{"id":56065,"date":"2010-02-17T00:00:00","date_gmt":"2010-02-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bharatiya-bhavan-co-operative-vs-smt-krishna-h-bajaj-ors-on-17-february-2010"},"modified":"2016-12-08T17:53:03","modified_gmt":"2016-12-08T12:23:03","slug":"bharatiya-bhavan-co-operative-vs-smt-krishna-h-bajaj-ors-on-17-february-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bharatiya-bhavan-co-operative-vs-smt-krishna-h-bajaj-ors-on-17-february-2010","title":{"rendered":"Bharatiya Bhavan Co-Operative … vs Smt. Krishna H. Bajaj & Ors on 17 February, 2010"},"content":{"rendered":"
Bombay High Court<\/div>\n
Bharatiya Bhavan Co-Operative … vs Smt. Krishna H. Bajaj & Ors on 17 February, 2010<\/div>\n
Bench: R. S. Dalvi<\/div>\n
                                         1\n\nMNM\n\n\n\n\n                                                                                \n              IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                        \n                            APPELLATE SIDE\n\n                       WRIT PETITION NO.1094 OF 2004\n\n\n\n\n                                                       \nBharatiya Bhavan Co-operative Housing \nSociety Limited & Anr.                                       ...Petitioners\n           Vs.\n\n\n\n\n                                             \nSmt. Krishna H. Bajaj & Ors.                                 ...Respondents\n                               \nMr. A.Y. Sakhare, Sr. Counsel i\/b. Mr.  M.N.Bhadrashete,\nAdvocate for the Petitioners\n                              \nMr. Zal Andhyarujina with Ms. Duhita Lewis i\/b. M\/s Goenka Law.Asso.\nAdvocate for Respondent No.1.\n\n                                     CORAM : SMT. ROSHAN DALVI, J.\n             \n\n\n            Date of  reserving the Judgment :    11TH JANUARY,  2010\n          \n\n\n\n            Date of pronouncing the Judgment :17TH FEBRUARY, 2010\n\n\nJUDGMENT :\n<\/pre>\n
    1. The Petitioner is the Co-operative Housing Society (Society) in which the
\n      Respondent   No.1   (Respondent)   is   a   member   upon   transfer   of   the <\/p>\n
      membership of one Mrs. Preeti Umesh Khimji (Khimji) who held the shares
\n      of the Society in respect of flat Nos.24 and 25 in the Society building being
\n      Bhatia Bhawan at Marine Drive, Mumbai 400 020 (the premises).\n<\/p>\n
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\n                                                 2<\/span><\/p>\n
    2.The Respondent No.1 entered into an agreement with Khimji on 30th March
\n      1992 for sale and transfer of the shares and the premises of Khimji to her <\/p>\n
      for   a   consideration   of   Rs.3.21   Crores.     It   was   agreed   in   the   agreement <\/p>\n
      dated 30th  March 1992 by the parties that they would contribute equal to
\n      3% of the consideration amount towards transfer fees.   The parties had
\n      certain meetings with the office bearers of the Society being the Chairman <\/p>\n
      (Petitioner   No.2)   and   the   Secretary.     The   parties   have   entered   into
\n      correspondence   with   the   Society   as   well   as   certain   other   authorities
\n      concerned   with   the   transfer   of   the   shares   and   the   premises.     Khimji <\/p>\n
      contributed  his   share   to  the  Respondent.     The  Respondent   has  paid  the <\/p>\n
      amount to the Society. This payment was made as a contribution to the
\n      Repair & Maintenance Fund of the Society. The Respondent was conferred <\/p>\n
      membership of the Society and the share certificates duly transferred in her
\n      name was given to her.  All this has transpired between April 1992 to July
\n      1992 as shall be enumerated presently.\n<\/p>\n
    3.The Respondent challenged the receipt of the amount representing 3% of
\n      the   consideration   amount   towards   transfer   fees   as   illegal   demand   for <\/p>\n
      transfer fees having been paid under coercion in the guise and name of the
\n      building repair and maintenance fund for the first time by her Advocate’s
\n      notice   dated   11th  August   1994.     Under   that   notice   she   demanded <\/p>\n
      repayment   of   the   amount   paid   to   the   Society   with   interest   at   21%   p.a
\n      thereon along with other amounts upon certain bills for repairs raised upon
\n      the Society.   That having not been repaid by the Society the Respondent
\n      No.1 filed a dispute before the First Co-operative Court at Mumbai being
\n      C.C.No.1\/1222\/94.   The   learned   Co-operative   Court   partly   allowed   the <\/p>\n
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\n                                                   3<\/span><\/p>\n
       dispute for refund of the amount paid to the Society under coercion with
\n       interest at 12% p.a thereon.\n<\/p>\n
    4. The Society preferred an Appeal therefrom to the Maharashtra State Co-\n<\/p>\n
       operative Appellate Court which came to be dismissed.  Both these orders
\n       are, therefore, challenged in this Writ Petition.\n<\/p>\n
    5.The   Petitioners   claim   that   the   Co-operative   Court   had   no   inherent
\n       jurisdiction to try the dispute because it related to the transaction prior to <\/p>\n
       the Respondent becoming a member of the Society and hence was not a <\/p>\n
       dispute between the Society and its member.   That contention has been
\n       rightly   negatived.     The   dispute   was   not   only   for   and   in   respect   of   the <\/p>\n
       coercion   practiced   upon   the   Respondent   prior   to   her   being   a   member
\n       which related to the payment of the amount on representing 3% of the
\n       consideration under the transaction payable as transfer fees, but was also <\/p>\n
       in   respect   of   other   amounts   incurred   by   way   of   repair   work   by   the <\/p>\n
       Respondent and claimed from the Society after she became a member.  The
\n       dispute   was   filed   after   the   Respondent   became   a   member.   As   per   the <\/p>\n
       judgment   in   the   case   of  Ramagauri   Keshvlal   Virani   Vs.   Walkeshwar
\n       Triveni   Co-operative   Housing   Society   Ltd.   1999   C.T.J.198  the   Co-
\n       operative Court would have jurisdiction.\n<\/p>\n
    6.The Petitioners have challenged the question of fact relating to the exercise
\n       of coercion upon her for the illegal demand of transfer fees. This dispute
\n       has been raised by the Respondent for the first time in August 1994 though
\n       the   payment   was   made   in   July   1992.     The   Respondent   examined   her <\/p>\n
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\n                                                 4<\/span><\/p>\n
      constituted   Attorney.     His   evidence   has   been   considered   by   the   Co-
\n      operative Court as well as the Co-operative Appellate Court with regard to <\/p>\n
      the factum of the coercion, if at all, used.   The parties have entered into
\n      extensive   correspondence   before   and   after   the   transaction   of   the <\/p>\n
      Respondent with the Society for payment of that amount paid as transfer
\n      fees   though   stated   to   have   been   paid   towards   the   building   repair   and <\/p>\n
      maintenance fund which also shall be dealt with presently.\n<\/p>\n
    7. Upon the Respondent’s case that the payment was made upon an illegal <\/p>\n
      demand of transfer fees by the Society which she paid under coercion, the <\/p>\n
      aspect   of   repayment   of   the   amount   paid   would   require   to   be   first
\n      considered.\n<\/p>\n
    8. The transactions relating to shares and premises in a Co-operative Society
\n      are governed under the Maharashtra Co-operative Societies Act 1960 (the <\/p>\n
      Act)   and   the   model   bye-laws   issued   thereunder.     The   model   bye-laws <\/p>\n
      would govern the affairs of the Society, unless the Society has framed its
\n      own bye-laws. The Society in this case has adopted the model bye-laws.\n<\/p>\n
      Bye-law   No.40   thereof   relates   to   transfer   of   shares   and   interest   in   the
\n      capital and property of the Society. It lays down the rights and entitlements
\n      of the Society as well as the members seeking transfer of their shares and <\/p>\n
      interest in the capital and property of the Society.  One of the requirements
\n      under bye-law 40(d) (vii) is the payment of premium by the member of the
\n      Society   to   the   Society   at   the   rate   fixed   in   the   AGM   not   exceeding   Rs.
\n      25,000\/-.   Any additional amount by way of donation etc., may be taken
\n      only with the consent of the member.\n<\/p>\n
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\n                                                  5<\/span><\/p>\n
    9. Indeed demand of money to be paid as transfer fees to the Society of an <\/p>\n
       amount representing 3% of the consideration under the transaction of the
\n       sale\/purchase of the flat is illegal except if it is donated by the member <\/p>\n
       voluntarily.\n<\/p>\n
    10.The   Act   under   which   the   bye-laws   are   framed,   therefore,     specifically
\n       forbids   receipt   of   any   premium   in   excess   of   Rs.25,000\/-.   Consequently, <\/p>\n
       under Section 23 of the Indian Contract Act the consideration paid by way <\/p>\n
       of transfer fees in excess of Rs.25,000\/- would be void as forbidden by the
\n       model   bye-laws   under   the   Act.     The   relevant   part   of   Section   23   of   the <\/p>\n
       Indian Contract Act runs thus :-\n<\/p>\n
                     “23.What   consideration   and   objects   are   lawful,   and   what
\n                     not.-  The   consideration   or   object   of   an   agreement   is   lawful,  <\/p>\n
                     unless-\n<\/p><\/blockquote>\n
                     it is forbidden by law; or <\/p>\n
                     ……..\n<\/p><\/blockquote>\n
                     ……..\n<\/p><\/blockquote>\n
                     ……..\n<\/p><\/blockquote>\n
                     ……..\n<\/p><\/blockquote>\n
                     In   each   of   these   cases,   the   consideration   or   object  of an
\n                     agreement   is  said  to  be   unlawful.   Every  agreement of which
\n                     the object or consideration is unlawful is void.”\n<\/p><\/blockquote>\n
    11.Any member of the Society or any proposed member of the Society paying
\n       any transfer fees in excess of Rs.25,000\/- would be entering into a void
\n       contract since the consideration thereunder is void being forbidden by the
\n       aforesaid  law.     Payment   under   bye-law   40(d)(vii)  is   independent   of   the <\/p>\n
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\n                                                6<\/span><\/p>\n
      amounts claimed from members of the Society by way of charges of the
\n      Society   under   bye-law   No.71(a)(iv).     Such   amounts   can   be   claimed <\/p>\n
      proportionately from the persons who are already members.\n<\/p>\n
    12. Mr. Andhyarijuna relied upon Section 65 of the Contract Act to enforce the
\n      obligation of the Society which had received advantage under the contract <\/p>\n
      with   the   Respondent   which   was   later   discovered   to   be   void   by   the
\n      Respondent.  Section 65 runs thus :-\n<\/p>\n
                    65. “Obligation of person who has received advantage under  <\/p>\n
                    void   agreement,  or  contract that becomes void  –  When   an
\n                    agreement is discovered to be void, or when a contract becomes  <\/p>\n
                    void,   any   person   who   has   received   any   advantage   under   such
\n                    agreement   or   contract   is   bound   to   restore   it,   or   to   make
\n                    compensation for it to the person from whom he received it.”\n<\/p><\/blockquote>\n
    13.Mr. Andhyarujina would contend that the Society received an advantage
\n      under   its   agreement   with   the   Respondent   for   payment   of   the   illegal <\/p>\n
      transfer   fees   and   had   the   obligation   to   return   it   under   the   aforesaid <\/p>\n
      provision.   He   contends   that   it   was   only   in   August   1994     that   the
\n      Respondent discovered that her contract with the Society was void having <\/p>\n
      the   consideration   which   was   unlawful.     He   relied   upon   the   case   of
\n      Thakurain Harnath Kuar Vs. Thakur Indar Bahadur Singh 1922 Privy
\n      Council 403.  That was not a case of a contract forbidden by law.  It was a <\/p>\n
      case   of   an   agreement   which   was   later   discovered   to   be   void.     That
\n      agreement was void only because a person had no interest in the lands he
\n      sought to transfer, but mere expectancy. He had this expectancy because
\n      the lands belonged to another through whom he claimed, but that other’s <\/p>\n
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\n                                                  7<\/span><\/p>\n
      widow had the interest which her husband during his life time had, under
\n      Hindu   Law   and   under   the   Oudh   Estates   Act   (which   was   analogous   to <\/p>\n
      Section 3 of the Hindu Women’s Right to Property Act which later came to
\n      be applied to the whole of India from 1937) and he was a collateral and <\/p>\n
      succession to collaterals opened only after the widow’s death.  Under these
\n      circumstances the transfer\/contract to sell the land by him was void.  That <\/p>\n
      was   not   the   case   of   an   agreement   being   void   under   Section   23   of   the
\n      Contract Act being prohibited by any other law.\n<\/p>\n
    14.The case of Kuju Collieries Ltd. Vs. Jharkhand Mines Ltd. A.I.R. 1874 <\/p>\n
      S.C. 1892    also relied upon by Mr. Andhyarijuna  was a case of a mining
\n      lease in favour of the Plaintiff.  The lease was contrary to the provisions of <\/p>\n
      the Mines and Minerals (Regulation and Development) Act, 1948 and the
\n      Mineral Concession Rules, 1949 made thereunder. The lease was void ab
\n      initio.   The Lessor knew that legal position.   It was observed that he was <\/p>\n
      already in the business of mining at the time the lease was entered into. He <\/p>\n
      had the advantage of consulting Lawyers and Solicitors.   The Lease Deed
\n      was drawn up and prepared by Solicitors.   The mining lease related to a <\/p>\n
      “Salami” which was rendered illegal under the Mining Rules. It was held
\n      that the Lessor was not  entitled to claim relief under Section  65  of  the
\n      Contract Act.  It was observed that Section 65 would come into play when <\/p>\n
      the   Plaintiff   comes   to   know   or   finds   out   that   the   agreement   is   void   or
\n      discovers   later   that   the   agreement   is   void.     Knowledge   is   an   essential
\n      requisite in such cases.  It is observed that there may be cases where parties
\n      entered   into   an   agreement   honestly   thinking   that   it   is   a   perfectly   legal
\n      agreement   and   then   discovered   it   to   be   void,   but   a   person   who   gives <\/p>\n
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\n                                                  8<\/span><\/p>\n
       money for an unlawful purpose knowing it to be so has knowledge of the
\n       illegality or unlawfulness, and if such a finding of fact can be imputed upon <\/p>\n
       him he cannot say that he later discovered it to be void, since the law will
\n       not assist the person who comes with unclean hands.  It is, therefore, held <\/p>\n
       that   the   invalidity   of   the   contract   or   agreement   should   be   discovered
\n       subsequent to the making of it to derive benefit under Section 65 of the <\/p>\n
       Contract Act.  Such advantage cannot be taken by parties who knew from
\n       the beginning the illegality of the agreement.  It was, therefore, held that
\n       such a party cannot be restored the advantage received by the other under <\/p>\n
       Section 65 of the Contract Act. It was held that there was a distinction <\/p>\n
       between   an   agreement   and   contract.   Under   Section   65   a   contract   was
\n       necessarily an agreement enforceable by law and that which was not void.\n<\/p>\n
       The   agreement   which   is   later   discovered   to   be   void   would   mean   an
\n       agreement which is not enforceable under Section 2 of the Contract Act
\n       and therefore, not a contract.   It may be  that the parties or one of the <\/p>\n
       parties did not know that it was not enforceable at the time he or they <\/p>\n
       entered into the contract.   They may have come to know later that their
\n       agreement was not enforceable; that is that it was not a contract at all.\n<\/p>\n
       The judgment further holds that if at the time the agreement was entered
\n       into,   both   parties   knew   that   it   was  not   lawful   and   was,   therefore,   void
\n       there was no contract at all, but only an agreement.  Hence, that would not <\/p>\n
       be a case of an agreement which is later discovered to be void – it was void
\n       ab initio.  Therefore, Section 65 does not apply to such a case.\n<\/p>\n
    15.Mr.Sakhare   strongly   relies   upon   this   enunciation   of   the   law   in   this
\n       judgment for the recovery of the amount by the Respondent by restitution <\/p>\n
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\n                                                9<\/span><\/p>\n
      of the advantage thereunder as claimed by the Respondent in the dispute.
\n      It is this aspect which is most material.\n<\/p>\n
    16.Further Mr. Andhyarujina claimed refund\/repayment from the Society, to <\/p>\n
      whom money was paid by the Respondent by mistake, under Section 72 of
\n      the Indian Contract Act.  Section 72 runs thus:-\n<\/p>\n
                “72.   Liability   of   person   to   whom   money   is   paid,   or   thing
\n                delivered,   by   mistake   or   under   coercion.  –   A   person   to   whom  <\/p>\n
                money has been paid, or anything delivered, by mistake or under
\n                coercion, must repay or return it.”\n<\/p><\/blockquote>\n
    17.As an illustration of such payment which was ordered to be returned, he
\n      cited the case of Sri Sri Shiba Prasad Singh Vs. Maharaja Srish Chandra <\/p>\n
      Nandi A.I.R. (36) 1949 Privy Council 297  which is the case of Mining
\n      lease entered into by the parties under which the lease rent was specified.\n<\/p>\n
      The parties expected the freight to come down after a new railway line was <\/p>\n
      to be constructed.  The parties provided for the rate of reduction of the rent
\n      upon expected specified rates of reduction in freight. There were 2 separate
\n      lease rents that would be paid depending upon the extent of the reduction <\/p>\n
      in freight. The Lessee paid the enhanced royalty under a   mistake though
\n      the freight payable to the Railway was reduced.  This was, therefore, paid
\n      under a mistake of fact as to the extent of freight payable.  The Lessee then <\/p>\n
      sought   appropriation   in   the   account   with   the   Lessor   with   regard   to   the
\n      payment   of   royalty.     The   clause   in   the   Lease   between   the   parties   was
\n      required to be interpreted.  It was held that the Lessee was unaware of his
\n      right under the Lease. Considering the distinction between the applicability <\/p>\n
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\n                                                  10<\/span><\/p>\n
      of Section 21 and 72 of the Contract act and the mistakes of fact and law,
\n      it was held that the mistake in that case was “thinking that the money paid <\/p>\n
      was due, while in fact it was not due”.  It was held that even if this was the
\n      mistake of law the contract must stand and would be enforceable unless <\/p>\n
      the Plaintiff was disentitled on principles of estoppal and the like.   It was
\n      observed   that   in   that   case   the   money   was   paid   under   the   belief   it   was <\/p>\n
      legally due and that belief was mistaken.   The case fell under Section 72
\n      and the amount was payable.  It must be appreciated that the payment in
\n      that case was not to be made under the contract which was void under <\/p>\n
      Section 23 of the Contract Act. ig\n<\/p>\n
    18.Mr.  Andhyarijuna  contended  that  the mistake  under  Section 72 is   the <\/p>\n
      mistake of fact as well as law as laid down in various judgments and if a
\n      party enters into agreement under a mistake  of law also the agreement
\n      would not be void.  (See The Sales Tax Officer, Banaras Vs. Kanhaiya Lal <\/p>\n
      Makund Lal Saraf A.I.R. 1959 S.C.135 (V 46 C20);   Kleinwort Benson <\/p>\n
      Ltd. Vs. Lincoln City Council 2 A.C. 349;  also  Shibu Prasad Singh Vs.
\n      Srish Chandra Nandi A.I.R 1949 P.C 297 and  Steel and Wire Products <\/p>\n
      Ltd. Vs. Superintendent of Commercial Taxes  A.I.R. 1957 Patna 112).\n<\/p>\n
    19.The law laid down in these judgments indeed is that a mistake of law is <\/p>\n
      also covered for suing under Section 72 of the Contract Act.  However what
\n      is   mentioned   is   the   act   of   the   parties   under   a   “mistake”   of   any   law.   A
\n      “mistake” by its very meaning as shown in Black’s Law Dictionary Eighth
\n      Edition at page 1022 is:\n<\/p>\n
                 An error, misconception or misunderstanding; an erroneous belief.  A  <\/p>\n
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\n                                              11<\/span><\/p>\n
                mistake of law is shown to be a mistake about the legal effect of a
\n                known fact or a situation – Also termed error in law; error of law.  It
\n                is, therefore, some act done without knowledge of the Law.\n<\/p><\/blockquote>\n
      A mistake is explained in Advanced Law Lexicon by P. Ramanatha Aiyar
\n      Third Edition Volume 3 page 3037 is :\n<\/p>\n
                An unconscious ignorance or forgetfulness of a fact, past or present,
\n                material to the contract, or a belief in the present existence of a thing
\n                material to the contract, which does not exist; some intentional act,
\n                omission, or error arising from ignorance, surprise, imposition, or  <\/p>\n
                misplaced confidence……\n<\/p><\/blockquote>\n
      Mistake of law explained in Advanced Law Lexicon by P. Ramanatha Aiyar <\/p>\n
      Third Edition Volume 3 page 3038 is:\n<\/p>\n
                  A mistake of law occures when a person having full knowledge of <\/p>\n
                  facts comes to a erroneous conclusion as to their legal effect.\n<\/p>\n
    20.None can “mistake” a Law which is known.  Hence if the party knows that
\n      an act is prohibited by any law, he cannot be taken to have mistaken that
\n      there was no such law and committed his act.  He does that act knowing it <\/p>\n
      to be unlawful.   He then violates Section 23 of the Contract Act.   Hence
\n      under Section 72 if the parties act under a mistaken belief that the act is
\n      lawful   and   valid,   she\/he   would   fall   within   the   protective   umbrella   of <\/p>\n
      Section 72 to undo the damage done to her\/him by such act.  If however a
\n      party acts upon the knowledge that the act she\/he does is void as being
\n      unlawful under any law he cannot be protected by and under Section 72.
\n      She\/he would fall within the mischief of Section 23 instead.  Taking all the <\/p>\n
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\n                                               12<\/span><\/p>\n
       acts, whether known or unknown, by the parties as granting protection to
\n       such   party   for   recovery   of   amounts   paid   under   such   contracts,   would <\/p>\n
       render the aforesaid part of Section 23 otiose and would be contrary to the
\n       known meaning of the term “mistake”.  The contract of the parties must be <\/p>\n
       considered to see the mistake or knowledge.\n<\/p>\n
    21.Further   Mr.Andhyarijuna   claimed   repayment   of   the   amount   paid   to   the
\n       Society  by the Respondent under Section 72 of the Contract Act as having
\n       been   paid   under   coercion.   Coercion   as   defined   in   Section   15   of   the <\/p>\n
       Contract Act itself is :\n<\/p>\n
                    “unlawfully detaining of a person with the intention of causing
\n                    such person to enter into an agreement.”\n<\/p>\n
    22.Coercion would impinge upon the free consent of the party being coerced.
\n       The contract entered into upon such coercion would not be a valid contract
\n       since it was devoid of free consent.  Consequently, it would be voidable, as <\/p>\n
       being without free consent at the option of the party giving the consent, <\/p>\n
       under Section 19 of the Contract Act.  It, therefore, follows as a matter of
\n       corollary that if the consent was free consent that contract would be a valid <\/p>\n
       contract.  It is only because it is without free consent that it is allowed to be
\n       avoided   by   the   aggrieved   party   whose   consent   was   obtained   under
\n       coercion.   Consequently,   therefore,   when   the   Respondent   claims   that   she <\/p>\n
       entered into a contract under coercion of the Society (or its Chairman) she
\n       claims that she was unlawfully detained with an intention of causing hurt
\n       to enter into the contract which she entered into without her free consent.
\n       And   consequently,   therefore,   if   she   had   freely   consented,   that   contract
\n       would have been a valid contract.     The amount in excess of Rs.25000\/-\n<\/p>\n
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\n                                                  13<\/span><\/p>\n
       paid to the Society would be vitiated only if it is paid under coercion i.e
\n       without the (free) consent of the Respondent.  It is one thing to pay under <\/p>\n
       coercion and quite another to pay under a mistake of Law.  In the former
\n       there is no mistake; the payment can be avoided by the party paying under <\/p>\n
       a   contract   which   is  voidable   at   her\/his  option.   In   the   latter  there   is  no
\n       question of coercion.   The Respondent claims under both these aspects of <\/p>\n
       Section 72 of the Contract Act.\n<\/p>\n
    23.It would, therefore, have to be seen :\n<\/p>\n
                  1. Whether the Respondent knew at the time she made payment
\n                     to the Society in July 1992 that the amount paid by her was for <\/p>\n
                     transfer   of   the   shares   and   the   premises   of   the   Society   from
\n                     Khimji   to   her   which   was   an   illegal   payment   or   whether   she
\n                     knew at that time that it was only the amount payable to the <\/p>\n
                     Society towards repair fund.\n<\/p><\/blockquote>\n
                                                                 AND\n<\/p><\/blockquote>\n
                  2. Whether   the   coercion   as   defined   under   Section   15   of   the <\/p>\n
                     Contract act was practiced upon her to part with that amount.\n<\/p><\/blockquote>\n
    24.Mr.   Andhyarujina   has   sought   to   show   from   the   agreement   between   the <\/p>\n
       Respondent   and   Khimji   and   the   correspondence   that   ensued   thereafter
\n       between the Respondent and the Society, Khimji and the Society, as well as
\n       by   the   Respondent   and   Khimji   with   other   legal   authorities   that   the
\n       Respondent   only   learnt   in   August   1994     that   the   amount   which   the
\n       Respondent paid to the Society by way of transfer fee, but in the guise and <\/p>\n
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\n                                                14<\/span><\/p>\n
      name  of   the   building  repair  fund  under  coercion   of  the   Society   was  an
\n      illegal payment which the Society was not entitled to receive.     Was the <\/p>\n
      Respondent acting under a mistake of Law  ?   OR   was she acting under
\n      coercion ?  Was the contract void or voidable or neither ?\n<\/p>\n
    25.On 30th March 1992 the Respondent entered into an agreement for sale of <\/p>\n
      the   premises   with   Khimji   who   was   then   a   member   of   the   Society.   The
\n      agreement sets out the various covenants between the parties for the sale
\n      of   the   flats,   the   requirement   of   completing   and   signing   the   requisite <\/p>\n
      transfer forms for transfer of the shares of the premises to the name of the <\/p>\n
      Respondent and executing a Deed of transfer for effectively transferring the
\n      shares of the premises to her. It shows Khimji to be a member of Society <\/p>\n
      and holding 2 shares therein under Share Certificate Nos.23 and 24 and as
\n      such   member   occupying   the   aforesaid   two   flat   Nos.24   and   25     with
\n      attached   adjoining   terraces   on   the   7th  floor   of   the   Society   building   and <\/p>\n
      entitled to 5 car parking spaces Nos.29,30,31,32 and 33 in the compound <\/p>\n
      of the Society.\n<\/p>\n
    26.Clause 1 of the agreement sets out the consideration agreed to be paid by
\n      the Respondent to Khimji being Rs.3 Crores for the two flats and Rs.21
\n      lakhs for the 5 car parking spaces aggregating to Rs.3.21 Crores.\n<\/p>\n
    27.Under  Clause 3  of the agreement the parties agreed to make application
\n      before the Income Tax authority for sale and transfer of the shares and the
\n      premises to the Respondent.\n<\/p>\n
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\n                                                15<\/span><\/p>\n
    28.Under  Clause 4  of the agreement the parties agreed that Khimji would
\n       make an application to the Society for obtaining its N.O.C for the sale and <\/p>\n
       transfer  of  the   shares   and  the   premises  to  the   Respondent.   It   is  further
\n       agreed that if the Society does not grant such N.O.C Khimji would refund <\/p>\n
       the earnest money paid by the Respondent without interest.\n<\/p>\n
    29.Under Clause 5 of the agreement the sale was to be completed within 15
\n       days of the aforesaid premises being obtained and a Deed of Transfer was
\n       to be executed by Khimji in favour of the Respondent.\n<\/p>\n
    30.The agreement also recites various declarations and covenants with only
\n       one of which this Petition is concerned i.e. Clause 7(viii) under which the <\/p>\n
       parties   agreed   to   pay   the   Society   \u00bd   the   amount   of   transfer   fee   each
\n       prescribed by the Society which, as per the bye-laws then in force, came to
\n       3% of the consideration amount.\n<\/p>\n
    31.The parties signed the execution clause of the agreement in the presence of
\n       their   respective   Advocates   and   Solicitors.   Khimji   has   acknowledged   the <\/p>\n
       receipt of the earnest amount of Rs.15 lakhs.\n<\/p>\n
    32.The   Respondent   has   shown   the   unregistered   and   inadequately   stamped <\/p>\n
       type-written copy of the agreement without the relevant stamp papers as
\n       well as the docket thereon.\n<\/p>\n
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\n                                                 16<\/span><\/p>\n
    33.This lis has arisen from the aforesaid clause 7(viii) under which the parties
\n       agreed to pay the transfer fee @ 3% of the consideration amount equally <\/p>\n
       by them which payment was then illegal.\n<\/p>\n
    34.As   agreed   in   Clause   4   of   the   agreement   dated  30th  March   1992   Khimji
\n       applied to the Society for obtaining its N.O.C for the sale and transfer of <\/p>\n
       the shares and the premises to the Respondent by his letter dated 9 th April
\n       1992.  Similarly the Respondent made her application to the Society to be
\n       admitted as a member on 9th April 1992.  They both enclosed a copy of the <\/p>\n
       agreement   dated   30th  March   1992.     They   both   mentioned   about   the <\/p>\n
       permission required from the Income Tax Authority. Whereas Khimji agreed
\n       to pay the necessary transfer fee to the Society, the Respondent agreed and <\/p>\n
       undertook   to   abide   by   the   bye-laws   of   the   Society.     Consequently   they
\n       applied for permission for the sale and transfer of the shares and premises
\n       to the Respondent.\n<\/p>\n
    35.Similarly   as   per   Clause   3   of   the   agreement   the   parties   made   a   joint
\n       application to the Income Tax Authority for sale and transfer of the shares <\/p>\n
       and   premises   to   the   Respondent.     The   Income   Tax   Authority   called   for
\n       certain particulars.  Khimji’s Attorneys replied the Income Tax Authority.  In
\n       their   letter   dated   20th  April   1992,   they   made   a   specific   mention   of   the <\/p>\n
       transfer   fee   payable   to   the   Society   which   was   3%   of   the   consideration
\n       amount mentioned in the agreement for sale which came to Rs.9.63 Lakhs.
\n       The   Khimji’s     Attorneys   further   mentioned   that   the   application   to   the
\n       Society for seeking permission for the sale and transfer of the flats was
\n       made by the Respondent and the Society would be issuing its N.O.C in due <\/p>\n
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\n                                               17<\/span><\/p>\n
       course.     They   further   mentioned   that   the   exact   amount   of   transfer   fee
\n       would be intimated by the Society at the time of issue of N.O.C in writing.\n<\/p>\n
       The details of the amount of transfer was as agreed between the parties in
\n       clause 7(viii).\n<\/p>\n
    36.The   Society   by   its   letter   dated   21st  May   1992   addressed   to   Khimji, <\/p>\n
       concerning the sale and transfer of the aforesaid premises, recorded that
\n       there   were   meetings   held   between   the   Society’s   Chairman   and   the
\n       constituted Attorneys of Khimji and the Respondent.   The modalities and <\/p>\n
       procedures   regarding   transfer   and\/or   the   contribution   by   Khimji   as   the <\/p>\n
       then member were clarified and agreed upon.  The Society recorded its no
\n       objection   to   transfer   the   said   premises   to   the   Respondent   subject   to <\/p>\n
       compliance of several conditions.  The Society recorded their appreciation
\n       of   the   Respondent   as   the   incoming   member   for   her   willingness   and
\n       “gracious contribution of Rs.9.63 lakhs towards building maintenance and <\/p>\n
       repair   fund”.     The   Society   specified   that   the   payment   “should   be   made <\/p>\n
       prior to taking possession of the flats or on or before 19th July 1992”.\n<\/p>\n
    37.The Respondent paid her cheque of Rs.9.63 lakhs on 8th July 1992 as the
\n       “gracious contribution towards the building maintenance and repair funds
\n       etc.”   under   her   letter   of   that   date   annexing   thereto   various   documents <\/p>\n
       required by the Society as also her cheque for Rs.9.63 lakhs dated 11th July
\n       1992.  The Respondent called upon the Society to transfer the shares and
\n       the flats together with the car parking spaces to her name and return the
\n       share certificates duly transferred to her name and issue her a receipt for
\n       Rs.9.63 Lakhs.\n<\/p>\n
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\n                                                  18<\/span><\/p>\n
    38.The   Society   transferred   the   share   certificates   in   the   name   of   the <\/p>\n
       Respondent   on   22nd  July   1992   and   thus   admitted   the   Respondent   as
\n       member of the Society.  The Society encashed the cheque on 22nd July 1992 <\/p>\n
       and passed its receipt in favour of the Respondent for Rs.9.63 lakhs on 27th
\n       July 1992 received towards “building repair fund”.\n<\/p>\n
    39.The   entire   transaction   for   the   sale   and   transfer   of   the   shares   and   the
\n       premises agreed to be purchased by the Respondent was thus effectuated.\n<\/p>\n
    40.It can be seen that the Respondent was herself aware of, or had obtained
\n       the   requisite   legal   advise   with   regard   to   the   compliance   of   various <\/p>\n
       requirements of the Society as well as legal authorities upon purchase of
\n       the flats by her.   She knew about the application to be made before the
\n       Income   Tax   Authority   for   obtaining   its   permission,   she   knew   about   the <\/p>\n
       application to be made to the Society setting out the precise amount of Rs.\n<\/p>\n
       9.63 lakhs which ultimately came to be paid by her to the Society,  she also
\n       knew about the requirement of completing and signing the transfer forms <\/p>\n
       as well as the Deed of Transfer for transfer of shares and the premises in
\n       her name. The agreement is seen to have been drafted by the Advocate and
\n       Solicitor, the absence of docket notwithstanding.   It is witnessed by him.\n<\/p>\n
       Each of the legal requirements in an agreement to transfer a flat in a Co-
\n       operative Society is shown to be complied with.  The parties have entered
\n       into a transfer of a large immovable property of considerable value. They
\n       are   not   expected   to   have   acted   without   legal   advice   and   without   the
\n       knowledge of the provisions of various laws relating to the transfer.  Laws <\/p>\n
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\n                                                  19<\/span><\/p>\n
       including the Transfer of Property Act, the Registration Act, Income tax Act
\n       and the Rules, Maharashtra Co-operative Societies Act and Rules (though <\/p>\n
       not the Stamp Act !) are seen to have been considered and acted upon. The
\n       very extent of the transaction (the purchase of the flats for Rs.3.21 Crores <\/p>\n
       in 1992) shows that the Petitioner availed herself of all the requisite legal
\n       advise   and   was   informed   about   and   acquired   knowledge   about   all   the <\/p>\n
       relevant laws at that time in force.\n<\/p>\n
    41.The correspondence entered into by Khimji as well as the Respondent with <\/p>\n
       the   Society   further   shows   the   Respondent’s   knowledge   of   the   requisite <\/p>\n
       laws.  The Society’s letter dated 21st May 1992 shows meetings held by the
\n       parties   with   regard   to   the   “transfer   fee   and\/or   contribution”   to   be <\/p>\n
       paid\/made to the Society. It shows that the Society’s position was clarified
\n       and that position was agreed upon by the Respondent’s husband as her
\n       constituted Attorney who attended the meeting on her behalf.  It shows the <\/p>\n
       gracious   contribution   which   is   enjoined   to   be   made   prior   to   taking <\/p>\n
       possession of the flats by the Respondent or prior to 19th  July 1992.   It
\n       shows   that   gracious   contribution   was   the   condition   precedent   for   the <\/p>\n
       transfer of the shares and the flats to the Respondent.   The letter shows
\n       that this payment was the transfer fee and\/or contribution.   This case is
\n       much like the case of  Kuju Collieries Ltd  (supra)  and the observations <\/p>\n
       relating to knowledge of Law made in that judgment lend themselves to fit
\n       this case like a glove.\n<\/p>\n
    42.  The   period   during   which   it   was   paid   is   also   a   pointer   to   its   known
\n       illegality  –  it  was   to  be   paid  at  least  before   19th  July  1992   which  was <\/p>\n
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\n                                                   20<\/span><\/p>\n
       before the next A.G.M. The transfer of the shares and the flats to her would
\n       be decided at the A.G.M if the transfer fee was paid prior thereto.   The <\/p>\n
       Respondent accepted the illegal offer of the Society by performance – she
\n       paid   Rs.9.63   lakhs   under   her   letter   dated   8th  July   1992.     The   Society <\/p>\n
       resolved   to   transfer   the   flats   in   her   name   consequent   upon   such   illegal
\n       payment made knowing it to be illegal.  The Society transferred the share <\/p>\n
       certificate and issued the receipt camouflaged  as contribution to the repair
\n       fund thereafter.\n<\/p>\n
    43.On 9th  August 1992 the Society held its A.G.M in which it acknowledged <\/p>\n
       the payment received from the Respondent being 3% of the sale value of
\n       the flats purchased by her.  The Society resolved that 3% of the sale value <\/p>\n
       must be asked from every new member admitted to the Society towards its
\n       repairs and maintenance fund.   This resolution shows that such payment
\n       was   until   then   not   received   by   the   Society   or   demanded   from   the   new <\/p>\n
       members.  The Respondent contends that under an earlier resolution of 9th <\/p>\n
       February   1986   the   new   members   were   required   to   pay   the   specified
\n       percentage of the sale amount to the Society.   Even if that be so, it is an <\/p>\n
       illegal payment demanded by the Society and an illegal payment made by
\n       the new members being contrary to bye-law No.40 cited above.\n<\/p>\n
    44.It   so   happened   that   the   flats   purchased   by   the   Respondent   had   certain
\n       leakages requiring the Respondent to call upon the Society to attend to
\n       those   leakages   by   several   of   her   letters.     The   first   of   such   letters   was
\n       written on 30th July 1992 by the Respondent to the Society.  It referred to
\n       acute water shortage, leakage problem and the problem of white ants. The <\/p>\n
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\n                                               21<\/span><\/p>\n
      Respondent   called   upon   the   Society   to   do   water   proofing   work   and
\n      requested   to   take   remedial   steps.     It   did   not   mention   of   the   gracious <\/p>\n
      amount   of   Rs.9.63   lakhs   paid   towards   repair   fund;   it   did   not   make   a
\n      demand that her flats be repaired from the proceeds of the fund. Similar <\/p>\n
      letter was written on 17th November 1993.\n<\/p>\n
    45.It was only in April-May 1994 that, the Respondent changed her stance.  In
\n      letter dated 25th April 1994 to the Society she stated that she would get the
\n      terrace   tarred   and   demanded   reimbursement   of   the   costs   of   “this <\/p>\n
      temporary arrangement”.   She also called upon the Society to reimburse <\/p>\n
      her for previous repair work under a bill sent by her to the Society.\n<\/p>\n
    46.In the letter dated 14th  May 1994 she stated that she paid Rs.9.63 lakhs
\n      under one of the conditions laid down by the Society in their letter dated
\n      21st May 1992.  She demanded to know from the Society if the Society had <\/p>\n
      charged   other   members   such   an   amount   for   transferring   the   flats,   how <\/p>\n
      many flats have been transferred, the amount received under such transfer
\n      and how they were spent. She mentioned in that letter that the amount <\/p>\n
      was paid before transferring the flats in her name.  The tenor of that letter
\n      implicitly shows that it was paid as transfer fee.  The reply of the Society
\n      dated 30th May 1994 to the Respondent’s letter dated 14th May 1994 shows <\/p>\n
      that the amount paid at the time of transfer of flats is “without any strings”
\n      denoting that amount paid by the Respondent was transfer fee simplicitor.\n<\/p>\n
    47. The Respondent claims to have received knowledge of the illegality of the
\n      transaction in about August 1994 when she issued her Advocate’s notice <\/p>\n
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\n                                                22<\/span><\/p>\n
       dated 11th August 1994 to the Society demanding the repayment of Rs.9.63
\n       lakhs with interest @ 21% from the date of the payment made by her till <\/p>\n
       repayment   by   the   Society   and   other   amounts   for   certain   repairs.     She
\n       claimed in the notice that the Society forced, coerced and pressurised her <\/p>\n
       to make the payment at the time of the transfer of the shares to her name
\n       in the guise of the building repair and maintenance fund.  She contended <\/p>\n
       that that was illegal amount of transfer fee made under the transfer of the
\n       shares   to   her   name,   leaving   no   option   but   to   make   payment   and
\n       consequently it was illegally extorted by the Society.\n<\/p>\n
    48.The reason for her changed stance is not far to see.  The Respondent put
\n       up   some   unauthorised   construction   on   the   terraces   of   her   flats.     She <\/p>\n
       enclosed them. She consumed additional F.S.I without the   permission of
\n       the Society.   The Society has written 3 letters to her on 4th  May 1994, 7th
\n       June   1994   and   17th  June   1994   which   have   remained   unreplied   and <\/p>\n
       uncomplied.  In these letters the Society set out the undertaking given by <\/p>\n
       the Respondent at the time of the transfer of the flat and showed its breach
\n       by   putting   up   additions   and   making   alterations   in   her   premises.     The <\/p>\n
       Society called upon her to remove the additions, demanded inspection of
\n       her premises and even sent the copy of the sanctioned plan demanded by
\n       her   showing   the   open   terraces.     Since   none   of   these   was   heeded,   the <\/p>\n
       Society resolved to file a dispute and obtain orders against the Respondent
\n       in their Managing Committee Meeting dated 11th June 1994.\n<\/p>\n
    49.Thereafter,   for   the   first   time,   the   Respondent   alleged   coercion   in   her
\n       Advocates notice dated 11th August 1994.\n<\/p>\n
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\n                                                23<\/span><\/p>\n
    50.It is for the Respondent to prove the coercion that she alleged.  She has led <\/p>\n
       evidence in that behalf.   Aside from the oral evidence of her constituted
\n       Attorney,   no other independent evidence of coercion is produced by her.\n<\/p>\n
       The evidence inter alia shows that the number of meetings were arranged
\n       and held between the Chairman and Secretary of the Society, Khimji and <\/p>\n
       the  Respondent’s  constituted  Attorney  at  the  time     she  entered  into  the
\n       contract and sought transfer of membership to herself.  The evidence shows
\n       what   was   told   by   the   Society   Chairman   and   the   Secretary   to   the <\/p>\n
       Respondent’s constituted Attorney.  It also shows that the Respondent was <\/p>\n
       represented by her Attorney at the time of the agreement and thereafter.
\n       The Attorney has witnessed the agreement.  The evidence also shows that <\/p>\n
       the Respondent has not asked anything in writing from the Society; the
\n       Respondent was orally asked to pay 3% of the total value of the flats as per
\n       a resolution passed at the A.G.M dated 9th  February 1986 for which the <\/p>\n
       Respondent   had   not   taken   legal   assistance.   The   Respondent   had   not <\/p>\n
       objected for the contribution\/transfer fee etc.  The evidence shows that the
\n       gracious contribution was mentioned in the letter dated 8th  July 1992 as <\/p>\n
       the Society compelled them to write so in that letter.  The letter dated 8th
\n       July 1992 is a type-written letter annexing 7 documents.\n<\/p>\n
    51.It   is   upon   this   evidence   that   the   Respondent   seeks   to   prove   coercion
\n       practiced   upon   her.  The   aforesaid   oral   and   documentary   evidence,   if
\n       appreciated   show   that   there   was   no   coercion   practiced   upon   the
\n       Respondent.   The Respondent entered into the contract of her free will.
\n       She   paid   the   amounts   to   the   Society   under   an   incorrect   misleading <\/p>\n
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\n                                              24<\/span><\/p>\n
       description.   She knew that she was required to pay nothing other than
\n       “transfer fees”,  the expression used since her initial agreement dated 30th <\/p>\n
       March 1992.  Knowledge of the fact that the transfer fees was illegal and
\n       could not have been paid as such must, therefore, be imputed upon her.\n<\/p>\n
       That knowledge is reflected from the very inception when she signed the
\n       agreement dated 30th March, 1992 under legal advise and in the presence <\/p>\n
       of her Solicitor.   The meetings held between the parties show deliberation
\n       and   thought.     The   presence   of   her   attorneys   rule   out   coercion.   The
\n       Resolution of 9th  February 1986 shows the Society’s practice.   Her letter <\/p>\n
       dated 8th  July 1992 annexing all the   required documents could not have <\/p>\n
       been written under detention.  It does not even show any prejudice caused
\n       to her; in fact it caused immediate transfer of the shares and premises to <\/p>\n
       her and gave her the status of a member, which she would have otherwise
\n       to fight for.  The requirements of coercion as defined in Section 15 of the
\n       Contract Act are far from being satisfied.\n<\/p>\n
    52.Not   only   the   agreement   itself   and   the   correspondence   that   ensued
\n       thereupon   but   also   the   further   otherwise   unrelated   and   innocuous <\/p>\n
       correspondence relating to the leakage in the Respondent’s flat as also the
\n       Respondent’s ultimate notice show that the Respondent paid transfer fee to
\n       the Society knowing it to be an illegal payment.\n<\/p>\n
    53.The payment made under the contract with the Society by the Respondent
\n       as   agreed   between   the   Respondent   and   the   Society   reflected   in   the
\n       aforesaid correspondence as well as between the Respondent and Khimji as
\n       reflected in the aforesaid agreement of sale shows that the contract was <\/p>\n
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\n                                                25<\/span><\/p>\n
    entered into and completed by performance though it was illegal at the
\n    relevant   time.     Such   a   contract   is   void   from   the   very   inception   under <\/p>\n
    Section 23 of the Indian Contract Act – it is made with knowledge of the
\n    legal   position.     It   does   not   happen   to   have   been   void.     It   is   not   later <\/p>\n
    discovered to be void.   It was not executed under a mistake of what the
\n    Law is.  It is completely covered by the judgment of the Supreme Court in <\/p>\n
    the case of Kuju Collieries Ltd supra. It does not fall within the protective
\n    ambit of Section 65 and Section 72 of the Contract Act.  The flats were to
\n    be purchased upon the illegal condition.   The Respondent succumbed to <\/p>\n
    the   illegality.     She   failed   to   keep   a   straight   bat.   This   was   despite   the <\/p>\n
    knowledge of law derived from the legal advice that she obtained.   If the
\n    contract was illegal the Respondent need not have been coerced to enter <\/p>\n
    into such a contract.  She could have resisted the illegality.  She could have
\n    refused to make the illegal payment.  She could have applied under Section
\n    22   of   the   Maharashtra   Co-operative   Societies   Act   for   transfer   of <\/p>\n
    membership without making the illegal payment.  She chose not to do so.\n<\/p>\n
    She chose the illegal way of getting the shares and the premises transferred
\n    in   her   name.   Had   she   applied   as   per   procedure   established   under   the <\/p>\n
    aforesaid   law,   the   Society   would   have   been   enjoined   to   admit   her   as
\n    member.   It could not have refused membership upon the refusal to pay
\n    transfer fee in excess of the legally prescribed amount under Section 23 of <\/p>\n
    the Act.  But the Respondent chose an easier option.  She paid the illegal
\n    amount   in   consideration   of   which   she   expedited   her   transfer   and
\n    membership status. The consideration being unlawful, the contract is void.\n<\/p>\n
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\n                                                   26<\/span><\/p>\n
    54.The payment of transfer fee to the Society of such a large amount which is
\n       by way of   percentage  of   the  sale  price  is illegal  under the  Co-operative <\/p>\n
       Societies Act and the model bye-laws issued thereunder being model bye-
\n       law No.40 adopted by the Society as their bye-laws.  The premium required <\/p>\n
       to be paid to the Society is allowed up to the maximum amount of Rs.
\n       25,000\/- only.  Any amount in excess of that payment is, therefore, illegal <\/p>\n
       contribution.     The   only   exception   under   the   aforesaid   bye-laws   is   the
\n       donation   which   would   be   given   only   with   the   consent   of   the   member.
\n       Hence if the amount is taken to be not the illegal transfer fee, but donation <\/p>\n
       in the name of contribution to the Society towards the repair fund, it would <\/p>\n
       be a valid contract.  It could then be avoided as voidable at the option of
\n       the Respondent only if she proved the coercion alleged.  The intrinsic oral <\/p>\n
       as well as documentary evidence unmistakenly  shows lack of that vitiating
\n       factor.   The Respondent having sent the typewritten letter dated 8th  July
\n       1992   annexing   as   many   as   7   documents   shows   that   the   latter   was   not <\/p>\n
       prepared   under   detention.     The   circumstantial   evidence   points   to   the <\/p>\n
       irresistible   conclusion   of   lack   of   any   coercion.     In   that     case   the   valid
\n       donation given by the Respondent to the Society cannot be refunded or <\/p>\n
       repaid to her.\n<\/p>\n
    55.Consequently   it   is   seen   that   knowing   this   precise   legal   position   the <\/p>\n
       Respondent,   Khimji   as   well   as   the   Society   contracted   for   Rs.9.63   lakhs
\n       which was paid and received as and by way of transfer fee for transferring
\n       the shares and the premises purchased by the Respondent in the name of
\n       the   gracious   contribution   made   by   the   Respondent   as   directed   by   the
\n       Society.   The illegal payment of transfer fee was made in the garb of the <\/p>\n
                                                                     ::: Downloaded on – 09\/06\/2013 15:37:33 :::<\/span>
\n                                                  27<\/span><\/p>\n
       legal payment of   contribution stated to be gracious contribution of the
\n       Respondent.     Any   which   way   one   sees   the   transaction,   it   gives   the <\/p>\n
       Respondent   no   leevay   for   backtrackking,   the   tenacious   and   erudite
\n       exposition   of   the   Law   of   Contracts   made   by     Mr.   Andhyarijuna <\/p>\n
       notwithstanding.\n<\/p>\n
    56.The   Respondent’s   dispute   relating   to   declaration   that   the   demand   and
\n       collection of the amount of Rs.9.63 lakhs was illegal and for an order and
\n       decree for repayment of that amount with interest at 24% p.a from the <\/p>\n
       date   of   payment   by   her   till   the   date   of   realisation   and  other   incidental <\/p>\n
       reliefs   is   under   a   contract   which   was   void   from   the   inception   being
\n       forbidden by the Law of   Co-operation and not void due to incapacity to <\/p>\n
       contract 20, 21 or 22 of the Contract Act.  She cannot, therefore, claim to
\n       be restored the illegal consideration that passed under her void contract in
\n       a Court of Law.   Consequently, the Respondent could not be restored or <\/p>\n
       repaid or returned the amount she paid as an illegal consideration to the <\/p>\n
       Society knowing it to be illegal under Sections 65 or 72 of the Contract Act.\n<\/p>\n
    57.It is this aspect that both the impugned orders have not considered.   The
\n       impugned orders, therefore, fall foul of the law relating to contracts which
\n       are void ab initio and the restitution of the advantage thereunder. There <\/p>\n
       has   been   a   fundamental   error   in   appreciating   this   legal   position   in   the
\n       impugned   judgments.     In   fact   the   impugned   judgments   show   the
\n       acceptance of a case of deemed coercion, a concept unknown to Law of
\n       Contracts.     The   learned   Co-operative   Court   fell   in   a   material   error   in
\n       considering Society’s admission that no repairs were required to be carried <\/p>\n
                                                                    ::: Downloaded on – 09\/06\/2013 15:37:33 :::<\/span>
\n                                               28<\/span><\/p>\n
    out at the time of the Respondent’s transaction in 1992. The observations
\n    in the impugned judgments that there is always an element of force in such <\/p>\n
    transactions   to   conclude   that   in   this   case   the   Respondent   was   in   fact
\n    coerced   to   make   illegal   payment   to   the   Society   fails   to   consider   her <\/p>\n
    knowledge and agreement with Khimji under legal advise to pay 3% of the
\n    consideration as transfer fee before the Society was at all involved in the <\/p>\n
    transaction.  The judgments relied upon by Mr. Andhyarijuna to require the
\n    Court’s restricted interference would not apply to desist from interfering
\n    with the impugned judgments.  Since it is not on facts, but on the effect of <\/p>\n
    those facts upon enunciation of the law applicable to such facts that the <\/p>\n
    present Writ Petition is considered.   In the case of  A. Raghavamma Vs.
\n    Chenchamma A.I.R. 1964 S.C. 136  the Supreme Court considered how <\/p>\n
    restricted its jurisdiction in Appeal would be upon findings of fact. At page
\n    142  it observed thus:\n<\/p>\n
                “The reason for the practice is stated to be that when facts have <\/p>\n
              been fairly tried by two Courts and the same conclusion has been <\/p>\n
              reached   by   both,   it   is   not   in   the   public   interest   that   the  facts
\n              should   be   again   examined   by   the   ultimate   Court   of   appeal.
\n              Whatever may be the reason for the rule, the practice has become
\n              fairly crystallized and this Court ordinarily will not interfere with <\/p>\n
              concurrent findings of fact except in exceptional cases, where the
\n              findings are such that it “shocks the conscience of the Court or by
\n              disregard to the forms of legal process or some violation of some
\n              principles   of   natural   justice   or   otherwise   substantial   and   grave
\n              injustice has been done”. It is not possible nor advisable to define <\/p>\n
              those circumstances.   It must necessarily be left to the discretion
\n              of this Court having regard to the facts of a particular case.”\n<\/p><\/blockquote>\n
                                                                       (underlining supplied)<\/p>\n
                                                                 ::: Downloaded on – 09\/06\/2013 15:37:33 :::<\/span>
\n                                               29<\/span><\/p>\n<\/blockquote>\n
    58.The   facts   shown   in   the   evidence,   which   are   not   even   contested,   the
\n       construction and interpretation of the contract of the parties, followed by <\/p>\n
       the correspondence that ensued, requires to be parsed within the ambit of
\n       the applicable law, hitherto not considered.\n<\/p><\/blockquote>\n
    59.Consequently, the judgment of the Learned Co-operative Court as well as <\/p>\n
       the Learned Co-operative Appellate Court are required to be set aside.  The
\n       award   passed   under   the   judgment   dated   10th  September   2003   and
\n       confirmed in appeal under the judgment dated 28th  October 2003 are set <\/p>\n
       aside.  Rule is made absolute accordingly with costs of Rs.10,000\/-.\n<\/p>\n
                                                                      (SMT.ROSHAN DALVI, J.)<\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 15:37:33 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Bharatiya Bhavan Co-Operative … vs Smt. Krishna H. Bajaj & Ors on 17 February, 2010 Bench: R. S. Dalvi 1 MNM IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.1094 OF 2004 Bharatiya Bhavan Co-operative Housing Society Limited & Anr. …Petitioners Vs. Smt. Krishna H. Bajaj & Ors. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-56065","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nBharatiya Bhavan Co-Operative ... vs Smt. Krishna H. 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