J M CO OP HOUSING SOCY LTD Vs. ZENITH CHEMICAL WORKS PVT LTD

JUDGEMENT

(1.) THESE petitions under Article 226 of the Constitution take exception to an order passed by the then Minister of State for Agriculture and Co-operation - being respondent No. 2 to the petitions - purporting to be in exercise of his powers under Section 154 of the Maharashtra Co-operative Societies Act, 1960 - hereinafter referred to as the "act".

(2.) BUILDING known as 'jaya Mahal' at French Bridge, 45, Atmaram Rangnekar Marg. Bombay 400 007, belonged to Khimji Chaturbhuj and contain others as joint owners. The building consisted of about six storeys and the ground floor was in the occupation of the first respondents to the petitions - hereinafter referred to as 'zenith Chemicals' and 'poona Automobiles' respectively. Zenith Chemicals were in occupation of five shops covered by two separate rent receipts. Poona Automobiles occupied shop No. 6 which was divided by them - one portion being sublet to Dharmatar Automobiles. The upper storeys were in the occupation of the residential tenants and these tenants decided to band together into a housing co-operative society for the acquisition and maintenance of the building. All the occupants of Zenith Chemicals and Poona Automobiles -- included attended meetings of the proposed society and minutes of the meetings were recorded. Minutes of 3-6-1978 show that Zenith Chemicals and Poona Automobiles were represented by their concerned representatives on that day. The recitals relating to Zenith Chemicals and Poona Automibiles read as follows :-"new members were requested to enrol themselves in the Society as the member and submit their consent letter duly completed, along with their contribution. . Mr. Kantilal Shanghani of M/s. Poona Automibiles. . . . and Mr. Rambhai G. Patel of M/s. Zenith Chemical Works (P.) Ltd. have consented orally to become members of the Society. Minutes of 17-6-1978 show that representatives of Zenith Chemicals and Poona Automobiles were again present and in fact both of them would be attending the Federation office for adopting the proceedings for registration. An application for registration of the proposed society was given on 14-8-1978 and the said application does not contain the names of the authorised representatives of Zenith Chemicals as also Poona Automobiles. In due course, excluding the two concerns and some tenants of the building, the rest succeeded in obtaining registration of a housing co-operative society and the said Society in due course purchased the property from the erstwhile owners. The Chief Promoter on 29/01/1979 addressed a communication to Zenith Chemicals as also Poona Automobiles. This communication to the extent relevant recited -

(3.) THE details of what transpired have been set out in the preceding paragraphs. The occupants of the Jaya Mahal Building had decided to band together into a housing cooperative society and acquire membership of the building from the erstwhile owners. For this purpose the first meeting was held on 13/03/1978. The Director of the Zenith Chemicals was addressed a letter on 18/05/1978 under the signature of the chief promoter of the proposed society. It was made clear in this communication that the occupants would have to pay 150 months' rent towards their share of the price for acquiring the building. The first instalment was to consist of 15 months' rent and Zenith Chemicals were informed that most of the tenants had already paid this first instalment. The Zenith Chemicals were invited to send their consent letter to become a member and also contribute Rs. 510. 00 representing membership fee. They were informed that the second instalment which would represent 1/3rd of the balance would be due very soon and were asked to pay the same at an early date. On 3-6-1978 a meeting was held and it was attended by M/ s. R. G. Patel and K. N. Shanghani representing Zenith Chemicals and Poona Automobiles. Again, a request was made that new members enrol themselves as members in the Society and submit their consent letters duly completed along with their contribution. M/s. Patel and Sanghani on behalf of their concerns expressed an oral consent to the proposal to become members, but stopped there. They did not take follow up action. In the meeting which took place on 17-6-1978 and which was attended by M/s. Patel and Shanghani it was decided that they would be attending the Federation office for taking part in the proceedings for registration of the proposed society. The Federation office referred to in the minutes of 17-6-1978 is the office of the Apex Body of co-operative societies. M/s. Patel and Shanghani did not keep the tryst with the result that the application for registration of the Society did not bear their signatures. The registration could not be indefinitely delayed and therefore it took place without Zenith Chemicals and Poona Automobiles being a party to the acquisition of the building from the erstwhile owners. In spite of this, on 29/01/1979, the Chief Promoter conveyed to Zenith Chemicals and Poona Automobiles his readiness to enrol them as members on their paying 150 months' rent to be sent along with their consent letters. The first time this communication evoked a reply was in late July, 1979. By this time the Poona Automobiles had been served with a notice claiming that it had rendered itself liable for ejectment under the Rent Act. With a view to counter this move of the Society, Zenith Chemicals and Poona Automobiles invented a fictitious intervening event. This was "subsequent talks". What those talks were, with whom they took place and other details, were all left delightfully vague. Naturally, the Society refused to be taken in and returned the remittances sent. In the appeal before the Deputy Registrar the stand taken by the appellants i. e. the first respondents in these petitions, was that contrary to the legitimate share of the price for acquiring the building they had been asked to pay 200 times rent by the Society which demand they refused to comply with and therefore did not join the other occupants of the building at the initial stages. They had been were always willing to pay their share of the purchase money equally 150 times the monthly rent. From the reasons given by the Deputy Registrar it does not appear that this patent falsehood was accepted by him. In fact it may not have been even seriously pressed before the Deputy Registrar. The Deputy Registrar took an unusual view in holding that there was nothing on record to show that Zenith Chemicals and Poona Automobiles had refused to become members of the proposed society. Thus conclusion is proved wrong in the face of the factual position, which was, that despite oral assents the concerns had done nothing to (i) apply for membership in writing, (ii) furnish letters of consent in writing, (iii) pay the membership fee, (iv) pay the first instalment representing 15 months' rent and (v) give a reply within a reasonable time to the letter sent, to them by the chief promoter on 29-1-1979. The failure of M/s. Shanghani and Patel to be present at the office of the Federation on the appointed day was a clear indication that they either were unwilling to honour the commitment made or did not have the wherewithal to pay their share of the price for the acquisition of the building. I am referred to a circular of the Government indicating the manner in which a refusal or disinclination is to be expressed. This circular is a non-statutory instrument and the specifications contained therein would have directory force. But a refusal or disinclination to join the membership of an acquiring society can be inferred from other circumstances. Here, despite repeated requests to do the needful, Zenith Chemicals and Poona Automobiles refrained from showing the slightest meaningful inclination to become members of the society. Therefore the reliance placed upon the alleged failure of the chief promoter to obtain letters of refusal from M/s. Patel and Shanghani is of no consequence. The second reason given by the Deputy Registrar was that Bye-law 80a did not apply and therefore a refusal based thereon could not be sustained. As pointed out in the revisional order passed by the Divisional Joint Registrar, as long as that bye-law stood it could not be ignored. It was not correct to restrict its operation to societies promoted by builders and contractors. The third reason given by the Deputy Registrar is that the chief promoter of the society had invited Zenith Chemicals and Poona Automobiles to become full members and therefore was precluded from withdrawing that invitation. I really fail to comprehend why the inference of an irreversible option was drawn. The offer made by the chief promoter was in the nature of a concession given to the Zenith Chemicals and Poona Automobiles. The concession had to be availed of within a reasonable period and not at a time of their own choosing. They were aware of the lapse of the offer and it was for this reason that they invented "subsequent talks" to make up a pretext for keeping that offer alive. Petitioner-society rightly refused to view the situation in that manner. Where no time is gives for the acceptance of an offer the law is that acceptance has to be communicated within a reasonable time. The offer could not be kept open indefinitely. Nor could the Zenith Chemicals and Poona Automobiles claim that they had the right to act upon that offer as and when it suited them.