Bombay High Court

Shri Poornanand Saraswati ... vs Divisional Joint Registrar ... on 14 June, 2016

Bench: M.S. Sonak

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        CIVIL APPELLATE JURISDICTION




                                                                                     
                           WRIT PETITION NO. 1875           OF 2005




                                                             
            Shri Poornanad Saraswati Co-op.
            Housing Society Limited                           ..      Petitioner
                   vs.




                                                            
            Divisional Joint Registrar (Appeal)
            Mumbai & Ors.                                     ..      Respondents


            Mr. M. J. Jamdar for Petitioner.




                                                
            Mr. A. R. Metkari - AGP for Respondent Nos. 1 and 2.
            Mr. Chaitanya Nikte for Respondent Nos. 3 and 4.
                                   
                                          CORAM : M. S. SONAK, J.

             Date of Reserving the Judgment :                05       May 2016
             Date of Pronouncing the Judgment :              14       June 2016


            JUDGMENT :-
        


            1]      The challenge in this petition is to the orders dated 19

October 2004 and 3 March 2005 made by the Deputy Registrar

(Co-operative Societies) and the Divisional Joint Registrar

(Appeals) directing the petitioner society to admit respondent nos. 3

and 4 as members of Shri Poornanad Saraswati Co-op. Housing

Society Limited (society).

2] Mr. Jamdar, learned counsel for the petitioner - society had

submitted that the appeal instituted by respondent nos. 3 and 4

before the Deputy Registrar (Co-operative Societies) under Section

23(2) of the Maharashtra Co-operative Societies Act, 1960 (said

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Act) was not at all maintainable as the petitioner society vide its

resolution dated 7 August 2004, had not rejected the applications

made by respondent nos. 3 and 4 for membership, but had merely

deferred the decision on this issue, to some further date. Mr.

Jamdar, relying upon the phraseology employed by the legislature

in enacting sub section (2) of Section 23 of the said Act submitted

that an appeal under the said provision is maintainable only if the

society refuses membership and not otherwise.

3] Although, the aforesaid contention had been considered and

decided against the petitioner society by the Deputy Registrar Co-

operative Societies - the appellate authority and the Divisional

Joint Registrar (Appeals) - the revisional authority, this Court, rather

than let such technical objection prevail, made an order on 29 April

2005 permitting the petitioner society to consider the application of

respondent nos. 3 and 4 for membership afresh and to take a

suitable decision in that regard. It was however clarified that in case

the society decides against respondent nos. 3 and 4, such order

can be placed on record in the present petition and the legality of

such order will be open to scrutiny in this petition.

4] The order dated 29 April 2005 made in this petition reads

thus:

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"1. Heard Mr. Keni and Mr. Thakare the learned counsel for the Petitioner-society which is aggrieved by an order

passed in Revision Application No. 583 of 2004 by the Divisional Registrar, Co-operative Societies, Mumbai on

3.3.2005. While dismissing the Revision Application, the order passed by the Deputy Registrar Co-operative

Societies, D-Zone, Mumbai on 19.10.2004 has been confirmed. The Deputy Registrar allowed the Appeal filed under Section 23(2) of the Maharashtra Co-operative

Societies Act, 1960 against the Resolution dated 11.8.2004 passed by the Petitioner-society and directed the society to

enroll Mrs. Daksha Baxi and Mr. Jawahar Baxi as the members of the Petitioner-Society.

2. The learned counsel for the Society submitted that its membership is given to a new entrant viz. a buyer of any of the flats strictly as per its by-laws and unless the earlier flat

holder resigns from the membership, such a membership

cannot be transferred. The Resolution dated 7.8.2004 as it appears on the record submitted before this Court shows that the application dated 2.8.2004 submitted by the present

Respondent nos. 3 and 4 was kept pending and it was not rejected. The reasons for keeping the application pending have also set out in the minutes and all of them may not be justified. Therefore, the learned counsel for the Petitioner-

society stated that the pending application will be considered strictly as per its by-laws and in any case, the Respondent no. 5 has submitted his resignation vide his letter dated 18.8.2004. It is further assured to the Court that the application pending will be decided by 23.5.2005 and strictly as per the by-laws of the society. While noting down this undertaking, it is clarified that the Respondent Nos. 3 and 4

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will have to furnish all the particulars within one week from receiving communication from the Petitioner-society so as to

prov their eligibility as per the by-laws of the society. The Petitioner shall communicate to the Respondent nos. 3 and 4

any such additional documents / clearances as per the by- laws within one week from today. The final decision of the

society so taken by 23.5.2005 shall be communicated to the Respondents Nos. 3 and 4 forthwith.

3. Hence, S.O. to 8.6.2005. It is clarified that in case

the society's decision goes against the Respondents Nos. 3 and 4, the order may be brought on record before

the next date and the legality of such a decision will be open to scrutiny in this petition.

4. Certified copy of this order is expedited."

(emphasis supplied)

5] In pursuance of the aforesaid order dated 29 April 2005, the

petitioner society resolved to deny membership to respondent nos.

3 and 4. The resolution dated 23 May 2005 to this effect has been

placed on record. As directed earlier, even the said decision, is

open for scrutiny in the present petition. Accordingly, the learned

counsel for the petitioner society as well as the learned counsel for

respondent nos. 3 and 4 have, without prejudice to their other

contentions, made their submissions in the context of the decision

dated 23 May 2005.

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            6]      Mr. Jamdar, learned counsel for the petitioner society has

made the following submissions in support of the present petition:

(A) That the appeal instituted by respondent nos. 3 and 4 on 9

August 2004 before the Deputy Registrar (Co-operative Societies)

under section 23(2) of the said Act, was premature and not

maintainable, as by the said date, the petitioner society had not

refused membership to respondent nos. 3 and 4. Therefore, the

impugned order dated 19 October 2004, made by the Deputy

Registrar (Co-operative Societies) is without jurisdiction and the

Divisional Joint Registrar (Appeals) failed to exercise jurisdiction

vested in him, by not setting aside the impugned order dated 19

October 2004;

(B) That in any case, the petitioner society, in pursuance of the

liberty granted by this Court, has refused membership to

respondent nos. 3 and 4 vide resolution dated 23 May 2005. In

case respondent nos. 3 and 4 are dissatisfied with such decision,

then, it is for them to institute appeal against the same under

section 23(2) of the said Act. This having not been done,

respondent nos. 3 and 4 cannot, at this stage, insist upon admission

to the membership of the society;

23 May 2005 for refusing membership to respondent nos. 3 and 4

are relevant, cogent and germane. Considering the circumstance

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that majority of the members of the society are not in favour of

admitting respondent nos. 3 and 4 as members of the society, there

is no case made out to upset the resolution dated 23 May 2005 and

direct the admission of the said respondents to the membership of

the society. Mr. Jamdar pointed out that respondent nos. 3 and 4

lacked 'spirit of co-operation'. This according to him, is evident from

the circumstance that respondent nos. 3 and 4 have exhibited

disinclination to comply with the rules and procedure of the society

and further the said respondents have gone to the extent of

instituting civil and criminal proceedings against the office bearers of

the society. Mr. Jamdar has submitted that these are legal and valid

reasons for declining membership to respondent nos. 3 and 4.

7] Mr. Chaitanya Nikte, learned counsel for respondent nos. 3

and 4 has submitted that membership was refused to respondent

nos. 3 and 4 in the meeting held on 7 August 2004. The petitioner

society failed to produce the resolution or the minutes of the

meeting held on 7 August 2004 either before the Deputy Registrar

(Co-operative Societies) or the Divisional Joint Registrar. The

statements made by the office bearers of the society before the

police were duly produced before the two authorities and in these

statements, the office bearers had clearly stated that membership

was refused to respondent nos. 3 and 4 in the meeting held on 7

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August 2004. Accordingly, Mr. Nikte submitted that the appeal

under Section 23(2) of the said Act was very much maintainable

and the same was rightly entertained and allowed by the Deputy

Registrar (Co-operative Societies). Mr. Nikte, by reference to this

Court's order dated 29 April 2005 submitted that the liberty granted

to the petitioner society, was only to obviate the necessity to decide

the technical objection raised by the petitioner society as to the

maintainability of the appeal. In any case, the order dated 29 April

2005 makes it clear that the legality of the decision taken in

pursuance of the liberty granted will be open to scrutiny in this

petition itself. As such there was no necessity of respondent nos. 3

and 4 again instituting any appeal under section 23 (2) of the said

Act in the matter. Mr. Nikte finally submitted that the reasons set out

in the resolution dated 23 May 2005 are false, irrelevant and

untenable. The mere circumstance that respondent nos. 3 and 4

were forced to and have taken recourse to legal remedies, can

hardly be held against respondent nos. 3 and 4. For all these

reasons, Mr. Nikte submitted that there is no case made out to

interfere with the concurrent findings recorded by the two

authorities, particularly considering the limited parameters of judicial

review under Article 227 of the Constitution of India.

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            8]      Both the learned counsel relied upon certain decisions, which

shall be considered in the course of this judgment and order.

9] Rival contentions, now fall for determination.

10] Sub section (1) of section 22 of the said Act inter alia provides

that no person shall be admitted as a member of a society except

the following, that is to say an individual, who is competent to

contract under the Indian Contract Act, 1872. Sub section 1A of

section 22 of the said Act however provides that notwithstanding

anything contained in sub section (1), the State Government may,

having regard to the fact that the interest of any person or class of

persons conflicts or is likely to conflict with the objects of any society

or class or societies, by general or special order, published in the

Official Gazette, declare that any person or class of persons

engaged in or carrying on any profession, business or employment

shall be disqualified from being admitted, or for continuing, as

members or shall be eligible for membership only to a limited

extent of any specified society or class of societies, so long as such

person or persons are engaged in or carry on that profession,

business or employment as the case may be. There is no dispute

in the present case that respondent nos. 3 and 4 qualify for

membership to the petitioner society in terms of sub section (1) of

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section 22 and further, it is not even the case of the petitioner

society that the provisions contained in sub section(1A) to section

22 of the said Act, are in any manner, attracted to the claim of

membership by respondent nos. 3 and 4. Sub section (2) of section

22 provides that where a person is refused admission as a member

of the society, the decision (with the reasons therefor) shall be

communicated to that person within fifteen days of the date of the

decision, or within three months from the date of receipt of such

application for admission, whichever is earlier. If the society does

not communicate any decision to the applicant within three months

from the date of receipt of such application the applicant shall be

deemed to have been admitted as a member of the society. If any

question arises whether a person has become a deemed member

or otherwise, the same shall be decided by the Registrar after giving

a reasonable opportunity of being heard to all the concerned

parties.

11] Section 23 of the said Act is entitled 'open membership'. Sub

section (1) to section 23 of the said Act provides that no society

shall, without sufficient cause, refuse admission to membership to

any person duly qualified therefor under the provisions of the said

Act and its bye-laws. Sub section (1A) takes care of the

contingency where a society refuse to accept the application from

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an eligible person for admission as a member. Sub section (2) to

section 23 of the said Act provides that any person aggrieved by the

decision of a society refusing him admission to the membership,

may appeal to the Registrar within a period of sixty days from the

date of receipt of the decision of the society. Every such appeal, as

far as possible, shall be disposed of by the Registrar within a period

of three months from the date of its receipt. Provided that, where

such appeal is not so disposed of within the said period of three

months, the Registrar shall record reasons for the delay. Sub

section (3) to section 23 provides that the decision of the Registrar

in appeal, shall be final and the Registrar shall communicate his

decision to the parties within fifteen days from the date thereof. Sub

section (4) of section 23 of the said Act concerns agro-processing

societies or any other society for which a definite zone or an area

of operation is allotted by the State Government or the Registrar. In

this case, we are not concerned with such a society.

12] The first objection raised by Mr. Jamdar is to the

maintainability of appeal before the Deputy Registrar, really does

not survive, if the subsequent developments in the matter are to be

taken into consideration. Nevertheless, since Mr. Jamdar has

pressed this contention, it is necessary to consider whether such

objection came to be correctly rejected by the Deputy Registrar and

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the Divisional Joint Registrar exercising appellate and revisional

authority under the said Act.

13] At the outset, it must be noted that it does appear that the

petitioner society did not produce either before the Deputy

Registrar or the Divisional Joint Registrar the copy of the resolution

actually adopted by the petitioner society in the special general

body meeting held on 7 August 2004. Since, the petitioners had

serious objections to the maintainability of the appeal under section

23 (2) on the ground that no decision was ever taken in the

meeting of 7 August 2004 to refuse membership to respondent nos.

3 and 4, the least that was expected from the petitioner society was

to place a true copy of such resolution before the Deputy Registrar,

taking up an appeal under section 23(2) of the said Act, at the

earliest instance. The petitioner society, having failed to place on

record such resolution before the appellate authority at the earliest

instance, cannot, at this stage, insist upon adjudication of the

technical objection as to maintainability of the appeal under section

23(2) of the said Act. In any case, the view taken by the two

authorities i.e. the appellate authority and the revisional authority on

the aspect of maintainability of the appeal, cannot really be said to

be vitiated by any error apparent on face of record or jurisdictional

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error, so as to warrant interference under Article 227 of the

Constitution of India.

14] The two authorities, in the context of maintainability of the

appeal have taken into consideration the statements made by the

office bearers of the petitioner society before the police that

membership was indeed refused to respondent nos. 3 and 4 in the

special general body meeting held on 7 August 2004. These

statements are incidentally a part of the record and upon perusal of

the same, there is really no ambiguity in the statements made by

the office bearers of the petitioner society. That apart, the record

also indicates that there was other material on record to suggest

that membership had in fact been refused. Mr. Jayant Arurkar, the

member of the society, from whom respondent nos. 3 and 4 have

purchased the premises in question was present at the meeting

and has filed an affidavit affirming rejection. The correspondence

addressed by the members of the petitioner society, including the

letter in which the office bearers have agreed to consider the

application for membership made by respondent nos. 3 and 4

again, also constitute sufficient material to sustain the concurrent

findings recorded by the two authorities in the matter of refusal of

membership. In exercise of extra ordinary jurisdiction under Article

227 of the Constitution of India, it is neither possible nor

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permissible to scan the material on record, as if this court was

exercising any appellate jurisdiction in the matter. Suffice to note

that this is neither a case of 'no evidence' nor a case of perversity

in the record of concurrent findings of facts.

15] In any case, the contention raised by Mr. Jamdar, in the facts

and circumstances of the present case, is only a technical. It is

quite apparent that the petitioner society is bent upon refusing

membership to respondent nos. 3 and 4. In order that the technical

objection does not persist, this Court, by its order dated 29 April

2005 granted liberty to the petitioner society to once again consider

the application made by respondent nos. 3 and 4 for membership

and to take a decision thereon. In pursuance of such order, the

general body of the petitioner society has taken a decision, on 23

May 2005, once again, rejecting the application for membership. In

these circumstances, it is not possible to interfere with the

impugned orders on the basis of the technical objection raised by

the petitioner society, particularly since the petitioner society has not

been able to make good the same. Jurisdiction under Articles 226

and 227 of the Constitution of India is conceived in equity and this

Court, in the exercise of such jurisdiction, is not bound to interfere,

merely because the petitioner makes out some case of a technical

breach.

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            16]     The issue of admission of respondent nos. 3 and 4 to the

membership of the petitioner society is pending since the year

2004. The two authorities under the Act have ruled that the denial

of membership by the petitioner society is neither legal nor proper.

The petitioner society, without prejudice, was offered opportunity to

reconsider this issue in terms of this Court's order dated 29 April

2005. At this stage, therefore, it is not possible to take the view that

the appeal instituted by respondent nos. 3 and 4 was either

premature or not maintainable under section 23(2) of the said Act.

Accordingly, it is not possible to accept Mr. Jamdar's first contention

with regard to the very maintainability of the appeal under section

23(2) of the said Act.

17] At this stage, respondent nos. 3 and 4 cannot be relegated to

challenge the decision dated 23 May 2005, in terms of which the

petitioner society has once again rejected the applications of

respondent nos. 3 and 4 to the membership of the petitioner society.

The order dated 29 April 2005 made by this Court is quite clear.

The order was made, merely in order to afford an opportunity to

the petitioner society to consider the issue of membership and in

order that the technical objection with regard to the alleged denial of

such opportunity and maintainability of the appeal, does not persist.

However, this Court, in paragraph 3 of the order dated 29 April 2005

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had made it abundantly clear that in case the petitioner society

decides against admitting respondent nos. 3 and 4 as its members,

such order may be brought on record and the legality thereof will be

open to scrutiny in this petition. At this stage, it is both incorrect and

unfair on the part of the petitioner society to even urge that its

decision dated 23 May 2005 is final or that respondent nos. 3 and 4

should be relegated to some alternate remedy at this point of time.

18]

In fact, the issue of examination of the legality of the decision

dated 23 May 2005 in this petition itself will arise, only if the

petitioner society succeeds in making a case warranting

interference with the impugned orders made by the appellate and

the revisional authorities. The petitioner society, having failed, to

make out any case to warrant interference with the impugned

orders, there is really no necessity to once again examine the

legality of the decision dated 23 May 2005, as, it is quite clear that

the liberty granted to the petitioner society to take such a decision,

was subject to further orders in this petition. This is quite clear from

the tenor of the order dated 29 April 2005.

19] The contention that the application for membership submitted

by respondent nos. 3 and 4 was incomplete or that the same

suffered from certain technical defects, is also untenable. Upon

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perusal of the provisions of the said Act, rules made thereunder

and the bye-laws of the society, it is quite clear that there was

substantial compliance on the part of the respondent nos. 3 and 4

as also Mr. Jayant Arurkar, from whom, the said respondents have

purchased the premises in question. In such circumstances, there is

really no case made out to interfere with the impugned orders made

by the appellate and revisional authorities under the said Act.

20]

The decision dated 23 May 2005, in the facts and

circumstances of the present case, cannot be said to be legal and

tenable. It appears that respondent nos. 3 and 4 attempted to move

into the premises in question, on the basis of the deeds and

documents of transfer obtained by them from Mr. Jayant Arurkar,

the member of the petitioner society. On that occasion, it appears

that there was some physical altercation between the parties, which

laid to institution of civil and criminal proceedings. Besides,

respondent nos. 3 and 4 were also per-forced to institute

proceedings to secure membership. For these reasons, it cannot

be said that respondent nos. 3 and 4 lacked 'spirit of co-operation'.

21] The decision dated 23 May 2005 also states that the society

has been dragged into unnecessary litigation by respondent nos. 3

and 4. Considering that at least two authorities have held in favour

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of respondent nos. 3 and 4, it cannot be said that such litigation was

either frivolous or unnecessary. It does appear that respondent

nos. 3 and 4 had no choice but to litigate in the matter of their

admission to the membership of the petitioner society. The reasons

stated in the decision dated 23 May 2005, therefore, cannot be

regarded as cogent or tenable, in the facts and circumstances of the

present case.

22]

Another reason set out in the decision dated 23 May 2005 is

that the respondent no. 4 has, allegedly, mortgaged the premises in

question, without necessary information to the office bearers of the

petitioner society and even before, the respondent no. 4 could be

enrolled as member of the society. Again, there is no material to

substantiate this aspect. In any case, in the peculiar facts and

circumstances of the present case, that circumstance by itself,

cannot be held to constitute sufficient cause for declining

membership.

23] Mr. Jamdar, learned counsel for the petitioner relied upon the

decisions of this Court in the case of New Sion Co-operative

Housing Society Ltd. vs. State of Maharashtra & Ors. 1 and

President, Nagarpalika Prathamik Shala Shikshak Servants Co-

operative Credit Society Ltd. vs. Ramchandra Damodar 1 2007 (1) Mh.L.J. 416

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Umalkar & Ors.2, to contend that opposition by majority of the

members of the society to the admission of respondent nos. 3 and 4

as members of the co-operative society, by itself, constitutes

sufficient cause for denying membership. Mr. Jamdar also placed

reliance upon the decision in case of Banarasi Das Saraf & Ors.

vs. Dalmia Dadri Cement Ltd. & Anr.3, in support of the very same

proposition.

24]

In my judgment, the said decisions are of no assistance to the

petitioner society considering the peculiar facts and circumstances

of the present case. In case of New Sion Co-operative Housing

Society Ltd. (supra), this Court, relying upon the decision of the

Division Bench in the case of President, Nagarpalika Prathamik

Shala Shikshak Servants Co-operative Credit Society Ltd.

(supra) remanded the matter to the Divisional Joint Registrar for

deciding whether in the facts and circumstances of the said case,

there was sufficient cause for denying membership to the applicant

concerned.

25] In President, Nagarpalika Prathamik Shala Shikshak

Servants Co-operative Credit Society Ltd. (supra), the Division

Bench of this Court has held that the circumstance that

2 1967 BCI 56 3 AIR 1959 Punjab 232

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overwhelming majority of the members of the society considered

the applicant undesirable to be admitted to the membership of the

society is a relevant circumstance, for determining whether there

exist sufficient cause for denying membership. However, the

Division Bench, has not held that the same can be the only

consideration in the matter of this nature. Besides, in the facts and

circumstances of the said case, there was material on record to

suggest that the applicant, while he was a member of another

society had indulged in acts of misbehaviour on account of which,

the majority members of the society resolved against the admission

of the applicant to the membership of the said society. Besides, in

paragraph 18 of the said decision it is recorded that the applicant

concerned was given full and fair opportunity to explain his case

and it is only upon consideration of such explanation that the

majority of the members resolved against the admission of the

applicant concerned to the membership of the society. Position in

the present case is quite different. As such, the decision of the

Division Bench is of no assistance to the petitioner society in the

peculiar facts and circumstances of the present case.

26] Mr. Jamdar, relying upon the decisions in the case of K.

Shantharaj & Anr. vs. M. L. Nagaraj & Ors.4 and Jt. Registrar of

4 (1997) 6 SCC 37

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Cooperative Societies, Kerala vs. T. A. Kuttappan & Ors.5

submitted that the Registrar is not empowered to enroll the

respondent nos. 3 and 4 as members of the petitioner society. The

decisions concern the power of an administrator or a special officer

appointed to govern the affairs of a society, to enroll new members.

Such issue is not even remotely involved in the present case.

27] Mr. Jamdar also relied upon the decision of the Hon'ble

Supreme Court in the case of Smt. Damyanti Naranga vs. The

Union of India & Ors.6, to contend that under Articles 19(1)(c) of

the Constitution of India freedom of association includes right to

associate with persons of one's choice. Again, the issue involved in

the said decision was entirely different and therefore the said

decision is not at all applicable to the issue involved in the present

case.

28] Mr. Jamdar also placed reliance upon the decision in State of

Maharashtra & Ors. vs. Karvanagar Sahakari Griha Rachana

Sanstha Maryadit7, to submit that the Registrar cannot issue

directions to the cooperative societies to amend their bye-laws to

enable plot holders to construct multi storied building with more

than one tenement on their plots and to form society of such

5 (2000) 6 SCC 127 6 1971 (1) SCC 678 7 (2000) 9 SCC 295

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building owners which would be the members of the tenant -

ownership co-operative housing society. In the said decision, it is

held that what is in the interest of the society is primarily for the

society to decide. Again, this decision is not at all applicable to the

issue involved in the present case. It is impermissible to read a

stray sentence out of context in support of the claim that the

petitioner society has unfettered discretion in the matter of

enrollment of members.

29] The decision in the case of Zoroastrian Cooperative

Housing Society Ltd. & Anr. vs. District Registrar, Co-operative

Societies (Urban) & Ors.8 is also not applicable to the issue

involved in the present case. In the said case, the issue involved

concerned the validity of bye-law restricting membership to the

members of a particular community.

30] The Respondent nos. 3 and 4 claim to have acquired the

premises in question from respondent no. 5 by virtue of a

conveyance dated 30 July 2004 registered on 31 July 2004. It is the

case of the petitioner society that respondent nos. 3 and 4, even

prior to their enrollment as members of the society attempted to

shift into the premises in question on 2 August 2004. The record

indicates that there was some incident on the said date, as 8 (2005) 5 SCC 632

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respondent nos. 3 and 4 were obstructed from moving into the

premises in question. Complaints and counter complaints were

therefore filed to the concerned police station.

31] On 7 August 2004 special general body meeting of the

petitioner society was convened. It is the case of the petitioner

society that decision was taken to defer the issue of admission of

respondent nos. 3 and 4 to the membership of the petitioner society

as the forms submitted by respondent nos. 3, 4 and 5 were

incomplete. Respondent nos. 3 and 4 preferred appeal under

section 23(2) of the said Act to the Deputy Registrar on 9 August

2004, which was allowed vide impugned order dated 19 October

2004. The revision instituted by the petitioner society before the

Divisional Joint Registrar was dismissed on 3 March 2005.

32] As noted earlier, the two Authorities, on the basis of material

before them, have held that membership was refused to respondent

nos. 3 and 4 in the meeting held on 7 August 2004. There is no

error apparent on face of record or jurisdictional error in

entertaining the appeal under section 23(2) of the said Act. In the

facts and circumstances of the present case, the technical objection

that the decision was only deferred and therefore, no appeal was

maintainable under section 23(2) of the said Act cannot be

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accepted. In fact, in the revision petition instituted by the petitioner

society, no such clear ground was also raised by the petitioner

society. The circumstances on record clearly indicate that the

petitioner society was determined not to enroll respondent nos. 3

and 4 as members of the society. There was substantial compliance

on the part of respondent nos. 3, 4, 5 and 6, in the matter of their

applications seeking membership. The reasons set out in the

decision dated 23 May 2005, which in any case, was in pursuance

of the limited liberty granted by this Court are in the nature of an

after thought. In any case, the same do not constitute sufficient

cause for denying membership.

33] In case of Cumballa Co-operative Housing Society vs.

Kavaldeep Gandhioke & Ors.9, the Division Bench of this Court

upheld the decisions of the authorities under the said Act to the

effect that there was no sufficient cause for denying membership

on the ground that the gift deed by which the applicant claim to

have acquired the premises in question was not genuine or that a

proper gift tax or stamp duty had not been paid. The Division

Bench of this Court held that the society cannot for extraneous

reasons refuse membership to eligible persons.




    9 2001 SCC Online Bom 830



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            34]     In the case of Sneh Sadan Co-op. Hsg. Soc. Ltd. vs. State

            of Maharashtra & Ors.10, this Court has held          that reasons like

failure to obtain NOC for sale, submission of incomplete documents

or the pendency of dispute between the society and the purchaser,

by itself, cannot be grounds to deny membership. This Court has

held that denial of membership must be based upon cogent material

and not on whims and fancies.

35]

In the course of hearing of this petition, considering the

circumstance that respondent nos. 4 and 5 have been staying in the

premises in question for last twelve years or thereabouts, the

parties were called upon to explore the possibility of settling the

matter amicably. The respondent nos. 3 and 4, without prejudice to

their rights and contentions, had offered to unconditionally withdraw