2009 Supreme(Bom) 1738

IN THE HIGH COURT OF BOMBAY
(Dr. D. Y. Chandrachud, J.)
PRAKASH M. NARK Petitioner
Versus
HANIFA JETHA alias HANIF A.A. CHARANIA and others Respondents.
W. P. (L) No. 2546 of 2009
Decided on 16-12-2009. (O.O.C.J., Bombay)

Headnote:Maharashtra Co-operative Societies Act, 1960 - Section 22(2) - Deemed member of society - Sale of flat in co-operative society by petitioner - Respondent-1, purchaser filed an application for his admission as a member in 1984 - No action taken on it by society-respondent-2 for over 25 years - Co-operative Court held that in view of Section 22(2) of Act respondent-1 becomes deemed member of society after 3 months of application - Challenged - Held - If society not communicate decision within 3 months, respondent-1 deemed to be refused admission - He cannot claim benefit of revised provisions - Impugned order not sustainable - Set aside - Petition allowed. - Under the provision, as it stands today, once a person is refused admission as a member of a society, the decision of the society has to be communicated within fifteen days of the date of the decision or, as the case may be, within three months of the receipt of the application whichever is earlier. In the event, that the society does not communicate its decision within three months of the receipt of the application, the applicant shall be deemed to have been admitted as a member of the society. Both the authorities below proceeded on the basis that the provisions of Section 22(2) of the Maharashtra Co-operative Societies Act, 1960, as they now stand, would govern the proceedings. Both the Deputy Register and the Divisional Joint Registrar completely ignored the legal position which held the field at the material time prior to the amendment of Section 22(2) by Maharashtra Act 20 of 1986. The statutory provision was to the effect that if the society does not communicate its decision of the applicant within three months from the date of receipt of the application, the applicant would be deemed to have been refused admission as a member of the society. The words "refused admission" came to be substituted by the word "admitted" by Maharashtra Act 20 of 1986. The consequence of the amendment is that, whereas earlier, the silence of a Corporative Society for a period of three years gave rise to a statutory fiction of a refusal of membership that has now been replaced after 1986 by a statutory implication to membership. The application that was filed by the first respondent was on 5th September 1984. Therefore much prior to the enforcement of Maharashtra Act 20 of 1986, the statutory fiction came into effect under the provision which then held the field. The failure to the Co-operative Society to communicate a decision to the first respondent within a period of three months gave rise to a deemed fiction which was that the membership stood refused. Hence the remedy that was open to the first respondent was to file an appeal against the refusal of membership, under Section 23(2) of the Maharashtra Cooperative Societies Act, 1960. The application that was filed by the first respondent after nearly 25 years proceeded on the basis that the first respondent was entitled to the benefit of the deemed fiction under Section 22(2) as it now stands. That is what has been done by the authorities below. Both the authorities lost sight of the legal position as it existed at the material point of time when the first respondent had applied for membership on 5th September 1984. There is no merit in the objection to the locus of the petitioner. There substantive relief granted operates against the petitioner.

       Consequently the orders passed by the Deputy Registrar and the Divisional Joint Registrar would have to be quashed and set aside. At the same time, the first respondent who claims to have paid consideration to the petitioner cannot be ousted of the remedy of challenging the deemed refusal of membership by filing an appeal under Section 23(2). In the event that the first respondent does so within a period of one month from today, the appeal shall be heard and disposed of on merits without having regard to the bar of limitation. For the reasons aforesaid the petition is allowed. The impugned order passed by the Divisional Joint Registrar on 12th September 2009 is set aside. However, it would be open to the first respondent to seek recourse to the remedies available in law for seeking membership of the Cooperative society.