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2015 (2) TMI 334 - HC - FEMA


Issues:
1. Ownership rights of a member in a Cooperative Housing Society.
2. Forfeiture of property under the Smugglers and Foreign Exchange Manipulators Act.
3. Dual ownership concept in Cooperative Housing Societies.
4. Membership criteria in a Cooperative Society.
5. Disposal of property following forfeiture.

Ownership rights of a member in a Cooperative Housing Society:
The petitioners, a Cooperative Housing Society and its Office Bearers, sought direction to remove a superstructure on a plot earmarked as plot No.3. The Society claimed that its members own only the superstructure, not the land, which remains the Society's property. The Society opposed the Central Government's request to be named as the owner due to the Gujarat Cooperative Society Act's provisions. The Court acknowledged the concept of dual ownership in such societies, where the member has rights and liabilities, but the land ownership remains with the Society. The Court noted that the forfeiture of a member's property would transfer all rights to the Central Government, but the member's rights not enjoyed would not transfer.

Forfeiture of property under the Smugglers and Foreign Exchange Manipulators Act:
The competent authority under the SAFEMA forfeited a plot initially allotted to a member, leading to a dispute with the Society. The Society contended that the Central Government could not be a member as per the Cooperative Society Act. The Court recognized the authority's power to forfeit properties and the implications on ownership rights within the Society.

Dual ownership concept in Cooperative Housing Societies:
The judgment emphasized the well-established concept of dual ownership in Cooperative Housing Societies. It clarified that while members own the superstructure, the land remains under the Society's ownership. The member's rights are subject to the Society's bylaws, and forfeiture transfers all rights to the Central Government.

Membership criteria in a Cooperative Society:
The Gujarat Cooperative Society Act outlines the categories of individuals eligible for membership, excluding the Central Government. The Court highlighted the importance of abiding by the bylaws and criteria for membership in Cooperative Societies, preventing the Central Government from becoming a member.

Disposal of property following forfeiture:
The Court directed the respondents, particularly the Central Government, to identify an intending purchaser for the forfeited plot. The Society agreed to transfer ownership to a qualified individual, subject to legal dues clearance and transfer charges. The judgment facilitated the sale and transfer of the property with specific directions for the involved parties, ensuring a lawful disposal process.

 

 

 

 

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