Case Note & Summary
The appellants, who were subsequent purchasers of flats in a housing co-operative society, filed an appeal against the order of the learned Single Judge dismissing their writ petitions seeking membership of the society. The appellants had purchased flats from the original allottees/members of the Samyukta Bharath Housing Co-operative Society Ltd. in May 2006. They applied for membership of the society, but the society refused to admit them as members on the ground that the transfer of shares to non-members was not permissible under the bye-laws of the society. The appellants then filed writ petitions before the High Court, which were dismissed by the learned Single Judge. Aggrieved, they filed the present appeals under Section 4 of the Karnataka High Court Act. The court considered the provisions of the Karnataka Co-operative Societies Act, 1959 and the bye-laws of the society. The court observed that the bye-laws of the society do not contain any provision barring transfer of shares and interest in favor of a non-member. The court held that the subsequent purchaser of a flat in a housing co-operative society is entitled to membership of the society upon application, and the society cannot deny membership arbitrarily. The court set aside the order of the learned Single Judge and allowed the appeals, directing the society to admit the appellants as members within a period of four weeks.
Headnote
A) Co-operative Law - Housing Co-operative Society - Membership - Transfer of Shares - Subsequent Purchaser - The appellants, subsequent purchasers of flats, sought membership of the respondent society. The society refused membership on the ground that the transfer of shares to non-members was not permissible under the bye-laws. The court held that the bye-laws do not prohibit transfer of shares and interest to a non-member, and the subsequent purchaser is entitled to membership upon application. The court set aside the order of the learned Single Judge and allowed the appeals. (Paras 1-10) B) Co-operative Law - Bye-laws - Interpretation - Transfer of Shares - The court interpreted the bye-laws of the society and held that there is no provision in the bye-laws which bars transfer of shares and interest in favor of a non-member. The court relied on the provisions of the Karnataka Co-operative Societies Act, 1959 and the Rules of 1960 to hold that the subsequent purchaser is entitled to membership. (Paras 5-10)
Issue of Consideration
Whether the subsequent purchasers of flats in a housing co-operative society are entitled to membership of the society under the Karnataka Co-operative Societies Act, 1959 and the bye-laws of the society.
Final Decision
The appeals are allowed. The order of the learned Single Judge dated 18.08.2011 in Writ Petition Nos.30934 to 30935/2009 is set aside. The respondent society is directed to admit the appellants as members within a period of four weeks from the date of receipt of a copy of this judgment.
Law Points
- Transfer of shares and interest in a housing co-operative society to a non-member is permissible under the Act and bye-laws
- subsequent purchaser entitled to membership
- bye-laws do not bar transfer to non-members
- membership cannot be denied arbitrarily
