CA Nos.7652-7653 of 2019 arising out of SLP(C)Nos.29516-29517 of 2016 Shivkishan    vs.   Sujata Tarachand Makhija and ors.

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Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.7652-7653 OF 2019 (Arising out of Special Leave Petition (Civil) Nos.29516-29517 of 2016)

SHIVKISHAN  …Appellant

VERSUS

SUJATA TARACHAND MAKHIJA AND ORS.  …Respondents

J U D G M E N T

Uday Umesh Lalit, J.

1. Leave granted.

2. These appeals challenge the decisions of the High Court1, namely,

(i)  Judgment  and Final  Order  dated  21.09.2015 passed in  Writ  Petition

No.1460  of  2006  and;  (ii)  Final  Order  dated  01.08.2016  passed  in

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 under the

provisions of  Section 91 of  the Maharashtra  Cooperative Societies  Act,

1High Court of Judicature at Bombay, Nagpur Bench, Nagpur

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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 Housing Society having its registered office at Sneha Nagar,  Nagpur.   The  opponent  No.2  is  the  then Secretary  of  the  opponent  No.1  Society.   The disputant  is  an  employee  of  Life  Insurance Corporation  India  and  is  working  at  Nagpur.   The employees  of  the  Life  Insurance  Corporation  are admittedly the members of the opponent No.1 Society and  have  a  preferential  claims  over  other  members who are not working in the L.I.C. It  is alleged that opponent No.2 being a Secretary has indulged himself in  illegal  activities  including  misappropriation  of funds of the Society for his own use.  It is also alleged that the opponent No.2 has used to take the amounts from the members of the Society in cash and used to misappropriate the same as alleged in para – 1 & 2 of the dispute.  It is further stated that as per policy of the  Society,  the  senior  members  shall  have preferential claim in the matter of allotment of plots of the Society.  The disputant with an intention to get the  allotment  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  plot admeasuring  3000  Sq.  Ft.  in  the  Layout  in  Kh. No.152/3 of Mouja Sornalwada on dated 18-12-1988, disputant  submitted  her  application  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, the disputant also deposited an amount of Rs.105/- as per demand of the society.  But neither receipt of the said amount was issued to her nor society has communicated any decision within 3 months from the date of receipt of her  application  for  membership,  and  hence,  she deemed  to  be  a  member  of  the  opponent  No.1 Society; and as such, she is entitled to claim a plot in dispute.  It is further alleged that the plot No 2 has

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been  wrongly  allotted  to  the  opponent  No.3,  who claims to be a member of opponent No.1 Society.  It is also stated that  disputant is  a senior member to the opponent  No.3.   However,  the  society  has  illegally executed the sale deed of the said plot on dt. 25-10- 1989 in favour of opponent No.3, who is not eligible to claim the said plot.  In view of this, it is stated that the allotment of plot in dispute to the opponent No.3 by society vide Resolution No.5 passed in A.G.M. in dated 25-3-1990, is illegal and required to be quashed and set aside, as alleged in Para 5 (a) & (b) of the dispute.  It is also stated that the 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  per  letter  of  opponent  No.2  dt.16-10- 1987; Rs.3000/- by self cheque No.503079, dt. 17-9- 87: Rs.5000/- as per letter dt. 14-10-88 Rs.105/- or on dt.18-12-88.  Thus, it is stated that the disputant has paid in all total amount of Rs.18,355/- to the opponent No.1 society from time to time as alleged and sated in para – 5[c] of the dispute.  It is further alleged that in the meeting dt. 18-12-1988, the Secretary has allotted the  plots  according  to  his  own  choice  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 2 in the said layout.  In spite of this,  the  opponent  Society  illegally  not  allotted  the said plot to her and hence, she issued a notice through Advocate on dt. 23-12-1988 to the opponents calling upon them to allot the plot No.2 and execute the sale deed for the same.  However, till filing of the dispute, the disputant did nether receive any reply to the said notice  nor  any  positive  action  by  the  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 alleged that

Plot  No.2  was  illegally  allotted  to  the  Opponent  No.3  (the  Appellant

herein) and prayed that the Resolution No.5 dated 25.03.1990 as well as

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the sale deed dated 25.10.1989 executed in favour of the Appellant be set

aside.  It was submitted:-

a) The Disputant, an employee of Life Insurance Corporation

of India had been paying amounts as stated above to the Society in

the capacity of a Member.

b) She had deposited an amount of Rs.18,355/- from time to

time till the Lay-out was approved on 01.12.1988.

c) In the meeting held on 18.12.1988 she had submitted her

application for membership/allotment of shares in Forms ‘E’ & ‘I’,

had deposited a sum of Rs.105/- as demanded by the Society and

had opted for said Plot No.2.

d) Though, in terms of seniority, she was entitled to be allotted

Plot  No.2,  the  Secretary  of  the  Society  had  allotted  said  Plot

wrongly and illegally to the Appellant.   

She claimed following reliefs:-

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

(c) prohibit  the  opponents  permanently  from allotting  Plot  No.2  in  Scheme No.2  at  Khasra No.152/3  of  Mouza  –  Somalwada,  Nagpur  or dealing with the same in any manner with any

CA Nos.7652-7653 of 2019 arising out of SLP(C)Nos.29516-29517 of 2016 Shivkishan    vs.   Sujata Tarachand Makhija and ors.

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other person that the disputant, either themselves or through their servants, agents, attorneys etc.”

5. According  to  the  record,  an  interim  order  was  passed  on

25.04.1989 by the Cooperative Court at Nagpur in said Dispute injuncting

the Society from making any allotment in respect of Plot No.2.  However,

despite  such  interim order,  a  registered  sale  deed was executed  by the

Society in favour of the Appellant in respect of said Plot on 25.10.1989.

Later, in the General Body Meeting of the Society held on 25.03.1990 the

allotment of  Plot  No.2 and the execution of  sale  deed in favour of  the

Appellant was confirmed vide Resolution dated 25.03.1990.

6. Thereafter, by way of amendment paragraphs 5(a), (b) and (c) were

inserted in the Dispute Application and it was prayed that the Resolution

dated 25.03.1990 and the sale deed dated 25.10.1989 be quashed 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 Jagat Restaurant, the disputant submitted her application for membership/allotment of shares with Form  “E”  and  “I”  to  the  Secretary  of  the  Society, thereafter  she  was  allowed  to  give  her  choice  for allotment of plot to her as per the seniority list then prepared on 18-12-1988 wherein her name appears at Sr.  No.5.   Disputant  also  deposited  an  amount  of Rs.105/- on 18-12-1988 as demanded by the Society. However, no receipt was then issued to her.  That the opponent  No.1  Society  has  not  communicated  any decision to the disputant within three months from the date  of  receipt  of  her  application  for  membership submitted by her on 18-12-1988 and as such she has

CA Nos.7652-7653 of 2019 arising out of SLP(C)Nos.29516-29517 of 2016 Shivkishan    vs.   Sujata Tarachand Makhija and ors.

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become  deemed  member  of  the  opponent  No.1 Society and as such she is entitled to claim the plot in dispute.

5.(b) Plot No.2 has been wrongly allotted to opponent No.3  who  claims  to  be  member  of  opponent  No.1 society by respondent on dt. 25-3-1990 passed by the A.G.M. of the opponent No.1 Society superseding the claim of the disputant for the said plot being senior to him.   It  is  now  learnt  that  the  Society  has  also executed sale deed on 25-10-1989 of the said plot in favour of opponent No.3 who is not eligible to claim the said plot.  However,  the date on which the said sale deed was executed is not disclosed by the present Secretary  and  President  of  opponent  No.3  by  the opponent  No.1  Society  vide  Resolution  No.5  dated 25-03-1990 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  the  opponent  No.1 Society  in  favour  of  the  opponent  No.3  be  also declared illegal and it be quashed and set aside with direction  to  the  opponent  No.1  Society  to  allot  the said plot to the disputant and execute proper transfer deed by way of  sale  deed and/or  lease  deed in  her favour and opponent No.1 and 2 be directed to deliver vacant possession of the said plot to the disputant.

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

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charges,  3)  Membership  fee  and  4)  Other miscellaneous 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 by him till this dated.    The  disputant  further  paid  an  amount  of Rs.3000/-  to  the  opponent  No.2  as  Secretary  of opponent  No.1  Society,  by  self  cheque  No.503079 dt.17-9-1987 drawn on Central Bank of India, Branch, Nagpur.  The said cheque was encashed by opponent No.2 and has received the said amount from the Bank, However,  no receipt  is  issued till  this  dated for  the said  payment  made  by  the  disputant.   Disputant further received letters dated 14-10-1988 followed by letter  dated  29-10-1988  from  Secretary  of  the opponent No.1 Society asking her to pay Rs.5000/- as development  charges  to  N.I.T.  Disputant  paid  an amount  of  Rs.5000/-  as  opponent  No.2  by  an intermediatory by withdrawing amount of self cheque No.0738632 dt. 26-10-1988 drawn on Canara Bank, Ramdaspeth, Nagpur.  However, no receipt is issued by opponent No.2 for the said payment received by him.  Similarly disputant paid an amount of Rs.105/- to the opponent No.1 Society in the meeting held on 18-12-1988 at Jagat Restaurant, Nagpur.  No receipt for this payment was also issued to the disputant has paid an amount of Rs.18355/- to the opponent No.1 society under specified heads, as and when demanded by  the  society,  from  time  to  time,  an  amount  of Rs.3000/- was refunded by the Secretary by Cheque No.7674 drawn on Nagari Sahakari Bank, Nagpur and cashed  on  22-03-1982.   Inference  drawn  in preliminary objection with regard to this refund,  by the Secretary on 18-01-1989 in this Court, are neither valid nor correct.”   

7. In the written statement dated 03.05.1991 filed on behalf of the

Society, it was asserted that the husband of the Disputant was the original

depositor;  that  the Disputant  had initially  made a  deposit  of  Rs.3,000/-

which was withdrawn subsequently and as such, she had ceased to be a

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depositor; that she had attended the meeting dated 18.12.1988 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  society  and  as  such  the disputant was allowed to attend the said meeting as a representative of her husband and not as a member. As such the disputant does not acquire any right in the affairs of the society by virtue of mere attendance in the  meeting  held  on  18-12-1988.   It  is  specifically denied that the disputant submitted an application for membership or allotment of shares with Form-E and I to  the  then  Secretary  of  the  Society  the  opponent No.2.  It is stoutly denied that the disputant deposited an  amount  of  Rs.105/-  to  the  society  towards membership.   It  is  further  submitted that  as  on  the date  of  the  said  meeting  the  disputant  had  already ceased to the member of the society and as such she had no right to give her choice for the allotment of plots.   The alleged choice  by  the  disputant  was  on behalf of her husband who admittedly is the depositor of the society.   It is specifically denied that the name of  the  disputant  appears  at  Serial  Number  5  in  the seniority list.   It  is  also submitted that having once known that the disputant has ceased to a member of the society about 6½ years prior to the meeting that was  held  on  18-12-1988,  the  disputant  is  trying  to mislead to  this  Hon’ble Court  by claiming that  she was readmitted as the member of the society by the principle  of  deemed  membership.   At  the  cost  of repetition, it is denied that the disputant deposited an amount of Rs.105/- to the society since the disputant had not applied for membership or rather did not have any right to apply so, the society did not communicate anything to her.  The alleged payment by the disputant to the society was on behalf of her husband and as such no right is carved out in favour of the disputant as a member of the society………….

It is specifically denied that the disputant was sent a letter  dated  9th September,  1983  asking  to  pay Rs.4750/-.  It is also denied that the disputant paid an amount of Rs.4750/- on her behalf.   It  is submitted

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that the said transaction was between the husband of the  disputant  and  the  opponent  Society  and  the disputant has no business with the said transactions. It  is  further  submitted  that  the  accounts  of  the opponent  Society  are  audited  upto  dated  and  all receipts had been passed from time to time which fact is cleared from the audited accounts.”

8. Mr. N.H. Deshpande, the then Secretary of the Society also filed

his written statement on 06.10.1994 stating inter alia:-

“It is submitted that disputant preferred to withdraw her membership  of the Society.  The Society refunded her membership fees and deposit to the disputant vide Cheque  No.7678  for  Rs.3,000/-  drawn  on  Nagpur Mahila Nagrik Sahakari Bank.  The said cheque was encashed  by the disputant on 22.3.1982.  As such the disputant ceased to be the member depositor  of the opponents  society  and claim any plot  much less  to give a preference for it.  Contents of this para so far as they relate to the matter of record are not disputed.  It is specifically denied that the disputant has preferncial claim to get the plot No.2.  It is submitted that the plot No.2 was never allotted to the disputant as she was not the depositor of the society when allotment was made.”

…    

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

…     

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

…    

It  is denied that  the opponent No.1 issued letter on 9.9.1983, asking her to pay Rs.4,750/- within 20 days

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as  alleged.   It  is  denied  that  the  disputant  has deposited  the  alleged  amount  according  to  the direction of this answering opponent.  It is denied that the opponent 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 for the 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/- in case to Opponent No.2, as Secretary of opponent No.1 Society as alleged.”

9. Said Mr. N.H. Deshpande examined himself as witness and in his

examination-in-chief stated as under:-

“As Smt. Makhija, the Plaintiff who had withdrawn her deposit sometime in the year 1982 and hence she did  not  have  any  right  to  remain  present  in  the meeting held on 18.12.1988, as a depositor member. However, the Society allowed her to remain present in the meeting as her husband’s representative.  All the depositor  members  had  given  their  options  for  the plots  except  Plot  Nos.1  and  2.   Smt.  Makhija, however, gave her option for Plot No.2.  At that time, the Society suggested her to give her option for any other plot except Plot Nos.1 and 2 as per the criteria decided earlier.  However, she refused to change her option.”

In his cross-examination the witness however stated:-

“It is true that prior to 18.12.1988, I and Plaintiff were working together 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, under my signature.  A copy of the said Notice is kept at Ext.D-1.  The entire matter in the said Notice is correct.  Now, I have been shown the Ext.D-1.   It  is  a  copy  of  the  proceedings  of  the meeting dated 18.12.1988.  It is correct.  It is true that only 21 plot depositors were present for this meeting. It  is  also  true  that  the  Respondent  No.3  was  not present for this meeting.  If it is the contention that nowhere in the Notice at Ext.D-1, it is mentioned that choice for a plot should be given by depositors except Plot Nos.1 and 2, the contention is correct.

…    

It is true that the said three forms (Ext. O-2 and O-3) were not given in the said meeting held on 18.12.88 by her husband.

…    

If it is the contention that the Respondent No.3 had not paid rs.105/-, vis. Rs.100/- towards cost of shares and  Rs.5/-  as  admission  fee  during  the  meeting  on 18.12.88, the contention so made is correct.  It is true that the petitioner was present for the meeting held at Hotel Jagat on 18.12.88.  If it is the contention that the  Petitioner  had  filled  in  and  signed  the  Share Application Form and Forms ‘E’ and ‘I’ during the meeting on 18.12.88, and had headed over the same to me, the contention is correct.   Similarly, if it  is  the contention that  the Petitioner  had made payment of Rs.105/- to the Society, the said contention is correct.

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

Reply:   I  myself  have  allotted  both  these  plots. However,  I do not remember the date on which the allotment of these two plots was made ….

  If it is the contention that even though the Hon. Court had passed an 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 the Respondent 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 copy of 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 have informed the Petitioner  to  pay an  amount  of  Rs.4,750/-  within  a period  of  20  days  which  is  correct.   If  it  is  the contention of the Plaintiff that the same amount was paid to me by a cheque and that as the Witness says the said amount was paid to me for the Society by cheque, the said cheque was deposited in the Society’s account  which  has  been  cleared,  the  contention  is correct.

…   … …

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

10. After considering the record, the Cooperative Court found that the

Disputant  had  proved  that  she  had  paid  a  sum  of  Rs.4,750/-  to  the

Secretary  of  the  Society;  that  she  had  handed  over  the  membership

application Forms ‘E’ & ‘I’ and requisite fees to the then Secretary of the

Society in the meeting dated 18.12.1988 but the Disputant could not claim

to be the Member or deemed Member of the Society and that she was not

entitled  to  any  relief  as  prayed  for.   However,  the  Cooperative  Court

observed that her husband was entitled to get sale deed executed in respect

of  Plot  No.26 after  getting  all  the  formalities  completed.   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 2004 in the

Cooperative Appellate Court, Nagpur, under Section 97 of the Act.  The

Cooperative  Appellate  Court  considered  the  rival  submissions  and

observed:-

“(11) Admittedly the meeting of the Depositors dated 8-12-88 is the first meeting after the layout plan was sanctioned  by  the  NIT  on  1-12-88.   There  is  no document  to  show  that  before  18-12-88  that  some plots were reserved for the senior members or for the special category of the members.  This being the first meeting of the depositors it was not possible that the plot No.2 was already allotted to some other depositor members.   When  the  disputant  had  exercised  her option for plot No.2 also it cannot be said that nobody was interested for the plot No.2” as mentioned in the minute of the meeting dated 18-12-88 Ex-D-11.  I am, therefore,  not  inclined  to  accept  the  case  of  the respondent  society that  plot  No.2 was not available for allotment in the meeting dated 18-12-88.

(12)  It is now to consider whether the disputant was present in the meeting dated 18-12-88 on behalf of her husband.  Admittedly according to the disputant she had  submitted  her  application  for membership/allotment of shares with form “E” & “I” to the secretary of the society and thereafter she was allowed to give her choice for allotment of the plot as per  seniority  list  then  prepared.   She  has  also deposited  the  amount  for  Rs.105/-  on  18-12-88 required  for  membership.   The  then  secretary opponent  No.2  has  deposed  at  Ex.91  and  admitted that the disputant was present in the meeting dated 18- 12-88  and  she  had  submitted  application  for membership for herself with form “E” & “I” and had deposited the amount of Rs.105/- for which no receipt was given to her.  He had not given the receipt to any of the depositors who had submitted their forms for

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membership  on  that  date.   Upon  this  evidence  the learned  trial  court  has  held  that  the  disputant  has proved  her  case  that  she  submitted  her  application along with form “I” & “E” and paid the entrance fee Rs.5/- and share amount of Rs.100/- total Rs.105/- on 18-12-88.  The findings have not been challenged by the opponents by filing the appeal.”

12. It held that since the application for membership was given by the

Disputant on 18.12.1988 and she was not communicated any decision in

respect of her application, by virtue of Section 22 of the Act she became

deemed Member of the Society after the expiry of three months; and on the

other  hand,  the  Appellant  and  certain  other  persons  were  admitted  as

Members of the Society only in the meeting dated 25.03.1990; and as such,

the Disputant was a senior Member of the Society as against the Appellant

and was entitled to Plot No.2 opted by her.  The Cooperative Appellate

Court thus set aside the order dated 31.01.2004 passed by the Cooperative

Court and allowed Dispute No.136 of 1989 with following directions: -

“(4) It is declared that the allotment of plot No.2 in favour  of  opponent  No.3  by Resolution  No.5  dated 25-3-1990 passed in the Annual General Meeting of the opponent No.1 Society and the sale deed dated 25- 10-1989 executed by the opponent No.1 in favour of opponent No.3 in respect of plot No.2 are illegal and hence those are quashed and set aside.

(5) The opponent No.1 society is directed to allot plot No.2  to  the  disputant  in  scheme  No.2  Khasra  No. 152/3  of  mouza-Somalwada,  Nagpur  and  further directed to  execute  the  sale  deed in  respect  of  said plot  No.2  in  favour  of  disputant  on  payment  of remaining amount of cost of the plot giving credit to

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the  amount  deposited  by  her  i.e.  Rs.4750/-  and handover possession of the said plot to her.”

13. The  Appellant  being  aggrieved,  approached  the  High  Court  by

filing Writ Petition No. 1460 of 2006.  While affirming the findings of the

Cooperative Appellate Court, the High Court observed as under:-

“8. In  the  present  case,  it  is  undisputed  that  the society  had  neither  taken  any  decision  nor   had communicated  any  decision  to  the  respondent  no.1 rejecting  her  claim  for  membership  of  the  society. Therefore, as per the deeming fiction, the respondent No.1  became  member  of  the  society  after  three months from the date of application.  The respondent No.1  undisputedly  submitted  her  application  for membership  on  18th December,  1988  and  as  the decision  was  not  taken  by  the  society  within  three months  it  is  to  be  held  that  the  petitioner  became member of the society from 18th March, 1989.  The contention of the society that  the application of the petitioner came to be rejected in the meeting held on 25th March, 1990 cannot be accepted as the petitioner became  member  of  the  society  much  earlier  and therefore,  rejection  of  her  application  seeking membership, on 25th March, 1990 is inconsequential.

…    

It is clear from the pleadings and the evidence on the record that the claim of the respondent No.1 for Plot No.2 has not been considered by the society treating her to be a member of the society w.e.f. 18th March, 1989.  Even if the submissions made on behalf of the petitioner  that  the  option  given  by the  respondent No.1 for plot No.2 on 18th December, 1988 cannot be accepted on the ground she was not the member of the society on that date, it goes unexplained as to why the entitlement of the respondent No.1 for plot No.2 has not  been considered when it  came to be allotted to the petitioner on 25th March, 1990.  The respondent  No.1  acquired  the  membership  of  the society by deeming fiction on 18th March, 1989 i.e. much before 25th March, 1990.

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

14. The High Court, however, found that the Disputant could not have

given option for Plot No.2 on 18.12.1988 as she was not a Member of the

Society on that date; that she acquired the membership rights on and after

18.03.1989;  that  allotment  of  Plot  No.2  to  the  Appellant  was  without

following  proper  procedure  and  was  done  arbitrarily  and  that  after

quashing  the  allotment  it  must  be  left  to  the  Society  to  follow  the

procedure in accordance with law for allotting Plot No.2.   

15. In the premises, the operative part of the order passed by the 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 the petitioner is illegal.

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

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

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

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

16. The aforesaid judgment and order passed by the High Court was

challenged by the Disputant by filing Special Leave Petition (Civil) No.

136  of  2016  which  was  dismissed  by  this  Court  on  15.01.2016  with

following observations2 :-

“We find no ground to interfere.

The  special  leave  petition  is  dismissed. However,  it  goes  without  saying  that  the petitioner may avail the remedy granted by the High Court.  In the event, petitioner is aggrieved by the order of the society, she may approach the High Court in accordance with law.  In case she approaches the  High Court,  the  matter  will  be dealt with expeditiously.”

17. In  this  appeal,  we  heard  Mr.  Anupam  Lal  Das,  learned  Senior

Advocate for the Appellant, Mr. Vinay Navare, learned Senior Advocate

for the Disputant and Mr. Gagan Sanghi, learned Advocate for the Society.

2Order dated 15.01.2016 in SLP(C)No. 136 of 2016 – Sujata Tarachand Makhija vs. Shivkishan and Ors.

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18. It was submitted by Mr. Lal Das, learned Senior Advocate that in

the meeting held on 24.06.1984 all the depositors had submitted that none

of them was interested in two big sized plots admeasuring 5000 square

feet each and that the society could give those plots to persons other than

the depositors.  The Resolution to that effect was as under:-

“(10)  The depositors  told that  nobody among them is interested for such big size of Plot and the society should give it  to the persons other than us who are interested in it.  Resolution to this effect has been passed in the meeting.”

It was further submitted that (i) the husband of the Disputant was

present in the meeting but no grievance or objection was raised either in

said meeting or in subsequent meetings held on 27.08.1985, 28.09.1987

and 16.10.1988; (ii) the Disputant was not a member of the Society and

therefore could not have made any choice and opted for Plot no.2; (iii) the

Appellant was rightly inducted as member of the society and allotted Plot

No.2; (iv) though the decisions of the Society in accepting the application

of the Appellant for membership and allotment of Plot No.2 were ratified

in the General Body Meeting dated 25.03.1990, they would relate back to

18.12.1988 and the Appellant would be senior to the Disputant as member

of the Society; (v) the application of the Disputant seeking membership of

the Society in place of her husband was also rejected in said meeting dated

25.03.1990.   Mr.  Lal  Das,  learned  Senior  Advocate  however  fairly

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accepted that the Appellant was not present in the meeting dated 18.2.1988

and that neither was he invited to attend said meeting nor had he submitted

application form for membership and deposited requisite fees.   

19. Mr.  Vinary  Navare,  learned  Senior  Advocate  for  the  Disputant

submitted that (i) she was the employee of Life Insurance Corporation, not

her  husband;  (ii)  the  Society  was  for  the  employees  of  Life  Insurance

Corporation;  (iii)  as found by the Courts below she had paid a sum of

Rs.4750/- to the Secretary of the Society which was accepted by the then

Secretary  in  his  deposition  though  it  was  stoutly  denied  in  the  written

statement  filed  earlier;  (iv)  she  had  handed  over  the  membership

application Forms ‘E’ & ‘I’ along with requisite fees to the then Secretary

of  the  Society  in  the  meeting  dated  18.12.1988  which  fact  was  also

accepted by the then Secretary; (v) as Depositor of the Society, she was

entitled to claim Plot No.2; (vi) in the meeting dated 18.12.1988 nobody

else had claimed Plot No.2 and as such she had a better claim to said Plot

as against anybody else; (vii) the Appellant was neither a Depositor nor a

member  of  the  Society  and  as  such  could  not  be  allotted  Plot  No.2

disregarding the claim of the Disputant.

20. Mr.  Gagan  Sanghi,  learned  Advocate  appearing  for  the  Society

placed the relevant record for perusal of the Court and submitted that the

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amount of Rs.4750/- which the then Secretary had accepted to have been

received from the Disputant was credited to the account of the Society.

21. At  this  stage,  the  Resolution  dated  18.12.1988  passed  by  the

Society needs to be extracted:-

“The meeting of depositors held on 18/12/88 at 9:30 AM at Jagat Hotel 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 the meeting.   

(3) The  Secretary  briefed  the  depositors  about  the developments in new layout.  The Secretary requested Shri Changde to proceed further with allotment of plot.

(4) The choice of allotment has been called for from every body for 1st pref.  IInd preference and IIIrd preference.   

(5) Accordingly  everybody  gave  the  choice  and  as  per criteria decided earlier by depositors the plot Nos. have been allotted to them.   

(6) But Smt. Makhija who attended the meeting on behalf of Mr. Makhija was interested in plot No.6 only.  She pleaded that  even though the  criteria  is  decided,  the

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said plot No.6 must be allotted to Mr. Makhija.  All the depositors tried to convince her but in vain.  Lastly she gave  choice  under  her  signature  for  plot  No.6  (1st

preference) and plot No.2 second preference.

It was cleared in the meeting that the plots are being allotted as per seniority of depositors hence plot No.6 cannot be allotted to Mr. Makhija.  As plot Nos.1 and 2 were already allotted as nobody was interested in them the question of allotment of Plot No.2 does not arise.

Finally,  Mr.  Changde  declared  the  allotment  as  per criteria and the number of plot before each name have been allotted.  The letter of allotment have also been issued to them.  For the absentees the plot has been allotted as per the seniority from the available one.

(7) The allottee plot  holders were asked to deposit  their share  of  Rs.105/-  with  Society  to  finalize  their membership.

The meeting ended with vote of thanks & dinner.  

Nagpur 18/12/88

   Sd/- Secretary”

22. Before we deal with the rival submissions, an important facet of

the matter whether it was the husband or the Disputant herself who was the

Depositor of the Society needs to be considered.  It is accepted that the

Disputant was an employee of Life Insurance Corporation of India and the

Society was meant principally for such employees.  It was however denied

in the pleadings that she was a Depositor and it was submitted that she had

withdrawn the amount of Rs.3000/- which she had earlier deposited and

had thus lost the status of being a Depositor.  The then Secretary of the

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Society, when confronted with the documents however had to accept that

he had received a sum of Rs.4750/- from the Disputant.  He also accepted

that  she  had  attended  the  meeting  on  18.12.1988,  had  submitted  an

application form and deposited the requisite fees.  Though it was tried to

project that it was her husband who was the Depositor and the Disputant

had attended the meeting as a representative of the husband, in the face of

the admitted position that  she had deposited Rs.4750/-  and the findings

rendered by the Courts below, it has to be concluded that the Disputant was

a Depositor of the Society and like all other Depositors was entitled to and

had attended the meeting dated 18.12.1988 in her own right.   

It is significant to note that at no stage the husband of the Disputant

claimed that he was the Depositor in his own right and entitled to allotment

of any Plot.  Further, it is not the case of the Disputant and her husband

that over and above the entitlement of the Disputant, her husband is also

entitled to an additional Plot.  The submission has always been that there

was only one entitlement, in exercise of which the option was given for

Plot No.2.

23. 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  the  relevant  meeting  in  her  own  right  or  as  a

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representative of her husband.  The fact of the matter is,  an option was

exercised in favour of Plot No.2 and the issue is whether such option ought

to have been allowed and accepted or not.  It may be stated here that the

communications addressed by the Society were, normally in printed format

where the name of the addressee would be written after the printed prefixes

“Mr./Mrs.” and many such communications were addressed to “Mr./Mrs.

Makhija”.  The record also shows that some meetings were attended by the

Disputant while some were attended by her husband.  But, considering the

facts that the Disputant was an employee of Life Insurance Corporation of

India and had deposited Rs.4,750/- as stated above, her status was clearly

that of a Depositor.   

24. It is a matter of record that the Depositors had collectively raised

funds with the help of which, the consideration for purchase of the land

over  which  the  layout  was  to  be  formed,  could  be  arranged.   All  the

required and incidental expenses thus came from the funds raised by the

Depositors  and  to  that  extent  the  Disputant  had  definitely  made  her

contribution.   The money deposited by all  the Depositors  including the

Disputant had thus helped the Society to have the requisite land whereafter

the Plots could be carved and allotted to the concerned members.  On the

other hand, at no stage the Appellant had made any such contribution.

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25. It is accepted that the Appellant was neither present in the meeting

dated 18.12.1988 nor had he submitted any application along with requisite

fees.  It  is  also accepted that he had not deposited anything by way of

deposit with the Society before or on 18.12.1988, with the help of which

the land could be purchased by the Society.  It is true that the tenor of the

Resolution passed by the depositors on 24.06.1984 shows that no depositor

was willing to take a bigger Plot but that resolution was passed in the year

1984 and it was four years thereafter that the day had arrived for exercise

of choices or options.  For the employees of Life Insurance Corporation it

may be that the Depositors at an earlier stage were not in a position to

arrange requisite funds and if the Society had to depend upon funding from

an outsider,  on  the  strength  of  such  resolution,  the  Society  could  have

garnered the requisite finances from an outsider.   But the facts on record

disclose that no such funding from any outsider was required to arrange the

requisite finance towards consideration for purchase of land.  If no outsider

had contributed in any manner there is  no reason why a Plot  could be

reserved for such an outsider disregarding the claim of a Depositor with

the help of whose money the Society had reached the stage where the Plots

could be allotted to the concerned.  In a situation where none of the other

Depositors had even made a claim with respect to Plot No.2 and if  the

Disputant  had exercised such option,  the Plot  had to  be allotted  to  the

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Disputant.    No outsider  could  have had a  better  claim as  against  any

Depositor as regards to that Plot.

26. It is also a matter of record that as on 18.12.1988, the Appellant

had not even submitted his application form for membership whereas all

the Depositors  including the Disputant  had submitted such forms along

with requisite fees for membership.  Even on this count, the claim of the

Disputant stands on a better footing as against the Appellant.

27. Further, though the Resolution dated 18.12.1988 records, “As Plot

Nos. 1 and 2 were already allotted as nobody was interested in them, the

question of allotment of Plot No.2 does not arise”, it was accepted by the

then Secretary in his cross-examination that:-

a) the Appellant had not paid any amount towards the cost of

shares of the Society and admission fee towards membership

of the Society at any time before or on 18.12.1988.

b) the  notice  calling  the  meeting  dated  18.12.1988  had  not

mentioned that choice to be exercised by the Depositors was

restricted to plots other than Plot Nos. 1 and 2.

It was also accepted by the learned counsel for the Appellant that

neither any invitation was received by the Appellant to attend the meeting

nor did the Appellant attend the meeting and no payment was made by the

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Appellant before 18.12.1988.  No document has been produced or relied

upon to say that there was any allotment of Plot Nos.1 and 2 in favour of

anybody before the meeting was actually held on 18.12.1988.   

28. In the circumstances, it must be held that the assertion so made in

the Resolution was completely incorrect and against the record.  The then

Secretary accepted in his deposition that he himself had allotted these two

plots but could not give the date when such allotment was made.  In any

case, it is accepted by the Appellant that no such allotment was done at any

time before 18.12.1988.

29. As on the date when the sale deed was executed on 25.10.1989 by

the Society in favour of the Appellant,  there was an interim order passed

by the Cooperative Court at Nagpur on 25.04.1989 injuncting the Society

from making any allotment of Plot No.2.  The then Secretary accepted in

his cross-examination that such allotment and execution of sale deed was

done in spite of the order of injunction.   For persons who had clearly

violated  the  order  of  injunction,  no  sympathetic  consideration  can  be

extended, nor any equity can be found in favour of such persons.  It is also

apparent that the execution of the sale deed was even before the Resolution

was passed in the meeting held by the Society on 25.03.1990 regarding

allotment of Plot No.2 in favour of the Appellant.

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30. In the circumstances, the conclusions drawn by the High Court that

the allotment of Plot No.2 in favour of the Appellant was illegal and that

the Resolution passed by the Society in its meeting dated 25.03.1990 and

the sale deed executed by the Society on 25.04.1989 were required to be

quashed, are absolutely correct and fully justified.

31. As regards other conclusions drawn by the High Court, we need

not say anything as the Petition for Special Leave to Appeal filed by the

Disputant  was  disposed  of  by  this  Court  on  15.01.2016  with  the

observations as quoted hereinabove.   

32. We, however, do conclude that the Disputant was a Depositor of

the Society; that she was entitled to attend the meeting dated 18.12.1988 in

her own right; that she had preferred requisite application for membership

and had paid requisite fees on 18.12.1988 itself; that she had opted for Plot

No.2 and as on that date there was nobody else apart from the Disputant

who opted for said Plot No.2.   

33. These  aspects  of  the  matter  shall  be  taken  into  account  by  the

concerned authorities while acting in terms of direction (v) issued by the

High  Court  which  are  quoted  by  us  in  para  15  hereinabove  and  the

allotment shall be restricted to those who had exercised their option as on

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18.12.1988 and were not otherwise allotted any plot and had not accepted

such allotment.   

34. With  the  aforesaid  directions  the  appeals  stand  dismissed.   No

order as to costs.

………………………..J. [Uday Umesh Lalit]

………………………..J. [Vineet Saran]

New Delhi; September 27, 2019.