Bombay High Court
Dinanath Co-Op. Housing Society ... vs The State Of Maharashtra And 5 Ors on 8 December, 2016
Bench: S.C. Dharmadhikari
Judgment-WPL.1939.2016.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 1939 OF 2016
Dinanath Co-operative Housing }
Society Ltd. }
a Co-operative Housing Society }
registered under M. C. S. Act, }
1960 having it's registered office }
at "Dinanath Building", Sahyog }
Nagar, Four Bungalows, }
Andheri (W), Mumbai - 400 053 } Petitioner
versus
1. The State of Maharashtra
ig }
through Secretary, Department }
of Land Revenue, Mantralaya, }
Mumbai - 400 032 }
}
2. The Hon'ble Minister, }
Social Justice and Special }
Assistance Division, the State of }
Maharashtra, Mantralaya, }
Mumbai - 400 032 }
}
3. The Assistant Commissioner, }
Social Welfare Department, }
th
having his office at 4 floor, }
new administrative office, }
Ramkrishna Chemburkar Marg, }
Mumbai - 400 007 }
}
4. M/s. Sagar Developers, }
a registered partnership firm }
having it's address at L-1-A, }
Balkrishna Co-operative Housing }
Society Ltd., J. P. Road, }
Andheri (W), Mumbai - 400 053 }
}
5. Mr. Pravin Samadhan Bhotkar }
residing at Flat No. B/1501, }
Regency Crest, Sector No. 19, }
Kharghar, Navi Mumbai }
Page 1 of 71
J.V.Salunke,PA
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6. Deputy Chief Engineer, }
Mumbai Building Proposal, }
Municipal Corporation, }
R. K. Patkar Marg, Bandra (W), }
Mumbai - 400 050 }
Mr. N. N. Bhadrashete for the petitioner.
Mr. G. S. Godbole with Mr. Mr. Milind
More - Additional Government Pleader
for respondent nos. 1 to 3.
Mr.Milind Deshmukh for respondent no.4.
ig CORAM :- S. C. DHARMADHIKARI &
B. P. COLABAWALLA, JJ.
Reserved on 30 th September, 2016
Pronounced on 8 th December, 2016
Judgment :-
1. Rule. Respondents waive service. By consent of both sides,
Rule is made returnable forthwith.
2. By this writ petition under Article 226 of the Constitution of
India, the petitioner seeks a writ of Certiorari or any other order
or direction in the nature thereof calling for the records and
proceedings in respect of orders dated 8 th June, 2016 and 8th
July, 2016 passed by respondent nos. 2 and 6 and after
ascertaining their legality, propriety and correctness, the same
be quashed and set aside.
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3. The petitioner is a co-operative housing society registered
under the Maharashtra Co-operative Societies Act, 1960. The
first respondent is the State of Maharashtra and the second
respondent is the Minister in-charge of the Department of Social
Justice and Special Assistance, Government of Maharashtra. The
third respondent is the Assistant Commissioner in the Social
Welfare Department, whereas, respondent no. 4 is a registered
partnership firm of builders and developers. Respondent no. 5 is
not the member of the petitioner society and who filed a
complaint with respondent nos. 2 and 3, based on which, the
order dated 8th June, 2016 and impugned in this writ petition is
passed. Respondent no. 6 is an official of the Municipal
Corporation of Greater Mumbai and in-charge of scrutiny of the
building proposals. He has passed the subsequent order dated 8 th
July, 2016.
4. The relevant facts for appreciating the rival contentions are
briefly set out hereinbelow.
5. Respondent no. 1, with a view to provide houses to the
persons from backward class, formulated a scheme commonly
known as PWR-219. The Collector, Mumbai Suburban Division,
under the said scheme known as PWR-219, allotted a plot of land
to the petitioner society being Plot No. 14 forming part of Survey
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No. 111-D, CTS No. 825/1/4 situate at village Amboli, Andheri
(W), Mumbai - 400 053, to enable the petitioner society to
construct building/s thereon comprising of flats and to allot the
same to its members. On receiving said plot, Maharashtra
Housing and Area Development Authority (MHADA) constructed
three buildings, in all comprising of 60 flats and gave possession
thereof in October, 1977. The petitioner, after taking a loan from
the Maharashtra State Housing Finance Corporation Ltd., a co-
operative society registered under the provisions of Maharashtra
Co-operative Societies Act, 1960, carrying on business of lending
amounts to housing societies throughout Maharashtra State, paid
the construction cost. Each building comprising ground plus
upper four floors consisting of 20 flats without lift service,
totalling 60 flats were constructed and the said 60 flats were
allotted to its members. As a result, there are 60 residential flats
and equal number of members, namely, 60 members of the
petitioner society.
6. With the passage of time and more particularly since the
said three buildings having been constructed in 1969-1972 or so
more than 30 years old, their condition had deteriorated. They
were not in sound and good condition. There were cracks in the
RCC members, steel reinforcement was exposed at various places
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and had been corroded at various places, cracks developed in the
walls, plaster had fallen out at various places with the result in
rainy season in allmost all the flats there was leakage. The
Municipal Corporation of Greater Mumbai had repeatedly
inspected the said buildings and at each time, issued notices
under section 354 of the Mumbai Municipal Corporation Act,
1888 thereby informing the petitioner society that the buildings
were in ruinous condition, likely to fall and dangerous to any
person occupying, residing in or passing by the same, as more
particularly set out in the said notice. Thus, since the year 2007,
the Municipal Corporation of Greater Mumbai had issued notices
under section 354 of the said Act continuously pointing out the
ruinous condition of the said property.
7. Ultimately, the Ward Officer, K/West Ward of the Municipal
Corporation issued a caution notice dated 19th June, 2010 to the
petitioner society informing them that the said buildings were in
dilapidated condition and called upon for urgent
structural/drainage repairs and immediate remedial measures
were directed to be taken, failing which, in case of any mishap,
the Municipal Corporation would not be responsible for any
damage and loss of life.
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8. The Municipal Corporation, through its Senior Legal
Assistant, filed a complaint in the Court of the Metropolitan
Magistrate, 39th Court at Vile Parle, Mumbai being CC No.
7305/SS/2010 on 30th September, 2010 against the chairman
and the secretary of the petitioner society complaining that they
were liable for action under section 354 of the Mumbai Municipal
Corporation Act, 1888 read with penal section 475-A(1)(a) of the
said Act. Pursuant to the said complaint, summons dated 22 nd
November, 2010 were issued to the chairman and secretary of
the petitioner society. The petitioner states that in view of
demolition of the said three old buildings, the said case is closed
on 8th August, 2012.
9. It is stated that having taken into account the deteriorating
condition of the said property, leakages in various flats, cracks
developed in RCC members etc., the petitioner society initiated
the process of redevelopment of the said plot.
10. The petitioner society had published a notice dated 22 nd
December, 2002 informing members to bring quotations for
redevelopment of the suit property from builders/developers
known to them.
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11. Pursuant to the said notice, respondent no. 4 submitted its
quotation dated 27th March, 2003 on the terms and conditions as
mentioned therein. Respondent no 4's said offer was discussed in
the Special General Body Meeting dated 15 th June, 2003
convened by the petitioner society and being satisfied with the
respondent no. 4's offer, the Special General Body of the
petitioner society passed a resolution appointing respondent no. 4
as the developer for the redevelopment of the said plot by
demolishing the then existing three buildings comprising of 60
flats.
12. Respondent no. 4 had agreed to provide each one of the said
60 members with a 575 square feet (carpet area inclusive of
balcony) flat comprising of two bed rooms, kitchen and a hall with
all modern amenities, in addition Rs.4,00,000/- towards the
corpus fund and a further amount for paying registration and
stamp duty for an area exceeding 418 square feet, if
applicable/payable.
13. In the General Body Meeting held on 29th January, 2006, in
view of increase in Transferable Development Right (TDR) rates
and more particularly taking into account the period of three
years that had since passed (the offer of respondent no. 4 was of
27th January, 2003) the petitioner society allowed an increase in
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the area for commercial use in the redeveloped buildings from
6000 square feet to 9000 square feet and resolved to execute a
written development agreement.
14. In all 55 out of 60 members of the petitioner society had
granted their irrevocable consent for the redevelopment project
on the said plot. This consent was in the form of letters addressed
by each member to respondent no. 4.
15. After considering the suggestions received from some of its
members, the petitioner society executed a development
agreement dated 22nd September, 2007 for the redevelopment
project of the said property in favour of respondent no. 4 on the
terms and conditions more particularly set out therein.
16. On or about 30th January, 2008, 14 out of 60 members of
the petitioner society filed a complaint before the Consumer
Disputes Redressal Forum, Suburban District Bandra, Mumbai
against the petitioner, respondent no. 4 and its partners,
respondent no. 3 etc. challenging said development agreement
and for various other reliefs, more particularly sought therein.
The said complainants also filed an application for interim reliefs
therein. Initially, the District Consumer Forum granted an ex-
parte ad-interim status quo on 27th June, 2008. However, after
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hearing all parties at length, the District Consumer Forum
vacated the said ad-interim status quo order that was passed
earlier by giving a detailed reasoned order dated 20 th February,
2009. Respondent no. 3, being party to the said proceedings, did
not object to the redevelopment on the ground, inter alia, that
their no objection had not been taken or for any other reason.
The petitioner states that subsequently by an order dated 7th
June, 2011, the said Complaint No. 52 of 2008 has been
dismissed on merits.
17. The petitioner society, in Special General Body Meeting, on
15th March, 2009, resolved to execute supplementary agreement.
Accordingly, the parties executed an agreement dated 22nd June,
2009 to amend the development agreement dated 22 nd
September, 2007. The said agreement is duly stamped and
registered with Sub-Registrar of Assurances at Mumbai. The said
development agreement dated 22nd September, 2007 was
amended by the agreement dated 22nd June, 2009.
18. The petitioner states that by its letter dated 11th April,
2008, respondent no. 4, believing in good faith that permission of
respondent no. 3 is needed for redevelopment of the said plot, had
applied to the Administration Officer, Social Welfare Department,
Government of Maharashtra, namely, respondent no. 3 to grant
its no objection certificate (NOC) for:-
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(a) Redevelopment of the plot of the petitioner society by
using plot FSI;
(b) By using benefit of FSI by way of Transfer of
Development Rights (TDR) available in view of Regulation
No. 34 of D. C. Regulations of MCGM.
19.
In response thereto, by its reply dated 7 th June, 2008,
respondent no. 3 informed the petitioner that for redevelopment
of society's plot, covered under Scheme PWR-219, no provisions
are made in the said scheme of grant of NOC by the said
Department.
20. In these circumstances, respondent no. 4 believed in good
faith that the permission of the Social Welfare Department was
not necessary for redevelopment by using plot FSI and using
additional FSI by way of TDR.
21. The petitioner states that in the meantime, respondent no. 1
had issued circular dated 26th June, 2009, in the facts and
circumstances mentioned therein, providing guidelines in respect
of redevelopment of a plot of the society covered under PWR-219
Scheme. Under the said circular, it is provided, inter alia, as
under:-
(a) In the place of a member from Backward Community,
if society is accepting new member, such new member
should also be from the same community;
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(b) Before taking up work of redevelopment,
Government's permission is mandatory;
(c) Certain amount, as mentioned therein be deposited
and the Government shall have sole power to increase
members in such society.
22. In the circumstances, respondent no. 4, in compliance of its
various obligations contained in the development agreement, for
the purpose of redevelopment of said plot, took various
irreversible steps and obtained numerous permissions, approvals,
sanctions, orders etc., as more particularly set out hereinbelow.
23. Respondent no. 4 and the petitioner followed up an
application made to the Municipal Corporation of Greater Mumbai
for getting the building plans sanctioned. The Municipal
Corporation of Greater Mumbai issued the Intimation of
Disapproval (IOD) dated 9th June, 2009. Subsequently it is
amended, extended sanctioning the building plans for the
redevelopment of said plot.
24. Respondent no. 4 has purchased the Development Rights
Certificate (DRC). By giving the details of the petitioner society's
plot, where the said DRC was proposed to be used (such as
location and Building File No. CE/9359/WE/AK C.T.S. No.
825/1/4, Plot No. 14, village Ambivali, Andheri (W), Mumbai 400
053 and for purchasing the said DRC, respondent no. 4, through
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the petitioner, paid a huge sum of Rs.5,27,26,378/- and also paid
the stamp duty of Rs.15,81,791/- thereon.
25. The petitioner states that since the said Plot No. 14, forming
part of Survey No. 111-D, CTS No. 825-1/4 situate at village
Ambivali, Andheri (W), Mumbai 400 053 was allotted to the
petitioner society by the Collector, Bombay Suburban District,
permission of the Collector was required for redevelopment and
the said permission was obtained. For obtaining permission from
the Collector, the petitioner society, by its request letters dated
12th June, 2008 and 21 st March, 2009 had requested the Collector
to grant permission as prayed therein.
26. The Collector, Bombay Suburban District, by its report
dated 18th June, 2009, forwarded his recommendations to the
State Government and the State Government, by its order dated
30th April, 2010 permitted the demolition of the existing buildings
and the reconstruction of a new building, subject to various terms
and conditions mentioned therein, including 10% of the market
value of said property to be deposited with the Government,
MCGM's permission be obtained for use of TDR, for using 15% of
area for commercial purposes, the additional lease rent and other
fees to be paid as mentioned in Government Resolution dated 7 th
September, 2007.
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27. By letter dated 5th May, 2010, the Collector informed the
petitioner society to deposit an aggregate sum of Rs.1,27,38,000/-
comprising Rs.1,24,56,000/- towards additional lease rent,
Rs.31,14,000/- towards use of TDR and Rs.18,68,000/- towards
use of 15% of constructed area for commercial use.
28. By letter dated 6th May, 2010, the State Government
informed the Collector of the various terms and conditions in
furtherance to its order dated 30th April, 2010. The petitioner
states that by the said order, respondent no. 1 has provided that
in case of additional members, in view of use of TDR and
additional FSI, 20% of such additional members should be the
from Backward Class and remaining 80% members from Open
Class.
29. In response to demand dated 5th May, 2010 issued by the
Collector, Bombay Suburban District, under its covering letter
dated 19th May, 2010, respondent no. 4, through the petitioner,
deposited the said sum of Rs.1,74,38,000/- by Demand Draft
dated 20th May, 2010 drawn by Punjab National Bank with the
Collector. The petitioner states that in furtherance of the
permission dated 5th May, 2010 granted by the Collector, the
society, through its Secretary, has executed guarantee bond and
submitted to the office of the Collector.
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30. The petitioner states that, on paying to the Collector, a sum
of Rs.1,74,38,000/-, by Pay Order No. 059475 dated 20 th May,
2010 issued by Punjab National Bank, Borivali (W) Branch,
Mumbai (in fact it is payment made by respondent no. 4 through
the society), the Collector issued order dated 21st May, 2010
granting permission for redevelopment of the society's plot, to use
100% permissible TDR on the said plot and to use 15%
constructed area for commercial area.
31.
Accordingly, respondent no. 4 obtained all the requisite
permissions required for the redevelopment of the said plot and
called upon the petitioner society to get its 60 flats vacated from
its members and handover the vacant and peaceful possession of
the said three buildings to enable respondent no. 4 to demolish
the said buildings and complete the redevelopment in accordance
with sanctioned plans. In response to respondent no. 4's said
request, 42 out of 60 members of the petitioner society vacated
and handed over quiet vacant and peaceful possession of their
respective flats to the petitioner society and in exchange thereof,
respondent no. 4 has paid each of the said 42 members the
requisite monthly rent, shifting charges, brokerage and corpus
fund. However, 18 out of 60 members refused to co-operate
resulting in disputes and differences.
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32. As provided under the said development agreement, each
one of the said 42 members have been paid a monthly rent
Rs.16,000/- for first 2 years and 17,000/- then onwards towards
rent amount, as they are occupying alternate accommodation on
rental basis.
33. As mentioned hereinabove, respondent no. 4 has paid huge
amounts to purchase TDR for the purpose of redevelopment of the
suit property, paid a sum of Rs.1,74,38,000/- to the learned
Collector and Municipal Corporation of Greater Mumbai for
getting permissions.
34. The petitioner states that the building plans for the
redevelopment project of the said property was sanctioned, all
the requisite permissions were obtained and since 9th June, 2009,
respondent no. 4 was following up with the petitioner society to
get the possession of remaining 18 flats. However, said 18
members failed and neglected to handover possession of their
flats to the petitioner despite being bound and liable to do so
under the development agreement. In the circumstances, the
petitioner society filed Dispute No. 279 of 2011 in the Co-
operative Court, Mumbai praying for possession of the said 18
flats from the said 18 non-co-operative members. The said 18
non-co-operative members filed a separate dispute being Dispute
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No. 231 of 2010 challenging redevelopment. Both disputes were
heard on merits. After recording evidence and by judgment and
order dated 9th May, 2012, the dispute filed by the society was
decreed and dispute filed by the said 18 members was dismissed.
The said 18 members, thereafter, filed appeals. By judgment and
order dated 9th November, 2012, said appeals were dismissed.
35. Respondent no. 4 had filed Suit No. 1020 of 2011 in this
court praying, inter alia, for specific performance of said
development agreement and moved Notice of Motion No. 1445 of
2011 praying for interim relief. In the said suit, all parties
thereto, including the said 18 members, filed consent terms duly
signed and accordingly, this court passed decree dated 9 th May,
2013 in terms of the said consent terms. In these circumstances,
remaining 18 members, in view of the consent terms and order
dated 9th May, 2013, vacated and handed over their respective
flats.
36. In these circumstances, respondent no. 4 demolished the
said three old structures and constructed two multi floor towers,
namely, Wing 'A' comprising in all 50 flats and Wing 'B'
comprising 60 flats to be given to the existing members of
petitioner society. Respondent no. 4 is entitled to deal with,
dispose of the said 50 flats. The petitioner states that accordingly
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50 flats in Wing 'A' are from saleable component and accordingly,
respondent no. 4 has a right to deal with, dispose of, alienate the
said flats and recover its cost that respondent no. 4 has incurred
from time to time and towards its profit. The petitioner states
that out of 50 flats generated from the use of TDR and in the
process of redevelopment (over and above society's earlier 60
flats) as per conditions imposed by the Government and Collector,
respondent no. 4 has to sell 20% of it, namely, 10 flats to the
members from Backward Class and remaining 80% flats, namely,
40 flats can be sold to the members of Open Class. Respondent no.
4 has furnished a list showing that so far respondent no. 4 has
agreed to sell 25 flats and has received substantial amount in
relation to them.
37. The petitioner states that the election authority constituted
under the Co-operative Societies Election Rules, 2004 appointed
one Mr. Rahul Patil to conduct election process for electing
managing committee for the period 2015-2020. The said election
officer conducted election on 18th July, 2015, declared elected 9
members of managing committee and thereafter, in the meeting
held on 25th July, 2015, the said elected members of managing
committee elected office bearers including Chairman, Secretary
etc.
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38. The petitioner states that one Mr. Laxman Tukaram
Kadam, a member of the petitioner society, belonging to
Backward Community and eligible to become member of the
petitioner society was duly approved by the Social Welfare
Department and accordingly, he was admitted to the membership
and was allotted Flat No. 15 and thus, he was and is continuing to
be a member from 1977 or so. The said member filed nomination
dated 19th November, 2014, thereby nominating his son one Mr.
Parag Laxman Kadam as a nominee and he had filed separate
application, thereby requesting the petitioner society to join his
son Mr. Parag Laxman Kadam as associate member. On the said
application, the said Mr. Parag Laxman Kadam was admitted as
associate member continuing Laxman Kadam as a member.
39. The petitioner states that there are 60 members and
respondent no. 4 has to provide 60 flats each of the area
mentioned in the development agreement as and by way of
permanent accommodation to the existing 60 members.
Accordingly, respondent no. 4 has constructed Wing 'B'
comprising in all 60 flats of the area and providing facilities, as
provided in the development agreement. The said building is
comprising of stilt + 2 podium floors for parking vehicles + 20
floors thereon.
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40. By using TDR and remaining plot FSI available under D. C.
Regulations, respondent no. 4 has constructed a building known
as Wing 'A' comprising 50 flats. It consists of stilt + 2 podium
levels and 17 floors thereon, comprising 50 flats of different sizes.
Respondent no. 4 has right to sell the said 50 flats in view of the
terms and conditions agreed upon by and between the petitioner
and respondent no. 4. The petitioner states that as on the date,
respondent no. 4 has already sold about 25 flats to the intending
buyers. The petitioner states that as per the permissions granted
by respondent no. 1, vide permission dated 30th April, 2010
(Exhibit 'H') read with subsequent letter/permission dated 5 th
May, 2010 (Exhibit 'I') from the office of the Collector Bombay
Suburban District, respondent no. 4 is obliged to sell 20% of the
said 50 flats, namely, 10 flats to the members from Backward
Class in accordance with the said permission or to take steps as
provided from time to time by respondent no. 1 and/or the
Collector.
41. The petitioner states that as on date, entire work is
complete except final internal painting coat, electric sub-station
work and car stack parking.
42. The petitioner states that respondent no. 4 has been paying
per member per month Rs.22,000/- by way of licence fee to enable
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the said 60 members to obtain alternate premises for their
occupation and accordingly has been and still paying
Rs.13,20,000/- per month and in addition thereto, brokerage at
the end of every 11 months equivalent to one month's licence fee.
43. The petitioner states that 42 members out of the said 60
members have vacated their respective premises in 2009 and
since then they have been paid the rent, as agreed upon,
including brokerage from time to time. So far as remaining 18
members out of 60 members, they vacated their respective
premises in 2013 and since they have also been paid the monthly
rent, brokerage etc.
44. The petitioner states that the members are out of their
premises for last about 6 to 7 years and are eagerly awaiting for
their premises. As on the date as per details given, respondent
no. 4 has spent a sum of Rs.67,69,96,602/- towards rent,
premium to the Government for obtaining various permissions,
on construction etc.
45. The petitioner states that respondent no. 4 was making
preparations through its architect to apply for and obtain
Occupation Certificate and is hoping that by the end of July,
2016, they would be able to obtain Occupation Certificate and
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handover premises to respective purchasers and to the members
of the society in accordance with orders passed by various courts
from time to time.
46. The petitioner states that respondent no. 5, who is neither
member of the petitioner society nor in any way concerned with
the petitioner, its members and for the redevelopment
undertaken by the petitioner, appears to have made a complaint
dated 17th February, 2016, making various false and frivolous
allegations. In fact he has no locus to make any grievance as
alleged or even otherwise. From the endorsement of the said
complaint dated 17th February, 2016, it appears that on the basis
of the said complaint,respondent no. 2 ordered to submit a report.
47. The petitioner society received on 20th February, 2016 a
copy of a show cause notice dated 11 th February, 2016 issued by
respondent no. 3 herein contending, inter alia, that guidelines
provided in Government Resolution dated 26th June, 2009 have
been violated.
48. The petitioner society received intimation dated 23rd
February, 2016 issued by the office of respondent no. 2 stating
that hearing of complaint of respondent no. 5 is fixed on 2 nd
March, 2016 and subsequently it was adjourned to 18 th March,
2016.
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49. The petitioner further states that respondent no. 3 further
recommended to the Deputy Registrar, Co-operative Societies to
appoint an Administrator on the grounds alleged therein.
50. The petitioner states that on 28th April, 2016, in the office of
respondent no. 2, hearing took place. The petitioner society filed
its reply dated 28th April, 2016 and made submissions.
51. The petitioner states that on 9th July, 2016 one Mr. Raju,
representative of Mr. Pravin Dabholkar delivered to the
Secretary of the petitioner society a letter dated 5 th July, 2016
addressed by respondent no. 3 to the petitioner society along with
various annexures thereto, including order dated 8th June, 2016
passed by respondent no. 2, Government Circular dated 26 th
June, 2009 and various other documents. Accordingly, for the
first time, the petitioner society received copy of the said order
dated 8th June, 2016, from the office of respondent no. 3 as
annexure to its letter dated 5th July, 2016.
52.
The petitioner states that on 11th July, 2016, the petitioner
received order dated 8th July, 2016 issued by respondent no. 6
thereby ordering stay to the further redevelopment work in view
of stay order dated 8th June, 2016 issued by respondent no. 2.
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53. On this petition and when it was moved before a division
bench of this court, the following order was passed on 4 th August,
2016:-
"1. An affidavit-in-reply is tendered by Mr. More, learned
AGP appearing for Respondent Nos. 1 to 3, in which the
Minister's interference is justified by stating that there are
several complaints about the working of the Petitioner-
Society and that the Petitioner-Society, comprising of
members of the backward classes and to whom the
Government land was allotted, was expected to work for
the protection and safeguarding of the interest of such
members, but was found to be acting contrary thereto.
2. Upon a specific query from the Court that, after
registration as a Co-operative Housing Society and as an
independent legal entity under a distinct legal Statute,
namely, Maharashtra Co-operative Housing Societies Act,
1960 and the Rules framed thereunder, can the
Government take up the issues of its internal working and
issue any directions, much less, staying any decision or
resolution of the Society, Mr. More states that today he is
not ready and would study the law and would assist the
Court on the next occasion.
3. Stand over to 10th August 2016."
54. In pursuance of that order, an affidavit in reply has been
filed on behalf of respondent no. 2. In that affidavit, respondent
no. 2, while denying and disputing the basic facts, urges that the
fifth respondent made an application on 27th February, 2016.
That was an application/complaint addressed to the Hon'ble
Minister, Department of Social Justice and Special Assistance,
Government of Maharashtra. The fifth respondent alleged that
there are many irregularities and illegalities in redevelopment of
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the said property. He complained that there is an injustice to the
Backward Class members. They are the real beneficiaries of the
scheme and they are suffering on account of these alleged
irregularities and illegalities. Since the complaint was very
serious, the State took cognizance of the same. Some directions
were issued on 2nd March, 2016 by the Hon'ble Minister. He
called for a report from the Field Officer, namely, the Assistant
Commissioner of Social Welfare. A hearing was also arranged
before the Hon'ble Minister. On 28th April, 2016, a hearing was
arranged before the Hon'ble Minister and on 28 th April, 2016, the
petitioner society through their advocate, their two members, the
complainant/respondent no. 5 and the Assistant Commissioner,
Social Welfare (respondent no. 3) were present. After giving full
opportunity of being heard, the Hon'ble Minister arrived at a
conclusion that there are serious irregularities and illegalities.
Hence, it will be proper to stay the further redevelopment of the
said property. It is in these circumstances that the Hon'ble
Minister was pleased to grant interim stay to the reconstruction
of the property. Accordingly, a detailed order was prepared and
issued on 8th June, 2016.
55. On the first contention that the order is passed without
jurisdiction, reliance is placed in this affidavit on Rule 10(1) of
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the Rules of Business of the Government of Maharashtra, framed
under Article 166(2) and (3) of the Constitution of India. The
Minister of a Department is primarily responsible for disposal of
work related to his Department. It is in these circumstances that
it is stated that when the complaint was made, the Minister was
not powerless to take cognizance of the same and to take further
action. Accordingly, an interim order was passed on this
complaint in due compliance with the principles of natural justice.
The petitioner, therefore, cannot allege want of jurisdiction or
power so also the authority of the Hon'ble Minister. The writ
petition is premature. Then it is contended in para 6 that the
findings in the order dated 8th June, 2016 are not perverse. They
are based on the stipulation that the petitioner society has not
obtained permission of Social Justice and Special Assistance
Department for change in members while redevelopment of the
property. This condition is specified at Sr. No. 2 in para no. 3 of
the Government Resolution dated 26th June, 2009 issued by the
Social Justice and Special Assistant Department. A copy of this
Government Resolution is annexed to the affidavit.
56. It is contended that it is incorrect to say that there were 60
members prior to the redevelopment and they continued as
members of the society. It is alleged that the petitioner has
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allowed unauthorised persons (who are not members of the
society) to sign various important documents. A report was
called for from the Assistant Commissioner, Social Welfare,
Mumbai on the complaint of respondent no. 5. At that time, it was
revealed that the persons, who are not members of the society,
have voted during the election of the society. The society has not
obtained permission for transfer of membership to the heirs of
the original members. It is in these circumstances that the
society, namely, the petitioner is called upon to produce the list of
original members.
57. Then, it is contended that it may be that by the letter dated
5th May, 2010, the Revenue and Forest Department has directed
the Collector of Mumbai Suburban District that so far as the flats
out of TDR are concerned, there should be a ratio of the members
as 20% from Backward Class and 80% from Open Class category.
However, this is a mistake. The attention of this court is invited
to para 6 of Government Resolution dated 25 th May, 2007 issued
by the Revenue and Forest Department, in which, it has been
clearly mentioned that the lands allotted to the Backward Class
under the PWR-219 are free of cost. The allotment under this
scheme is on specific conditions. This scheme is implemented by
the Social Justice and Special Assistant Department. In this light
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of this clear provision, the Revenue and Forest Department has
no jurisdiction to interfere in this scheme. Therefore, the letter
dated 5th May, 2010 is without jurisdiction. The petitioner society
never applied to the Department of Social Justice and Special
Assistance. It is an admitted fact that under the PWR-219
Scheme, the ratio of the members of a Backward Class society is
90% Backward Class and 10% Open Class members. Even if the
flats are available out of the TDR, the fact remains that the land
was allotted in terms of the above scheme. Hence, the ratio does
not change. The petitioner has not maintained this ratio. Hence,
it is incorrect to state that there is no violation.
58. In para 9 of this affidavit, it is stated that there are
complaints of various members and other persons against the
petitioner society and copies of these complaints are on the file of
the said respondent.
59. Finally, it is alleged that it was the duty of the petitioner
society to take permission from the Social Justice and Special
Assistance Department for redevelopment of the property. At the
same time, it is stated that respondent no. 4, who is the
developer, had submitted an application to this very Department,
but as far as this scheme (PWR-219) is concerned, the developer
has no role. Therefore, his application was not entertained by the
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Department. It was for the petitioner society to apply and obtain
necessary permission. Hence, the Social Justice and Special
Assistance Department is not estopped from insisting upon the
necessary permission. Once again, it is stated that the Revenue
and Forest Department and the Social Justice and Special
Assistance Department are two different Departments
implementing different schemes. The PWR-219 Scheme is under
the control of the Social Justice and Special Assistance
Department and the Collector, Mumbai Suburban District has no
power to waive any of the conditions prescribed by the Social
Justice and Special Assistance Department. Hence, it is not
admitted that the Social Justice and Special Assistance
Department is not concerned with the use of TDR. The TDR has
been granted on the land which was allotted under the PWR-219
Scheme. The petitioner cannot take benefit under this scheme
and at the same time expect that rules and regulations of the said
scheme would be relaxed. For all these reasons, it is submitted
that the writ petition be dismissed.
60. In addition to this affidavit filed on 3rd August, 2016, there
is another affidavit filed on behalf of the State on 26 th August,
2016. In this additional affidavit, it is stated that there are
certain important documents, which will conclusively indicate
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that insofar as the original allotment of the land to the petitioner
society is concerned, it was a conditional one and the petitioner
society is bound by the conditions imposed therein. That is how
the State seeks to rely upon Government Resolution dated 15 th
July, 1966 resolving that the Government land should be allotted
to the petitioner society for construction of residential building
for accommodating members whose list is appended to the
Government Resolution duly approved. Then, reliance is placed
on another order dated 13th May, 1977 and the Additional
Collector, Mumbai Suburban District approving the list of
members of the petitioner. It is stated that since the society
consists of Backward Class community and the rate of occupancy
price payable for this land is below Rs.5/- per square yards, the
land is granted free of occupancy price, according to the
provisions of the PWR-219 Scheme. It is stated that insofar as the
redevelopment of the lands allotted to Backward Class society
formed by Backward Class people is concerned, the policy
decision of the Government is contained in Government
Resolution dated 26th June, 2009 and copy of this resolution is
annexed.
61. A copy of an application made by the petitioner society to
the Collector, Mumbai Suburban District on 12th June, 2008 is
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relied upon to submit that in this application also the petitioner
society stated that it has got approval from the Social Welfare and
Special Assistance Department for admitting new members. The
purpose of obtaining such approval was obviously on account of
the society being of Backward Class citizens, it was obliged to
obtain approval from the Social welfare and Special Assistance
Department. Then, reliance is placed on Government Resolution
dated 1st April, 1998, which also stated to contain the policy of
the Government that in respect of the lands allotted to societies of
Backward Class citizens, at least 90% members have to be from
Backward Class. It is in this backdrop and to ensure that the
important policies of the State are not flouted that the Minister
intervened by entertaining the subject complaint. In these
circumstances and when final decision is yet not taken, the writ
petition should not be entertained.
62. A rejoinder affidavit of the petitioner society has been filed
and in which, the petitioner states that it is correct that while
granting the plot of land vide order dated 15th July, 1966, the
Government approved the names of 60 persons. During the
period of construction of building, there were some changes in the
list and such changed/modified list of members was approved
vide order dated 13th May, 1977. By the letter dated 12 th June,
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2008, the petitioner society requested the Collector to grant
permission for redevelopment, for use of TDR and for using some
constructed area for commercial purpose. The petitioner society
furnished the list of members and other details. Then, the
rejoinder affidavit points out the details with regard to original 60
members and it is stated that as on date 52 members, including
the heirs of the deceased approved members are the members of
the petitioner society. That is approved by the Social Welfare
Department. In case of 7 applications seeking membership and
which are filed by the heirs of 7 deceased members, who are
already approved members, the same are pending for approval
with the Social Welfare Department. Hence, the 7 applicants so
far are not admitted as members. In respect of one flat, the
society has received application for membership on 27 th August
2016, but it has not taken any decision on the said application.
The society shall not admit the said applicant without permission
from the Social Welfare Department.
63. So far as the additional members, in view of the
construction of additional premises by using TDR, while granting
permission, the Government and the Collector have provided that
the ratio of 80% members of Open Class and 20% from Backward
Class be maintained. The developer has developed the property
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subject to these conditions. The purchasers of the additional
premises have yet not approached the petitioner society for
membership. The petitioner stated that insofar as the saleable
component is concerned, it is not correct that 90% of such
purchasers should be from Backward Class. It is in these
circumstances that the society maintains that the Minister has no
jurisdiction to interfere by entertaining the complaint. It is
reiterated that society's 42 members are staying in temporary
accommodations. Then, it is urged that while seeking permission
for redevelopment, use of TDR of constructed area for commercial
purpose, it is not necessary to approach the Social Justice and
Special Assistance Department. The condition prescribed,
namely, Sr. No. 2 of Government Resolution dated 26th June,
2009 is for obtaining Government permission and the same has
already been obtained. All the allegations with regard to signing
of important documents by unauthorised persons or
unauthorised persons being allowed to vote are expressly denied.
It is denied that the heirs of deceased approved members are
admitted without approvals of Social Welfare Department. It is
stated that the society and the developer have acted and are
acting on the basis of permissions granted by orders dated 30th
April, 2010, 5th May, 2010 and 21st May, 2010. It is denied that
the Revenue and Forest Department has no jurisdiction to grant
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permission as alleged. It is in these circumstances that it is
stated that all compliances have been made in terms of the
Government Resolutions and the work of development does not
suffer from any legal infirmities. Hence, the writ petition be
allowed.
64. It is on the above material that we have heard the rival
contentions. Mr. Bhadrashete, learned advocate appearing for
the petitioner submits that the allotment of the plot has been
made in the year 1977.
ig The building constructed thereon is
dilapidated. Hence, it was decided to redevelop the property. The
society has not made any changes in the membership. A
complete chart is annexed and therefore, there was no scope for
interference in such lawful work commenced and completed by
the society. The permissions having been obtained and all
compliances made, it was not permissible for the Minister to
entertain any complaint and interfere with the redevelopment
work and project as a whole. In the process, the Minister in-
charge of the Social Welfare and Special Assistance Department is
seeking to set at naught the Government's decision to permit the
redevelopment. The entire order is without jurisdiction and can
never bind the petitioner. It is ex-facie illegal and must be set
aside.
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65. Mr. Bhadrashete then elaborates as to how the petitioner
society proceeded after obtaining the relevant permissions. In
that regard, he relied upon the letter dated 5 th May, 2010
Annexure 'I' to the writ petition, addressed by the Collector,
Mumbai Suburban District. He submits that it is not as if the
Collector was unaware of the details of the allotment to the
petitioner for he refers to the details of the land and the
admissible FSI. He calls upon the petitioner society to
deposit/pay a sum of Rs.1,74,38,000/-. Mr. Bhadrashete submits
that so far as the Government lands are concerned, in the light of
the clear provisions of the Maharashtra Land Revenue Code,
1966, the competent authority is the Collector of the District. In
the present case, the lands are allotted and situate in Mumbai
Suburban District. Therefore, the Collector of Mumbai Suburban
District is the competent authority not only to levy, assess and
recover the land revenue, but also take all decisions preceding
such collection. Meaning thereby, even in matters of allotment of
Government lands, it is the Collector who is the competent
authority. It is he who conveys, communicates and implements
the decisions of allotment. Therefore, it is erroneous to state that
the Collector is not competent authority or his order or
permission does not bind the other Departments of the State. Our
attention is invited to the conditions imposed while granting
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permission and even the circular dated 30th April, 2010. It is
clear from these conditions that they are imposed on the
petitioner society. The conditions and permission are plot
specific. Mr. Bhadrashete has invited our attention to the
paragraphs of the writ petition and particularly paragraph no.
11(c) and (d) to submit that now the entire work is complete. It
is time to obtain the requisite permission/certificate to occupy the
premises. It is at this stage that respondent no. 2 has intervened.
However, it is erroneous to assume that 90% of the flats
constructed out of the use of TDR and other benefits have to be
reserved for members of the Backward Class citizens. In fact the
letter dated 5th May, 2010 and the circular preceding it does not
impose any condition to this effect. Therefore, the second
respondent's assumption is incorrect. Mr. Bhadrashete submits
that as on date a sum of Rs.67,69,96,602/- towards rent premium
to the Government etc. has been spent by respondent no. 4. The
members of the petitioner society are eagerly awaiting the
allotment in their favour. Mr. Bhadrashete relies upon the
communication, copy of which is annexed to the petition at page
67, where, the Sub-District Social Welfare Officer, Mumbai
Suburban District informs respondent no. 4 that as far as the
allotments under the PWR-219 Scheme is concerned, the
redevelopment of the property/plot does not require any no
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objection certificate (NOC) from this office. There is no such
stipulation in any Government Resolution or circular. Therefore,
the District Social Welfare Officer cannot grant any NOC as
prayed.
66. Mr. Bhadrashete also relies upon page 69 of the paper book
to submit that even the Social Welfare and Special Assistance
Department is of the opinion that permission of the Government
will have to be sought before redevelopment of the property.
However, this decision of 26th June, 2009 nowhere states that
any ratio of 90% Backward Class members has to be maintained
in the redeveloped premises or building. Mr. Bhadrashete invited
our attention to page 189-A of the paper book to submit that the
Occupation Certificate is being withheld and not granted only
because of the purported stay order passed by respondent no. 2.
Mr. Bhadrashete complains that the attempt by respondent no. 2
amounts to take over and interfere with the authority and power
of the Municipal Corporation of Greater Mumbai to grant the
Occupation Certificate as well.
67. Mr. Bhadrashete took us through the grounds or reasons
assigned in the impugned order and submits that they are
without any merits. He submitted that respondent no. 2 has no
jurisdiction to pass any stay or restraint order. Mr. Bhadrashete
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invited our attention to the affidavit in reply of the second
respondent to submit that the second respondent was not
empowered by any statute or law to pass the impugned order.
The rules framed under Article 166 of the Constitution of India
may be styled as the Rules of Business, but they do not empower
any particular Minister or Head of the Department to pass the
orders of the present nature. That power must flow and ought to
be derived from a law or a valid rule. Such being not the case, Mr.
Bhadrashete would submit that the second respondent exceeded
his powers and has illegally interfered with the working,
functioning and management of the petitioner society. In any
event, in the light of the clarification given by the District Social
Welfare Oficer at page 67 of the paper book, the impugned order
cannot be sustained. The redevelopment of the society's property
is clearly an internal matter or concern and connected with
internal management and administration of the business of the
society. Nobody is empowered to interfere therewith. Mr.
Bhadrashete submitted that once the order passed in the present
case is read in the light of the communication from the developer
dated 11th April, 2008 and the reply thereto (page 67) of the
paper book, then, all the more the impugned order deserves to be
quashed and set aside.
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68. In support of his contentions, Mr. Bhadrashete relied upon
the following judgments and decisions:-
(i) Prof. (Dr.) D. R. Bharadwaj vs. State of
Maharashtra and Ors., AIR 1993 Bombay 366.
(ii) Dharam Dutt and Ors. vs. Union of India and Ors.,
(2004) 1 SCC 712.
(iii) Andhra Pradesh Dairy Development Corporation
Federation vs. Narasimha Reddy and Ors., (2011) 9
SCC 286.
69.
On the other hand, Mr. Godbole, learned Special Counsel
appearing on behalf of the State and particularly respondent nos.
2 and 3 would submit that there is no merit in the writ petition
and it must be dismissed. He submits that it will be not proper
and correct to proceed on the footing that all the powers and
authority vests only in the Collector of the Mumbai Suburban
District or the Revenue and Forest Department of the
Government of Maharashtra. Mr. Godbole submits that an
interpretation which would empower only the Collector to deal
with allotments and of specific categories particularly favouring
Backword Class citizens would nullify the scheme of allotment of
Government lands to Backward Class citizens of the State. The
Backward Class residents of the State and particularly in the
Mumbai City look to only the Department of Social Justice and
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Special Assistance of the Government of Maharashtra. Mr.
Godbole invited our attention to the annexures to the additional
affidavit in reply dated 26th August, 2016. He submits that it is
the resolution of the Revenue and Forest Department dated 15 th
July, 1966 under which the society claims allotment of the
Government land. However, the preamble to the resolution
clearly states that the allotment is made for construction of
residential buildings for accommodating members of the
petitioner society whose list is appended to the said resolution.
That list is duly approved. It is stated that the grant shall also be
subject to the terms and conditions prescribed in the Government
Resolution, Revenue and Forest Department dated 23 rd April,
1965.
70. Mr. Godbole then relies upon the agreement in Form H-1,
which is executed by the petitioner society with the Collector and
particularly the conditions incorporated therein. Mr. Godbole
submits that the allotment is for a specific purpose and to achieve
a clear object. That is to assist the Backward Class
citizens/residents. They were facing acute shortage of
accommodation in Mumbai. To assist them and improve their
living conditions, the State stepped in. Mr. Godbole submits that
there is an order passed on 13th May, 1977, copy of which is at
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Annexure 'B' to the additional affidavit. That is an order passed
by the Additional Collector, Bombay Suburban District. He states
that the conditions in Schedule 'I' to the office order have to be
complied with. This orders refers to the composition of the
society, namely, its members being Backward Class
residents/citizens and also it is granted free of occupancy price.
Mr. Godbole submits that this Government order refers to the
provisions of PWR-219 Scheme. Mr. Godbole invited our
attention to the conditions in Schedule 'I' to this Government
order, particularly Condition No. 2 appearing at page 232 of the
paper book, where, the society was directed not to enroll any
additional member or substitute any member except with
previous written approval of the Government. Mr. Godbole
submits that it is to subserve the larger public interest and the
purpose sought to be achieved that it was informed that the
society shall be liable to be evicted and the land and buildings
resumed by the Government without payment of any
compensation in case there is breach of any of the conditions of
grant of land and failure on the part of the society to remedy the
breach within six months from the date of issue of notice by the
Additional Collector, Bombay Suburban District communicating
the breach. In that regard, he invites our attention to the
condition nos. 9 and 10.
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71. Mr. Godbole's emphasis is on the contents of the documents,
compilation of which is handed over by him. He submits that the
Backward Class Co-operative Housing Society Scheme (PWR-219)
and its working was reviewed. The earlier Government
Resolutions dated 27th September, 1971 and 18th February, 1972
were referred and a fresh resolution was issued on 21 st February,
1974. Mr. Godbole submits that the Backward Class Co-operative
Housing Societies would be governed by the terms and conditions
to this resolution. ig The terms and conditions governing the
allotment of land can safely be termed as covenants running with
the land. The ratio of members, namely, Backward Class-Non-
Backward Class has to be strictly maintained. Further, the
implementation of the scheme is by the Department of Social
Justice and Special Assistance. The land is allotted free of cost to
the societies of Backward Class and it is but natural that this
Department, which is in-charge of the allotment and frames the
policy, implements the same. He submits that the policy
decisions have to be taken by this Department and the petitioner
is aware of the same. In that regard, our attention is invited to
the documents, which are annexed to the additional affidavit and
from the compilation. It is submitted that the petitioner is aware
of the Government Resolution dated 25th May, 2007, which
outlines the general scheme of allotment of Government lands to
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co-operative housing societies. Condition No. 6 therein
specifically refers to the co-operative housing societies of
Backward Class/Magasvargiya Sahakari Grihanirman Sanstha. If
lands are allotted to such co-operative housing societies under
PWR-219 Scheme, then, the general policy outlined in
Government Resolution dated 25th May, 2007 and the earlier
Government Resolution does not apply to such lands. The scheme
in relation to Backward Class persons is implemented by the
Department of Social Justice and Special Assistance. Once the
petitioner is aware of this position and also Condition No. 10 of
the above Government Resolution, then, it is futile to urge that
the Government Resolution dated 26th June, 2009, which is
issued by the Department of Social Justice and Special Assistance
is not applicable. Mr. Godbole, therefore, submits that if the
entire matter is understood in this backdrop, then, the Cabinet
Minister in-charge of the Department of Social Justice and
Special Assistance was fully empowered to take cognizance of the
complaint of respondent no. 5. Mr. Godbole relies upon the Rules
of Business. He relies upon Rules 5, 7 and 10 thereof to submit
that neither has the second respondent unduly, much less
illegally or unauthorizedly interfered with the redevelopment
project nor has he overridden the authority and power of the
Department of Revenue and Forest, Government of Maharashtra.
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He has ensured that the policy, which is framed and which
enables grant of Government land to Backward Class citizens for
their assistance and solving their problem of housing is not
defeated and frustrated. That is defeated and frustrated in this
case by allowing the developer to deal with the property, namely,
Government land and to induct outsiders, namely, non-Backward
Class citizens. The entire ratio is disturbed and that is why on
both counts, namely, on jurisdiction as also on merits, the order
under challenge is sustainable. It is passed in accordance with
law. Neither has the Minister usurped the power of any authority
nor has he exceeded his authority or acted beyond his
jurisdiction. For all these reasons, the impugned order cannot be
termed as vitiated by any error of law apparent on the face of the
record nor it can be termed as perverse warranting interference
in writ jurisdiction. Hence, the writ petition deserves to be
dismissed. Mr. Godbole has sought to distinguish the judgments
relied upon by Mr. Bhadrashete and therefore submits that the
writ petition be dismissed.
72. Mr. Godbole has relied upon the following decisions:-
(i) Zoroastrian Co-operative Housing Society Ltd. and
Anr. vs. District Registrar, Co-operative Societies (Urban)
and Ors., (2005) 5 SCC 632.
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(ii) Ramesh Himmatlal Shah vs. Harsukh J. Joshi, (1975)
2 SCC 105.
(iii) The State of U. P. vs. Zahoor Ahmad and Anr., (1973)
2 SCC 547.
(iv) Margret Almeida and Ors. vs. Bombay Catholic Co-
operative Housing Society Ltd. and Ors., (2012) 5 SCC 642.
(v) Mohinder Kaur Kochar vs. Mayfair Housing Pvt. Ltd.
2012 (6) Bombay C. R. 194.
(vi) Manchegowda and Ors. vs. State of Karnataka and
Ors., (1984) 3 SCC 301.
73. For properly appreciating the rival contentions, we would
have to refer to certain undisputed facts.
74. The petitioner is a co-operative housing society registered
under the Maharashtra Co-operative Societies Act, 1960 way
back on 17th April, 1967. It holds Government land bearing Plot
No. 14, Survey No. 111-D, CTS No. 825/1/4 situate at village
Amboli, Andheri (W), Mumbai 400 053, admeasuring 3114
square meters. It shall be described as the said property. There
were three buildings standing on the said property consisting of
ground and four upper floors having 20 flats in each building
thereby totaling 60 flats occupied by 60 members. The buildings
were constructed 30 years ago and were in dilapidated condition
requiring extensive repairs. Considering the cost of repair and
maintenance, the society came to a conclusion that it is desirable
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to demolish these existing buildings and reconstruct new
buildings by utilising the FSI of the said property and TDR/FSI
permitted to be loaded on the said property. Thus, it decided to
exploit the entire development potential of the said property in
the manner permissible in law.
75. It is apparent and clear that on account of the status of the
buildings, they requiring structural repairs as enumerated in the
notice issued under section 354 of the Mumbai Municipal
Corporation Act, 1888 that the above steps were taken.
Preceding these steps and decisions, proper meetings were
convened by the petitioner society. Before these meetings,
quotations received from the interested parties were placed. An
offer was given by respondent no. 4 on 27 th March, 2003. It was
discussed in the Special General Body Meeting dated 15th June,
2003 after which, a resolution was passed appointing the said
respondent as developer. A regular development agreement was
drawn up and executed, copy of which is at Annexure 'A'.
Subsequent to this agreement, as amended, respondent no. 4 took
the requisite measures, applied for permission of respondent no.
3. He requested respondent no. 3 to grant NOC for redevelopment
of the property by utilising the FSI and TDR. However, it was
informed by the office of respondent no. 3 that no provisions are
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made in the scheme for obtaining a NOC from the Department of
Social Welfare/Justice and Special Assistance, Government of
Maharashtra.
76. The petitioner has relied upon a Government Circular dated
26th June, 2009, copy of which is at Annexure 'E' to the writ
petition. That is issued by the Department of Social Justice and
Special Assistance, Government of Maharashtra. That refers to
the earlier circular dated 1st April, 1998. The earlier circular
dated 1st April, 1998 dealt with the subject of transfer of
membership. The circular dated 26th June, 2009 is on the subject
of redevelopment of the property/plots allotted to Backward Class
Co-operative Housing Societies. The circular refers specifically to
the benefits in the form of FSI or TDR. Because of the utilisation
of the increased FSI, TDR, excess area becomes available to such
societies. The buildings are constructed and flats therein are
thereafter offered to purchasers who are made members of the
society. Further, old and dilapidated buildings belonging to such
societies are being redeveloped and when new buildings are
constructed, the flats even in these buildings are offered and sold
to persons who are later on enrolled as members. All this
deprives the Backward Class persons of their benefits under the
scheme.
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77. It is in these circumstances that the Government decided
that when such societies are allotted Government lands free of
cost or financial assistance is provided to them in acquiring lands
and properties, then, they should abide by the condition of 90%
membership of Backward Class. All this is approved by the State
and whenever there is a change or modification in membership,
permission of the Social Justice and Special Assistance
Department has to be obtained. However, it was noticed that
several co-operative
ig housing societies of Backward Class
members are violating the terms and conditions. That is how by
this circular, it was directed that in the co-operative societies
belonging to Backward Class, wherever change in membership is
effected, then, the outgoing member shall be substituted by
another Backward Class member and before such co-operative
housing society undertakes work of redevelopment, they should
obtain permission of the Government. The third condition is that
a developer engaged for the purpose of redevelopment should,
prior to such redevelopment, deposit a sum mentioned in para 3
of this circular. Finally, by clause 4, it is mandated that if any
addition has to be made in the number of members, then, the
decision of the State Government in that regard shall be final. In
this behalf it can safely be held that the question of entertaining
and allowing the membership application of the flat purchasers
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does not arise at this stage. It is only when the members over and
above the original 60 claim any rights, then, whether the ratio of
Backward Class and Non-Backward Class is maintained or
otherwise will be an issue to be determined. That will be
determined in accordance with the law, namely, the Maharashtra
Co-operative Societies Act, 1960, the Rules of 1961, the
Government Resolutions etc. by the Registrar or his delegates. At
that time, appropriate steps can be taken. Presently, in the garb
of the ratio being allegedly breached, no coercive action can be
taken. More so, when the State's approval is obtained.
78. By virtue of the development agreement, respondent no. 4
took various steps, he obtained permission, approvals, sanctions
from the Municipal Corporation of Greater Mumbai. Since the
plot was allotted to the petitioner society by the Collector,
Mumbai Suburban District, his permission and approval was
sought for the said project.
79. We have perused carefully the materials and it is disclosed
in the petition itself that the petitioner society addressed letters
dated 12th June, 2008 and 21st March, 2009 requesting the
Collector to grant the permission. The Collector submitted a
report dated 18th June, 2009 to the State Government and the
State Government, by its order dated 30 th April, 2010, agreed to
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the request. It issued the requisite order and copy of which is at
annexure 'H'. The Government order is society and land specific.
In the earlier order, it does not say anything with regard to the
constitution of a co-operative housing society, its membership etc.
It only says that the redevelopment is permitted on the terms and
conditions set out in that order and which could be imposed by
the Collector as well.
80. When such a record was placed before the Collector, he, in
turn, addressed a communication dated 5th October, 2010. He
granted the necessary permission and imposed a condition of
deposit of Rs. 1,74,38,000/- and an indemnity bond on a stamp
paper to be executed. In response to this, the sum has been
deposited by Demand Draft and equally, the indemnity/guarantee
bond has been submitted. Thereafter, further steps have been
taken and it is evident that some of the non-confirming members
of the petitioner society later on fell in line. The redevelopment
project is complete. It is at such a stage that respondent no. 5,
who is neither member of the petitioner society nor in any way
concerned with the petitioner, made the subject complaint.
81. A copy of that complaint is annexed as Annexure 'Q'. We
have carefully perused it and what we find is that respondent
no.5 is a resident of Sector No. 19, Kharghar, Navi Mumbai. He
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makes a complaint on 17th February, 2016. In his complaint, he
makes certain general allegations and questions the
redevelopment project. He states that the redevelopment project
has not been initiated and completed in accordance with the
Government policy, rules, regulations and conditions of
allotment. He does not, in his complaint, explain as to how he is
affected by such redevelopment or whether he is interested in the
property or he has any contractual relationship with the society.
82.
The petitioner, on being forwarded with a copy of this letter
as also one show cause notice issued by the Assistant
Commissioner, Social Welfare, Mumbai Suburban District dated
11th February, 2016, clarified in writing that there is absolutely
no substance in the allegations. The petitioner denied that the
terms and conditions of allotment have been violated. The
petitioner relied upon the Government order dated 30 th April,
2010 and the conditions incorporated therein, which requires the
petitioner to call upon the developer to sell 20% of the additional
premises only to persons from Backward Class. The ratio as per
this order is being maintained. The petitioner clarified that the
society would come to know as to whether the said developer has
maintained the said ratio when it receives the applications for
membership from the purchasers of these additional premises.
J.V.Salunke,PA
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As on date, these allegations cannot be accepted for they have no
basis. There is no question of any action being taken. The
petitioner clarified that there is no substance in the other
allegations as well. The detailed reply, copy of which is to be
found at pages 176 to 184 of the paper book, also takes care of the
objection of the second respondent, particularly that a permission
from the Social Justice and Special Assistance Department/Social
Welfare Department is necessary. The petitioner raises a specific
ground that no such permission is required even in terms of the
Government Resolution dated 26th June, 2009.
83. We have carefully perused this Government Resolution and
we do not find that any permission is required specifically from
this Department. We do not agree with Mr. Godbole that this
Resolution has imposed any condition that the ratio of Backward
Class to Open Class members has to be maintained and
throughout. If the society consisting of 60 members enrolled way
back in 1970 applied for and obtained a plot of land which can be
allotted only by the Revenue and Forest Department, then, what
we have found is an attempt by another Department of the
Government to foist or thrust upon the petitioner additional
conditions and terms for redevelopment of the petitioner's
property. If any Department of the Government finds that the
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membership of the society has been offered to those who are not
eligible to apply for and obtain it, then, it is not as if such
Departments in the Government have no remedies or are
powerless. It is common ground that once a co-operative housing
society is registered, it is governed by the Maharashtra Co-
operative Societies Act, 1960 and the Maharashtra Co-operative
Societies Rules, 1961. There are enough provisions in that Act
empowering the statutory authorities to take cognizance of the
complaints and grievances of those who have not been enrolled as
members. Equally, these authorities can take note of the
objections and remarks of other Departments of the Government
that in peculiar societies, such as the petitioner, the office bearers
cannot take any decision contrary to the by-laws or rules and
regulations. They have not enrolled members in the stated and
given ratio. We do not think that respondent no. 2 could have
entertained any complaint of respondent no. 5 and obstructed the
redevelopment project in the manner done. In the impugned
order, we have not found any reason assigned by the concerned
Minister. Rather, the stand before us that no permission is
required from the Social Welfare Department was reiterated. Yet,
the impugned order proceeds to hold that the policy decision
contained in the Government Resolution dated 26 th June, 2009
together with the terms and conditions thereof have not been
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complied with. The petitioner society has not taken permission
while making changes in its constitution and composition from
the Department of Social Justice and Special Assistance. This
observation pre-supposes that changes in the constitution and
composition of the petitioner society have already been effected.
The society has clarified that the developer was made aware of all
the terms and conditions imposed while allotment of the plot.
Respondent no. 4 is implementing the redevelopment project.
The ratio and required to be maintained in terms of the
Government order was also brought to his notice. It is premature
to hold that the developer has sold all the additional premises
only to Non-Backward Class persons and therefore, not
maintained the ratio. The society has clarified that the
purchasers of these additional premises would have to be enrolled
as members of the petitioner society. They would have to apply in
the prescribed format for membership. A decision would be taken
on their applications and if at all such of those who are entitled
and belonging to Backward Class are not enrolled as members,
then, they have adequate remedies available to them in law. Even
the State can then forward any complaints of such persons and
for necessary action by the society. The society would also ensure
due compliance with the Government orders and policies. The
impugned order proceeds on the footing that the society has not
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maintained 90% reservation for Backward Class persons. On
what material this conclusion is based is not clear at all. Where
such allegation is to be found, either in the complaint or in any
document styled as a report, is not clarified to us at all. If there
are complaints about the working of the society, then, those who
have such issues, can always approach an appropriate forum.
84. We have been unable to find from the affidavit in reply any
material which would indicate that as far as the redevelopment
project is concerned, there are any violations of the terms and
conditions, based on which, the allotment of the plot or land has
been made.
85. Though Mr. Godbole would emphasise the stand in the
affidavit of respondent no. 2 that in PWR-219 Scheme, the ratio of
members of the Backward Class Co-operative Society is 90%
Backward Class and 10% Open Class and this ratio has to be
maintained even while redeveloping the society's property,
Mr.Godbole has been unable to point out anything from the whole
scheme to the above effect. We have carefully perused each and
every document which has been placed before us by Mr. Godbole.
We find that though the allotment of land or plot to the petitioner
society consisting of Backward Class members is in accordance
with the old PWR-219 Scheme, we have not found in the primary
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document or in the document, namely, Government Resolution
dated 21st February, 1974 any condition which would oblige the
petitioner to maintain any specific ratio. Annexure 'A' to that
Government Resolution having been carefully perused by us, we
do not find that though the benefits of the scheme are available to
Scheduled Caste, Schedule Tribe, Nomadic Tribe, Other Backward
Class etc, still, the scheme postulates communal mixing. It also
aims at removing untouchability. Therefore, 10% Non-Backward
Class persons are permitted to be members of Backward Class Co-
operative Housing Societies of all categories. These Non-
Backward Class members are entitled to get the same financial
benefits which are made available to the majority members of the
Backward Class Co-operative Housing Societies. However, the
Backward Class persons can join Non-Backward Class societies
and they would be entitled to certain concession. Therefore,
though Mr. Godbole vehemently relies on this Government
Resolution, we do not find that the same prohibits enrollment of
Non-Backward Class members. Now, with regard to the ratio,
even in the additional affidavit filed, we do not find that after
redevelopment, 90% members have to be from Backward Class.
For the redevelopment of such societies, a distinct policy is
enunciated and in that, it is apparent that the essential
composition has to be maintained. Meaning thereby, the original
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society of Backward Class persons must comprise of 90%
Backward Class members and 10% Open Class members. After
TDR is generated and additional premises are made available,
they have to be disposed of in terms of the Government
Resolution dated 25th May, 2007, which has been highlighted in
the order of the Government dated 30 th April, 2010 and the
Collector's communication dated 5th May, 2010 (see page 96).
The ratio that has to be maintained is that the additional
premises have to be disposed of as 20% to Backward Class and
80% to Open Class/Non-Backward Class. This is how the
Government has understood its policy. That is part and parcel of
the record and with the Government itself. It is in these
circumstances that presently we are not inclined to agree with
Mr. Godbole that the redevelopment project suffered from
fundamental legal infirmities or that the same defeats the very
purpose and object of allotment of plots of land to Backward Class
persons.
86. We have found from the impugned order that in a completed
project, another Wing or Department of the State has sought to
interfere with a view to prevent the petitioner from obtaining the
requisite certificates from the local authority so as to enable its
members to occupy the premises. Meaning thereby, at the stage
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of consideration of the application for grant of Occupation
Certificate, the Government has stepped in and that too at the
instance of a complete stranger. There is no denial of the fact that
respondent no. 5 is in no way connected with the petitioner
society. He is neither an office bearer nor a member thereof. At
his instance, it was not permissible for the State to have
intervened and stalled the issue of Occupation Certificate to the
building of the petitioner society. We find that this is a clear
attempt of interfering with the internal affairs of a co-operative
housing society governed by the Maharashtra Co-operative
Societies Act, 1960. More so, when the Government Resolution
dated 26th June, 2009 on the subject of redevelopment of
properties/plot allotted to societies like the petitioner
contemplates obtaining approval from the State Government
which is obtained. That Government Resolution does not name
any particular Department of the Government.
87. We find that the reliance by Mr. Bhadrashete on a Division
Bench judgment of this court to be apposite and appropriate.
88. Mr. Bhadrashete relied upon a Division Bench judgment in
the case of Prof. (Dr.) D. R. Bharadwaj vs. State of Maharashtra
and Ors.1. In the backdrop of a similar case of interference by the
Government/Collector, the Division Bench held as under:-
1 AIR 1993 Bom. 366
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"10. Maharashtra Co-operative Societies Act, 1960
was enacted by State Legislature to consolidate and
amend the law relating to the Co-operative Societies in
the State of Maharashtra. Legislature desired to
consolidate and amend the law relating to Societies with
a view to providing for the orderly development for the
cooperative movement in the State of Maharashtra in
accordance with the relevant directive principles of
State policy enunciated in the Constitution of India. The
Act is a self-contained Code for regulating the activities
of Co-operative Societies and exhaustively provides for
registration of the Society, enrolment of members, rights
and liabilities of members, the incorporation duties and
privileges of Societies, the management of Societies as
well as settlement of disputes between Societies and the
members. In City of Bombay and other parts of the State,
several Co-operative Housing Societies are registered
with the object of providing shelter to the members and
the Housing Societies are classified as tenant-ownership
Housing Society, tenant co-partnership Housing Society
and other Housing Societies. Tenant-ownership Housing
Societies are those where land is held either on leasehold
or freehold basis by Societies and houses are owned or
are to be owned by members. Due to paucity of available
land for construction of houses in City of Bombay,
several applications were received by Government of
Maharashtra for "grant of Government lands for the
purpose of formation of Housing Societies. The
Government decided to grant lands to Housing Societies
in accordance with the provisions of Maharashtra Land
Revenue Code, 1966. The lands are granted in favour of
the Society with a condition that the lands will not be
alienated or transferred and would be used for the
purpose of construction of houses, to be occupied by
members. The Government by Resolution dated May 12,
1983 took a policy decision that the grant of Government
land to Housing Societies should be on certain terms and
conditions. Section 48 of Land Revenue Code specifically
provides that the State Government has a right to
dispose of lands on such terms and conditions as it
deemed fit. The terms and conditions set out by
Government Resolution are with an object of ensuring
that Government lands are used for the purpose of
housing and only by those occupants who fulfil certain
conditions. The anxiety of the State Government was to
ensure that the few available Government lands should
be put to the best use for the benefit of persons who
genuinely need accommodation at a reasonable price.
J.V.Salunke,PA
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While allotting Government lands, the Resolution
demands that the allotment should be only to Co-
operative Housing Societies and not to individuals with a
view to prevent exploitation of the land and buildings to
be erected thereon. The Government was also desirous of
ensuring that members to be enrolled in such Housing
Societies should be the genuine members and who fulfil
the terms and conditions annexed to the resolution. The
Government lands are not allotted unless the Society is
duly registered under the Cooperative Societies Act. The
Government Resolution dated May 12, 1983 is a policy
decision and is not a statutory provision which creates
any right in the Government to evict an occupier from
the tenement of a Housing Society. The terms and
conditions on which the land is allotted to the Society
entitles the Government to resume both, the land and
the building construed thereon, in cases where the
Society commits the breach of the terms and conditions
and in cases where the Society fails to take action
against the occupier in spite of breaches committed. The
right of resumption vested in the State Government is to
be exercised against the Society and not against an
individual occupant of a tenement. The provisions of
Maharashtra Land Revenue Code set out the right of the
Government to dispose of Government lands and the
power to resume in case of breach of terms and
conditions but the Code nowhere provides that the
Government can recover a tenement out of building of
the Society.
11. On registration of Co-operative Housing Society
under the Act, the rights and liabilities of members qua
the Society are to be determined with reference to the
statutory provisions. Chapter III of the Act deals with the
Subject of members and the rights and liabilities and the
right of a person to be enrolled as a member has to be
determined with reference to the provisions of the Act
and the bye-laws of the Society. For ascertaining
whether a person should be enrolled as a member of a
registered Housing Society, it is not permissible to refer
to the terms and conditions of the grant unless those
terms and conditions form part of the bye-laws. One of
the terms of grant of Government lands is that a Society
shall not enroll any new member or substitute any
member without prior written permission of the said
authority and this term is incorporated in Model Bye-law
No. 17(c) which, inter alia, provides that admission of a
person to membership of the Society directly or as a
result of transfer shall be subject to the approval of the
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Collector of the District if the Society has been given land
by Government. In view of the specific bye-law, the
condition of seeking prior approval provided in the terms
and conditions at the time of allotment of Government
land is to be strictly observed by the Society. The
question which requires determination is when once the
Society is duly registered under the provisions of the Act
is it open for the Collector to proceed to terminate the
membership of an occupant and direct the Society to
recover possession? In our judgment, it is not open for
the Collector to bypass the statutory provisions
contained in the Societies Act and assume the right to
terminate the membership and permit the Society to
take possession. The Collector by assuming jurisdiction
is obviously trespassing on the statutory powers
conferred on the Society as well as on the Courts
constituted under the Act to determine the disputes
between the members and the Society.
12. Section 35 of the Act confers statutory right on
Society to expel a member by resolution passed by
majority of not less than three-fourths of the members
entitled to vote and present at the general meeting. The
power to expel a member is circumscribed by the
provision that the member should be guilty of acts which
are detrimental to the interest or proper working of the
Society. The resolution to expel a member is not valid
unless the member to be expelled is given opportunity of
presenting his case to the general body and the
resolution cannot be put to effect unless it is approved by
the Registrar. Proviso to sub-section (1) of Section 35
makes it clear that power to expel a member is available
only to the Society and the power can be exercised only
in the manner prescribed by the Act and the Rules. It is
also not left to the exclusive determination of the Society
as to whether a member is liable to be expelled for acts
which are detrimental to the interest or proper working
of the Society and the decision of the Society is subject to
the approval of the Registrar of Co-operative Societies.
The member who is to be expelled is provided with a
right to file an appeal under Section 152 of the Act to the
State Government. The provisions of Section 35 clearly
indicate that a right to determine whether a member
should be expelled for certain acts is available only to the
Society and not to any other authority including the
State Government. The power to expel a member is not
available to the Collector merely because the building of
the Society is constructed on the land allotted by the
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Government. It is not open for the Additional Collector to
determine that a particular member should be expelled
merely because the Society requests the Additional
Collector to take proceedings. The consequences of
expulsion of a member under Section 35 is that the name
of the member is struck off from the register of members.
Even expulsion of a member and the fact that name of
the member is struck of from the register will not
automatically entitle the Society to recover possession.
In case the member who is expelled declines to restore
possession to the Society, then the Society is bound to
adopt proceedings under Chapter II of the Act. Section
91, inter alia, provides that any dispute between a
Society and a member shall be referred to a co-operative
Court. Section 91-A provides for constitution of
Cooperative Court to adjudicate upon all disputes.
Section 97 of the Act provides that any party aggrieved
by the decision of the Cooperative Court can prefer an
appeal to Cooperative Appellate Court. These provisions
unmistakably establish that the Act has created a forum
which must be approached for resolving the dispute
between Society on the one hand and members on the
other and in view of the statutory provisions, it is not
permissible for any authority howsoever high it may be,
to interfere with the administration of Housing Society
and direct that a member should be expelled or Society
can recover possession from a member."
89. Now a co-operative society stands elevated and has attained
a constitutional status. Article 43B of the Constitution of India
inserted by the Constitution (Ninety-seventh amendment) Act,
2011 with effect from 15th February, 2012 reads as under:-
"ARTICLE 43B. Promotion of co-operative
societies. - The State shall endeavour to promote
voluntary formulation, autonomous functioning,
democratic control and professional management of co-
operative societies."
90. In a decision in the case of Dharam Dutt and Ors. vs. Union
of India2 prior to this constitutional amendment, the Hon'ble
2 (2004) 1 SCC 712
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Supreme Court of India was considering a challenge to an
Ordinance. The Central Government had taken over the society
so also its immovable and movable properties. The society,
namely, Indian Council of World Affairs challenged it and in that
context so also highlighting the mandate of Article 19(1)(c) of the
Constitution of India, the Hon'ble Supreme Court of India held
thus:-
"28. A right to form unions guaranteed by Article 19(1)(c)
does not carry with it a fundamental right in the union so
formed to achieve every object for which it was formed
with the legal consequence that any legislation not falling
within clause (4) of Article 19 which might in any way
hamper the fulfillment of those objects, should be declared
unconstitutional and void. Even a very liberal
interpretation cannot lead to the conclusion that the trade
unions have a guaranteed right to an effective collective
bargaining or to strike, either as part of collective
bargaining or otherwise. The right to strike or the right to
declare a lock-out may be controlled or restricted by
appropriate industrial legislation, and the validity of such
legislation would have to be tested not with reference to
the criteria laid down in clause (4) of Article 19 but by
totally different considerations. A right guaranteed by
Article 19(1)(c) on a literal reading thereof can be
subjected to those restrictions which satisfy the test of
clause (4) of Article 19. The rights not included in the
literal meaning of Article 19(1)(c) but which are sought to
be included therein as flowing therefrom i.e. every right
which is necessary in order that the association, brought
into existence, fulfills every object for which it is formed,
the qualifications therefor would not merely be those in
clause (4) of Article 19 but would be more numerous and
very different. Restrictions which bore upon and took into
account the several fields in which associations or unions
of citizens might legitimately engage themselves, would
also become relevant.
... ... ... ...
36. Article 19 confers fundamental rights on citizens. The
rights conferred by Article 19 (1) are not available to and
J.V.Salunke,PA
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cannot be claimed by any person who is not and cannot be
a citizen of India. A statutory right -- as distinguished from
a fundamental right -- conferred on persons or citizens is
capable of being deprived of or taken away by legislation.
The fundamental rights cannot be taken away by any
legislation; a legislation can only impose reasonable
restrictions on the exercise of the right. Out of the several
rights enumerated in clause (1) of Article 19, the right at
sub-clause (a) is not merely a right of speech and
expression but a right to freedom of speech and
expression. The enumeration of other rights is not by
reference to freedom. In the words of the then Chief
Justice Patanjali Sastri in State of W.B. v.. Subodh Gopal
Bose these rights are great and basic rights which are
recognized and guaranteed as the natural rights, inherent
in the status of a citizen of a free country. Yet, there
cannot be any liberty absolute in nature and uncontrolled
in operation so as to confer a right wholly free from any
restraint. Had there been no restraints, the rights and
freedoms may tend to become the synonyms of anarchy
and disorder. The founding fathers of the Constitution,
therefore, conditioned the enumerated rights and
freedoms reasonably and such reasonable restrictions are
found to be enumerated in clauses (2) to (6) of Article 19
excepting for sub-clauses (i) and (ii) of clause (6), the laws
falling within which descriptions are immune from attack
on the exercise of legislative power within their ambit
(See: H.C. Narayanappa v. State of Mysore.)
.........
43. The Preamble to the Act declares the Indian Council of
World Affairs (ICWA) to be an institution of national
importance and to provide for its incorporation. The same
declaration is contained in the body of the Act vide Section
2. The pre-existing society ICWA and the new body
corporate, also given the name of ICWA, bear a similarity
of names. Yet, it is clear that the impugned Act only deals
with ICWA the pre-existing body and ICWA the body
corporate under the impugned Act. The new body takes
over the activities of the pre-existing society by running
the institution which too is known as ICWA. So far as the
society ICWA is concerned, it has been left intact,
untouched and un-interfered with. There is no tampering
with the membership or the governing body of the society.
The society is still free to carry on its other activities. No
membership of the old society has been dropped. No new
member has been forced or thrust upon the society. The
impugned legislation nominates members who will be
members of the council, the new body corporate, different
J.V.Salunke,PA
Judgment-WPL.1939.2016.doc
from the society. The pith and substance of the impugned
legislation is to take over an institution of national
importance. As the formation of the society, which is a
voluntary association, is not adversely affected and the
members of the society are free to continue with such
association, the validity of the impugned legislation cannot
be tested by reference to sub-clauses (a) and (c) of clause
(1) of Article 19. The activity of the society which was
being conducted through the institution ICWA has been
adversely affected and to that extent the validity of the
legislation shall have to be tested by reference to sub-
clause (g) of clause (1) of Article 19. The activity was of
the society and the society cannot claim a fundamental
right. Even otherwise, the impugned legislation is a
reasonable legislation enacted in the interest of the general
public and to govern an institution of national importance.
It is valid.
.........
58. It was further submitted that the provisions of the
Societies Registration Act, 1860 were effective enough
which, if invoked, could have taken care of the alleged
grievances. If there was any truth or substance therein the
same could have been found on enquiries being held. In our
opinion, in a given set of facts and circumstances, merely
because an alternative action under the Societies
Registration Act, 1860 could have served the purpose, a
case cannot be and is not made out for finding fault with
another legislation if the same be within the legislative
competence of the Parliament, which it is, as will be seen
hereinafter."
91. Thereafter, in a decision in the case of Andhra Pradesh
Dairy Development Corporation Federation vs. B. Narasimha
Reddy and Ors.3 in the context of this very freedom, the Hon'ble
Supreme Court of India held as under:-
"46. The Government has inherent power to promote the
general welfare of the people and in order to achieve the
said goal, the State is free to exercise its sovereign powers
of legislation to regulate the conduct of its citizens to the
extent, that their rights shall not stand abridged.
3 (2011) 9 SCC 286
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47. The co-operative movement by its very nature, is a
form of voluntary association where individuals unite for
mutual benefit in the production and distribution of wealth
upon principles of equity, reason and common good. So,
the basic purpose of forming a co-operative society
remains to promote the economic interest of its members
in accordance with the well recognised co-operative
principles. Members of an association have the right to be
associated only with those whom they consider eligible to
be admitted and have right to deny admission to those
with whom they do not want to associate. The right to form
an association cannot be infringed by forced inclusion of
unwarranted persons in a group. Right to associate is for
the purpose of enjoying in expressive activities. The
constitutional right to freely associate with others
encompasses associational ties designed to further the
social, legal and economic benefits of the members of the
association. By statutory interventions, the State is not
permitted to change the fundamental character of the
association or alter the composition of the society itself.
The significant encroachment upon associational freedom
cannot be justified on the basis of any interest of the
Government. However, when the association gets
registered under the Co-operative Societies Act, it is
governed by the provisions of the Act and rules framed
thereunder. In case the association has an option/choice to
get registered under a particular statute, if there are more
than one statutes operating in the field, the State cannot
force the society to get itself registered under a statute for
which the society has not applied.
61. Cooperative law is based on voluntary action of its
members. Once a society is formed and its members
voluntarily take a decision to get it registered under the X
Act, the registration authority may reject the registration
application if conditions prescribed under X Act are not
fulfilled or for any other permissible reason. The
registration authority does not have a right to register the
said society under Y Act or even a superior authority is
not competent to pass an order that the society would be
registered under the Y Act. Such an order, if passed, would
be in violation of the first basic cooperative principle that
every action shall be as desired by its members
voluntarily. Introducing such a concept of compulsion
would violate Article 19(1)(c) of the Constitution of India.
It is not permissible in law to do something indirectly, if it
is not permissible to be done directly. (See Sant Lal Gupta
v. Modern Coop. Group Housing Society Ltd.)"
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Judgment-WPL.1939.2016.doc
92. Pertinently, in this decision, the Hon'ble Supreme Court
referred to earlier judgments, including in the case of Dharam
Dutt (supra).
93. We do not find Mr. Godbole's reliance on the judgment in the
case of Zoroastrian Co-operative Housing Society Ltd. (supra) to
be well placed. It was a case where after formation and
registration of the society, one of the members of the society sold
the plot in which he had constructed a residential building, to the
father of respondent no. 2 before the Hon'ble Supreme Court of
India with previous consent of the petitioner society. The father
of respondent no. 2 was also admitted to membership of the
society as he was qualified for such admission in terms of the by-
laws of the society. After the rights devolved on respondent no. 2,
consequent on the death of his father, he became a member of the
society of his volition. He applied to the society for permission to
demolish the bungalow that had been put up and to construct a
commercial building in its place. The society refused him
permission stating that the by-laws of the society did not permit
commercial use of the land. Thereafter, respondent no. 2 applied
to the society for permission to demolish the bungalow and to
construct residential flats to be sold to Parsis. The society
acceded to the request of respondent no. 2, making it clear that
J.V.Salunke,PA
Judgment-WPL.1939.2016.doc
the flats constructed could only be sold to Parsis. Respondent no.
2 did not take any steps pursuant to that permission for seven
years. Apprehending that respondent no. 2 intended to violate
the by-laws of the society, the society passed a resolution
reminding its members that in accordance with by-law 7, no
person other than a Parsi could become a new member of the
society and informing the existing members of the society that
they could not sell their plots or bungalows to any person not
belonging to the Parsi community.
ig Respondent no. 2 started
negotiations with respondent no. 3 a builder's association in
violation of the restriction on sale of shares or property to a non-
Parsi. That is how a case was filed before the Board of Nominees
for injunction restraining respondent no. 2 from putting up any
construction and from transferring the same to outsiders in
violation of the by-law without valid prior permission from the
society. Though, initially an interim order of injunction was
granted, the Board informed the society that the society could not
restrict its membership only to the Parsi community and that
membership should remain open for every person. That is how
the earlier order came to be vacated. Once again, respondent no.
2 and armed with such an order, sought permission to transfer
his shares to respondent no. 3. That application was rejected. In
the meanwhile, the society also challenged the order of the Board
J.V.Salunke,PA
Judgment-WPL.1939.2016.doc
of Nominees vacating the order of injunction before the Gujarat
State Co-operative Societies Tribunal and respondent nos. 2 and 3
challenged the rejection of the request of respondent no. 2 to sell
his plot to respondent no 3 by way of an appeal before the
Registrar of Co-operative Societies under section 24 of the
Gujarat State Co-operative Societies Act. The tribunal took a view
that the by-law restricting membership to Parsi was a restriction
on the rights to property and the right to alienate property and
therefore, was invalid in terms of Article 300-A of the
Constitution of India. This order was challenged by the society
and its Chairman before the Gujarat High Court. A learned Single
Judge of the Gujarat High Court dismissed that writ petition. The
society and the Chairman challenged that decision before a
Division Bench, but the Letters Patent Appeal was also dismissed.
That is how the matter was carried to the Hon'ble Supreme Court
of India. It is in this factual backdrop that the observations relied
upon by Mr. Godbole have to be seen. Paras 23 to 26 emphasise
the principle that there could be a restriction of the nature
contemplated by the by-laws of that society and there was
nothing erroneous in restricting the membership to certain
persons. Paras 29 to 32 are highlighted, but we do not think that
Mr. Godbole appearing as a Special Counsel for the State can rely
upon this judgment and to support the impugned actions. None of
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Judgment-WPL.1939.2016.doc
the paragraphs and particularly paras 42-43, which lay down
settled principles and reiterate them would come to his
assistance.
94. Similarly, the other judgments relied upon by Mr. Godbole,
namely, in the case of Ramesh Himmatlal Shah vs. Harsukh
Jadhavji Joshi4 would be of any assistance. Mr. Godbole would
submit that a share of the co-operative housing society in the
property is capable of being transferred. We do not see how these
judgments and particularly the other one in the case of Margret
Almeida vs. Bombay Catholic Co-operative Housing Society Ltd.5
would carry the arguments of Mr. Godbole further.
95. The interests of the Backward Class, Scheduled Caste and
Scheduled Tribe have to be protected. They are constitutionally
recognised, but it cannot be that a society comprising of
Backward Class citizens and functioning in terms of the existing
law, namely, the Maharashtra Co-operative Societies Act, 1960
can be called upon in the teeth of the Government order itself by
another Wing or Department of the Government to stop a valid
construction/redevelopment activity. In the garb of relying on
the above principles we do not think that Mr. Godbole can justify
the impugned order. The State was not justified in interfering
4 (1975) 2 SCC 105
5 (2012) 5 SCC 642
J.V.Salunke,PA
Judgment-WPL.1939.2016.doc
with a completed redevelopment project at the stage of
occupation of flats by the society members. No Rule prohibited
redevelopment of a plot belonging to a co-operative housing
society by it. In the view we have taken, we do not deem it
necessary to consider Mr. Godbole's submission that the terms
and conditions of the PWR Scheme or the allotment order are
covenants running with the land. Apart from the fact that the
basic materials for these submissions are lacking in the pleadings,
the record available, we have not found any such term enabling
us to invoke and apply this principle at the stage of
redevelopment of the petitioner's property.
96. As a result of the above discussion, we find that the
impugned order is ex-facie illegal, erroneous, arbitrary and
violates the mandate of Article 14 of the Constitution of India.
Even in the matters of present nature, the state ought to act
fairly, reasonably and in non-arbitrary manner. It cannot, at the
behest and instance of anybody, much less a stranger, interfere
with the administration of a lawful association or a co-operative
housing society as in the instant case and violate the mandate of
Article 19(1)(c) of the Constitution of India as well. Once all
these constitutional provisions are violated, then, the impugned
order cannot be sustained. It is quashed and set aside. Rule is
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Judgment-WPL.1939.2016.doc
made absolute in terms of prayer clause (a). There would be no
order as to costs.
97. At this stage Mr. Godbole prays for continuation of the
order of status-quo which was subject matter of challenge in this
writ petition. He also prays for the stay to the judgment and
order pronounced today.
98. This request is opposed by Mr. Bhadrashete. Mr.
Bhadrashete points out that the buildings are ready and fit for
occupation but the certificate is withheld by the Municipal
Corporation on account of the order of status-quo of the Minister/
2nd respondent and the pendency of the writ petition.
99. After hearing both sides on this limited point, we are of the
view that what Mr. Godbole in fact seeks is a continuation of the
order passed by the Minister and which we have quashed and set
aside. We cannot and having observed that there is violation of
the constitutional mandate and serious prejudice and hardship to
the petitioner society either continue that order or stay our
order. Both requests are refused.
(B.P.COLABAWALLA, J.) (S.C.DHARMADHIKARI, J.)
J.V.Salunke,PA
