IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Sandeep K. Shinde, J.
Karan Vishnu Khandelwal – Appellant
Versus
Honourable Chairman/secretary Vaikunth (andheri) Cooperative & Ors. – Respondents
Writ Petition No. 12468 of 2022
Decided On : 09-11-2022
[COOPERATIVE SOCIETIES] - [Maharashtra Cooperative Societies Act, 1960] - [Sections 23(2), 30, 154-B(2), 154-13] - [The court discussed the provisions of the Maharashtra Cooperative Societies Act, particularly focusing on the rights of nominees and legal heirs in the context of share transfer upon the death of a member. It highlighted that while a society is bound to acknowledge a valid nomination, the nominee holds the property in trust for the legal heirs. The court emphasized the need for proper legal documentation for the transfer of shares and the provisional membership status of the nominee until legal heirs are determined.]
Fact of the Case:
Mr. Mannalal Surajmal Khandelwal, the deceased, had nominated his grandson (the Petitioner) for his share in a cooperative housing society. After his death, his son (Respondent No.2) sought to transfer the membership and share certificate to himself, claiming a 2/3rd interest in the property. The society initially rejected this application, but the Deputy Registrar later allowed the transfer, leading to the Petitioner filing a revision application against this decision.
Finding of the Court:
The court found that the Divisional Joint Registrar had acted in haste and without affording the Petitioner a proper opportunity to be heard, violating principles of natural justice. The court noted that the society must recognize the nomination and allow the Petitioner to be a provisional member until legal heirs are determined.
Issues: Whether the Divisional Joint Registrar's order was valid given the lack of opportunity for the Petitioner to present his case, and the interpretation of the rights of nominees versus legal heirs under the Maharashtra Cooperative Societies Act.
Ratio Decidendi: The court held that the cooperative society is bound by a valid nomination but clarified that the nominee does not become the owner of the property outright; rather, they hold it in trust for the legal heirs. The society must follow the amended provisions of the Maharashtra Cooperative Societies Act regarding the transfer of shares upon a member's death.
Final Decision: The court quashed the order of the Divisional Joint Registrar and ruled in favor of the Petitioner, allowing him to be recognized as a provisional member of the society until the legal heirs are determined.
JUDGMENT
1. Rule. Rule made returnable forthwith. By consent of the parties, taken up for hearing forthwith.
2. This petition under Article 227 of the constitution of India takes exception to order passed in revision by the Revisional Joint Registrar Co-operative Societies, Mumbai Division Mumbai, by which the revision application filed by the Petitioner was dismissed by confirming the order dated 8th February, 2021 passed by the Deputy Registrar Cooperative Societies under Section 23 (2) of the Maharashtra Cooperative Societies Act, 1960.
In brief facts of the case are as under:
2. Mr. Mannalal Surajmal Khandelwal (deceased) was owner of a flat no.1 and by virtue thereof, was entitled to share certificate No. 7 bearing share distinctive numbers 37-35 issued by the Vaikuntha (Andheri) Co-operative Housing Society Ltd. ('Society' for short). The deceased during his lifetime registered a nomination in the name of Petitioner- his grandson. The nomination was acknowledged by the managing committee of the society in its' meeting held on 14th March, 2004 and made an entry in the nomination register. Mr. Mannalal Khandelwal died intestate on 20th January, 2011, leaving behind, Rajendra Mannalal Khandelwal (Son- Respondent No.2); Krishnakumar Mannalal Khandelwal (Son); and Petitioner- son of Vishnu Mannalal Khandelwal (predeceased son of deceased).
3. That upon demise of Mannalal Surajmal Khandelwal, Respondent No.2 - Rajendra M. Khandelwal, made an application to the society, inter alia, seeking transfer of membership and the share certificate in his name. Along with the application, he submitted a 'No Objection cum Declaration' and indemnity bond made and executed by Krishnakumar Mannalal Khandelwal. This way, the Respondent No.2 claimed 2/3rd share and interest in the flat and sought transfer of proportionate interest in flat and claimed membership. The application was rejected by the society on 8th August, 2018. Whereafter, the Respondent No.2 preferred an appeal under section 23 (2) of the Maharashtra Societies Act ('MCS Act' for short), being Appeal No. 09 of 2019 before the Deputy Registrar. The Petitioner sought intervention in the said appeal. The Intervention was allowed. The Deputy Registrar vide order dated 8th February, 2021 allowed the appeal and held that since the Respondent No.2 has acquired 2/3rd right in flat No.1, to that extent, his interest be noted in the society record. In consequence, the Deputy Registrar acknowledged 2/3rd undivided right of the Respondent No.2 and 1/3rd undivided right of the Petitioner in the flat No.1 and directed to make entry in the society records. In revision, the Divisional Joint Registrar, upheld the order of Deputy Registrar and dismissed the revision application of the Petitioner. Feeling aggrieved by that order, the Petitioner has filed this petition.
4. Heard learned counsel for the Petitioner, the Respondent No.2 and learned AGP for the State.
5. Mr. Simil Purohit, Learned Counsel for the Petitioner submitted that Revision application has been decided without affording opportunity of being heard to the Petitioner. To fortify this submission, Mr. Purohit has taken me to the Roznama of the proceedings of the Revision application maintained by the Divisional Joint Registrar. Wherefrom it appears, the Revision application was listed for hearing on 13th June, 2022; however, board was discharged, as the authority was on leave. Accordingly, hearing was adjourned to 27th September, 2022. On 14th June, 2022, Advocate on behalf of Respondent No.2 intimated the petitioner to remain present before the Divisional Joint Registrar on 21st June, 2022, as he would apply for the urgent relief in the said revision. Accordingly, the Petitioner was present before the Divisional Joint Registrar on 21st June, 2022, but none had appeared on behalf of the Respondent No.2. Therefore, hearing was adjourned to 27th September, 2022. However, it appears from the Roznama that the Divisional Joint Registrar heard the
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