The concept of Public Policy with reference to Zoroastrian Co-operative Housing Society Ltd vs. District Registrar, Co-operative Societies (Urban) Judgment *

It all started long before coming into effect of the Constitution of India. The bye-laws of the Society restricted the membership to Parsi origin community only. The Gujarat Co-operative Societies Act, 1961 : Chapter II : Registrar and Registration : Section :4 : Societies which may be registered : clearly envisaged that :..

Provided that it shall not be registered, if in the opinion of the Registrar... its working is likely to be in contravention of public policy.

The Hon’ble Gujarat High Court held that – A bye-law of the Petitioner Society providing that a member cannot sale or transfer his interest to a non-Parsi is void. A Co-operative Society is the creation of statute- so the rules of the co-operative society must confirm the law and statutory provisions- Parsis cannot claimthat being a minority community membership of a Co-operative Housing Society to non-Parsis can be denied  -AIR 2000 Guj 9.

The Hon’ble Supreme Court has reversed this judgment holding that prohibition on registration of Society whose working is likely to be in contravention of Public Policy in terms of a particular entity must be as reflected by the statute that creates the entity or governs it. Concept of public policy has to be looked for within the four corners of the Gujarat Co-0perative Societies Act – Since, the statute does not restrict bye-law confining membership to a particular community, such bye-law cannot be said to be opposed to public policy. * - AIR 2005 SC 2306: 2005(5) SCC 632

The fact is that the right to property is not the fundamental right but merely a legal right. The society is not the legal person or citizen to enforce the fundamental rights. There are golden rules to define the Public Policy enunciated in the following Supreme Court Judgments:

- If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public good and public interest declare such practice to be opposed to the public policy. Above all, in deciding any case which may not be covered by any authority, court should be guided by the Preamble of the Constitution and the principles underlying the Fundamental Rights and the Directive Principles... -AIR 1986 SC 1571 ; (1986) 3 SCC 156

... though the heads are not closed and though theoretically it may be permissible to evolve anew head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make an attempt to discover new heads in these days -AIR 1959 SC 78

...The rules which stem from the public policy, must of necessity be laid to further the progress of the society in particular when social change is bring about an egalitarian social order through the rule of law, in deciding a case, which may not be covered by authority courts have before them the beacon light of the trinity of the Constitution and the play of the legal light and shade must lead on the path of justice- social, economic and political. Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution. -AIR 1991 SC 101 : (1991) Supp 1 SCC 600

The concept of Public Policy within four corner of the statute is absolutely erroneous and posing threat to the unity and integrity of the Nation of which the Ministry of Law and Justice, Govt. Of India, New Delhi should and ought to have taken immediate notice of it by challenging this judgment before the larger bench of the Hon’ble Supreme Court to set the record right. Meanwhile we may termed the said judgment to be the magic of Bawaji.

The  author can be reached at: akpsurat@legalserviceindia.com