ZOROASTRIAN SOCIETY V DISTRICT REGISTRAR, CO-OP SOCIETY SOCIETIES (URBAN) (2005) 5 SCC 632
FACTS
- A society was registered under the Bombay Co-operative Societies Act, with the object of constructing houses for residential purposes, and according to the byelaws, the membership was restricted only to Parsis.
- The byelaws also contained a condition that no member could alienate the house to non-Parsis.
HELD
- The High Court of Bombay stated that a restriction based on religion, race or caste contained in a byelaw on the member’s right in a co-operative housing society to transfer his membership coupled with his right to alienate his interest in the immovable property would be bad in the eyes of law. Restriction on the member’s right to transfer membership and/or his interest in the property, to a non-Parsi was held violative of s. 10, and is therefore void.
- The Apex Court held that when a person accepts the membership of a co-operative society by submitting himself to its byelaws and places on himself a qualified restriction on his right to transfer property by stipulating that same would be transferred with prior consent of society to a person qualified to be a member of the society, it could not be held to be an absolute restraint on alienation offending 10 of the TP Act.
- Hence, it set aside the finding of the High Court that the restriction placed on rights of members of a society not to sell the property allotted, to non-Parsis was an absolute restraint on alienation as unsustainable.
- A condition imposed by a bye-law on its members that a member cannot alienate the property to a non-Parsi person would be only a partial restraint and therefore valid and enforceable.