The Parijat Flat Owners Co Op ... vs Rameshkumar Shyamlal Agarwal And ...
2021 Latest Caselaw 9413 Bom

P.H. Jayani                           WPST94388.2020 WITH 95242.2020new.doc


              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      CIVIL APPELLATE JURISDICTION

                 WRIT PETITION (ST.) NO. 94388 OF 2020

The Parijat Flat Owners Co-Op. Housing
Society Ltd.                                         ....Petitioner
            v/s.
Rameshkumar Shyamlal Agarwal and ors.                .... Respondents

                                WITH
                 WRIT PETITION (ST.) NO.95242 OF 2020

Ajay Motilal Ramnathkar and anr.                            ....Petitioners
           v/s.
Rameshkumar Shyamlal Agarwal and ors.                .... Respondents

Mr. Pradeep J. Thorat for the Petitioners in WPST/94388/2020.
Mr. Mayur Khandeparkar i/b. Mr. Girish Kedia for Respondent No.1.
Mr. P.P. Pujari, AGP for the State in WPST/94388/2020.
Mr. Jay K. Bhatia for the Petitioners in WPST/95242/2020 and
for Respondent Nos.5 and 6 in WPST/94388/2020.
Mr. S.L. Babar, AGP for the State in WPST/95242/2020.

                   CORAM      :- SMT. ANUJA PRABHUDESSAI, J.

PRONOUNCED ON :- 17/07/2021

JUDGMENT :-

. Rule, returnable forthwith. Respondents waive service. With

consent, taken up for final hearing.

2. By these Petitions, the Petitioners have challenged the order

dated 27/02/2020 passed by the Divisional Joint Registrar, Co-

operative Societies in Revision Application No.516/2016. By the

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impugned order, the Respondent No.3 has set-aside the order dated

08/07/2016 passed by Respondent No.2 under Section 23(2) of

Maharashtra Co-operative Societies Act, 1960 (MCS Act) and admitted

the Petitioners as a member of the Petitioner - Society in respect of the

suit shop-cum-office No.4 and further directed the Petitioner-Society to

transfer the shares in respect of the said premises in the name of

Respondent No.1 by making necessary entries in the share certificate

and records.

3. The dispute is in respect of a Store Room-cum-Office No.4

situated on the ground floor of the building 'Parijat', Plot No.95,

Backbay Reclamation, Marine Drive, Mumbai - 400002 which shall be

hereinafter referred to as 'the said premises'. By an Indenture of Lease

dated 12/03/1973, Bharat Builders Pvt. Ltd. gave on lease the suit

premises to one Anant Venkatesh Deshpande for a period of 980 years

with effect from 17/10/1953. The widow of said Anant Venkatesh

Deshpande assigned leasehold rights in favour of Dwarkaprasad

Jagannath Agarwal who in turn executed a Deed of Gift dated

21/05/2012 in favour of Respondent No.1 in respect of said premises.

The Respondent No.1 submitted an Application to the Petitioner-

Society seeking membership in respect of the said premises. The

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Petitioner-Society claims that there is discrepancy in the area as in the

initial Deed of Assignment, the area of the said premises is shown as

156.50 sq.ft, whereas in the Deed of Gift, the carpet area is shown to

be 524 sq.ft. The Petitioner - Society brought this discrepancy to the

notice of Respondent No.1. The Respondent No.1 issued a letter dated

19/05/2021 contending that the carpet area of the said premises is

15.70 sq. meters at plinth level and 13.99 sq. meters at mezzanine floor

level and that he is in possession of the same.

4. The Petitioner-Society rejected the Application for membership

on the ground that the Respondent No.1 had demolished the internal

load bearing wall of the adjoining ground floor premises and had

amalgamated the suit premises with the adjoining premises. The said

order was challenged in an Appeal before the Respondent No.2 -

Assistant Registrar, Co-operative Societies, C-Ward, Mumbai. The

Respondent No.2 dismissed the said Appeal vide order dated

08/07/2016. Being aggrieved by the said order, the Respondent No.1

filed Revision Application No.516/2016 before Respondent No.3 - the

Divisional Joint Registrar, Co-operative Societies.

5. The Respondent No.3, relying upon the decision of the Apex

Court in Videocon Appliances Ltd. v/s. Maker Chamber V Premises Co-

P.H. Jayani WPST94388.2020 WITH 95242.2020new.doc

operative Society Ltd. held that membership cannot be refused on the

ground of illegal construction, encroachment etc. and accordingly

allowed the Revision Application and admitted the Petitioner as the

member of the Petitioner -Society in respect of the said premises.

Being aggrieved by this order, the Petitioners have filed these Petitions

under Article 227 of the Constitution of India.

6. Heard Mr. Pradeep J. Thorat, learned counsel for the Petitioner in

WPST/94388/2020 and Mr. Jay K. Bhatia, learned counsel for the

Petitioners in WPST/95242/2020. They contend that the predecessor

of Respondent No.1 was merely a lessee in respect of the said premises

admeasuring 152.56 sq.ft. and hence, the Respondent No.1 cannot

claim ownership in respect of the said premises to the extent of 524

sq.ft, without there being any valid document of title in his favour. It is

submitted that the Gift Deed executed in favour of Respondent No.1 is

an outcome of a well planned fraud and that Petitioner-Society cannot

be a privy to such fraud sought to be perpetuated by the Respondent

No.1 by increasing the area of the said premises from 152.56 sq.ft. to

524 sq.ft. They contend that the Respondent No.3 has failed to

consider that the Respondent No.1 has demolished the internal walls

and has encroached over the adjoining premises. It is stated that the

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Respondent No.1 cannot claim right in respect of any additional area

beyond the area mentioned in the Deed of Assignment executed by

Leela Deshpande in favour of Late Dwarkadas Jagannath Agarwal.

7. Per contra, Shri. Khandeparkar, learned counsel for Respondent

No.1 submits that in view of the consent terms filed by the Petitioner-

Society in Civil Appeal No.6556/1999, the Society is under an

obligation to join every occupant of a flat or garage in the suit building

as a member and to look after the management of the suit building on

being paid service charges by each of the members of the Society. He

submits that the Application for membership submitted by the

Respondent No.1 in prescribed form was received by the Registrar of

Society on 05/09/2015. The Society did not respond to the said

Application within a period of 60 days. Hence, the Respondent No.1

was constrained to file an Appeal before the Respondent No.2. He

submits that the Respondent No.2 had rejected the Application merely

on the ground of encroachment. He submits that in case of Videocon

Appliance Ltd. (Supra), this Court has held that the membership

cannot be rejected on the ground of unauthorized construction or

encroachment. He therefore submits that there is no infirmity in the

order of the Respondent No.3.

P.H. Jayani WPST94388.2020 WITH 95242.2020new.doc

8. I have perused the records and considered the submissions

advanced by the learned counsels for the respective parties.

9. It is not in dispute that by Indenture of Lease dated 12 th March,

1973 Bharat Builders had given on lease the entire ground floor office

premises in the building to Anant Venkatesh Deshpande for a period of

980 years w.e.f. 17/10/1983. Widow of Anant Deshpande assigned the

leasehold rights in favour of Dwarkaprasad Jagannath Agarwal by deed

of assignment dated 12/05/2007. Said Dwarkaprasad Agarwal has

gifted the said premises to the Respondent No.1 by deed of gift dated

21/05/2010.

10. The Respondent No.1 had applied for membership in the

prescribed format. It is to be noted that Section 22 enunciates who

may become a member of the Society. Clause (a) of section 22 provides

that an individual who is competent to contract under Section 22(1) of

the Indian Contract Act, shall be qualified to seek a membership of a

Co-operative Society. Section 23 of the Act stipulates that Society shall

not without sufficient cause refuse admission to membership to any

person duly qualified under the provisions of the Act and the byelaws.

In the instant case, the Application for membership has not been

rejected on the ground that the Respondent No.1 is not qualified to be

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a member under the provisions of Maharashtra Co-operative Societies

Act or its byelaws but has been refused in view of the discrepancy in

the area of the premises as stated in the deed of assignment vis-à-vis

the gift deed executed in favour of Respondent No.1 and consequent

encroachment.

11. The question which thus falls for consideration is whether the

Society could refuse membership on the ground of encroachment. This

question is no more res integra as this Court in case of Videocon

Appliances Ltd. (supra) has held that it is not open for any Society to

refuse membership on the ground that the construction is

unauthorized. It is held that the question whether the construction is

authorized or unauthorized, is a matter of civil dispute to be decided by

the civil court and neither the co-operative Society nor the Deputy

Registrar nor the Divisional Joint Registrar is empowered to go into the

aforesaid issue for determining whether a person is entitled to be a

member or not. It has been emphasized that a membership of the

Society has to be considered only on the Rules, Regulations and Bye-

laws and not on the basis of the external factors such as whether the

construction of the premises is legal, illegal or authorized or

unauthorized. Until the issue of the validity of the construction is

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determined by the Civil Court, the Society as well as the Authorities are

not justified in refusing to grant membership. Similar view has been

taken by this Court in Snehsadan Co-operative Housing Society Vs.

State of Maharashtra and ORs. AIR 2004 Bombay 2004, Bhagwati

Bhuwan Co-operative Housing Society Ltd. Vs. State of Maharashtra

Writ Petition (Lodging) No.2641 of 2019.

12. In the instant case, the Respondent No.1 is in possession of the

said premises by virtue of a gift deed executed in his favour by

Dwarkaprasad Agarwal and he has been paying property tax to the

Society. The Society or the authorities under the Act are not competent

either to decide the validity of the gift deed or to adjudicate upon the

issue of encroachment or to reject membership on such ground. The

dispute relating to the encroachment being essentially of civil nature,

the only recourse available is to adopt appropriate action, in

accordance with the law, if deemed fit.

13. Learned Divisional Joint Registrar has considered in detail

various judgments of this Court and has held that the Society could not

have rejected membership on the ground of encroachment or

unauthorized construction and that it can always approach the court of

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competent jurisdiction for redressal of their grievance as regards

validity of the gift deed. The Respondent No.3 has also taken note of

the pendency of the First Appeal filed by the Petitioners-Ajay

Ramnathkar and others and has observed that the decision of the High

Court would be binding on the parties. The decision of Respondent

No.3 does not suffer from any infirmity as the same is in consonance

with the law laid down by this Court in several decisions referred to

above.

14. Under the circumstances and in view of discussion supra, the Writ

Petitions have no merits and are accordingly dismissed. Rule stands

discharged. It is clarified that this Court has not expressed views on

the merits of the allegations made by the Petitioner-Society and any

action initiated or proposed to be initiated against the Respondent

No.1 in respect of the alleged encroachment/unauthorized construction

shall be decided on its own merits.

15. There shall be no order as to costs.

PREETI JAYANI Digitally signed by (SMT. ANUJA PRABHUDESSAI, J.) PREETI H JAYANI Date: 2021.07.20 15:33:46 +0530