Dismissed

Narang Overseas Pvt. Ltd. v. Divisional Joint Registrar Co-Operative Societies and 4 Ors.

Bombay HC10 Jan 2011WP/158/2010

Case brief

AI extract

What is this about?

The Bombay High Court dismissed a writ petition challenging the Registrar's orders admitting Sanjay Narang to a cooperative society. The court held the authorities acted within their powers under specific Sections of the Maharashtra Co-operative Societies Act to decide limited membership issues, reserving full title disputes for civil courts.

What did the court decide?

The writ petition was dismissed, upholding the validity of the Registrar's admission order as long as the society abided by pending civil proceedings.

Narang Overseas Pvt. Ltd. Vs Divisional Joint Registrar… — Cooperative Societies | Bombay HC (2011)

wp.158.10.4

kps

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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WRIT PETITION NO.158 of 2010

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Narang Overseas Pvt.Ltd.. ..Petitioners -VersusDivisional Joint Registrar, Co-operative Societies and others. ..Respondents

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Mr.Shailesh Shah a/w Mr.J.S.Solomon and Ms.Shruti Maniar i/b Solomon & Company, for the Petitioners.

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Mr.V.B.Naik a/w Mr.Aroop Dasgupta i/b J.Narula & Associates, for the Respondent No.3.

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CORAM : S.C.DHARMADHIKARI, J. DATE : 10^th January, 2011.

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P.C.

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1 Heard the learned counsel appearing for the parties.

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2 The Petitioners are challenging the order passed by the Respondent No.1 dated 30.07.2009 in Revision Application No.12/2007 (Exhibit-Y) and the order dated 21.12.2006 passed by the Respondent No. 2 in Appeal No.30/2005 (Exhibit-T).

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3 It is stated that the Petitioner is a private limited company and is a member of the Respondent No.4 Co-operative Housing Society. It is owner and holder of shares bearing Distinctive Nos.16 to 20 in the Respondent No.4 Society, therefore, it is owner of the flat No.5 on the first floor in building of the Respondent No.4. After setting out as to how the shares have been acquired it is contended on behalf of the Petitioner that the family settlement dated 12.07.1990 was executed by one Manu Narang and his brothers Rama Narang and Omi Narang and by sons of

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Rama Narang viz. Ramesh Narang and Rajesh Narang and sons of Manu Narang viz. Ashok Narang and Sanjay Narang (Respondent No.3). On the date of execution of family settlement dated 12.07.1990, the assets of the Petitioner included Flat Nos.5 and 9 in the Respondent No.4 Society. Thereafter, there was a Deed of Family Settlement dated 30.01.1992 executed between Manu Narang and his sons Ashok (Respondent No.3) and Sanjay and daughter Rachana Narang and Rama Narang and his wife Mona Narang and sons Ramesh Narang, Rajesh Narang and Rakesh Narang and Rohit Narang and Rahul Narang and daughter Ramona Narang and brother Omi Narang as also the Petitioner Company and other Companies of Narang family. It is stated that by virtue of family settlement certain rights were to be created inasmuch as Ashok resigned as director of the Petitioner and Manu and Sanjay also tendered their resignations. There were consent terms filed in Case No.10/1991, pursuant to the deed of family settlement, before the Company Law Board, New Delhi. It is alleged that disputes and differences arose about implementation of the family settlement and contrary to the terms of the family settlement, Manu tried to act as director of the Petitioner, therefore, the Petitioner and Rajesh Narang had to file Suit No.2199/1993 against Manu Narang in the City Civil Court, Mumbai. It is also alleged that the said Manu, Ashok, Sanjay and Rachana failed to implement the family settlement and are not ready and willing to perform their obligations under the family settlement. In such circumstances and when there are conflicting applications and civil suits filed, there was no question of the Respondent No.3 claiming to have become entitled to the flat No.5 in building of the Respondent No.4 Society. It is stated that there was correspondence between the Society and the Petitioner but the Advocate for the Respondent No.3 by a letter dated 26.07.2005 addressed to the

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Respondent No.4 claimed that the transfer papers were submitted for transfer of flat No.5 in favour of Manu on 19.02.1992 and the Society has failed to communicate its decision on membership application within three months, therefore, Manu deemed to have become a member of the Respondent No.4. Therefore, the Respondent No.3 called upon the Respondent No.4 to admit the Respondent No.3 as a member of the Society, that application was not accepted because of the reply dated 29.09.2005 and that is how on 17.10.2005 the appeal was filed before the Respondent No.2 claiming membership. 4 The submission of the Petitioner’s counsel is that this application could not have been granted because the family settlement deed and its implementation and execution was itself an issue between the parties. The authorities under the Maharashtra Co-operative Societies Act, 1960 could not have assumed that the Respondent No.3 has right, title and interest in the immovable property, therefore, entitled to claim membership. Therefore, they have travelled much beyond their powers and their orders are vitiated by non-application of mind and errors apparent on the face of record. Further it is submitted that the application made could not have been entertained because it was not made within a reasonable time. For 13 years after execution of the family settlement, no application was made and therefore, the orders passed on the same are ex-facia erroneous and arbitrary. For all these reasons, this Writ Petition is required to be allowed.

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5 On the other hand, it is clarified by Mr.Naik, learned counsel appearing on behalf of the Respondent No.3, that the appeal made by the Respondent No.3, copy of which is at Exhibit-R, shows that he is son of Manu. That appeal recites that the Petitioner (Narang Overseas Pvt.Ltd.) is a member of the Respondent No.4 and holding that in respect of the

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said flat, Manu was monthly contractual tenant of the Petitioner. Relying upon a family settlement and not suppressing the disputes that were initiated by Rajesh, it was urged that the society was aware that the Respondent No.3 (Sanjay Narang) is in possession and other two legal heirs of Manu namely Ashok and Rachna gave their consent vide declaration dated 11.07.2005. The Respondent No.4 Society for strange reasons is avoiding to effect transfer referring to the disputes between the parties, however, that cannot be ground to refuse membership. Mr.Naik submits that the Registrar has not gone into any of the disputes on title or claims about genuineness or otherwise of the documents, but has merely given a finding that the Respondent No.3 was seeking membership of the Society and that application was not accepted and therefore, the claim for membership was made by filing an appeal. In such circumstances nothing more be read in the order and it does not conclude any issue much less those raised by Mr.Shah. For all these reasons, Mr.Naik submits that the petition be dismissed.

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6 One of the argument canvassed is that the deed of family settlement to which Manu was a party, even if the same is conferring certain rights in favour of Manu, those rights could not have been claimed after his death. Therefore, the claim was not bonafide. 7 However, perusal of the concurrent orders would indicate that the Deputy Registrar as well as the Divisional Joint Registrar have considered only the fact that after the death of Manu his son made an application for membership and transfer of flat. However, the Respondent No.4 Society refused to grant membership and therefore, the appeal was preferred. The only contention raised was that a suit was filed for specific performance of the family settlement which is pending and therefore, the issue of transfer of flat is sub-judice. The second issue that was raised is

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that the deceased Manu was not a member or owner of the flat. However, all that the authorities under the Maharashtra Co-operative Societies Act, 1960 have referred to is the fact that an application was submitted by Manu during his lifetime but the Society failed to communicate the decision on the application for membership. After death of Manu, his son submitted an application and it is not as if the requirements specified by Section 22 are not satisfied at all. All that has been urged is that the authorities could not have accepted the claim of the Respondent No.3 because it was disputed. I do not see how the observations and findings in the impugned orders conclusively determine any issue much less those raised before me. The authorities had to decide a limited issue and that application of membership made to the Co-operative Society having been rejected, the law permits the aggrieved party to approach the Registrar by filing an appeal. That Registrar was approached with a limited request. It is not as if any pending disputes have been suppressed. All that has been urged is that the rights allegedly created in favour of Manu cannot accrue to the Respondent No.3. The orders under challenge cannot be said to be concluding the issue about ownership of the flat. 8 The argument that the Petitioners cannot be prohibited from raising any issue of title, is misconceived because there is no question of either authorities or this Court calling upon the Petitioner to file any suit. It is the Petitioner who is raising the issues with regard to the title of Manu and his successor in respect of the flat/ immovable property. Therefore, its remedy to challenge the documents and the rights of either Manu or his successor if any, is not affected merely because of initiation of the subject proceedings by the Respondent No.3. It is in that context that it is rightly held that irrespective of what has been placed on record the authorities are not prevented from exercising their powers under Sections

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22 and 23 of the Maharashtra Co-operative Societies Act, 1960 and that they have done in the instant case and for a limited purpose so as to enable the Society to deal with a person who has filed the application for membership. That by itself does not mean that any rights have been created or conferred in favour of the person claiming membership. His name being entered in the membership register is also not decisive and conclusive. The limited issue that has been urged and decided by the authorities, therefore, cannot be said to be prejudicially affecting the Petitioner’s rights and taking away any remedy in that behalf.

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9 Having found that the authorities exercised their powers within four corners of law in deciding a limited issue, there is no reason to interfere with the impugned orders and the petition is, accordingly, dismissed.

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10 Needless to state that the Society in implementing the impugned orders will have to ultimately abide by the outcome of the proceedings which have been instituted in the Civil Court.

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(S.C. Dharmadhikari, J)

Narang Overseas Pvt. Ltd. v. Divisional Joint Registrar Co-Operative Societies and 4 Ors.

Case brief

What is this about?

What did the court decide?

Narang Overseas Pvt. Ltd. v. Divisional Joint Registrar Co-Operative Societies and 4 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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