Case Note & Summary
The petitioner, Hirabai Verma, was a member of the MahaLaxmi Cooperative Housing Society (respondent no. 1). The society was formed to operate housing schemes for its members. In 1979, the society allotted Flat No. 8 to the petitioner, and she paid a total of Rs. 39,871/- towards the price. The society intended to help its members obtain housing loans from the Maharashtra Cooperative Housing Finance Corporation. For this purpose, the society required members to submit documents proving their unearned income, including income tax assessment orders. The petitioner was asked to either submit a copy of her income tax assessment order or deposit Rs. 6000/- in lieu thereof. The petitioner claimed her income was below the taxable limit and thus she could not provide such documents. The society did not accept this explanation and, by a resolution, cancelled the allotment and forfeited the amount paid. The petitioner filed a dispute under Section 91 of the Maharashtra Cooperative Societies Act, 1960 before the Cooperative Court. The Cooperative Court dismissed the dispute and directed the society to refund Rs. 33,871/- with interest at 18% per annum from 15.2.1980. The society appealed, and the Cooperative Appellate Court set aside the refund order and confirmed the forfeiture. The petitioner then filed the present writ petition challenging both orders. The High Court examined the facts and found that the petitioner had failed to comply with the society's reasonable requirement for loan processing. The court noted that the society had given the petitioner several opportunities to comply, but she did not. The court held that the society's action was justified and that the forfeiture was in accordance with the bye-laws. The court also rejected the petitioner's argument of violation of natural justice, stating that she was aware of the consequences of non-compliance. The High Court dismissed the writ petition, upholding the orders of the cooperative courts.
Headnote
A) Cooperative Law - Housing Society - Forfeiture of Shares - Section 91 Maharashtra Cooperative Societies Act, 1960 - The petitioner, a member of a housing society, failed to comply with the society's requirement to submit income tax documents or deposit Rs. 6000/- for loan processing. The society cancelled the allotment and forfeited the amount paid. The Cooperative Court and Appellate Court dismissed the dispute. Held that the society's action was justified as the petitioner did not fulfill the conditions for loan assistance, and the forfeiture was in accordance with the society's bye-laws. (Paras 1-10) B) Cooperative Law - Natural Justice - Section 91 Maharashtra Cooperative Societies Act, 1960 - The petitioner argued that the society did not give her an opportunity of being heard before forfeiting her share money. However, the court found that the petitioner was given ample opportunity to comply with the requirements and was aware of the consequences. Held that there was no violation of natural justice as the petitioner was repeatedly called upon to comply. (Paras 5-8)
Issue of Consideration
Whether the forfeiture of the petitioner's share money and cancellation of flat allotment by the society was valid and whether the cooperative courts erred in dismissing the dispute.
Final Decision
The High Court dismissed the writ petition, upholding the orders of the Cooperative Appellate Court and the Cooperative Court.
Law Points
- Cooperative Society
- Forfeiture of Shares
- Section 91 Maharashtra Cooperative Societies Act
- 1960
- Natural Justice
- Breach of Contract
