SHIVKISHAN versus SUJATA TARACHAND MAKHIJA AND ORS. on 27 September 2019

796

SUPREME COURT REPORTS

[2019] 12 S.C.R.

SHIVKISHAN

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v.

SUJATA TARACHAND MAKHIJA AND ORS.

(Civil Appeal Nos.7652-7653 of 2019)

BSEPTEMBER 27, 2019

[UDAY UMESH LALIT AND VINEET SARAN, JJ.]

Maharashtra Cooperative Societies Act, 1960 –s.91 – FirstRespondent (the disputant), an employee of Life InsuranceCorporation of India (LIC) opted for Plot No.2 in the CooperativeCHousing Society, meant principally for such employees– Allegedly,in terms of seniority, she was entitled to be allotted the said Plot,however it was illegally allotted to the appellant – Interim orderpassed by the Cooperative Court injuncting the Society frommaking any allotment in respect of Plot No.2– Despite the order,Dregistered sale deed executed by the Society in favour of theappellant – Plea of the Society that it was the husband of thedisputant who was the original depositor and that she had attendedthe meeting dtd. 18.12.88 not in her own capacity but asrepresentative of her husband – Cooperative Court inter alia foundthat the the disputant could not claim to be the Member/deemedEMember of the Society and thus, was not entitled to any relief,however, her husband was entitled to get sale deed executed aftergetting all the formalities completed – Cooperative Appellate Courtheld that the Disputant was senior Member of the Society as againstthe appellant and was entitled to Plot No.2 opted by her – HighFCourt affirming the findings of the Appellate Court inter alia heldthat the allotment of plot in favour of the appellant was illegal anddirected the Society to follow the procedure in accordance with lawfor allotment of the plot – Held: In view of the fact that theDisputant was an employee of LIC and had admittedly depositedRs.4,750/-, her status was clearly that of Depositor –Thus, in theGface of such admission and the findings rendered by the Courtsbelow, the Disputant was a Depositor of the Society and like allother Depositors was entitled to and had attended the meeting dtd.18.12.88 in her own right – At no stage the husband of theDisputant claimed that he was the Depositor in his own right andentitled to allotment of any Plot – Money deposited by all theH

Depositors including the Disputant helped the Society to have therequisite land whereafter the Plots could be carved and allottedto the concerned members – On the other hand, at no stage theAppellant made any such contribution – He was neither presentin the meeting dtd.18.12.88 nor had he submitted any applicationalong with requisite fees – Disputant opted for Plot No.2 and ason that date there was nobody else apart from the Disputant whoopted for the said plot – These aspects of the matter be taken intoaccount by the authorities while acting in terms of the directionissued by the High Court and the allotment be restricted to thosewho exercised their option as on 18.12.88 and were not otherwiseallotted any plot and had not accepted such allotment.

Dismissing the appeals, the Court

Conclusion

Dismissing the appeals, the Court

HELD: 1.1 In the face of the admitted position that shehad deposited Rs.4750/- and the findings rendered by the Courtsbelow, it has to be concluded that the Disputant was a Depositorof the Society and like all other Depositors was entitled to andhad attended the meeting dated 18.12.1988 in her own right. Atno stage the husband of the Disputant claimed that he was theDepositor in his own right and entitled to allotment of any Plot.Further, it is not the case of the Disputant and her husband thatover and above the entitlement of the Disputant, her husbandis also entitled to an additional Plot. The submission was alwaysthat there was only one entitlement, in exercise of which theoption was given for Plot No.2. If between the husband and wife,the claim has always been only with respect to one entitlement,it really made no difference whether the Disputant attended therelevant meeting in her own right or as a representative of herhusband. The fact of the matter is, an option was exercised infavour of Plot No.2 and the issue is whether such option oughtto have been allowed and accepted or not. The communicationsaddressed by the Society were, normally in printed format wherethe name of the addressee would be written after the printedprefixes “Mr./Mrs.” and many such communications wereaddressed to “Mr./Mrs. Makhija”. The record also shows thatsome meetings were attended by the Disputant while some wereattended by her husband. But, considering the facts that theDisputant was an employee of Life Insurance Corporation of India AB

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Aand had deposited Rs.4,750/-, her status was clearly that of aDepositor. It is a matter of record that the Depositors hadcollectively raised funds with the help of which, the considerationfor purchase of the land over which the layout was to be formed,could be arranged. All the required and incidental expenses thusBcame from the funds raised by the Depositors and to that extentthe Disputant had definitely made her contribution. The moneydeposited by all the Depositors including the Disputant had thushelped the Society to have the requisite land whereafter the Plotscould be carved and allotted to the concerned members. Onthe other hand, at no stage the Appellant had made any suchCcontribution. [Paras 22-24] [816-G-H; 817-A-F]

1.2 It is accepted that the Appellant was neither presentin the meeting dated 18.12.1988 nor had he submitted anyapplication along with requisite fees. It is also accepted that hehad not deposited anything by way of deposit with the SocietyDbefore or on 18.12.1988, with the help of which the land couldbe purchased by the Society. It is true that the tenor of theResolution passed by the depositors on 24.06.1984 shows thatno depositor was willing to take a bigger Plot but that resolutionwas passed in the year 1984 and it was four years thereafter thatEthe day had arrived for exercise of choices or options. For theemployees of Life Insurance Corporation it may be that theDepositors at an earlier stage were not in a position to arrangerequisite funds and if the Society had to depend upon fundingfrom an outsider, on the strength of such resolution, the Societycould have garnered the requisite finances from an outsider. ButFthe facts on record disclose that no such funding from anyoutsider was required to arrange the requisite finance towardsconsideration for purchase of land. If no outsider had contributedin any manner there is no reason why a Plot could be reservedfor such an outsider disregarding the claim of a Depositor withGthe help of whose money the Society had reached the stagewhere the Plots could be allotted to the concerned. In a situationwhere none of the other Depositors had even made a claim withrespect to Plot No.2 and if the Disputant had exercised suchoption, the Plot had to be allotted to the Disputant. No outsiderHcould have had a better claim as against any Depositor as

regards to that Plot. As on 18.12.1988, the Appellant had noteven submitted his application form for membership whereas allthe Depositors including the Disputant had submitted such formsalong with requisite fees for membership. Even on this count,the claim of the Disputant stands on a better footing as againstthe Appellant. [Paras 25, 26] [817-G-H; 818-A-E]

1.3 It was accepted by the then Secretary in his cross-examination that:- a) the Appellant had not paid any amounttowards the cost of shares of the Society and admission feetowards membership of the Society at any time before or on18.12.1988. b) the notice calling the meeting dated 18.12.1988had not mentioned that choice to be exercised by the Depositorswas restricted to plots other than Plot Nos. 1 and 2. It was alsoaccepted by the counsel for the Appellant that neither anyinvitation was received by the Appellant to attend the meetingnor did the Appellant attend the meeting and no payment wasmade by the Appellant before 18.12.1988. No document wasproduced or relied upon to say that there was any allotment ofPlot Nos.1 and 2 in favour of anybody before the meeting wasactually held on 18.12.1988. [Paras 27-29] [818-F-H; 819-A-B]

1.4 In the circumstances, the conclusions drawn by theHigh Court that the allotment of Plot No.2 in favour of theAppellant was illegal and that the Resolution passed by theSociety in its meeting dated 25.03.1990 and the sale deedexecuted by the Society on 25.04.1989 were required to bequashed, are absolutely correct and fully justified. As regardsother conclusions drawn by the High Court, anything need notbe said as the Petition for Special Leave to Appeal filed by theDisputant was disposed of by this Court on 15.01.2016. TheDisputant was a Depositor of the Society; that she was entitledto attend the meeting dated 18.12.1988 in her own right; thatshe had preferred requisite application for membership and hadpaid requisite fees on 18.12.1988 itself; that she had opted forPlot No.2 and as on that date there was nobody else apart fromthe Disputant who opted for said Plot No.2. These aspects ofthe matter shall be taken into account by the concernedauthorities while acting in terms of direction (v) issued by theHigh Court which are quoted by us in para 15 and the allotment A

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Ashall be restricted to those who had exercised their option ason 18.12.1988 and were not otherwise allotted any plot and hadnot accepted such allotment. [Paras 30-33] [819-E-H; 820-A-B]

Sujata Tarachand Makhija vs. Shivkishan and Ors.Order of Supreme Court dated 15.01.2016 inBSLP(C)No.136 of 2016 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7652-7653 of 2019.

From the Judgment and Order dated 21.09.2015 of the HighCourt of Judicature at Bombay, Nagpur Bench, Nagpur in Writ PetitionCNo. 1460 of 2006 and order dated 01.08.2016 in Miscellaneous CivilApplication No. 206 of 2016 in Writ Petition No. 1460 of 2006 (D).

Anupam Lal Das, Sr. Adv., Parthiv K. Goswami, Ms. DikshaRai, Ms. Palak Mahajan, Ishan Bisht, Ratnesh Kumar, Anirudh Singh,Krishanu Barua, Ms. Ritu Sharma, Advs. for the Appellant.D

Vinay Navare, Sr. Adv., Ms. Sushma V. Deshpandey, Ms. GwenKarthika, Ms. Abha R. Sharma, Gagan Sanghi, Rameshwar PrasadGoyal, Rajat Singh, Lokender Raghav, Farrukh Rasheed, ChanderShekhar Ashri, Advs. for the Respondents.

The Judgment of the Court was delivered byE

UDAY UMESH LALIT, J.

1. Leave granted.

2. These appeals challenge the decisions of the High Court[1],namely, (i) Judgment and Final Order dated 21.09.2015 passed in WritFPetition No.1460 of 2006 and; (ii) Final Order dated 01.08.2016 passedin Miscellaneous Civil Application No.206 of 2016 in Writ Petition No.1460 of 2006(D).

3. The facts leading to the filing of Dispute No.136 of 1989 underthe provisions of Section 91 of the Maharashtra Cooperative SocietiesGAct, 1960 (‘the Act’ for short) from which present appeal has arisen,as culled out from the decision of the Cooperative Court are as under:-

“The opponent No.1 is a duly registered Cooperative HousingSociety having its registered office at Sneha Nagar, Nagpur. The H1 High Court of Judicature at Bombay, Nagpur Bench, Nagpur opponent No.2 is the then Secretary of the opponent No.1 Society.The disputant is an employee of Life Insurance Corporation Indiaand is working at Nagpur. The employees of the Life InsuranceCorporation are admittedly the members of the opponent No.1Society and have a preferential claims over other members whoare not working in the L.I.C. It is alleged that opponent No.2being a Secretary has indulged himself in illegal activities includingmisappropriation of funds of the Society for his own use. It isalso alleged that the opponent No.2 has used to take the amountsfrom the members of the Society in cash and used tomisappropriate the same as alleged in para – 1 & 2 of the dispute.It is further stated that as per policy of the Society, the seniormembers shall have preferential claim in the matter of allotmentof plots of the Society. The disputant with an intention to get theallotment of plot in the Society, paid certain amounts on dated 5-11-1981 vide receipt No.334 on dated 9-9-1983; and accordingly,the Society assured the disputant that he shall be allotted the plotadmeasuring 3000 Sq. Ft. in the Layout in Kh. No.152/3 of MoujaSornalwada on dated 18-12-1988, disputant submitted herapplication for the membership/allotment of shares with the Form– ‘E’ & ‘I’ to the Secretary of the society. In the: said meeting,she was allowed to give her choice for allotment of plot to her,as per the seniority list, then prepared on dated 15-12-1988,wherein her name appears at Sr. No.5. On the same day, thedisputant also deposited an amount of Rs.105/- as per demandof the society. But neither receipt of the said amount was issuedto her nor society has communicated any decision within 3months from the date of receipt of her application for membership,and hence, she deemed to be a member of the opponent No.1Society; and as such, she is entitled to claim a plot in dispute. Itis further alleged that the plot No 2 has been wrongly allotted tothe opponent No.3, who claims to be a member of opponent No.1Society. It is also stated that disputant is a senior member to theopponent No.3. However, the society has illegally executed thesale deed of the said plot on dt. 25-10-1989 in favour of opponentNo.3, who is not eligible to claim the said plot. In view of this, itis stated that the allotment of plot in dispute to the opponent No.3by society vide Resolution No.5 passed in A.G.M. in dated 25- AB

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A3-1990, is illegal and required to be quashed and set aside, asalleged in Para 5 (a) & (b) of the dispute. It is also stated thatthe disputant deposited the amount of Rs.3,000/- on dt. 5-11-1981,vide receipt No.334, Rs.4,750/- as per letter of the society dt. 9-9-1983 by cheque No.105998, dt, in 19-8-83; Rs.2500/- as perBletter of opponent No.2 dt.16-10-1987; Rs.3000/- by self chequeNo.503079, dt. 17-9-87: Rs.5000/- as per letter dt. 14-10-88Rs.105/- or on dt.18-12-88. Thus, it is stated that the disputanthas paid in all total amount of Rs.18,355/- to the opponent No.1society from time to time as alleged and sated in para – 5[c] ofthe dispute. It is further alleged that in the meeting dt. 18-12-C1988, the Secretary has allotted the plots according to his ownchoice to various members of the society excluding plot Nos.1& 2 along with other plots. It is further stated that the disputant,being a senior member is entitled to claim plot No plot No plot 2in the said layout. In spite of this, the opponent Society illegallyDnot allotted the said plot to her and hence, she issued a noticethrough Advocate on dt. 23-12-1988 to the opponents calling uponthem to allot the plot No.2 and execute the sale deed for thesame. However, till filing of the dispute, the disputant did netherreceive any reply to the said notice nor any positive action byEthe society as alleged in para 6 to 10 of the dispute and hence,disputant constrained to file this dispute.”

4. The Disputant namely the first Respondent herein thus allegedthat Plot No.2 was illegally allotted to the Opponent No.3 (the Appellantherein) and prayed that the Resolution No.5 dated 25.03.1990 as wellFas the sale deed dated 25.10.1989 executed in favour of the Appellantbe set aside. It was submitted:-

a) The Disputant, an employee of Life Insurance Corporationof India had been paying amounts as stated above to theSociety in the capacity of a Member.

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b) She had deposited an amount of Rs.18,355/- from time totime till the Lay-out was approved on 01.12.1988.

c) In the meeting held on 18.12.1988 she had submitted herapplication for membership/allotment of shares in Forms ‘E’& ‘I’, had deposited a sum of Rs.105/- as demanded byHthe Society and had opted for said Plot No.2.

d) Though, in terms of seniority, she was entitled to be allottedPlot No.2, the Secretary of the Society had allotted said Plotwrongly and illegally to the Appellant.

She claimed following reliefs:-

“(b) direct the opponents to allot Plot No.2 to the disputant inscheme No.2 at Khasra No. 152/3 of Mouza-Somalwada, Nagpurand further execute the sale deed in respect of the said plot infavour of the disputant and hand over the possession of the saidplot to the disputant.

(c) prohibit the opponents permanently from allotting Plot No.2in Scheme No.2 at Khasra No.152/3 of Mouza – Somalwada,Nagpur or dealing with the same in any manner with any otherperson that the disputant, either themselves or through theirservants, agents, attorneys etc.”

5. According to the record, an interim order was passed on25.04.1989 by the Cooperative Court at Nagpur in said Dispute injunctingthe Society from making any allotment in respect of Plot No.2.However, despite such interim order, a registered sale deed wasexecuted by the Society in favour of the Appellant in respect of saidPlot on 25.10.1989. Later, in the General Body Meeting of the Societyheld on 25.03.1990 the allotment of Plot No.2 and the execution of saledeed in favour of the Appellant was confirmed vide Resolution dated25.03.1990.

6. Thereafter, by way of amendment paragraphs 5(a), (b) and(c) were inserted in the Dispute Application and it was prayed that theResolution dated 25.03.1990 and the sale deed dated 25.10.1989 bequashed and set aside. Said paragraphs 5(a), (b) and (c) were:-

“5.(a) In the meeting of the Society held on 18-12-1988 at JagatRestaurant, the disputant submitted her application formembership/allotment of shares with Form “E” and “I” to theSecretary of the Society, thereafter she was allowed to give herchoice for allotment of plot to her as per the seniority list thenprepared on 18-12-1988 wherein her name appears at Sr. No.5.Disputant also deposited an amount of Rs.105/- on 18-12-1988as demanded by the Society. However, no receipt was thenissued to her. That the opponent No.1 Society has notcommunicated any decision to the disputant within three monthsfrom the date of receipt of her application for membership A

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submitted by her on 18-12-1988 and as such she has becomedeemed member of the opponent No.1 Society and as such sheis entitled to claim the plot in dispute.

5. (b) Plot No.2 has been wrongly allotted to opponent No.3 whoclaims to be member of opponent No.1 society by respondenton dt. 25-3-1990 passed by the A.G.M. of the opponent No.1Society superseding the claim of the disputant for the said plotbeing senior to him. It is now learnt that the Society has alsoexecuted sale deed on 25-10-1989 of the said plot in favour ofopponent No.3 who is not eligible to claim the said plot. However,the date on which the said sale deed was executed is notdisclosed by the present Secretary and President of opponentNo.3 by the opponent No.1 Society vide Resolution No.5 dated25-03-1990 passed by the Annual General Meeting of the Society,be declared illegal and it be quashed and set aside. Similarly,the sale deed of the said plot, executed on 25-10-1989 by theopponent No.1 Society in favour of the opponent No.3 be alsodeclared illegal and it be quashed and set aside with direction tothe opponent No.1 Society to allot the said plot to the disputantand execute proper transfer deed by way of sale deed and/orlease deed in her favour and opponent No.1 and 2 be directedto deliver vacant possession of the said plot to the disputant.

5. (c) That the disputant deposited an amount of Rs.3000/- on5-11-1981 vide receipt No.334. That the disputant received letterdated 9[th] Sept., 1983 from the Secretary of opponent No.1Society asking her to pay Rs.4750/- within 20 days. This amountwas termed as balance amount. Accordingly, the disputant paidRs.4750/- to the opponent No.1 Society by cheque No.105998dt. 19-9-1983 drawn on Central Bank of India, Kingsway Br.Nagpur, within a stipulated time limit, and the said cheque hadbeen encashed by the society on 6-12-1983. However, no receiptwas issued by the Society for the said payment received by itfrom the disputant. That the disputant received letter dt. 16-10-1987 from Shri N.H. Deshpande, Secretary of opponent No.1Society, asking her to pay an amount of Rs.2500/- within a week.This payment was specified as dues – 1) N.A taxes, 2)Registration charges, 3) Membership fee and 4) Othermiscellaneous expenses. Accordingly, the disputant paid Rs.2500/- in cash to opponent No.2 as Secretary of opponent No.1 society

within one week of the receipt of the said amount recovered byhim till this dated. The disputant further paid an amount ofRs.3000/- to the opponent No.2 as Secretary of opponent No.1Society, by self cheque No.503079 dt.17-9-1987 drawn on CentralBank of India, Branch, Nagpur. The said cheque was encashedby opponent No.2 and has received the said amount from theBank, However, no receipt is issued till this dated for the saidpayment made by the disputant. Disputant further received lettersdated 14-10-1988 followed by letter dated 29-10-1988 fromSecretary of the opponent No.1 Society asking her to payRs.5000/- as development charges to N.I.T. Disputant paid anamount of Rs.5000/- as opponent No.2 by an intermediatory bywithdrawing amount of self cheque No.0738632 dt. 26-10-1988drawn on Canara Bank, Ramdaspeth, Nagpur. However, noreceipt is issued by opponent No.2 for the said payment receivedby him. Similarly disputant paid an amount of Rs.105/- to theopponent No.1 Society in the meeting held on 18-12-1988 at JagatRestaurant, Nagpur. No receipt for this payment was also issuedto the disputant has paid an amount of Rs.18355/- to the opponentNo.1 society under specified heads, as and when demanded bythe society, from time to time, an amount of Rs.3000/- wasrefunded by the Secretary by Cheque No.7674 drawn on NagariSahakari Bank, Nagpur and cashed on 22-03-1982. Inferencedrawn in preliminary objection with regard to this refund, by theSecretary on 18-01-1989 in this Court, are neither valid norcorrect.”

7. In the written statement dated 03.05.1991 filed on behalf ofthe Society, it was asserted that the husband of the Disputant was theoriginal depositor; that the Disputant had initially made a deposit ofRs.3,000/- which was withdrawn subsequently and as such, she hadceased to be a depositor; that she had attended the meeting dated18.12.1988 not in her own capacity but as representative of her husband.It was asserted:- “As is already submitted by the opponent in the forgoing para,husband of the disputant is the Depositor of the opponent societyand as such the disputant was allowed to attend the said meetingas a representative of her husband and not as a member. As suchthe disputant does not acquire any right in the affairs of the societyby virtue of mere attendance in the meeting held on 18-12-1988.

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AIt is specifically denied that the disputant submitted an applicationfor membership or allotment of shares with Form-E and I to thethen Secretary of the Society the opponent No.2. It is stoutlydenied that the disputant deposited an amount of Rs.105/- to thesociety towards membership. It is further submitted that as onthe date of the said meeting the disputant had already ceased toBthe member of the society and as such she had no right to giveher choice for the allotment of plots. The alleged choice by thedisputant was on behalf of her husband who admittedly is thedepositor of the society. It is specifically denied that the nameof the disputant appears at Serial Number 5 in the seniority list.CIt is also submitted that having once known that the disputanthas ceased to a member of the society about 6½ years prior tothe meeting that was held on 18-12-1988, the disputant is tryingto mislead to this Hon’ble Court by claiming that she wasreadmitted as the member of the society by the principle ofdeemed membership. At the cost of repetition, it is denied thatDthe disputant deposited an amount of Rs.105/- to the society sincethe disputant had not applied for membership or rather did nothave any right to apply so, the society did not communicateanything to her. The alleged payment by the disputant to thesociety was on behalf of her husband and as such no right isEcarved out in favour of the disputant as a member of thesociety………….

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It is specifically denied that the disputant was sent a letter dated9[th] September, 1983 asking to pay Rs.4750/-. It is also deniedthat the disputant paid an amount of Rs.4750/- on her behalf. Itis submitted that the said transaction was between the husbandFof the disputant and the opponent Society and the disputant hasno business with the said transactions. It is further submittedthat the accounts of the opponent Society are audited upto datedand all receipts had been passed from time to time which fact iscleared from the audited accounts.”

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8. Mr. N.H. Deshpande, the then Secretary of the Society alsofiled his written statement on 06.10.1994 stating inter alia:- “It is submitted that disputant preferred to withdraw hermembership of the Society. The Society refunded hermembership fees and deposit to the disputant vide ChequeHNo.7678 for Rs.3,000/- drawn on Nagpur Mahila Nagrik Sahakari SHIVKISHAN v. SUJATA TARACHAND MAKHIJAAND ORS. [UDAY UMESH LALIT, J.]

Bank. The said cheque was encashed by the disputant on22.3.1982. As such the disputant ceased to be the memberdepositor of the opponents society and claim any plot much lessto give a preference for it. Contents of this para so far as theyrelate to the matter of record are not disputed. It is specificallydenied that the disputant has preferncial claim to get the plot No.2.It is submitted that the plot No.2 was never allotted to thedisputant as she was not the depositor of the society whenallotment was made.”

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It is specifically denied that the disputant submitted an applicationfor membership or allotment of shares with Form-E and I to thethen Secretary of the society, the opponent No.2. It is stoutlydenied that the disputant deposited, an amount of Rs.105/- to thesociety towards membership.

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The alleged choice by the disputant was on behalf of her husbandwho admittedly is the depositor of the Society.

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It is denied that the opponent No.1 issued letter on 9.9.1983,asking her to pay Rs.4,750/- within 20 days as alleged. It is deniedthat the disputant has deposited the alleged amount according tothe direction of this answering opponent. It is denied that theopponent No.2 issued a letter on 6.10.1987 to the disputant,asking her to deposit an amount of Rs.2,500/- within a week forthe purpose of a(a) N.A. Taxes, (b) Registration charges, (c)Membership fee and other miscellaneous expenses as alleged.It is specifically denied that the disputant has paid Rs.2,500/- incase to Opponent No.2, as Secretary of opponent No.1 Societyas alleged.”

9. Said Mr. N.H. Deshpande examined himself as witness andin his examination-in-chief stated as under:- “As Smt. Makhija, the Plaintiff who had withdrawn her depositsometime in the year 1982 and hence she did not have any rightto remain present in the meeting held on 18.12.1988, as adepositor member. However, the Society allowed her to remainpresent in the meeting as her husband’s representative. All the AB

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depositor members had given their options for the plots exceptPlot Nos.1 and 2. Smt. Makhija, however, gave her option forPlot No.2. At that time, the Society suggested her to give heroption for any other plot except Plot Nos.1 and 2 as per thecriteria decided earlier. However, she refused to change heroption.”

In his cross-examination the witness however stated:-“It is true that prior to 18.12.1988, I and Plaintiff were workingtogether in LIC Office…

…The Plaintiff’s husband was working as a Professor in G.S.Commerce College.

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“I had issued a Notice of Meeting to be held on 18.12.1988, undermy signature. A copy of the said Notice is kept at Ext.D-1. Theentire matter in the said Notice is correct. Now, I have beenshown the Ext.D-1. It is a copy of the proceedings of the meetingdated 18.12.1988. It is correct. It is true that only 21 plotdepositors were present for this meeting. It is also true that theRespondent No.3 was not present for this meeting. If it is thecontention that nowhere in the Notice at Ext.D-1, it is mentionedthat choice for a plot should be given by depositors except PlotNos.1 and 2, the contention is correct.

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It is true that the said three forms (Ext. O-2 and O-3) were notgiven in the said meeting held on 18.12.88 by her husband.

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If it is the contention that the Respondent No.3 had not paidrs.105/-, vis. Rs.100/- towards cost of shares and Rs.5/- asadmission fee during the meeting on 18.12.88, the contention somade is correct. It is true that the petitioner was present forthe meeting held at Hotel Jagat on 18.12.88. If it is the contentionthat the Petitioner had filled in and signed the Share ApplicationForm and Forms ‘E’ and ‘I’ during the meeting on 18.12.88, andhad headed over the same to me, the contention is correct.Similarly, if it is the contention that the Petitioner had madepayment of Rs.105/- to the Society, the said contention is correct.

Question: On which date the allotment of the said Plot Nos.1and 2 was made and by whom?

Reply: I myself have allotted both these plots. However, I donot remember the date on which the allotment of these two plotswas made ….

If it is the contention that even though the Hon. Court had passedan order on 25.4.89 in respect of allotment of the said Plot No.2– placed in this suit at Exh. 5, I have allotted the said Plot to theRespondent No.3 on 25.10.89, such contention is correct.

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Now I have been shown the Exh. D-6 which is a Xerox copyof the letter dated 9.9.83 written by the Society to the Plaintiff.My signature is on the original letter. In the said letter, I haveinformed the Petitioner to pay an amount of Rs.4,750/- within aperiod of 20 days which is correct. If it is the contention of thePlaintiff that the same amount was paid to me by a cheque andthat as the Witness says the said amount was paid to me for theSociety by cheque, the said cheque was deposited in the Society’saccount which has been cleared, the contention is correct.

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I am shown Exh. D-11. It is a copy of the proceedings of themeeting of Plot Depositors held on 18.12.88. If it is the contentionthat the said proceedings do not clearly mention that the plotdepositors should given their choice for allotment of plots otherthan Plot Nos.1 and 2, it is correct.”

10. After considering the record, the Cooperative Court foundthat the Disputant had proved that she had paid a sum of Rs.4,750/- tothe Secretary of the Society; that she had handed over the membershipapplication Forms ‘E’ & ‘I’ and requisite fees to the then Secretary ofthe Society in the meeting dated 18.12.1988 but the Disputant couldnot claim to be the Member or deemed Member of the Society andthat she was not entitled to any relief as prayed for. However, theCooperative Court observed that her husband was entitled to get saledeed executed in respect of Plot No.26 after getting all the formalitiescompleted. The Dispute Application was thus disposed of on 31.01.2004.

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11. The Disputant being aggrieved, filed Appeal No.11 of 2004in the Cooperative Appellate Court, Nagpur, under Section 97 of theAct. The Cooperative Appellate Court considered the rival submissionsand observed:-

“(11) Admittedly the meeting of the Depositors dated 8-12-88 isBthe first meeting after the layout plan was sanctioned by the NITon 1-12-88. There is no document to show that before 18-12-88that some plots were reserved for the senior members or for thespecial category of the members. This being the first meeting ofthe depositors it was not possible that the plot No.2 was alreadyCallotted to some other depositor members. When the disputanthad exercised her option for plot No.2 also it cannot be said thatnobody was interested for the plot No.2” as mentioned in theminute of the meeting dated 18-12-88 Ex-D-11. I am, therefore,not inclined to accept the case of the respondent society that plotDNo.2 was not available for allotment in the meeting dated 18-12-88.

(12) It is now to consider whether the disputant was present inthe meeting dated 18-12-88 on behalf of her husband. Admittedlyaccording to the disputant she had submitted her application forEmembership/allotment of shares with form “E” & “I” to thesecretary of the society and thereafter she was allowed to giveher choice for allotment of the plot as per seniority list thenprepared. She has also deposited the amount for Rs.105/- on 18-12-88 required for membership. The then secretary opponentNo.2 has deposed at Ex.91 and admitted that the disputant wasFpresent in the meeting dated 18-12-88 and she had submittedapplication for membership for herself with form “E” & “I” andhad deposited the amount of Rs.105/- for which no receipt wasgiven to her. He had not given the receipt to any of the depositorswho had submitted their forms for membership on that date.GUpon this evidence the learned trial court has held that thedisputant has proved her case that she submitted her applicationalong with form “I” & “E” and paid the entrance fee Rs.5/- andshare amount of Rs.100/- total Rs.105/- on 18-12-88. Thefindings have not been challenged by the opponents by filing theHappeal.”

12. It held that since the application for membership was givenby the Disputant on 18.12.1988 and she was not communicated anydecision in respect of her application, by virtue of Section 22 of theAct she became deemed Member of the Society after the expiry ofthree months; and on the other hand, the Appellant and certain otherpersons were admitted as Members of the Society only in the meetingdated 25.03.1990; and as such, the Disputant was a senior Member ofthe Society as against the Appellant and was entitled to Plot No.2 optedby her. The Cooperative Appellate Court thus set aside the order dated31.01.2004 passed by the Cooperative Court and allowed DisputeNo.136 of 1989 with following directions: - “(4) It is declared that the allotment of plot No.2 in favour ofopponent No.3 by Resolution No.5 dated 25-3-1990 passed inthe Annual General Meeting of the opponent No.1 Society andthe sale deed dated 25-10-1989 executed by the opponent No.1in favour of opponent No.3 in respect of plot No.2 are illegaland hence those are quashed and set aside.

(5) The opponent No.1 society is directed to allot plot No.2 tothe disputant in scheme No.2 Khasra No. 152/3 of mouza-Somalwada, Nagpur and further directed to execute the sale deedin respect of said plot No.2 in favour of disputant on payment ofremaining amount of cost of the plot giving credit to the amountdeposited by her i.e. Rs.4750/- and handover possession of thesaid plot to her.”

13. The Appellant being aggrieved, approached the High Courtby filing Writ Petition No. 1460 of 2006. While affirming the findingsof the Cooperative Appellate Court, the High Court observed as under:-

“8.In the present case, it is undisputed that the society had neithertaken any decision nor had communicated any decision to therespondent no.1 rejecting her claim for membership of the society.Therefore, as per the deeming fiction, the respondent No.1became member of the society after three months from the dateof application. The respondent No.1 undisputedly submitted herapplication for membership on 18[th] December, 1988 and as thedecision was not taken by the society within three months it isto be held that the petitioner became member of the society from18[th] March, 1989. The contention of the society that theapplication of the petitioner came to be rejected in the meeting A

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held on 25[th] March, 1990 cannot be accepted as the petitionerbecame member of the society much earlier and therefore,rejection of her application seeking membership, on 25[th] March,1990 is inconsequential.

A

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B

It is clear from the pleadings and the evidence on the record thatthe claim of the respondent No.1 for Plot No.2 has not beenconsidered by the society treating her to be a member of thesociety w.e.f. 18[th] March, 1989. Even if the submissions madeon behalf of the petitioner that the option given by the respondentCNo.1 for plot No.2 on 18[th] December, 1988 cannot be acceptedon the ground she was not the member of the society on thatdate, it goes unexplained as to why the entitlement of therespondent No.1 for plot No.2 has not been considered when itcame to be allotted to the petitioner on 25[th] March, 1990. TheDrespondent No.1 acquired the membership of the society bydeeming fiction on 18[th] March, 1989 i.e. much before 25[th]March, 1990.

In these facts, I find that the allotment of Plot No.2 in favour ofthe petitioner on 25[th] March, 1990 without considering the claimEof the respondent No.1, is illegal. The finding recorded by theCooperative Appellate Court in this regard are proper.”

14. The High Court, however, found that the Disputant could nothave given option for Plot No.2 on 18.12.1988 as she was not aMember of the Society on that date; that she acquired the membershipFrights on and after 18.03.1989; that allotment of Plot No.2 to theAppellant was without following proper procedure and was donearbitrarily and that after quashing the allotment it must be left to theSociety to follow the procedure in accordance with law for allottingPlot No.2.

G15. In the premises, the operative part of the order passed bythe High Court was as under:- “i) the impugned orders are modified.

ii) It is declared that the allotment of Plot No.2 in favour of theHpetitioner is illegal.

iii) The resolution No.5 passed by the society in its meeting heldon 25[th] March, 1990 regarding the allotment of Plot No.2 infavour of the petitioner and the sale-deed executed by the societyin favour of the petitioner on 25[th] October, 1989 in respect ofthe Plot No.2 are quashed.

iv) The claim of the respondent No.1 for allotment of Plot No.2as made in the dispute is rejected.

v) It is left open for the society to consider the allotment of plotNo.2 in favour of its member, however, it is clarified that whileallotting Plot No.2 the society shall follow the same procedureas was followed by it in the year 1988 while allotting the otherplots to its members.

The petition is partly allowed in the above terms. In thecircumstances, the parties to bear their own costs.”

16. The aforesaid judgment and order passed by the High Courtwas challenged by the Disputant by filing Special Leave Petition (Civil)No. 136 of 2016 which was dismissed by this Court on 15.01.2016 withfollowing observations[2] :- “We find no ground to interfere.

The special leave petition is dismissed. However, it goes withoutsaying that the petitioner may avail the remedy granted by theHigh Court. In the event, petitioner is aggrieved by the order ofthe society, she may approach the High Court in accordance withlaw. In case she approaches the High Court, the matter will bedealt with expeditiously.”

17. In this appeal, we heard Mr. Anupam Lal Das, learned SeniorAdvocate for the Appellant, Mr. Vinay Navare, learned Senior Advocatefor the Disputant and Mr. Gagan Sanghi, learned Advocate for theSociety.

18. It was submitted by Mr. Lal Das, learned Senior Advocatethat in the meeting held on 24.06.1984 all the depositors had submittedthat none of them was interested in two big sized plots admeasuring 2 Order dated 15.01.2016 in SLP(C)No. 136 of 2016 – Sujata Tarachand Makhija vs.Shivkishan and Ors.

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A5000 square feet each and that the society could give those plots topersons other than the depositors. The Resolution to that effect wasas under:- “(10) The depositors told that nobody among them is interestedfor such big size of Plot and the society should give it to theBpersons other than us who are interested in it. Resolution to thiseffect has been passed in the meeting.”

It was further submitted that (i) the husband of the Disputantwas present in the meeting but no grievance or objection was raisedeither in said meeting or in subsequent meetings held on 27.08.1985,C28.09.1987 and 16.10.1988; (ii) the Disputant was not a member of theSociety and therefore could not have made any choice and opted forPlot no.2; (iii) the Appellant was rightly inducted as member of thesociety and allotted Plot No.2; (iv) though the decisions of the Societyin accepting the application of the Appellant for membership andallotment of Plot No.2 were ratified in the General Body Meeting datedD25.03.1990, they would relate back to 18.12.1988 and the Appellantwould be senior to the Disputant as member of the Society; (v) theapplication of the Disputant seeking membership of the Society in placeof her husband was also rejected in said meeting dated 25.03.1990. Mr.Lal Das, learned Senior Advocate however fairly accepted that theEAppellant was not present in the meeting dated 18.2.1988 and thatneither was he invited to attend said meeting nor had he submittedapplication form for membership and deposited requisite fees.

19. Mr. Vinary Navare, learned Senior Advocate for theDisputant submitted that (i) she was the employee of Life InsuranceFCorporation, not her husband; (ii) the Society was for the employeesof Life Insurance Corporation; (iii) as found by the Courts below shehad paid a sum of Rs.4750/- to the Secretary of the Society which wasaccepted by the then Secretary in his deposition though it was stoutlydenied in the written statement filed earlier; (iv) she had handed overthe membership application Forms ‘E’ & ‘I’ along with requisite feesGto the then Secretary of the Society in the meeting dated 18.12.1988which fact was also accepted by the then Secretary; (v) as Depositorof the Society, she was entitled to claim Plot No.2; (vi) in the meetingdated 18.12.1988 nobody else had claimed Plot No.2 and as such shehad a better claim to said Plot as against anybody else; (vii) theHAppellant was neither a Depositor nor a member of the Society and as such could not be allotted Plot No.2 disregarding the claim of theDisputant.

20. Mr. Gagan Sanghi, learned Advocate appearing for theSociety placed the relevant record for perusal of the Court and submittedthat the amount of Rs.4750/- which the then Secretary had acceptedto have been received from the Disputant was credited to the accountof the Society.

21. At this stage, the Resolution dated 18.12.1988 passed bythe Society needs to be extracted:- “The meeting of depositors held on 18/12/88 at 9:30 AM at JagatHotel Nagpur.

The following depositors attended the meeting

(1) Shri Kelkar (2) Prayaji (3) Durani (4) Sh Kurve (5) Bhambani(6) L.G. Deshpande (7) Joshi (8) Kashikar (9) Shri Vaidya (10)Bhadagne (11) Patait (12) Sahu, (13) Sonone (14) Jairaman (15)Yawalkar (16) Prayagi (17) Nanoti (18) Arvikar (19) Smt Mishra(20) Smt Makhija on behalf of T D Makhija (21) Pillay The following Business transacted in meeting:

(1) Last meeting minutes confirmed.

(2) Shri Changde old member ex-Secretary presided over themeeting.

(3) The Secretary briefed the depositors about the developmentsin new layout. The Secretary requested Shri Changde toproceed further with allotment of plot.

(4) The choice of allotment has been called for from every bodyfor 1[st] pref. II[nd] preference and III[rd] preference.

(5) Accordingly everybody gave the choice and as per criteriadecided earlier by depositors the plot Nos. have been allottedto them.

(6) But Smt. Makhija who attended the meeting on behalf ofMr. Makhija was interested in plot No.6 only. She pleadedthat even though the criteria is decided, the said plot No.6must be allotted to Mr. Makhija. All the depositors tried toconvince her but in vain. Lastly she gave choice under hersignature for plot No.6 (1[st] preference) and plot No.2 secondpreference.

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AIt was cleared in the meeting that the plots are being allotted asper seniority of depositors hence plot No.6 cannot be allotted toMr. Makhija. As plot Nos.1 and 2 were already allotted asnobody was interested in them the question of allotment of PlotNo.2 does not arise.

BFinally, Mr. Changde declared the allotment as per criteria andthe number of plot before each name have been allotted. Theletter of allotment have also been issued to them. For theabsentees the plot has been allotted as per the seniority from theavailable one.C(7) The allottee plot holders were asked to deposit their shareof Rs.105/- with Society to finalize their membership.

The meeting ended with vote of thanks & dinner.

Nagpur

D18/12/88

Sd/-Secretary”

22. Before we deal with the rival submissions, an important facetof the matter whether it was the husband or the Disputant herself whoEwas the Depositor of the Society needs to be considered. It is acceptedthat the Disputant was an employee of Life Insurance Corporation ofIndia and the Society was meant principally for such employees. It washowever denied in the pleadings that she was a Depositor and it wassubmitted that she had withdrawn the amount of Rs.3000/- which sheFhad earlier deposited and had thus lost the status of being a Depositor.The then Secretary of the Society, when confronted with the documentshowever had to accept that he had received a sum of Rs.4750/- fromthe Disputant. He also accepted that she had attended the meeting on18.12.1988, had submitted an application form and deposited the requisitefees. Though it was tried to project that it was her husband who wasGthe Depositor and the Disputant had attended the meeting as arepresentative of the husband, in the face of the admitted position thatshe had deposited Rs.4750/- and the findings rendered by the Courtsbelow, it has to be concluded that the Disputant was a Depositor ofthe Society and like all other Depositors was entitled to and had attendedHthe meeting dated 18.12.1988 in her own right.

It is significant to note that at no stage the husband of theDisputant claimed that he was the Depositor in his own right and entitledto allotment of any Plot. Further, it is not the case of the Disputantand her husband that over and above the entitlement of the Disputant,her husband is also entitled to an additional Plot. The submission hasalways been that there was only one entitlement, in exercise of whichthe option was given for Plot No.2.

23. If between the husband and wife, the claim has always beenonly with respect to one entitlement, it really made no differencewhether the Disputant attended the relevant meeting in her own rightor as a representative of her husband. The fact of the matter is, anoption was exercised in favour of Plot No.2 and the issue is whethersuch option ought to have been allowed and accepted or not. It maybe stated here that the communications addressed by the Society were,normally in printed format where the name of the addressee would bewritten after the printed prefixes “Mr./Mrs.” and many suchcommunications were addressed to “Mr./Mrs. Makhija”. The recordalso shows that some meetings were attended by the Disputant whilesome were attended by her husband. But, considering the facts thatthe Disputant was an employee of Life Insurance Corporation of Indiaand had deposited Rs.4,750/- as stated above, her status was clearlythat of a Depositor.

24. It is a matter of record that the Depositors had collectivelyraised funds with the help of which, the consideration for purchase ofthe land over which the layout was to be formed, could be arranged.All the required and incidental expenses thus came from the funds raisedby the Depositors and to that extent the Disputant had definitely madeher contribution. The money deposited by all the Depositors includingthe Disputant had thus helped the Society to have the requisite landwhereafter the Plots could be carved and allotted to the concernedmembers. On the other hand, at no stage the Appellant had made anysuch contribution.

25. It is accepted that the Appellant was neither present in themeeting dated 18.12.1988 nor had he submitted any application alongwith requisite fees. It is also accepted that he had not deposited anythingby way of deposit with the Society before or on 18.12.1988, with thehelp of which the land could be purchased by the Society. It is truethat the tenor of the Resolution passed by the depositors on 24.06.1984shows that no depositor was willing to take a bigger Plot but that A

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Aresolution was passed in the year 1984 and it was four years thereafterthat the day had arrived for exercise of choices or options. For theemployees of Life Insurance Corporation it may be that the Depositorsat an earlier stage were not in a position to arrange requisite funds andif the Society had to depend upon funding from an outsider, on thestrength of such resolution, the Society could have garnered the requisiteBfinances from an outsider. But the facts on record disclose that nosuch funding from any outsider was required to arrange the requisitefinance towards consideration for purchase of land. If no outsider hadcontributed in any manner there is no reason why a Plot could bereserved for such an outsider disregarding the claim of a Depositor withCthe help of whose money the Society had reached the stage where thePlots could be allotted to the concerned. In a situation where none ofthe other Depositors had even made a claim with respect to Plot No.2and if the Disputant had exercised such option, the Plot had to be allottedto the Disputant. No outsider could have had a better claim as againstany Depositor as regards to that Plot.D

26. It is also a matter of record that as on 18.12.1988, theAppellant had not even submitted his application form for membershipwhereas all the Depositors including the Disputant had submitted suchforms along with requisite fees for membership. Even on this count,the claim of the Disputant stands on a better footing as against theEAppellant.

27. Further, though the Resolution dated 18.12.1988 records, “AsPlot Nos. 1 and 2 were already allotted as nobody was interested inthem, the question of allotment of Plot No.2 does not arise”, it wasaccepted by the then Secretary in his cross-examination that:-F

a) the Appellant had not paid any amount towards the cost ofshares of the Society and admission fee towardsmembership of the Society at any time before or on18.12.1988.

b) the notice calling the meeting dated 18.12.1988 had notmentioned that choice to be exercised by the Depositorswas restricted to plots other than Plot Nos. 1 and 2.

G

It was also accepted by the learned counsel for the Appellantthat neither any invitation was received by the Appellant to attend theHmeeting nor did the Appellant attend the meeting and no payment was made by the Appellant before 18.12.1988. No document has beenproduced or relied upon to say that there was any allotment of PlotNos.1 and 2 in favour of anybody before the meeting was actually heldon 18.12.1988.

28. In the circumstances, it must be held that the assertion somade in the Resolution was completely incorrect and against the record.The then Secretary accepted in his deposition that he himself had allottedthese two plots but could not give the date when such allotment wasmade. In any case, it is accepted by the Appellant that no suchallotment was done at any time before 18.12.1988.

29. As on the date when the sale deed was executed on25.10.1989 by the Society in favour of the Appellant, there was aninterim order passed by the Cooperative Court at Nagpur on 25.04.1989injuncting the Society from making any allotment of Plot No.2. Thethen Secretary accepted in his cross-examination that such allotmentand execution of sale deed was done in spite of the order of injunction.For persons who had clearly violated the order of injunction, nosympathetic consideration can be extended, nor any equity can be foundin favour of such persons. It is also apparent that the execution of thesale deed was even before the Resolution was passed in the meetingheld by the Society on 25.03.1990 regarding allotment of Plot No.2 infavour of the Appellant.

30. In the circumstances, the conclusions drawn by the HighCourt that the allotment of Plot No.2 in favour of the Appellant wasillegal and that the Resolution passed by the Society in its meeting dated25.03.1990 and the sale deed executed by the Society on 25.04.1989were required to be quashed, are absolutely correct and fully justified.

31. As regards other conclusions drawn by the High Court, weneed not say anything as the Petition for Special Leave to Appeal filedby the Disputant was disposed of by this Court on 15.01.2016 with theobservations as quoted hereinabove.

32. We, however, do conclude that the Disputant was a Depositorof the Society; that she was entitled to attend the meeting dated18.12.1988 in her own right; that she had preferred requisite applicationfor membership and had paid requisite fees on 18.12.1988 itself; thatshe had opted for Plot No.2 and as on that date there was nobody elseapart from the Disputant who opted for said Plot No.2.

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A33. These aspects of the matter shall be taken into account bythe concerned authorities while acting in terms of direction (v) issuedby the High Court which are quoted by us in para 15 hereinabove andthe allotment shall be restricted to those who had exercised their optionas on 18.12.1988 and were not otherwise allotted any plot and had notaccepted such allotment.B

34. With the aforesaid directions the appeals stand dismissed. Noorder as to costs.

C

Divya Pandey

Appeal dismissed.

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