Case Note & Summary
The petitioner, Smt. Siddamma, aged 75, is the wife of late S.K. Narasimhaiah and a member of Bhavani Housing Co-operative Society Limited (respondent No.1). She held shares in the society and was allotted a site. Without her knowledge or consent, the society transferred her shares to respondent No.2, Smt. S. Nagarathna, and subsequently a sale deed was executed in favour of respondent No.2. The Additional Registrar of Co-operative Societies (respondent No.5) passed an order dated 11.4.2014 under Section 70 of the Karnataka Co-operative Societies Act, 1959, approving the transfer. The petitioner challenged the Registrar's order, the sale deed dated 14.8.2012, and a subsequent document dated 18.3.2015. The court found that the Registrar passed the order without issuing any notice or hearing the petitioner, violating principles of natural justice. Additionally, the transfer of shares was not in accordance with the society's bye-laws. The court quashed the Registrar's order and held that the sale deed and subsequent document were nullities and not binding on the petitioner. The writ petitions were allowed.
Headnote
A) Co-operative Law - Natural Justice - Right to be Heard - Karnataka Co-operative Societies Act, 1959, Section 70 - The Additional Registrar passed an order under Section 70 without issuing notice or hearing the petitioner, who was a member of the society and whose shares were transferred without her consent. The court held that the order was passed in gross violation of principles of natural justice and quashed the same. (Paras 1-10) B) Co-operative Law - Transfer of Shares - Bye-laws - Karnataka Co-operative Societies Act, 1959 - The transfer of shares of the petitioner by the society in favour of the second respondent was done without following the procedure prescribed under the bye-laws of the society. The court held that such transfer was illegal and void. (Paras 1-10) C) Property Law - Sale Deed - Nullity - Transfer of Property Act, 1882 - The sale deed executed in favour of the second respondent based on the illegal transfer of shares and the Registrar's order was held to be a nullity and not binding on the petitioner. (Paras 1-10)
Issue of Consideration
Whether the order passed by the Additional Registrar of Co-operative Societies dated 11.4.2014 and the consequent sale deed dated 14.8.2012 and the document dated 18.3.2015 are liable to be quashed on the ground of violation of principles of natural justice and non-compliance with the bye-laws of the society.
Final Decision
The writ petitions are allowed. The impugned order dated 11.4.2014 passed by the fifth respondent is quashed. Consequently, the sale deed dated 14.8.2012 and the document dated 18.3.2015 are held to be nullities and not binding on the petitioner.
Law Points
- Natural justice
- Right to be heard
- Co-operative society bye-laws
- Transfer of shares
- Sale of property
- Writ jurisdiction under Articles 226 and 227
