Raj Rani & Ors Vs. Delhi
Administration & Ors [1976] INSC 324 (10 December 1976)
RAY, A.N. (CJ) RAY, A.N. (CJ) BEG, M.
HAMEEDULLAH SINGH, JASWANT
CITATION: 1977 AIR 1900 1977 SCR (2) 371 1977
SCC (2) 314
ACT:
Delhi Co-operative Societies Act 1972--Delhi
Co-operative Societies Rules, 1973, rr. 24, 25, 30--Rules about
membership--Cooperative Society--Applications--Payment of share money--Whether
mandatory or directory--Mala fide allotment--Allotment with undue haste by
passing persons in wanting list-Declaration as defaulters for non-payment of
dues-Not submitting affidatvits.
HEADNOTE:
On 6-7-1971 the Lt. Governor of Delhi passed
an award directing the New Friends Co-operative House Building Society Limited
to pay Rs.22 lacs to the Delhi Administration.
On 9-7-1971 the Lt. Governor by a
notification removed the elected Managing Committee and appointed a nominated
Managing Committee under rule 56 of the Delhi Cooperative Societies Rules, 1950
framed under the Bombay Cooperative Societies Act 1925 as applied to Delhi. The
term of the Managing Committee was for one year. On 23-10-1971 the nominated
Managing Committee passed a resolution to make the award of the Lt. Governor a
rule of the court. In December, 1971, the nominated Managing Committee passed a
resolution for having direct sub-leases and in January 1972 called for more
funds. In July, 1972, the Lt. Governor issued a second notification extending
the term of the nominated Managing Committee by further two years.
287 members of the Society filed writ
petition No. 340 of 1972, challenging the rites of rule 56 and challenging the
action of the Lt. Governor in superseding the elected Managing Committee and in
extending the term of the nominated Managing Committee by a further period of 2
years. On 30-4-1973, the nominated Managing Committee issued a circular asking
the members of the Society to pay certain amounts. On 6-7-1973, this Court
restrained the Society and its Chairman from declaring any member a defaulter.
On 13-8-1973, this Court directed that all the interim orders passed in the
writ petition should be confined to the 287 petitioners. On 16-8-1973, K.V.
Johar filed a writ petition in a representative capacity under Order 1 rule 8
of the C.P.C. on behalf of all the members of the Society. On 17-8-1973, the
nominated Managing Committee declared 321 members as defaulters. On 21-9-1973
this Court restrained the Society from taking any steps in pursuance of the
said resolution. On an application made by respondent No. 6 the stay granted in
K.V. Johar's petition was vacated.
However, application for vacating the stay
order in Raj Rani's petition was not pursued.
On 6-1-1974 the nominated Managing Committee
declared 39 members as defaulters for non-payment of dues and 42 members as
defaulters for not submitting the affidavits. On 25-11974 the nominated
Managing Committee decided to enrol 60 new members. On 26-1-1974 a confidential
letter was addressed by respondent No. 6 to the Lt. Governor seeking his
approval to the enrolment of 60 new members and allotment of plots to them. On
the same day the Lt. Governor gave his approval. Two C.M. Ps. were filed by the
writ petitioners challenging the declaration of the members as defaulters and
enrolment of 60 new member`. This Court on 29-3-1971 directed that all the
papers including resolutions, original applications and original allotments
should be produced in the Court. This Court also restrained the nominated Managing
Committee by an injunction from taking any steps in any manner. On 4-4-1974.
this Court passed direction in respect of some members who were declared
defaulters and who had made part payments either within the time prescribed or
even beyond the time prescribed. This Court also mentioned that the allotment
of plota to 60 new metal:era who were characterised as very important persons
appeared 372 to have been made in undue haste and the persons on the waiting
list were not considered and that no notice was given to persons inviting
applications. This Court directed that the list of 60 new members had to await
final adjudication and also directed that no further steps should be taken in
the case of those 60 allottees. The Court also directed that the cases of
remaining 24 defaulters would be considered if it came to the conclusion that
the allotment in favour of 60 new members could not be allowed to stand.
Rule 24 of the Delhi Cooperative Societies
Rules 1973, requires a person to apply for membership in writing in the form
prescribed by the Society. His application is to be approved by the Managing
Committee of the Society. He has to fulfill other conditions laid down in the
Act, the Rules and the Bye-laws. Rule 25 provides that a person shall not be
eligible for admission as a member if he owns a residential house or a plot of
land for the construction of a residential house in Delhi. Rule 30 provides
that on receipt of an application for membership the Cooperative Society shall
enter particulars of the application in the register of applications in the
form mentioned therein. It also requires the Society to dispose of the
application received as early as possible and in no case later than the
expiration of a period of one month from the date of receipt of the
application. Rule 30 further provides that the person whose membership has been
approved by the Managing Committee of a Cooperative Society shall deposit the
membership fee and the amount of qualifying shares necessary to become a member
within 14 days of the passing of the resolution of the Managing Committee approving
the membership of the person concerned. Bye-law 5 provides that every person
seeking membership of the Society shall sign a declaration to the effect that
he or his wife or any of his dependants does not own a dwelling house or a plot
in Delhi.
When the writ petitions came up for final
hearing along with the C.M.Ps. on 29-8-1974 this Court appointed Shri Deb Brat
Mukherjee as Chairman of the Society. The Chairman was asked to scrutinise
whether any person had been either illegally brought in as a member or
illegally removed having regard to the rules, the bye-laws and the regulations
of the Society.
The Chairman restored the membership of the
alleged defaulters and published a tentative voters' list. The Chairman
declared that out of the 60 new allottees 21 did not have applications for
membership and 38 were illegally admitted and could not be included in the
voters' list. The chairman said that the allotment of plots in their favour
could not be upheld. 11 persons out of the 60 new allottees filed two C.M.Ps.
in August 1976 praying for an injunction restraining the chairman from holding
elections. These applications were filed without serving any party to the
proceedings contrary to the rules and practice of the court. On 23-91976, the
Chairman submitted his report.
Allowing the writ petitions,
HELD: 1. The date of the application,
prescription of time for deposit of membership fee and the amount of qualifying
shares, and the filing of the requisite declaration are formalities which
cannot be disregarded. The Chairman rightly came to the conclusion that the new
allottees could not be treated as members. The new allottees were taken in
without considering the persons on the waiting list. It was incumbent on the
Society to act in accordance with clause 7 of the Lt. Governor's award. The
Managing Committee took 38 persons as members unlawfully. The declaration of
defaulters could not have been made except by the General Body with a special
majority and with the approval of the Registrar. The nominated Managing
Committee could not have functioned after 1st April 1973 in view of the
provisions of s. 92 read with s. 32 of the Delhi Cooperative Societies Act
1972. In view of the award of the Lt. Governor dated 6-7-1971 the Committee had
no jurisdiction to declare any member a defaulter. The act of declaration of
defaulters of 6-1-1974 cannot be dis-associated from the enrolment of new
allottees on 25th and 26th January 1974. The report of the chairman in
restoring membership to the 108 alleged defaulters is just and correct. The
circular dated 30-41973 issued by the nominated Managing Committee is not a
notice within the meaning of 373 the bye-laws of the Society and the
declaration of defaulters on the basis of the circular is illegal and contrary
to the bye-laws of the Society. The circular was dispatched after the time for
payment mentioned therein was over. No opportunity was given to a member as
required by the amended bye-laws to show cause why his right to a plot would
not be forfeited. The order of this court dated 6-7-1973 continued to be in
force in so far as the petitioners in Raj Rani's petition are concerned.
Therefore, the declaration of defaulters from amongst the petitioners in Raj
Rani's petition was unjustified. The action of the nominated Managing Committee
declaring defaulters was in bad faith because they wanted to confer benefits on
other persons in the guise of declaration of defaulters. [381 A-B, D, E, H,
383A, D, F, 384B-E] The Chairman rightly came to the conclusion that out of the
42 declarations of defaulters for not submitting affidavit 30 members had
genuine grievances. [384-F] The Chairman rightly held that the 4 persons whose
money was lying with the Society should be made members. The Chairman also
rightly held that the 4 persons whose lands had been acquired by the Society
should be accepted as members [385A-B] The priority fixed by the Chairmaan
about allotment of plots is just. [385-C] [The Court with a view to ensuring
that the persons mentioned in the Chairman's report should get the reliefs
mentioned in the report held that those persons should make fresh applications
with affidavits through the Chairman 'and the allotment of plots should be made
in accordance with the priority laid down by the Chairman.]
ORIGINAL JURISDICTION: Writ petition No. 340
of 1972.
(Under article 32 of the Constitution of
India).
P.H. Parekh and Miss Manju Jetlcy, for the
petitioners in W.P. 340/72 excepting petitioner No. 59 and for petitioners in
W.P. 1526/ 73.
Petitioner No. 59 in W.P. No. 340/72 in
person.
Yogeshwar Prasad, S.K. Bagga, Mrs. S. Bagga
and Miss Yesh Bagga for the petitioner in W.P. No. 286/74.
Niren De, Attorney General in writ petition
340, Sardar Bahadur Saharya and Vishnu Bahadur Saharya, for respondents Nos. 1,
3, 4, 5 and 15 in W.P. 340/72 and respondents in all the W.Ps.
K.J. John for M/s. J. B. Dadachanji & Co.
for R.R. 2, 6, 8, 10, and 12 in W.P. 340 & 1526 and R.R. 6, 8, 9, 11 and 12
in W,P. 286/74.
S.K. Mehta, K.R. Nagaraja and P.N. Puri for
R.R. 13-178 in W.P. 1526/73.
The Judgment of the Court was delivered by
RAY, C.J. This Court on 29 August, 1974 appointed Shri Debabrata Mookerjee
Chairman to convene, fix the date and hold the meeting of New Friends
Cooperative House Building Society Ltd. referred to as the Society in
accordance with the provisions of the Delhi Co-operative Societies Act, 1972.
This meeting was direct374 ed to be held for the purpose of electing the
members of the New Managing Committee The Chairman was directed to look into
each and every disputed question of membership. The Chairman was further
directed to decide whether the persons had been rightly or wrongly declared to
be defaulters. The order further directed that if the Chairman came to the
conclusion that the person had been wrongly declared to be a defaulter, the
Chairman would include him or her in the list of members. The Chairman was also
asked to give effect to all orders of this Court already made in regard to
persons who were declared defaulters and who according to orders of this Court
on payment of moneys are not and cannot be treated defaulters. The Chairman was
asked to go into cases where money had been sent and not accepted. If the
Chairman came to the conclusion that money had been wrongly not accepted, the Chairman
would decide the same in accordance with Rules and Bye-laws of the Society.
There are further details in the order dated 29 August, 1974.
In the order dated 29 August, 1974 Brij Mohan
Malhotra was given liberty to adduce proof before the Chairman that the money
was tendered Within time. If the Chairman came to the conclusion that it was
tendered in time, he would decide in accordance with Rules and Bye-laws of the
Society.
The Chairman was entitled to scrutinise
whether any person had been either illegally brought in as a member or
illegally removed, having regard to the rules, bye-laws and regulations of the
Society. Inder Bir Kaur alleged that she had been illegally removed from
membership. The Chairman was directed to go into the question.
The order was made in two writ petitions No.
340 of 1972 and 1526 of 1973 and in a number of miscellaneous applications.
On 6 July, 1971 the Lt. Governor passed an
award directing the Society to pay Rs.22 lakhs to the Delhi Administration. On
9 July, 1971 the Lt Governor by a notification removed the elected Managing
Committee and appointed a nominated' Managing Committee under Rule 56 of the
Rules made under the Bombay Cooperative Societies Act, 1925 hereinafter
referred to as the Bombay Act which applied to Delhi. The term of the Managing
Committee was for one year.
On 23 October, 1971 the nominated Managing
Committee passed a resolution to make the award rule of the Court. On 18
December, 1971 the nominated Managing Committee passed a resolution for having
direct sub-leases. On 22 January, 1972 the nominated Managing Committee called
for more funds. On 5 July, 1972 the Lt. Governor issued second notification
extending the term of the nominated Managing Committee by two years.
The Society was the subject matter of two
writ petitions. 287 members of the Society filed writ petition No.
340 of 1972 hereinafter referred to Raj
Rani's petition.
The members challenged 375 the vires of Rule
56 of the Society on the ground that the rule.was ultra rites section 71 of the
Bombay Act and further that the rule was bad on account of excessive delegation.
The petitioners contended that action under Rule 56 could not. be taken without
complying with the provisions of section 46A of-the Bombay Act which was applicable
to. Delhi at the relevant time. The petitioners also challenged some
notifications on the ground that the Lt. Governor having exercised his powers
once could not extend the term, In short, it was said that the power of the Lt.
Governor was exhausted. The other challenges were that the notifications were
not speaking order and were made malafide. The broad challenge in the petition
was against the extension of term of the Managing Committee. On 29 August, 1972
Rule Nisi was issued.
On 30 April, 1973 the nominated Chairman of
the Managing Committee issued a circular asking the members of the Society to
pay certain amount. On 6 July, 1973 this Court restrained the Society and its
Chairman from declaring any member a defaulter. 'On 13 August, 1973 this Court
directed that all the interim orders passed in the writ petition should be
confined to the petitioners in Raj Rani's petition.
On 16 August, 1973 K.V. Johar filed a writ
petition in a representative capacity under Order I Rule 8 of the Code of Civil
Procedure. This is writ petition-No. 1526 of 1973 hereinafter referred to as
Johar's petition. On 20 August, 1973 this Court issued Rule Nisi in Johar's
petition.
On 17 August, 1973 the nominated Managing
Committee declared 321 members as defaulters. This Court on 21 September, 1973
restrained the Society from taking any steps in pursuance of the resolution
dated 17 August, 1973 against the petitioners and all other members of the
Society.
On 29 November, 1973 respondent No. 6 filed
an application in Johar's petition for vacating the stay order granted on 21
September, 1973. An application for vacating the stay order granted on 6 July,
1973 in Raj Rani's petition was not pursued. This Court vacated the stay
granted on 21 September, 1973 in Johar's petition and granted a fortnight's
time to make the requisite payment.
On 6 January, 1974 the nominated Managing
Committee declared 39 members as defaulters for non-payment of dues, 42 members
as defaulters for not submitting the affidavits. This was one of the
controversies which formed the subject mattter of the enquiry made by the
Chairman.
On 25 January, 1974 the nominated Managing
Committee decided to enrol 60 new members. On 26 January, 1974 a confidential
letter was addressed by respondent No. 6 to the Lt. Governor seeking his
approval to the enrolment of 60 new members and allotment of plots to them. On
the same day, the Lt. Governor addressed a letter to respondent No. 6 giving
his approval. The enrolment of 8--1546SCI/76 376 new members on 25 January,
1974, the approval of the Lt.
Governor on 26 January, 1974 and the
allotment of plots to those 60 new members formed a big controversy which was
also enquired into by the Chairman.
Two Civil Miscellaneous Petitions No. 1683
and 1072 of 1974 challenging the declaration of defaulters and the enrolment of
new members were filed in this Court in February, 1974.
C.M.P.No.1683 of 1974 is in Raj Rani's
petition and C.M.P.No. 1072 of 1974 is in Johar's petition. This Court on 29
March, 1974 directed that all the papers including resolutions, original
applications, original allotments should be produced in this Court on 4 April,
1974. This Court also restrained the Managing Committee by an injunction from
talking any steps in any manner. On 4 April, 197 4 this Court passed directions
in respect of persons who had made part payments within the time prescribed or
even beyond the time prescribed not to be treated as defaulters.
This Court mentioned in its order that the
allotment of plots to 60 new members who were characterised by the petitioners
as very important persons appeared to have been made in undue haste and the
persons in the Waiting list were not considered and that no notice was given to
persons inviting application. This Court directed that the said list of 60 new
members had to await final adjudication by. this Court. This Court also
directed that in case of 60 allottees no further steps should be taken. This
Court directed that the case of 24 defaulters would be considered if it came to
the conclusion that the allotment in favour of 60 new members would be treated
as defaulters.
In the order dated 4 April, 1974 petitioners
No. 60, 46, 216, 171 and 165 in Raj Rani's petition who paid in part after due
date were not to be treated as defaulters and they were given four weeks time
to pay the balance. It was said that if they failed to pay the balance within
the time granted they would be treated as defaulters. Petitioners No. 1,118, 43
and 287 in Raj Rani's petition were stated to have paid in full but after the
due date. They were not to be treated as defaulters. It was also said that if
they had not paid the full amount, they were also given four weeks time for
paying the balance,if any. If they did not pay the balance within the time
granted they would be treated as defaulters.
In Johar's petition S. Diwan, Virendra Singh,
Dalip Singh and Hari Singh were stated to have made payments in part beyond
time.Iqbal Khanna and H. Bhatia were stated to have made payments in part
within time. They were all given four weeks time from the date of the order and
in default of payment within the time they would be treated so defaulters. Ten
other persons in Raj Rani's petition and 14 persons in Johar's petition were
said not to have paid within time. A list of 31 sons was handed up to this
Court by the petitioners. These 31 persons were alleged to have been admitted
as members and to have been allotted plots. It was contended that this
allotment is irregular.
These allotments were made on 26 January,
1974 to which reference has already been made. It was 377 said that the list of
31 persons would await final adjudication. Ten defaulters in Raj Rani's
petition and 14 defaulters in Johar's petition aggregating 24 defaulters were
to be considered at the time of final adjudication. It was said that if the
allotment in respect of 31 per-, sons could not be allowed to stand then the
cases of these 24 persons would be considered.
In this back ground on 29 August, 1974 when
the two writ petitions filed by Raj Rani and K.V. Johar came up for heating
this Court appointed Shri Debabrata Mookerjee as Chairman of the Society.
It may be stated here that some time in 1975 someone
started a suit against the Chairman to stop the enquiry by him. The matter was
brought to the notice of this Court.
Some malicious and baseless allegations were
made against the Chairman. Under these circumstances this Court directed notice
to the respondent who filed the suit to show cause why he should not be
committed for contempt. The Chairman was in the meantime asked to continue and
he was directed to look into each and every matter as mentioned in the earlier
orders.
The Chairman between 17 March, 1975 and 5
August, 1975 restored the membership of the alleged defaulters. On 26 April, 1976
tentative voters list was published. On 14 May, 1976 the Chairman informed the
parties that election would be held on 29 August, 1976. On 12 July, 1976 the
Chairman informed the parties that the election would be held on 29 August,
1976 at Mavalankar Hall. On 27 July, 1976 the Chairman declared that of the 60
new members who had been described as very important persons 21 did not have
applications for membership and 38 were not legally admitted members and could
not be included in the list. The Chairman said that the allotment of plots in
their favour could not be upheld. On 28 July, 1976 the list of members was
published. On 17 August, 1976 there was scrutiny of the ballot papers.
On 24 August, 1976 11 persons out of the 60
persons who were enrolled members on 25 January, 1974 and allotted plots on 26
January, 1974 filed two Civil Miscellaneous praying for an order restraining
the Chairman from holding the election on 29 August, 1976 These applications
were held without serving any party to the proceedings contrary to the rules
and practice of this Court. On 25 August, 1976 counsel for those petitioners
mentioned the applications before the Court presided over by Khanna, J. asking
that the applications filed might be heard. It was also mentioned without
informing the parties. On 27 August, 1976 this Court further adjourned the
applications.
On 29 August 1976 the meeting was held and
voting took place at Mavalankar Hall.
On 23 September, 1976 the Chairman submitted
his report and give copies to the parties. On 15 October, 1976 11 persons who
378 had made the two applications for restraining of holding of the election
filed an application for adjournment of the case for two months.
This Court cannot help observing two
features. One is that an attempt was made some time in the year 1975 to
restrain the Chairman from proceeding with-the enquiry by filing a suit against
him and making baseless allegations.
It is only because this Court took immediate
notice of the matter that the frivolous suit which had been filed in abuse of
process of court was put an end to. The second is that on the eve of the
election another attempt was made to.
restrain the Chairman from holding the
election. These facts. along with the attempt on the part of those 11 petitioners
to keep the matter adjourned for two months indicate the persistent attitude on
the part of some of those persons to mark time for some oblique purposes.
In view of the importance of issues involved
and the gravity of the situation where interest of ordinary citizens
was-sacrificed to meet the interest of persons of importance and influence that
this Court took the aforesaid steps, in order to put an end to the litigation
and the controversies, It was to be kept in the forefront that the Society is not
yet the lessee of the Government in respect of the land which is to be allotted
to the members. In Volume II in Raj Rani's petition No. 340 of 1972 appears the
printed memorandum agreement to be entered into between the Society and the
President of India in respect of land which will be allotted to the members of
the Society, On 3 August, 1967 the Deputy Secretary, Delhi Administration wrote
to the Secretary of the Society, inter alia, as follows: "I am desired to
make it clear that the list of members submitted with your letter' has been
treated as final and no change in that list can be made without prior written
permission of the Delhi Administration." The printed memorandum of
agreement has three recitals.
One of the racitals is that whereas the
Society has deposited with the Chief Commissioner the sum of Rs.41, 62, 456.61
and has further agreed to deposit with the Chief Commissioner the additional
sum or sums as hereinafter provided, being the amounts agreed to be paid by the
Society to the President by way of premium for the grant to the Society of the
lease hereinafter mentioned which amounts, pending the grant of the said lease,
are to be a security to the President for due performance by the Society of the
terms of the Agreement. It is agreed between the parties, inter alia, as
follows:-
1. The President hereby grants f0r a period
of three years commencing from 13 February, 1973 a licence to the Society to
enter upon the said land only for the purposes of making surveys and taking
measurements and levels for preparing a lay-out plan.
VIII. Upon the completion of the development
of the land in accordance with the provisions contained herein and to the
satisfaction of the Chief Commissioner and issue by him of a certificate to
that effect 379 and provided that the other conditions of the Agreement have
been duly observed, the President will, in-.consideration of the expenses
incurred by the Society on the development of the land and the payment of the
premium and of the yearly rent as herein provided and of the covenants on the
part of the Society to be contained in the lease, grant to the Society and the
Society ,shall accept a lease of such of the residential plots as may be
determined by the Chief Commissioner in ,his absolute discretion.
XV(a). After the execution and registration
of the lease, the Society shall sub-lease, within such time and on such premium
and yearly rent as may be fixed by the President, one residential plot to each
of its members who or whose wife/husband or any of his/her dependent relatives
including unmarried children does not own, in full or in part, on the free-hold
or lease-hold basis, ,any residential plot or house in the urban areas of
Delhi, New Delhi or Delhi Cantonment and who may be approved by the Chief Commissioner.
Reference to the Agreement is necessary to
show that the Society is not yet lessee of the Government in respect of the
land. This is a mere agreement for the grant to the Society of the lease. The
Government refused to grant lease. Thereafter the matter was referred to the
arbitration of the Lt. Governor. The Lt. Governor made an award directing the
Society to pay Rs.22,45,742/as the balance amount representing the cost of
land.
In 1972 a supplementary agreement was made
between the President of India and the Society. One of the recitals in that
agreement mentions that the Society has not completed the development of the
land and the members of the Managing Committee resolved that the Lt. Governor
of Delhi be requested to allow the members to pay their individual dues to the
Administration to evacute their sub-teases. This recital indicates that there
was an attempt on the part of individual members to pay dues to the Society as
well as to the Government. It can, therefore, be seen that membership of the
Society and the allotment of lands are different matters.
One of the main contentions before the
Chairman was in regard to membership of 60 persons. These 60 persons were
admitted to membership on 25 January, 1974. The Lt, Governor approved of their
membership on 26 January, 1974.
The Chairman found that of these 60 persons
21 had at one time or another withdrawn their membership. 10 out of those 21
had either never applied or never paid the requisite membership fee. The
result, according to the Chairman, was that the cases of 39 persons were to be
considered. The Chairman noticed that "many of these 60 persons were
highly placed Government officials and friends and relations of persons
prominent in public life." Another allegation was that many of them
happened "to be close relations or friends and members of the nominated
Managing Committee." At the meeting held on 27 July, 1976 the Chairman referred
to Rules 24 and 30 of the 1973 Delhi Cooperative Societies Rules. These 380
rules were under the Delhi Co-operative Societies Rules 1972 which replaced the
Bombay Act 1925 in relation to the Union Territory. These rules relate to
conditions to be complied with for admission to membership. Bye-law 5 of the
Society Bye-laws was also referred to by the Chairman.
Broadly stated, Rule 24 requires a person to
apply in writing in the form laid down by the Society for membership.
His application is to be approved by the
Committee of the Society. He has to fulfill other conditions laid down in the
Act, the Rules and the Bye-laws.
Rule 25 of the Delhi Co-operative Societies
Rules, 1973 provides to ter alia that no person shall be eligible for admission
as member of a co-operative society, if in the case of membership of a housing
society (1 ) he owns a residential house or a plot of land for the construction
of a residential house in any of the approved or up-approved colonies or other
localities in the Union Territory of Delhi, in his own name or in the name of
his spouse or any of his dependent children on lease hold or free hold basis;
(2) he deals in purchase or sale of immovable
property either as principal or as agent in the Union Territory of Delhi; or
(3) he or his spouse or any of his dependent children is a member of any other
housing society except otherwise permitted by the Registrar. Rule 25(2)
provides that if a member becomes or has already become subject to any
disqualifications specified in sub-rule (1), he shall be deemed to have ceased
to be a member from the date when the disqualifications were incurred.
Rule 30 deals with the disposal of
application for admission of members. The rule provides that on receipt of an
application for membership, the co-operative society shall enter particulars of
the application in the register of applications in the form mentioned therein.
The co-operative society shall dispose of an application received for admission
as member as early as possible and in no case later than the expiration of a
period of one month from the date of receipt of the application by the Society.
In case of refusal to admit, such society shall communicate its decision
together with reasons thereof. The appeal to the Registrar lies against the
order for refusal to admit a member. An important feature in rule 30 is the
date of receipt of application for membership because the application is to be
dealt with within one month. Rule 30(4) provides that the person whose
membership has been approved by the Managing Committee of a co-operative
society shall deposit the membership fee, and the amount of the -qualifying
shares necessary to become a member, within 14 days of the passing of the
resolution of the Managing Committee approving the membership of the person
concerned.
Bye-law 5, inter alia, provides that every
person seeking membership of the Society shah sign a declaration to the effect
that he or his wife (she or her husband) or any of his/her dependents does not
own a dwelling house or plot in Delhi and that he/she is not a member of any
other cooperative house building society.
381 Judged by these rules and considering the
rival contentions of the parties the Chairman found that of the 39 cases there
was only one case of N.K. Mukherjee M. No. 1526 which fulfilled the
requirements of the rules and the bye-laws and the Chairman in his report
declared him as having been validly accepted as member. Out of those 39 persons
20 applications did not bear any date. The date of an application, the
prescription of time for deposit of the membership fee and the amount of qualifying
share and the filing of the requisite declaration arc formalities which could
not be disregarded. The Chairman rightly came to the conclusion that out of 39
persons except N.K. Mukherjee the other 38 were not legally admitted to the
membership and, therefore, they could not be treated as members.
The Chairman in paragraphs 9 to 16 of the
Report considered the cases of several persons who. had been declared
defaulters. He rightly came to the conclusion that 108 persons mentioned in
Annexure 'C' should be restored to membership.
The Chairman next considered whether there
should be a waiting list. A list of 102 persons described as the waiting list
was forwarded and endorsed by the officers of the Delhi Administration. The
Chairman came to the conclusion that of the 102 persons on the list, only a few
prosecuted their claims before the Chairman and the rest appeared to him to be
no more interested in the membership of the Society. In an annexure marked 'G'
the Chairman rightly included in the waiting list the names of such persons who
could be considered.
The Chairman said that 38 persons whose
membership was cancelled by him at the meeting held on 27 July, 1976 could
apply afresh so that their applications could be considered.
The Chairman said that 24 persons made
applications for membership. The Chairman rightly said that it would be fair to
leave the consideration of the applications of these 24 persons to the new
Managing Committee and that their names should be kept in a waiting list.
The Chairman next found that the Society had
received from 4 persons deposits towards the price of the land more than a
decade ago but took no steps to return the moneys or to admit them to the
benefit of membership. Again, there were 4 other persons whose land had been
acquired by the Delhi Administration. There was an agreement which required the
Society to offer membership to these persons upon their fulfilling the
conditions of membership. The Chairman found that those 4 persons whose land
had been acquired had made applications. The Chairman tightly came to the
conclusion that these 8 persons, namely 4 from whom moneys had been received
and the other 4 whose land had been acquired should be accepted as members.
Out of 38 persons whose membership was cancelled
by the Chairman on 27 July 11 applied to this Court in C.M.P. No.
2065 of 1976 for an order that admission of
124 members mentioned in 382 Annexure 'C' to the petition is illegal and for
further declaration of revocation of membership of 38 members as mentioned in
Annexure 'B' to the said petition. These petitioners also asked for an order
directing the Chairman not to proceed with the meeting of the Society and the
holding of elections on 29 August, 1976.
These 11 persons also made applications C.M.Ps.
No. 8485 and 8486 for filing objections to the report of the Chairman. They
wanted two months to file objections.
It should be stated here that 11 applicants
wanted to prevent the holding of the meeting and the election for the purpose
of prolonging litigation.
This Court rightly did not prevent the
holding of the meeting and the election. The report of the Chairman shows that
the meeting as well as the election was lawfully and validly held.
These 11 persons were given full opportunity
to make their submissions by way of objection to the report. Counsel appeared
and made their submissions.
These 11 persons submitted that no relief can
be sought by the petitioners in the writ petitions against the Society and that
Article 19 cannot now be invoked for the enforcement of rights. Their further
submissions were these. On 6 January, 1974 39 persons were declared defaulters
by the Managing Committee for non-compliance with the order of this Court
passed on 11 December, 1973. One of those 39 defaulters made an application to
this Court on 9 February, 1974 for condonation of delay and for restoration of
his membership. The application was dismissed on 25 February, 1974. On 4 April,
1974 this Court granted four weeks time to 15 persons out of the 39 declared
defaulters and therefore the default of 24 persons was confirmed. The Chairman
re-considered the cases of 24 defaulters including the one whose application
was dismissed. These 11 persons submitted that their membership and allotment
should have been restored. The Chairman was also in error in considering the
cases of 8 persons because records were not available.
It is significant that out of 1100 members
and the several parties to the writ petitions none has taken objection to the
report of the Chairman. The only persons who objected are out of the 24 persons
those membership and allotment on 26 January, 1974 was cancelled. These 24 persons
have however been put by the Chairman in a waiting list.
The membership as well as the allotment of
plots to these 38 persons is rightly rejected by the Chairman. The Chairman
based his finding on facts of tabulated statements prepared in the presence of
counsel and parties in open public hearings. No challenge can be taken to the
dates and facts. The Chairman rightly found that even if the date of the
eligibility certificate is taken as the effective date of application the
position cannot be otherwise. The Chairman rightly found that the records do
not indicate that the payment was 383 made within 14 days of the date of
resolution. The Chairman rightly found that the requirement of payment is not
proved and there has not been substantial compliance. The conclusion is correct
and inescapable that the enrolment of 38 persons was not only rushed but was
done with unseemly haste.
It also appears from the report of the
Chairman that person’s the waiting list were not considered before these 38
persons were enrolled as members. Reference may be made to clause (7) of the
Award of the Lt. Governor which was made the rule of Court. The award is dated
6 July, 1971.
Clause (7) made it encumbent on the Society
to act in accordance with the award. There were some persons who were treated
by the new Managing Committee as defaulters and these 38 persons were taken by
the new Managing Committee unlawfully as members.
The Chairman in Annexure 'C' restored 108
persons to membership. These 108 persons had been declared defaulters by the
nominated Managing Committee. This Court by order dated 29 August, 1974
required the Chairman to look into each and every disputed question of
membership and to decide as to whether a member has been rightly or wrongly
declared a defaulter.
The nominated Managing Committee on 6
January, 1974 declared a number of persons to be defaulters. The declaration of
defaulters could not have been made except by the General Body with a special
majority and with the approval of the Registrar. The nominated Managing
Committee could not have functioned after 1 April, 1973 in view of the
provisions of section 92 read with section 32 of the Delhi Co-operative
Societies Act, 1972. In view of the award of the Lt. Governor dated 6 July,
1971 the Committee had thereafter no jurisdiction to declare any member a
defaulter.
This Court by order dated 4 April, 1974
observed that the case of 24 defaulters would be considered if it transpired
that the list of new allottees could not be allowed to stand. The act of
declaration of defaulters on 6 January, 1974 cannot be dissociated from the
enrolment of new allottees on 25 and 26 January, 1974.
The report of the Chairman in restoring 108
alleged defaulters to membership is just and correct. This Court by Order dated
29 August, 1974 required the Chairman to look into each and every disputed
question of membership and to decide whether a person has been tightly or
wrongly declared a defaulter. The order further stated that if the Chairman
came to the conclusion that the person has been declared to be a defaulter the
Chairman will include him or her in the list of members. The report of the
Chairman is lucid and direct to the point. The report noticed that there was
widespread discontent as to the way in which the affairs of the Society were
conducted. The report said "Allegations of favouritism want of fairplay, mal-administration,
deliberate suppression of the rights of members were freely made against the
nominated Managing Committee in 1971". The Chairman noticed that there was
"nothing to 384 choose between the old elected Committee which was superseded
and the nominated Managing Committee which came to take its place".
Letters were hardly replied-to. Enquiries were rarely attempted to. Cheques
were hardly ever cashed in time. Sudden declarations of default were made
without following the prescribed procedure laid down in the Act and the Rules.
The nominated Managing Committee issued a
circular dated 30 April, 1973 demanding Rs.6 per sq. yard and threatened the
members that in case they did not pay the said amount they would be declared
defaulters. This circular is not a notice within the meaning of the bye-laws of
the Society and declaration of defaulters on the basis of the circular is
illegal and contrary to bye-laws of the Society. Further the said circular was dispatched
after the time for payment mentioned therein was over. No opportunity was given
to member as required by the mended bye-laws to show cause why his right to a
plot would not be forefeited for non-payment of deposit. Figures of alleged
dues were not mentioned in the circular in most of the case.
In view of the award of the Lt. Governor
dated 6 July, 1971 the nominated Managing Committee could not declare, any
member to be a defaulter. Further the order of this Court dated 6 July, 1973
continued to be in force, in so far as the petitioners in Raj Rani's petition
are concerned. The declaration of defaulters from amongst the petitioners in
Raj Rani's petition was unjustified. The action of the Managing Committee
declaring defaulters was in bad faith because they wanted to confer benefits on
other persons under the guise of declaration of defaulters.
This Court in the order dated 4 April, 1974,
observed that the cases of 24 defaulters would be considered if it transpired
that the list of allottees on 26 January, 1974 could not be allowed to stand.
The Chairman has rightly dealt with the cases of 24 defaulters in view of his
right conclusion that the allotments on 26 January; 1974 were bad.
The Chairman considered the cases of 42
persons who had been declared defaulters. The Chairman rightly came to the
conclusion that 30 persons had genuine grievances and he accepted them as
members on their submitting fresh affidavits with a view to putting an end to
all controversies whether they filed affidavits of not. R was admitted before
the Chairman that all these persons had field their affidavits originally while
seeking membership. The question was whether they filed any fresh affidavits as
required by the subsequent direction of the Delhi Development Authority. Some
of the members contended before the Chairman that they filed amended
affidavits. Some members contended that in spite of their request to give the
proforma of the amended affidavit the nominated Managing Committee did not give
the proforma of the affidavit. Under these circumstances the Chairman rightly
accepted the contentions of 30 out of the 42 persons.
385 The Chairman rightly held that 4 persons
whose money was lying with the Society should be made members. The Chairman
also rightly held that 4 persons whose lands had been acquired by the Society
should be accepted as members.
The Chairman in paragraph 37 of the report
has indicated that the new Managing Committee should fix priorities in the
order mentioned in sub-paragraph (a) to (e). These in subparagraphs (a) to (b)
belong to classes of members in whose favour there was specific allotment as
early as the year 1957. Due communication was made to them about the specific
allotment of plots. They were persons who had paid more than Rs.17,000. They
were declared defaulters for nonpayment of Rs.3000 or less by the nominated
Managing Committee as late as the year 1974. The Chairman rightly put persons
in sub-paragraphs (a) and (b) in order of priority.
Persons in sub-paragraph (c) in paragraph 37
of the Chairman's report comprise those who were declared defaulters round
about the year 1962-63. The amounts paid by persons in sub-paragraph (c) are
less than the amounts paid by persons in sub-paragraphs (a) and '(b). There was
no specific allotment of plots in favour of persons mentioned in sub-paragraph
(c). Persons in sub-paragraph (c) therefore cannot claim priority over persons
in sub-paragraphs (a) and (b). In sub-paragraph (c) only one person objected
regarding priority. The other 47 persons accepted their places in sub-paragraph
(c). This also shows the justness of the report,.
Subject to the following directions, the
report of Mr. D. Mookerjee dated 23 September, 1976 is accepted and confirmed.
1. The Managing Committee of the New Friends
Co-operative Society Ltd. (hereinafter called "the new Managing
Committee") elected at the meeting held on 29 August, 1976 shall assume
charge with effect from the date of this order.
2. The new Managing Committee shall send to
all persons referred to in sub-paragraphs (a) to (e)of paragraph 37 of Mr.
Mookerjee's report, through Mr. Mookerjee, a letter stating that membership fee
and the amount of qualifying share necessary to become a member of the Society
and also copies of this order as well as the appropriate forms of application for
membership of the Society and of the affidavits to be sent by the applicants to
the new Managing Committee within one month from the date of this order.
3. Each person referred to in sub-paragraphs
(a) to (e) of paragraph 37 shall, if he desires to have any plot allotted to
him, apply for membership of the Society. All such applications for membership
of the Society shall be sent to Mr. Mookerjee within 30 days. from the date of
receipt of the documents referred to in the next preceding paragraph hereof. If
any application is not received by Mr. Mookerjee within the said period, or if
the affidavit referred to in the next preceding paragraph is not enclosed with
the application, or if any application or affidavit be found by Mr. Mookerjee
to be 386 not in compliance with the form of the application and the affidavit
sent to the applicant, Mr. Mookerjee shah reject such application. Such
rejection by Mr. Mookerjee shall be final.
4. All applications for membership along with
affidavits, found by Mr. Mookerjee to be in order, will be forwarded by Mr.
Mookerjee to the new Managing Committee upon the expiry of the said period of
30 days. Mr. Mookerjee will make a list of the persons whose applications are
so forwarded by him to the new Managing Committee.
5. The new Managing Committee shall convene a
meeting of the Committee within 30 days from the receipt of the applications
along with the affidavits sent by Mr. Mookerjee to the new Managing Committee
as aforesaid and pass a resolution accepting all such applicants for membership
as members of the Society.
6. The new Managing Committee shall convey to
Mr. Mookerjee its said resolution within 14 days of the passing of such
resolution and shall send to Mr. Mookerjee at least as many copies of the
resolution as the number of persons who are admitted as members of the Society
by virtue of that resolution. Mr. Mookerjee will thereafter send a copy of the
said resolution to each of the applicants Who is admitted as a member of the
Society by virtue of the said resolution.
7. On receipt of the said communication from.
Mr. Mookerjee each person who has been admitted as member of the Society by
virtue of the said resolution shall, within 14 days from the receipt of the
communication from Mr. Mookerjee, pay to Mr. Mookerjee by Bank Draft (drawn in
favour of "New Friends Co-operative House Building Society Ltd.") an
amount including the membership fee and the amount of qualifying share
necessary to become a member of the Society.
Mr. Mookerjee will thereafter forward the
Bank Drafts to the new Managing Committee.
8. Regarding the allotment of plots, the
suggestions of Mr. Mookerjee contained in sub-paragraphs (a) and (b) of
paragraph 37 of his report will be given effect to by the new Managing
Committee, subject to the availability of plots and subject also to each person
referred to in the said two sub-paragraphs and to whom any plot is allotted
complying with the direction contained in the preceding paragraph 7 hereof and
further subject to each such person paying his full share of the money payable
to the Delhi Development Authority under the Supplementary Agreement entered
into between the President of India and the Society on 1 February, 1972 by a
Bank Draft drawn in favour of the Delhi Development Authority".
9. The allotment of plots among persons
referred to in sub-paragraphs (a)and (b) of paragraph 37 of Mr. Mookerjee's
report shall be in the order of priority mentioned there and already earmarked
for them. If plots which are already earmarked for persons in subparagraphs (a)
and (b) are not available then there will be allotments to those persons by
draw of lots first among those in sub387 paragraph (c): and thereafter among
those in sub-pargraph (b). Mr. Mookerjee will prepare a list of persons to whom
plots are so allotted and send copies of,the list of the new. Managing
Committee and, the Delhi Development Authority and inform the persons to Whom,
such allotments are made.
10. Each person referred to in the said.
sub-paragraphs. (a) and (b) of paragraph 37 and to whom any plot is allotted
shall, within (b) days from the receipt of the communication from Mr. Mookerjee
as referred to re-paragraph 6 hereof, enquire from the Delhi Development
Authority as to the sum payable by him to the Delhi Development Authority as
aforesaid and upon receipt of the reply from the Delhi Development Authority
pay the sum to the latter by a Bank Draft within 15 days from the date of the
receipt of the reply.
In default of such payment the allotment to
him will stand cancelled. In the event of any such cancellation allotment may
be made to the next person if any, in this sub-paragraph.
11. Thereafter, if any plot or plots remain
to be allotted the allotment or allotments shall strictly be in accordance with
the order of priority laid down in paragraph 37 of Mr. Mookerjee's report. Such
allotments shall be made by Mr. Mookerjee by means of draw of lots first among
the persons referred to in sub-paragraph (c) thereafter among those in
sub-paragraph (d) and thereafter among those in sub-paragraph (e) of paragraph
37 of his report. Mr. Mookerjee will prepare a list of persons to whom the
plots are so allotted and send copies of the list to the new Managing Committee
and the Delhi Development Authority and inform the persons to whom such
allotments are made. Any person referred to in sub-paragraphs (c), (d) and (e)
of Mr. Mookerjee's report who is allotted any plot shall within 14 days from
the receipt of the communication from Mr. Mookerjee to the effect that a
particular plot has been allotted to him enquire from the Delhi Development
Authority as to the sum payable by him to the Delhi Development Authority as
aforesaid and upon receipt of the reply from the Delhi Development Authority
pay the sum to the latter by a Bank Draft within 15 days from the date of the
receipt of the reply. In default of such payment the allotment to him will
stand cancelled. In the event of any such cancellation, allotment may be made
to next person, if any, in that subparagraph.
12. Each allotment of plot, referred to in
this order, shall be in accordance with the application of each applicant for
membership referred to in paragraph 3 hereof, that is to say, will not be
entitled to any allotment of any land, the area whereof is different from the
area mentioned in his application form.
13. If any person referred to in any of the
sub-paragraphs of paragraph 37 of Mr. Mookerjee's report has already paid any
money to the Society and proves such payment to Mr. Mookerjee, the money so
paid and proved shall be appropriated towards payment of the amounts mentioned
in paragraphs No. 7, 8 mad 11 hereof.
388
14. Upon allotment of land to any person
mentioned in this Report each allottee shall pay to the Society a sum of Rs.1,000/within
one month from the date of such allotment as and by way of costs relating to
these proceedings. In default of payment of such sum, the allotment to such
person shall stand cancelled. In the event of any such default, the procedure
laid down in paragraph 10 and 11 hereof shall be followed. To sum up. In the
event of any lucia default the allotment may be made to the next person, if
any, in the sub-paragraph group of the defaulting persons and thereafter to
next sub-paragraph group of persons.
No lease shall be granted to any allottee
until and unless all directions contained in this order are fully complied with
by him.
The Society shall pay to Mr. Mookerjee a
further sum of Rs.45,000/as his remuneration for the work done by him so far. The
Society shall also pay Mr. Mookerjee a further stun of Rs.5,000/for the work to
be done by him under this order and also such further sum or sums as he may
intimate to the new Managing Committee as extra expenses, including
remuneration for his staff, postage etc. for the work to be done under this
order. Mr. Mookerjee's Personal Assistant Mr. Jain will be paid Rs.300/per
month.
This order shall not apply to such members of
the Society who have already obtained leases from the President of India.
This order will govern only the affairs of
this Society and will not be a precedent for the affairs of any other
co-operative society.
Some persons have deposited monies with the
Registrar of this Court. The Registrar may hand over the money to the Society.
Writ Petition No. 340 of 1972, 1526 of 1973
and 286 of 1974 and all proceedings in these writ petitions are disposed of
accordingly.
All parties will pay and bear their own
costs.
P.H.P. Petitions allowed.
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