Zoroastrian Co-operative Housing Society Ltd. v. District Registrar Co-operative Societies 2005 (5) SCC 632

Zoroastrian Co-operative Housing Society Ltd. v. District Registrar Co-operative Societies 2005 (5) SCC 632

Author by Preyansi Anand Desai, a student of Maharaja Sayajirao University of Baroda 

Introduction 

The Bombay Co-operative Societies Act, of 1925, was used to register the Zoroastrian Co-operative Housing Society on 19.5.1926. The Society sought the Bombay government to purchase property in the Ahmedabad District, which was then part of the State of Bombay, to build dwellings for its members and further the objectives of the Society. The Society distributed land plots to its members to achieve its goals from the properties that were donated to it or purchased at its expense. After the States were reorganized, the Gujarat Co-operatives Act of 1961 applied to the society. The Bombay Cooperative Societies Act was abolished under Section 169 of that Act, which also stipulated that any societies registered under that Act would be considered registered under the Gujarat Act.

Facts of the Case

The Committee, which had complete authority in giving or refusing such authorization, had to give prior approval before a member’s share may be sold, as per By-law No.- 21. To put it briefly, being a Parsi was a requirement for membership in the Society. Invoking the Land Acquisition Act of 1894, the State granted the Society access to land. Requesting authorization from the Society, Respondent No.- 2 planned to tear down his home and build apartments that would be marketed to Parsis.

The Society denied him permission, claiming that the site could not be utilized for commercial purposes according to the Society’s bylaws. The Gujarati government also published a notice on July 20, 2022, stating that anybody involved in the sale or acquisition of real estate, contractors, architects, and engineers was not eligible to join cooperative housing societies.

In line with Bye-law No. 7, the Society has passed a resolution informing its members that non-Parsis are not permitted to join the organization as new members. Additionally, current members are not permitted to sell their plots or bungalows to non-Parsi individuals. To prevent Respondent No. 2 from building on Plot No. 7 or giving it to other parties without the Society’s prior authorization, the Society brought a matter under the Act before the Board of Nominees. The Board then overturned the issued temporary injunction ruling. Bylaws that limited membership to Parsis violated Article 300A of the Indian Constitution since it restricted someone’s freedom to own property. The Gujarat High Court heard a challenge to this ruling filed in Special Civil Application No. 6226 of 1996 by the Society and its chairman.

A learned Single Judge of the Gujarat High Court denied the writ petition in a decision dated 16.1.1997. The erudite Single Judge’s reasoning and findings were largely agreed upon when the Society’s appeal was rejected. In this appeal before the Supreme Court of India, Special Leave was used to contest the Division Bench’s ruling from the Gujarat High Court.

Parties to the Case

Issues Framed

The matter to be examined is whether a housing society established by members of a certain religious community and registered under the Co-operative Societies Act might limit the society’s membership to members of that community alone.

Does Section 10 of the Transfer of Property Act’s restriction on the member’s ability to transfer membership and/or his stake in the property to a non-Parsi violative?

Arguments Involved

(i) Appellants Arguments: 

The Indian Constitution’s Article 19(1)(c) guarantees Parsis the basic freedom to organize associations, according to Senior Counsel Soli J. Sorabjee. It was incorrect for the High Court to rule that a society may only admit members who shared its beliefs, opinions, or points of view because neither the Act nor the Rules prohibited such restrictions. Since Bye-law No. 7 remained fully in effect, it was permissible for certain people to band together to establish a society, restrict membership in it, or exclude the general public at their discretion to effectively carry out its goals. There was only a limited if any, legal limitation on alienation that qualified under Section 10 of the Transfer of Property Act. No absolute restriction existed.

(ii) Respondents Arguments:

The legitimacy of a cooperative society’s bylaws has been contested by the Society of Co-operative Societies of India under Section 4 of the Societies Registration Act. Mr. Bobde, the erudite Senior Counsel, learned In support of the opposing respondents, Senior Counsel said that, given the Indian Constitution and the rights of individuals under the laws of the nation, no bylaws could be recognized that violated or were in opposition to public policy. Additionally, counsel argued that the High Court erred in concluding that the relevant bylaws acted as a restriction on alienation and that this restriction was manifestly unlawful under Section 10 of the Transfer of Property Act.

Judgment

The petitioner in this case received land authorized to establish a residential complex in Ahmedabad. Only Parsi community members were eligible to join the group under its bylaws. When some society members sought to sell their properties, the founding members opposed it. A writ case brought by the Society was rejected by the High Court.

Based on the argument that the Parsis had a basic right to create an organization under Article 19 (1)(c) of the Indian Constitution and that it would be against their fundamental rights to allow non-Parsis to become members, an appeal was filed with the Supreme Court. 

The limitation against selling land to non-Parsis was self-imposed, and the Apex Court granted the appeal, noting that it could not be claimed to be an absolute prohibition. Furthermore, alienation was not completely prohibited.

Conclusion 

It is essential to examine the Zoroastrian cooperative society’s membership dynamics to fully comprehend the complexities of the land issue. Essentially, the dispute centers on whether or not members of one community may lawfully purchase land in another, especially considering the cooperative society’s regulations.

The main issue is that membership in the Zoroastrian cooperative society is granted only to those who expressly accept the bylaws as they are written. It is also important to emphasize that potential members be informed of these bylaws promptly before joining the club. By accepting this pre-membership letter, people are indicating that they have read the bylaws and understand the terms and conditions before joining the society and have given their informed permission to follow them.

The Supreme Court’s conclusion that the restriction imposed by the bylaws was only partial is given a more nuanced perspective by addressing this issue. This conclusion is supported by the notion that members voluntarily submit to the restrictions outlined in the bylaws by their consent and awareness of them. This brings up important issues about consent’s nature and the degree to which it may be regarded as voluntary when constrained by social or cultural norms.

However, a rigorous examination forces us to examine the parameters of this consent. When one takes into account the social and community influences that might affect someone’s choice to become a member of the cooperative society, is it voluntary or does it involve implicit coercion? It is necessary to investigate the socio-cultural background of the disagreement to determine the degree of agency and autonomy that each party has utilized.

Furthermore, the concept of partial constraint demands a closer look at how these restrictions affect the purchase of property. How does this partial restriction fit in with the nondiscrimination and equality clauses of the Constitution? Is it compatible with more general legal frameworks that prioritize equitable access to resources for all people, irrespective of their group affiliations?

In conclusion, the contractual structure of the bylaws and the members’ presumed informed consent support the Supreme Court’s decision, but a more thorough examination is necessary to fully understand the dynamics of consent, the context, and the wider legal ramifications of partial restrictions on land acquisition based on community affiliations. To resolve the land conflict in a more complex and fair manner, this holistic viewpoint is necessary.