Case Note & Summary
The petitioner, Natrajan Chandran, was a member of the Royal Industrial Co-operative Society Limited and was allotted Gala number C-16. He intended to sell the gala to respondent no.2 firm, and a memorandum of understanding was executed in August 1989 for a consideration of Rs.9 lakhs, payable in three instalments. However, no formal agreement of sale was ever executed, and the transaction was not completed. Respondent no.2 approached respondent no.1 bank for a loan to purchase the gala, and part of the loan was advanced and part of the consideration was paid to the petitioner. There was a controversy regarding whether possession of the gala was delivered to respondent no.2. On 20th June 1997, the petitioner was in possession of the gala and was dispossessed by the bank with the help of a Special Recovery Officer in execution of an award obtained by the bank against respondent no.2. The petitioner filed a writ petition challenging the dispossession. The court considered whether the dispossession without notice to the petitioner was legal. The court held that the possession of a member of a co-operative society cannot be taken without following the procedure under Section 101 of the Maharashtra Co-operative Societies Act, 1960 and Rule 107 of the Maharashtra Co-operative Societies Rules, 1961, which require notice and an opportunity of hearing. The court found that the petitioner was not given any notice before being dispossessed, and the execution of the award without notice was illegal and violative of principles of natural justice. The court allowed the petition and directed the bank to restore possession of the gala to the petitioner within four weeks.
Headnote
A) Co-operative Law - Dispossession of Member - Section 101 Maharashtra Co-operative Societies Act, 1960 - Rule 107 of Maharashtra Co-operative Societies Rules, 1961 - The petitioner, a member of a co-operative society, was dispossessed from his gala by the bank in execution of an award without any notice to him. The court held that the possession of a member of a co-operative society cannot be taken without following the procedure under Section 101 of the MCS Act and Rule 107 of the MCS Rules, which require notice and an opportunity of hearing. The court directed restoration of possession to the petitioner. (Paras 1-6) B) Co-operative Law - Execution of Award - Section 101 Maharashtra Co-operative Societies Act, 1960 - The bank obtained an award against the respondent no.2 firm and in execution, dispossessed the petitioner from the gala. The court held that the petitioner, being a member of the society and not a party to the award, was entitled to notice before being dispossessed. The execution of the award without notice to the petitioner was illegal and violative of principles of natural justice. (Paras 3-6)
Issue of Consideration
Whether the dispossession of the petitioner from the gala by the bank in execution of an award without notice to the petitioner was legal and whether the petitioner is entitled to restoration of possession.
Final Decision
The court allowed the writ petition and directed respondent no.1 bank to restore possession of Gala number C-16 to the petitioner within four weeks from the date of the order.
Law Points
- Writ of certiorari
- Natural justice
- Right to hearing
- Possession without notice
- Co-operative society member rights
- Section 101 MCS Act
- Rule 107 MCS Rules
