# RAMESH HIMMATLAL SHAH v. HARSUKH.JADHAVJI JOSHI April 25, 1975

- **Citation:** [1975] Supp. 1 S.C.R. 270
- **Court:** Supreme Court of India
- **Decided:** 1975-04-25
- **Bench:** A. Alagiriswami, P. N. B!Iagwati, P. K. Goswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ramesh-himmatlal-shah-v-harsukh-jadhavji-joshi-april-25-1975-6517
- **Pages:** 11

## Headnote

c
D
E
F
G
ll
Maharashtra Co-operative Societies Act1 1960 Sections 29,31,47 and i46(a),
1961, Rule 24 and Bye-Laws 9 and 71-D right of a judgn1e11J-dcbtor to
occupy a fiat owned by a housir..g society, if fiablc to attac/unent and su!e ill
execution of a decree against hin1.
Code of Ciril Procedure, Section 60-Riglit to occupy a fiat owr,ed /Jy
a ca-operari11e housing society, 1.'f a species of property.
The appellant is the decree-holder. He obtained a money decree agains1
the respondent judgment-debtor and took a warrant of attachment of fiat No. 9
of Paresh Cooperative Housing Society Limited at Santacruz, Bombay. This
flat was attached on August 8, 1970 and a warrant of attachment was served
on -the judgment-debtor wh.ile be was in jail in Rajkot.
In due Cot,_rse -a· sale
proclamation was also issued in respect of the flat while the judgment-debtor
was yet in jail. At this stage of the proceedings, the judgment·debtor's brother,
Hasmukh J. Joshi took out a chamber summons challenging the execution on
the· ground that the fiat did not belong to the judgment-debtor but belonged
to him and to the judgment-debtor's wife and that the attachment should
be raised.
His chamber surnmons was made absolute but in appeal the order
was set aside and the matter was remanded. The afore!faid chamber sumn1ons
was, however, finally dismissed on _September 30, 1971.
Hasmukh did not
take any further action against the rejection of his claim to the property. After
coming out of the jail, the: judgment-debtor filed a suit some time in 1972
to set aside the decree.
He, however, could not se\;ure an order for injunction to prevent the eXecutic,n of the decree and the suit __ is pending.
The flut
was offered for sale and was purchased i,n auction· hy One Bhupendra N. Shah
for a sum of Rs. 34,000 / ··.
The sale, however, is not yet confirm~d. Subsequently a new plea was taken by the judgment--debtoc. This time he filed
a chamber summons on March 28, 1972, praying for the dismissal of the
execution petition filed by the decree-holder 3Dd for setting aside the w41-r~int
of attachment and proclamation of sale on the ground that the flat being
a fiat in a cooperative housing society was not liable to attachment and sale.
It was also stated that he had not saleable interest in the said property under
section 60, Civil Procedure Code, and therefore, it was not liable to attachment.
The Judge, City Civil Court, Bombay, dismissed the chamber summons. The
learned single Judge, Bo1nbay High Court, however, in appeal allowed the
claim and made the summons absolute by directing that the attachment and
sale of the flat being Hlegal be set aside.
The appellant preferred a Letters
Patent Appeal before the Bombay High Court without success and the decision
cif the learned single Judge was affirn1ed.
Hence this appeal by special leave.
It was contended for the appellant that the right of the judgment-debtor,
who claims the right to occupation of flat No. 9, is liable to atta.chn1ent and
sale in execution of a decree.
The respondent contended that section 31 of
the ~Iaharashtra Co-operative Societies Act, 1960, completely bars attachment
and saJe of the flat in question in execution of thl! decree. lt \Vas also contended for the respondent that section 60, Civil Procedure Code does not
specify that this species of property is liable to attachment.
'
A11owing the appeal,
HEW : (i) While section 29(2) refers to transfer of a member's share
or his interest in the capital or property of any society, section 31 in contrast
speaks of "the share or interest of a men1ber in the capital of a society". The
Act, therefore, makes a clear distinction between the share or
interest
in
the capital and share or interest in property of the society,
[2780-E]
(ii) The right or interest to occupy is a species of property.
There is
)
R. H. SHAH "· H. J, JOSHI (Goswumi, J.)
271:'
nothing in the language of section 31 lo indie<1te that the right to ocoupation
J..
wbich is the right to be

## Text

270
,. - '
A
. RAMESH HIMMATLAL SHAH
v.
HARSUKH.JADHAVJI JOSHI
April 25, 1975.
B
[A. ALAGIRISWAMI, P. N. B!IAGWATI AND P. K. GOSWAMI, JJ.]
c
D
E
F
G
ll
Maharashtra Co-operative Societies Act1 1960 Sections 29,31,47 and i46(a),
1961, Rule 24 and Bye-Laws 9 and 71-D right of a judgn1e11J-dcbtor to
occupy a fiat owned by a housir..g society, if fiablc to attac/unent and su!e ill
execution of a decree against hin1.
Code of Ciril Procedure, Section 60-Riglit to occupy a fiat owr,ed /Jy
a ca-operari11e housing society, 1.'f a species of property.
The appellant is the decree-holder. He obtained a money decree agains1
the respondent judgment-debtor and took a warrant of attachment of fiat No. 9
of Paresh Cooperative Housing Society Limited at Santacruz, Bombay. This
flat was attached on August 8, 1970 and a warrant of attachment was served
on -the judgment-debtor wh.ile be was in jail in Rajkot.
In due Cot,_rse -a· sale
proclamation was also issued in respect of the flat while the judgment-debtor
was yet in jail. At this stage of the proceedings, the judgment·debtor's brother,
Hasmukh J. Joshi took out a chamber summons challenging the execution on
the· ground that the fiat did not belong to the judgment-debtor but belonged
to him and to the judgment-debtor's wife and that the attachment should
be raised.
His chamber surnmons was made absolute but in appeal the order
was set aside and the matter was remanded. The afore!faid chamber sumn1ons
was, however, finally dismissed on _September 30, 1971.
Hasmukh did not
take any further action against the rejection of his claim to the property. After
coming out of the jail, the: judgment-debtor filed a suit some time in 1972
to set aside the decree.
He, however, could not se\;ure an order for injunction to prevent the eXecutic,n of the decree and the suit __ is pending.
The flut
was offered for sale and was purchased i,n auction· hy One Bhupendra N. Shah
for a sum of Rs. 34,000 / ··.
The sale, however, is not yet confirm~d. Subsequently a new plea was taken by the judgment--debtoc. This time he filed
a chamber summons on March 28, 1972, praying for the dismissal of the
execution petition filed by the decree-holder 3Dd for setting aside the w41-r~int
of attachment and proclamation of sale on the ground that the flat being
a fiat in a cooperative housing society was not liable to attachment and sale.
It was also stated that he had not saleable interest in the said property under
section 60, Civil Procedure Code, and therefore, it was not liable to attachment.
The Judge, City Civil Court, Bombay, dismissed the chamber summons. The
learned single Judge, Bo1nbay High Court, however, in appeal allowed the
claim and made the summons absolute by directing that the attachment and
sale of the flat being Hlegal be set aside.
The appellant preferred a Letters
Patent Appeal before the Bombay High Court without success and the decision
cif the learned single Judge was affirn1ed.
Hence this appeal by special leave.
It was contended for the appellant that the right of the judgment-debtor,
who claims the right to occupation of flat No. 9, is liable to atta.chn1ent and
sale in execution of a decree.
The respondent contended that section 31 of
the ~Iaharashtra Co-operative Societies Act, 1960, completely bars attachment
and saJe of the flat in question in execution of thl! decree. lt \Vas also contended for the respondent that section 60, Civil Procedure Code does not
specify that this species of property is liable to attachment.
'
A11owing the appeal,
HEW : (i) While section 29(2) refers to transfer of a member's share
or his interest in the capital or property of any society, section 31 in contrast
speaks of "the share or interest of a men1ber in the capital of a society". The
Act, therefore, makes a clear distinction between the share or
interest
in
the capital and share or interest in property of the society,
[2780-E]
(ii) The right or interest to occupy is a species of property.
There is
)
R. H. SHAH "· H. J, JOSHI (Goswumi, J.)
271:'
nothing in the language of section 31 lo indie<1te that the right to ocoupation
J..
wbich is the right to be sold in auction is not attachable in executio11 of the
decree, There is nothing in section 31 to even l'emotely inclQde a prohibition against attachment or. sale of the aforesaid right to occupation 'of the fiats.
The o,i;tly restrictions under section 29(2) are that the mem~r may.not tranlllftr
his· interest in the· property prior to one year ~nd the transfer is made to. an
ex.i!ting member of the society or to a person whose application for membership ~ been accepted by the Society, It is !rue that bye-Jaw 71D .ays tlmt
a meinber to whom- a tenement is allowed, shall· not assign or underlet, vacate
B
or. part with the possession of the tenement or any part thereof without the
prev'ious con.sent in writing of the Managing Committee, but there is nothing
to show that contravention of this bye-law ma!t.:_es the assignment vqid under
the. Act
~1nlik.e in the case of a transfer being void under section 47(3).
Section 29 read with rule 24 shows that there is no prohibition as ::;uch against
transfer of a share to a member or even lo a non-member if he consenL 1'0
be :i mcrri.ber and makes an application for membership by purchasing· five
shares as· Provided under bye-law 9. There is no reason to think that there is
C
any question of refusal of membership of the Society to a non-membe-r if
he' is qualified otherwise and makes an appropriate application in which case
thf'. transfer of shares will be operative and tJ:ius the assignment of the right
to occupation will hold good. [278F-H, 279-B]
(iii) Section 60 of the Civil Procedure Code is not exhaustive ns such.
It also refers to any other saleable property, movable or immovable, whether
the san1e be held in the name of the judgment-debtor or by another person on
D
his behalf. The right to occupation of a fiat is property both -attachable and
Sfl1eable.
Specific non-inclusion of a particular species of prbperty
under
section 60, is therefore, not of any consequence if it is saleable otherwise.
(280-F-GJ
·CIVL APPELLATE JURISDICTION ; Civil Appeal No. - 1539
of
1974.
.
A!>peal by special leave from the Judgment and Order of the High
,Court of Bombay in LPA No. 80 of 1972.
.
B·. R. Zaiwala, D. R. Zaiwala, K· J. John and J. B. Dadachanji,
for the Appellant.
.
.
.
P. K. Chatterjee and D. P. Mukherjee, for the Respondent.
O. L. Sangh; and H. K. Puri, for Shri
Suryakant N.
Gangani
(Purchaser)
.The Judgment of the Court was. delivered by
F
GOSWAMI, J.-This appeal in. forma pauperis rainses an
impor-. G
tau~ question of Jaw : Is a flat m a te,nant co-partnership housing
society under the Maha;ashtra Cooperative Societies Act, 1960 liable
to .attachment and sale m execution of a decree against a member in
ll'hooe favour or for whose benefit the same has been allotted by the
society ?
·
. We may briefly note the tacts. :
H
.. The appellant is the . decree-holder. He obtained a money decree.
against the respondent judgment-debtor and took a warrant of attachment of ffat No. 9 of Pare~h Cooperativ~ Housing Society Limited
at .Santacruz, Bombay. ·Tius ·flat (descnbed as ownership. flat in
common parlance) was attached on August 8, 1970 and. a warrant
(
·~:-<
272
A
B
c
SUPREME COURT REPORTS
[1975] SUPP· s.C.R.
of attachment was served on the judgment-debtor while be was m
jail in Rajkot.
In due course a sale proclamation was also issued in
respect of the flat while the judgment-debtor was yet in jail.
At this
stage of the proceedings, the judgment-debtor's brother, Hasmukh J.;
Joshi (for brevity Hasmukh) took out a chamber summons challenge
ing the execution on the ground that the flat did not belong to the
judgment-debtor but belonged to him and to the judgment-debtor's
wife and that the attachment should be raised. His chamber summons was made absolute but in appeal the order was set aside and
the matter was remanded.
The aforesaid chamber summons was,
however, finally dismissed on September 30, 1971.
Hasmukii did
not take any further action against the rejection of his claim to the
property.
After coming out of the jail, the judgment-debtor filed a
suit some time in 1972 to set aside the decree.
He, however, could
not secure an order for injunction to prevent the execution of the
decree and the suit is pending.
The fiat was offered for sale and was
purchased in auction by one Bhupendra N. Shah for
a
sum
of
Rs. 24,000. The sale, however, is not yet confirmed. Subsequently
a new plea was taken by the judgment-debtor.
This time he filed
D
a chamber summons on March 28, 1972, praying for the dismissal
of the execution petition filed by the decree-holder and for setting
aside the warrant of attachment and proclamation of sale on the
ground that the flat being a flat in a cooperative housing society was
not liable to attachment and sale. It was also stated that he had
no saleable intere•st in the said property under section 60, Civil Procedure Code, and therefore, it was not liable to attachment.
The
E
Judge, City Civil Court, Bombay, dismissed the chamber summons.
F
The learned single Judge, Bombay High Court, however, in appeal
allowed the claim and made the summons absolute by directing that
the attachment and sale of the flat being illegal be set aside.
The
appellant preferred a Letters Patent Appeal before the Bombay High
Court without success and the decision of the learned single Judge
was affirmect.
Hence this appeal by special leave.
The flat in question is admittedly owned by the Paresh Co()J'el'ative Housing Society Limited (briefly the Society).
Originally · this
fiat stood in the name of one Ramesh Hariram Chande and his wife.
It is not disputed before us and it has been so held by the court in
the claim case by the judgment-debtor's brother that the respondent
G purchased the flat benami in the. name of his brother Hasmukh and
his · wife Shashikala.
Although, therefore, the respondent is not a
registered holder of the fiat, it is clear that the flat is held by :his
brother and his wife on behalf of the respondent.
This is to be
noted as section 60, Civil Procedure Code, reaches a benami holding ..
It may also be noted that the respondent is now fighting the case on
the basis that the right to occupy the flat in question is his property
ff ·which is not liable to attachment and sale. We should also note
here that after the High Court invalidated the attachment and sale,
the flat was purchased by one Suryakant N. Sangani (briefly Surya·
kant) having acquired the shares in the Society from Hasmnkh and'
Shashikala. It is said that on the joint application of Shashikala .and
Suryakant, the shares were transferred to the latter on
or
abour·
May 15, 1974.
·
j
,
'
R. H. SHAH v. H. J. JOSHI (Goswami, /.}
273
The appeal came up for hearing earlier and when it was found that
the respondent was not represented the court issued notice to the
purchaser, Suryakant and also directed for appointment of an amicus
curiae. Mr. Chatterjee has now appeared before us as amicus cur~
and the purchaser has also entered appearance through Mr. Sangh1.
Ultimately, however, we did not hear Mr. Sanghi, as we are concerned in this appeal only with the 'question of attachability and saleability which is a condition prior to the . purchase of the property
by Bbupendra N. Shah. Mr. Sanghi,. therefor<:, had to retire from
the appeal.
The point that arises for consideration m this appeal, as stated
earlier, is whether the right of the judgment-debtor, who claims the
right to occupation of fiat No. 9, is liable ttl attachment and sale
in execution of a decree.
Before we proceed further it is necessary
to go through the relevant provisions of the Maharashtra Cooperative
Societies Act, 1960 (briefly the Act}. The Maharashtra Cooperative
Societies Rules, 1961 (briefly descri0ed as the Rules} and the Byelaws of the Society.
The Act was passed in the year 1961 to consolidate and amend the law relating to cooperative societies in the
state of :Maharashtra.
Section 2 of the Act contains the definitions. By section 2(5}
" 'by-Jaws' means by-laws registered under this Act and for the time
being in force, and includes registered amendments of such by-laws".
By section 2 (11} "dividend" means the amount paid, out of the
profits of a society, to a member in proportion to the shares held
by him.
By section 2(16} '"housing society' means a society the
object of which is providing its members with dwelling houses". By
section 2(9} "'member' means a person joining in an application
for the registration of a cooperative society which is subsequently
registered, or a person duly admitted to membership of a society after
registration, and includes a nominal, associate or sympathiser member".
By section 2(19} (b} "'associate member' means a member who holds
jointly a share of a society with others, but whose name does not
stand first in the share certificate".
By section 2(19} (c} " 'nominal
member' means a person admitted to membership as such after registration in accordance with the by-law''. By section 2(21} " 'prescribed'
means prescribed by rules". By section 2(31} "'working capital'
means funds at the disposal of a society inclusive of paid up share
capital, funds built out of profits, and money raised by borrowing and
by other means."
A
B
c
D
E
F
G
. By secti~n ~ "a society, which has as its objects the promotion of
the economic mterests or general welfare of its members or of the
~blic, i? accord8:flce with .c?O~erative principles, or a so~iety estabH
hshed with the. ob1ect of fac1htatmg the operations of any snch society
may be registered under this Act.
'
Pro~ided that, no society shall .be registered if if is likely to be
econOtrucally unsound, or the registration of which may have an
adverse effect on development of the cooperative movement".
···~·-
.,
.,
274
SUPREME COURT REPORTS
[1975] SUPP· S.C.R.
A
B
c
D
E
F
G
Chapter Ill of the Act deals with members and their rights and
lia])ilities.
Section 22 with which this chapter opens provides .how
a person may become a member.
For example by section 22(1A)
subject to the provisions of section 24, an individual competent to
contract under .the Indian Contract Act may be admitted as a member.
By section 23 (l) '·No society shall, without sufficient cause, refuse
admission to membership to any person duly qualified therefor under
the provisions of this Act and its bye-Jaws". By sub-section (2), "Any
person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar" and the decision of the Registrar under sub-section (3) shall be final.
By section 25 "a person shall cease to be a member of a society on his
resignation from the membership thereof being accepted, or on the
transfer of the w):iole of his share or interest in the society to another
member, or on his death, or removal or expulsion from the society".
By section 26, "no person shall exercise the right of a member of a
society, until he has made such payment to the society in respect
of: membership, or acquired such interest in the society, as may be
prescribed by the rules, or the by-laws of such society".
Section
28 contains certain
restrictions on holding
shares.
Two of the
material sub-sections of section 29 which are jmportant and with
which we are concerned may be set out :
29(1). "Subject to the provisions of the last precedinl',
section as to the maximum holding of shares and
to any rules made in this behalf, a transfer of, or
charge on, the share or interest of a member in the
share capital of a society shall be subject to such
conditions as may be prescribed.
( 2) A member
shall not transfer
any share held by
him or his interest in the capital or property of any
society, or any part thereof, unless :-
(a) he has held such share or interest for not less
than one year ;
(b) the transfer is made, to a member. of the society
or to a person whose application for membership
has been accepted".
Section 31 may also be set out :-
"The share or interest of a member in the capital of
a society, or in the Joan-stock issued by a housing society,
or in the funds raised by a society from its
members by
way of savings deposit, shall not be liable to attachment
or sale under any decree · or order of a Court for or in
respect of any debt or liability incurred by the member ; ·
and accordingly, neither the Ofiicial Assignee
under· . the
Presidency-towns Insolvency Act,
1909, ·nor ·a Receiver
under the Provincial Insolvency Act, 1920, nor any such
person ,or authority under al)y corresponding l~w for the time
being in force, shall be- entitled to, or have any claim. -OD,
such share .or interests."
'''
R. H. sllAH ~- H.' J. JOSHI iGoswami, !.)
i7_75
Section 4 7 so far as material for our purpose may be quoted·
.·· A
47(1). "Notwithstanding .anything i,n any other law for
the time being· in force,
brit subject to any prior
claim of Government in respect of land revenue or
any money recoverable as land revenue and to the
provisions of section 60 and 61 of the Code of Civil
· .. B
Procedure, 1908.
(b) any oustanding demands or dues
payable to a
society by any member or
past
member
or·
deceased member, in respect of rent, shares, loans
or purchase money or any other rights or amou11ts
c
payable to such society, shall be a first charge upon
his interest in the immovable
property of
the
society".
(2) No property or interest in property, which is subject
to a charge nuder the foregoing sub-section, shall be
D
transferred in any manner without the previous permission of the society; and such transfer shall be
subject to such conditions, iLany, as the society may
impose.
(3) Any transfer made in contravention of sub-section
(2) shall be void".
E
Section 165 contains the rule making powers.
The last section
167 provides that "for the removal of doubt, it is hereby declared
that the provisions of the Companies Act, 1956, shall not apply to
societies registered or deemed to be registered, under this Act".
F
We may now turn to the relevant Rules. By rule-9 "wheu a
society has been registered the by-laws of. the society as .approved
and registered by the Registrar shall
be
the
bye-laws
of
the
society".
Rule 10 contains
classification
and
sub-classification
of societies and we are concerned with the fifth
class
mentioned
therein, namely, the 'Housing Society' which again is sub-divided
into three categories and we are concerned in this appeal with the
G
second category, namely, 'Tenant Co-partnership Housing Society',
which is described therein as an example of "Housing Societies which
hold both lands al)d buildings either on lease hold or free hold basis
and allot them to their members".
Chapter III of the Rules deals with members and their rights and
liabilities.
Rule 19 contains conditions to be complied with for · H
admission for membership.
Rule 24 provides for the procedure for
transfer of shares.
Rule 28 provides for expulsion of members and
expulsion from membership may involve forfeiture of· shares held by
the member.
We may now notice some of the material Bye-laws of the Society.
L276
SUPREME COURT REPORTS
[1975] SUPP· s.c.R.
A Bye-Jaw 6. "All persons permanently residing in Bombay city
and suburban area and who have signed the application for registration, are original members. Other
members Jll\lY be admitted by the General .Bouy.
Every person on applying for membership shall d.cposit Re. 1 as entrance
fee and. the value of at
least five shares for which he shall receive a copy
of the Bye-laws.
In case where an application is
refused, the deposit shall ordinarily be returned".
B
c
D
E
F
G
H
· 6(1). "The General Body may admit any new members
other than the promoters subject to the applicants
satisfying the qualifications for membership as prescribed under the bye-laws".
(2) "TI1e General Body shall not admit members exceeding the· number of tenements or plots available for
allotment".
(3) The General Body alone shall be comi;i:etent to allot
tenements to the members on the basis of
policy
framed by it for such allotment".
7 (a). "A person may be admitted as a nominal member
on payment of Re. 1 only as entrance fee for the
purposes of occupying a
shop/ godown/ garage
m
the society.
A nominal member shall not exercise
any right of membership or receive any advantage,
or benefit or dividend, etc."
7(b). "A subletec, a licencee or a caretaker may also be
admitted as a nominal member of the Society on payment of Re. 1 as entrance fee. Such member shall
not exercise any right of membership or receive any
advantage or benefit or dividend, etc.".
8 (a) . "Ko person shall be admitted as a member of the
Society who already owns a house, a plot or a ilat
in Bombay city and suburban area, in his own name
or in the name of any of his dependents or of his
family members, such as
wife/husband,
children,
etc. and whose need of a house, a plot or a fiat in
the' opinion of the General Body are not considered
pressing or deserving ...... "
10. "No person shall exercise the rights of a member of
the Society until he is admitted as such as laid down
in Bye-law No. 6 and holds not less than five fully
paid shares in the Society and his name has been
entered in the Register of Members".
·
Chapter Vil of the Bye-laws provides for transmission of interests.
Bye-law 14 01>11tains how a nomination has to be made, how a
member may nominate a person to whom his share or intcrcst in
the society or so much thereof as is specified in such nomination
'
R. H. SHAH v. H. :r. JOSHI (Goswami, J.)
277
shall ·be transferrcc;I at h.i~ decease, .etc. Byc-la.w 15(1) provides .that
/.
"on r~iving satisfactory pr()Of of the. death of a
member,
the'
Generai' Body may tr1msfer the share or the. interest of the member
to the person or persons nominated or if there is no. person so nominatecl to such person as may appear to the Ge11eral Body to be the
heir or the legal representative of the member or to pay such a sum
representing the value of such nominator's share or interest as oete.r-
!l
mined in accordance with the Rule 23 of the M.C.S. Rules 1961
deducti11g all sums due to the Society from
the
nominator ..... .''
Under Bye-law 15 ( 4) where a share or shares were issued
to
a
member by virtue of his being a tenant or a lessee
what
would
happen on the death of such a member is provided for.
Chapter XX deals with tenants.
Bye-law 71 with which it opens
C
says "no member shall be a tenant of the Society unless he subscribes to such nnmber of shares as the Managing Committee prescribesi'.
71A, "Whenever a member to whom a dwelling house/
tenement or flat has been allotted by the society does
not require it for his own use for
any particular
period, he may hand it over to the society for using
the same in such manner as it may consider best".
71B. "The society may offer the dwelling house/tenements
or flats falling vacant in its possession in terms of
D
the provisions of bye-law No. 7HA) above, to any
E
person in its discretion _for temporary occupation for
the period indicated by the original allottee on such
clear understanding provided that:
(i) It shall give preference to such person
as
has
already been enrolled as member of the society in
terms of the provisions in bye-law but who could
not be allotted a dwelling house/tenement or fiat .
by it;
(ii) It shall enroll the person to whom the dwelling
house/tenement or flat is proposed to be allotted
as a nominal member if he is not already a mem·
ber of the society.
G
(iii) The payments received for such temporary occupation shall be credited to the account of the .original
allottee and be apportioned towards satisfaction
of the dues and the demands of the society out-
•tanding against him under these Bye-laws and
the tenancy regulations.
H
71D. "A member to whom a tenement is allotted ·shall
occupy it himself and shall not assign,
under!et,
vac'ate. or pan with the possession of the. tenement
. any part thereof without .the previous. consent in writ· ·
ing of the Managing Committee."
·
·<~--·
27&
B
SUPREME COURT REPORTS
[1975) SUPP. S.C.R.
72. "No dwelling house offered on lease shall be taken ·
by persons who are not members of the Society un" ·
less no member is willing to take it".
Form A to the Bye-laws contains "regulations relating to. tenancies to be granted by the Society to members in respect of houses held
by tbe Society".
From a review of the foregoing provisions
the
position
,~ith
reference to the particular Society is as follows :
There is no absolute prohibition in the Act or in the Rules or
in the Bye-laws prohibiting transfer of interest of a member in the
C property belonging to the Society.
Tne only transfer which is void
under the Act is one made in contravention of sub-section ( 2) of
secti'On 47 [see section 47(3)]. We have not been able to find any
ether provision anywhere to the same effect.
In :he scheme. of the
provisions a dichotomy is seen between share or interest . in
the
capital and interest in property of tbe Society.
While section 29(2)
refers to transfor of a member's share or his interest in tbe capital
D or property of any society, section 31 in contrast speak~ of "the
share or interest of a member in the capital of a society''.
The Act,
therefore, makes a clear distinction between the share or interest in
the capital and share or interest in property of tbe Society. We have
also noticed that the Act does recognise interest in the immovable
property of the Society as well [see section 4 7 (I) (b)]. We have
·E
seen the qnalifications for membership.
There is
no
reason
to
snppose that if the qualifications under the Bye-laws are fulfilled an
application for membership may be rejected. It is admitted that the
fiat is owned by the Society and the judgment-debtor has a right or
interest to occupy the same.
F
This right or interest to occupy is a species of property.
We have
to consider wh1:ther this right to the particular property is attachable
and saleable in execution of the decree against the judgment-debtor.
It is contended by Mr. Chatterjee, amicus curiae, that section 31 of
the Act completely bars attachment and ·sale of the said property in
execution of the decree.
We have already pointed out the difference
in language between section 29 and section 31 and also made reference to section 47(1) (b) in that connection.
There is nothing in
G the language of section 31 to indicate that the right to occupation
which is the right to be sold in auction is not attachable in execution
of the decree.
There is nothing in section 31 to even remorely include a prohibition against attachment or sale of the aforesaid right
to occupation of the fiat.
Once section 31 is out of the way, we are
left with section 29 wherein we do not find even a provision of
prior consent for transfer of share or inrerest in such property. The
H only restrictions un~er section 29(2) are that the member may not
transfer his interest in the property prior to one year and the transfer
is made to an existing member of the Society or to a person whose
application for membership has been accepted by the Society. It is
true that bye~law 71D says that a member to whom a tenement is
allotted shall not assign or underlet, vacate or part with the possession
of the tenement or any part thereof without the previous consent in
•
•
.~
R. H. SHAH v. H. J. JOSHI (Goswami, J.)
279
'
writing of the Managing Committee, but there is nothing ·to show
A
that contravention of this bye-law makes the assignment void under
the Act unlike in the case of a transfer being void under section 4 7 ( 3) .
There is no impediment to ratification of the assignment by the Committee particularly in view of the legal position arising . out of the
conjoint effect of section 29, rule 24 and bye-Jaw 9.
Sect10n 29 read
with rule 24 shows that' there is no prohibition as such against transB
fer of a share to a member or even to a non-member if he consents
to be a member .and makes an application for membership by purchasing five shares as provided under bye-law 9. Reading the aforesaid provisions there is no reason to ~hink that 'there is any guestio?
of refusal of membership of the Society to a non-member 1f he 1s
qualified otherwise and makes an appropriate .application in which
case the transfer of shares will be operative and thus the assignment c
of the right to occupation will hold good.
Further it is significant
t
that under section 146(a) of the Act, contravention of sub-section
(2) of section 47 is punishable under section 147 of the Act.
Contravention of any bye-law is, however, no offence.
We, therefore,
unhesitatingly come to the conclusion that this species of property.
namely the right to occupy a fiat of this type, assumes significant
D
importance and acquires under the law a stamp of transferability in
furtherance of the interest of commerce.
We have seen no fetter
under any of the legal provisions against such a conclusion.
The
attachment and the sale of the property in this case in execution of
the decree are valid under the Jaw.
Multi-storeyed ownership fiats on cooperative basis in cities and
E
big towns have come to stay because of dire necessity and are in !he
process of rapid expansion for manifold reasons.
Some of these are:
ever growing needs of an urban community necessitating its accommodation in proximity to cities and towns, lack of availability of land
in urban areas, rise in price elf building material, restrictions under
various rent legislations, disincentive generated by tax laws and other
F
laws for embarking upon housing construction on individual basis,
security of possession depending upon fulfilment of tlie conditions of
membership of a society which are none too irksome. In absence
of clear- and unambiguous legal provisions to the contrary, it will
not be in public interest nor in the interest of commerce to impose
a b1111 on saleability of these fiats by a tortuous process of reasoning.
The prohibition, if intended by the legislature, must be in express
terms.
We have failed to find one.
G
The phenomenon of ownership of fiats
as
contra-distinguished
from personal houses has been in vogue in England as well as in
the, European Continent.
Ownership rights over separate parts of
a building are mentioned in Coke on Littleton and such "super-imposed
free holds" have existed in England in various places for a long time
(see International and Comparative Law Quarterly ·Volume
VII,
H
January 1958, pages 36-37).
With regard to a fiat-owners's right to dispose of his rights, it is
pointed out that "the fiat owner may, in the words of
a leadincr
French Commentator" "sell, donate, leave by will, Jet or hypothecateil
-{
his right.
The rights are regulated by statutes in the Continent. The
JO SC/75-19
~~...;
~";""""-'"<:.~
280
SUPREME COURT REPORTS
[1975] SUPP· s.c.R.
A German Statute, for example, allows the flat owner's right to dispose
of his property to be made subject to the consent of other flat owners,
but such consent may be refused only "for a very important reason.;"
[Article 12( I), (2)] and the statute gives the aggrieved flat-owner
easy access to the court if a violation of this provision is alleged
(see ibid page 39). Thus the trend is towards recognition of these
B
rights.
Now that attachment and sale have been held to be valid, it will
be for the auction-purchaser first to obtain membership of the society
and the court before confirmation of the sale will insist upon his
membership of the society which, it would not be unreasonable to
assume, will be granted by the Society in the ordinary course unless
C there are cogent and relevant reasons for not doing so.
The fact
that at the time of auction-sale the purchaser was not a member of
the Society would not in law affect the saleability or prior attachment
of the property in execution of the valid decree.
D
E
F
The judgment-debtor has a valid decree against him.
Ordinarily
he has to discharge his liability under the decree.
He can pay the
decretal amount straigbtaway or suffer his property to be attached
and sold in execution of the decree.
As an honest debtor the liability under the decree has to be discharged.
Here the Society is not
objecting to the attachment and sale of the property, but the judgmentdebtor is.
We have seen there is no absolute prohibition against
transfer of a right to occupation of the flat or even to transfer a share.
The auction-purchaser is presumed to know the
limitations
under
wltich he has purchased the right to occupy the flat in court auction.
If ultimately the Society turns down his application for membership
(which of course cannot be done except for valid reasons) it is upto
him to take such course of action as available under the law.
Such
a remote contingency, per se, will not make the particular right of
the judgment-debtor in the flat non-attachable or non-saleable.
It is contended by Mr. Chatterjee that section 60, Civil Procedure
Code, does not specify that this species of property is
liable
to
attachment.
The argument, however, fails to take note of section 60
being not exhaustive as such.
It refers also to any other saleable
property, movable or immovable, whether the same be held in the
G name of the judgment-debtor or by another person on his behalf.
We have held that the right to occupation of a flat is property both
attachable and saleable.
Specific non-inclusion of a particular species
of property under section 60 is, therefore, not of any consequence if
it is saleable otherwise.
In the result the judgment of the High
Court is set aside and the judgment-debtor's chamber summons dated
March 28, 1972, stands dismissed.
The appeal is allowed, but there
will be no order as to costs except that the court-fees will be payH able by the appellant.
We record our appreciation of
the
assistance
rendered
by
Mr .. Chatterjee as amicus curiae and also by Mr. Zaiwala, couru;el
for the appeilant.
V.M.K.
Appeal allowed.
+ ..
•
-
•