Case Note & Summary
The dispute arose from a cooperative housing society registered under the Maharashtra Cooperative Societies Act, 1960. The first respondent, Sujata Tarachand Makhija, claimed to be a deemed member of the society and sought allotment of Plot No.2, alleging that the appellant, Shivkishan, was illegally allotted the plot. The first respondent had deposited various amounts with the society from 1981 onwards, but the society did not issue receipts for many payments. She applied for membership on 18.12.1988 and paid Rs.105, but no decision was communicated within three months, leading her to claim deemed membership under Section 22(1) of the Act. Meanwhile, the society executed a sale deed in favour of the appellant on 25.10.1989, despite an interim injunction from the Cooperative Court dated 25.04.1989 restraining allotment of Plot No.2. The allotment was later confirmed by a resolution on 25.03.1990. The Cooperative Court allowed the first respondent's dispute, declaring the allotment and sale deed illegal and directing the society to allot Plot No.2 to her. The High Court upheld this decision. The Supreme Court examined whether the first respondent became a deemed member. It noted that under Section 22(1), deemed membership arises only if the applicant pays the admission fee and share value within three months of application. The first respondent failed to prove payment of admission fee and share value; the Rs.105 paid was not shown to be for those purposes. Therefore, she was not a deemed member. The Court also held that the sale deed executed in favour of the appellant was not void ab initio despite the interim injunction, as the injunction was not set aside and the sale was later confirmed. Moreover, the Cooperative Court could not direct conveyance of property to a non-member. Consequently, the Supreme Court allowed the appeals, set aside the orders of the High Court and Cooperative Court, and dismissed the first respondent's dispute.
Headnote
A) Cooperative Societies - Deemed Membership - Section 22(1) of Maharashtra Cooperative Societies Act, 1960 - For deemed membership, the applicant must pay admission fee and share value; mere application and deposit of other amounts is insufficient - The first respondent failed to prove payment of admission fee and share value, hence not a deemed member - Held that the Cooperative Court and High Court erred in treating her as a deemed member (Paras 10-12).
B) Cooperative Societies - Allotment of Plot - Validity of Sale Deed Despite Interim Injunction - The sale deed executed on 25.10.1989 in favour of the appellant was not void ab initio merely because an interim injunction existed; the injunction was not set aside and the sale was later confirmed by Resolution dated 25.03.1990 - Held that the sale deed remains valid unless set aside in appropriate proceedings (Paras 13-14).
C) Cooperative Societies - Relief of Conveyance - Section 91 of Maharashtra Cooperative Societies Act, 1960 - The Cooperative Court cannot direct the society to convey property to a person who is not a member; the first respondent was not a member and thus not entitled to allotment of Plot No.2 - Held that the relief of allotment and execution of sale deed in her favour was beyond the jurisdiction of the Cooperative Court (Paras 15-16).
Issue of Consideration
Whether the first respondent (disputant) became a deemed member of the society under Section 22(1) of the Maharashtra Cooperative Societies Act, 1960, and whether the allotment of Plot No.2 to the appellant and the subsequent sale deed were illegal.
Final Decision
The Supreme Court allowed the appeals, set aside the judgment and final order dated 21.09.2015 of the High Court and the final order dated 01.08.2016, and consequently set aside the order dated 30.09.2005 of the Cooperative Court. The dispute filed by the first respondent was dismissed.
Law Points
- Deemed membership under Section 22(1) of Maharashtra Cooperative Societies Act
- 1960 requires payment of admission fee and share value
- mere application insufficient
- Interim injunction does not invalidate subsequent sale deed if not set aside
- Cooperative Court cannot order conveyance of property in favour of non-member
Case Details
Civil Appeal Nos.7652-7653 of 2019 (Arising out of SLP(C)Nos.29516-29517 of 2016)
Sujata Tarachand Makhija and Ors.
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Nature of Litigation
Civil appeals arising from a dispute under Section 91 of the Maharashtra Cooperative Societies Act, 1960 regarding allotment of a plot in a cooperative housing society.
Remedy Sought
The first respondent (disputant) sought a declaration that the allotment of Plot No.2 to the appellant and the sale deed executed in his favour were illegal, and sought direction to the society to allot the plot to her and execute a sale deed in her favour.
Filing Reason
The first respondent claimed to be a deemed member of the society and alleged that Plot No.2 was wrongly allotted to the appellant despite her seniority and payments made.
Previous Decisions
The Cooperative Court at Nagpur allowed the dispute on 30.09.2005, declaring the allotment and sale deed illegal and directing the society to allot Plot No.2 to the first respondent. The High Court of Bombay at Nagpur dismissed the appellant's writ petition on 21.09.2015 and the review application on 01.08.2016.
Issues
Whether the first respondent became a deemed member of the society under Section 22(1) of the Maharashtra Cooperative Societies Act, 1960.
Whether the allotment of Plot No.2 to the appellant and the sale deed dated 25.10.1989 were illegal and liable to be set aside.
Whether the Cooperative Court had jurisdiction to direct the society to convey the plot to the first respondent who was not a member.
Submissions/Arguments
Appellant argued that the first respondent never became a member of the society as she did not pay the admission fee and share value; the amounts deposited were for other purposes and not towards membership. The sale deed in his favour was valid and the interim injunction did not render it void.
First respondent argued that she became a deemed member under Section 22(1) as the society did not communicate any decision within three months of her application; she had paid various amounts including Rs.105 on 18.12.1988. The allotment to the appellant was illegal and the sale deed executed despite interim injunction was void.
Ratio Decidendi
Under Section 22(1) of the Maharashtra Cooperative Societies Act, 1960, deemed membership arises only if the applicant pays the admission fee and share value within three months of application; mere application and deposit of other amounts is insufficient. The first respondent failed to prove payment of admission fee and share value, hence she was not a deemed member. Consequently, the Cooperative Court had no jurisdiction to direct allotment of the plot to her. The sale deed executed in favour of the appellant, though executed during the pendency of an interim injunction, was not void ab initio and remained valid.
Judgment Excerpts
For deemed membership under Section 22(1) of the Act, the applicant must pay the admission fee and the value of the share. The first respondent did not prove that she paid the admission fee and share value. The amount of Rs.105 paid on 18.12.1988 was not shown to be towards admission fee and share value.
The sale deed executed on 25.10.1989 in favour of the appellant was not void ab initio merely because an interim injunction existed. The injunction was not set aside and the sale was later confirmed by Resolution dated 25.03.1990.
The Cooperative Court cannot direct the society to convey property to a person who is not a member. Since the first respondent was not a member, the relief of allotment and execution of sale deed in her favour was beyond the jurisdiction of the Cooperative Court.
Procedural History
The first respondent filed Dispute No.136 of 1989 under Section 91 of the Maharashtra Cooperative Societies Act, 1960 before the Cooperative Court at Nagpur. The Cooperative Court allowed the dispute on 30.09.2005. The appellant challenged this order by filing Writ Petition No.1460 of 2006 before the High Court of Bombay at Nagpur, which was dismissed on 21.09.2015. The appellant then filed Miscellaneous Civil Application No.206 of 2016 for review, which was dismissed on 01.08.2016. Thereafter, the appellant filed Special Leave Petitions (Civil) Nos.29516-29517 of 2016 before the Supreme Court, which were converted into Civil Appeal Nos.7652-7653 of 2019.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: Section 22(1), Section 91
