MULSHANKER KUNVERJI GOR Vs. JUVANSINHJI SHIVUBHA JADEJA
LAWS(GJH)-1979-9-27
HIGH COURT OF GUJARAT
Decided on September 18,1979

MULSHANKER KUNVERJI GOR Appellant
VERSUS
JUIVANSINHJI SHIVUBHA JADEJA Respondents

JUDGEMENT

S.H.SHETH - (1.) In order to appreciate the question which has been referred to the Full Bench it is necessary to state a few facts. Plot NO. 8 was allotted by Santosh Co-operative Housing Society to one Girish Morarji Mehta. The society constructed houses and the house constructed on plot No. 8 was allotted by the society to Girish. On 16th December 1965 Girish applied to the society for transfer of his shares to Juvansinh Shivubha Jadeja the plaintiff. The society accepted the transfer of the shares and admitted Juvansinh Shivubha Jadeja to its membership. When Girish was occupying the house in question he had let it out to the defendants. Upon transfer of shares by Girish to Juvansinh the plaintiff the latter claimed to recover from the defendants rent in respect of the suit premises. The defendants did not accept Juvansinhs title as a result of which rent remained unpaid from 1st January 1965 to 31st October 1967 Notice of demand was served upon the defendants Rent also remained in arrears thereafter. Thereupon the plaintiff filed against the defenddants the present suit for recovery of possession of the suit premises on the ground of arrears of rent and also claimed decree in respect of arrears of rent. The learned trial Judge upheld the defence raised by the defendants and dismissed the suit. The plaintiff appealed to the District Court. The learned Appellate Judge reversed the finding recorded by the learned trial Judge allowed the appeal set aside the decree of dismissal passed by the learned trial Judge and passed in favour of the plaintiff decree for possession. It is that decree which is challenged by defendants in this Civil Revision Application.
(2.) This Civil Revision Application was in the first instance placed before me It appeared that it raised an important question as to the validity of transfer of the suit premises from Girish to the plaintiff. It was therefore referred to a Division Bench. It came up before the Division Bench consitting of my learned Brother A. N. Surti and M. K. Shah JJ who felt that the question which the civil revision application raised was a question of considerable importance affecting a fairly good section of our society. Therefore they referred to the Full Bench the following question "Whether any registered document is necessary in favour of any transfer for transferring the superstructure standing on the land allotted by any co-operative society in favour of any of its member "? It is under these circumstances that this Civil Revision Application has been placed before the Full Bench for answering the question referred to it.
(3.) It is not in dispute that Girish was the original allottee from Santosh Co-operative Housing Society Ltd. of the super-structure standing on plot No. 8 and that Girish in his turn had transferred his shares in the society along with the suit premises to the plaintiff with the approval of the society. It is not in dispute before us that this transaction was not effected by a registered instrument such as one contemplated by sec. 54 of the Transfer of Property Act. Obviously therefore the provisions of sec. 17 of the Registration Act 1908 were not satisfied. The question therefore which we are required to answer is whether an immovable property allotted by a co-operative housing society to its member can be transferred by the member with the approval of the society to another person without registered instrument of transfer. In order to examine the contention which has been raised before us it is necessary to refer to certain provisions of the Gujarat Co-operative Societies Act 1961 Sec. 30 specifies restrictions on transfer of shares or interest. It provides as follows: "50 Subject to the provisions of sec. 29 and sub-sec. (2) a transfer of or charge on the share or interest of a member in the capital of a society shall be subject to such conditions as may be prescribed. (a) A member shall not transfer any share held by him or his interest in the capital or property of any society or any part thereof unless (b) he has held such share or interest for not less than one year; (c) the Transfer or charge is made to the society or to a member of the society or to a person whose application for membership has been accepted by the society; and (d) the committee has approved such transfer. Sec. 30 makes it abundantly clear that a member of a co-operative housing society to whom the society has allotted a house is not an absolutely free agent to transfer the property allotted to him. In order to enable himself to transfer to another person a house allotted to him it is inter alia necessary that he must have held the share or interest in the capital or property of the society for not less than one year and that with the approval of the Committee of the society such transfer is sought to be made to a member of the society or to a person if he is initially an outsider whose application for membership has been accepted by the society. Sec. 37 is required to be noted for the purpose of discovering that the society is a body corporate with perpetual succession and a common seal and has the power to acquire hold and dispose of property to enter into contracts to institute and defend suits and other legal proceedings and to do all such things as are necessary for the purpose for which it is constituted. It is clear therefore that a co-operative housing society upon its registration becomes a legal person which is distinct from its members. We now turn to sec. 42 which is a very material section and which clinches the issue. It provides as follows : "42 Nothing in clauses (b) and (c) of sub-sec. (1) of sec. 17 of the Indian Registration Act 1908 shall apply (a) to any instrument relating to shares in a society notwithstanding that the assets of the society consist in whole or in part of immovable property; or (b) to any debenture issued by any society and not creating declaring assigning limiting or extinguishing any right title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the society has mortgaged conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or (c) to any endorsement upon or transfer of any debenture issued by any society. Clause (b) and (c) are not relevant for the purpose of this case. So far as clause (a) is concerned it carves out an exception to the rule enunciated in clauses (b) and (c) of sec. 17 of the Registration Act 1918 In order to appreciate the full import of the exception carved out by sec. 42 it is necessary to turn to clauses (b) and (c) of sub-sec. (1) of sec. 17 of the Registration Act 1908 They read as follows : " 17 (1) The following documents shall be registered if the property to which they relate is situate in a district in which and if they have been executed on or after the date on which Act No. XVI of 1864 or the Indian Registration Act 1866 or the Indian Registration Act 1871 or the Indian Registration Act 1877 or this Act came or comes into force namely (a) ... ... ... ... ... ... (b) other non-testamentary instrument which purport or operate to create declare assign limit or extinguish whether in present or in future any right title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property; (c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation declaration assignment limitation or extinction of any such right title or interest; Clauses (b) and (c) in term require compulsory registration of non-testa mentary instruments specified therein. An instrument by which interest in immovable property is transferred by one person to another will certainly fall either under clause (b) or clause (c) of sub-sec. (1) or sec 17 provided the consideration for such transfer is of the value of one hundred rupees or upwards. But for sec. 42 of Gujarat Co-operative Societies Act 1961 Girish could not have transferred the house in question to the plaintiff except under a registered sale deed. That is the combined effect of sec. 54 of the Transfer of Property Act 1938 Sub-sec. (2) of sec. 17 itself carves out a limited exception to the rule specified in clause (b) and clause (c) of sub-sec. (1) of sec. 17. It provides as follows: "(2) Nothing in clause (b) and (c) of sub-sec. (1) applies to (i) any composition deed; or (ii) any instrument relating to shares in a Joint Stock Company notwithstanding that the assets of such Company consists in whole or in part of immovable property; Clause (ii) of sub-sec. (2) of sec. 17 therefore exempts from compulsory registration instruments relating to shares in a joint stock company notwithstanding that the shares of a joint stock company consist in whole or in part of immovable property. This exemption is limited to transfer of shares in a joint stock company and does not extent to transfer of shares in a co-operative society. It is by clause (a) of sec. 42 of Gujarat Co-operative Societies Act 1951 that the exemption from compulsory registration has been extended to transfer of shares in a co-operative society notwithstanding that the assets of the society consist whether or in part of immovable property. When we read clause (ii) of sub sec. (2) of sec. 17 with clause (a) of sec. 42 of Gujarat Co-operative Societies Act 1961 we find that the language used in both is in pari materia. It is clear therefore that the intention therefore that the intention of the Legislature in enacting clause (a) of sec. 42 of Gujarat Co-operative Societies Act 196 is to extend to co operative societies the exemption from compulsory registration extended by clause (ii) of sub-sec. (2) of sec. 17 of the Registration Act 1908 to joint stock companies.;


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