MANU/MH/2031/2002

IN THE HIGH COURT OF BOMBAY

Writ Petition NO. 1948 of 1997
Decided On: 30.07.2002
Appellants: Venus Co-op. Housing Society and Ors.
Vs.
Respondent: J.Y. Detwani and Ors.
Hon'ble Judges/Coram:
R.J. Kochar, J.
Counsels:
For Appellant/Petitioner/Plaintiff: G.R. Rege
For Respondents/Defendant: Y.S. Jahagirdar
Subject: Trusts and Societies
Subject: Civil
Acts/Rules/Orders:
Constitution Of India - Article 226; Maharashtra Co-operative
Societies Act, 1960 - Section 72, Maharashtra Co-operative
Societies Act, 1960 - Section 91
Cases Referred:
The State of Punjab vs. Nathu Ram MANU/SC/0019/1961
Disposition:
Petition Dismissed
Industry: Cooperative Societies
Case Note:
Trusts and Societies Flat owners - Maintenance charges
Calculation thereof Petitioner-Society decided to switch
system of charging maintenance charges from flat-wise basis
to flat area basis Resolution challenged by big flat owners
Tribunal directed Society to continue with flat-wise system
Hence, present Petition Whether Society was entitled to change
system of charging maintenance from its flat owners from flat-
wise basis to flat area basis Held, big flat holders were not
getting higher or more services to make them liable to pay
more on basis of area of flat - Services were enjoyed by all
members equally - There was no rational or any reason to
require large flat owners to pay more for service charges -
Resolution was totally unreasonable and arbitrary regardless of
amenities, facilities availed of by members No merit found in
Petition Petition dismissed. [9] and[11]
JUDGMENT
R.J. Kochar, J.
1. The Resolution dated 30th November, 1980 is still hanging to
await the decision in respect of its legality and validity. On that
date the special general meeting of the petitioner cooperative
housing society passed the said resolution to be effective from
1st December, 1980 to switch over from the system of flat-wise
monthly maintenance charge to the system of charging
maintenance as per the area of the flat as specified in the said
resolution. The petitioner society has flats of different sizes i.e.
284 flats of two bed room, kitchen and hall and about 39 flats
are of larger size viz., 4 bed rooms, kitchen and hall. The said
resolution gave rise to a controversy between the smaller flat
holders who are in large majority and larger flat holders who are
in minority. The purpose of passing of such resolution was said
to be to make up the losses sustained by the society on account
of various reasons including defaults in making payment of the
maintenance charges by some of the members of the society.
The minority of the large flat holders challenged the said
resolution and refused to make payment of maintenance
charges as per the area of the flat. They were, however, ready
and willing to abide by the earlier resolution of flat wise
payment. It appears that the managing committee passed its
resolution revising the general maintenance charges for all the
flats on the basis of area of the flats. The aforesaid resolution of
the Managing Committee was finally ratified by the subsequent
general body meeting held on 31st May, 1981. By a circular
dated 1st March, 1981, the managing committee, however,
informed the members the rise in the maintenances charges as
computed on the area of the flats.
2. The disputants who are the respondents in the present
petition filed a dispute under section 91 of the Maharashtra Co-
operative Societies Act, 1960 before the Cooperative Court,
giving challenge to the circular dated 1st March, 1981 of the
managing committee and also to the resolution dated 30th
November, 1980 passed by the special general meeting of the
society. The cooperative court by its order dated 29 February,
1996 declared that the disputants were entitled to pay general
maintenance charges to the society for the flats held by them
not on area wise basis but as on flat wise basis. It also declared
the resolution dated 30th November, 1980 passed at the special
general meeting as invalid and not at all binding on the
disputants. It also declared that the resolution of the managing
committee dated 10th February, 1981 as invalid and not binding
on the disputants. The Cooperative Court consequently
restrained the petitioners and their servants and agents from
implementing the resolution dated 30th November, 1980 and
from recovering general maintenance charges at the rate of
more than the rate that was prevalent prior to 30th November,
1980. The Cooperative Court allowed the dispute as aforesaid
with costs. The Cooperative Court made an award accordingly
on 29th February, 1996. The petitioner society was aggrieved by
the said decision of the cooperative court and therefore, it filed
an appeal before the Maharashtra State Cooperative Appellate
Tribunal, to challenge the said decision. The learned member of
the appellate tribunal by its judgment and order dated 26th
February, 1997 confirmed the said decision. The appellate
tribunal also held that the society had delayed in adopting the
model bye-laws and finally it adopted the same in the year 1996.
Under the said model bye laws a minute provision is made in
respect of the recovery of maintenance and service charges and
other charges payable by the members. It also observed that the
society had acted in a high handed manner against the bigger
flat holders whereby the minorities of bigger flat holders were
discriminated against by the smaller flat owners and, therefore,
they had an absolute right to come before the court of law,
which has power and jurisdiction to interfere with the impugned
resolution which was rightly held by the cooperative court as
invalid. In the opinion of the appellate tribunal, if the members
were given equal amenities, they should be charged equal
maintenance charges as per the model bye laws and directed
the society to refund the excess amount collected from the
bigger flat holders with interest. The petitioners have
approached this court under Article 226 of the Constitution of
India to challenge the said decision of the appellate court.
3. According to Shri Rege, the learned Counsel appearing for the
petitioner society, the general body of the society being the
supreme for the administration of the society had absolute
power and right to decide the question of maintenance payable
by the members. In the meeting held on 30th November, 1980, it
was resolved that the maintenance charges should be levied in
accordance with the area of a flat and not in accordance with
the flat. The Managing Committee had by its circular dated 10th
February, 1981 performed ministerial job of fixing the rates and
the said decision of the managing committee was finally ratified
and approved in the general body meeting held on 31st May,
1981. Shri Rege, further pointed out that the dispute was filed
before the court on 24th May, 1981 before the general body
approved and ratified the decision on 31st May, 1981. He has,
therefore, emphasised the fact that the disputants have not
challenged the said resolution dated 31-5-1981 passed by the
General Body. Shri Rege further relied upon the bye law No.
24(C) of the bye laws governing the working of the society to fix
the rent/rate and according to him under the said the law the
managing committee is empowered to fix the rates. He relied
upon section 72 of the Maharashtra Cooperative Societies Act to
submit that the general body was the supreme and final
authority in the working of every co-operative society. Shri Rege,
therefore, pointed out that the second resolution passed by the
general body on 31-5-1981 was not challenged and the question
whether the resolution dated 30th November, 1980 was arbitrary
or unreasonable, cannot be gone into by the cooperative court
as the general body being the final and supreme authority had
taken that decision, not only once but twice. He also justified the
enhancement of the maintenance charges area-wise as
according to him, the owners of the bigger flats were getting
better and more amenities and facilities than those available to
the small flat owners. Shri Rege pointed out that the appeal
court has not at all dealt with the points urged before him and
has merely concluded the issue in last two paragraphs. Shri
Rege further submitted that many members from the larger flats
have made payment on the area wise basis and that it was only
the present disputants who are challenging the said resolution.
4. Shri Jahagirdar, the learned Counsel for the disputants/
respondents has raised a very serious substantive objection to
the hearing of the present petition on the ground that the
respondent Nos. 1, 15, 16, 18, 19, 22, 23, 26, 27 and 29 have not
been served with rule nisi. Shri Jahagirdar pointed out from the
report of the Sheriff that they were either not found or premises
were found locked or had gone out or had left, as indicated in
the remarks on the packets Shri Jahagirdar submitted that after
the appeal court's order dated 20th March, 2002 to serve the
respondent as reflected in the affidavit of service, out of twelve
respondents three were served and seven packets were returned
with the postal remark "not claimed" and one packet with the
postal remark "left" while in the case of respondent No. 25
(Punjabi), the packet has not come back. Shri Jahagirdar
vehemently submitted that the cause of action against the
society was common and indivisible for a declaration that the
resolution passed by the petitioner society was illegal and
invalid and such declaration was granted and, therefore,
according to the learned Counsel, even if one respondent is not
served, the writ petition must abate in these circumstances. The
learned Counsel has cited the judgment of the Supreme Court in
the case of State of Punjab vs. Nathu Ram reported in
MANU/SC/0019/1961 : A.I.R. 1962 SC 89 in support of the said
contention urged by him. Shri Jahagirdar has very seriously
urged that the petitioners have taken the court for granted and
for a ride. Shri Jahagirdar has drawn my attention to the order
dated 3rd August, 2001 passed by this Court (Dr. Chandrachud,
J) wherein he issued an ultimatum that on the expiry of the
period of three weeks from 3rd August, 2001, the writ petition
shall stand dismissed in the event no steps were taken and
parties were not served with the nisi. Shri Jahagirdar
emphasised the fact that the writ petition was of 1997 and at
the time of admission of the said petition on 16th December,
1997, the petitioner had obtained interim relief in terms of prayer
clause (b) i.e. stay of the order passed by the appellate tribunal.
Since then, the petitioners have failed to serve the rule nisi on
the majority of the respondents. When this fact was brought to
the notice of this court this Court gave the aforesaid ultimatum
as the petition was called out time and again and was adjourned
since rule nisi was not served on all the contesting respondents.
The learned Judge has noted several dates of adjournment only
on that ground as no steps were taken by the petitioners to
serve the rule nisi on the concerned respondents. Shri
Jahagirdar further submitted that by his order dated 12th
September, 2001, again this Court (P.V. Kakade, J.) had held that
the petition had already and automatically stood dismissed by
virtue of the self-operative order dated 3rd August, 2001 passed
by Chandrachud, J. due to inaction on the part of the petitioners
and that no further indulgence was granted. The learned Judge,
therefore, passed the order that the petition stood disposed of
as dismissed by virtue of the order dated 3rd August, 2001. Shri
Jahagirdar further submitted that since the petitioners were
aggrieved by the aforesaid orders they filed an appeal before the
appeal court. The appeal court took a lenient view and restored
the writ petition to file and granted time to the petitioners upto
30th April, 2002 to serve the respondents. The appeal court had
also given an ultimatum and ordered that in case the petitioners
(appellants) fail to serve the respondents, the writ petition will
stand dismissed. Shri Jahagirdar, therefore, submitted that the
respondents were not served even by the deadline fixed by the
appeal court i.e. 30th April, 2002 and, therefore, by virtue of the
said order the writ petition already stood dismissed and,
therefore Shri Jahagirdar submits that this court should not hear
the petition at all as it had already stood dismissed. Shri
Nalawade, the learned Advocate for the respondent No. 2
submits that the original respondent No. 2 had expired even
before the petition was filed. The petition was filed against the
dead person and, therefore, the whole petition must fail say both
Shri Jahagirdar and Shri Nalawade.
5. Shri Jahagirdar further submitted that under High Court
Original Side Rule 641 rule nisi has to be served along with true
copies of the petitions and all annexures. For ready reference
the Rule 641 is reproduced hereinbelow : "The rule nisi granted
as above, shall, along with a copy of the petition and of the order,
if any, made under the last preceding rule, be served on the
respondent in the manner prescribed for service of a writ of
summons upon a defendant in a suit." (emphasis is given by
me). Shri Jahagirdar pointed out from the packets that they did
not contain the copies of the petition and the order. The learned
Counsel, therefore, requested me to open the packets which
were returned unserved by the office of the Sheriff to find out
whether the said packets contained the contents as mandatorily
prescribed in the said rule. Accordingly, I opened one of the
several packets to find out whether the said packet contained
the content as prescribed in the said rule. To my surprise the
said packet did not contain a copy of the writ petition and the
annexures of the writ petition. The said packet had only a copy
of the rule nisi and nothing more. Shri Jahagirdar, therefore,
seriously attacked the petitioners for being cavalier and very
negligent in the matter of service of rule nisi in accordance with
the rules. Shri Rege the learned Counsel for the petitioner
society had to accept the fact of basic defect and deficiency in
the service of the Rule nisi on the respondents. I agree with the
serious grievance made by Shri Jahagirdar that the petitioners
have failed to comply with the mandatory conditions prescribed
in the said rule to serve the rule nisi on the respondents. In the
affidavit of service filed by Shri Rege on behalf of the petitioners,
though it is mentioned that twelve respondents were issued rule
nisi, in fact it appears that there are only eleven respondents
who were tried to be served with rule nisi. Three have already
been served and their acknowledgements are found along with
the affidavit of service. There are eight packets with the affidavit
of service. One packet is not yet received. It is, therefore, clear
that atleast eight packets which were returned by the postal
authorities to the office of the sheriff did not contain the
contents as prescribed in rule 641 and, therefore, it cannot be
said that it was a good service in accordance with the rules. The
matter, therefore, boils down to this position that atleast eight
respondents have not been properly served rule nisi in
accordance with the rules. To the aforesaid eight, we will have to
add even the other four respondents as even they were sent the
similar packets which did not contain the contents in
accordance with the said rule. It is, therefore, clear that twelve
respondents have not been properly and legally served with the
rule nisi under Rule 641 at all. The petitioners have, therefore,
failed to serve rule nisi in accordance with law and even in
accordance with the appeal court's ultimatum and, therefore, the
petition must fail on that ground alone. I cannot travel beyond
the orders passed by either Justice Chandrachud or Justice
Kakade and never beyond the appeal court, which also mandate
that the petition shall stand dismissed if the respondents were
not served by 30th April, 2002. In the aforesaid circumstances,
the writ petition must abate and has already abated and the
same, therefore, deserves to be dismissed for the reasons
aforesaid.
6. The declaration was indivisible and was not severable and,
therefore, I accept the submissions of Shri Jahagirdar that even
if one respondent is not to be served in that contingency also
the petition would have abated. Here in this case twelve
respondents have not been served. The packets of service were
not in accordance with the rules prescribed and therefore, it
cannot be said to be a good service of rule nisi in accordance
with the rules. Further one of the respondents i.e. respondent
No. 2 had expired but still the petition was filed against him and
for that reason also the writ petition stands abated against all.
7. In spite of the longest rope given by the learned Single Judge
and the appeal court, the petitioners have proved that the did not
deserve the sympathetic and lenient view taken by the appeal
court to give them one more opportunity. The petition, therefore,
having abated pursuant to the order passed by the appeal court
and the petition having stood dismissed as aforesaid, it was not
necessary for me to enter into merits of the case. I have,
however, entered into the merits of the case to put an end to this
petition at this stage itself even on merits.
8. According to Shri Jahagirdar, the society had, as members
small flat holders who comprise 86.4% of the total membership.
They were and are in brute majority in the society and they are
always oppressing the minority of the large flat holders. Shri
Jahagirdar pointed out that even in the past on the strength of
the brute majority the small flat owners had increased the rates
of maintenance which the large flat owners accepted to
maintain the spirit of cooperation and cordial relations. Shri
Jahagirdar pointed out that on this occasion, the large flat
holders thought it proper to put an end to this oppressive
decision of the majority small flat owners. Shri Jahagirdar
pointed out that an amount of Rs. 16 lakhs was due to the small
flat holders who were defaulters. He pointed out that to make up
the said loss they were oppressing and coercing the large flat
holders by enhancing the maintenance charges. The majority
flat holders, therefore, resorted to the device of charging the
maintenance charges on the basis of area of the flat. Shri
Jahagirdar pointed out that the said decision was totally
unreasonable, arbitrary and oppressive as the amenities,
facilities and services rendered to all of them were the same and
it was not that the large or big flat holders were getting more or
higher or greater benefits so that they should be coerced to pay
more. Shri Jahagirdar submitted that the general maintenance
comprises of the following common factors such as salary of
staff, expenses for the security of the society, lift maintenance,
common electricity charges, internal road lighting, common
passage maintenance, charges for lifting water from the tank
and expenses for postage.
9. I agree with the submissions of Shri Jahagirdar that it cannot
be said that the big flat holders are getting higher or more
services to make them liable to pay more on the basis of the
area of the flat. Aforesaid services are enjoyed by all the
members equally and therefore, there was no reason for the
society to have made the large flat holders to pay more on the
basis of the area of the flat. There is absolutely no rational or
any reason to require the large flat owners to pay more for the
aforesaid service charges. The supremacy of the general body
cannot be disputed but even the supreme general body has to
be reasonable and has to pass rational resolution considering all
the facts and circumstances of the matter. The general body
cannot pass arbitrary and unreasonable resolutions merely
because it is supreme and it has a large majority in favour of one
of the issues on the agenda. In the present case, the resolution
dated 30th November, 1980 passed by the general body is totally
unreasonable and arbitrary regardless of the amenities, facilities
availed of by the members. It is clarified here that the payment
of municipal taxes is on the basis of the area of the flat and
there is no dispute over that issue. Whatever bill is sent by
municipal authorities is accordingly paid by all the flat owners
small or big. It was, however, mandatory for the general body
meeting to have considered whether the large flat holders were
drawing more benefits or facilities by virtue of the big size of the
flats. It is not the case of the society that by virtue of the large
size of the flat, the flat holder gets more or higher security or
more common road or common passage light than that of the
small flat holders. There is absolutely no rational basis for the
society to charge for the aforesaid services on the basis of the
size of the flats.
10. The present model bye laws which came in force and which
ought to have been accepted by the petitioner society as long
back as in the year 1986, but for the reasons best known to the
society, it had accepted the same only in the year 1996. The
present model bye laws have neatly stipulated and provided for
as to how the maintenance charges are payable by the
members. The reliance by the society on its old obsolete bye law
No. 24(c) is misplaced as the source of the authority to levy the
maintenance charges. It is an admitted position that the said
bye laws were framed under the old Act of 1925 which has
stood repealed by the present Maharashtra Cooperative
Societies Act, 1960. If the old Act itself stood repealed in the
year 1960, I fail to understand how the bye laws framed under
that Act can be said to be the source of the power for the
managing committee or for the society to levy any maintenance
charges under that bye law which is no more in existence. In any
case, we cannot read bye law 24(c) in isolation. There are other
sub-laws of bye law No. 24 viz., (a) and (b). In my opinion, the
aforesaid bye-laws have become obsolete and outdated as
repealed and the same are deemed to have been substituted by
the model bye-laws. The concept of rent is no more available for
a cooperative society. The reliance placed on this archaic bye-
laws is totally misplaced. The source of power to levy
maintenance charges in accordance with the said bye-law 24(c)
had dried up long back in the year 1960 and is dead as on today.
11. In my opinion, the resolution dated 30th November, 1980 is
totally arbitrary, unreasonable and without any rationale and
without any source of power. Both the courts, therefore, have
rightly held the said resolution and the subsequent resolution
dated 10th February, 1981 as invalid and inoperative. The
declaration granted by both the courts cannot be interfered with
as there is absolutely no illegality or infirmity in the said
concurrent decisions of the courts below. There is, therefore,
absolutely no merit in the petition which deserves to be
dismissed and the same is dismissed with no orders as to
costs. It is needless to mention that the orders passed by the
courts below are confirmed and would be in force in every
respect. All concerned including the petitioner society to act on
a copy of this order duly authenticated by the Associate.
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