Category: Allied Laws

The Bombay High Court was concerned with a petition where Landlords suit for eviction of tenant on the ground of unlawful subletting without consent was dismissed by the lower court and confirmed by the appellate court. According to the tenant, whilst retaining the possession of the suit premises he had merely entered into partnership for carrying on business through the suit premises and as per the law laid down by the Apex Court in the case of Helper Girdharbhai vs. Saiyed Mohmad Mirasaheb Kadri & Ors. (1987) 3 SCC 538, such arrangement, does not amount to subletting. According to the Landlord, the partnership was merely a cloak to conceal the real transaction of subletting. It was held that that the clauses in the partnership deed that profit of partnership would be shared by sub-tenants only and tenant would receive fixed monthly amount irrespective of profit or loss in partnership business showed that partnership was not genuine and it was created to conceal real transaction of subletting. It was held that the tenant was liable to be evicted.

The U.P. State Cement Corporation Limited (for short, ‘the Corporation’) was wound up on 8th December, 1999. In the State of U.P. existed a set of rules, namely, the Uttar Pradesh Absorption of Retrenched Employees of Government or Public Corporations in Government Service Rules, 1991 (for short, ‘the 1991 Rules’).

After the Corporation was wound up, one Mr. Shailendra Kumar Pandey and some others, who were the employees of the Corporation, filed Civil Miscellaneous Writ Petition No. 36644 of 2003, seeking absorption under the aforesaid Rules. The learned Single Judge hearing the writ petition cogitated upon the U.P. Absorption of Retrenched Employees of the State Government/Public Sector Corporation in Government Service (Recession) Rules, 2003 (the 2003 Rules) and, eventually came to hold that the Absorption Rules, 1991 were applicable. This decision was confirmed by the Division Bench of the High Court as well as the Apex Court.

When the matter stood thus, all the affected employees of the Corporation felt relieved, inasmuch as the controversy had travelled to the Apex Court and was put to rest. The impugned writ petitions which were preferred in the year 2001 were still pending before the High Court and the expectation of the Petitioners therein was that similar benefits shall enure to them, for the writ petitions instituted on later dates had been disposed.

The Learned single Judge allowed the Writ petitions. However, the Division Bench dismissed the writ petition on the ground that in Mr. Shailendra Kumar Pandey and other cases, the Recession Rules 2003 were not adverted to by the division benches.

In appeal before the Apex Court, allowing the appeal the Court held that there had already been interpretation of 2003 Rules by the learned Single Judge which had been affirmed up to this Court. In such a situation, we really fail to fathom how the Division Bench could have thought of entering into the analysis of the ratio of the earlier judgment and discussion on binding precedents when the controversy had really been put to rest by this Court. The decision rendered by this Court inter se parties was required to be followed in the same fact situation. When the factual matrix was absolutely luminescent and did not require any kind of surgical dissection, there was no necessity to take a different view.

The High Court had to consider whether the plaintiff, being the first born amongst the co-parceners of the HUF property, would by virtue of her birth, be entitled to be its Karta. HELD by the High Court upholding the claim:

(i) It is rather an odd proposition that while females would have equal rights of inheritance in an HUF property, this right could nonetheless be curtailed, when it comes to the management of the same. The clear language of section 6 of the Hindu Succession Act does not stipulate any such restriction.

(ii) The impediment which prevented a female member of a HUF from becoming its Karta was that she did not possess the necessary qualification of co-parcenership. Section 6 of the Hindu Succession Act is a socially beneficial legislation; it gives equal rights of inheritance to Hindu males and females. Its objective is to recognise the rights of female Hindus as co-parceners and to enhance their right to equality apropos succession. Therefore, Courts would be extremely vigilant apropos any endeavour to curtail or fetter the statutory guarantee of enhancement of their rights. Now that this disqualification has been removed by the 2005 Amendment, there is no reason why Hindu women should be denied the position of a Karta.

(Editor’s note: Readers are advised to refer to the feature Laws and Business by Anup Shah in various issues of BCAJ for a complete understanding of the subject).

Section 6 of the Hindu Succession Act, 1956 deals with devolution of interest of Coparcenary property. With a view to confer right upon the female heirs, even in relation to the joint family property governed by Mitakshara law, the Parliament amended section 6 by enacting the Hindu Succession (Amendment Act), 2005 which came into effect from 9-9-2005. Phulavati, daughter of Late Yeshwanth Chandrakant Upadhye (died on 18-2-1988) filed suit for partition in the Civil court somewhere in the year 1992. She amended her claim in the suit in terms of the Amendment Act of 2005.

The Karnataka High Court, on interpretation of section 6, held that the Amendment Act of 2005 would be applicable to pending proceedings. The matter travelled to the Apex Court.

The Apex Court held that the text of the amendment itself clearly provides that the right conferred on a ‘daughter of a coparcener’ is ‘on and from the commencement of Hindu Succession (Amendment) Act, 2005’. Accordingly, it was held that the rights under the amendment are applicable to living daughters of living coparceners as on 9th September, 2005 irrespective of when such daughters are born. Disposition or alienation including partitions which may have taken place before 20th December, 2004 as per law applicable prior to the said date will remain unaffected. An amendment of a substantive provision is always prospective, unless either expressly or by necessary intendment it is retrospective. Even a social legislation cannot be given retrospective effect, unless so provided for or so intended by the legislature. Accordingly, the order of the High Court was set aside and the matter was remanded to the High Court for a fresh decision in accordance with law.

The plaintiff filed a suit against the defendant and the plaintiff in such suit prayed that a decree be passed under Specific Relief Act directing the defendant to execute the sale deed in respect of the suit property in terms of the agreement for sale dated 26-04-2006 entered in between the plaintiff and the defendant. The plaintiff also prayed for a decree directing the defendant not to disturb the possession of the plaintiff from the suit property. The trial court, after hearing the parties and considering the evidence on record, dismissed the said suit and directed the defendant to refund the earnest money. The trial court dismissed the said suit mainly on the ground that the agreement for sale is not a registered instrument and therefore the plaintiff is debarred from getting any relief in the said suit. The plaintiff filed another Appeal. The learned District Judge affirmed the view of the learned Trial Court that since the said agreement for sale is not a registered instrument, the plaintiff is not entitled to get any relief by virtue of the agreement for sale dated 26-04- 2006. The learned First Appellate Court was of the view that since the said agreement for sale is not a registered document as per the provisions of section 17(1A) of the Registration Act, 1908, the plaintiff is not entitled to get any decree.

The Hon’ble High Court observed that a document which happens to be an agreement for sale does not by itself confer any right, title and/or interest in favour of the proposed transferee and it is only a document by which the parties entered into an agreement to create a further document which is called a deed of conveyance. There cannot be any dispute that such deed of conveyance is required to be compulsorily registered if the value of the immovable property is more than Rs. 100/- but since the agreement for sale does not create any such right, title and/or interest, there is no such provision in law which mandates that the said agreement for sale will also have to be registered excepting in cases where section 17(1A) of the Registration Act, 1908 applies. The provisions of the Registration Act, would also clearly indicate that an agreement for sale is not required to be compulsorily registered.

The Court further observed that, section 53A of the Transfer of Property Act stipulates that when a transferee has, in part performance of contract, taken possession of the property or any part thereof or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of contract and the transferee has performed or is willing to perform his part of the contract then in that event the transferor is debarred from enforcing against the transferee any right in respect of such property.

The plaintiff accordingly, gets a decree of specific performance of contract against the defendant/respondent in respect of the suit property in terms of the agreement for sale dated 26-04-2006 and the defendant was directed to execute an appropriate sale deed in favour of the plaintiff/ appellant in respect of the suit property and in terms of the said agreement for sale dated 26-04-2006.

The case of the plaintiff is that the first defendant is the partnership firm comprising of four partners i.e. the plaintiff and defendant nos 2 to 4 by virtue of partnership deed dated 03-04-1992. The partnership firm was engaged in advertising business and allied matters. Each of the partner has contributed a sum of Rs. 10,000/- towards share capital and the partnership was one at will. While so, the plaintiff expressed her willingness to retire from the partnership firm and sent letter on 17-01-1994. The said letter was acknowledged by the defendants 2 to 4 by letter dated 24-01-1994, confirming that the plaintiff was deemed to have retired from the partnership firm with effect from 18-01-1994. Though the plaintiff retired from the partnership firm, the existing partners reconstituted the deed of partnership and carried on their business. It was contended by the plaintiff that the partnership firm did not settle her accounts on retirement despite several demands and that she demanded to settle all her share in respect of transactions from 03-04-1992 to 18-01-1994, till the date of settlement of her dues. The plaintiff also had given break-up of the amounts that she is entitled to from the partnership firm

The suit was contested by the defendants who are the other partners on the ground that the plaintiff was acting detrimental to the interest of the partnership firm. It was further contended that the suit was not maintainable as the plaintiff only retired voluntarily from the partnership firm and the partnership firm was not dissolved as alleged by her.

The Hon’ble Court observed that u/s. 37 of the Partnership Act, the court can grant relief to outgoing partner who has not been made a final settlement and the partnership is carrying out of the business with the surviving partners and the court has jurisdiction to grant such relief based on the findings of the fact. In the instant case plaintiff partner has categorically stated that she voluntarily resigned from the firm. Therefore, she cannot be expected to claim profits of the partnership firm subsequent to her exit as there was no contribution from her side. Share of the partner would be his/her proportion of the partnership assets after they have been all realised and converted into money, all the partnership debts and liabilities have been paid and discharged. Liability to pay arises when the partnership firm is dissolved and the legal existence is taken away. After voluntary resignation of partner from firm even presuming that immovable assets purchased from the plaintiffs participation in the firms as a partner and admittedly the partnership firm was continuing the business even after the exit of the plaintiff, the retired partner can only demand her share, be it an asset or liability based on the value on the date of her exit and she cannot claim profits of the firm.

The appellant, a Hindu woman, executed a registered gift deed in respect of an immovable property in favour of the respondent reserving to herself the right to retain possession and to receive rents of the property during her lifetime. The gift was accepted by the respondent. But subsequently the appellant revoked the gift deed by a revocation deed. The respondent filed a suit assailing the revocation deed and seeking a declaration that the same was invalid and void ab initio. The trial court found that the appellant defendant had failed to prove that the gift deed set up by the respondent plaintiff was vitiated by fraud or undue influence or that it was a sham or nominal document. The gift, according to the trial court, had been validly made and accepted by the respondent plaintiff, hence, was irrevocable in nature. It was also held that since the appellant donor had taken no steps to assail the gift made by her for more than 12 years, the same was voluntary in nature and free from any undue influence, misrepresentation or suspicion. The fact that the appellant donor had reserved the right to enjoy the property during her lifetime did not affect the validity of the deed. Accordingly, the suit was decreed. The first appellate court and the High Court in second appeal concurred with the findings of the trial court.

The Hon’ble Court observed that sections 124 to 129 deal with matters like gift of existing and future property, gift made to several persons of whom one does not accept, suspension and revocation of a gift, and onerous gifts including effect of non-acceptance by the donee of any obligation arising thereunder. Section 123 calearly provides that a gift of immovable property can be made by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. When read with section 122 of the Act, a gift made by a registered instrument duly signed by or on behalf of the donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the donee. That such acceptance must be given during the life time of the donor and while he is still capable of giving is evident from a plain reading of section 122 of the Act. A conjoint reading of sections 122 and 123 of the Act makes it abundantly clear that “transfer of possession” of the property covered by the registered instrument of the gift duly signed by the donor and attested as required is not a sine qua non for the making of a valid gift under the provisions of Transfer of Property Act, 1882.

The Court further observed that section 123 of the T.P. Act is in two parts. The first part deals with gifts of immovable property while the second part deals with gifts of movable property. Insofar as the gifts of immovable property are concerned, ssection 123 makes transfer by a registered instrument mandatory. This is evident from the use of word “transfer must be effected” used by Parliament in so far as immovable property is concerned. In contradistinction to that requirement the second part of section 123 dealing with gifts of movable property, simply requires that gift of movable property may be effected either by a registered instrument signed as aforesaid or “by delivery”. The difference in the two provisions lies in the fact that in so far as the transfer of movable property by way of gift is concerned the same can be effected by a registered instrument or by delivery. Such transfer in the case of immovable property no doubt requires a registered instrument but the provision does not make delivery of possession of the immovable property gifted as an additional requirement for the gift to be valid and effective. If the intention of the legislature was to make delivery of possession of the property gifted also as a condition precedent for a valid gift, the provision could and indeed would have specifically said so. Absence of any such requirement can only lead to the conclusion that delivery of possession is not an essential prerequisite for the making of a valid gift in the case of immovable property.

In the present case, the execution of registered gift deed and its attestation by two witnesses is not in dispute. It has also been concurrently held that the donee had accepted the gift. The recitals in the gift deed also prove transfer of absolute title in the gifted property from the donor to the donee. What is retained is only the right to use the property during the lifetime of the donor which does not in any way affect the transfer of ownership in favour of the donee by the donor.

There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property. As noticed earlier, section 123 does not make the delivery of possession of the gifted property essential for validity of a gift.

The High Court was in that view perfectly justified in refusing to interfere with the decree passed in favour of the donee. The appeal was hereby dismissed.

The Petitioner-Society is a Tenant Cooperative Society, as contemplated under Rule 10 of the Maharashtra Cooperative Societies Rules, 1961. The Respondent No. 5 applied for the transfer of shares and suit flat from the name of Respondent Nos. 3 and 4th members of the Petitioner Society on 24th January 2004. Respondent No. 3 was the Director of Respondent No. 5 and also the Secretary of Petitioner Society. The Society refused the said transfer for want of sufficient stamp and registration. The Society never accepted the payment on behalf of Respondent No. 5, and even through Respondent Nos. 3 and 4, and communicated their inability to transfer the suit flat. The Application filed by Respondent No. 5, was therefore rejected and the flat remained, so also the membership, in the name of Respondent Nos. 3 and 4. The Society returned the amount paid to it. Respondent Nos. 6 and 7, on 15th August 2008, filed an Application for transfer of the suit flat and shares from Respondent No. 5 to them. On 26th August 2008, the same was rejected as Respondent No. 5 was not the owner of the suit flat in the above background. Respondent Nos. 6 and 7, therefore, invoked section 23(1) of MCS Act, 1960 before the Deputy Registrar of Cooperative Societies on 13th April, 2009. The Registrar directed that they be admitted as members in respect of the suit shares and the suit flat. The Petitioner Society therefore, preferred a Revision Application and challenged the above order. Respondent No.1 the Divisional Joint Registrar by impugned order dated 15th December 2009, rejected the Revision Application, therefore, the Writ Petition was filed by the Society.

The Hon’ble Court observed that the MCS Act and Rules made there under makes provisions for members and membership and various classes of the same and the procedure to be followed for getting such membership. Mere filing of Application for getting membership is not sufficient. The Society is governed and run by the byelaws, which is basic requirement to consider to grant and/or refuse such membership. Normally, the Society, needs to grant membership if all other requisite elements and/or qualifications are satisfied. Even for rejection, the Society must give sufficient reason and/or must show the grounds for such refusal of admission. In the present case, for the above stated case, the Society refused to accept the membership Application.

The basic scheme and procedure so prescribed under the MCS Act referring to “Member”/”Membership”. Section 2(19)(a) provides the concept of “member”. The concept “deemed member” as provided in sections 22(2) and 23 is not defined. Section 22(2) deals with the members who became members and section 23 provides a procedure for open membership. For deciding the membership issue, the aspect of restriction on transfer or charge of share or interest, as contemplated u/s. 29 is also relevant, so also to maintain the register of members as contemplated u/s. 38 of the MCS Act. Rule 38 of the byelaws provides that the Society needs to follow the byelaws, which binds the Society, as well as, its members. Rule 19 deals with the conditions before admission for the membership. This also provides the detailed procedure to be followed by all the parties. Rule 24 deals with the procedure for transfer of shares, as no transfer of shares shall be effective unless the condition so provided under the Rules and the Act are fulfilled.

Thus for transfer of membership and/or shares, the concerned parties need to follow the various procedure and the supporting material and documents. The Society needs to apply its mind to the law, as well as, the related record before granting and/or refusing admission. The statutory Authorities are also under obligation to consider this, if the Society refused the membership and/or any challenge is made to grant such admission. These, are essential elements before considering the rival case, as well as, the contentions at every stage of admission of members and/or granting membership.

Merely because someone has claimed membership, a Society is not under obligation to grant the same. The lawful occupation, their rights, title and interest in the property, permissible transfer of shares and/or property and/or interest as per the byelaws and all related aspects, just cannot be overlooked by the concerned parties, including the Society, as well as, the Registrar/Authorities.

The Society having refused to grant admission with reasoned order, the interference by the Respondent Authority in the present facts and circumstances of the case and specifically by not giving the reasons in support of their reversal order as contemplated and by overlooking the provisions and procedures of the orders passed by the Authorities are unsustainable, therefore, required to be interfered with.

Thus, the Hon’ble Court held that the fact that Respondent Nos. 6 and 7 have purchased the property and are in occupation of the same since 2008; their entitlement based upon the said transaction and/or related agreements need to be reconsidered in accordance with law by the concerned Authorities afresh, by giving full opportunity to all the parties concerned. Further, the jurisdiction of Registrar u/s. 23, though nowhere contemplated to determine the validity and/or legality of the documents, which are executed in favour of the parties, but still the basic elements as contemplated under the scheme and the provisions as referred above, right from the byelaws of the Society, need to be looked into before granting and/ or refusing membership. The serious issue of validity and/ or legality of the documents may be the matter of trial and/ or inquiry before the appropriate forum, but that itself is not sufficient to deny the membership, if all requirements are prima facie satisfied.

The appellant was the counsel for the 2nd respondent in a matter before the Magistrate Court. The 2nd respondent for the reasons known to him substituted the appellant with some other counsel. The subsequent counsel had filed his vakalatanama in the matter. The appellant sent a letter to the 2nd Respondent stating that his action is against the rule of law. The said letter was followed by filing Writ Petition before the High Court. The appellant submitted that his fundamental right to practice as a Lawyer has been infringed. The learned Metropolitan Magistrate ought not to have noted the change of vakalath filed without following the required procedure.

The Hon’ble Court observed that during the proceedings, a vakalath had been filed on behalf of the second respondent by another Advocate. Admittedly, the consent of the appellant had not been obtained.

The relationship between the Advocate and the client is strictly professional. It depends upon the trust between the parties. The legal profession is not only a service but also a calling. Therefore, when the client wants to engage another counsel, the earlier Lawyer has got no option, except to recuse himself from the case. Acting as a Lawyer to a client is different from any other disputes inter se including the payment of fees etc.

The Court further observed that the any fundamental right of the appellant has not been infringed. It is not as if the appellant has been debarred from doing his profession. It is purely a personal dispute between the appellant on the one hand and the second respondent on the other hand. It is not the case of the appellant that the vakalatanama has not been signed by the second respondent. On the contrary, it is the case of the appellant that the learned X Metropolitan Magistrate, ought to have conducted an enquiry as the change of vakalatanama has been filed without obtaining his consent. Assuming, that the permission of the court is required that aspect, at the best, can be termed as a procedural one. The duty of the Magistrate is to conduct the case before him and not to resolve the inter se between the Lawyer and the party. The Petition was accordingly dismissed.