BRUHAT BANGALORE MAHANAGARA PALIKE vs DATTAPRASAD CO OPERATIVE HOUSING SOCIETY LIMITED

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®




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 4 DAY OF JUNE, 2026

PRESENT

THE HON'BLE MR. JUSTICE D K SINGH

AND

THE HON'BLE MR. JUSTICE T.M.NADAF

WRIT APPEAL NO. 1337 OF 2025 (LB-TAX)


BETWEEN:

1. BRUHAT BANGALORE
MAHANAGARA PALIKE
BY ITS CHIEF COMMISSIONER
CORPORATION OFFICE BUILDING
BENGALURU-560002
…APPELLANT

(BY SRI PRASHANTH CHANDRA S N, ADVOCATE)

AND:

1. DATTAPRASAD CO-OPERATIVE
HOUSING SOCIETY LIMITED
TH
10 MAIN, MALLESHWARAM
BENGALURU-560055
REPRESENTED BY ITS
CHIEF EXECUTIVE
SMT. SHASHIREKHA K. MURTHY

2. ADDITIONAL CHIEF SECRETARY OFFICER
URBAN DEVELOPMENT DEPARTMENT
VIKASA SOUDHA, AMBEDKAR VEEDHI
BENGALURU-560 001
…RESPONDENTS

(BY SRI SATISHCHANDRA N D, ADVOCATE FOR R-1;
SRI M N SUDEV HEGDE, AGA FOR R-2)








Digitally
signed by
VASANTHA
KUMARY B
K
Location:
HIGH
COURT OF
KARNATAKA

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THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED
ORDER DATED 02.07.2025 PASSED BY THE LEARNED SINGLE
JUDGE IN WRIT PETITION NO.1690/2018 (LB-TAX) AND ETC.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE D K SINGH
and
HON'BLE MR. JUSTICE T.M.NADAF

ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE D K SINGH)
I PREFACE:

1. The present intra Court appeal has been filed impugning
the judgment and order dated 02.07.2025 passed by the
learned Single Judge in W.P.No.1690/2018.
2. The parties are referred to as per their ranking before the
writ Court for the sake of convenience.
II FACTS OF THE CASE:
3. The petitioner, Dattaprasad Co-operative Housing Society
Limited, is a registered Tenant/Co-partnership Housing Society
under the Karnataka Co-operative Societies Act, 1959
(hereinafter referred to as 'the Act'). The Society was
registered in the year 1970 and acquired lands under registered

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sale deeds dated 29.03.1971 and 16.08.1971 for the purpose
of constructing residential apartments. For construction of the
apartment complex, the petitioner/Society availed financial
assistance from HUDCO and constructed multiple residential
units/flats.
4. The flats so constructed were allotted to the members of
the Society. According to the petitioner/Society, the number of
flats corresponded to the number of members and each
member was placed in exclusive possession of the allotted flat
through possession certificates issued by the Society. Ever
since the allotment, the members have been residing in and
enjoying their respective flats. The petitioner has also been
paying property tax in respect of the apartment complex, which
was accepted by the municipal authorities for several decades.
5. Subsequently, the Bengaluru Mahanagara Palike, now
Bruhat Bengaluru Mahanagara Palike (‘BBMP’) issued a demand
notice dated 03.01.2002 seeking differential property tax. The
demand was founded on the premise that, since no registered
conveyance deeds had been executed by the petitioner in
favour of the members, the members were to be treated as

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"tenants" of the Society. Proceeding on the said basis, BBMP
invoked the amended proviso to Section 38 of the Act and
sought to levy additional property tax. Challenging the
consequential demand of differential property tax, the Society
filed W.P.No.1690/2018 contending that its members were not
tenants but allottees in a tenant co-partnership housing
society, that they had acquired possessory and beneficial rights
long prior to the 2001 amendment to Section 38 of the Act, and
that the amendment could not be retrospectively applied to
classify them as tenants merely because conveyance deeds had
not been executed.
6. These facts gave rise to the principal question that
whether the members of a tenant co-partnership housing
society, who had been allotted flats and put in possession prior
to the insertion of the proviso to Section 38 of the Act, could be
treated as tenants for the purpose of property tax merely on
account of non-execution of registered conveyance deeds.
III FINDINGS OF THE LEARNED SINGLE JUDGE :
7. The learned Single Judge recorded the following findings
while allowing W.P.No.1690/2018:

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i. The petitioner/Society is a valid Tenant Co-partnership
Housing Society and there was no legal prohibition under
Section 38 of the Act, prior to the 2001 amendment, for such
societies to allot flats to members without executing registered
conveyance deeds.
ii. The relationship between the petitioner/Society and its
members is not that of landlord and tenant. The
petitioner/Society does not collect rent from the flat owners
and merely recovers maintenance-related charges such as
property tax, water charges, overhead expenses, etc.
Therefore, the members cannot be treated as tenants.
iii. The flats were constructed from contributions and share
capital raised from members, and not from the Society's
independent funds. The bye-laws also demonstrate that the
members acquired rights in the flats through their financial
contributions and shareholding.
iv. The ownership rights substantially vest in the members.
The learned Single Judge held that the Society had not retained
beneficial ownership over the flats and that the members

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enjoyed rights in their respective flats through allotment,
possession, and shareholding.
v. The expression ‘tenant’ in a Tenant Co-partnership
Housing Society is only a term of art in co-operative law and
does not denote tenancy in the sense understood under the
Transfer of Property Act or rent control legislation. Members
occupy flats as co-owners within the co-operative framework
and not as tenants.
vi. The proviso inserted to Section 38 of the Act requiring
compulsory registration of instruments transferring rights in
immovable property applies only prospectively.
vii. The 2001 amendment does not retrospectively affect
vested rights or lawful possession already acquired by members
before 01.04.2001. The members who were allotted flats and
put in possession prior to the amendment cannot be treated as
tenants or licensees merely because registered conveyance
deeds were not executed.
viii. A Division Bench in W.A. No. 3883/2003 had already
recognized that the proviso to Section 38 of the Act operates

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prospectively, and even the State had conceded the same
position.
ix. Consequently, the BBMP's attempt to classify the
members as tenants solely on the ground that registered
conveyance deeds were absent was legally unsustainable, since
the allotments were made prior to the 2001 amendment and
the members' rights stood protected.
x. The learned Single Judge further held that the petitioner
had complied with the 2001 amendment by amending its bye-
laws by providing that future transfers would be effected only
through registered instruments, thereby complying with the
legislative mandate.

IV POINT FOR CONSIDERATION:
8. The only issue which requires consideration in this appeal
may be summarized as under:
Whether the finding of the learned Single
Judge that the proviso inserted to Section 38
of the Karnataka Co-operative Societies Act,
1959 with effect from 01.04.2001 has only

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prospective operation calls for interference by
this Court?
V ANALYSIS AND CONCLUSION:
9. A statute or an amendment is prima facie prospective;
retrospective operation requires express words or necessary
implication.
10. Section 38 of the Act before amendment in the year 2001
would read as under:
"38. Exemption from compulsory
registration of instruments.- Nothing
in clauses (b) and (c) of sub-section
(1) of section 17 of the Indian
Registration Act, 1908 (Central Act
XVI of 1908), shall apply to,—
(a) any instrument relating to shares
in a co-operative society
notwithstanding that the assets of
the society consist in whole or in
part of immovable property;
(b) any debentures issued by any
such society and not creating,
declaring, assigning, limiting or
extinguishing any right, title or
interest to or in immoveable
property except in so far as it
entitles the holder to the security
afforded by a registered instrument
whereby the society has mortgaged,
conveyed or otherwise transferred
the whole or part of its immoveable

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property or any interest therein to
trustees upon trust for the benefit of
the holders of such debentures, or
(c) any endorsement upon or
transfer of any other debenture
issued by any such society"

11. The proviso inserted to Section 38 of the Act with effect
from 01.04.2001 read as under:
"Provided that the exemption from
compulsory registration of
instrument shall not apply to
instruments which is intended to
transfer or in effect transfers the
right title or interest in immovable
property executed by or in favour of
House Building Co-operative
Societies, registered under this Act."

12. The amendment introduced with effect from 01.04.2001
imposes a requirement of compulsory registration of
instruments intended to transfer rights, title or interest in
immovable properties executed by or in favor of House Building
Co-operative Societies. However, the amendment does not
contain any express language indicating that it was intended to
invalidate or alter allotments already made, nor does it disclose
any necessary implication warranting retrospective operation.

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13. It is no longer res-integra that statutes affecting
substantive rights are presumed to be prospective unless the
legislature has manifested a contrary intention in clear and
unambiguous terms.
SHYAM SUNDER AND OTHERS vs RAM KUMAR
14. In
AND ANOTHER
[(2001) 8 SCC 2024] , the Supreme Court
held that every statute is prima facie prospective unless it is
expressly or by necessary implication made retrospective. The
Supreme Court held that retrospective operation is not to be
given merely because such an interpretation appears
convenient or desirable. Where a statute affects vested rights,
courts must lean against retrospective construction. The
Supreme Court also held that a legislation which impairs
existing rights or creates new obligations in respect of past
transactions cannot ordinarily be construed as retrospective in
the absence of clear legislative intent. The relevant paragraphs
are extracted hereunder:
22.
“ In Maxwell on the Interpretation of
Statutes, 12th Edn., the statement of law in
this regard is stated thus:
“Perhaps no rule of construction is more
firmly established than thus — ‘that a

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retrospective operation is not to be given to
a statute so as to impair an existing right or
obligation, otherwise than as regards
matters of procedure, unless that effect
cannot be avoided without doing violence to
the language of the enactment. If the
enactment is expressed in language which
is fairly capable of either interpretation, it
ought to be construed as prospective only’.
The rule has, in fact, two aspects, for it,
‘involves another and subordinate rule, to
the effect that a statute is not to be
construed so as to have greater
retrospective operation than its language
renders necessary’.”
25.
In Dayawati v. Inderjit [AIR 1966 SC
1423 : (1966) 3 SCR 275] it is held thus:
(AIR p. 1426, para 10)
“10. Now as a general proposition, it may
be admitted that ordinarily a court of appeal
cannot take into account a new law, brought
into existence after the judgment appealed
from has been rendered, because the rights
of the litigants in an appeal are determined
under the law in force at the date of the
suit. Even before the days of Coke, whose
maxim — a new law ought to be
prospective, not retrospective in its
operation — is oft-quoted, courts have
looked with disfavour upon laws which take
away vested rights or affect pending cases.
Matters of procedure are, however, different
and the law affecting procedure is always
retrospective. But it does not mean that
there is an absolute rule of inviolability of
substantive rights. If the new law speaks in
language, which, expressly or by clear
intendment, takes in even pending matters,
the court of trial as well as the court of
appeal must have regard to an intention so

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expressed, and the court of appeal may
give effect to such a law even after the
judgment of the court of first instance.”
26.
In Hitendra Vishnu Thakur v. State of
Maharashtra [(1994) 4 SCC 602 : 1994 SCC
(Cri) 1087] this Court laid down the ambit
and scope of an amending Act and its
retrospective operation as follows: (SCC p.
633, para 26)
“(i) A statute which affects substantive
rights is presumed to be prospective in
operation unless made retrospective, either
expressly or by necessary intendment,
whereas a statute which merely affects
procedure, unless such a construction is
textually impossible, is presumed to be
retrospective in its application, should not
be given an extended meaning and should
be strictly confined to its clearly-defined
limits.
(ii) Law relating to forum and limitation is
procedural in nature, whereas law relating
to right of action and right of appeal even
though remedial is substantive in nature.
(iii) Every litigant has a vested right in
substantive law but no such right exists in
procedural law.
(iv) A procedural statute should not
generally speaking be applied
retrospectively where the result would be to
create new disabilities or obligations or to
impose new duties in respect of transactions
already accomplished.
(v) A statute which not only changes the
procedure but also creates new rights and
liabilities shall be construed to be
prospective in operation, unless otherwise

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provided, either expressly or by necessary
implication.”
28.
From the aforesaid decisions the legal
position that emerges is that when a repeal
of an enactment is followed by a fresh
legislation, such legislation does not affect
the substantive rights of the parties on the
date of the suit or adjudication of the suit
unless such a legislation is retrospective and
a court of appeal cannot take into
consideration a new law brought into
existence after the judgment appealed from
has been rendered because the rights of the
parties in an appeal are determined under
the law in force on the date of the suit.
However, the position in law would be
different in the matters which relate to
procedural law but so far as substantive
rights of parties are concerned, they remain
unaffected by the amendment in the
enactment. We are, therefore, of the view
that where a repeal of provisions of an
enactment is followed by fresh legislation by
an amending Act, such legislation is
prospective in operation and does not affect
substantive or vested rights of the parties
unless made retrospective either expressly
or by necessary intendment. We are further
of the view that there is a presumption
against the retrospective operation of a
statute and further a statute is not to be
construed to have a greater retrospective
operation than its language renders
necessary, but an amending Act which
affects the procedure is presumed to be
retrospective, unless the amending Act
provides otherwise…”

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15. Applying this principle, allotments made by a co-operative
housing society and possession delivered to its members prior
to 01.04.2001 created enforceable rights in favor of such
members. The subsequent insertion of the proviso to Section
38 of the Act cannot be construed as retrospectively altering
the legal implication of those allotments or reducing the status
of members to that of tenants merely because the conveyance
deeds had not yet been executed.
ZILE SINGH vs
16. The same principle was explained in
STATE OF HARYANA AND OTHERS
[(2004) 8 SCC 1] . The
Supreme Court held that retrospective operation may be
inferred only when the legislative intent is clear either from
express words or from necessary implication. The Supreme
Court emphasized that statutes affecting substantive rights
stand on a different footing from procedural enactments. Unless
the legislature clearly indicates otherwise, courts should avoid
an interpretation that disturbs vested rights or reopens
concluded transactions. The relevant paragraph is extracted
hereunder:

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“13.
It is a cardinal principle of
construction that every statute is
prima facie prospective unless it is
expressly or by necessary implication
made to have a retrospective
operation. But the rule in general is
applicable where the object of the
statute is to affect vested rights or to
impose new burdens or to impair
existing obligations. Unless there are
words in the statute sufficient to show
the intention of the legislature to
affect existing rights, it is deemed to
be prospective only — “nova
constitutio futuris formam imponere
debet non praeteritis” — a new law
ought to regulate what is to follow,
not the past. (See Principles of
Statutory Interpretation by Justice
G.P. Singh, 9th Edn., 2004 at p. 438.)
It is not necessary that an express
provision be made to make a statute
retrospective and the presumption
against retrospectivity may be
rebutted by necessary implication
especially in a case where the new
law is made to cure an acknowledged
evil for the benefit of the community
as a whole (ibid., p. 440).”

17. The proviso to Section 38 of the Act cannot be interpreted
so as to make the allotments made decades earlier and lawfully
acted upon by the petitioner/Society and its members as a
relationship between the Society and its members as one of
ownership and tenant in absence of registration of Conveyance

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Deed. Such an interpretation would have the effect of
unsettling long-standing possessory and proprietary rights
without any express legislative mandate.
18. The rights enjoyed by the members of the
petitioner/Society prior to 01.04.2001 were not merely
expectant or contingent rights. The members had contributed
funds, were allotted specific flats, had been issued possession
certificates, and were in exclusive enjoyment of their respective
units for several decades. These rights had crystallized long
before the amendment came into force. Therefore, it
constituted vested rights which could not be impaired by a
subsequent statutory amendment unless the legislature
expressly so provided.
19. Another well-settled principle governing statutory
interpretation is the distinction between substantive and
procedural laws. While procedural statutes are generally
regarded as retrospective in nature, amendments affecting
substantive rights are presumed to operate prospectively
unless a contrary legislative intention is expressly provided or
necessarily implied. The reason being, procedural law merely

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regulates the manner in which rights are enforced, whereas
substantive law creates, extinguishes, enlarges, restricts or
otherwise affects the rights and liabilities. The Supreme Court
MANISH KUMAR vs UNION OF INDIA
in [(2021) 5 SCC 1] ,
explained that the first inquiry in determining retrospective is
whether the amendment affects substantive rights or merely
alters procedural machinery. If the provision alters substantive
rights and obligations, the presumption is that it is prospective;
conversely, if it merely regulates procedure or the forum for
enforcement of rights, it may ordinarily apply to pending and
future proceedings. The relevant paragraphs are extracted
hereunder:
332.4.
“ Our attention is drawn to the
judgment of this Court in Hitendra
Vishnu Thakur v. State of
Maharashtra [Hitendra Vishnu
Thakur v. State of Maharashtra,
(1994) 4 SCC 602 : 1994 SCC (Cri)
1087] , wherein this Court laid down
that statute, which affects substantive
right, is presumed to be prospective,
unless made retrospective expressly
or by necessary intendment. Every
litigant has a vested right in
substantive matters but no such right
exists in procedural law. The law
relating to right of action and right of
appeal, even though remedial, is
substantive in nature. A procedural

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statute should not, generally
speaking, be applied retrospectively,
where the result would be to create
new disabilities or obligations or to
impose new duties in respect of
accomplished transactions.
405.
In an action, where the law is
not challenged, the court would
ordinarily proceed as follows. It will
presume that a law, which affects
substantive rights, is meant to have
prospective operation only. In the
same way, as regards procedural laws
or the laws relating to a mere matter
of procedure or of forum, they carry
retrospective impact.
406.
A statute is not retrospective
merely because it affects existing
rights. This is, however, in regard to
the future operation of law qua the
existing rights. If the existing right is
modified or taken away and it is to
have operation only from the date of
new law , it would obviously have only
prospective operation and it would
not be a retrospective law.”

20. In view of the aforesaid discussion, we are of the
considered view that the proviso inserted to Section 38 of the
Act imposes a requirement of compulsory registration in
respect of instruments intended to transfer rights, title or
interest in immovable property. Thus, it affects the substantive
rights relating to transfer and recognition of interests in

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immovable properties and cannot be regarded as a mere
procedural regulation. Consequently, in absence of any express
provision or necessary implication indicating a contrary
legislative intent, the proviso must be construed as prospective
in nature and cannot be applied so as to affect the rights that
had already accrued prior to its commencement.
21. In view of the aforesaid, the judgment and order dated
02.07.2025 passed by the learned Single Judge does not call
for any interference. Accordingly, the appeal is dismissed .

Sd/-
(D K SINGH)
JUDGE

Sd/-
(T.M.NADAF)
JUDGE



RKA
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