Gujarat High Court
Yogashram Cooperative Housing ... vs Ashish Kiritkumar Purani on 4 August, 2023
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/17081/2021 CAV JUDGMENT DATED: 04/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17081 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 21824 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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YOGASHRAM COOPERATIVE HOUSING SOCIETY LTD. PART I
Versus
ASHISH KIRITKUMAR PURANI
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Appearance:
MR KAMAL TRIVEDI, SENIOR ADVOCATE WITH MR RAVINDRA
MR MIHIR JOSHI WITH MR JAY KANSARA FOR M/S WADIAGHANDY AND
CO(5679) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 04/08/2023
CAV JUDGMENT
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1.Heard learned Senior Advocate Mr. Kamal
Trivedi with learned advocate Mr. Ravindra
Shah for the petitioner and learned Senior
Advocate Mr. Mihir Joshi with learned
advocate Mr. Jay Kansara for the respondents.
2.Special Civil Application No.17081/2021 is
filed by the petitioner society with the
following prayers:
"(A) to issue a writ of certiorari
or any other appropriate writ, order
or direction quashing and setting
aside the impugned judgement dated
18.10.2021 passed by the Gujarat
State Co-operative Tribunal at
Annexure-AB (Pages 396-422) to the
petition in so far as it permits the
respondents to make construction of
ground + seven floors on sub plot
32/A of the petitioner society and
the impugned award and operative
part of the judgement dated
30.08.2019 rendered by the board of
nominees, Amdavad in Lavad Suit
217/2017 at Annexure-S (Pages 251
275/B) to the petition and allow the
Lavad Suit 217/2017 in toto by
granting all the reliefs prayed for
by the petitioner society;
(B) pending hearing and final
disposal of the petition, to
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restrain the Respondents, their
agents, assigns, servants, whosoever
etc. from carrying on erection or
execution of construction of
whatsoever nature in Sub-Plot 32/A
of the Petitioner Society;
(C) pending hearing and final
disposal of the petition, to stay
the further execution,
implementation and operation of the
impugned judgement dated 18.10.2021
passed by the Gujarat State Co-
operative Tribunal at Annexure-AB
(Pages 396 422) to the petition and
the impugned award and operative
part of the judgement dated
30.08.2019 rendered by the board of
nominees, Amdavad in Lavad suit
217/2017 at Annexure-S (Pages 251 -
275) to the petition;
(D) pending hearing and final
disposal of the petition, to extend
the stay order dated 18.102.2021
passed by the tribunal at Annexure-
AB (Pages 396-422) to petition;"
3.Special Civil Application No.21824/2019 is
filed with the following prayers:
"(A) to issue a writ of mandamus or in
the nature of mandamus or any other
appropriate writ, order or direction
setting aside the impugned action of
the Respondent Authorities in
approving the plan submitted by the
Respondents 3 to 5 and grant of
commencement letter dated 13.04.2017
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to be ultra vires, illegal and without
authority of law and direct the
Respondents to cancel/ revoke / recall
the said Plan and commencement letter
at Annexure-A (Colly) to the petition;
(B) to issue a writ of mandamus or in
the nature of mandamus or any other
appropriate writ, order or direction
prohibiting the Respondent Authorities
in accepting or approving any plan of
Flat-Type or non-residential
construction or in the nature of
having superstructure construction of
more than Ground plus Two Floors from
the Respondents 3 to 5 or from any
other person and granting construction
permission for any Sub-Plot situated
within the Petitioner Society;
(C) to issue a writ of mandamus or in
the nature of mandamus or any other
appropriate writ, order or direction
directing the Respondents Authorities,
officers, assigns, servants, etc. to
remove the construction of existing
superstructure erected by the
Respondents 3 to 5 on Sub-Plot 32/A in
the Petitioner Society and to remove
the Respondents 3 to 5 to from the
premises of Sub-Plot 32/A in the
Petitioner Society:
(D) pending hearing and final disposal
of the petition, to restrain the
Respondents 3 to 5, their agents,
assigns, servants, etc. from carrying
on erection or execution of
construction of whatsoever nature in
Sub-Plot 32/A of the Petitioner
Society;
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(E) pending hearing and final disposal
of the petition, to direct the
Respondents 1 and 2 to forthwith stop
the Respondents 3 to 5, their agents,
assigns, servants, etc. from carrying
on erection or execution of
construction of whatsoever nature in
Sub-Plot 32/A of the Petitioner
Society;"
4.Brief facts of the case are that petitioner-
Yogashram Cooperative Housing Society Ltd.
was registered on 11.01.1962 under the Bombay
Cooperative Societies Act, 1925 with
Registration no.Gh-165 of 1962.
4.1) The District Registrar, Cooperative
Societies passed an order dated 20.04.1989
under the provisions of section 17 of the
Gujarat Cooperative Societies Act, 1961 (For
short, "the Act, 1961") effecting division of
the petitioner society into two independent
residential cooperative societies i.e. Part-I
located at Shreyas Tekra and Part-II located
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near Ayojan Nagar Society.
4.2) The petitioner society was
registered as Tenant-Ownership Society with
new Registration No.Gh-13753.
4.3) In Tenant-Ownership type of Society,
land belongs to the Society whereas member
can construct his superstructure thereon
whereas in Tenant-Co-Partnership type of
society, society owns the land as well as
superstructure thereon wherein the member has
mere occupancy right. According to the
petitioner, the petitioner society is a
tenement/bungalow type society and not a flat
type society.
4.4) Along with registration, bye-laws of
the petitioner society also came to be
registered in usual prescribed format called
'Leaflet-U'. Respondent nos.1 and 2 are
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original allottees of Plot No.32/A situated
in the petitioner society as they have
purchased the right of use of Plot No. 32/A
with the permission of the society in the
year 1966 and since then the respondents are
in occupation of the said plot.
4.5) Respondent no.1 made an application
dated 12.03.2016 to the petitioner society
seeking the consent for carrying out
construction on sub-plot No. 32/A of the
petitioner society stating inter-alia to the
effect that they want to construct on their
sub-plot No. 32/A as per Rules/Norms of the
Ahmedabad Municipal Corporation along with
the copy of plan.
4.6) Ex-Secretary of the petitioner
Society Shri Yogeshbhai Shah gave a consent
letter dated 23.05.2016 to respondent no.1
by approving Building Plan presented to the
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petitioner society for construction of ground
plus seven floors on sub-plot no.32/A. It is
the case of the petitioner society that such
consent letter was given without knowledge
and information of the members of the society
and in absence of any authorisation and/or
resolution of the petitioner society, such
consent letter was signed by former Secretary
of the petitioner society.
4.7) Thereafter, respondent no.1 with
reference to sub-plot no. 32/A and one Shri
Manishkumar P. Shah with reference to sub-
plot No.32/B, jointly applied to the
Ahmedabad Municipal Corporation (for short
"AMC") on 31.05.2016 for entire sub-plot
No.32 seeking permission for construction of
Residential Flat in prescribed Forms-2(A),
2(B) and 2(C).
4.8) Respondents also sought
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classification of such construction in
prescribed Form-6(A) of the application as
belonging to Category-III which is meant for
use of Dwelling-3 comprising of building type
such as Apartment, Hostel, Dharamshala,
Cottage Industry and Pre-school.
4.9) The AMC approved the Building Plan
and granted Development Permission to the
respondents on 13.04.2017. According to the
petitioner society, the Building Plan as
approved by the AMC clearly shows that each
of the ground plus seven floors of the
proposed flat type construction to be used
for residential usage, has an independent
unit consisting of a living room, a bed room,
a kitchen, store and a wash and a toilet.
4.10) It is the case of the petitioner
society that on coming to know about passing
of the construction plan by the AMC, members
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of the petitioner society addressed a letter
dated 06.05.2017 to its office bearers
raising serious objections against the
proposed construction of building consisting
of ground plus seven floors by the
respondents on their sub-plot no.32/A by
stating inter-alia that the petitioner
society is a residential cooperative society
and the proposed construction is against the
bye-laws of the petitioner society and
therefore, the respondents should be
restrained from proceeding ahead with the
construction.
4.11) The Managing Committee of the
petitioner society in response to such
objections convened the meeting on 08.05.2017
wherein after deliberation, resolution was
passed resolving inter-alia that right from
the inception of the petitioner society,
members have constructed tenement type of
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building and that there is no practice
permitting any member to construct flat type
or multi-storeyed building and that
therefore, the signature on the plan or
approval of the plan may be treated as
cancelled.
4.12) It is the case of the petitioner
society that in furtherance of the above, the
petitioner society through its Ex-Secretary
Shri Yogeshbhai Shah wrote a letter dated
14.05.2017 to the AMC taking objections in
view of resolution dated 08.05.2017.
4.13) Thereafter, the General Body of the
petitioner society in its Annual General
Meeting held on 04.06.2017 after taking note
of the objections raised by the respondents
who also attended the said meeting, passed a
resolution and inter-alia decided not to
allow construction of flat type, high rise or
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commercial building etc. and the respondents
were directed to file revised building plan.
4.14) Thereafter, the petitioner society
had raised objections before the AMC by
writing letters dated 29.06.2017, 12.07.2017
and 08.08.2017.
4.15) The petitioner society thereafter
filed Lavad Suit No. 217 of 2017 in the Court
of Board of Nominees and obtained injunction
against further construction. The respondents
being aggrieved by such injunction preferred
revision application before the Gujarat State
Cooperative Tribunal (For short "the
Tribunal") which was dismissed followed by
Writ Petition before this Court against such
order.
4.16) The Ex-Secretary Shri Yogeshbhai
Shah filed his written statement on
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07.07.2017 on behalf of the petitioner
society stating inter-alia that he was misled
by the respondents to believe that their
Building Plan was not for construction of a
Flat/Commercial Building.
4.17) Writ Petition being Special Civil
Application No.17685/2017 filed by the
respondents against the order of the Tribunal
was disposed of by the learned Single Judge
of this Court vide order dated 13.10.2017
confirming the order of interim injunction
granted by the Board of Nominees by remanding
the matter to the Board of Nominees with the
direction to consider the injunction
application afresh.
4.18) Meanwhile, the AMC passed an order
dated 06.11.2017 on the objection letter
given by the petitioner society raising
objections against the proposed construction
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of flat type building undertaken by the
respondents inter-alia observing that the
Development Permission dated 13.04.2017
issued by the AMC will be subject to the
final orders that may be passed by the Board
of Nominees, Appellate Tribunal and this
Court in the pending proceedings.
4.19) The petitioner society preferred an
appeal being Letters Patent Appeal No. 1851
of 2017 against the order dated 13.10.2017
passed in Special Civil Application
No.17685/2017 wherein by order dated
09.11.2017, Division Bench of this Court
modified the order in view of undertaking of
the respondents that construction to be
raised on sub-plot No. 32/A by the
respondents would be for residential use only
and the same would not be transferred, gifted
or given on rent to anybody and that no
construction would be raised beyond ground
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plus two floors till the finalisation of the
same by the Court of Board of Nominees.
4.20) The respondents thereafter, carried
out the construction of building of ground
plus two floors on Plot No.32/A between
10.11.2017 and 29.08.2019.
4.21) The Board of Nominees passed the
order dated 30.08.2019 and decreed the suit
in favour of the petitioner society observing
that if the respondents carry out the
construction beyond two floors on their sub-
plot No.32/A, the same would not be given on
rent or for commercial purpose on the ground
that the petitioner society is a Tenant
Ownership Society and that before counter
signing the plan, neither the petitioner
society in the meeting of General Body nor in
the meeting of its Managing Committee passed
a resolution authorising the signature on the
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plan produced by the respondents which was
the basis for approval of such plan and
issuance of Development Permission by the AMC
and therefore, such plan would not be binding
upon the petitioner society as per its bye-
laws and the respondents have failed to
establish that the proposed construction is
for their own residential use.
4.22) The respondents after passing of the
impugned judgment and order, carried out
construction of two more floors till
injunction was granted by this Court between
01.09.2019 and 16.12.2019.
4.23) In Special Civil Application
No.22364/2019 preferred by the petitioner
society challenging the aforesaid Judgment
and Award of the Board of Nominees, this
Court granted injunction in favour of the
petitioner society as the Tribunal had become
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defunct on account of non appointment of
judicial members which continued to be in
operation till the Tribunal decided the
appeal of the petitioner society.
4.24) The petitioner society also
preferred Special Civil Application
No.21824/2019 challenging the action of the
AMC granting the approval to the plan and
issuance of Development Permission in favour
of the respondents in which notice was issued
by this Court.
4.25) Respondent nos. 1 and 2 preferred
Appeal No. 73/2019 before the Appellate
Tribunal wherein the petitioner society filed
the Cross Objection.
4.26) Learned Single Judge of this Court
by order dated 03.02.2021 in Special Civil
Application No.22364/2019 observed that as
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the Tribunal was validly constituted, Appeal
No.73/2019 filed before it together with
Cross Objection would be heard by the
Tribunal within a period of two months from
the date of receipt of order and interim
relief granted by the Court was ordered to be
vacated on condition of filing an undertaking
by respondent nos.1 and 2 before the
Tribunal that in the event they do not
succeed in appeal, construction shall be
demolished.
4.27) Being aggrieved, the petitioner
Society preferred Letters Patent Appeal No.
204/2021 which was disposed of by the
Division Bench vide order dated 23.07.2021
directing the Tribunal to decide Appeal
No.73/2019 with Cross Objection filed by the
petitioner society within a period of three
months on merits with a further direction to
the Tribunal to pass further appropriate
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orders with regard to the interim relief and
continued the interim relief granted on
10.02.2021 by the Division Bench till final
disposal of the appeal.
4.28) The Tribunal by order dated
18.10.2021 disposed of the appeal and cross
objection by holding that in absence of any
decision taken by the AMC either to stop the
disputed construction or to cancel the
Development Permission upon the
representation made by the petitioner society
that it has withdrawn the consent in favour
of the respondents, the respondents were
permitted to construct ground plus seven
floors as per the approved plan and
Development Permission granted by the AMC for
their own residential purpose only and the
same or part thereof would not be given on
lease or sub-let and would not be used for
commercial purpose.
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4.29) Being aggrieved, the petitioner
society has preferred Special Civil
Application No.17081/2021. This Court by
order dated 23.11.2021 after considering the
submissions made by both the sides passed the
following order:
"5. Having heard the learned
Counsels for the parties, I am of
the opinion that the matter requires
consideration and it is required to
be heard with Special Civil
Application No. 21824 of 2019, which
is pending for adjudication before
this Court because the question that
arises for the consideration of this
Court is as to whether, the
Petitioner-Society can restrict any
member from putting-up the
construction beyond a particular
height when there is no bylaw which
prescribes such prohibition or any
rules or resolution passed by the
Petitioner-Society to that effect
when all the members of the
Petitioner-Society are of the
opinion that such a construct should
not be put-up. Further, whether only
one member of the Petitioner-Society
can be permitted to make
construction of such ground plus
seven floors building or not.
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5.1 So far as the use of the
building to be constructed is
concerned, the Tribunal has taken
care of the said aspect by
restraining the Respondents from
using the same for any other purpose
without the permission of the
Petitioner-Society, except, for
residential purpose. It is also
required to be considered as to
whether, the Tribunal can pass such
order or not.
5.2 So far as the grant of interim
relief is concerned, the Tribunal
has already extended the interim
relief, which was in operation
during the pendency of the Appeal
till 22nd November, 2021 and
therefore the same interim relief is
required to be granted till the next
date of hearing.
5.3 At this stage, learned Counsels
for the parties submitted that they
are ready and willing to proceed
with the matter finally and
therefore, instead of admitting this
matter, the same is adjourned for
hearing on 16th December, 2021.
5.4 In the meantime, the Registrar
of Cooperative Societies Tribunal is
directed to sent the entire R&P to
this Court before the next date of
hearing."
4.30) In view of the aforesaid order, the
petition was taken up for hearing with the
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consent of the learned advocates for both the
sides.
5.Learned Senior Advocate Mr. Kamal Trivedi
with learned advocate Mr.Ravindra Shah for
the petitioner society submitted that there
are more than 56 bungalows in the petitioner
society and not a single bungalow is having
more than ground plus two floors as the
petitioner society is a bungalow/tenement
type society and not a flat type society.
5.1) It was submitted that since
inception, the petitioner society is a
Tenant-Ownership type society wherein land
belongs to the society and the members of the
society can construct only superstructure
thereon.
5.2) Learned Senior Advocate Mr. Trivedi
referred to and relied upon the following
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bye-laws of the petitioner society, English
translation of which is as under:
"6. Any person:
(2) Who himself or any member of his
joint family does not have any house
or a land for house in their name in
this city and who has made requisite
declaration for the same (this bye-
law would not bar a person who has
obtained permission as per the
provisions of bye-laws 9 and 11).
(4) Who has provided requisite
details in the declaration and who
has a special need of a house. Only
such person can become the member of
this Society.
11. In special cases, after taking
prior permission of the District
Registrar, any person having in his
own name or in the name of his joint
family, a plot or a house in this
city, can become a member of this
Society."
5.3) Referring to above bye-laws, it was
submitted that bye-laws which are in the
nature of contract are to be interpreted
purposively taking into account subsequent
resolution of the Managing Committee and
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General Body of the society. It was submitted
that the resolution passed in General Body of
the Society on 4.06.2017 shall prevail in
view of sections 73 and 74 of the Act, 1961.
It was submitted that as per Section 73 of
the Gujarat Co-operative Societies Act, 1961,
the final authority of every cooperative
society vests in the General Body of members
in General Meeting and that therefore,
resolution passed by the Governing Body,
binds every member of the Society. Therefore
in this case the Resolution dated 08.05.2017,
could not have been brushed aside by the
learned Tribunal only on the ground that the
construction plans for multi-storied building
of Respondent No.1 and 2, was counter-signed
by the Secretary of the Petitioner Society
and approved by the Ahmedabad Municipal
Corporation.
5.4) Learned Senior Advocate Mr.Trivedi
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also referred to Schedule-1 and Schedule-3 of
the bye-laws wherein clause (1) of Schedule-1
provides that as per the present Rules, a
member who has applied for constructing a
house in the society should possess five
fully paid up shares.
5.5) It was submitted that word used is
"Ghar". Reliance was also placed on clause
nos. 2(7), 2(11) and 2(17) of Schedule-3,
English translation thereof is as under:
"2. For the purpose of implementing
the aforesaid obligations during the
above agreed lease period, the
lessee himself and his assigns,
covenant that:-
(7) without the written consent of
the lessor, shall not alter himself
or allow to be altered through
others, the structure and the design
of the existing house on the leased
plot, and on obtaining the
permission of the lessor, if any
additional construction is proposed
to be made, details of such
additional construction shall be
first presented to the lessor and
any existing house or construction
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shall not be demolished or new
construction be raised without prior
written order or permission of the
lessor.
(11) shall not cause or to be caused
on the leased plot and place
thereon, any disadvantage,
annoyance, harassment or
inconvenience to the occupants of
nearby houses, lessor and the
neighbors.
(17) shall follow all existing
rules, regulations and bye-laws
framed by the lessor as binding and
implement, whatever directions and
guidelines, that may be issued by
the Managing Committee."
5.6) Referring to the above clauses,
learned Senior Advocate Mr. Trivedi
demonstrated that the petitioner society is
not a flat type society nor is a tenant co-
partnership type of society and for that
purpose, reference was made to Schedule-1(A)
of the bye-laws relating to tenant co-
partnership society to point out that the
same would not be applicable to the
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petitioner society wherein clause 25 thereof
provides for Flat type societies, English
translation of which is as under:
"25. Flat Type Societies-
(1) Flat type societies shall be called
'Tenant co-partnership Societies' and
the ownership of the house shall be of
the Society and not of the member."
5.7) Learned Senior Advocate Mr. Trivedi
submitted that as per the bye-law no. 6(4) of
the bye-laws, the respondents have given a
declaration to the petitioner society
declaring that they do not have any residence
or land for constructing their residential
house either under their own names or under
the name of any person of their joint family
and that no person of their family is a
member of any other cooperative society. It
was submitted that inspite of such a
declaration being filed by the respondents,
there was deliberate suppression of the fact
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that the respondents were having residential
house wherein they are presently residing
which is clear from the cause title of the
impugned order passed in Appeal No. 73/2019
before the Tribunal wherein it is stated that
the respondents are residing at 11/12,
Shyamal Row House, Part No.V, Satellite,
Ahmedabad before purchasing Tenement No.32/A
in the petitioner society in the month of
April, 2005 wherein also the respondents have
never come to reside. It was therefore,
submitted that the respondents have purchased
the Plot No.32/A only for commercial purpose
by constructing flat type construction of
ground plus seven floors.
5.8) It was further submitted that though
the bye-laws of the cooperative society are
not the legislative provisions but a contract
between the members and the society where its
provisions are to be interpreted purposively
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as per the intention of the majority of its
members.
5.9) It was submitted that though there
may not be any express prohibition provided
in bye-laws of the society as regards the
height of building or as regards the
construction of flats, such a prohibition is
implied in view of the overall circumstances
like (i) each of 57 members of the petitioner
society has residential tenements/bungalows
having ground plus one or two floor
construction and no flats, (ii) there is no
express reference to flat type construction
in Schedule-1 and Schedule-3 to the Bye-laws,
applicable to the petitioner society just
like Schedule-1(A) to the said Bye-laws which
is not applicable to the petitioner society,
(iii) Resolution dated 08.05.2017 of the
Managing Committee of the petitioner society
and (iv) Resolution dated 04.06.2017 of the
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General Body of the petitioner society.
5.10) Learned Senior Advocate Mr. Trivedi
submitted that the direction of the Tribunal
for usage of Ground plus 7-storied
construction with each floor having living
room, bed room, Dining Place, Kitchen,
wash and toilet, only for residential purpose
and that too, for a family of only four
persons, apart from being illegal, is likely
to be misused by using the said construction
for providing Paying Guest or Bed and
Breakfast facility.
5.11) It was therefore, submitted that
merely because Ex-Secretary of the society
has put his signature in the consent letter
as well as plan submitted by the respondents,
the petitioner society is not bound by the
same as the Secretary was not authorised and
therefore, there is no question of invoking
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the principle of promissory estoppel.
Reliance was placed on section 2(19) of the
Act, 1961 read with Section 74(1) of the Act,
1961 to submit that Secretary is not the
society and in absence of any resolution
passed by the Managing Committee and/or
General Body of the society, no consent of
the society was given to the plan submitted
by the respondents.
5.12) It was submitted that the petitioner
society is consisting of like-minded persons
who have to abide by the wish of the members
of the society in view of the principles of
cooperation in a cooperative housing society
and therefore, resolution passed in General
Body meeting is binding upon each of the
members. It was therefore, submitted that the
Tribunal has committed an error in permitting
the respondents to raise construction upto
ground plus seven floor with a rider to be
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used for their own residential purpose only
and is liable to be quashed and set aside.
5.13) In support of his submissions,
learned Senior Advocate Mr. Trivedi referred
to and relied upon the following decisions:
(I) Tenant Ownership Housing Society
i) Karvengar Sahakari Griha Rachana Sanstha
Maryadit, Pune and another v. State of
Maharashtra and others reported in AIR 1989
Bombay 392, wherein it is observed as under:
"8. Dr. Naik submits that the
housing societies are formed by the
members with a view to construct
houses for their own enjoyment and
the members joined such society with
an assurance that the plots of
lands would not be exploited for
commercial purposes. The members
also were assured as to who would be
their neighbors in the housing
society. The registration of a
housing society as tenant-ownership
housing society makes it clear that
the society holds the Land and
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houses are owned by the members. The
registration and classification of
housing society as tenant-ownership
housing society make it clear that
the houses which would be
constructed by the members would be
owned by them and the by-laws of the
society provides that such houses
would not be sold, let out or
possession parted with without prior
approval of the society. The entire
concept of forming a housing co-
operative society is to provide
accommodation to the members and the
society is not formed with an
intention of enabling the members to
exploit the Land by commercial
methods and make profits. The
petitioner society is registered
tenant-ownership housing society and
the plots are allotted to the
members who joined the society with
the clear provision that
construction would be made by the
members for their own use. The by-
laws of the society clearly provide
that the person would not be
enrolled as a member unless the
society is satisfied that such
applicant has bona fide desire to
construct a house for his own
occupation. It is necessary to bear
in mind that the member is allotted
a plot for construction of house,
but the right in the Land
underneath continued with the
society all along. The rights of
member of the society are regulated
by the by-laws and Full Bench
decision of this court reported in
63 Bom LR 1001 : (AIR 1962 Bom 154)
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(Dr. Manohar Ramchandra Sarfare v.
Konkan Co-operative Housing Society
Ltd.), lays down (at p.159 of AIR):
"The mutual rights and
obligation of a co-operative
housing society and its members
are quite different from those
of a landlord and a tenant. The
relationship is of special type,
which is governed by special
laws made for this purpose viz,
the co-operative Societies Act
and the Rules, By-laws and
regulations made thereunder.
Even though therefore, a member
to whom a tenement is given for
occupation is described in the
by-laws and the regulations as a
tenant, he is not a tenant in
the sense in which this term is
used in the Transfer of property
Act or in the Rent Act, nor is
the Society his landlord."
Respondent 5 has joined the
petitioner society and has accepted
the by-laws framed by the society
and registered by the Registrar. The
by-laws make it crystal clear that
the construction is to be raised by
the allottee for his own use and the
member is not permitted to part with
possession or to sub-let the
premises without the prior approval
of the society. In spite of this
clear cut agreement, respondent 5 is
insisting that multi-storyed
building can be raised on his plot
and respondent No. 5 would dispose
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of the flats on ownership basis. The
occupiers of the flat then would
form a co-operative society with
the result that on the Land of
housing society another society
would construct building and let it
out to the members. It is obvious
that such action on the part of the
members of the housing society would
invite his expulsion from the
society. Respondent 5 insisted upon
constructing multi-storeyed building
because of the flat issued by the
State Government on Jan. 19, 1985.
Direction of the government proceeds
on the basis that the existing by-
laws of the society do not permit
construction of multi-storeyed
building by a member. The submission
on behalf of State Government that
existing by-laws permit such
construction is therefore required
only to be stated to be rejected.
Directive claims that it is
necessary to grant such permission
to over-come the shortage of
accommodation in city like Pune and
Bombay and therefore the Registrar
should direct amendment of by-laws.
It further directs that the
occupiers of the flats in such
multi-storeyed building should form
a society and a representative of
that society should be a member in
the existing housing society. Dr.
Naik submitted that the State
Government has no power to issue
such direction. In answer in the
submission the Government Pleader
relied upon S. 4 and 79 A of the
Act. We are unable to accept the
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claim of the State Government that
S.4 or S. 79A confers such power on
the State Government. The proviso to
S. 4 prescribes that the Registrar
shall not register the society if
the registration is contrary to
policy directives issued by the
State government. Section 4 confers
upon State Government the right to
issue policy directive for the
purpose of achieving the object set
out in the preamble to the Act and
the object obviously is orderly
development of the co-operative
movement. The directives are issued
or the guidelines are given so as to
ensure that only those societies
whose object is to advance cause of
the co-operative movement are
registered. This power certainly
cannot be used to destroy the co-
operative movement. Section 79A also
confers power to give direction for
advancement of the co-operative
movement and this power cannot be
made use of for the purpose of
destroying the co-operative movement
or to benefit the builders or the
developers. The bare perusal of s. 4
and S. 79A leaves no manner of doubt
that the power is to be exercised
for the purpose of securing proper
implementation of co-operative
movement. In the present case the
directive is issued by the State
Government on a spacious ground that
there is dearth of accommodation in
the cities like Pune and Bombay.
Though there is undoubtedly dearth
of accommodation that does not
enable the State to compel the
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housing society to Act contrary to
by-laws or to foist new members who
are not acceptable to the existing
members of the society. The members
have joined the society in
accordance with the by-law and the
members join a housing society by
ascertaining what would be the
environments in which they will
reside. It is not permissible for
the State Government to compel the
society to amend its by-laws as to
defeat the object of formation of
the society. In the present case the
society was constituted with the
object of providing peaceful
accommodation to the members. The
compulsion of the State Government
that members should be permitted
irrespective of the desire of the
majority, to erect high rising
buildings would totally destroy the
basic concept of formation of
society. The answer to the dearth of
accommodation is not to force the
existing registered housing
societies to amend by-laws and
permit few members to commercially
exploit the plots in violation of
agreements under which they were
secured. The directive is nothing
but a charter to permit breach of
such agreements and compulsion to
amend by-laws in only with a view to
validate such infraction. In our
judgment neither S.4 nor S. 79 A of
the Act confers any such power upon
the State government. The
notification issued by the State
government therefore is without any
authority or jurisdiction and is
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therefore required to be struck
down.
10. The next contention of Dr. Naik
that the Registrar is exercising
quasi-judicial powers while
sanctioning the amendment of by-laws
u/s. 13 or compelling a society to
amend the by-laws under Section 14
of the Act is correct. The Registrar
is required under the provisions of
the Act to exercise powers and while
exercising the powers the Registrar
is performing quasi-judicial
functions. The power exercised by
the Registrar is appealable under
Section 152 of the Act and further
revisable by the State Government.
It is now well settled that exercise
of such powers are quasi-judicial
and the Registrar in exercise
thereof should not be guided by
extraneous consideration or by the
directions issued by higher
authorities including the State
Government. A reference can be
usefully made to the decision of the
Supreme Court reported in AIR 1984
SC 322 (Chandrika Jha v. State of
Bihar). Dr. Naik submitted that the
petitioner society is compelled to
amend the by-laws by the letter
issued by the Registrar and the
Registrar has exercised his power
merely because the Government has
issued directions and not because
the requirements of Section 14 are
complied with. Section 14 provides
that the registrar may call upon the
society to make the amendment
provided it appears to the Registrar
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that an amendment of the by-law is
necessary or desirable in the
interest of such society. The
crucial words are "necessary or
desirable in the interest of such
society". The registrar has to be
satisfied that the amendment of the
by-laws are necessary or desirable
in the interest of the society to
which order is directed. The
registrar in the present case has
not even examined whether the
requirements of S. 14 are satisfied,
but has directed the society to
amend the by-laws merely because the
Government so desires. It hardly
requires to be stated that
permission to an allottee of a flat
in the housing society to erect
multy-storeyed structure would not
be in the interest of the housing
society. The Housing society, like
the petitioners society is formed
with a view to provide for peaceful
accommodation to the members and
therefore the by-laws insists the
allotee of a plot of Land can erect
structure for his own occupation and
not for letting out or for
commercial exploitation of the
Land . An amendment to the by-laws
permitting such actions can by no
stretch of imagination be in the
interest of society. The members of
the society contributes the amount
for maintenance for common amenities
and service and the liability to
contribute is on the basis that
plots of Land would be enjoyed by
the members by constructions of
houses for their own benefits. The
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internal roads are constructed, the
lights are provided, water supply is
given and all other common amenities
and services are provided by the
society. The permission to a member
to construct high rising building
and letting out the flats on
ownership basis would result in
heavy pressure on the common
amenities and services provided by
the society and for which the
members surely have not contemplated
while joining the co-operative
society. The permission to construct
high rising building on a developed
plot in housing society would
certainly give huge benefit to a
member but at the cost of other
members and in clear violation of
by-laws. The amendment is also not
necessary as the members have joined
the society voluntarily accepting
the rules and by-laws and in case a
member is not desirous of
constructing house for his own use,
then there is no compulsion to
continue the membership. It is
therefore obvious that the Registrar
is forcing the petitioner's society
to amend the by-laws when it is
neither necessary nor desirable in
the interest of the petitioners
society.
It is also difficult to appreciate
how a sub-society of the flat owners
in the high rising buildings can be
formed and registered and how the
registrar will classify it. As
mentioned herein above the housing
societies are divided in the three
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sub-classes and the proposed society
of flat owners on a plot of land
allotted to a member of a tenant-
ownership housing society would not
fall in any of the three categories
of sub classes referred to under
item 5 of R. 10 of the Rules. Indeed
the society which the Government
contemplates under notification
would neither be a tenant ownership
housing society nor a tenant co-
partnership housing society nor
other housing society and therefore
it is difficult to appreciate how
the registrar would register such
societies and under which clause or
circular. In our judgment the
registrar has issued a flat
compelling the petitioner's society
to amend the by-laws without
satisfying whether the necessary
ingredients for exercise for powers
under Section 14 of the Act are in
existence. A reference in this
connection to the decision of
division bench Dt July 2nd, 1981 in
writ petition. No. 3555 of 1980 and
to which one of us (Pendse, J. ) is
a party is appropriate. The division
bench held that the powers under
Section 14 of the Act can be used by
the registrar only if it is
established that the amendment of
the by-laws is desirable and is in
the interest of such society. The
exercise of powers in the present
case is clearly faulty, and the
petitioners are entitled to the
relief sought."
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(II) Binding nature of the bye-laws of
the Cooperative Housing Society
i) Zoroastrian Cooperative Housing
Society Ltd. and another v. District
Registrar, Cooperative Societies (Urban) and
others reported in (2005) 5 Supreme Court
Cases 632, wherein it is observed as under:
"(22.) The validity of a bye-law,
that too an approved bye-law, has to
be tested in the light of the
provisions of the Act and the rules
governing co-operative societies. In
so testing, the search should be to
see whether, a particular bye-law
violates the mandate of any of the
provisions of the Act or runs
counter to any of its provisions or
to any of the rules. Sec. 24(1) of
the Act only provides for open
membership subject to a person,
aspiring to be a member, possessing
the qualification prescribed by the
bye-laws. It is not an open
membership dehors the qualification
prescribed by the bye-laws When in
Daman Singh this Court held that
when a co-operative society is
governed by the appropriate
legislation it will be subject to
the intervention made by the
concerned legislation, it only meant
that a legislative provision in the
Act can be introduced for the
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purpose of eliminating a
qualification for membership based
on sex, religion or a persuasion or
mode of life. But so long as there
is no legislative intervention of
that nature, it is not open to the
court to coin a theory that a
particular bye-law is not desirable
and would be opposed to public
policy as indicated by the
Constitution. The Constitution no
doubt provides that in any State
action there shall be no
discrimination based either on
religion or on sex. But Part III of
the Constitution has not interfered
with the right of a citizen to enter
into a contract for his own benefit
and at the same time incurring a
certain liability arising out of the
contract. As observed by the High
Court of Bombay in Karvanagar
Sahakari Griha Rachana Sanstha
Maryadit and others V/s. State of
Maharashtra [AIR 1989 Bombay 392]
the members have joined the society
in accordance with the bye-laws and
the members join a housing society
by ascertaining what would be the
environment in which they will
reside. It is not permissible for
the State Government to compel the
society to amend its bye-laws as it
would defeat the object of formation
of the society. In that case, the
society was constituted with the
object of providing peaceful
accommodation to its members. Though
there may be circumstances
justifying the State taking steps to
meet shortage of accommodation, it
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was not open to the State Government
to issue a direction to the
Registrar of Co-operative Societies
to : direct a co-operative society
to make ' requisite amendments to
their bye-laws and grant permission
to its members to raise multistoried
constructions. In appeal from that
decision reported as State of
Maharashtra and others V/s.
Karvanagar Sahakari Griya Rachana
Sanstha Maryadit and others [(2000)
9 SCC 295] this Court while
dismissing the appeal stated that it
was clear that though a power was
conferred on the Registrar to direct
amendment of the bye-laws of a
society, yet the paramount
consideration is the interest of the
society. So also, the power of the
State Government to issue directions
in public interest, could not be
exercised so as to be prejudicial to
the interest of the society. In the
view of this Court, what was in the
interest of the society was
primarily for the society alone to
decide and it was not for an outside
agency to say. Where, however, the
government or the Registrar
exercised statutory powers to issue
directions to amend the bye-laws,
such directions should satisfy the
requirement of the interest of the
society. This makes it clear that
the interest of the society is
paramount and that interest would
prevail so long as there is nothing
in the Act or the Rules prohibiting
the promotion of such interest.
Going by Chheoki Employees' Co-
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operative Society Ltd.,'s
case[(1997) 3 SCC 681], neither the
member, respondent no. 2, nor the
aspirant to membership, respondent
no. 3 had the competence to
challenge the validity of the bye-
laws of the Society or to claim a
right to membership in the Society."
ii) Dhaneshbhai Bhikhubhai Patel &
Another v. Shantiniketan Cooperative Housing
Society Ltd. & another reported in 2014(2)
GLR 1638, wherein it is observed as under:
"7. Having heard learned advocates
for the parties and having perused
the record of the case, it prima
facie appears that the object of
respondent No.1 society is primarily
to permit its members to have
dwelling house. Each tenant- member
is required to comply with the terms
of the bye-laws for his/her
tenement. Byelaw No.66 specifically
provides that no dwelling offered on
lease shall be taken by persons who
are not members of the society
unless no member is willing to take
it. Bye-law provides for activities
to be undertaken by the society for
houses of its members. Bye-laws also
provide for powers of the Managing
Committee of the society. It thus
prima facie appears that the members
are allowed to hold tenement in the
society for dwelling purpose.
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9. It is required to be noted that
there is no specific provision in
the bye-law for permitting any of
the members of the society to put up
commercial construction. Learned
advocate Mr. Desai for the
petitioners however submitted that
since there is no prohibition in the
bye-law against putting up the
commercial construction, use of the
plots of the society will be
governed by the GDCR and the
provisions of the Corporation Act as
per which the commercial
construction is permissible on the
plot of the society. Such contention
of learned advocate Mr. Desai cannot
be accepted for the simple reason
that what is required to be
considered is the intent and purpose
contained in the bye-laws. Prima
facie, it appears from the bye-laws
that respondent No.1 society was
incorporated to provide houses to
its members. Therefore, every member
of the society is well aware that he
or she holds tenement as a house or
dwelling unit to reside therein.
Therefore, absence of prohibition in
the bye-laws against making of
commercial construction on the plot
of the society, could not be taken
as a permission for raising
commercial construction on the plots
of the society which the society
never provided for in the bye-laws.
11. In above view of the matter and
in the context of the provisions of
the Act, the Chairman had no
authority to sign the plans for
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commercial construction contrary to
the bye-laws of the society,
especially when there was no
decision by the society in its
meeting. If the signing of the plans
by the Chairman is to be taken as
permission for commercial
construction, it would not only be
contrary to the Act and the bye-law
but would also amount to altering
the bye-laws without the decision by
the society in its meeting by two-
third majority and without there
being any approval by the Registrar
under the provisions of Section 13
of the Co-operative Societies Act.
14. In the case of Sant Lal Gupta
(supra), the Hon'ble Supreme Court
has held and observed in para 28 as
under:-
"28. The High court ought to
have considered that it was a
writ of certiorari and it was
not dealing with an appeal. The
writ of certiorari under Article
226 of the Constitution can be
issued only when there is a
failure of justice and it cannot
be issued merely because it may
be legally permissible to do so.
There must be an error apparent
on the face of record as the
High Court acts merely in a
supervisory capacity. An error
apparent on the face of the
record means an error which
strikes one on mere looking and
does not need long drawn out
process of reasoning on points
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where there may conceivably be
two opinions. Such error should
not require any extraneous
matter to show its
incorrectness. Such errors may
include the giving of reasons
that are bad in law or
inconsistent, unintelligible or
inadequate. It may also 16
include the application of a
wrong legal test to the facts
found, taking irrelevant
considerations into account and
failing to take relevant
considerations into account, and
wrongful admission or exclusion
of evidence, as well as arriving
at a conclusion without any
supporting evidence. Such a writ
can be issued when there is an
error in jurisdiction or
authority whose order is to be
reviewed has acted without
jurisdiction or in excess of its
jurisdiction or has failed to
act. While issuing the Writ of
Certiorari, the order under
challenge should not undergo
scrutiny of an appellate court.
It is obligatory on the part of
the petitioner to show that a
jurisdictional error has been
committed by the Statutory
Authorities. There must be the
breach of principles of natural
justice for resorting to such a
course."
iii) State of Maharashtra and others v.
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Karvanagar Sahakari Griha Rachna Sanstha Mary
Adit and others reported in (2000) 9 Supreme
Court Cases 295, wherein it is observed as
under:
"(6.) From the above discussion, it
is clear that though the power is
conferred on the Registrar to direct
amendment of the bye-laws of the
Societies, yet the paramount
consideration is the interest of the
Society. So also the power of the
State Government to issue directions
in public interest cannot be
exercised so as to be prejudicial to
the interest of the Society. In our
view, what is in the interest of the
society is primarily for the society
alone to decide and it is not for an
outside agency to say. Where,
however, the Government or the
Registrar exercises statutory power
of issuing directions to amend the
bye-laws, such directions should
satisfy the requirement of the
interest of the Society. In the
instant case, having regard to the
nature of the Society and its
objectives, referred to above, and
having also regard to the fact that
the Society in the case of 5th
respondent has turned down his
request for the grant of permission
by overwhelming majority, we are
unable to say that the amendment
directed by Government is in the
interest of the Society. The High
Court is, therefore, right in
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quashing the impugned
directions/circulars."
iv) Kumari Jethi T. Sipahimalani v. The
Maharashtra State Cooperative Tribunal,
Bombay reported in 1973 SCC OnLine Bom 786,
wherein it is observed as under:
"27. It is difficult to follow the
arguments of Mr. Dalvi. If his
argument is that Sections 64 and 65
did not apply to the resolutions
passed by the General Meeting, these
sections could not prevent the
General Meeting from passing the
resolutions. As stated above Section
72 constitutes the General Meeting
of the Society, the Supreme
authority in the Society subject to
the Act, Rules and Bye-laws. The
General Body of the members in
general meeting is the final
authority in all matters, unless
there is some limitation imposed on
that power under the general law of
the land or under some section of
the Act or some provision in rules
framed thereunder or under the bye-
laws registered under the Act. If
honorarium is not remuneration as
contended by Mr. Dalvi Section 64
also will not apply. Mr. Dalvi was
unable to point out any limitation
on the powers of the general meeting
in any provision of the Act or in
any rules framed under the Act or
under the Society's Bye-laws or
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under any other law. What is not
prohibited under the Act, the Rules
and Bye-laws framed thereunder is
permitted to the general meeting
subject to the general laws of the
land. It is free to do what it likes
subject to the provisions of the
Act, the Rules and the Bye-laws
provided it does not infringe any
general law for the time being in
force.
29. It is true that Section 64 deals
with remuneration and not with
honorarium. Section 65(2) deals with
payment of honorarium only out of
net profits. None of these sections
came in the way of the general
meeting of the Society in passing
the resolutions for payment of
honorarium as part of the
construction cost. It was for the
majority of the members in the
general meeting to decide how much
was the value of the services of
petitioner No. 6 and how and when it
should be paid to him. Petitioner
No. 6, who was Honorary General
Secretary of the Society, is an
advocate. He had sacrificed all his
time and energy and dedicated his
services to the Society for ten
years. Members who enjoyed the
benefit of these services could
decide to reward him. We do not
think that Section 64 was a
stumbling block to the members of
the Society who wanted to pass any
resolution regarding honorarium to
be paid in such a case as
construction costs. Section 64
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applied to division of the profits
of the Society to any member qua
member. Section 65 deals with
appropriation of profits. All that
Section 65(2) lays down is that out
of net profits honorarium also may
be paid. Even Section 65(2) does not
prevent the general body of the
Housing Society to pay honorarium to
petitioner No. 6 as part of the
construction cost. Construction cost
was to be paid by members. Society
was not paying it to him as a matter
of division of funds. We, therefore,
do not find any legal restriction
whatsoever on the power of the
general body under Section 72 to
pass a resolution to pay honorarium
as part of the construction cost to
a person like petitioner No. 6, for
the services rendered by him to the
Society."
(III) Authority of the Secretary
i) Vasantkumar Radhakisan Vora (Dead)
By His Lrs v. Board of Trustees of the Port
of Bombay and another reported in (1991) 1
Supreme Court Cases 761, wherein it is
observed as under:
"1. The respondent is a statutory
body corporate initially constituted
under the Bombay Port Trust Act,
1879 (Bombay Act 6 of 1879), for
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short State Act. Under Section 26
thereof, the Board have power to
acquire and hold, moveable and
immoveable property and also have
power to lease, to sell or otherwise
convey moveable and immoveable
property which may have become
vested in or acquired by them. The
respondent has appointed A. J.
Mescarnas, Assistant Estate Manager
as their power Of attorney holder to
lease out its properties from time
to time or terminate the leases and
to lay action for ejectment, etc.
The respondent owns the building
bearing Old R.R. No. 941 known as
"Frere Land Estate" in which room
No. 2 admeasuring 28.27 sq. meters
was leased out to Vasantkumar
Raidhakisan Vora, for short
'Vasantkumar'. The appellants are
his legal representatives. He was
served with a notice under Section
106 read with Section 111(h) of the
Transfer of Property Act terminating
the tenancy in terms of the
covenants of lease and was asked to
deliver possession of the demised
property giving one month's time
from 22.01.1975.
2. It was served on Vasantkumar on
28.01.1975. The notice of
termination thereby became effective
from 28.02.1975. In the meanwhile
Major Port Trust Act, 1963 (Act No.
38 of 1963), for short the "Central
Act", was made applicable to the
Bombay Port Trust by operation of
Section 1330(2A) with effect from
1.02.1975. After the expiry of one
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month, ejectment application was
filed under Section 41 of the Bombay
Presidency Small Cause Courts Act
(Act 15 of 1882) as amended under
1963 Maharashtra Amendment Act,
against Vasantkumar and another for
delivery of possession. After 1976
Amendment Act 19 of 1976 came into
force suits were laid against three
other tenants. It was pleaded by the
respondent that it is a successor in
interest of the Board under the
State Act and were entitled to eject
the tenants and to the possession of
the demised portions. The plea of
Vasantkumar in his written statement
elaborated by the learned counsel,
is that the suit is not
maintainable. Since the State Act
ceased to be operative with effect
from 1.02.1975, the quit notice
issued under Section 106 read with
Section 111 (h) of Transfer of
Property Act became ineffective and
without determining the tenancy
afresh, the suit was not validly
laid. It was also pleaded that the
respondent had promised that on
deposit of certain amount which the
tenant did, Vasantkumar would be
given on lease of a portion in the
reconstructed building. Thereby the
respondent is estopped by promissory
estoppel to have the tenant ejected.
It may be mentioned at this juncture
that one suit was dismissed on the
ground that the tenancy was not duly
determined as per law. Other suits
were decreed. No appellate forum has
been prescribed under Amendment Act
of 1963 but a substantive suit on
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original side provided was
available. By Maharashtra Amendment
Act 19 of 1976 to the principal such
a right to appeal was incorporated.
Vasantkumar filed writ petition in
the High Court under Articles 226
and 227 and others filed regular
appeals to a Bench of two Judges of
the Small Cause Court and are stated
to be pending.
3. In the writ petition the
petitioner challenged the vires of
1963 Amendment Provisions and also
1976 Amendment Provisions to the
Presidency Small Cause Courts Act.
When it came up for hearing before
Masodkar, J., he referred to a
Division Bench. The Division Bench
by its Judgement dated January
17/18, 1982 upheld the
constitutional validity' of those
sections and remitted to the learned
single Judge to dispose of the writ
petition on merits. The learned
single Judge considered and
negatived two points namely,
validity of the notice terminating
the tenancy, promissory estoppel and
dismissed the writ petition.
Vasantkumar had leave of this Court
under Art. 136."
(IV) Power to sanction plans by AMC is
subject to permission granted by the Society
i) New India Cooperative Housing Society
Limited v. Municipal Corporation of Greater
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Supreme Court Cases 694, wherein it is
observed as under:
"(22.) As regards the observation in
paragraph 3 of the impugned judgment
of the Division Bench dated
1.9.2006, we are of the opinion that
the dispute between the appellant
and respondent No. 2 which is going
on before the co-operative
authorities has nothing to do with
the powers of the Bombay Municipal
Corporation which is a statutory
body. We are concerned in this case
about how a statutory body, like the
Bombay Municipal Corporation should
exercise its power. This has nothing
to do with the dispute between the
two private parties viz., respondent
No. 2 and the appellant. Hence, the
observation in paragraph 3 was
wholly irrelevant and misconceived."
ii) Sarjan Cooperative Housing Society Ltd.
v. Surat Municipal Corporation and others
reported in 2012(1) GLR 267, wherein it is
observed as under:
"7.02. That the petitioner-Society
passed a resolution dtd.18/07/2003
granting approval to the sale in
favour of respondent Nos.2 and 3 and
enrolled them as members of the
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Society on terms and conditions
mentioned in the said Resolution
dtd.18/07/2003. As per condition
No.7, it was provided that if any
construction or renovation work is
to be carried out by the member,
before raising such
construction/renovation, such plan
should be approved from the society
and then only the construction can
be raised. As per condition No.8, it
was further provided that
construction upto second floor i.e.
ground+2 Floors and upto 35 feet
from the road level, is permissible
and portion beyond 35 feet should be
kept open. On the aforesaid terms
and conditions, the respondent Nos.2
and 3 were enrolled as members of
the society, which the respondent
Nos.2 and 3 agreed to abide by the
same. It appears that respondent
Nos.2 and 3 wanted to renovate and
wanted to put up construction, they
have requested the Society to
approve the plan for construction,
which came to be approved by the
Society, subject to the rules and
regulations of the Surat Municipal
Corporation as well as rules and
regulations of the society and the
said plan was also countersigned by
the Society. It appears that at the
relevant time responde2022nt Nos.2
and 3 were also given rules and
regulations for raising construction
which prohibits putting up
construction above 35 feet and under
which only ground plus 2 floors are
permissible. It appears that
respondent Nos.2 and 3 started
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putting up construction without
getting the plans sanctioned by the
Corporation and Raja Chithhi issued
and it was found that respondent
Nos.2 and 3 raised construction
beyond the plans approved by the
Society and, therefore, the
petitioner-society approached the
Corporation by submitting that
instead of ground plus 2 Floors,
respondent Nos.2 and 3 are
constructing ground plus 3 floors
and even area of margin was also not
maintained. Again remainders were
sent to respondent No.1 and
ultimately on 14/02/2005, the
Corporation replied that respondent
Nos.2 and 3 have put up construction
beyond the plans approved and,
therefore, Notices were issued to
them. It appears that even revised
plans submitted by respondent Nos.2
and 3 were rejected by the
Corporation, as per intimation
dtd.14/02/2005. It appears that
thereafter, various correspondence
between the petitioner -society and
Corporation to remove the illegal
construction raised by respondent
Nos.2 and 3 had taken place and
ultimately on 20/06/2006 the
Corporation has replied that stay
against the construction has been
granted by the Corporation. It
appears that thereafter revised
plans were submitted by respondent
Nos.2 and 3 without prior approval
of the society, which were objected
by the petitioner- society by
submitting that without approval and
sanction of the petitioner-society,
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the Corporation cannot sanction the
said revised plan. It appears that
despite the above, the Corporation
was to sanction the revised plan
submitted by respondent Nos.2 and 3.
At that stage, the petitioner-
society preferred Lavad Case
No.755/2006 before the Learned Board
of Nominees Court, Surat, wherein
ex-parte ad-interim relief was
granted in favour of the petitioner-
society and the same came to be
continued from time to time. It is
the case on behalf of the
petitioner-society that the Learned
Board of Nominees Court, Surat was
also incharge of as Board of
Nominees of other districts also and
therefore, for certain period of
time learned Board of Nominees Court
was not available and, therefore,
stay granted earlier could not be
extended. However, as soon as the
petitioner-society came to know
about the fact that the stay has not
been extended, the petitioner
submitted application for extension
of stay granted earlier before
Learned Board of Nominees Court,
which was objected by respondent
Nos.2 and 3 herein. However, on the
next day, after hearing the parties,
the Learned Board of Nominees Court,
Surat passed order of status-quo to
be maintained. However, it appears
that during the period when the stay
granted earlier was not extended,
respondent Nos.2 and 3 started
putting up the construction and
despite the aforesaid suit was
pending, respondent No.1-
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Corporation received the money to
process the revised plans in
November, 2008 and sanctioned the
plans submitted by respondent Nos.2
and 3 on 05/12/2008, without
obtaining prior approval of the
petitioner-society. As stated above,
thereafter, vide order
dtd.07/01/2009 passed below Exh.132,
after hearing both the parties, the
learned Board of Nominees, Surat had
passed an order of status-quo to be
maintained. Being aggrieved by and
dissatisfied with the aforesaid
action of the Surat Municipal
Corporation to sanction the revised
plan and to permit respondent Nos.2
and 3 to put up the construction of
Ground plus 3 floors and that too
beyond 35 feet, the petitioner-
society has preferred the present
petition under Article 226 of the
Constitution of India.
7.03. As stated above, under the
rules and regulations of the
petitioner-society for raising the
construction, which the respondent
Nos.2 and 3 agreed to abide by at
the time of enrolling them as
members, the construction upto
ground plus 2 floors and upto 35
feet only is permissible. Even as
per the conditions imposed by the
Society while passing resolution
dated 18/07/2003 enrolling
respondent Nos.2 and 3 as members of
the society and approving the sale
in favour of respondent Nos.2 and 3,
as per condition No.7, before any
construction and/or renovation,
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member is required to get approval
of the society and/or get the plan
sanctioned by the society and
respondent Nos.2 and 3 also agreed
to abide by the same. Despite the
above specific terms and conditions
and aforesaid rules and regulations
for raising construction in the
submitted revised plan before
respondent No.1-Corporation without
prior sanction / approval of the
petitioner-society and raised
construction contrary to the rules
and regulations of the society and
terms and conditions of the
resolution, by which, sale in favour
of respondent Nos.2 and 3 was
approved and terms and conditions of
the resolution, by which, respondent
Nos.2 and 3 were enrolled as members
of the petitioner-society.
iii) Bengal Secretariat Cooperative Land
Mortgage Bank Housing Society Ltd. v. Aoke
Kumar and another reported in 2022 SCC OnLine
1404, wherein it is observed as under:
56. It is not in dispute that the
General Body of the Appellant
Society, which is supreme, has taken
up a conscious decision to redevelop
the administrative building. The
General Body of the Appellant
Society has also resolved to appoint
the Hi-Rise as the developer. Those
decisions having not been challenged
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at all, the Respondent No. 1 being a
member of the Appellant Society is
bound by the said decisions. The
General Body of the Appellant
Society has approved the terms and
conditions of the development
agreement by overwhelming majority.
Merely because the terms and
conditions of the development
agreement are not acceptable to the
Respondent No. 1, who could be said
to be in minuscule minority cannot
be the basis of not to abide by the
decision of the overwhelming
majority of the General Body of the
Appellant Society. The redevelopment
of the property is necessitated in
view of the fact that the building
is in a dilapidated condition with
passage of time. The redevelopment
thus, in our view, would be a
requirement and a necessity and
cannot be termed as business. The
Appellant Society in such
circumstances did not even require
to carry out any amendment to the
bye-laws or to include the
"redevelopment of the buildings" as
one of the objects of the Society
before taking any decision to
redevelop its property.
57. By now it is well established
position that once a person becomes
a member of the Co-operative
Society, he loses his individuality
with the Society and he has no
independent rights except those
given to him by the statute and bye-
laws. The member has to speak
through the Society or rather the
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Society alone can act and speaks for
him qua the rights and duties of the
Society as a body (see : Daman Singh
v. State of Punjab, reported in
(1985) 2 SCC 670 : AIR 1985 SC 973).
This view has been followed in the
subsequent decision of this Court in
the case of State of U.P v. Chheoki
Employees Co-operative Society Ltd.,
reported in (1997) 3 SCC 681 : AIR
1997 SC 1413. In this decision, this
Court further observed that the
member of a Society has no
independent right qua the Society
and it is the Society that is
entitled to represent as the
corporate aggregate. This Court also
observed that the stream cannot rise
higher than the source. Suffice it
to observe that so long as the
Resolutions passed by the General
Body of the Appellant Society are in
force and not overturned by a forum
of competent jurisdiction, the said
decisions would bind the Respondent
No. 1. He cannot be permitted to
take a stand alone position but is
bound by the majority decision of
the General Body. Notably, the
Respondent No. 1 has not challenged
the Resolutions passed by the
General Body of the Appellant
Society to redevelop the property
and more so, to appoint the Hi-Rise
as the Developer to give him all the
redevelopment rights.
58. It was also argued on behalf of
the Respondent No. 1 that the
property is in a good condition and
there is no need to redevelop the
existing building. In the first
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place, as noted earlier, the
decision of the General Body of the
Society to redevelop the subject
property has not been challenged at
all. Besides, no provision in the
Co-operative Societies Act or the
rules or any other legal provision
has been brought to our notice which
would curtail the right of the
Society to redevelop the property
when the General Body of the Society
intends to do so. Essentially, that
is the commercial wisdom of the
General Body of the Society. It is
not open to the Court to sit over
the said wisdom of the General Body
as an Appellate Authority. Merely
because one single member in
minority disapproves of the
decision, that cannot be the basis
to negate the decision of the
General Body, unless it is shown
that the decision was the product of
fraud or misrepresentation or was
opposed to some statutory
prohibition. That is not the
grievance made before us. In the
present case, the General Body took
a conscious decision after due
deliberations for many years to
redevelop its property. Even with
regard to the appointment of the
"Hi-Rise" as the Developer, the
record shows that it was decided by
the General Body of the Society
after examining the relative merits
of the proposals received from the
developers."
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(V) Declaratory/statute having retrospective
effect
i) Union of India and another v. V.V.F.
Supreme Court Cases 57, wherein it is
observed as under:
"23. In the case of State Bank of
India v. V. Ramakrishnan (2018) 17
SCC 394, it is observed and held
that the presumption against
retrospective operation is not
applicable to declaratory statutes.
For modern purposes a declaratory
Act may be defined as an Act to
remove doubts existing as to the
common law, or the meaning or effect
of any statute. Such Acts are
usually held to be retrospective.
23.1 In the case of State of Bihar
v. Ramesh Prasad Verma (2017) 5 SCC
665, it is observed and held that
any legislation or instrument having
force of law, if clarificatory,
declaratory or explanatory in nature
and purport, will have retrospective
operation especially in the absence
of any indication to the contrary as
to retrospectivity either in parent
Act or Rules or notifications
involved.
23.2 In the case of Union of India
v. Martin Lottery Agencies Ltd.
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(2009) 12 SCC 209, it is observed
and held that whether a subordinate
legislation or a parliamentary
statute would be held to be
clarificatory or declaratory would
depend upon the nature thereof as
also the object it seeks to achieve.
23.3 In the case of T.N. Electricity
Board v. Status Spg. Mills Ltd.
(2008) 7 SCC 353 it is observed and
held that a clarificatory order can
be given retrospective effect as it
can throw light on substantive
provision by principle of
contemporanea expositio.
25. In view of the above and for the
reasons stated above and once it is
held that the subsequent
notifications/industrial policies
which were impugned before the
respective High Courts are
clarificatory in nature and are
issued in public interest and in the
interest of the Revenue and they
seek to achieve the original object
and purpose of giving
incentive/exemption while inviting
the persons to make investment on
establishing the new undertakings
and they do not take away any vested
rights conferred under the earlier
notifications/industrial policies
and therefore cannot be said to be
hit by the doctrine of promissory
estoppel, the same is to be applied
retrospectively and they cannot be
said to be irrational and/or
arbitrary."
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ii) Ghanshyam Mishra and Sons Private
Limited Through the Authorised Signatory v.
Edelweiss Asset Reconstruction Company
Limited through the Director and others
reported in (2021) 9 Supreme Court Cases 657,
wherein it is observed as under:
(85.) In Justice G.P. Singh treatise
on "The principles of Statutory
Interpretation", 14th Edition,
Revised by Justice A.K. Patnaik,
former Judge of this Court, it is
observed thus:
"(i) Declaratory Statutes
The presumption against
retrospective operation is not
applicable to declaratory
statutes. As stated in CRAIES
and approved by the Supreme
Court:
"For modern purposes a
declaratory Act may be defined
as an Act to remove doubts
existing as to the common law,
or the meaning or effect of any
statute. Such Acts are usually
held to be retrospective. The
usual reason for passing a
declaratory Act is to set aside
what Parliament deems to have
been a judicial error, whether
in the statement of the common
law or in the interpretation of
statutes. Usually, if not
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invariably, such an Act contains
a preamble, and also the word
'declared' as well as the word
'enacted'.
But the use of the words 'it is
declared' is not conclusive that
the Act is declaratory for these
words may, at times, be used to
introduce new rules of law and
the Act in the latter case will
only be amending the law and
will not necessarily be
retrospective. In determining,
therefore, the nature of the
Act, regard must be had to the
substance rather than to the
form. If a new Act is 'to
explain' an earlier Act, it
would be without object unless
construed retrospective. An
explanatory Act is generally
passed to supply an obvious
omission or to clear up doubts
as to the meaning of the
previous Act. It is well settled
that if a statute is curative or
merely declaratory of the
previous law retrospective
operation is generally intended.
The language 'shall be deemed
always to have meant' or 'shall
be deemed never to have
included' is declaratory, and is
in plain terms retrospective. In
the absence of clear words
indicating that the amending Act
is declaratory, it would not be
so construed when the pre-
amended provision was clear and
unambiguous. An amending Act may
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be purely clarificatory to clear
a meaning of a provision of the
principal Act which was already
implicit. A clarificatory
amendment of this nature will
have retrospective effect and,
therefore, if the principal Act
was existing law when the
constitution came into force,
the amending Act also will be
part of the existing law.
The above statement of the law
relating to the nature and
effect of a declaratory statute
has been quoted with approval by
the Supreme Court from earlier
editions of this book in a
number of cases.
"In Mithilesh Kumari v. Prem
Bihari Khare[(1989) 2 SCC 95],
section 4 of the Benami
Transactions (Prohibition) Act,
1988 was, it is submitted,
wrongly held to be an Act
declaratory in nature for it was
not passed to clear any doubt
existing as to the common law or
the meaning or effect of any
statute. The conclusion,
however, that section 4 applied
also to past benami transactions
may be supportable on the
language used in the section."
These observations and criticism
of Mithilesh Kumari's case also
received the approval in R.
Rajgopal Reddy v. Padmini
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Chandrasekharan [(1995) 2 SCC
630], where the Supreme Court
after quoting them (from 5th
Edition pp. 315, 316) said :
"No exception can be taken to
the above observations".
A proviso added from 1.4.1988 to
section 43 B inserted in the
Income Tax Act, 1961 from
1.4.1984 came up for
consideration in Allied
Motors(P.) Ltd. v. Commissioner
of Income-tax and it was given
retrospective effect from the
inception of the section on the
reasoning that the proviso was
added to remedy unintended
consequences and supply an
obvious omission so that the
section may be given a
reasonable interpretation and
that in fact the amendment to
insert the proviso would not
serve its object unless it is
construed as retrospective. In
Commissioner of Income-Tax,
Bombay v. Podar Cement Pvt.
Ltd., [(1997) 5 SCC 482] the
Supreme Court held that
amendments introduced by the
Finance Act, 1987 in so far they
related to section 27(iii),
(iiia) and (iiib) which
redefined the expression 'owner
of house property', in respect
of which there was a sharp
divergence of opinion amongst
the High Courts, was
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clarificatory and declaratory in
nature and consequently
retrospective. Similarly, in
Brij Mohan Das Laxman Das v.
Commissioner of Income -
tax[(1997) 1 SCC 352].
Explanation 2 added to section
40 of the Income-tax Act, 1961
from 1.4.1985 on a question on
which there was a divergence of
opinion was held to be
declaratory in nature and,
therefore, retrospective. And in
Zile Singh v. State of Haryana,
[(2004) 8 SCC 1] substitution of
the word 'upto' for the word
'after' in the proviso to
section 13A (added in 1994) in
Haryana Municipal Act, 1973 by
the Haryana Municipal (Second
Amendment) Act, 1994 was held to
be correction of an obvious
drafting error to bring about
the text in conformity with the
legislative intent and,
therefore, retrospective. Even
without the amendment of the
proviso, the court in all
probability would have read and
interpreted the section as
corrected by the amendment."
(93.) As discussed hereinabove,
one of the principal objects of
I&B Code is, providing for
revival of the Corporate Debtor
and to make it a going concern.
I&B Code is a complete Code in
itself. Upon admission of
petition under Section 7, there
are various important duties and
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functions entrusted to RP and
CoC. RP is required to issue a
publication inviting claims from
all the stakeholders. He is
required to collate the said
information and submit necessary
details in the information
memorandum. The resolution
applicants submit their plans on
the basis of the details
provided in the information
memorandum. The resolution plans
undergo deep scrutiny by RP as
well as CoC. In the negotiations
that may be held between CoC and
the resolution applicant,
various modifications may be
made so as to ensure, that while
paying part of the dues of
financial creditors as well as
operational creditors and other
stakeholders, the Corporate
Debtor is revived and is made an
ongoing concern. After CoC
approves the plan, the
Adjudicating Authority is
required to arrive at a
subjective satisfaction, that
the plan conforms to the
requirements as are provided in
subsection (2) of Section 30 of
the I&B Code. Only thereafter,
the Adjudicating Authority can
grant its approval to the plan.
It is at this stage, that the
plan becomes binding on
Corporate Debtor, its employees,
members, creditors, guarantors
and other stakeholders involved
in the resolution Plan. The
legislative intent behind this
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is, to freeze all the claims so
that the resolution applicant
starts on a clean slate and is
not flung with any surprise
claims. If that is permitted,
the very calculations on the
basis of which the resolution
applicant submits its plans,
would go haywire and the plan
would be unworkable.
(94.) We have no hesitation to
say, that the word "other
stakeholders" would squarely
cover the Central Government,
any State Government or any
local authorities. The
legislature, noticing that on
account of obvious omission,
certain tax authorities were not
abiding by the mandate of I&B
Code and continuing with the
proceedings, has brought out the
2019 amendment so as to cure the
said mischief. We therefore
hold, that the 2019 amendment is
declaratory and clarificatory in
nature and therefore
retrospective in operation."
iii) Hero Motocorp Ltd. v. Union of India
reported in 2022 SCC OnLine SC 1436, wherein
it is observed as under:
"70. We are, therefore, of the
considered view that even on the
ground of change of policy, which is
in public interest or in view of the
change in the statutory regime
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itself on account of the GST Act
being introduced as in the instant
case, it will not be correct to hold
the Union bound by the
representation made by it, i.e. by
the said O.M. of 2003. Further, this
would be contrary to the statutory
provisions as enacted under Section
174(2)(c) of the CGST Act."
6.On the other hand, learned Senior Advocate
Mr. Mihir Joshi with learned advocate Mr. Jay
Kansara for the respondents submitted that
the petitioner society has prayed for a writ
of certiorari and therefore, the scope of
this petition is in a narrow compass to
scrutinise the impugned Judgment and Order
passed by the Tribunal from the aspect of
perversity only.
6.1) It was submitted that there is
express consent given by the Secretary of the
Society in May, 2016 and thereafter, the
plans are sanctioned in the month of April,
2017 by the AMC and till that point of time
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no action is taken by the petitioner society
and after plans are sanctioned by the AMC as
per the Building Regulations in accordance
with law, the petitioner now cannot say that
the consent stands withdrawn and therefore,
the AMC has committed any error in
sanctioning the plan.
6.2) It was further submitted that the
action of passing resolution in the
petitioner society prohibiting the
construction of multi-storeyed building in
society is prospective one and therefore,
cannot be applied to the plan which is
already sanctioned by the AMC pursuant to the
consent given by the society. It was
therefore, submitted that principle of
estoppel would apply and society cannot now
pray for cancelling the plans which are
already passed by the AMC in accordance with
law.
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6.3) It was submitted that the
respondents are put to restriction of not
using its premises for any other use by the
impugned Judgment and Order passed by the
Tribunal and therefore, the respondents
should be permitted to put up construction as
per the sanctioned plan beyond four floors
upto seven floors as such construction would
be as per the restriction placed by the
Tribunal which is accepted by the petitioner
society as the same is not under challenge.
6.4) It was submitted that how the
property is to be used by the member of the
society cannot be restricted by the bye-laws
or by the other members of the society, more
particularly, when such restriction to make
construction would be contrary to the bye-
laws as bye-laws does not provide for any
restrictions for height or for the way in
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which a member can make construction on the
plot allotted by the society.
6.5) It was submitted that the reliance
placed upon bye-law nos.6(2) and 6(4) cannot
be said to be causing any restriction upon
the right of the respondent to put up
construction for their own residential
purpose as per the sanctioned plan.
6.6) Learned Senior Advocate Mr. Joshi
submitted that the Tribunal has also
restrained the respondents from giving,
letting or sub-letting the property or to use
the same for commercial purpose without prior
sanction from the petitioner society. It was
therefore, submitted that the impugned
Judgment and Order is within the scope of
provisions of Act, 1961 as well as the bye-
laws of the society.
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6.7) Learned Senior Advocate Mr. Joshi
submitted that the cases cited on behalf of
the petitioners are not applicable to the
facts of the case inasmuch as it is not in
dispute that as per the principles of
cooperation, members of the cooperative
society are required to act as per the wish
of the majority of members, however, at the
same time when there is no prescription with
regard to height of the residential building
to be constructed on the plot allotted to the
members of the society nor there being any
restriction in the bye-laws or provisions of
the Act to restrain the use of the plot by
the members of the cooperative housing
society for residential purpose, then in such
case, the subsequent resolutions passed by
the members cannot be made applicable
retrospectively.
6.8) It was therefore, submitted that
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once the AMC has sanctioned the plan pursuant
to the consent letter given by the society,
the society thereafter cannot take a 'U' turn
and contend that such consent is withdrawn so
as to cancel the plans which are already
sanctioned by the AMC for construction of the
residential unit of the respondents.
6.9) It was submitted that it is for the
respondents to make construction over the
plot allotted by the cooperative society and
the cooperative society cannot dictate as to
in what manner such construction is required
by the respondents. It was therefore,
submitted that the contention raised on
behalf of the petitioner society that each
plot contains separate residential unit is of
no consequence because it is for the
respondents to make construction over the
plot in question and in such circumstances,
the petitioner societ2022y cannot raise any
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objection with regard to the manner of
construction which is in accordance with the
rules and regulations of the AMC.
6.10) Learned Senior Advocate Mr. Joshi
therefore, submitted that no interference is
required to be made in the impugned Judgment
and Order passed by the Tribunal whereby the
order passed by the Board of Nominees is
modified by permitting the respondents to
make construction as per the sanctioned plan
for ground plus seven floors for residential
purpose of the respondents and further
restraining the respondents from using such
construction over Plot No.32A of the
petitioner society for letting or sub-letting
or for commercial purpose without prior
sanction of the petitioner society as per the
bye-laws and the resolutions of the
petitioner society.
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7.Having heard the learned advocates for the
respective parties, it appears that the Ex-
Secretary of the society by consent letter
dated 23.05.2016, approved the plan for
construction put up by the respondents before
the petitioner society and relying upon such
consent letter, the AMC has sanctioned the
plans and issued the Development Permission
in the month of April 2017. When the
respondents started construction on Plot
No.32/A as per the sanctioned plan by the
AMC, some members of the petitioner society
raised objection, pursuant to which
resolution dated 08.05.2017 was passed by the
Managing Committee to withdraw the consent
which was granted by the Ex-Secretary of the
petitioner society in May 2016. The
petitioner society in the Annual General
Meeting dated 04.06.2017 has also ratified
such resolution passed by the Managing
Committee and decided not to allow
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construction of flat type high rise or
commercial building without express
permission of the society and the respondents
were directed to file revised plan by the
said resolution.
8.Thus, the question arises as to whether the
consent given by the petitioner society was
an authorised permission signed by the
Secretary or not?
9.As held by the Supreme Court in case of
Vasantkumar Radhakisan Vora (Dead) By His Lrs
(supra), the Secretary was not authorised to
sigh the consent letter. Such consent letter
was issued without there being any resolution
passed by the Managing Committee and/or
General Body and therefore, such consent
letter could not have been acted upon by AMC
in absence of any resolution passed by the
petitioner society. In Vasantkumar Radhakisan
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Vora (Dead) By His Lrs (supra), it is held as
under:
"1. The respondent is a statutory
body corporate initially constituted
under the Bombay Port Trust Act,
1879 (Bombay Act 6 of 1879), for
short State Act. Under Section 26
thereof, the Board have power to
acquire and hold, moveable and
immoveable property and also have
power to lease, to sell or otherwise
convey moveable and immoveable
property which may have become
vested in or acquired by them. The
respondent has appointed A. J.
Mescarnas, Assistant Estate Manager
as their power Of attorney holder to
lease out its properties from time
to time or terminate the leases and
to lay action for ejectment, etc.
The respondent owns the building
bearing Old R.R. No. 941 known as
"Frere Land Estate" in which room
No. 2 admeasuring 28.27 sq. meters
was leased out to Vasantkumar
Raidhakisan Vora, for short
'Vasantkumar'. The appellants are
his legal representatives. He was
served with a notice under Section
106 read with Section 111(h) of the
Transfer of Property Act terminating
the tenancy in terms of the
covenants of lease and was asked to
deliver possession of the demised
property giving one month's time
from 22.01.1975.
2. It was served on Vasantkumar on
28.01.1975. The notice of
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termination thereby became effective
from 28.02.1975. In the meanwhile
Major Port Trust Act, 1963 (Act No.
38 of 1963), for short the "Central
Act", was made applicable to the
Bombay Port Trust by operation of
Section 1330(2A) with effect from
1.02.1975. After the expiry of one
month, ejectment application was
filed under Section 41 of the Bombay
Presidency Small Cause Courts Act
(Act 15 of 1882) as amended under
1963 Maharashtra Amendment Act,
against Vasantkumar and another for
delivery of possession. After 1976
Amendment Act 19 of 1976 came into
force suits were laid against three
other tenants. It was pleaded by the
respondent that it is a successor in
interest of the Board under the
State Act and were entitled to eject
the tenants and to the possession of
the demised portions. The plea of
Vasantkumar in his written statement
elaborated by the learned counsel,
is that the suit is not
maintainable. Since the State Act
ceased to be operative with effect
from 1.02.1975, the quit notice
issued under Section 106 read with
Section 111 (h) of Transfer of
Property Act became ineffective and
without determining the tenancy
afresh, the suit was not validly
laid. It was also pleaded that the
respondent had promised that on
deposit of certain amount which the
tenant did, Vasantkumar would be
given on lease of a portion in the
reconstructed building. Thereby the
respondent is estopped by promissory
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estoppel to have the tenant ejected.
It may be mentioned at this juncture
that one suit was dismissed on the
ground that the tenancy was not duly
determined as per law. Other suits
were decreed. No appellate forum has
been prescribed under Amendment Act
of 1963 but a substantive suit on
original side provided was
available. By Maharashtra Amendment
Act 19 of 1976 to the principal such
a right to appeal was incorporated.
Vasantkumar filed writ petition in
the High Court under Articles 226
and 227 and others filed regular
appeals to a Bench of two Judges of
the Small Cause Court and are stated
to be pending.
3. In the writ petition the
petitioner challenged the vires of
1963 Amendment Provisions and also
1976 Amendment Provisions to the
Presidency Small Cause Courts Act.
When it came up for hearing before
Masodkar, J., he referred to a
Division Bench. The Division Bench
by its Judgement dated January
17/18, 1982 upheld the
constitutional validity' of those
sections and remitted to the learned
single Judge to dispose of the writ
petition on merits. The learned
single Judge considered and
negatived two points namely,
validity of the notice terminating
the tenancy, promissory estoppel and
dismissed the writ petition.
Vasantkumar had leave of this Court
under Art. 136."
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10. The petitioner society is a cooperative
housing society formed on the basis of
principle of cooperation as held by the
Supreme Court in case of Zoroastrian
Cooperative Housing Society Ltd. and another
(supra), wherein it is observed as under:
"(22.) The validity of a bye-law,
that too an approved bye-law, has to
be tested in the light of the
provisions of the Act and the rules
governing co-operative societies. In
so testing, the search should be to
see whether, a particular bye-law
violates the mandate of any of the
provisions of the Act or runs
counter to any of its provisions or
to any of the rules. Sec. 24(1) of
the Act only provides for open
membership subject to a person,
aspiring to be a member, possessing
the qualification prescribed by the
bye-laws. It is not an open
membership dehors the qualification
prescribed by the bye-laws When in
Daman Singh this Court held that
when a co-operative society is
governed by the appropriate
legislation it will be subject to
the intervention made by the
concerned legislation, it only meant
that a legislative provision in the
Act can be introduced for the
purpose of eliminating a
qualification for membership based
on sex, religion or a persuasion or
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mode of life. But so long as there
is no legislative intervention of
that nature, it is not open to the
court to coin a theory that a
particular bye-law is not desirable
and would be opposed to public
policy as indicated by the
Constitution. The Constitution no
doubt provides that in any State
action there shall be no
discrimination based either on
religion or on sex. But Part III of
the Constitution has not interfered
with the right of a citizen to enter
into a contract for his own benefit
and at the same time incurring a
certain liability arising out of the
contract. As observed by the High
Court of Bombay in Karvanagar
Sahakari Griha Rachana Sanstha
Maryadit and others V/s. State of
Maharashtra [AIR 1989 Bombay 392]
the members have joined the society
in accordance with the bye-laws and
the members join a housing society
by ascertaining what would be the
environment in which they will
reside. It is not permissible for
the State Government to compel the
society to amend its bye-laws as it
would defeat the object of formation
of the society. In that case, the
society was constituted with the
object of providing peaceful
accommodation to its members. Though
there may be circumstances
justifying the State taking steps to
meet shortage of accommodation, it
was not open to the State Government
to issue a direction to the
Registrar of Co-operative Societies
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to : direct a co-operative society
to make ' requisite amendments to
their bye-laws and grant permission
to its members to raise multistoried
constructions. In appeal from that
decision reported as State of
Maharashtra and others V/s.
Karvanagar Sahakari Griya Rachana
Sanstha Maryadit and others [(2000)
9 SCC 295] this Court while
dismissing the appeal stated that it
was clear that though a power was
conferred on the Registrar to direct
amendment of the bye-laws of a
society, yet the paramount
consideration is the interest of the
society. So also, the power of the
State Government to issue directions
in public interest, could not be
exercised so as to be prejudicial to
the interest of the society. In the
view of this Court, what was in the
interest of the society was
primarily for the society alone to
decide and it was not for an outside
agency to say. Where, however, the
government or the Registrar
exercised statutory powers to issue
directions to amend the bye-laws,
such directions should satisfy the
requirement of the interest of the
society. This makes it clear that
the interest of the society is
paramount and that interest would
prevail so long as there is nothing
in the Act or the Rules prohibiting
the promotion of such interest.
Going by Chheoki Employees' Co-
operative Society Ltd.,'s
case[(1997) 3 SCC 681], neither the
member, respondent no. 2, nor the
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aspirant to membership, respondent
no. 3 had the competence to
challenge the validity of the bye-
laws of the Society or to claim a
right to membership in the Society."
11. In view of above settled legal position,
the wish of the members of the petitioner
society who are staying in such housing
society peacefully has to be honoured. At the
same time, the respondents cannot be
restrained from putting up the construction
as per their own wish for residential
purpose. Therefore, without entering into the
question whether the plans of ground plus
seven floor of flat type construction were
prepared, the issue has to be seen in light
of the fact that all other 57 members of the
petitioner society are having having maximum
ground plus two floors for residential
purpose. Therefore, t2022he intention of the
respondents who have never stayed in the
petitioner society since 2005 onwards after
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purchasing Plot No.32/A is clear that the
respondents never wanted to stay in the
petitioner society but wanted to use the plot
other than the residential purpose.
12. The Apex Court has time and again held
in the following decisions that provisions of
bye-laws of the cooperative societies are
required to be applied to each of the
members:
i) Zoroastrian Cooperative Housing
Society Ltd. and another (supra), wherein it
is observed as under:
"(22.) The validity of a bye-law,
that too an approved bye-law, has to
be tested in the light of the
provisions of the Act and the rules
governing co-operative societies. In
so testing, the search should be to
see whether, a particular bye-law
violates the mandate of any of the
provisions of the Act or runs
counter to any of its provisions or
to any of the rules. Sec. 24(1) of
the Act only provides for open
membership subject to a person,
aspiring to be a member, possessing
the qualification prescribed by the
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bye-laws. It is not an open
membership dehors the qualification
prescribed by the bye-laws When in
Daman Singh this Court held that
when a co-operative society is
governed by the appropriate
legislation it will be subject to
the intervention made by the
concerned legislation, it only meant
that a legislative provision in the
Act can be introduced for the
purpose of eliminating a
qualification for membership based
on sex, religion or a persuasion or
mode of life. But so long as there
is no legislative intervention of
that nature, it is not open to the
court to coin a theory that a
particular bye-law is not desirable
and would be opposed to public
policy as indicated by the
Constitution. The Constitution no
doubt provides that in any State
action there shall be no
discrimination based either on
religion or on sex. But Part III of
the Constitution has not interfered
with the right of a citizen to enter
into a contract for his own benefit
and at the same time incurring a
certain liability arising out of the
contract. As observed by the High
Court of Bombay in Karvanagar
Sahakari Griha Rachana Sanstha
Maryadit and others V/s. State of
Maharashtra [AIR 1989 Bombay 392]
the members have joined the society
in accordance with the bye-laws and
the members join a housing society
by ascertaining what would be the
environment in which they will
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reside. It is not permissible for
the State Government to compel the
society to amend its bye-laws as it
would defeat the object of formation
of the society. In that case, the
society was constituted with the
object of providing peaceful
accommodation to its members. Though
there may be circumstances
justifying the State taking steps to
meet shortage of accommodation, it
was not open to the State Government
to issue a direction to the
Registrar of Co-operative Societies
to : direct a co-operative society
to make ' requisite amendments to
their bye-laws and grant permission
to its members to raise multistoried
constructions. In appeal from that
decision reported as State of
Maharashtra and others V/s.
Karvanagar Sahakari Griya Rachana
Sanstha Maryadit and others [(2000)
9 SCC 295] this Court while
dismissing the appeal stated that it
was clear that though a power was
conferred on the Registrar to direct
amendment of the bye-laws of a
society, yet the paramount
consideration is the interest of the
society. So also, the power of the
State Government to issue directions
in public interest, could not be
exercised so as to be prejudicial to
the interest of the society. In the
view of this Court, what was in the
interest of the society was
primarily for the society alone to
decide and it was not for an outside
agency to say. Where, however, the
government or the Registrar
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exercised statutory powers to issue
directions to amend the bye-laws,
such directions should satisfy the
requirement of the interest of the
society. This makes it clear that
the interest of the society is
paramount and that interest would
prevail so long as there is nothing
in the Act or the Rules prohibiting
the promotion of such interest.
Going by Chheoki Employees' Co-
operative Society Ltd.,'s
case[(1997) 3 SCC 681], neither the
member, respondent no. 2, nor the
aspirant to membership, respondent
no. 3 had the competence to
challenge the validity of the bye-
laws of the Society or to claim a
right to membership in the Society."
ii) Dhaneshbhai Bhikhubhai Patel &
Another (supra), wherein it is observed as
under:
"7. Having heard learned advocates
for the parties and having perused
the record of the case, it prima
facie appears that the object of
respondent No.1 society is primarily
to permit its members to have
dwelling house. Each tenant- member
is required to comply with the terms
of the bye-laws for his/her
tenement. Byelaw No.66 specifically
provides that no dwelling offered on
lease shall be taken by persons who
are not members of the society
unless no member is willing to take
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it. Bye-law provides for activities
to be undertaken by the society for
houses of its members. Bye-laws also
provide for powers of the Managing
Committee of the society. It thus
prima facie appears that the members
are allowed to hold tenement in the
society for dwelling purpose.
9. It is required to be noted that
there is no specific provision in
the bye-law for permitting any of
the members of the society to put up
commercial construction. Learned
advocate Mr. Desai for the
petitioners however submitted that
since there is no prohibition in the
bye-law against putting up the
commercial construction, use of the
plots of the society will be
governed by the GDCR and the
provisions of the Corporation Act as
per which the commercial
construction is permissible on the
plot of the society. Such contention
of learned advocate Mr. Desai cannot
be accepted for the simple reason
that what is required to be
considered is the intent and purpose
contained in the bye-laws. Prima
facie, it appears from the bye-laws
that respondent No.1 society was
incorporated to provide houses to
its members. Therefore, every member
of the society is well aware that he
or she holds tenement as a house or
dwelling unit to reside therein.
Therefore, absence of prohibition in
the bye-laws against making of
commercial construction on the plot
of the society, could not be taken
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as a permission for raising
commercial construction on the plots
of the society which the society
never provided for in the bye-laws.
11. In above view of the matter and
in the context of the provisions of
the Act, the Chairman had no
authority to sign the plans for
commercial construction contrary to
the bye-laws of the society,
especially when there was no
decision by the society in its
meeting. If the signing of the plans
by the Chairman is to be taken as
permission for commercial
construction, it would not only be
contrary to the Act and the bye-law
but would also amount to altering
the bye-laws without the decision by
the society in its meeting by two-
third majority and without there
being any approval by the Registrar
under the provisions of Section 13
of the Co-operative Societies Act.
14. In the case of Sant Lal Gupta
(supra), the Hon'ble Supreme Court
has held and observed in para 28 as
under:-
"28. The High court ought to
have considered that it was a
writ of certiorari and it was
not dealing with an appeal. The
writ of certiorari under Article
226 of the Constitution can be
issued only when there is a
failure of justice and it cannot
be issued merely because it may
be legally permissible to do so.
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There must be an error apparent
on the face of record as the
High Court acts merely in a
supervisory capacity. An error
apparent on the face of the
record means an error which
strikes one on mere looking and
does not need long drawn out
process of reasoning on points
where there may conceivably be
two opinions. Such error should
not require any extraneous
matter to show its
incorrectness. Such errors may
include the giving of reasons
that are bad in law or
inconsistent, unintelligible or
inadequate. It may also 16
include the application of a
wrong legal test to the facts
found, taking irrelevant
considerations into account and
failing to take relevant
considerations into account, and
wrongful admission or exclusion
of evidence, as well as arriving
at a conclusion without any
supporting evidence. Such a writ
can be issued when there is an
error in jurisdiction or
authority whose order is to be
reviewed has acted without
jurisdiction or in excess of its
jurisdiction or has failed to
act. While issuing the Writ of
Certiorari, the order under
challenge should not undergo
scrutiny of an appellate court.
It is obligatory on the part of
the petitioner to show that a
jurisdictional error has been
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committed by the Statutory
Authorities. There must be the
breach of principles of natural
justice for resorting to such a
course."
iii) Karvanagar Sahaka2022ri Griha
Rachna Sanstha Mary Adit and others (supra),
wherein it is observed as under:
"(6.) From the above discussion, it
is clear that though the power is
conferred on the Registrar to direct
amendment of the bye-laws of the
Societies, yet the paramount
consideration is the interest of the
Society. So also the power of the
State Government to issue directions
in public interest cannot be
exercised so as to be prejudicial to
the interest of the Society. In our
view, what is in the interest of the
society is primarily for the society
alone to decide and it is not for an
outside agency to say. Where,
however, the Government or the
Registrar exercises statutory power
of issuing directions to amend the
bye-laws, such directions should
satisfy the requirement of the
interest of the Society. In the
instant case, having regard to the
nature of the Society and its
objectives, referred to above, and
having also regard to the fact that
the Society in the case of 5th
respondent has turned down his
request for the grant of permission
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by overwhelming majority, we are
unable to say that the amendment
directed by Government is in the
interest of the Society. The High
Court is, therefore, right in
quashing the impugned
directions/circulars."
iv) Kumari Jethi T. Sipahimalani
(supra), wherein it is observed as under:
"27. It is difficult to follow the
arguments of Mr. Dalvi. If his
argument is that Sections 64 and 65
did not apply to the resolutions
passed by the General Meeting, these
sections could not prevent the
General Meeting from passing the
resolutions. As stated above Section
72 constitutes the General Meeting
of the Society, the Supreme
authority in the Society subject to
the Act, Rules and Bye-laws. The
General Body of the members in
general meeting is the final
authority in all matters, unless
there is some limitation imposed on
that power under the general law of
the land or under some section of
the Act or some provision in rules
framed thereunder or under the bye-
laws registered under the Act. If
honorarium is not remuneration as
contended by Mr. Dalvi Section 64
also will not apply. Mr. Dalvi was
unable to point out any limitation
on the powers of the general meeting
in any provision of the Act or in
any rules framed under the Act or
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under the Society's Bye-laws or
under any other law. What is not
prohibited under the Act, the Rules
and Bye-laws framed thereunder is
permitted to the general meeting
subject to the general laws of the
land. It is free to do what it likes
subject to the provisions of the
Act, the Rules and the Bye-laws
provided it does not infringe any
general law for the time being in
force.
29. It is true that Section 64 deals
with remuneration and not with
honorarium. Section 65(2) deals with
payment of honorarium only out of
net profits. None of these sections
came in the way of the general
meeting of the Society in passing
the resolutions for payment of
honorarium as part of the
construction cost. It was for the
majority of the members in the
general meeting to decide how much
was the value of the services of
petitioner No. 6 and how and when it
should be paid to him. Petitioner
No. 6, who was Honorary General
Secretary of the Society, is an
advocate. He had sacrificed all his
time and energy and dedicated his
services to the Society for ten
years. Members who enjoyed the
benefit of these services could
decide to reward him. We do not
think that Section 64 was a
stumbling block to the members of
the Society who wanted to pass any
resolution regarding honorarium to
be paid in such a case as
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construction costs. Section 64
applied to division of the profits
of the Society to any member qua
member. Section 65 deals with
appropriation of profits. All that
Section 65(2) lays down is that out
of net profits honorarium also may
be paid. Even Section 65(2) does not
prevent the general body of the
Housing Society to pay honorarium to
petitioner No. 6 as part of the
construction cost. Construction cost
was to be paid by members. Society
was not paying it to him as a matter
of division of funds. We, therefore,
do not find any legal restriction
whatsoever on the power of the
general body under Section 72 to
pass a resolution to pay honorarium
as part of the construction cost to
a person like petitioner No. 6, for
the services rendered by him to the
Society."
13. However, it is true that bye-laws do not
provide for any height of the building to be
constructed by the members of the petitioner
society but reading bye-laws a a whole, the
same are required to be interpreted and
applied purposively. The petitioner society
is for the purpose of providing plots to its
members for residential units of tenement and
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bungalow since 1962. The members of the
petitioner society are staying in the society
for more than five decades and as such, any
use of the plot of the petitioner society
other than for residential purpose by making
construction like the plans which are
sanctioned by the AMC in the facts of the
present case of ground plus seven floors,
would be contrary to the basic concept of
cooperation between the members of the
cooperative society. The petitioner society
on coming to know about the plans which are
sanctioned by the AMC has passed resolution
in General Body so as to restrain the
respondents from making construction of
ground plus seven floors and such resolution
would be applicable retrospectively as the
same is in consonance with the bye-laws of
the society which are referred to here-in-
above.
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14. In such circumstances, the very purpose
of the existence of the petitioner society is
for peaceful residence of its members and if
the respondents can also reside in the
petitioner society, in the construction to be
made but not of ground plus seven floor which
apparently would be contrary to the bye-laws
of the petitioner society, more particularly,
when the petitioner society is for the
purpose of making the land available to its
members for construction of residential
houses, the basic concept of principle of
cooperation can be achieved.
15. The Tribunal while permitting the
respondents to make construction of ground
plus seven floor has failed to consider the
aspect of principle of cooperation which are
required to be applied to the members of the
petitioner society and merely because there
was a consent given by the Secretary who has
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later on withdrawn the same by filing an
affidavit before the Board of Nominees to the
effect that he was misled by the respondents
while granting the consen2022t and therefore,
such consent cannot be said to be consent
given by the petitioner society. Therefore,
in view of decisions in cases of New India
Cooperative Housing Society Limited (supra),
Sarjan Cooperative Housing Society Ltd.
(supra) and Bengal Secretariat Cooperative
Land Mortgage Bank Housing Society Ltd.
(supra), the consent given by the petitioner
society is liable to be null and void and as
such, plan sanctioned by the AMC could not
have been granted relying upon such consent
of the petitioner society which was given
without any authority by the Ex-Secretary of
the society.
16. The Resolution dated 04.06.2017 passed
in Annual General Meeting of the petitioner
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society would therefore, be binding upon all
the members and operation of such resolution
would be retrospective as the same would be
declaratory resolution of the wish of the
members of the petitioner society to the
effect that all the members would not raise
the height of their building nor put their
residential units for any other use than the
residence of the members and as such, the
respondents could not have been permitted by
the Tribunal to put up construction of ground
plus seven floors contrary to such
resolution. The Apex Court in the following
decisions while holding that declaratory
statute have retrospective effect have
observed as under:
i) Union of India and another v. V.V.F.
Limited and another (supra), wherein it is
observed as under:
"23. In the case of State Bank of
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India v. V. Ramakrishnan (2018) 17
SCC 394, it is observed and held
that the presumption against
retrospective operation is not
applicable to declaratory statutes.
For modern purposes a declaratory
Act may be defined as an Act to
remove doubts existing as to the
common law, or the meaning or effect
of any statute. Such Acts are
usually held to be retrospective.
23.1 In the case of State of Bihar
v. Ramesh Prasad Verma (2017) 5 SCC
665, it is observed and held that
any legislation or instrument having
force of law, if clarificatory,
declaratory or explanatory in nature
and purport, will have retrospective
operation especially in the absence
of any indication to the contrary as
to retrospectivity either in parent
Act or Rules or notifications
involved.
23.2 In the case of Union of India
v. Martin Lottery Agencies Ltd.
(2009) 12 SCC 209, it is observed
and held that whether a subordinate
legislation or a parliamentary
statute would be held to be
clarificatory or declaratory would
depend upon the nature thereof as
also the object it seeks to achieve.
23.3 In the case of T.N. Electricity
Board v. Status Spg. Mills Ltd.
(2008) 7 SCC 353 it is observed and
held that a clarificatory order can
be given retrospective effect as it
can throw light on substantive
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provision by principle of
contemporanea expositio.
25. In view of the above and for the
reasons stated above and once it is
held that the subsequent
notifications/industrial policies
which were impugned before the
respective High Courts are
clarificatory in nature and are
issued in public interest and in the
interest of the Revenue and they
seek to achieve the original object
and purpose of giving
incentive/exemption while inviting
the persons to make investment on
establishing the new undertakings
and they do not take away any vested
rights conferred under the earlier
notifications/industrial policies
and therefore cannot be said to be
hit by the doctrine of promissory
estoppel, the same is to be applied
retrospectively and they cannot be
said to be irrational and/or
arbitrary."
ii) Ghanshyam Mishra and Sons Private
Limited Through the Authorised Signatory
(supra), wherein it is observed as under:
(85.) In Justice G.P. Singh treatise
on "The principles of Statutory
Interpretation", 14th Edition,
Revised by Justice A.K. Patnaik,
former Judge of this Court, it is
observed thus:
"(i) Declaratory Statutes
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The presumption against
retrospective operation is not
applicable to declaratory
statutes. As stated in CRAIES
and approved by the Supreme
Court:
"For modern purposes a
declaratory Act may be defined
as an Act to remove doubts
existing as to the common law,
or the meaning or effect of any
statute. Such Acts are usually
held to be retrospective. The
usual reason for passing a
declaratory Act is to set aside
what Parliament deems to have
been a judicial error, whether
in the statement of the common
law or in the interpretation of
statutes. Usually, if not
invariably, such an Act contains
a preamble, and also the word
'declared' as well as the word
'enacted'.
But the use of the words 'it is
declared' is not conclusive that
the Act is declaratory for these
words may, at times, be used to
introduce new rules of law and
the Act in the latter case will
only be amending the law and
will not necessarily be
retrospective. In determining,
therefore, the nature of the
Act, regard must be had to the
substance rather than to the
form. If a new Act is 'to
explain' an earlier Act, it
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would be without object unless
construed retrospective. An
explanatory Act is generally
passed to supply an obvious
omission or to clear up doubts
as to the meaning of the
previous Act. It is well settled
that if a statute is curative or
merely declaratory of the
previous law retrospective
operation is generally intended.
The language 'shall be deemed
always to have meant' or 'shall
be deemed never to have
included' is declaratory, and is
in plain terms retrospective. In
the absence of clear words
indicating that the amending Act
is declaratory, it would not be
so construed when the pre-
amended provision was clear and
unambiguous. An amending Act may
be purely clarificatory to clear
a meaning of a provision of the
principal Act which was already
implicit. A clarificatory
amendment of this nature will
have retrospective effect and,
therefore, if the principal Act
was existing law when the
constitution came into force,
the amending Act also will be
part of the existing law.
The above statement of the law
relating to the nature and
effect of a declaratory statute
has been quoted with approval by
the Supreme Court from earlier
editions of this book in a
number of cases.
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"In Mithilesh Kumari v. Prem
Bihari Khare[(1989) 2 SCC 95],
section 4 of the Benami
Transactions (Prohibition) Act,
1988 was, it is submitted,
wrongly held to be an Act
declaratory in nature for it was
not passed to clear any doubt
existing as to the common law or
the meaning or effect of any
statute. The conclusion,
however, that section 4 applied
also to past benami transactions
may be supportable on the
language used in the section."
These observations and criticism
of Mithilesh Kumari's case also
received the approval in R.
Rajgopal Reddy v. Padmini
Chandrasekharan [(1995) 2 SCC
630], where the Supreme Court
after quoting them (from 5th
Edition pp. 315, 316) said :
"No exception can be taken to
the above observations".
A proviso added from 1.4.1988 to
section 43 B inserted in the
Income Tax Act, 1961 from
1.4.1984 came up for
consideration in Allied
Motors(P.) Ltd. v. Commissioner
of Income-tax and it was given
retrospective effect from the
inception of the section on the
reasoning that the proviso was
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added to remedy unintended
consequences and supply an
obvious omission so that the
section may be given a
reasonable interpretation and
that in fact the amendment to
insert the proviso would not
serve its object unless it is
construed as retrospective. In
Commissioner of Income-Tax,
Bombay v. Podar Cement Pvt.
Ltd., [(1997) 5 SCC 482] the
Supreme Court held that
amendments introduced by the
Finance Act, 1987 in so far they
related to section 27(iii),
(iiia) and (iiib) which
redefined the expression 'owner
of house property', in respect
of which there was a sharp
divergence of opinion amongst
the High Courts, was
clarificatory and declaratory in
nature and consequently
retrospective. Similarly, in
Brij Mohan Das Laxman Das v.
Commissioner of Income -
tax[(1997) 1 SCC 352].
Explanation 2 added to section
40 of the Income-tax Act, 1961
from 1.4.1985 on a question on
which there was a divergence of
opinion was held to be
declaratory in nature and,
therefore, retrospective. And in
Zile Singh v. State of Haryana,
[(2004) 8 SCC 1] substitution of
the word 'upto' for the word
'after' in the proviso to
section 13A (added in 1994) in
Haryana Municipal Act, 1973 by
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the Haryana Municipal (Second
Amendment) Act, 1994 was held to
be correction of an obvious
drafting error to bring about
the text in conformity with the
legislative intent and,
therefore, retrospective. Even
without the amendment of the
proviso, the court in all
probability would have read and
interpreted the section as
corrected by the amendment."
(93.) As discussed hereinabove,
one of the principal objects of
I&B Code is, providing for
revival of the Corporate Debtor
and to make it a going concern.
I&B Code is a complete Code in
itself. Upon admission of
petition under Section 7, there
are various important duties and
functions entrusted to RP and
CoC. RP is required to issue a
publication inviting claims from
all the stakeholders. He is
required to collate the said
information and submit necessary
details in the information
memorandum. The resolution
applicants submit their plans on
the basis of the details
provided in the information
memorandum. The resolution plans
undergo deep scrutiny by RP as
well as CoC. In the negotiations
that may be held between CoC and
the resolution applicant,
various modifications may be
made so as to ensure, that while
paying part of the dues of
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financial creditors as well as
operational creditors and other
stakeholders, the Corporate
Debtor is revived and is made an
ongoing concern. After CoC
approves the plan, the
Adjudicating Authority is
required to arrive at a
subjective satisfaction, that
the plan conforms to the
requirements as are provided in
subsection (2) of Section 30 of
the I&B Code. Only thereafter,
the Adjudicating Authority can
grant its approval to the plan.
It is at this stage, that the
plan becomes binding on
Corporate Debtor, its employees,
members, creditors, guarantors
and other stakeholders involved
in the resolution Plan. The
legislative intent behind this
is, to freeze all the claims so
that the resolution applicant
starts on a clean slate and is
not flung with any surprise
claims. If that is permitted,
the very calculations on the
basis of which the resolution
applicant submits its plans,
would go haywire and the plan
would be unworkable.
(94.) We have no hesitation to
say, that the word "other
stakeholders" would squarely
cover the Central Government,
any State Government or any
local authorities. The
legislature, noticing that on
account of obvious omission,
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certain tax authorities were not
abiding by the mandate of I&B
Code and continuing with the
proceedings, has brought out the
2019 amendment so as to cure the
said mischief. We therefore
hold, that the 2019 amendment is
declaratory and clarificatory in
nature and therefore
retrospective in operation."
iii) Hero Motocorp Ltd. (supra) wherein
it is observed as under:
"70. We are, therefore, of the
considered view that even on the
ground of change of policy, which is
in public interest or in view of the
change in the statutory regime
itself on account of the GST Act
being introduced as in the instant
case, it will not be correct to hold
the Union bound by the
representation made by it, i.e. by
the said O.M. of 2003. Further, this
would be contrary to the statutory
provisions as enacted under Section
174(2)(c) of the CGST Act."
17. Therefore, the contentions raised on
behalf of the respondents that no
interference would be required while issuing
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writ of certiorari would be without any basis
inasmuch as when the Tribunal has committed
an error in interpreting the very basic
concept of cooperation applicable to the
cooperative society for the purpose of
allowing the respondents from making
construction of ground plus seven floors,
merely on technical ground of consent letter
issued by the society admittedly without any
authority cannot be said to be justified in
the facts of the case.
18. In view of the foregoing reasons, the
petitions succeed and are accordingly
allowed. The impugned order passed by the
Tribunal as well as order of sanctioning the
plan and issuance of Development Permission
are also quashed and set aside with a
permission to the respondents to file fresh
revised plan in accordance with bye-laws of
the petitioner society as well as the
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resolutions which are passed by the
petitioner society from time to time till
date after obtaining necessary consent from
the petitioner society without demolishing
the existing construction put up by the
respondents which shall be subject to the
plans which may be submitted and sanctioned
by the AMC. The respondents are also
restrained from putting up construction of
ground plus seven floors and the construction
put up by the respondents during the pendency
of this petition shall be continued to remain
in existence and the same can be used by the
respondents for their residential purpose by
filing revised plans before the AMC which
shall be sanctioned by the AMC in accordance
with resolution dated 4.06.2017 passed by the
petitioner society as well as the bye-laws
and prevalent development rules.
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19. Petitions stand disposed of accordingly.
No order as to costs.
Record and Proceedings be sent back to
the concerned Tribunal.
(BHARGAV D. KARIA, J)
RAGHUNATH R NAIR
