Case Note & Summary
The petitioner, M/s. Padmarag Co-operative Housing Society Ltd., challenged an order dated 9th July 2002 passed by the Divisional Joint Registrar (Appeals), which allowed an appeal filed by respondent no.4, a member of the society, against her expulsion. The society was registered under the Maharashtra Co-operative Societies Act, 1960. It purchased a plot of land on 17th October 1984 for constructing flats for its members. Construction reached plinth level but was halted due to disputes over the plot area and right of way claimed by strangers. To fund litigation, the society passed a resolution on 23rd March 1994 demanding Rs.5,000 from each member. Respondent no.4 failed to pay despite multiple reminders. Additionally, the society learned that respondent no.4 had acquired another residential flat, making her ineligible for membership. The society issued a show-cause notice and, after considering her reply, expelled her. The Divisional Joint Registrar set aside the expulsion, holding that the society had not followed proper procedure. The High Court examined the facts and found that the society had given adequate opportunity to respondent no.4 to pay and to show cause. The court held that non-payment of the demanded sum and acquisition of another residential flat were valid grounds for expulsion under the Act. The court also found that principles of natural justice were complied with. Consequently, the High Court allowed the writ petition, set aside the order of the Divisional Joint Registrar, and restored the society's resolution expelling respondent no.4.
Headnote
A) Co-operative Law - Expulsion of Member - Non-Payment of Dues - Section 35 Maharashtra Co-operative Societies Act, 1960 - The society resolved to call Rs.5,000 from each member for litigation expenses; member failed to pay despite reminders - Held that non-payment justified expulsion under the Act (Paras 2-4). B) Co-operative Law - Expulsion of Member - Acquisition of Another Flat - Section 35 Maharashtra Co-operative Societies Act, 1960 - Member acquired another residential flat, making her ineligible for membership - Held that acquisition of another residential premises is a valid ground for expulsion (Paras 5-6). C) Natural Justice - Opportunity of Hearing - Expulsion Proceedings - The society gave member opportunity to show cause and considered her reply before expelling her - Held that principles of natural justice were complied with (Paras 7-8).
Issue of Consideration
Whether the expulsion of a member from a co-operative housing society for non-payment of a demanded sum and acquisition of another residential flat is valid, and whether the principles of natural justice were violated.
Final Decision
The High Court allowed the writ petition, set aside the order of the Divisional Joint Registrar dated 9th July 2002, and restored the resolution of the petitioner society expelling respondent no.4.
Law Points
- Co-operative society can expel member for non-payment of dues
- Member acquiring another residential flat loses eligibility for membership
- Natural justice requires opportunity of hearing before expulsion
- Section 35 of Maharashtra Co-operative Societies Act
- 1960
