"It Is Impermissible For Co-operative Societies To Deny Membership To Single Women, Members of Particular Community, People Who Eat Particular Food": Supreme Court

The facts, as recorded in the impugned order of the High Court, are that the petitioner is a Co-operative Housing Society registered under the MCS Act. Respondent no.1 is a purchaser of flat no.1 situated on the first floor of the petitioner's premises known as "Punam" situated at Malabar Hill Division, Nepean Sea Road, Mumbai along with a covered garage below the children's play area. Respondent no.2 is an Associate Member along with respondent no.1. Respondent no.1 purchased the said flat under a registered Deed of Transfer dated 30.5.2007 executed by the erstwhile owners of the flat. After the sale was effected in favour of respondent no.1, it appears that the petitioner-society obstructed the entry of respondent no.1 to the flat and asserted that the sale of the said flat, in favour of respondent no.1 was illegal as 'no objection' or 'written consent' was not obtained from the petitioner. Thereafter, respondent no.1 by an application dated 4.3.2008 applied to the Secretary of the petitioner society for transfer of shares nos. 1 to 5 qua the said flat in favour of respondent no.1. All the necessary documents/prescribed forms, to effect transfer of the shares, along with the necessary fees were submitted by respondent no.1 to the petitioner. The Secretary of the petitioner by his letter dated 31.5.2008 informed respondent no.1 that the petitioner cannot accept respondent no.1 as a member, as respondent no.1 was claiming rights over the open space/garden. In the said letter, the Secretary of the petitioner recorded that according to the petitioner, the original owner had purchased the said flat having an area of 2050 sq.feet, and respondent no.1 did not have any right to the open space. It was recorded that respondent no.1 had adopted strong-arm tactics to use, the open space which had caused inconvenience and hardship to the members of the society. For these reasons, it was recorded that the petitioner-society cannot admit respondent no.1 as its member and rejected respondent no. 1's application, for transfer of the share certificate.

In the impugned order, the High Court observed, "A reading of the above letter of the petitioner, clearly goes to show that the dispute between the petitioner and respondent no. 1 is in regard to the open space and garden, which according to the petitioner is not the entitlement of respondent no.1. On the other hand, respondent no. 1 appears to have refuted the petitioner's assertion of any excess area being in possession of respondent no. 1 and he asserts that the area as specified in the agreement under which he has purchased the premises from the Bhatias is in his possession. It, however, needs to be observed, that the petitioner in no manner has disputed the execution of the agreement/Deed of Transfer in favour of the respondent no.1 by the erstwhile owners. The petitioner has also not asserted that the transfer application of respondent no.1 was not in compliance with the bye laws of the petitioner or provisions of the MCS Act or Rules. It thus needs to be observed, that the reasons as recorded in the said letter of the petitioner in rejecting respondent no.1's membership application were totally extraneous to the requirements of the provisions of Section 23 and ex facie, on these reasons, application for transfer of the shares (membership) in favour of respondent no. 1 could not have been rejected."

The High Court further ruled, "Thus, a society asserting rights on premises adjoining to a flat cannot deny membership to a person who had appropriately and adhering to the rules had applied for membership. Once there was a registered agreement and it was not declared to be illegal by competent court the society cannot reject the membership application and refuse to transfer the shares. The above discussion would make it clear that the contentions as raised on behalf of the petitioner are wholly un-tenable. The impugned orders have recorded proper and appropriate reasons within the parameters of law, necessary for the authorities to exercise jurisdiction under section 23 of the MCS Act. In the facts and circumstances, there were sufficient reasons and materials for the authorities below, to conclude that respondent no. 1 was required to be admitted as a member of the petitioner society and consequently to direct the petitioner-society to admit respondent no.1 as its member by transferring the share certificates in favour of respondent no.1."

"The other contentions as urged on behalf of the petitioner that there is a dispute in regard to the open space and garden and hence membership cannot be conferred on respondent no. 1 is also un- tenable in view of the clear provisions of law and as laid down in the decisions of this Court as discussed above. The petitioner's assertion is totally extraneous to the basic requirements for the applicability of section 23 of the Act. Moreover, such contention as urged on behalf of the petitioner is against the provisions of section 23 of the Act as also the interpretation of these provisions in the decision of this Court... None of the grounds as set out in the petition makes out any case for interference in this petition", the High Court had held.