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1972 Supreme(Pat) 107

PATNA HIGH COURT
N.L.Untwalia and S.N.P.Singh JJ.
Patliputra Co-operative House Construction Society
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 586 of 1972 ;
Decided On : JULY 12, 1972

The heirs of a deceased member of a co-operative society are entitled to be admitted as members jointly, and they cannot claim to be admitted as separate members unless they hold at least one share in the society.

Headnote:

CO-OPERATIVE SOCIETY - MEMBERSHIP - HEIRS OF DECEASED MEMBER - ADMISSION - JOINT MEMBERSHIP - DIVISION OF SHARES - INTERPRETATION OF BYLAWS - JURISDICTION OF REGISTRAR, CO-OPERATIVE SOCIETIES - SECTION 48 OF THE BIHAR AND ORISSA CO-OPERATIVE SOCIETIES ACT, 1935.

Fact of the Case:

Dr. Rajendra Prasad, a member of the Patliputra Co-operative House Construction Society, died leaving behind two sons, respondents 2 and 3. The Society recognized respondent 2 as a member in place of his deceased father. Later, respondents 2 and 3 jointly requested the Society to split the plots allotted to Dr. Prasad and register respondent 3 as a separate member. The Society rejected their request. Respondents 2 and 3 approached the Registrar, Co-operative Societies, who directed the Society to admit respondent 3 as a member and demarcate the plots separately in the names of the two brothers. The Society challenged the Registrar's order by filing a writ petition.

Finding of the Court:

The Court held that on the death of a member, his heirs jointly become members for the purpose of exercising and being bound by the rights and obligations of the deceased member. The joint right acquired by the heirs cannot automatically make all the members exercise that right separately and individually. The right has to be exercised by the entire bundle of heirs as if all of them are one member. The Court further held that to be a member of the Society, a person must be the holder of at least one share either by transfer, devolution of interest, partition, or family arrangement. A person holding no share cannot claim to be a member of the Society. The Court also held that the Registrar's order directing the Society to admit respondent 3 as a member was erroneous in law and void.

Issues: 1. Whether the heirs of a deceased member of a co-operative society are entitled to be admitted as members jointly or separately? 2. Whether the Registrar, Co-operative Societies, has jurisdiction to determine a dispute regarding the admission of a member to a co-operative society?

Ratio Decidendi: 1. The Court held that on the death of a member, his heirs jointly become members for the purpose of exercising and being bound by the rights and obligations of the deceased member. The joint right acquired by the heirs cannot automatically make all the members exercise that right separately and individually. The right has to be exercised by the entire bundle of heirs as if all of them are one member. 2. The Court held that to be a member of the Society, a person must be the holder of at least one share either by transfer, devolution of interest, partition, or family arrangement. A person holding no share cannot claim to be a member of the Society.

Final Decision: The Court allowed the writ petition and quashed the Registrar's order directing the Society to admit respondent 3 as a member.

Judgment

Untwalia, J.

1. The Patliputra Co-operative House Construction Society, Ltd., hereinafter, for the sake of brevity, called the Society, the sole petitioner in this writ application, has obtained a rule from this Court under Articles 226 and 227 of the Constitution of India against the State of Bihar, respondent 1, the Registrar, Co-operative Societies. Bihar, respondent 1(A), Shri Mritunjay Prasad, respondent 2 and Shri Dhananjay Prasad Varma, respondent 3, to show cause why the order dated the 17th of January, 1972, a copy of which is annexure 5 to the writ application made by respondent 1(A) be not called up and quashed by grant of an appropriate writ. Cause has been shown by respondents 2 and 3 at the time of the hearing of the writ application; the former had filed a counter-affidavit also.

2. The petitioner Society was registered as a Co-operative Society under the Bihar and Orissa Co-operative Societies Act, 1935 (Bihar and Orissa Act VI of 1935), hereinafter called the Act, and the Rules framed thereunder. At the time of registration of the Society, its By-laws were also registered under the Act. The object of the Society has been acquisition of land and construction of houses for the members in accordance with the By-laws. On the 28th of December, 1961 Dr. Rajendra Prasad since deceased, father of respondents 2 and 3 applied for being admitted as a member of the Society. Along with his application he annexed a cheque for Rs. 525/- Rs. 25/-as the admission fee in acordance with bylaw 8 and Rs. 500.00 for purchase of five shares as required by bylaw 11 as per bylaw, 10. The Board of Directors of the Society admitted him to the membership on the 7th of January, 1_962. Two E type plots bearing Nos. 273 and 274 were allotted to him after amalgamation treating it as one plot. A consolidated price was charged and paid for it. Dr. Rajendra Prasad died on the 28th February, 1963. A joint petition on behalf of respondents 2 and 3 was filed to be treated as the legal heirs of Dr. Rajendra Prasad, and for transfer of his interest to them. A succession certificate was demanded from them but eventually that was given up as it was conceded that that was a worng demand. On the 11th of July 1964 respondents 2 & 3, under their own signatures, filed a joint petition before the Society (annexure 2) stating as follows--

"With reference to the previous correspondence, we shall thank you to accept us as the joint owners of the above plots. We are agreeable to one of us, viz. Shri Mrityunjay Prasad, being admitted by you as a member of the Society for all correspondence with you and for the discharge of all functions and the exercise of all the rights of a member on behalf of both of us, subject to the acceptance by you of the joint proprietorship of the above plots of both of us so far as the title is concerned."

On the 4th of January, 1965 respondent 2 wrote a letter to the Society fannexure 3) to get himself enrolled as a full-fledged member. He stated in the letter that he was grateful to the Society for giving its approval for the house plan submitted in respect of plot No. 273/74. He wanted a loan of Rs. 20,000.00 for construction of the house. The Societys case is that respondent 2 was admitted as a member by the Board of Directors in their meetins held on 24th January, 1965 and they recognised respondent 2 as a member in place of his deceased father. About a year and a half later -- on the 1st of July, 1966 -- respondent 3 also wrote a letter to the Society (annexure 4) stating therein that in one of the plots his brother, meaning thereby respondent 2, had constructed a house and he had allotted the other plot to him in which he proposed to construct one. He therefore, enquired of the Society the rules and regulations under which he may also become a member and expressed his desire to pay the membership fee. Nothing seems to have been done on that letter-Thereafter -- on the 20th of September., 1966 -- as stated in the counter







































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