Co-operative housing share transfers: registration is unnecessary in tenant co-partnership societies, but required where members own the superstructure personally.

A transfer by a member of a co-operative housing society of allotted shares, together with the superstructure, is exempt from compulsory registration under Section 42(a) of the Gujarat Co-operative Societies Act when the society is a tenant co-partnership society, because the land and superstructure vest in the society and the member transfers only the associated contractual and beneficial rights of occupation. In a tenant ownership society, however, a member may hold a personal interest in the superstructure or other immovable property, and that transfer is outside the exemption and requires a registered conveyance. On the facts stated, the transfer was treated as valid.

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Issues: Whether a transfer by a member of a co-operative housing society of the shares allotted to him, together with the superstructure standing on the land, requires a registered instrument, and whether the answer depends on whether the society is a tenant co-partnership society or a tenant ownership society.

Analysis: Section 42(a) of the Gujarat Co-operative Societies Act, 1961 creates an exemption from compulsory registration for instruments relating to shares in a society, notwithstanding that the society's assets include immovable property. Read with the scheme of Section 17 of the Registration Act, 1908, the exemption is analogous to the statutory treatment of shares in a joint stock company. In a tenant co-partnership society, the land and superstructure vest in the society, and the member's transfer of shares carries with it only the contractual and beneficial right of occupation and enjoyment allotted by the society; such transfer falls within the statutory exemption. In a tenant ownership society, by contrast, the member may have a personal interest in the superstructure, and a transfer of that personal immovable property is not covered by the exemption and would require a registered conveyance.

Conclusion: A registered instrument is not necessary where the society is a tenant co-partnership society and the land and superstructure belong in law to the society; it is necessary where the superstructure or other immovable property belongs personally to the member. On the facts found, the transfer in question was valid.

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