Case Note & Summary
The petitioner, Janardan Daji Naik, was a promoter member of Mahim Causeway Machhimar Co.op.Housing Society Ltd. (Respondent No.1), registered under the Maharashtra Co-operative Societies Act, 1960. On 9th April 1986, an agreement was entered into between the petitioner and Respondent No.2 (Pradeep Laxman Ghivalikar) whereby the petitioner agreed to transfer all his shares and interests in the society to Respondent No.2. An affidavit and application to that effect were executed on 9th and 10th April 1986. The society was registered on 11th June 1987. Respondent No.2 paid Rs.10,000/- towards land contribution. Since the society did not formally admit Respondent No.2 as a member, he filed Appeal No.7 of 1991 under Section 23 of the Act before the Assistant Registrar, who allowed the appeal on 15th October 1992. The society filed Revision Application No.252 of 1992 under Section 154 before the Divisional Joint Registrar. The petitioner intervened and filed an affidavit supporting the revision, alleging that Respondent No.2 had obtained his signatures by fraud and that he never intended to transfer his membership. The revisional authority dismissed the revision on 30th September 1997, without considering the fraud allegations. The petitioner then filed the present writ petition. The High Court held that the revisional authority ought to have considered the allegations of fraud, as fraud vitiates all transactions. The court set aside the revisional order and remanded the matter for fresh consideration, directing the authority to give an opportunity to the parties to lead evidence on the fraud issue.
Headnote
A) Co-operative Law - Membership Transfer - Fraud Allegations - Section 23, Maharashtra Co-operative Societies Act, 1960 - The petitioner alleged that his signatures on the affidavit and application for transfer of membership were obtained by fraud. The revisional authority dismissed the revision without considering these allegations. Held that the revisional authority ought to have considered the fraud allegations and remanded the matter for fresh consideration (Paras 2-6).
Issue of Consideration
Whether the Divisional Joint Registrar was justified in dismissing the revision application without considering the petitioner's allegations of fraud regarding the transfer of membership in a co-operative society.
Final Decision
The High Court allowed the writ petition, set aside the order of the Divisional Joint Registrar dated 30th September 1997, and remanded the matter back to the revisional authority for fresh consideration. The authority was directed to give an opportunity to the parties to lead evidence on the issue of fraud and decide the revision application afresh in accordance with law.
Law Points
- Section 23 of Maharashtra Co-operative Societies Act
- 1960
- Section 154 of Maharashtra Co-operative Societies Act
- Fraud vitiates all transactions
- Revisional authority must consider allegations of fraud
Case Details
2012 LawText (BOM) (01) 26
WRIT PETITION NO. 6343 OF 1997
Mr. Uday Warunjikar for Petitioner, Mr. L.H. Patil for Respondent No.2, Mr. R.M. Patne, AGP for Respondent No.3
1. Mahim Causeway Machhimar Co.op.Housing Society Ltd., 2. Shri Pradeep Laxman Ghivalikar, 3. The Divisional Joint Registrar of Co-operative Societies, Mumbai Division (Appeals), Mumbai
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Nature of Litigation
Writ petition challenging the order of the Divisional Joint Registrar dismissing revision application without considering allegations of fraud in membership transfer.
Remedy Sought
Petitioner sought setting aside of the revisional order and remand for fresh consideration of fraud allegations.
Filing Reason
The petitioner alleged that his signatures on the transfer documents were obtained by fraud and that the revisional authority failed to consider this.
Previous Decisions
Assistant Registrar allowed appeal of Respondent No.2 for membership; Divisional Joint Registrar dismissed revision filed by the society; petitioner intervened in revision.
Issues
Whether the Divisional Joint Registrar erred in dismissing the revision application without considering the petitioner's allegations of fraud.
Whether the revisional authority should have conducted an inquiry into the fraud allegations before deciding the revision.
Submissions/Arguments
Petitioner argued that Respondent No.2 played fraud and obtained his signatures on the affidavit and application for transfer of membership.
Petitioner contended that he never intended to transfer his membership and had offered to refund the amount received from Respondent No.2.
Respondent No.2 opposed the petition, supporting the revisional order.
Ratio Decidendi
Fraud vitiates all transactions, and a revisional authority under Section 154 of the Maharashtra Co-operative Societies Act, 1960 must consider allegations of fraud raised by a party before dismissing a revision application. Failure to do so amounts to a jurisdictional error warranting remand.
Judgment Excerpts
The controversy involved in this petition is very narrow.
It was contended by the Petitioner that the Respondent No.2 allegedly played fraud on him and that Respondent No.2 had allegedly obtained his signature on the affidavit dated 9th April 1986 and application dated 10th April 1986 by playing a fraud.
In my opinion, the revisional authority ought to have considered the allegations of fraud made by the petitioner.
Procedural History
Respondent No.2 filed Appeal No.7 of 1991 under Section 23 of the Maharashtra Co-operative Societies Act, 1960 before the Assistant Registrar, who allowed it on 15th October 1992. Respondent No.1 Society filed Revision Application No.252 of 1992 under Section 154 before the Divisional Joint Registrar. The petitioner intervened. The revisional authority dismissed the revision on 30th September 1997. The petitioner filed the present writ petition on 10th November 1997.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: 23, 154
