1998 Supreme(Bom) 527

IN THE HIGH COURT OF BOMBAY
A.V. Savant, J.
The Talmakiwadi Co-operative Housing Society Ltd...... Petitioner.
Versus
The Divisional Joint Registrar, Co-operative
Societies others ..... Respondents.
Writ Petition No. 1458 of 1996, decided on 9 10-11-1998.
Advocates appeared :
M.A. Dharmaraj, for the petitioner.
Pradip Jadhav, A.G.P., for respondent Nos. 1 and 2.
N.N. Bhadrashete, for respondent No. 3.

Headnote:Article 19(1)(c)-A co-operative society-Not a citizen-Cannot claim fundamental right under Article 19(1)(c) of Constitution.- The point, however, is whether a corporate body, like the petitioner society, can claim the fundamental right to form an association guaranteed to a citizen under Article 19(1)(c) of the Constitution. Section 36 of the Societies Act makes it clear that registration of the society confirms upon if it a status of a corporate body by name under which it is registered. It has a perpetual Succession and common seal with power to acquire, hold and dispose of the property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all such things as are necessary for the purpose for which it is constituted. There is thus no controversy that society is a corporate body. The question whether a corporate body like the petitioner society can claim a fundamental right which is available to the citizen under Article 19(1)(c) of the Constitution has been considered by the Apex Court.

       Article 19(c)-Maharashtra Co-operative Societies Act (24 of 1961), Section 4-A co-operative society not being a citizen cannot claim fundamental right guaranteed under Article 19(1)(c) of the Constitution.-A co-operative society which is a corporate sole cannot allege violation of fundamental right guaranteed under Article 19(1)(c) of the Constitution of India. While the Constitution guarantees certain rights to "persons", certain other rights are guaranteed only of citizens. A co- operative society not being a citizen, it cannot claim the fundamental right guaranteed under Article 19(1)(c) of the Constitution of India. AIR 1969 SC 1100 AIR 1973 SC 106 and AIR 1981 SC 1368-Relied on.

       Maharashtra Co-operative Societies Act, 1960

       Sections 4, 9, 22 and 23-Bye law No.7-Constitution of India, 1950, Article 19 (1) (c)-Cooperative Housing Society-Claim of fundamental right available under Article 19 (1) (c)-Cooperative Society not. being a person or citizen cannot claim fundamental right-Bye law No.7 of Society restricting its membership only to persons belonging to a particular community-Validity-Held, such bye law restriction ultra vires scheme of provisions of Sections 4, 9, 22 and 23 of Act-If the requirement that a person must belong to Kanara Saraswat community is held to be inconsistent with the scheme of the Provisions of Sections 4, 9, 22 and 23 of the Act, it must follow that insistence that a person must belong to Kanara Saraswat community to be eligible to become a member of the petitioner society is ultra pires the said provisions of the Act. By laws No.7 insofar as it insists on every member belonging to Kanara Saraswat community would, therefore, be contrary to the scheme of the said provisions and would be liable to be struck down as ultra vires the said provisions. Let Court, however, consider the question as to whether the failure to comply with the requirement of belonging to Kanara Saraswat Community is sufficient cause within the meaning of sub-section (1) of Section 23.

       Section 4 contemplates that the society may have as one of its objects the promotion of the economic interests or general welfare of its members or of the public in accordance with the co-operative principles. Section 9 dealing with the registration requires the Registrar to be satisfied that the proposed Bye laws are not contrary to the provisions of the Act and Rules. Sections 22, 23 and 24 deal with who can be a member having regard to the principles of open membership. Broadly, speaking an individual who is competent to enter into a contract under the Indian Contract Act, 1872 is eligible to become a member, subject of course, to certain exceptions carved out in Section 22 itself. Under Section 23 refusal to admit a person who is duly qualified. Under the provisions of the Act and Bye laws to be a member must be supported by sufficient cause. Court has already come to the conclusion that Bye law cannot override the provisions of the Act and Bye law cannot impose restriction which is ultra vires the statute. Therefore reference to by laws at the end of sub-section (1) of Section 23 must be construed as Bye law which is a valid Bye law and which is not ultm vires the provisions of the Act.

       In the light of the above discussion, I have no hesitation in coming to the conclusion that insistence in Bye law No.7 of the petitioner society that the applicant must belong to Kanara Saraswat comn1unity to be eligible to become a member of the society is in1permissible and ultra vires the scheme of the provisions of Sections 4, 9, 22 and 23 of the Act. It must consequently follow that the mere fact that the third respondent did not belong to Kanara Saraswat community was not a sufficient cause within the meaning of subsection (1) of Section 23 of the Societies Act to justify refusal to admit her as a men1ber of the society.

       Sections 4, 9, 22, 23-Membership-Cooperative Housing Society-Bye law-Registration to membership to Kanara Saraswat Community -Held-Restriction is impermissible and ultra vires of provisions of Act-Refusal to admit respondent as a member of society not a sufficient cause.-Instance in bye law No.7 of the petitioner society that the applicant must belong to Kanara Saraswat community to be eligible to become a member of the society is impermissible and ultra vires the scheme of the provisions of Sections 4, 9, 22 and 23 of the Act. It must consequently follow that the more fact that the third respondent did not belong to Kanara Saraswat community was not a sufficient cause within the meaning of sub-section (1) of Section 23 of the Societies Act to justify refusal to admit her as a men1ber of the society. The second point framed above is answered accordingly

       Section 9-Bye-Iaws of a cooperative society do not have the force of law-They cannot be inconsistent with the provisions of the statute-Bye-laws which are registered under Section 9 of the Maharashtra Co-operative Societies Act, 1961 must necessarily conforn1 to the provisions of the Act and must not be contrary thereto. Byelaws cannot be inconsistent with the provisions of the statute, They cannot be held to be a law or to have the force of law.

       Section 14 (2)-Society-Bye Law-Restricting membership to a particular society-Direction to amend it-Held-Society insistence in Bye law violative of provisions of Sections 4 9 22 23 of Act-ultra vires-Direction issued was just and proper.- The third point is whether the power under Section 14 (2) of the Act has been exercised lawfully while passing the impugned orders. The petitioner society seeks to challenge the concurrent findings recorded by the two authorities below. There is no irrationality or perversity in the impugned orders. Principles of the natural justice have been complied with. The petitioner society had been given an opportunity of being heard. The orders are reasoned orders. Having regard to the objects of the petitioner society as enumerated in bye law No, 2, it would be in the interest of the society to permit even a person other than those who belong to Kanara Saraswat community to be its member. If the petitioner society insists on maintaining old by law No, 7, it would be obviously impermissible in the scheme of the provisions of Sections 4, 9, 22 and 23 of the Act It would, therefore, follow that the order for Amendment of the bye laws b in the interest of the petitioner society and is consistent with the principle of open membership enshrined under Section 23 of the Act.

       Sections 23 (1), 22 (1), 9 and 4-Bye-law of a co- operative society requiring applicant desirous of being enrolled as member must belong to Kanara Saraswat community only ultra vires scheme of the provisions of Sections 4, 9, 22 and 23 of the Act-Refusal of Society to admit applicant who did not belong to Kanara Saraswat community not a "sufficient cause" within the meaning of Section 23 (1) to justify refusal to admit such person as member of the society.-A Co-operative Housing Society registered under the Maharashtra Co-operative Societies Act had among its Bye-laws, bye-law No. 7 which required that members of the society should belong to Kanara Saraswat comn1unity. A member of the Society intended to transfer the share in respect of his flat to one who did not belong to the said community gave notice to the Society of his intention to transfer the shares of his flat. The Managing Committee rejected the proposal in the matter and the resolution was confirmed by the General Body of the Society. On a complaint in the matter made to the Deputy Registrar, Co-operative Societies, with regard to the said byelaw, notice under Section 14 (1) of the Maharashtra Co-operative Societies Act 1960 read with Rule 13 (1) of the Rules of 1961 was issued to the Society asking it to amend the said bye-law so as to delete the requirement of a member belonging to the Kanara Sara swat community. On refusal by the Society to amend the said bye-law, the Deputy Registrar on 7.9.1995 passed an order directing the Society under Section 14 (2) of the Act to amend the said byelaw by deleting the restriction in the matter of membership only to person belonging to Kanara Saraswat Community. Appeal preferred by the Society was dismissed by the Divisional Joint Registrar, Co-operative Societies. In writ petition by the Society challenging the said orders,

       Held, that an individual who is competent to enter into contract under the Indian Contract Act, is eligible to become a member subject to the exceptions carved out under Section 22 of the Act. Under Section 23 refusal to admit a person who is duly qualified under the provisions of the Act and Bye-laws to be a member must be supported by "sufficient cause". Bye-laws cannot override the provisions of the Act nor can bye-laws impose restrictions which are ultra vires the statute. There was no nexus between the requirement of belonging to a particular community stipulated in bye-law No.7 with the objects of the Society stipulated in the bye-law No.2. There was nothing in the object of the Society to suggest that the objects as stipulated could be achieved only if the member belonged to Kanara Saraswat community. The requirement that a person must belong to the said community was inconsistent with the scheme of the provisions of Sections 4, 9, 22 and 23 of the Act. Insistence that a person must belong to the said community to be eligible to become a member of the Society was ultra vires the said provisions of the Act. Therefore, the mere fact that the applicant did not belong to Kanara Saraswat community was not a "sufficient cause" within the meaning of Section 23 (1) of the Act to justify refusal to admit him to the membership of the Society. 1974 MPLJ 1, AIR 1971 SC 966, AIR 1997 Guj 136, Relied on