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Everest Apartments Co-Operative Housing Society Ltd. v. State Of Maharashtra And Others .
Factual and Procedural Background
The appellant is a registered Co-operative Housing Society under the Maharashtra Cooperative Societies Act, 1960. Shivdasani (Respondent 4) sought membership, paid the requisite fees, and was allegedly denied admission by the Society. Upon rejection, he invoked the statutory appeal under Section 23(2) before the District Deputy Registrar, who decided in his favour. The Society then approached the State Government for revision under Section 154; the Government replied that it had no revisional jurisdiction because the Registrar’s order was “final” under Section 23(3). A writ petition under Articles 226/227 to the Bombay High Court was dismissed in limine. The Society obtained special-leave and appealed to the Supreme Court, which limited itself to two questions of statutory interpretation.
Legal Issues Presented
- Whether the “finality” declared in Section 23(3) bars the State Government from exercising its revisional power under Section 154 of the Maharashtra Cooperative Societies Act, 1960.
- Whether an aggrieved party has a right to move the State Government to invoke its revisional jurisdiction under Section 154, or whether that power may be exercised only suo motu.
Arguments of the Parties
Respondent’s Arguments (State Government/Supporting)
- Conceded that Section 154 confers a wide revisional power but contended that it is intended to be exercised only on the Government’s own motion and not on the application of a private party.
- Argued the power is purely discretionary; even when moved, the Government is under no duty to act unless it independently decides intervention is necessary.
- Relied on precedent to show that the word “may” in a statute generally denotes a permissive, not mandatory, power.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Commissioner of Income Tax, West Punjab v. Tribune Trust, Lahore (1948) 16 ITR 214 PC | Revisional power under a statute does not create a vested right in the assessee; exercise of the power is discretionary. | Distinguished: unlike the Income-tax Act which used “suo motu,” Section 154 lacks such words and therefore does not preclude applications by parties. |
| Julius v. Bishop of Oxford (1880) 5 App Cas 214 | Interpretation of “may” as permissive unless context imposes a duty. | Cited to examine whether Section 154 imposes a mandatory duty; the Court held it confers a power that is discretionary but exists. |
| Sheffield Corporation v. Luxford (1929) 2 KB 180 | “May” ordinarily means “may,” i.e., permissive. | Used to support the view that Government is not compelled to act whenever moved, but still retains the jurisdiction to do so. |
Court's Reasoning and Analysis
The Court first clarified that Section 154 grants the State Government a general supervisory power over “any inquiry or proceeding” conducted by subordinate officers, save one express exception—orders reviewed by the Maharashtra State Tribunal under Section 149(9). Because the Registrar’s order under Section 23 is not within that exception, the Government’s revisional competence remains intact.
“Final” in Section 23(3) merely forecloses ordinary appeals; it does not curtail the special statutory power of superintendence vested in the Government. Consequently, the Government erred in declaring lack of jurisdiction.
On the second issue, the statute’s silence regarding who may trigger Section 154 does not amount to a prohibition on party applications. Although the power is “potential but not compulsive”—the Government retains discretion to act or decline—nothing prevents an interested party from requesting intervention. Such applications serve the useful purpose of drawing the Government’s attention to potential illegality or impropriety.
The Court distinguished the Tribune Trust decision because Section 154 lacks the restrictive expression “suo motu,” and therefore does not confine the Government’s action to situations initiated solely on its own motion.
In dismissing the writ, the High Court failed to recognise that the Government had wrongly abdicated a jurisdiction it in fact possessed. A writ of mandamus should therefore issue, directing the Government to consider the Society’s revision on its merits.
Holding and Implications
APPEAL ALLOWED. The Supreme Court set aside the decisions of both the State Government and the Bombay High Court and directed the issuance of a mandamus compelling the Government of Maharashtra to entertain and decide the Society’s revision application under Section 154.
Implications: The ruling confirms that the State Government’s revisional power under Section 154 extends even to matters declared “final” under Section 23(3), and that aggrieved parties may request the Government to exercise this power. While the Government retains discretion whether to intervene, it cannot decline jurisdiction on the ground of statutory finality. The judgment clarifies supervisory jurisdiction under the Maharashtra Cooperative Societies Act but does not establish a new substantive right of appeal.
Hidayatullah, J.— In this appeal by special leave we are not concerned with the merits of the controversy between the appellant and the fourth respondent, who are the contesting parties, because only two short questions of law arise for our decision. The appellant is a registered Co-operative Housing Society, registered under the Maharashtra Cooperative Societies Act, 1960 (24 of 1961). The Society was promoted by two individuals for the construction of a block of flats in Bombay. Shivdasani (Respondent 4) claims to have paid the entrance fee, share money and other demands and complaints that his membership was wrongly rejected by the Society. The Society denies these statements and the claim. We are not concerned with the details of this dispute. What we are concerned with is this: On being informed of the rejection of his application for membership, Shivdasani filed an appeal under Section 23(2) of the above Act, which was heard and decided in his favour by the District Deputy Registrar, Cooperative Societies, Bombay. The Society filed an application before the State Government for revision purporting to be under Section 154 of the Act. This application was rejected. The Society was intimated this result by the Under Secretary to the Government of Maharashtra (Agriculture and Cooperative Department) and the communication (CAR/1064/426590/ C-42, 17th May, 1965) was as follows:
“Sir,
I am directed to state that following the hearing to you by the Deputy Secretary of this Department on 10th March, 1965, in connection with the subject noted above, a note was received in this Department from Shri M.G Mani, Advocate wherein it was claimed that though an order was final under Section 23(3) of the Maharashtra Cooperative Societies Act, 1960, Government had inherent revisionary powers under Section 154 of the said Act to entertain in such representations against such an order. I am to inform you that the matter has been examined by Government and to state that in such cases orders given under Section 23(3) are final and Government has no revisional jurisdiction in such a matter.
Yours faithfully,
Sd
(D. A. EKBOTE)
Under Secretary to Government.”
The Society filed a petition under Articles 226 and 227 of the Constitution in the High Court of Bombay which was also rejected (SCA 1027/65, 30 June, 1965). The High Court passed a short and laconic order which reads:
“Government right in declaring no jurisdiction. It is wrong to say that respondent had withdrawn the application voluntarily. Attitude of the Society unjust. Admittedly the promoters were members of Everest Co. and they wanted Rs 3000 from each one for themselves.
Societies are not meant for self aggrandizement.
No ground to interfere.
REJECTED.”
It is against the last order that the present appeal has been brought and the first question is whether the Government is right in law in declining to interfere because it has “no revisional jurisdiction in such a matter”. The answer to this question depends upon the construction of Section 154 of the Act but before we attempt it, we shall say something about the Act and the provisions applicable to this case.
2. The Maharashtra Cooperative Societies Act, which replaced the Bombay Cooperative Societies Act, 1925 was passed to provide for the orderly development of the cooperative movement in the State of Maharashtra. It deals, among others, with housing societies, the object of which is to provide their members with dwelling houses. Every society having as its objects the promotion of the economic interests or general welfare of its members, or of the public, in accordance with cooperative principles and which is economically sound may register under the Act. This entitles the societies to obtain certain benefits. The State Government appoints a Registrar of Cooperative Societies, who has numerous powers under the Act, and may appoint one or more persons to assist him and may confer all or any of the powers of the Registrar upon them. Chapter II of the Act then deals with registration of societies and all matters connected therewith. Chapter III next deals with members and their rights and liabilities. Section 22 in that Chapter lays down who may become a member of a society and by its second sub-section provides:
“22. Person who may become member.—(1) * * *
(2) Where a person is refused admission as a member of a society, the decision (with the reasons therefore) shall be communicated to that person within fifteen days of the date of the decision, or within three months from the date of the application for admission, whichever is earlier.”
Section 23 then gives a right of appeal to a member who has been refused admission. It provides:
“23. Open membership.— (1) No society shall, without sufficient cause, refuse admission to membership to any person duty qualified therefore under the provisions of this Act and its by-laws.
(2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar.
(3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof.”
The appeal of Shivdasani was made under the above section. After the order in appeal was passed by the Registrar, the Society moved the State Government under Section 154 to exercise its powers under that section. It reads:
“154. Power of State Government and Registrar to call for proceedings of subordinate officer and to pass orders thereon.— The State Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any other matter of any officer subordinate to them, except those referred to in sub-section (9) of Section 149 for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed, and as to the regularity of the proceedings of such officer. If in any case, it appears to the State Government, or the Registrar, that any decision or order or proceedings so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may after giving persons affected thereby an opportunity of being heard pass such order thereon as to it or him may seem just.”
The State Government held that it had no jurisdiction as orders given under Section 23(3) were final. Two questions arise here: (i) Is the finality under Section 23(3) subject to Section 154, and (ii) Has a party a right to move the State Government under Section 154?
3. Mr Niren De defending the order of the State Government as well as that of the High Court, admits that the State Government has been given a power to call for and examine the record of any enquiry or the proceedings of any other matter of any officer subordinate to it, except those referred to in sub-section 9 of Section 149, and that as the present is not a matter under Section 149(9) the power could be exercised by Government for the purpose of satisfying itself as to the legality or propriety of the order. In other words, he does not contest that the finality stated by Section 23(3) does not affect the power of the State Government. In making this admission he is clearly right. The Act has provided for appeals in other sections and the decision on appeal is stated to be final. Yet the power of superintendence is given to the State Government in general terms in respect of any inquiry or proceeding with only one exception, namely, the proceedings of the Maharashtra State Tribunal, when the Tribunal calls for and examines the record of any proceeding in which an appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of any decision or order passed. By mentioning one specific exception to the general power, the Act has indicated an intention to include every other inquiry or proceeding within the action by Governments as contemplated by Section 154. Mr De, however, contends, firstly, that the action by Government is intended to be on its own motion and not by application, and, secondly, that the power need not be exercised unless Government itself feels that its exercise is necessary. He refers, by way of contrast, to the opening words of Section 150 where provision is made for review of orders of the Tribunal in these words:
“150. Review of orders of Tribunal.— (1) The Tribunal may, either on the application of the Registrar, or on the application of any party interested, review its own order in an case, and pass in reference thereto such order as it thinks just:
Provided that, no such application made by the party interested shall be entertained, unless the Tribunal is satisfied that there has been the discovery of new and important matter of evidence, which after the exercise of due diligence was not within the knowledge of the applicant or could not be produced by him at the time when its order was made, or that there has been some mistake or error apparent on the face of the record, or for any other sufficient reason:”
4. Mr De next submits that this power not being coupled with any duty need not be exercised by Government even if moved to take action, unless Government itself feels inclined. He relies upon the Commissioner of Income Tax, West Punjab v. Tribune Trust, Lahore (1948) 16 ITR 214 PC. In that case the question was whether Section 33 of the Indian Income Tax Act, 1922 which conferred revisional jurisdiction on the Commissioner established a right to relief on the application of an assessee. It was contended by the assessees in that case that the relief claimed by them under Section 33 was wrongly denied to them. In dealing with this contention Lord Simond (later Viscount) observed, at p. 225 of the report, as follows:
“The fallacy implicit in this question has been made clear in the discussion of the first two questions. It assumes that Section 33 creates a right in the assessee. In Their Lordships' opinion it creates no such right. On behalf of the respondent the well-known principle which was discussed in Julius v. Bishop of Oxford(1880) 5 App. Cas. 214 — was invoked and it was urged that the section which opens with the words ‘The Commissioner may of his own motion' imposed upon him a duty which he was bound to perform upon the application of an assessee. It is possible that there might be a context in which words so inept for that purpose would create a duty. But in the present case there is no such context. On the contrary Section 33 follows upon a number of sections which determine the rights of the assessee and is itself, as its language clearly indicates, intended to provide administrative machinery by which a higher executive officer may review the acts of his subordinates and take the necessary action upon such review. It appears that as a matter of convenience a practice has grown up under which the Commissioner has been invited to act ‘of his own motion' under the section and where this occurs a certain degree of formality has been adopted. But the language of the section does not support the contention, which lies at the root of the third question and is vital to the respondent's case, that it affords a claim to relief. As has been already pointed out, appropriate relief is specifically given by other sections: it is not possible to interpret Section 33 as conferring general relief.”
Mr De also relies upon certain passages from Julius v. Bishop of Oxford (1880) 5 App Cas 214 which show the distinction between power which is discretionary in its exercise and power which must be exercised every time the occasion for its exercise arises. He contends in the words of Talbot, J. in Sheffield Corporation v. Luxford (1929) 2 KB 180 at 183 that the word “may” always means “may” which is a permissive or enabling expression and that there are no circumstances either in the Act or in the facts here, by which it can be said that Government was under a duty to interfere. He submits that the order of Government must be read as indicating the above position and not that it had no jurisdiction.
5. There is no doubt that Section 154 is potential but not compulsive. Power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise, Government is made the sole judge. This power can be exercised in all cases except in a case in which a similar power has already been exercised by the Tribunal under Section 149(9) of the Act. The exception was considered necessary because the legality or the propriety of an order having been considered once, it would be an act of supererogation to consider the matter twice. It follows, therefore, that Government can exercise its powers under Section 154 in all cases with one exception only and that the finality of the order under Section 23(3) does not restrict the exercise of the power. The word “final” in this context means that the order is not subject to an ordinary appeal or revision but it does not touch the special power legislatively conferred on Government. The Government was in error in considering that it had no jurisdiction in this case for it obviously had.
6. There remains the question whether a party has a right to move Government. The Tribune Trust case is distinguishable and cannot help the submission that Government cannot be moved at all. The words of the two enactments are not materially equal. The Income Tax Act used the words “suo motu” which do not figure here. It is, of course, true that the words “on an application of a party” which occur in Section 150 of the Act and in similar enactments in other Acts, are also not to be found. But that does not mean that a party is prohibited from moving Government. As Government is not compelled to take action, unless it thinks fit, the party who moves Government cannot claim that he has a right of appeal or revision. On the other hand, Government should welcome such applications because they draw the attention of Government to cases in some of which, Government may be interested to intervene. In many statutes, as for example the two major procedural Codes, such language has not only not inhibited the making of applications to the High Court, but has been considered to give a right to obtain intervention, although the mere making of the application has not clothed a party with any rights beyond bringing a matter to the notice of the Court. After this is done, it is for the court to consider whether to act or not. The extreme position does not obtain here because there is no right to interference in the same way as in a judicial proceeding. Government may act or may not act; the choice is of Government. There is no right of relief as in an appeal or revision under the two Codes. But to say that Government has no jurisdiction at all in the matter is to err, and that is what Government did in this case.
7. The order of the High Court in these circumstances overlooked that the Government had denied to itself a jurisdiction which it undoubtedly possessed by considering that the finality of the order under Section 23(3) precluded action under Section 154. The High Court ought to have issued a mandamus to Government to deal with the application before it within its jurisdiction under Section 154. That mandamus shall now issue to Government.
8. The appeal is thus allowed with costs.
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