Lok Sevak Cooperative House ... vs S.P. Goyal And Ors.
1996 Latest Caselaw 647 Del

JUDGMENT

Mohd. Sharnim, J.

(1) The present petition has been brought forward under Article 226 of the Constitution of India for quashment of the resolution dated28.9.1986 and for fixing of premium in accordance with law so as to bring the price of the land at par with the market price and in any event at the notional price fixed by the Delhi Development Authority (for short DDA) and for issue of a restraint order against respondents Nos. 1, 2 and 3 from raising construction on the plots allotted to them by the impugned resolution. Brief facts, which are necessary for the appreciation of the points raised through the present petition are being reproduced below that the petitioner is a Cooperative House Building Society since the year1959. lt was allotted a piece of land for construction, development and allotment of plots amongst the members of the petitioner Society by respondent No. 5 vide Agreement dated 31.1.1966 and a lease deed dated 29.7.1970. Respondent Nos. I to3 herein applied for membership of the petitioner Socirity. The Managing Committee approved their membership in principle subject to compliance with the prescribedprocedure. However, neither the Registrar i.e. respondent No. 4 nor respondentsNos. 1 to 3 were apprised of this fact. The said respondents neither submitted application in the prescribed form nor deposited the stipulated share money of Rs.100.00 alongwith a registration fee of Rs. 5 / -.Later on, the general body of the Society rejected the decision of the Managing Committee and instead decided to invite applications from all, whosoever was interested in the membership. In pursuance of the said decision the petitioner Society received 19 applications, including that of the three respondents. Subsequently, the general body of the Society resolved not to admit any more members. The Society, in view of the above, remitted cheques of Rs. 10.000.00 each to each of the 19 applicants. Out of the 19 applicants, 17 accepted their refund. However, respondents Nos. 1 and 2 did not encash their drafts and cheques and pressed their claims for membership.

(2) The respondents complained to the Registrar Cooperative Societies, who on receipt of their complaint, issued a notice to the petitioner to show cause as to why the Managing Committee be not superseded. The petitioner gave a reply to the show cause notice. Respondent No. 4 did not accept the said explanation and passed an orderdated 6.6.1984superseding the Managing Committee.Asa corollary of the above supersession, an Administrator was appointed. The said Administrator passed an order in July, 1986 admitting the above named respondents as members of the society. He further asked for a sum of Rs. 1,00,000.00 from Sh. J.K. Khanna,respondent No. 3. Respondent No3.deposited the said amount. The Administrator there after allotted plots Nos. B4, F17 and E2, Gitanjali Enclave, New Delhi belonging to the petitioner to respondents Nos. 1,2 and 3 respectively at a rate ofRs. 29.00 per sq. yd. The Administrator while doing so, secured an affidavit from each of the said respondents to pay interest in addition to the premium paid by them, as decided by the general body of the petitioner Society. The guiding factor for determining the price of the land in such a case should be the present market value which alone is the proper measure Rs. 29.00per sq. yd. represented the market value at a time when there was no development in the Society and the value of the rupee was much more than now. The rate for determining the unearned increase in the value of the land in the case of transfer was Rs. 4,000.00 to Rs. 5,000.00 per sq.yd. It has thus been prayed that the resolution dated 28.9.1986 be quashed and respondents Nos. 1 to 3 be restrained from raising construction on the plots allotted to them by the above said resolution and the lessor be directed to fix the premium in accordance with law and justice so as to bring the price of the land at par with the market price.

(3) Respondents Nos. 1 to 3 have put in contest, inter alia, on the followinggrounds; that the present writ petition is not maintainable as the same has not been properly instituted. It is also not maintainable in view of the conditions of the perpetual lease deed dated 29.7.1971. Clause ll(4)(5)(a) of the lease deed provides that the lessee shall sub-lease, within such time and on such premium and year lyrent as may be fixed by the lessor, 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 free hold or lease hold basis, any residential plot or house in the Urban Areas of Delhi, New Delhi or DelhiCantonment, and who may be approved by the Chief Commissioner.

(4) In view of the above, the petitioner Society can charge only such premium which is in accordance with the directions given by the paramount lessor. The DDA had fixed the price at Rs. 29.00 per sq. yd. which is the price that has been charged from the respondents. The petitioner is trying to take advantage of its own wrongs as Clause (5)(e) envisages that if any of the residential plot is not sub-leased or is surrendered by any of the sub-lessees or is taken possession of by the lessee in any manner what so ever, the lessee shall forthwith surrender such residential plot to the lessor and the lessee may pay such compensation and make such reduction in they early rent as the lessor may in his absolute discretion think proper. The lessor may dispose of such plot in any manner and to whomsoever he thinks proper.

(5) In view of the above, the petitioner Society was duty bound to allot plot sat the same price to all the members and surrender the remaining plots to the lessor.The petitioner Society not only failed to all of the remaining three plots but continued to superes the said fact from the concerned statutory authorities. The petitioner Society is, in fact, disputing the price at which the plot can be sub-leased tore spondents Nos. 1 to 3. Such a dispute relates to an interpretation of the perpetual lease deed between the petitioner Society and the President of India. Thus the dispute cannot be raised and adjudicated upon in a Court of Law. In case the petitioner is to charge higher price than the price fixed by the Dda and charged from other members, the petitioner Society will be guilty of discrimination in between the members of the Society without there being any reasonable classification for differentiation. The petitioner is a Cooperative Society and as such not entitled to make profits. The petitioner Society in the year 1980 sub-leased a plot to one Sh.Umesh Chand at the rate of Rs. 29.00 per sq. yd. Hence how the petitioner can charge a higher rate from the respondents, who became members in the year 1981 and as such became entitled to plots in the said year itself. Thus, there is no reasonable classification in between the respondents and the said Sh. Umesh Chand.

(6) Respondent No. 5, namely, Dda, filed an affidavit before the Supreme Court wherein they had stated that Rs. 29.00 per sq. yd. is the correct price which is to be charged from the sub-lessees.

(7) Respondent No. 5 through their counter affidavit have relied upon the rates fixed by the L&DO which were prevalent at the relevant time i.e. in the year1986. Thus, according to them Rs. 1,320.00 per sq. mtr. be charged from respondentsNos. 1 to 3. The other respondents did not put in any contest.

(8) Initially the present writ petition was dismissed in limini vide order dated20.7.1987 passed by a Division Bench of this Court. Thereafter the petitioner approached the Supreme Court. The Supreme Court vide order dated 30.11.1988 set aside the aforesaid order of dismissal and remanded the case to the High Court for determination of the question of rate in respect of three plots of land allotted Nos. 1 to 3, vide Resolution dated 28/09/1986 (Annexure A).Inview of the above, prayers mentioned at Sr. No. (A) and (C) are no more available to the petitioner. Thus this Court need not dilate upon the said prayers and would confine itself only to the determination of reasonable and just rate of plots allotted to respondents Nos. 1 to 3 by the Administrator in terms of the a fore mentioned judgment and order.

(9) Learned Counsel for the petitioner Dr. Singhvi has vehemently contended that the premium i.e. Rs. 29.00 per sq. yard which finds a mention in the Resolution dated 28/09/1986 at which the plots were allotted to the three respondents is extremely low and is almost ludicrous in the facts and circumstances of the present case keeping in view the location of the Society which is situated in South Delhi known as Geetanjali Enclave and the prevalent market rates for the lands in South Delhi. The very fact that this case was remanded io this Court for fixing a just and reasonable rate ipso facto shows that the Hon'ble Supreme Court was of the view that the premium which was charged from the respondents was meagre and was not in consonance with the prevailing rate of the lands in the posh colonies. The learned Counsel thus contends that the rate of premium is to be re-fixed by this Court and that has to be on the higher side.

(10) Learned Counsel for the respondents, on the other hand, have urged before this Court that the petitioner is a co-operative Society and is as such under an obligation to charge only such premium which is fixed by the lessor for the allotment of plots to the members of the Society. It has got no powers to charge enhanced rate from the new and subsequent members. Doctrine of equality amongst members is sine qua non of the co-operative movement. Every member is to be treated equally and at par with other members. The next limb of the argument advanced by the learned Counsel for the respondents Messrs Ramesh Chandra,Senior Advocate, and Mr. Kanwal Narain is that a co-operative Society is not a profit-making body. It is thus a different institution from a company.

(11) There is no dispute in between the parties that the petitioner Society was allotted a tract of land measuring 77,810 sq. yards of land for the purposes of construction and development and allotment of plots to its different members vide agreement dated 31/01/1966 and the lease deed dated 29/07/1970. The premium which was initially fixed for the allotment of the plot to its members was at the rate of Rs. 29.00 per sq. yard (vide lease deed Annexure B). The petitioner paid a sum of Rs. 8,37,660.00 which included the premium i.e. Rs. 7,68,216.00 and Rs.59,391 / - by way of development charges. The learned Counsel in view of the above thus argue that if all the plots belonging to the Society are sold and disposed of atRs. 29.00 per sq. yard even then the Society would get Rs. 22,56,231.00 by way of premium as opposed to the consideration which is paid to the Delhi Development Authority i.e. Rs. 8,37,660.00. It was in view of the above that the Society was asked to charge only Rs. 29.00 per sq. yard from the sub-lessees in the above circumstances.Thus it could not have varied the rate.

(12) The learned Counsel in support of their above argument have drawn my attention to Clause (5)(a) of the perpetual lease deed (Annexure B) which is in the following words: "(5)(A).The lessee shall sub-lease, within such time and on such premium and yearly rent as may be fixed by the lessor, one residential plot to each proofits members who or whose wife/husband or any of his/her dependen trelatives including unmarried children does not own, in full or in part, on 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."

(13) It has thus been argued that the petitioner Society was under an obligation to allot to its members and to charge from them such premium which is fixed by the lessor and since in the instant case the premium fixed was Rs. 29.00 per sq. yard the petitioner could not have charged any other rate. The contention of the learned Counsel no doubt is an ingenious one but can be brushed aside within an non without any difficulty.

(14) It is true that there is a clause in the leas e deed which casts a duty on the shoulders of the Society to sub-lease at a rate fixed by the lessor. However, the question which comes to the tip of the tongue is as to whether in the face of the said clause the rates of the premium to be charged by the petitioner Society are to remainstatic, immutable and constant for all times to come and are not to be changed at any point of time. My answer to the above question is an emphatic 'no'. Admittedly,the land to the Society was allotted on 29/07/1970. It is a common knowledge that in those days the rates of lands were very much cheaper and the lands were being purchased and sold at throw away prices. Furthermore, the area which was allotted to the petitioner Society was completely barren, desolate and un-inhabited. It was almost a jungle which was developed by the initial members of the Society who made it worth living. Thus there is nothing strange if the plots of land were allotted to them at Rs. 29.00 per sq. yd. However, it does not imply thereby that the persons who were enrolled as members of the Society later on, after expiry of such a long period of 16 years i.e. in the year 1986 should also be allotted the plots at the same rate i.e. Rs. 29.00per sq. yard, as argued by the learned Counsel for respondents Nos.I to 3. To my mind, if the contention of the learned Counsel for the respondents is allowed to prevail it would be tantamount to giving away all the three plots of land free of cost in a posh colony like the colony developed by the petitioner Society where every inch of land is very precious and as such costly.

(15) The petitioner has placed on record quite a good number of documents in order to substantiate the contention of the Society that the prevalent market rate in the year 1986 i.e. the time when the plots were allotted to the respondents wasRs. 4,000.00 per sq. yard. In this connection, a reference may be made to the letter addressed to the petitioner Society by one Kunj Behari Lal (Annexure A) dated 12/06/1987. Shri Kunj Behari Lal, a member of the Society, informed the petitioner that he was selling his plot of land bearing No.C-3, Geetanjali Enclave, for a consideration of Rs. 10,75,000.00. The said plot was measuring 350 sq. yards. It can thus be safely concluded therefrom that the said plot of land was sold @ Rs. 3,000.00 per sq. yard(vide para 2 of the affidavit).

(16) The petitioner has then placed on record a copy of the letter dated 2/09/1988 from the Income Tax Authorities addressed to Mrs. Poonam Kochar and Mrs. Neeraj Gupta. A perusal of the same reveals that. the Income Tax Authorities exercised their powers of pre-emptive purchases under chapter 26C of the Income Tax Act in respect of plot of land measuring269.10sq. mtrs. and bearingNo. 122A, Block B7, Safdarjang Enclave, New Delhi, even when the apparent consideration for the plot was as high as Rs. 23 lacs. It means that the plot of land was being sold at the rate of Rs. 7165.00 per sq. mtr. even then the Income Tax Department thought it a fit case for the purchase of the said property by the CentralGovernment. The learned Counsel has thus contended that the prevalent market rate in a colony like Safdarjang Enclave which is quite proximate to the was nearabout Rs. 8,000.00 per sq. mtr. Thus the learned Counsel wants this Court to conclude therefrom that the prevalent market rate in the year 1986 of the petitioner Society was also Rs. 8,000.00 per sq. mtr.

(17) The petitioner has then placed on record a list of the prices fixed by the Delhi Administration for the areas quite close to Geetanjali Enclave at the rate of Rs.4,000.00 per sq. yard. A close scrutiny of the same reveals that the prevalent marketrate in those days i.e. in the year 1986 was Rs. 5,000.00in Vasant Vihar whereas it wasRs. 4,500.00 per sq. yard in Safdarjang Enclave. The market rate prevalent in Masjid Moth Extension, Chirag Enclave, Epr Colony, Greater Kailash and Sarvodya Colony/Enclave was Rs. 4,000/ - per sq. yard, Sarvodya Colony is almost adjoining the petitioner Society. It is thus fully evident from above that the prevalent rate the Delhi Administration in the year 1986 was Rs. 4,000.00 per sq. yard.

(18) A matter with regard to the fixation of the prices of lands which were allotted to co-operative Societies came up for consideration before a Division Bench of this Court in the case reported as , Vikas ViharCoop. Group Housing Society Ltd. v. Union of India & Ors. The Court while determining the prices of the land in South Delhi came to the conclusion that the prevalent rate in the year 1986 which was being charged by the Delhi Development Authority was Rs. 4,000.00 per sq. yard. I am tempted here to cite a few lines from the said judgment...." In South Delhi area, with which we are concerned. Rs. 4,000/- per sq. yard is fixed by the Dda as the notional price of land. In the face of the sehard facts what is rational justification for giving land to cooperative Societies atl/15th price of the market value ? With the addition of about lacs of population in Delhi every year, scarcity of land is being aggravated year to year...."

(19) In the above circumstances this Court is constrained to conclude that the prevalent market rate of the land in the petitioner Society was Rs. 4,000.00 per sq.yard.

(20) Learned Counsel for the respondents have, however, argued that a sublease in favour of Umesh Chand was executed at the rate of Rs. 29.00 per sq. yard in the year 1980 (vide page 167 of the file). Hence, there is nothing strange that theres pondents were also allotted land at the rate of Rs. 29.00 per sq. yard in the year1986 and the petitioner, as such, should have no quarrel on that score.

(21) The contention of the learned Counsel for the respondents is devoid of any force. The petitioner Society in its rejoinder affidavit sworn by Shri Jyotirmoy Sen (vide para XIII) has stated that Shri Umesh Chand was not a new member of theSociety. Shri Umesh Chand is the real brother/nominee of Smt. Krishna Kumari who was the original member of the Society. Smt. Krishna Kumari applied for transfer of her membership in favour of Shri Umesh Chand, her brother. The said application was approved by the Dda in the year 1976. The registration and the allotment of plot to Shri Umesh Chand was, however, delayed on account of the procedural difficulties. The lease deed was therefore, executed in his favour on 21/03/1980. Even then he was not allotted land at the rate of Rs. 29.00per sq. yard.In fact, Shri Umesh Chand was called upon to make donation towards the community half fund in the society. He was thus charged at the rate of Rs. 78.00 persq. yard. The respondents thus cannot take any advantage out of the said case.

(22) Learned Counsel for the respondents have contended that the equality is the hallmark of democracy within the Society. Every member of the Society is to be treated at par with the other members of the Society. The Society can not discriminate one member from the other member. All are to be treated equally.There is no dispute with the said principle elucidated by the learned Counsel help of a Full Bench decision as , The Collective Fanning Society Ltd. & Ors. v. State of Madhya Pradesh & Ors. The equality here refers to his rights in the Society. Every member in fact has got the same rights as that of the other member irrespective of his financial and social status and his share capital in the Society. However, it cannot be deduced therefrom by any stretch of imagination that a person who was inducted in the Society as a member thereof in the year 1970 should be allotted the land at the same rate in the year 1986, as is the case of the respondents. Admittedly, much water has flown down the bridge sincethen, there is a world of change in the circumstances, conditions and situations obtaining at that time in the year 1970 and the circumstances and conditions prevalent in the year 1986. Thus to equate two members at par with regard to the allotment of land at the same rate in the year 1970 and the year 1986 would betant amount to treating the un-equals as equals which is not warranted by any criterion whatsoever. It is true, as put forward by the learned Counsel for there spondents, that equals should not be treated unequally. However, the learned Counsel while advancing the said argument are oblivious of the fact that unequalsare also not to be treated equally because it would lead to discrimination. I thus feel that to treat at par a member who was inducted in the year 1986 with a member who was enrolled in the year 1970 would be treating un-equals as equals leading to invidious discrimination.

(23) The next contention raised by the learned Counsel for the respondents is that one of the basic principles of the co-operative movement is that a co-operative organisation is not a profit-making body. Thus if the petitioner Society is allowed to allot the land at such an exorbitant rate i.e. Rs. 4.000.00 per sq. yard, it would be virtually granting the permission to the Society to make the profits. The contention of the learned Counsel for the respondents does not hold any water.

(24) It is true that a co-operative Society is not a joint stock company which is formed to make profits for the purposes of share-holders whereas the functioning of a co-operative Society is to improve the economic conditions of the members to help them in their respective pursuit and not to earn pr . Nevertheless there is no such bar for a Society to earn profits in case the Society should be encouraged to do so. Had it not been so the society would not be in a position to attain its goal for which it is formed. I am tempted here to illustrate the above point with the help of an example. Suppose a co-operative Society is formed with one of the objects of the Society to run educational institutions. If the society is debarred from making the profit it would be inconceivably for it to run the school. However, it is true that prof it cannot be its motive in the sense in which it is that of a joint stock company to earn profits for its share-holders. The above point is quite clear from a reference to Sections 46 and 47 of the Delhi Co-operative Societies Act.

(25) It has then been argued by the learned Counsel for the respondents that the petitioner can at the most charge equalisation charges from the respondents. The learned Counsel in support of their argument have adverted to circular issued by the Registrar, Co-operative Societies, dated 28/05/1996. I have carefully gone through the said circular. A perusal of the same reveals that it is meant for charging interest from the defaulting members of the group housing society (vide para 1 of the circular). Thus the said circular is of no help and assistance to the respondents.Admittedly, the respondents in the instant case have been allotted land at the rate of Rs. 29.00 per sq. yard. Thus the pertinent question is are they entitled to retain the land at the above said rate ? The said circular was issued in order to bring parity in the rate of interest which was being charged by the group housing societies defaulting members (vide para 2 of the said circular).

(26) Learned Counsel for the respondents have then placed on record copies of the two sub lease deeds executed by the Government of India, Ministry of Rehabilitation infavour of the employees of the Ministry of Rehabilitation. The said documents are of no help to the respondents inasmuch as the said two sub-lease deeds admittedly were executed by the Government of India, Ministry of Rehabilitation, in favour of its employees in order to rehabilitate them in the wake of the partition of the country. The purpose behind the execution of the lease deeds is to rehabilitate the displaced persons and migrants from Pakistan. Further a per usal of the said sub lease-deeds reveals that the land was allotted to the said Society by a lease executed on 23/08/1989. The sub-lease deeds were executed in favour of the respective sub lessees on Septembers, 1995. The other two perpetual sub-lease deeds pertain to the Sarai Julaina Co-operative House Building SocietyLtd. A perusal of the said lease deeds also reveals that the land was allotted to the said Society in the year 1973. Further the sub-lease was executed in favour of Shri Jyoti Giri and Shri Raj Kumar Gupta in June, 1985. Moreover, it is not clear from any of the afore-mentioned four documents as to when the said persons were en rolledas members, as to whether they were initial members or came to be enrolledsubsequently. Thus this Court is not prepared to place much reliance on the saiddocuments.

(27) The respondent Dda in the instant case filed two affidavits. Affidavited 31/05/1988 sworn by Mrs. Janak Juneja, Secretary, Dda was filed before the Hon'ble Supreme Court. It has been stated in the said affidavit that the lessor fixed the rate Rs. 29.00 per sq. yard and the petitioner, as such, could not have charged more than that. Subsequently, another affidavit dated 29/11/1994was filed before this Court sworn by Mr. Somaal, Officer on Special Duty. It has been stated in para 3 of the said affidavit that the prevailing rate in the closest localitynamely, Malviya Nagar as fixed by L&DO was Rs. 1,320.00 per sq. mtr. Neither the petitioner nor the respondents Nos. 1 to 3 have placed any reliance on the saidaffidavits. Curiously enough it is common knowledge and a judicial notice can betaken note of the fact that the Dda fixes its own rate of the lands which are at itsdisposal. However, for the best reasons known to them the Dda had cited the rates which were being charged by the L&DO in the year 1986. Thus the said two affidavits are contradictory to and inconsistent with one another. The said affidavit sare thus of no assistance and help to this Court.

(28) In the above-stated circumstances I conclude that Rs. 4,000.00 per sq. yard would be the just and reasonable rate to be charged from respondents Nos. 1 to 3. The writ petition is allowed to this extent only. The parties left to bear their owncosts.