore, had to retire from theis no absolute prohibition in the Act or in the Rules or in the Bye laws against transfer of interest of a member in the property belonging to the Society. The only transfer which is void under the Act is one made in contravention of sub-section (2) of Section 47 (see Section 47 (3)).We have not been able to find any other provision anywhere" to the same effect. In the scheme of the provisions a dichotomy is seen between share or interest in the capital and interest in property of the Society. While Section 29 (2) refers to transfer of a members share or his interest in the capital or property of any society, Section 31 in contrast speaks of "the share or interest of a member in the capital of a society". The Act, therefore, makes a clear distinction between the share or interest in the capital and share or interest in property of the Society. We have also noticed that the Act does recognise interest in the immovable property of the Society as well (see Sec. 47 (1) (b)). We have seen the qualifications for membership.There is no reason to suppose that if the qualifications under the Bye-laws are fulfilled an application for membership may be rejected. It is admitted that the flat is owned by the Society and the judgment-debtor has a right or interest to occupy thehave already pointed out the difference in language between Section 29 and Section 31 and also made reference to S. 47 (1) (b) in that connection. There is nothing in the language of Section 31 to indicate that the right to occupation which is the right to be sold in auction is not attachable in execution of the decree. There is nothing in Section 31 to even remotely include a prohibition against attachment or sale of the aforesaid right to occupation of the flat. Once Section 31 is out of the way, we are left with Section 29 wherein we do not find even a provision at prior consent for transfer of share or interest in such property. The only restrictions under S. 29 (2) are that the member may not transfer his interest in the property prior to one year and the transfer is made to an existing member of the Society or to a person whose application for membership has been accepted by the Society. It is true that bye-law 71D says that a member to whom a tenement is allotted shall not assign or underlet, vacate or part with the possession of the tenement or any part thereof without the previous consent in writing of the Managing Committee, but there is nothing to show that contravention of this bye-law makes the assignment void under the Act unlike in the case of a transfer being void under Section 47 (3). There is no impediment to ratification of the assignment by the Committee particularly in view of the legal position arising out of the conjoint, effect of Section 29, Rule 24 and bye-law 9. Section 29 read with R. 24 shows that there is no prohibition as such against transfer of a share to a member or even to a non member if he consents to be a member and makes an application for membership by purchasing five shares as provided under bye-law 9. Reading the aforesaid provisions there is no reason to think that there is any question of refusal of membership of the Society to a non-member if he is qualified otherwise and makes an appropriate application in which case the transfer of shares will be operative and thus the assignment of the right to occupation will hold good. Further it is significant that under Section 146 (a) of the Act, contravention of sub-sec.(2) of Section 47 is punishable under Section 147 of the Act. Contravention of any bye-law is, however, no offence.We therefore, unhesitatingly come to the conclusion that this species of property, namely the right to occupy a flat of this type, assumes significant importance and acquires under the law a stamp of transferability in furtherance of the interest of commerce. We have seen no fetter under any of the legal provisions against such a conclusion. The attachment and the sale of the property in this case in execution of the decree are valid under the law.In absence of clear and unambiguous legal provisions to the contrary, it will not be in public interest nor in the interest of commerce to impose a ban on saleability of these flats by a tortuous process of reasoning. The prohibition, if intended by the legislature, must be in express terms. We have failed to find one.Now that attachment and sale have been held to be valid, it will be for the auction-purchaser first to obtain membership of the society and the Court before confirmation of the sale will insist upon his membership of the society which it would not be unreasonable to assume, will be granted by the Society in the ordinary course unless there are cogent and relevant reasons for not doing so. The fact that at the time of auction-sale the purchaser was not a member of the Society would not in law affect the saleability or prior attachment of the property in execution of the valid decree.23. The judgement-debtor has a valid decree against him. Ordinarily he has to discharge his liability under the decree. He can pay the decretal amount straightway or suffer his property to be attached and sold in execution of the decree. As an honest debtor the liability under the decree has to be discharged. Here the Society is not objecting to the attachment and sale of the property, but the judgment-debtor is. We have seen there is no absolute prohibition against transfer of a right to occupation of the flat or even to transfer a share. The auction-purchaser is presumed to know the limitations under which he has purchased the right to occupy the flat in Court auction. If ultimately the Society turns down his application for membership (which of course cannot be done except for valid reasons) it is up to him to take such course of action as available under the law. Such a remote contingency, per se, will not make the particular right of the ,judgment-debtor in the flat non-attachable orhave held that the right to occupation of a flat is property both attachable and saleable. Specific non-inclusion of a particular species of property under Section 60 is, therefore, not of any consequence if it is saleable. With regard to a flat owners right to dispose of his rights, it is pointed out that "the flat owner may, in the words of a leading French Commentator "sell, donate, leave by will, let or hypothecate" his right. The rights are regulated by statutes in the Continent. The German Statute, for example, allows the flat owners right to dispose of his property to be made subject to the consent of other flat owners but such consent may be refused only "for a very important reason" (Article 12 (1), (2)) and the statute gives the aggrievedeasy access to the court if a violation of this provision is alleged (see ibid page 39). Thus the trend is towards recognition of these rights.