New Friends Co-Operative House Building Society Ltd. Vs. Rajesh Chawla &
Ors  Insc 305 (21
Raju & Arijit Pasayat. Arijit Pasayat, J.
appellant-society calls in question legality of the judgment rendered by
Division Bench of the Delhi High Court whereby it was held that respondents 1
to 3 were not defaulters and, therefore, demands raised against them for the
period prior to 4th
August, 1984 were
unsustainable. Respondents nos. 1 to 3 were the writ petitioners nos. 1 to 3 in
the writ petition filed by them before the High Court. There was further
direction given by the High Court that there may have been many members to whom
similar demands have been sent. They were also entitled to refund of any
payment taken by the society from them.
application was filed by the respondents with prayer to quash the order dated
1.2.2003 issued by the Election Officer of the appellant-society and for
setting aside the orders dated 23.1.2003 passed by him and for a direction for
carrying out fresh inquiry regarding defaulters. They had filed nomination for
the post of President, Member and Vice-President of the society for the
election which was scheduled to be held on 1.2.2003. A bare reading of the writ
petition shows that they were not satisfied with the list of defaulters
prepared. The writ petition was filed on 8.1.2003. An affidavit was filed by
the Secretary of the appellant-society indicating as to how the stand of the
writ petitioners about they being not defaulters was not correct. It has been
specifically pointed out that in the petition before this Court that the books
of accounts and correspondences were produced on 9.7.2003. Matter was listed on
25.7.2003 but no hearing took place on account of lawyers' strike at the Delhi
High Court. But the appellant's officers were present in the Court with the
books of accounts and the records.
High Court seems to have adjudicated as to whether the writ petitioners were
defaulters or not.
was made to a letter dated 4.8.1984 wherein it has been stated that no dues
were outstanding against Shri Rajesh and Shri Rajiv Chawla holders of plot no.
230, Sector VIII. Whether there was any amount outstanding would not normally
and could not effectively and finally be adjudicated in a writ petition and
that too filed against a decision incidentally rendered in the course of
election proceedings by the Election officer. Separate forums are available in
the statutory governing and functioning of co-operative society whereunder only
such issues affecting substantial civil rights of parties could be got
adjudicated. The High Court seems to have not considered all such relevant
aspects and seems to have proceeded superficially and summarily.
in the writ petition was to the following effect:
Issue a writ in the nature of Mandamus or any other like writ or order or
direction directing the second and the third respondent to enquire into the
alleged List of Defaulters submitted to them by the present Managing Committee
of the Society;
Issue a writ in the nature of Mandamus or any other like writ or direction or
order directing the second and the third respondent to prepare, after holding
the necessary enquiry, a fresh and actual List of Defaulters of the members of
Issue a writ of Certiorari or any other like writ or direction or order
quashing the Notification dated 6.01.2002 proposing to hold elections of the
Managing Committee of the Society on the 1.2.2003;
Issue a writ of prohibition or like writ, order or direction, prohibiting the
respondent nos. 5 and 6 herein from holding the election of the members of the
Society on 1.2.2003; and
such other and further order as this Hon'ble Court may deem fit and proper in the facts and circumstances of
the case to do complete justice between the parties."
question whether a member was a defaulter had to be adjudicated in appropriate
proceedings and writ application prima facie was not a proper course.
without accepting that the stand taken for the alleged defaulters can be
entertained and gone into in the course of conduct of election, it could, if at
all be only for the limited purpose of election and the right of the society or
the member for having their rights and liabilities finally and effectively get
adjudicated by arbitration proceedings statutorily provided for under the
statute in lieu of proceedings before civil court, and the conclusions arrived
at or recorded in the course of election proceedings shall be only without prejudice
to and ultimately subject to all or any such proceedings and decisions by such
statutory forums. In any event without proper hearing and consideration of
relevant materials, High Court seems to have arrived at abrupt conclusions.
High Court's order is consequently unsustainable for more than one reason. To
add further to the vulnerability of the High Court's judgment is the direction
given for refund and in favour of those who have not approached the Court also,
as though it is deciding statutory Arbitration proceedings, envisaged under the
Co-operative Societies Act concerned. It was no body's case that any other
person has been illegally asked to pay, or that any such collection has been
illegally made. Direction for refund to other members is without application of
mind and totally uncalled for. The records and correspondences were apparently
called for. If the High Court wanted to decide the matter it should have been
done after looking into them which has not been done.
such decision, as noticed above, should be made subject to any adjudication in
the Statutory Arbitration proceedings and not to decide finally the civil
liabilities inter se of parties. Therefore, we set aside the judgment of the
High Court and remit the matter back for fresh adjudication. We make it clear
that except quashing the directions given for refund to other members and
restraining the High Court from giving any such directions, rest of the matter
shall be adjudicated on its own merit in accordance with law and such exercise
could only be for the limited purpose of treating the person(s) concerned
"defaulters or not" for participating in the election process and not
for foreclosing the right of the society to recover any amount as such, through
the forums prescribed under the concerned Co-operative Societies Act and in
accordance with law.
appears that respondents 1 to 3 have filed application before the Registrar of
the Society on 27.8.2003 for referring the dispute to arbitration, which alone
is the proper procedure to get their civil liability finally and effectively
adjudicated. The High Court shall consider the desirability of adjudicating the
issues raised in the writ petition in view of the recourse taken by respondents
1 to 3 (writ petitioners before the High Court) themselves before the Competent
Authorities, availing already of their effective remedies. The appeal is
accordingly disposed of. There shall be no order as to costs.