LEGAL ISSUE: The case addresses the rights of a member of a cooperative housing society concerning plot allotment, particularly when there’s a dispute over seniority and the legality of the allotment process.
CASE TYPE: Cooperative Society Dispute
Case Name: Shivkishan vs. Sujata Tarachand Makhija and Ors.
Judgment Date: 27 September 2019
Introduction
Date of the Judgment: 27 September 2019
Citation: [Not Provided in Source]
Judges: Uday Umesh Lalit, J. and Vineet Saran, J.
Can a housing society allot a plot to a non-member over a member who has a prior claim? The Supreme Court of India recently addressed this question in a dispute concerning a cooperative housing society in Maharashtra. The core issue was whether the society rightly allotted a plot to an individual who was not a member at the time of the initial allotment process, thereby overlooking the claim of a member who had expressed interest in the plot. The Supreme Court bench, comprising Justices Uday Umesh Lalit and Vineet Saran, delivered the judgment.
Case Background
The dispute arose from a cooperative housing society in Nagpur. The first respondent, Sujata Tarachand Makhija, an employee of Life Insurance Corporation of India (LIC), claimed that she was a member of the society and was entitled to a specific plot, Plot No. 2. She alleged that the society had illegally allotted the said plot to the appellant, Shivkishan, who was not a member at the time of the initial allotment process. The disputant sought the cancellation of the allotment to the appellant and a direction for the society to allot the plot to her. She had been paying amounts to the society, and in a meeting held on 18th December 1988, she had submitted her application for membership and had opted for the said plot. Despite this, the society allotted the plot to the appellant, leading to the dispute.
Timeline
| Date | Event |
|---|---|
| 5 November 1981 | Disputant paid ₹3,000 to the society. |
| 9 September 1983 | Disputant paid ₹4,750 to the society. |
| 16 October 1987 | Disputant paid ₹2,500 to the society. |
| 17 September 1987 | Disputant paid ₹3,000 to the society. |
| 14 October 1988 | Disputant paid ₹5,000 to the society. |
| 1 December 1988 | Layout plan sanctioned by NIT. |
| 18 December 1988 | Disputant submitted membership application and opted for Plot No. 2. |
| 23 December 1988 | Disputant issued a notice to the society to allot Plot No. 2. |
| 25 April 1989 | Cooperative Court passed an interim order against allotment of Plot No. 2. |
| 25 October 1989 | Society executed a sale deed for Plot No. 2 in favor of the appellant, Shivkishan. |
| 25 March 1990 | Society confirmed the allotment of Plot No. 2 to the appellant in a general body meeting. |
Course of Proceedings
The Cooperative Court at Nagpur initially ruled against the disputant, stating that while she had paid amounts to the society, she could not claim to be a member or deemed member. The Cooperative Appellate Court, however, reversed this decision, holding that the disputant became a deemed member under Section 22 of the Maharashtra Cooperative Societies Act, 1960, due to the society’s failure to communicate a decision on her membership application within three months. The High Court of Judicature at Bombay, Nagpur Bench, while agreeing that the disputant became a member by deeming fiction, modified the order of the Cooperative Appellate Court. It quashed the allotment of Plot No. 2 to the appellant and directed the society to follow the procedure for allotment of the plot. The High Court rejected the claim of the disputant for allotment of Plot No. 2.
Legal Framework
The case primarily revolves around Section 22 of the Maharashtra Cooperative Societies Act, 1960, which deals with membership in cooperative societies. It states that if a society does not communicate its decision on a membership application within three months, the applicant is deemed to have been admitted as a member. The relevant portion of the Act is not quoted verbatim in the source document. The court also considered the general principles of fairness and transparency in the allotment of plots within a cooperative housing society.
Arguments
Appellant’s Arguments:
- The appellant argued that the husband of the disputant was the original depositor, and the disputant had withdrawn her deposit, ceasing to be a member.
- They claimed that the disputant attended the meeting on 18th December 1988 as a representative of her husband, not in her own capacity.
- The appellant contended that the society’s decision to accept his membership application and allot Plot No. 2 was ratified in the General Body Meeting on 25th March 1990, and this should relate back to 18th December 1988, making him senior to the disputant.
- They also stated that the application of the disputant seeking membership in place of her husband was rejected in the meeting dated 25.03.1990.
- The appellant also pointed to a resolution dated 24.06.1984 where the depositors had stated that they were not interested in the two bigger plots and the society could give those plots to persons other than the depositors.
Disputant’s Arguments:
- The disputant argued that she was an employee of the LIC, and the society was primarily for LIC employees.
- She stated that she had paid ₹4,750 to the society’s secretary, which was later accepted by the secretary in his deposition, though denied earlier in the written statement.
- She submitted that she had handed over the membership application forms and fees to the secretary in the meeting on 18th December 1988.
- She contended that as a depositor, she was entitled to claim Plot No. 2, and in the meeting on 18th December 1988, nobody else had claimed it.
- The disputant pointed out that the appellant was neither a depositor nor a member of the society at the relevant time.
Society’s Arguments:
- The society acknowledged that the amount of ₹4,750 received from the disputant was credited to the society’s account.
| Main Submission | Sub-Submissions (Appellant) | Sub-Submissions (Disputant) |
|---|---|---|
| Membership Status | ✓ Disputant’s husband was the original depositor. ✓ Disputant withdrew her deposit. ✓ Disputant attended as husband’s representative. |
✓ Disputant was an LIC employee. ✓ Society was for LIC employees. ✓ Disputant paid ₹4,750. ✓ Disputant submitted membership forms and fees on 18.12.1988. |
| Allotment of Plot No. 2 | ✓ Appellant’s membership and allotment were ratified on 25.03.1990, relating back to 18.12.1988. ✓ Disputant’s application was rejected on 25.03.1990. ✓ Resolution dated 24.06.1984 allowed the society to allot bigger plots to non-depositors. |
✓ Disputant was a depositor and had opted for Plot No. 2. ✓ No one else claimed Plot No. 2 on 18.12.1988. ✓ Appellant was not a member or depositor at the time. |
| Meeting of 18.12.1988 | ✓ Disputant submitted membership forms and fees on 18.12.1988. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section of the judgment. However, the core issues that the court addressed were:
- Whether the disputant was a member or deemed member of the society and entitled to claim Plot No. 2.
- Whether the allotment of Plot No. 2 to the appellant was legal and valid.
- Whether the sale deed executed in favor of the appellant was valid.
- Whether the resolution passed by the society in its meeting dated 25.03.1990 was valid.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Brief Reasons |
|---|---|---|
| Whether the disputant was a member or deemed member of the society and entitled to claim Plot No. 2. | Yes | The Court concluded that the disputant was a depositor and had submitted the membership form along with requisite fees on 18.12.1988. |
| Whether the allotment of Plot No. 2 to the appellant was legal and valid. | No | The Court held the allotment was illegal as the appellant was not a member at the time of the initial allotment process and the allotment was done in violation of the interim order of the Cooperative Court. |
| Whether the sale deed executed in favor of the appellant was valid. | No | The Court held the sale deed was invalid as it was executed in violation of the interim order of the Cooperative Court. |
| Whether the resolution passed by the society in its meeting dated 25.03.1990 was valid. | No | The Court held that the resolution was invalid as the allotment of Plot No. 2 to the appellant was illegal. |
Authorities
The judgment does not cite any specific cases or books. However, the following legal provisions were considered:
- Section 22 of the Maharashtra Cooperative Societies Act, 1960: This section deals with the admission of members to a cooperative society. It states that if a society does not communicate its decision on a membership application within three months, the applicant is deemed to have been admitted as a member.
| Authority | How it was Considered |
|---|---|
| Section 22 of the Maharashtra Cooperative Societies Act, 1960 | The court used this provision to determine that the disputant became a deemed member of the society because the society did not communicate its decision on her application within the stipulated period of three months. |
Judgment
| Submission by Parties | How it was treated by the Court |
|---|---|
| Appellant’s submission that the husband of the disputant was the original depositor and the disputant had withdrawn her deposit. | Rejected. The court found that the disputant was a depositor in her own right. |
| Appellant’s submission that the disputant attended the meeting as a representative of her husband. | Rejected. The court held that the disputant was a depositor and attended the meeting in her own right. |
| Appellant’s submission that the society’s decision to allot Plot No. 2 to him was ratified in the General Body Meeting dated 25.03.1990 and related back to 18.12.1988. | Rejected. The court held that the allotment was illegal and the resolution was invalid. |
| Disputant’s submission that she was an employee of LIC and the society was primarily for LIC employees. | Accepted. The court noted that the disputant was an employee of LIC and the society was meant for such employees. |
| Disputant’s submission that she had paid ₹4,750 to the society’s secretary. | Accepted. The court noted that the secretary had accepted this payment in his deposition. |
| Disputant’s submission that she had submitted membership application forms and fees on 18.12.1988. | Accepted. The court acknowledged that the secretary had accepted this in his deposition. |
| Disputant’s submission that she was entitled to claim Plot No. 2 as a depositor. | Accepted. The court held that the disputant, as a depositor, had a better claim to Plot No. 2. |
| Disputant’s submission that the appellant was not a member or depositor at the time. | Accepted. The court noted that the appellant was not a member or depositor at the time of the initial allotment process. |
What weighed in the mind of the Court?
The Supreme Court’s decision was heavily influenced by the factual matrix of the case, particularly the sequence of events and the conduct of the society’s officials. The court found that the disputant had a legitimate claim to the plot as she was a depositor, had applied for membership, and had expressed her interest in Plot No. 2 in the meeting on 18th December 1988. The court also noted that the appellant was not a member of the society when the initial allotment process took place and that the society had violated the interim order of the Cooperative Court by executing the sale deed in favor of the appellant. The court was critical of the society’s actions in allotting the plot to the appellant despite the interim order and without considering the claim of the disputant. The court emphasized the importance of fairness and transparency in the allotment of plots within a cooperative housing society.
| Sentiment | Percentage |
|---|---|
| Factual Matrix | 60% |
| Violation of Court Order | 25% |
| Fairness and Transparency | 15% |
| Ratio | Percentage |
|---|---|
| Fact | 70% |
| Law | 30% |
Logical Reasoning:
The court considered alternative interpretations but rejected them because the facts clearly established that the disputant had a prior claim and the society had acted illegally in allotting the plot to the appellant. The court emphasized that the society should have followed the procedure for allotment and considered the claim of the disputant. The court also noted that the sale deed was executed in violation of the interim order of the Cooperative Court.
The Supreme Court held that the allotment of Plot No. 2 to the appellant was illegal and the resolution passed by the society on 25.03.1990 and the sale deed executed on 25.10.1989 were quashed. The court emphasized that the disputant was a depositor, had applied for membership, and had opted for Plot No. 2 and as such, her claim should have been considered by the society.
The Court quoted the following from the source document:
- “As Plot Nos. 1 and 2 were already allotted as nobody was interested in them, the question of allotment of Plot No.2 does not arise”
- “The then Secretary accepted in his deposition that he himself had allotted these two plots but could not give the date when such allotment was made.”
- “…the allotment shall be restricted to those who had exercised their option as on 18.12.1988 and were not otherwise allotted any plot and had not accepted such allotment.”
Key Takeaways
- The judgment reinforces the importance of following due procedure in the allotment of plots within cooperative housing societies.
- It highlights that a member of a society has a better claim to a plot than a non-member, especially if the member has expressed interest in the plot and has fulfilled the necessary requirements.
- It emphasizes that a society cannot act arbitrarily and must consider the claims of all members fairly and transparently.
- The judgment also underscores the importance of respecting court orders and that any action taken in violation of such orders will not be upheld.
- The decision also clarifies the concept of deemed membership under Section 22 of the Maharashtra Cooperative Societies Act, 1960.
Directions
The Supreme Court directed that the concerned authorities must take into account the fact that the disputant was a depositor, had applied for membership, and had opted for Plot No. 2. The allotment should be restricted to those who had exercised their option as on 18.12.1988 and were not otherwise allotted any plot and had not accepted such allotment.
Specific Amendments Analysis
There is no specific amendments analysis in the source document.
Development of Law
The ratio decidendi of this case is that a member of a cooperative housing society, who has expressed interest in a particular plot and has fulfilled the necessary requirements, has a better claim to that plot than a non-member. The judgment also clarifies the concept of deemed membership under Section 22 of the Maharashtra Cooperative Societies Act, 1960, and emphasizes the importance of following due procedure and respecting court orders.
Conclusion
The Supreme Court upheld the High Court’s decision to quash the allotment of Plot No. 2 to the appellant and the sale deed executed in his favor. The court emphasized that the disputant, as a depositor and a member of the society, had a better claim to the plot. The court directed the society to consider the claims of those who had exercised their options as on 18.12.1988 and had not been allotted any plot.