Can a Joint Secretary of a Cooperative Society be held liable for financial losses caused by a fraudulent loan applicant when the loan was sanctioned by the management committee?

 In the given facts and circumstances of the present case, it cannot be fathomed that Respondent No. 6 being the Joint Secretary of the Society and one of the office bearers of the Managing Committee can be solely held responsible and liable for disbursement of loan to a person who is not an employee of the Police Department. The most important aspect for consideration is the fact of due diligence in such a case. Appropriate enquiry and due diligence if carried out by those responsible to do so before recommending the application of such persons (Applicants) for loan sanction to the Managing Committee could have unearthed the genuineness of the Applicants. Therefore the role of Respondent No. 6 needs to be understood in its proper perspective. It is on record that a resolution to that effect was passed by the Society assigning and authorising individual Managing Committee members to sign the cheques of the loan amount which were signed by the Managing Committee. In that view of the matter, the entire Managing Committee is liable and responsible and not the member who has appended his signature on the cheque for disbursement of loan. If the Enquiry Officer has exonerated the other Managing Committee members then in that case indictment of Respondent No. 6 is high handed and arbitrary. All that is needed to be seen in the present case is that the Managing Committee members had been authorised by the Managing Committee to sign the cheques for disbursement of loan. In that view of the matter, it cannot be held that only Respondent No. 6 and three other members of the Committee are liable for causing financial loss to the Society and are liable for reimbursement of the said financial loss. It is reiterated that verification, due diligence and scrutiny of the application for seeking loan is the most important step which is verified by the Manager of the Society or those responsible who are entrusted with the said work and appointed by the Society for the same. This is a classic case where the Managing Committee has sanctioned the loan amount and an individual office bearer of the Managing Committee who has been entrusted with the responsibility and duty of signing the cheques is held responsible for disbursement of loan. This cannot be countenanced in the facts of the case. 

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 1475 of 2017

Decided On: 14.06.2023

Brihanmumbai Police Karmachari Sahakari Pat Sanstha Maryadit

Vs. State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Milind Narendra Jadhav, J.

Citation: MANU/MH/2099/2023.

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Who can be treated as the owner of immovable property as per MRTP Act where unauthorized construction is done?

 Plain reading of the above provisions of law discloses that in cases of any development within the territorial limits of the planning authority without the prior permission under the said Act or after revocation of such permission granted under the said Act, if carried out, then it could be ordered to be removed as well as direction can be issued for restoring the land to the condition which existed prior to the concerned development. The authority can also direct to restore such status quo ante within specified period. However, the specified period shall not be less than one month. Such a direction can be issued to the owner of the concerned development. The term "owner" would obviously disclose the person in whom the ownership of the property or the structure vests. The Section 2(18) of the said Act, however, widens the scope of the said expression "owner" by defining it to mean to include any person for the time being receiving or entitled to receive, whether on his own account or as agent, trustee, guardian, manager or receiver for another person or for any religious or charitable purpose, the rents or profits of the property in connection with which it is used. In other words, it is not only the person in whom the title of the property stands, but even his agent or person acting on behalf of the owner for the purpose of receipt of rent or profits from such property would be the owner for the purpose of the said expression under Section 53 of the said Act. Undoubtedly, in the case of co-operative societies, either the Chairman as well as the other members of the managing committee thereof would be the owners of the property of the society for the purpose of the said section.

{Para 7}.

Bombay High Court

D.N. Punamiya vs The State Of Maharashtra (Through ... on 10 February, 2005

Bench: R Khandeparkar

Citation: 2005(2) Bom CR 747.

Read full Judgment here: Click here

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Whether prosecution can be started against Co-operative society if notice under MRTP Act was issued against chairman of said society?

 It is well-settled that expressions in a penal provision of law are to be construed strictly and in favour of the subject. The rules of interpretation clearly require that the language of a statute should be so construed that no case shall be held to fall within it which does not come within the reasonable interpretation of the statute, and in case of any doubt the cardinal principle is that the construction favourable to the subject should be preferred. {Para 8}

9. Where an authority is bestowed with certain power under a statute and for the execution of such power certain requirements or formalities are prescribed under the same statute, it is neither unjust nor incorrect to expect rigorous observance of such requirements or formalities by such authorities while exercising their powers. The relevant provision of law clearly speaks of notice of minimum 30 days to comply with the direction, which the Authority is empowered to issue under such notice. The provision does not contemplate prosecution during the subsistence of such period nor in case of compliance of direction within the stipulated period of time. In other words, non-compliance of direction is precondition for the prosecution. Unless the said precondition is satisfied, there cannot exist criminal liability of the owner and the Authority is not entitled to initiate prosecution under Section 53(6) and (7) of the said Act. Obviously occasion for non-compliance of direction would arise only in case of the party being made aware of the direction. The mode statutorily specified for making the party aware of the direction is only by way of notice under Section 53(1). Being so, issuance of such notice with the necessary direction and non-compliance thereof are pre-requirements for prosecution under Section 53(6) and (7) of the said Act.

10. Undisputedly, in the case in hand, the development is in the property of the society. The notice which was issued to Shri S.S. Rane was in the capacity as the Chairman of the society. It is pertinent to note that there was no notice separately issued to the society as such. In fact, the notice was addressed thus:-

"Shri S.S. Rane (Chairman)

1. A Neelkanth Apartment, Gokuldas Pasta Road, Dadar, Mumbai 400 014."

Even the contents of the notice disclose that the allegations were against Shri S.S. Rane, Chairman of the society. The third para thereof clearly recorded that "it has been reported to me that you have commenced, carried out development described in the Schedule appended below: ......" Even the warning regarding prosecution was directed to Shri S.S. Rane in the sense it recorded that "Please note that on failure to comply with the aforesaid requisition, you will be liable for prosecution under the said act ......"

11. It is not in dispute that no notice was issued to the petitioner in relation to the alleged development. Being so, the petitioner had no occasion to comply with the directions stated to have been issued to Shri S.S. Rane. The notice issued to Shri Rane can by no stretch of imagination be said to be good for the petitioner nor that is the case of the respondents. The Section 53(6), quoted above, clearly reveals that the criminal liability of the owner arises only upon the failure to comply with the directions in the notice and not otherwise. Being so, if there is no notice issued to the party, there cannot be any occasion for prosecution of such person. In fact, the sub-section (7) clearly speaks of prosecution under the sub-section (6)(a). The sub-section (6)(a) empowers the Authority to prosecute the owner only on failure to comply with the notice. Being so, in the case in hand, once it is not in dispute that no notice was served upon the petitioner in terms of the provisions of law comprised under Section 53(1) of the said Act, the petitioner never incurred any criminal liability for the purpose of he being made to face the prosecution under Section 53(6) or to be punished under sub-section (7) thereof for the alleged development. The petitioner, therefore, is justified in contending that the prosecution was without any occasion for the same against the petitioner. In such cases, the prosecution being in the absence of jurisdictional fact which is otherwise needed for the Magistrate to take cognizance of the complaint, question of asking the party to face the prosecution and defend his right does not arise at all. On this count itself, the process issued against the petitioner in Criminal Case No.45/P/2000 by the learned Metropolitan Magistrate is liable to be quashed and set aside.

Bombay High Court

D.N. Punamiya vs The State Of Maharashtra (Through ... on 10 February, 2005

Bench: R Khandeparkar

Citation: 2005(2) Bom CR 747.

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Whether housing society can terminate development contract with developer if he fails to pay transit rent?

  The defaults by the Developer have undoubtedly caused immense prejudice and harm to the members of the Society. The hardship to the members is real and immediate; the so-called hardship to the Developers is notional. When it spent in the

project, this was no altruism or charity. It was an investment toward great profit. Every investment involves risk. The Developer gambled on the project. Receiving monthly rent is not a sop, not a matter of ‘convenience’. It is a matter of survival. Therefore, the non-payment of dues, the delays in project completion, and not paying transit rent for months together speaks to an inherent, and constantly growing, social injustice. It should not be allowed to continue. Therefore, apart from the exceptionally strong prima facie case that the Society makes

out, the ‘balance of convenience’ is decidedly in its favour.

 The society’s members

agree to this upheaval, to move out altogether, to separate from each

other while their new homes are built. The promise to them is that

they will be looked after and provided for while their new homes are

being built. Days, weeks, months and years pass; the members do not

receive the promised rent. Thus begins the downward slide. The

promised homes are delayed, then delayed further, and then delayed

even further. This cuts at the root of the initial entrustment. A

development project for a society demands commitment, fidelity,

respect and honesty. When these begin to disappear, the contractual

relationship collapses. Where there was anticipation and confidence,

there is now just bitterness, disappointment and despair. There is a

breakdown of confidence, and there is only distrust. Loss of faith and

confidence on account of contractual violations and breaches by a

developer are sufficient grounds to find for the society and against the developer. Gopi Gorwani v Ideal Cooperative Housing Society Ltd & Ors, 2013 SCC OnLine Bom 1967. Indeed, I would go a step further. There is urgency for  the society. Therefore, the slightest delay in project completion, unless specifically accepted by the society, and even one single default in payment of transit rent or other dues is actually sufficient to warrant a termination. There is no such thing in these matters as ‘substantial compliance’. That is not the principle of obligations in the realm of private law.

REPORTABLE

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

IN ITS COMMERCIAL DIVISION

COMM ARBITRATION PETITION (L) NO. 74 OF 2020

Rajawadi Arunodaya Co-op Hsg Soc Ltd Vs  Value Projects Pvt Ltd.,

CORAM : G.S.Patel, J.

DATED : 15th March 2021

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Can a development agreement signed by the Chairman of Society be binding upon the non-signatory member of society?

This is the point of law raised in opposition. The submission is that the development agreement and its arbitration clause cannot possibly bind a non-signatory, namely, Kondvilkar. Reliance is placed on the decision of the Supreme Court in Indowind Energ Ltd v Wescare (I) Ltd & Anr., 2010 5 SCC 306.  but this decision lends no support to the argument in question because this was not a case where one of the parties sought to be bound by the agreement was a member or affiliate of a signatory.

Then in paragraphs 21 and 22, the Court said:

“21.It is to be noted that once the person becomes a member of the Co-operative Society he loses his individuality with the Society and has no independent rights except which is given to him by the statute and bye-laws. Hence, objection raised by the respondent nos.3, 4, 6 and 7 that there is no privity of contact between them and petitioner, is not maintainable.

24.This again was a question of a development agreement between a developer and the society and of some members saying that they were not bound by it, not having signed, and opposing the development. The Division Bench considered a large body of law and the argument that the dispute between the developer and the individual descending member was not arbitrable. In paragraph 18, the Division Bench said that it had no hesitation in taking the view that since the dissenting persons were members of the society and held flats in the society they were bound by the decision of the general body of the society as long as the decision is in force. This puts the matter exactly in perspective; and this is why I noted at the forefront the importance or signifcance of the 2nd Respondent never having even attempted to challenge the general body decision. In Girish Mulchand Mehta the dissenting members had not challenged the decisions of the general body and the Division Bench said that the general body ‘is supreme’ in so far as redevelopment of the property in question or of appointing of the developer is concerned. The overwhelming majority approved the appointment of the developer. These found voice and incorporation in the development agreement, and then the Division Bench said that the decision and acts of the society would bind the dissenting members unless the resolutions were quashed and set aside by a forum of competent jurisdiction.

REPORTABLE

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION PETITION (L) NO. 108 OF 2021

Chirag Infra Projects Pvt Ltd  Vs Vijay Jwala Coop. Hsg Soc Ltd & Anr

CORAM:

G.S. PATEL, J

DATED: 12th March 2021

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Whether Judgment debtor can resist the execution of decree if it fails to challenge compromise decree?

True, the trial Court has simply recorded the terms of the compromise. But this compromise carries with it all the elements highlighted in Roshan Lal, a judgment of the Supreme Court's three-Judge Bench: "The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord in the circumstances, is entitled to have such a decree under the law."

33. About the plea of collusion, I must note that the Society has already raised that issue in an independent suit but did not pursue it. It has not even arrayed, in these proceedings, the President eo nominee. Besides, the courts below have, on facts, rejected the Society's plea of collusion. First, the court that passed the decree has inherent jurisdiction. Second, the procedural lapses, if any, have not gone to the root of the matter to nullify that decree. Third, the Society filed a suit on the same cause but later abandoned it. Fourth, in a revision, this Court will not upset findings of fact.

34. In the above context, so long as the decree has remained unchallenged, the Society or its members cannot be heard saying that despite their earlier failed attempt, they still can obstruct the decree. Such an approach, if approved, falls foul of the Rule of Law.

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 296 of 2008

Decided On: 11.09.2019

 Nira and Palm Product Producers Co-op. Society's Ltd. and Ors.

Vs. Nirmala Yeshwant Pethe and Ors.

Hon'ble Judges/Coram:

Dama Seshadri Naidu, J.

Citation: MANU/MH/3150/2019

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Whether the court can dismiss the complaint about the dishonour of cheque if an officer of Co-operative society was not duly authorized to give evidence?

When the Complainant's witness the said Shirodkar was cross-examined on the said Resolution/Authority letter, the Complainant's witness admitted that the said Resolution authorised him to attend Court cases and not to depose on oath. It is contended by learned Counsel on behalf of the accused that this point was raised before both the Courts below. The learned J.M.F.C., merely observed that the Complainant produced on record true extract of the Resolution authorising Gaurish Shirodkar to attend the Court on behalf of the Society. There is no whisper about the said Resolution/Letter of Authority in the Judgment of the learned Appellate Court, which otherwise also is very cryptic. The said Resolution did not authorise the said Gaurish P. Shirodkar, the recovery officer of the Complainant-Co-operative Society, either to file a complaint on behalf of the Complainant, which is a separate legal entity or to depose in support of the Complainant. A complaint under Section 142 of the Act can be filed either by the payee or the holder in due course. The Complainant-Co-operative Society was the payee in his case and the complaint was filed in its name. The authority produced did not sufficiently authorise Shri G. P. Shirodkar either to file the complaint or to depose in support thereof. The Complainant was not sufficiently represented before the Court. Therefore, it could not be said that the complaint filed or the evidence given in support thereof was in accordance with Section 142 of the Act, which requires that the complaint has to be made by the payee or, as the case may be, by the holder in due course of the cheque. In the absence of any Power of Attorney or a valid authority by the Complainant in favour of the said Recovery Officer, the complaint itself could not have been entertained and conviction based on such a complaint, is liable to be set aside.

IN THE HIGH COURT OF BOMBAY AT GOA

C.R.A. No. 32 of 2006

Decided On: 04.10.2006

 Alka Toraskar  Vs.  The Vaishya Urban Co-op. Credit Society Ltd. and Ors.

Hon'ble Judges/Coram:

N.A. Britto, J.

Citation: MANU/MH/1097/2006,2007 CRLJ 858, 2006(6) ALLMR 397

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Whether society can challenge lease deed signed by its president?

If it is the plaintiff's case that the President in fact did not have such authority because the subject was one which was prescribed in the internal statute of the society, it was indeed for the plaintiff to produce and prove such internal statute. Neither in the Trial Court nor in this Court is there any attempt made by the plaintiff to produce or prove any such internal statute. In the premises, it must assumed that such internal statue entailing restrictions on the President to act or take initiative in the matter does not exist.

11. Learned Counsel for the respondent-plaintiff is not right in submitting that the onus in such a case is upon the defendants, who assert the existence of such authority in the President. The lease is an executed act here; it has been a registered Lease Deed. If it is the case of the plaintiff that this Lease Deed was executed on its behalf by someone who did not have the authority to do so, it is for the plaintiff to prove such a case at the trial. The question of burden of proof really goes by this primary consideration: If no evidence were to be led before the Court at the trial, who would lose? It is a foregone conclusion that in our case, if there were no evidence before the Court, it is the plaintiff who would fail. The onus to show lack of authority and vitiation of the subject Lease Deed on that account was, in that case, clearly on the plaintiff as someone who questioned the execution of that deed.

12. There is one more reason why the onus was on the plaintiff in the present case. Under Section 106 of the Evidence Act, the burden of proving any fact which is especially within the knowledge of any person is upon that person. Its own internal statute was a matter which was clearly within the special knowledge of the plaintiff. If it was its case that having regard to this internal statute, the executant of the deed could be said to be lacking in authority to do so, it was indeed for it to prove such fact. The plaintiff, as we have noted above, has made no such attempt. The internal statute has, in fact, till date, not seen the light of the day.

 IN THE HIGH COURT OF BOMBAY AT GOA

First Appeal Nos. 6 and 8 of 2010

Decided On: 20.06.2019

 Kantu Shankar Dessai  Vs. Sociedade Agricola Dos Gauncares De Cuncolim E Veroda and Ors.

Hon'ble Judges/Coram:

S.C. Gupte and Prithviraj K. Chavan, JJ.

Citation: 2019(6) MHLJ 910

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Whether proposed co-operative society is body corporate?

 It is undisputed that the petitioner - society is not a registered cooperative society and is merely a proposed cooperative society. A proposed Cooperative society does not possess an independent legal identity. It is only after the cooperative society is registered it has a status of a body corporate. All the privileges and rights enjoyed by the registered society cannot be availed of if the society is not registered. The cooperative society cannot act beyond its bye laws/Constitution. We had asked the learned Advocate for the petitioner as to the bye laws of the proposed society. The learned Advocate could not produce any bye laws of the society. The petitioner being a proposed society does not possess the legal right to maintain the petition. In fact, if at all the petition was to be filed, the same was required to be filed through the members of the proposed society.

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Writ Petition No. 8864 of 2013

Decided On: 12.09.2018

Shraddha Commercial Premises Co-op. Society Vs. The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

S.V. Gangapurwala and S.M. Gavhane, JJ.

Citation: 2019(1) MHLJ 845.

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Whether recovery officer of co-operative society can take possession of immovable property without approaching CMM or District Magistrate?

21. Rule 11(d-1) onwards are material for our purposes as they deal with taking over possession of immovable property. They are inserted by Government Notification dated 30th August 2014 and they read as follows:

"(d-1) (i) No sale of immovable property under these rules shall take place unless possession of the property is taken or caused to be taken.

(ii) For sale of attached immovable property, the Recovery officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Form "Z" to these rules, to the judgment debtor and by affixing the possession notice on the outer door or at such conspicuous place of the property.

(iii) The possession notice as referred to in sub-rule (2) shall also be published in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the Recovery officer.

(iv) In the event of possession of immovable property is taken by the Recovery officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody has an owner of ordinary prudence would, under the similar circumstances, take care of such property.

(v) The Recovery officer shall take steps for preservation and protection of such property and insure it, if necessary, till it is sold or otherwise disposed of.

(vi) (a) Where the possession of the any property is required to be taken by the Recovery Officer under the provisions of this rule, the Recovery Officer may, for the purpose of taking possession, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction such property is situate to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him take possession of such property and forward such property to the Recovery Officer.

(b) For the purpose of securing compliance of this sub-rule, the Chief Metropolitan Magistrate or the District Magistrate, may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary.

(c) No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this sub-rule shall be questioned in any court or before any authority."

22. Thus, it follows that when a clear procedure is laid down in the Act and Rules, as per these Rules, only the possession of the suit property was required to be taken before its sale. Assuming that, in this case, the sale has taken place before these Rules were inserted, at-least as regards taking over possession of the suit property, the procedure prescribed in these Rules was required to be followed as possession is taken over from Respondent on 12th April 2015, after the Rules came in to effect.

23. Thus, when the statutory provisions contained in the Act and Rules clearly prescribe a particular mode to be adopted for delivery of possession of the property to the purchaser, as held in the above said authority of Satguru Construction Co. Pvt. Ltd. & Ors. (supra), it would not be open for the parties to take the law in own hands for obtaining the possession. It would be amounting to ignoring the mandate of Section 163 of the said Act. Neither the Recovery Officer nor the Applicant-auction purchaser can take the law in their hands and with the help of police dispossess the Respondent from the suit premises. 

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 455 of 2016

Decided On: 05.04.2018

 Kadir Ilahi Bagwan Vs. Usha  Anandrao Yadav

Hon'ble Judges/Coram:

Dr. Shalini Phansalkar Joshi, J.

Citation: 2019(1) MHLJ 705

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Which court will have jurisdiction to try service matters of employees of co-operative society?

 It may be noted that the High Court, in the impugned judgment, has itself proceeded on the basis that if the dispute relates to reinstatement, the Cooperative Court will not have any jurisdiction. The main reason for conferring jurisdiction upon the Cooperative Court in the instant case is that the Cooperative Court has replaced the Civil Court and, therefore, powers of the Civil Court are given to the Cooperative Court. However, the High Court erred in not further analysing the provisions of Section 91 of the Act which spells out the specific powers that are given to the Cooperative Court and those powers are of limited nature. Our aforesaid analysis leads to the conclusion that the disputes between the cooperative society and its employees are not covered by the said provision. We may hasten to add that if the provision is couched in a language to include such disputes (and we find such provisions in the Cooperative Societies Acts of certain States) and it is found that the Cooperative Society Act provides for complete machinery of redressal of grievances of the employees, then even the jurisdiction of the Labour Court/Industrial Tribunal under the Industrial Disputes Act shall be barred having regard to the provisions of such a special statute vis-a-vis general statute like the Industrial Disputes Act {See-Ghaziabad Zila Sahkari Bank Ltd.2}.

18. As a result, this appeal is allowed, the order of the High Court is set aside and the Division Bench judgment, on which reliance is placed by the High Court in the impugned judgment, is overruled. As a consequence, it is held that the petition filed by the Respondent before the Cooperative Court is not maintainable. It would, however, be open to the Respondent to file a civil suit. Needless to mention, in such a civil suit filed by the Respondent, he would be at liberty to file application Under Section 14 of the Limitation Act, 1963 in order to save the limitation.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1488 of 2017

Decided On: 30.03.2017

 The Maharashtra State Cooperative Housing Finance Corporation Ltd.

Vs.

 Prabhakar Sitaram Bhadange

Hon'ble Judges/Coram:

A.K. Sikri and R.K. Agrawal, JJ.

Citation: 2017(6) MHLJ 365

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Whether membership of housing society can be claimed on basis of doubtful agreement of sell?

 This Court clearly held that an agreement to sell which is
not a registered deed of conveyance would not meet the
requirements of Section 54 and 55 of the Transfer of Property Act.
With respect to Section 53A of the Transfer of Property Act, it is
well settled that the same can only be used as a defence in
proceedings initiated by the transferor or by any person claiming
under him.
17. As far as the present case is concerned, the very foundation
of the case of the respondent No.1 i.e. agreement to sell is
doubtful. The original has not seen the light of day and only
photocopy thereof was filed. There are doubts with regard to the
signature of Shri Dhillon P. Shah. As pointed out earlier, the
Bank attached the property in question in the year 2001. Shri
Dhillon P. Shah died in the year 2004 and during these three
years though Shri Shah and his wife filed various legal
proceedings, they never disclosed that this flat had been sold by
them. The respondent No.1, during the life time of Shri Dhillon
P. Shah never claimed ownership of the flat.
18. Shri Dhillon P. Shah and his wife never disclosed the fact of
the alleged sale of the suit property to anybody including any
member of the Society. It is more than obvious that with a view
to wriggle out of the recovery proceedings, after the death of Shri
Dhillon P. Shah this document has been fabricated. This
document does not transfer any right, title or interest of the
property and, therefore, the Revisional Court and the High Court
erred in allowing the claim of the respondent No.1
19. The appeals are accordingly allowed and the order of the
High Court and the revisional/appellate authority accepting the
claim of respondent No.1 are set aside and the claim of the
respondent No.1 is rejected. It is held that respondent No.1 has
no right, title or interest in the suit property. Therefore, he
cannot claim membership of the New Shrinath Kunj Housing
Co-operative Society.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 009777-009778 OF 2017
[Arising out of SLP (C) Nos. 28064-28065 of 2014]
The Greater Bombay Co-operative Bank Limited .
V
Mr. Nagraj Ganeshmal Jain & Ors. 
Deepak Gupta, J.
Dated:July 26, 2017

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Whether it is necessary to examine person passing resolution authorizing filing complaint of dishonour of cheque?

 
 The learned counsel for the appellant submitted that,
that the complaint had not been filed by an authorized officer or
person, was not correct.  He pointed out that the resolution passed
by the complainant bank authorizing the said Hindurao Kumbhar
was filed before the Magistrate, and that, the resolution clearly
authorized the said Hindurao  Kumbhar to  file a complaint on
behalf of the  complainant bank.

This   submission   of   the   learned   counsel   for   the
applicant appears to be proper.   The Magistrate's reasoning that
the resolution had not been proved because the same had been
passed in the absence of the said Hindurao Kumbhar, and that, he
had no personal knowledge about the said resolution is not sound.
The Magistrate's view that some of the persons who passed the

resolution ought to have been examined, is not correct. 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.920 OF 2013
WITH
CRIMINAL APPLICATION NO.472 OF 2013
IN
CRIMINAL APPEAL NO.920 OF 2013

THE KARAD URBAN CO­OPERATIVE BANK LIMITED  V/s.
SUNIL LAXMAN DALVI AND ANR. )...RESPONDENTS

CORAM : ABHAY M. THIPSAY, J.

DATE : 15th DECEMBER 2015.
Citation:2016(4) MHLJ 577

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Whether co-operative society can unilaterally cancel sale deed by executing extinguishment Deed?

For the reasons
stated supra, I have to grant the reliefs in
favour of the appellant as prayed by him and
quash the extinguishment deed dated
09.08.2001 along with the subsequent sale
deeds registered in favour of the respondent
No.5 who in turn has sold property in favour
of respondent Nos.6 and 7 without the
authority of law. The sale deed can be
cancelled under Section 31 of the Specific
Relief Act, 1963, by the competent civil
court if the same is challenged within the
period of limitation stipulated under Article
59 of the Limitation Act, 1963. Since the
facts are undisputed in the case on hand and
the respondent Society, after the lapse of 39
years has erroneously and illegally cancelled

the absolute sale deed registered in favour
of the appellant’s mother, the appellant has
acquired a valid and absolute title to the
property in question and the same could not
have been cancelled by the respondent Society
and the Sub-Registrar as it is void ab initio
in law. Hence, the High Court should have
responsibly exercised its extraordinary
jurisdiction and should have examined the
documents of the sale deed with respect to
the relevant provisions of the M.P
Co-operative Societies Act and Rules, 1962
and the Bye-laws of the Society. The
cancellation of the sale deed executed in
favour of the appellant’s mother in the year
1962 by way of the extinguishment deed could
not have been registered by the Sub-Registrar
as he is not empowered to do so. Hence, for
want of the competent jurisdiction, in
registering such document, the High Court
should have exercised its extraordinary
jurisdiction to annul the extinguishment deed

and the transactions of the subsequent sale
deeds, which has not been done by it.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6673 OF 2014
Satya Pal Anand 
Versus
State of M.P. and Others .
Dated:August 25, 2015.
Dipak Misra, J.

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Duties of board of directors while making decision of retirement/compulsory retirement of employee of company

In pursuance to the directions of the Single Bench, record pertaining to the retirement/compulsory retirement was produced by the counsel for the appellant bank wherein it was evident that the impugned orders had been passed by the Board of Directors on the advise of the Legal Advisers and the Banking Experts. In terms of Rule 15, it was incumbent upon the Board of Directors to have independently applied their mind and taken decision based on specific grounds. The specific grounds which have been spelt out in Rule 15 include doubtful integrity or incompetence to discharge official duties or inefficiency in due performance of official duties which would have the effect of the employees losing their utility.        It was, therefore, necessary for the Board of Directors to have independently considered the entire service record of the employees so as to form opinion with regard to their utility to the Bank. The requirement of recording specific grounds to arrive at the decision in the rules is intended to ensure that the Board of Directors does not act arbitrarily while compulsorily retiring the employees. There does not seem to be any independent and due application of mind on the part of the Board of Directors while arriving at the decision which has the effect of bringing the services of the employees to a premature end. The function which had been entrusted upon the Board of Directors by the rule could not have been outsourced to the legal advisers. 
The Single Bench has also held that the record which had been produced had not been contemporaneously maintained inasmuch as that the proceedings of the Board of Directors in the meeting held on 31.03.2010 was not made available and instead only an office note dated 31.03.2010 had been produced. This office note refers to the meeting of the Board of Directors held on 22.03.2010 wherein it was decided to compulsorily retire the officials. The proceedings of the meeting of the Board of Directors held on 22.03.2010 indicate that the decision had been arrived in view of the earlier meetings held on 24.02.2010 and 10.03.2010. However, in the proceedings of the meetings held on 24.02.2010 and 10.03.2010 there is no mention of any consideration of the matter as contemplated under Rule 14 and 15 of the Rules of 2006 regarding superannuation and retirement/ compulsory retirement of the officials. 
It has also been held by the Single Bench that the record which had been produced included the attendance register of the meetings of the Board of Directors from 01.07.2009 onwards as well as the register containing details of the proceedings of the Board of Directors from 01.07.2009 to 27.04.2011 which were serially paginated. However, the office note dated 31.03.2010 and the report on the analysis of the service record of the employees alongwith annexures had been prepared in separate sheets. Even in the legal opinion which had been tendered by the legal Advisers, there was no mention of any reference number and date of any document in response to which the legal opinion had been furnished. It has been held that these documents along with the fact sheet reflecting consideration of the service record of the respondents by the committee of four senior and experienced staff and banking expert (on contract) which examined the individual records of the employees on 20th March appear to be documents which were subsequently generated to fill the lacuna. Therefore, the Single Bench has expressed serious doubts about the contemporaneity of the record. We find that there is no basis for us to take a different view in the matter.

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JAIPUR BENCH, JAIPUR

(1) D.B. Special Appeal (Writ) No.529/2015
Rajasthan Urban Co-operative Bank Ltd. vs. Ajay Kumar Katewa & Ors.


Date of Judgment : 12th January, 2016

HON'BLE THE ACTING CHIEF JUSTICE MR.AJIT SINGH
HON'BLE MR. JUSTICE ANUPINDER SINGH GREWAL



Reportable

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Whether contract of lease between promoter of unregistered co-operative society and other party is specifically enforceable?

In the case of Ramji Mandir Narsinhji and Ors. v. Narsinh Nagar @ Tekri Co-op. Housing Society Ltd. & Ors., reported in 1979 (XX) GLR 801, wherein the Division Bench of this Court has held that a contract between a non-existent society on whose behalf some one purports to act is a nullity and gives rise to no cause of action. For Housing Society registered under the Co-operative Societies Act, 1961, it is further held that in view of Section 37 of the Gujarat Co-operative Societies Act, it is clear that a Co-operative society becomes a legal person after it is registered and it is after its registration that it acquires the capacity to enter into contracts. No provision of the Act has been pointed out under which the promoters of a society can act on behalf of the society before it has been registered and has come into existence. Ultimately, it has been held that the agreement of lease entered into between the defendant trust on one hand and a nonexistent co-operative society on the other hand was a nullity and gave no rise to cause of action for the society, and therefore, such an agreement of lease cannot be specifically enforced against the defendants.1

Gujarat High Court

Ashokkumar J. Pandya vs Suyog Co-Operative Housing ... on 21 March, 2002

Equivalent citations: (2002) 3 GLR 673

Bench: H Mehta

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How to prove conspiracy to commit criminal breach of trust by chairman and other members of co-operative society?

  Indian Penal  Code 1860,  Ss. 120 B, 109, 408, 467 and
471.
     Chairman of  Co-operative Society  along with  others
charged with  conspiracy to commit criminal breach of trust-
Charge of conspiracy having failed-Sessions Court acquitting
all but  one accused-Appeal  by State-High  Court convicting
Chairman-Conviction whether valid and legal.
     Defalcation of  properties-Several accused charged with
conspiracy-Prosecution to prove collusion and cohesion among
all  accused-Mens  rea not  to  be  excluded-If  charge  of
conspiracy fails-Prosecution  to  prove  affirmatively that
accused directly  and  personally  connected  with  acts  or
omissions.



HEADNOTE:
     The  appellant   was  the Chairman  of  an  autonomous
cooperative society under the control and supervision of the
State  Government.   On  receipt  of  complaints  about  the
financial  management  of  the Society,  the  Registrar  of
Cooperative Societies  appointed a  special auditor to audit
the Society's  accounts. On  the basis of the audit report a
charge-sheet was  filed against all the accused for entering
into a conspiracy to  commit criminal breach of trust. The
conspiracy charge  having failed, all the accused except one
were acquitted by the Sessions Judge.
     On appeal by the State, the  High Court convicted the
appellant in  respect of  three items, namely, purchase  of
fertilisers  involving  two  transactions  and  missing  of
certain oil  engines, on  the ground that as Chairman of the
Managing Committee  he must be held to be vicariously liable
for any  order given  or misappropriation  committed by  the
other accused.
     In appeal to this  Court it was contended on behalf of
the appellant  that no case of defalcation had been made out
against the appellant.
     Allowing the appeal,
^
     HELD: 1.  There was no justification for the High Court
to  interfere  with  the  appellant's  acquittal.  The case
against the  appellant had not been proved beyond reasonable
doubt and  he was  wrongly convicted by the High Court. [802
D-E]
798
     2. In a case where there was serious defalcation of the
properties, unless  the prosecution  proved that there was a
close cohesion and collusion  between all the accused which
formed the  subject matter  of a  conspiracy,  it  would  be
difficult to  prove the  charges against  the appellant. The
charge of  conspiracy having  failed, the  most material and
integral part of the prosecution story against the appellant
disappeared. [801 B-C]
     3. In  a criminal case of such serious nature mens rea
cannot be excluded. Once the charge of conspiracy has failed
the onus  lay on the prosecution to prove affirmatively that
the appellant  was directly  and personally  connected with
acts or omissions pertaining to the items purchased. [801 E]
     4. In  the absence  of a  charge of conspiracy the mere
fact that  the appellant  happened to be the Chairman of the
Committee would  not make  him liable  in a vicarious sense.
There is no evidence either direct or circumstantial to show
that apart  from approving  the purchase  of fertilisers  he
knew  that   the  firms  from  which  the  fertilisers were
purchased did  not exist.  If the  Chairman was  to be made
liable then  all members of the Committee, viz Tehsildar and
other nominated  members would be equally liable because all
of them  participated in the deliberation of the meetings of
the Committee. The appellant  as Chairman of the Sangh, had
to deal  with a large variety of matters and it would not be
humanly possible  for him to analyse and go into the details
or every small matter in order to find out whether there has
been any criminal breach of trust. [801 G-H; 802 A-B]




   Supreme Court of India

Jethsur Surangbhai vs State Of Gujarat on 9 November, 1983

Equivalent citations: 1984 AIR 151, 1984 SCR (1) 797

1984CriLJ162,1983(2)Crimes942(SC),1984 SCC(cri)474
 




Bench: Fazalali, Syed Murtaza
1984 SCC(cri)474

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Whether co-operative society can be treated as factory for purposes of property tax?

 It is not in dispute that the Petitioner is not a factory within
the meaning of the Factories Act. Subsection
(1) of Section 125 of the
said Act, as stated earlier, contemplates an agreement by the Village
Panchayat with a factory. At this stage, it will be necessary to make a
reference to the relevant provisions of the Rules framed under the said
Act. Rule 18 of Maharashtra Village Panchayats Taxes and Fees Rules,
1960 reiterates the principles laid down by the Section 125(1) of the
said Act that the taxes shall be leviable primarily from the actual
occupier of the building or land upon which it is assessed, if such
occupier is the owner of such building or land. Separate set of Rules
have been framed which governed the agreement under Section 125(1)
of the said Act. The said Rules are Maharashtra Village Panchayats
(Payment of Lump Sum Contribution by Factories In Lieu of Taxes )
Rules 1961 (for short “the said Rules of 1961”). The Rule 3 thereof
provides that it is for an occupier of a factory desiring to arrive at an
agreement to make an application not later than 60 days from the
commencement of the particular financial year. Clause (c) of Rule 2 of
the said Rules of 1961 defines “occupier” of a factory as the person
who has ultimate control over the affairs of the factory.
12. Apart from the fact that the individual owner or the
occupier of each factory is primarily liable to pay property taxes, only

the occupier of the factory can make an application for execution of the
agreement in accordance with Subsection
(1) of Section 125 of the said
Act. Rule 3 of the said Rules of 1961 provides that only an occupier of a
factory can apply for execution of an agreement under Subsection
(1)
of Section 125 of the said Act. The obvious reason is that only a person
who is primarily liable to pay taxes can enter into such an agreement
inasmuch as the execution of the agreement attaches several liabilities
and several consequences. Subsection
(1) of Section 125 of the said
Act provides that the sanction of the State Government is required for
such Agreement.
13. The admitted position which emerges is that the Petitioner
purported to enter into an agreement under Subsection
(1) of Section
125 of the said Act in relation to 325 factories of which the Petitioner is
neither an owner nor an occupier. Apart from the fact that the Petitioner
is not a factory within the meaning of the Factories Act, the application
made by the Petitioner for execution of the agreement under Subsection
(1) of Section 125 of the said Act was itself not competent. The
Divisional Commissioner in the impugned order has rightly stated that
the Petitioner is not a factory within the meaning of the Factories Act.
It is not possible to find fault with the reasons assigned by the
Divisional Commissioner. In the affidavit filed by Shri Bharat Balbhim
Shendage, the Deputy Commissioner (Establishment), Pune Division,

Pune, it is pointed out that the Petitioner has been registered as a Cooperative
Industrial Society and, therefore, the Petitioner has no right to
make an application under Subsection
(1) of Section 125 of the said
Act.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.6477 OF 2013
Parvati Cooperative
Industrial Estate Ltd. .. Petitioner
Vs
The State of Maharashtra & Others. .. Respondents

CORAM
: A.S. OKA & M.S. SONAK, JJ
DATE : 24TH FEBRUARY 2014
Citation;2015(2) ALLMR890

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When civil court has jurisdiction to decide dispute relating to co-operative society?

Trusts & Associations - Practice & Procedure - Maharashtra Co-operative Societies Act, 1960, ss.45 and 91 - Inherent jurisdiction of Civil Court - To adjudicated cases of cooperative society - Held, u/s.91 of Act to bar Civil Court's jurisdiction, which was otherwise unlimited and was only subject to express and implied bar under statute, it should be dispute touching management of the society and between society, its members or person other than members of the society who had entered into any transaction in respect of which certain restrictions and regulations were prescribed inter alia u/s. 45 of Act - It was held referring to the judgment in SC case that before the dispute could be referred to the Co-operative Court u/s. 91(1) of Act, it was not only essential that the dispute should be of the kind described in the sub-section but also essential that parties to the dispute should be ones specified there under - Marine Times Publications (P) Ltd. Vs. Shriram Transport & Finance Co. Ltd.(1991) 1 SCC 469  Trusts relied on - Hence both the subject matter as also parties should be those specified in the section - It was, therefore, held that if either of the two requirements was not satisfied the dispute could not be adjudicated by the Co-operative Court - Consequently then the Civil Court's jurisdiction would not be barred - It appeared that only circumstance which enabled Cooperative Court to exercise its jurisdiction against such third party was that while adjudicating dispute which was otherwise amenable to its jurisdiction, Cooperative Court concluded that third party acquired some interest in property of one of parties to dispute - Consequently contention on behalf of defendants that as dispute related to management and business of plaintiff- society and was between society, its member and person other than its proposed members being covered u/s.91 of Act, it should be adjudicated in Co-operative Court was incorrect - Civil Court's jurisdiction was not seen to be barred - Thus, preliminary issue was answered in the negative .

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

NOTICE OF MOTION NO. 2716 OF 2011
IN
SUIT NO. 2240 OF 2011
Usha Sunder Premises Cooperative
Soceity Ltd.
Vs.
Mr. Nilang Desai & Ors. 

Dated : 29 th APRIL, 2014 .

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Whether Consumer protection Act is applicable to co-operative societies?

Upholding the decision of the National Commission, the Supreme Court held that having regard to the scheme of the Tamilnadu Act and the object sought to be achieved to protect the interest of the consumers better, provisions were to be interpreted broadly, positively and purposefully and in the context together meaning to the additional/extended jurisdiction (in the Consumer Forums), particularly when section 3 of the Act seeks to provide remedy in addition to the other remedies provided under other Acts. In our view, in the light of the decision of the Supreme Court in the case of Secretary, Thirumurugan (supra) it must be held that a remedy under Consumer Protection Act is a remedy in addition to the remedy provided under section 91 of the Co-operative Societies 

Act and the jurisdiction of the District Consumer Forum and other authorities under the Consumer Protection Act is not excluded expressly or by necessary implication by section 91 of the Maharashtra Co-operative Societies Act.

Bombay High Court

Mandatai Sambhaji Pawar And Anr vs The State Of Maharashtra And ... on 3 May, 2011

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