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Writ Petition No. 1948 of 1997

Venus Co-op. Housing Society v. Dr. J.Y. Detwani

2002 SCC OnLine Bom 1457

In the High Court of Bombay

(BEFORE R.J. KOCHAR, J.)

Venus Co-op. Housing Society and Anr.

V.
Dr. J.Y. Detwani & Ors.
Mr. G.R. Rege with Ms. Shakuntala Mudbidri i/b. Little & Company for Petitioners.
Mr. Y.S. Jahagirdar with Mr. Sanjay Udeshi for Respondent No. 21.
Mr. D.A. Nalawade with Mr. S.G. Bane for Respondent No. 2.
Writ Petition No. 1948 of 1997
Decided on July 30, 2002
The Judgment of the Court was delivered by
R.]J. KOCHAR, J.:— The Resolution dated 30" 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 1% 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 31°* May, 1981. By a circular dated 1°* 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 15 March, 1981 of the
managing committee and also to the resolution dated 30" 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 30" 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 10" February, 1981 as
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invalid and not binding on the disputants. The Cooperative Court consequently
restrained the petitioners and their servants and agents from implementing the
resolution dated 30" November, 1980 and from recovering general maintenance
charges at the rate of more than the rate that was prevalent prior to 30" November,
1980. The Cooperative Court allowed the dispute as aforesaid with costs. The
Cooperative Court made an award accordingly on 29" 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 26" 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 30" 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 10"
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 31°* May, 1981. Shri Rege, further pointed out that the dispute was
filed before the court on 24™ May, 1981 before the general body approved and ratified
the decision on 31°t 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 30" 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
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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 20" 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.
5. The learned Counsel has cited the judgment of the Supreme Court in the case of
State of Punjab v. Nathu Ram reported in 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 3" 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 3™ 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 16'™ 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 12t 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 3™ 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 3 August, 2001.
6. 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 30 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. 30" 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
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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.
7. 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).
8. 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
30 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.
9. 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
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expired but still the petition was filed against him and for that reason also the writ
petition stands abated against all.
10. 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.
11. 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.
12. 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
30" 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.
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13. 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.
14. In my opinion, the resolution dated 30" 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 10™ 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
merits 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.
15. All concerned including the petitioner society to act on a copy of this order duly
authenticated by the Associate.

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