Case Note & Summary
The petitioner, R.N.A. Classic CHS Ltd, a cooperative housing society, filed four writ petitions challenging orders passed by the Deputy Registrar and Divisional Joint Registrar under the Maharashtra Cooperative Societies Act, 1960. The respondent flat purchasers, Mrs. Tina Agarwal, Mrs. Monisha Jain, and others, had purchased flats from the builder/promoter. The promoter transferred shares of the society to the flat purchasers. The society refused to register the transfer of shares and admit the flat purchasers as members. The Deputy Registrar and Divisional Joint Registrar held that the transfer of shares was valid and directed the society to register the transfer and admit the flat purchasers as members. The society challenged these orders. The High Court held that the transfer of shares by the promoter to flat purchasers is valid under Section 22 of the Maharashtra Cooperative Societies Act, 1960 and Bye-law 27 of the Model Bye-laws. The court observed that the society cannot refuse to register the transfer of shares to flat purchasers who are entitled to membership as owners of flats. The court dismissed the writ petitions, upholding the orders of the Deputy Registrar and Divisional Joint Registrar.
Headnote
A) Cooperative Law - Transfer of Shares - Validity - Transfer of shares by promoter to flat purchasers is valid under Section 22 of Maharashtra Cooperative Societies Act, 1960 and Bye-law 27 of Model Bye-laws - The society cannot refuse to register transfer of shares to flat purchasers who are entitled to membership as owners of flats. (Paras 1-25) B) Cooperative Law - Membership - Entitlement - Flat purchasers are entitled to membership of the society as they are owners of flats - The society cannot deny membership to flat purchasers on the ground that the promoter transferred shares without society's approval. (Paras 1-25)
Issue of Consideration
Whether the transfer of shares by the promoter to flat purchasers is valid and whether the society can refuse to register such transfer.
Final Decision
The High Court dismissed the writ petitions, upholding the orders of the Deputy Registrar and Divisional Joint Registrar directing the society to register the transfer of shares and admit the flat purchasers as members.
Law Points
- Transfer of shares by promoter to flat purchasers is valid
- Transfer of shares does not require prior approval of society if bye-laws permit
- Society cannot refuse transfer of shares to flat purchasers
- Section 22 of Maharashtra Cooperative Societies Act
- 1960
- Bye-law 27 of Model Bye-laws
