Case Note & Summary
The petitioners, five members of Jal Ratan Deep CHS Ltd., a cooperative housing society in Mumbai, filed a writ petition under Article 226 of the Constitution of India seeking a direction to the respondents to register the transfer of shares in their names and to issue share certificates. The petitioners had acquired shares through valid transfers from the original allottees, but the managing committee of the society failed to register the transfers and issue share certificates despite compliance with the society's bye-laws and the Maharashtra Cooperative Societies Act, 1960. The petitioners contended that the inaction of the managing committee was arbitrary and violative of their rights as members. The respondents, including the State of Maharashtra, the Deputy Registrar of Cooperative Societies, and the Divisional Joint Registrar, argued that the society had not complied with certain procedural requirements. The court, after examining the bye-laws and the provisions of the Act, held that the managing committee is bound to register the transfer of shares and issue share certificates once the transfer is in accordance with the bye-laws. The court directed the respondents to complete the registration and issuance within a specified period. The judgment reinforces the principle that bye-laws of a cooperative society have statutory force and must be adhered to by the managing committee.
Headnote
A) Cooperative Societies - Transfer of Shares - Registration of Transfer - Section 22 of Maharashtra Cooperative Societies Act, 1960 - The managing committee of a cooperative housing society is duty-bound to register the transfer of shares and issue share certificates to the transferee members when the transfer is in accordance with the society's bye-laws and the Act. Failure to do so amounts to a violation of the statutory rights of the members. (Paras 1-10) B) Cooperative Societies - Bye-laws - Binding Nature - The bye-laws of a cooperative society have the force of law and are binding on the society and its members. The managing committee cannot refuse to register a transfer of shares on grounds not specified in the bye-laws or the Act. (Paras 1-10) C) Cooperative Societies - Issuance of Share Certificate - Mandatory Duty - Upon registration of transfer, the society is obligated to issue a share certificate to the transferee. Delay or refusal to issue share certificate without valid cause is arbitrary and illegal. (Paras 1-10)
Issue of Consideration
Whether the managing committee of a cooperative housing society is bound to register the transfer of shares and issue share certificates to the transferee members upon compliance with the society's bye-laws and the Maharashtra Cooperative Societies Act, 1960.
Final Decision
The court allowed the writ petition and directed the respondents to register the transfer of shares in the names of the petitioners and to issue share certificates within a specified period.
Law Points
- Transfer of shares in cooperative housing society
- Registration of transfer
- Issuance of share certificate
- Bye-laws of cooperative society
- Section 22 of Maharashtra Cooperative Societies Act
- 1960
- Right of member to transfer shares
- Duty of managing committee to register transfer
