Lucky Home Cooperative Group ... vs Registrar, Cooperative ...
1996 Latest Caselaw 528 Del

JUDGMENT

Mohd. Shamim, J.

(1) This is a petition under Article 226 of the Constitution of India for quashment of Order No. F.47/224/Co.op/GH/NW/971 dated June 28,1995 passed by the Registrar, Co-operative Societies, under Section 32 of the Delhi Co-operative Societies Act whereby the managing committee of the petitioner was superseded, and for issue of a direction to the respondent to hold the elections.

(2) Brief facts which are necessary for the appreciation of the points raised through the present petition are as under: that the petitioner is a registered co-operative group housing society under the provisions of the Delhi Co-operative Societies Act, 1972 (hereinafter referred to as the 'Act' for the sake of convenience). The petitioner was allotted a plot bearing No.{ 19/1, Sector 13, Rohini, for the purposes of construction of 78 dwelling units. The election of the managing committee of the petitioner was to be held on September 5,1993. Shri P.P.Sikri was appointed as an Election Officer in connection therewith by the Registrar. However, the same could not be held as it was stayed by the Deputy Registrar, Shri B.L.Sharma, vide his order dated September 3,1993. Subsequently the said order was set aside by the Delhi Co-operative Tribunal vide order dated October 19,1993. Later on the Registrar removed Shri Sikri and appointed Shri Ravinder Singh in his place as an Election Officer on December 9,1993. The said Shri Ravinder Singh vide his letter dated June 20,1995 directed the society to deposit a sum of Rs. 2350.00 by way of expenses for conducting the election. The petitioner complied with the said order and deposited the necessary expenses, alluded to above. The respondent, however, served the petitioner with a show cause notice dated April 27,1995 as to why the management of the petitioner be not superseded. The said notice was replied on May 12,1995. 59 members out of 74 members also requested the respondent not to supersede the managing committee. The impugned order of supersession was passed on June 28,1995 is illegal and invalid and not in conformity, with the provisions of the Act. Consequently an appeal was preferred against the said order before the Financial Commissioner under Section 76(1)(f) of the Act on July 7,1995. An application was moved for early hearing on July 11,1995. however, the same was rejected. It is amply clear from above that the respondent while appointing the Administrator acted with ulterior motive and in order to help one Manju Bakshi to have a flat in the petitioner society. Hence arose the necessity for the presentation of the present petition.

(3) The respondent have opposed the petition, inter a!ia, on the following grounds: that the petitioner has not approached this Court with clean hands inasmuch as it has suppressed the material facts from this Court. Hence the petitioner is not entitled to any relief at the hands of this Court. The last election to elect the office bearers of the managing committee of the petitioner was held on January 1,1989 wherein Shri V.K. Rastogi was elected as the Secretary of the petitioner. No election of the office bearers of the managing committee was held thereafter. After having been elected Shri Rastogi conducted the affairs of the petitioner in violation of all the bye-laws and the rules. The respondent appointed three Election Officers successively vide order dated June 12,1991, May 7,1992 and December 9,1993 to hold the election in the society. Shri Ravinder Singh, an inspector with the respondent was appointed as an Election Officer vide order dated December 9,1993. The Election Officers are required to complete the election within one month from the date of appointment or within such period as may be extended by the respondent. However, no elections could be held in the petitioner Society as the management of the Society was averse to holding the elections. Hence neither any document/record nor the funds were furnished to the Election Officers to do the needful. The respondent received quite a good- number of complaints from the members and other persons with regard to the irregularities of serious nature, misappropriation and embezzlement of funds of the petitioner Society by the office bearers. During the audit serious irregularities and illegalities were pointed out by the auditors which find a mention in para 10 of the counter affidavit sworn by Shri L.N. Sharma, Assistant Registrar. The petitioner failed to rectify the irregularities which were pointed out during the audit report. Consequently, in view of the above complaint the respondent appointed an Enquiry Officer, Mr. S.C.S.Visht, vide order dated September 21,1993. The petitioner is under an obligation to render all possible assistance to the Enquiry Officer to examine all the relevant books of account and the documents in possession of the Society. The petitioner, however, did not render any assistance to the Enquiry Officer to conduct the inquiry with ulterior motives. In the above circumstances the respondent was left with no alternative but to issue a notice under Section 32 of the Act to show cause as to why the managing committee of the petitioner society be not superseded. A reply was filed by the petitioner to the said show cause notice. Having been dissatisfied with the said reply the respondent superseded the management of the committee vide order dated June 28,1995 and appointed Shri A.K. Mehta as the Administrator of the Society. The Administrator after being appointed asked the petitioner to hand over the records of the Society, but to no avail though the Society was under an obligation under the rules to hand over the said record.

(4) Shri Ravinder Singh was appointed an Election Officer on December 9,1993 but could not. hold the election? within one month from the date of his appointment and till the appointment of the Administrator. The appointment of Shri Ravinder Singh was cancelled Vide order dated June 30,1995 as he ceased to be an Election Officer after the appointment of the Administrator. The petitioner, however, in collusion with the said Ravinder Singh disclosed its intentions to hold the elections. The petitioner subsequently by making false representation before the Court obtained an ex parte order dated July 18,1995 whereby the said Election Officer known as Ravinder Singh was directed to conduct the election notwithstanding the appointment of the Administrator. Armed with the above said ex parte order dated July 18,1995 the petitioner approached Shri Ravinder Singh to conduct the election knowing fully well that he was no more the Election Officer. The appeal filed by the petitioner Society against the order of supersession dated June 28,1995 was dismissed by the order dated August 17,1995. The order of supersession has thus become final. The same has not been challenged by the petitioner society till to this date. Taking undue advantage of the above said order the petitioner manipulated and fabricated the alleged election result. It was wrongly alleged by the petitioner that the election had already been held before the date fixed i.e. on September 4,1995 by Shri Ravinder Singh. No report with regard to the alleged election has been made by Ravinder Singh till to this date. The petitioner thus cannot take any advantage of the said election result and its office bearers cannot continue in office of the petitioner society on the basis of the said alleged result. The said election is void and illegal. The alleged election result is a forged and fabricated document.

(5) Learned counsel for the petitioner Mr. Dewan has vehemently contended that the impugned order of supersession passed by the Registrar dated June 28,1995 is absolutely illegal and invalid. According to the learned counsel, there was absolutely no justification for passing the impugned order in the facts and circumstances of the present case. There was no violation of any of the provisions of the law by the office bearers of the society. The affairs of the society were being conducted in accordance with law. It is false and preposterous that there was any embezzlement of the funds of the society. It is also wrong and incorrect that there was non compliance with the audit report. It is a sheer travesty to allege that the elections had not been conducted in the petitioner society from January 1,1989 onwards on account of non co-operation from the office bearers of the society. The fact is that the last election was held on September 23,1990 as is manifest from the proceedings register of the said date.

(6) Learned counsel for the respondent Mr. Poddar, on the other hand, with great zeal and fervour, urged to the contrary.

(7) I have heard the learned counsel for both the parties at sufficient length and have very carefully examined their rival contentions and have given my anxious thoughts thereto.

(8) Learned counsel for the respondent, Mr. Poddar has raised certain preliminary objections with regard to the maintainability of the present petion. According to the learned counsel, admittedly the impugned order of supersession was passed on June 28,1995. The petitioner society challenged the validity and legality of the said order before the Tribunal through an appeal under Section 76(1)(f) of the Act. The said appeal was dismissed on August 17,1995. However, the said appeal was preferred on July 7,1995. The present writ petition was filed on July 17,1995. Thus the learned counsel contends that the appeal before the Tribunal was sub judice and the Financial Commissioner was in seizing of the matter at the time when the present writ petition was presented before this Court. It implies thereby that the petitioner was pursuing two remedies at two different forums for redressal of his grievances at one and the same time which he cannot be allowed to do. I find myself in perfect agreement with the learned counsel.

(9) Learned counsel for the petitioner has tried to justify the presentation of the present writ petition during the pendency of the appeal on the ground that the petitioner moved the Tribunal to quicken the pace of the disposal of the appeal through an application. However, the request of the petitioner did not find favour with the learned Financial Commissioner and he dismissed the said application (vide para 11 of the writ petition). To my mind, the contention of the learned counsel is devoid of any force inasmuch as it is manifest from the record that the appeal was filed on July 7,1995 and the same was disposed of on August 17,1995. Thus the petitioner is not justified while putting forward the said argument that since the matter was considerably delayed, hence he approached this Court under Art. 226 of the Constitution of India.

(10) The next point raised by Mr. Poddar with regard to the maintainability of the-present petition is that the petitioner as is abundantly clear from the relief sought through the present petition has not questioned the impugned order dated August 17,1995 passed by the Tribunal in the instant case. Admittedly, the impugned order dated June 28,1995 passed by the Registrar superseding the management of the society and appointing an Administrator was impugned through an appeal before the Financial Commissioner. The said order was upheld vide order dated August 17,1995 by the Tribunal. It thus follows as a corollary of the dismissal of the said appeal that the impugned order dated June 28,1995 merged in the order dated August 17,1995. Hence the petitioner in order to secure proper relief from this Court should have challenged both the orders. However, as the things are even if the petitioner succeeds in getting the impugned order dated June 28,1995 set aside even then the impugned order dated August 17,1995 will remain intact. The learned counsel for the best reasons known to him did not challenge the order dated August 17,1995. He even did not give any reply to the above issue raised by the learned counsel for the respondent during the course of his arguments. I thus feel that the present writ petition is not maintainable on the said score also.

(11) One of the grounds on which the management of the petitioner society was sought to be superseded in the show cause notice dated 27.4.95 was that the petitioner society failed to hold any election since January 1,1989 onwards (vide para 2 of the show cause notice). Learned counsel for the petitioner during the course of his arguments has contended that it is incorrect that no election was held after January 1,1989. In fact, the elections were held on September 23,1990 and Messrs Satish Chandra and P.C. Bansal were elected as Vice President and Member of the managing committee respectively as nobody opposed their candidature. The learned counsel in support of the above has led this Court through the proceedings of the Annual General Meeting (AGM) held on September 23,1990. I am sorry I am unable to agree with the contention of the learned counsel. Had there been a grain of truth in the above contention it would have found a mention in the reply to the show cause notice while dealing with this point in the reply to the show cause notice with regard to the non-holding of the elections. The petitioner has nowhere alleged that any such election was held on the above said date. Thus the fact remains that no elections were held after January 1,1989 onwards. Admittedly, the elections are to be held every year, as per the provisions of Section 31 of the Delhi Co-operative Societies Act, 19/2, Rule 58(3) of the Delhi Co-operative Societies Rules, Schedule Ii, and Rule 62, as one-third of the members of the society retire every year to fill up the said vacancies caused on account of the retirement of the said members.

(12) The Registrar, as is manifest from the record, made every possible effort to hold the elections. He in this connection appointed four election officers known as S/Shri Jagdish Chandra on June 12,1991, Tariq Salam on May 7,1992, P.P.Sikri on June 30,1993 and Ravinder Singh on December 9,1993. After going through the reply to the show cause notice dated May 12,1995 it transpires that Shri Jagdish Chandra could not conduct the elections as the society failed to deposit Rs.5000.00 by way of election expenses as the society was not having sufficient funds to meet the said expenses. The said fact was communicated to the said officer vide letter dated August 19,1991. The fact that it was simply a ruse-to avoid the elections becomes crystal clear from the fact that the society was having sufficient funds at its command during the year 1991-92 as is quite clear from the balance-sheet filed on March 31,1992. It was having cash in hand to the tune of Rs. 10,229.57. Further it was having Rs. 53,558.49 with the Delhi State Co- operative Bank. It was also having Rs. 1,62,951.26 with Delhi Nagrik Sahkari Bank Ltd. It will also not be out of place to mention here that the balance-sheet of the society pertaining to the year 1990-91 filed on March 31,1991 shows cash in hand Rs. 159.62, a sum of Rs. 50,042.49 with Delhi State Co-operative Bank and a sum of Rs. 5,040.24 with Delhi Nagrik Sahkari Bank. Thus it was a white lie that the petitioner was not in a position to provide fund for holding the elections.

(13) According to the petitioner society Shri Tariq Salam was appointed as Election Officer on May 7,1992. However, he could not hold elections on account of certain litigation in between M/s Shanti Developers and Promoters (India) Pvt. Ltd. and the society. M/s Shanti Developers and Promoters (India) Pvt. ltd. claimed a sum of Rs. 92 lacs from the society and as such on account of the said litigation the general body of the society passed a resolution unanimously that in view of the special circumstances obtaining in the society the Registrar, Co-operative Societies be requested not to disturb the managing committee by holding the elections vide letter dated 18.5.92 addressed to Sh. M.A. Hashmi, Assistant Registrar Cooperative Societies. This again goes to show that the managing committee of the society was not at all interested in the elections and wanted to put them off on one pretext or the other and wanted to perpetuate its life for all times to come.

(14) This brings us to the appointment of Shri P.P. Sikri. A close scrutiny of the reply to the show cause notice (vide para 1(c) ) reveals that Shri P.P.Sikri could not hold the elections on account of some stay order passed by Shri B.L.Sharma, Deputy Registrar. The petitioner society preferred an appeal. The said appeal was allowed and the order passed by Shri B.L.Sharma was set aside vide order dated October 19,1993.

(15) It is true that Shri B.L, Sharma, Deputy Registrar, stayed the elections vide his order dated September 3,1993. However, the said stay order remained in operation for a period of 45 days only. Thus I think the learned counsel for the petitioner is not justified in saying that the elections could not be held on account of the stay order passed by Shri B.L.Sharma, Deputy Registrar. In fact, Shri Madan Jha, Presiding Officer, while allowing the revision - petition, directed that the election in the petitioner society should be held as per the prescribed procedure.. Furthermore, the petitioner for the said delay cannot blame the respondent. The petition for stay was filed by Shri Kishan Chand Gupta and Shri Anand Swarup Goel, Members of the society.

(16) The respondent thereafter appointed Shri Ravinder Singh vide order dated December 9,1993 passed by the Deputy Registrar. Shri Ravinder Singh vide order dated January 7,1994 requested the society to furnish the record. Surprisingly enough, no reply was given to the said letter. However, there is one letter on record addressed to Shri Ravinder Singh by the Secretary of the Society Mr. Rastogi. This again reveals that the petitioner society never wanted him to hold the elections. I am tempted here to cite a few lines from the concluding lines .of the said letter. It is in the following words:- "Your conducting the election from the initial stage will not only be tantamount to violation of the Hon'ble Tribunal's order but it will also mean additional unnecessary financial loss to the society which it can hardly afford."

(17) The said letter goes a long way to prove and substantiate the contention of the learned counsel for the petitioner that the petitioner society was not cooperating and giving any sort of assistance to the Election Officer to hold the election.

(18) Then there is another letter dated December 6,1994 written by the Secretary of the Society to Shri Ravinder Singh. This again shows that the petitioner society was in no mood to hold the elections and that with the said end in view all sorts of queries and questions were being raised.

(19) Shri Ravinder Singh requested the petitioner society again to deposit the election expenses vide his letter dated June 20,1995. It was in reply to this letter that we find a change in the attitude of the petitioner society. The petitioner society through the said letter has shown its readiness and willingness to deposit the required amount of Rs. 2,350.00 which was demanded by the Election Officer, Shri Ravinder Singh, by his letter dated June 20,1995. The amount of Rs. 2.350.00 was in fact handed over through a cheque dated June 29,1995. Thus obviously the said amount was deposited with the Election Officer after the order of supersession had already been passed on 28.6.95.

(20) Now the question which is precariously perched on the tip of the tongue is as to what was the reason for this change of heart. Admittedly, the supersession order was passed on June 28,1995. The impugned letter along with the cheque, adverted to above, was received by Shri Ravinder Singh on June 29,1995 as is amply clear from the receipt issued by Shri Ravinder Singh which finds a mention in the margin of the letter. Thus the said step was taken by the petitioner in order to show that it had been ready and willing to hold the elections and the supersession order was illegal and invalid. The petitioner in fact encashed the said cheque when it filed a writ petition on July 18,1995 and obtained an exparte stay order from a Division Bench of this Court on the basis of the said letter. The operation of the said order was subsequently suspended vide order dated September 1, 1995. The Division Bench vide the impugned order dated September 1,1995 put certain conditions on the proposed election to be held. According to the said order the result of the election held or to be held pursuant to the order dated July 18,1995, if not already declared was not to be declared unless permitted by the court.

(21) Learned counsel for the petitioner has vehemently urged that the elections were held on September 3,1995 in pursuance of the orders passed by this Court on July 18,1995, but he is oblivious of the fact that the election, if any, was held on September 3,1995 when the order with regard to the supersession of the management of the petitioner society under Section 32 of the Act was very much in operation. The consequence of the said order was that there was no managing committee as the same had been removed and an Administrator, namely, Shri A.K. Mehta, had been appointed. Hence Shri Ravinder Singh could not have held the elections. The petitioner obtained the impugned order by concealment and suppression of material facts from the Court. Had the true facts been brought to the notice of the Court the Court would have declined to pass the order dated July 18,1995.

(22) There is yet another side of the picture. Shri Ravinder Singh was no more the Election Officer at the time when he held the impugned alleged elections as his appointment had already been cancelled vide order dt. 30-6-1995.

(23) The other ground for the supersession of the management of petitioner society is that an inquiry was ordered into the affairs of the petitioner society on the ground of complaints received in the office of the Registrar from the members and several other persons with regard to the mis-management and defalcation of funds. Shri S.C.S.Visht was appointed as an Enquiry Officer to look into the said complaints. The petitioner, however, did not cooperate with Mr. S.C.S. Visht and instead raised several objections with regard to the appointment of the Enquiry Officer. Reference in this connection be made with profit to the letter dated October 22,1993 addressed to the Joint Registrar, Co-operative Societies. One of the objections raised in the said letter is that the Registrar was not competent to do so suo moto. He could have instituted an inquiry only on the application by a majority of the committee or of not less than one-third of the members. The learned counsel for the petitioner has reiterated the said objection during the course of his arguments before this court.

(24) I do not agree. Before proceeding any further in the matter it would be in the fitness of things to look into the relevant provisions of law on this point. Section 55 of the Act deals with the inquiry by Registrar. It provides as under: "55(1).The Registrar may on his own motion or on the application of majority of the committee or of not less than one-third of the members, hold an inquiry or direct some person authorised by him by order in writing in this behalf to hold an inquiry into the constitution, working and financial condition of a co-operative society. (2) The Registrar or, the person authorised by him under sub-section (1) shall have the following powers, namely - (a) he shall at all times have, for purpose of examination, free access to the books, accounts, cash and other properties belonging to or in the custody of the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same, at any place specified by him; (b) xxxx xxxx xxxxx (c) xxxx xxxx xxxxx "

(25) Rule 86(4) further envisages " On receipt of the order referred to in sub rule (1) the person authorised to conduct the inquiry or inspection shall proceed to examine the relevant books of accounts and other documents in possession of the society or any of its officers, members, agents or servants and obtain such information or explanation from any such officers, members, agents or servants of the society in regard to the transaction and working of the society as he deems necessary for conduct of such inquiry or inspection."

(26) It is abundantly clear from above that the Registrar on his own motion may initiate an inquiry on his own or on the application of the majority of the members of the society. In the instant case the Registrar chose to initiate an inquiry suo moto and appointed an Inquiry Officer in connection therewith. On such an appointment being made, the said Inquiry Officer was entitled to have free access to the books, accounts and cash or other properties belonging to or in the custody of the society. He could also summon any person in possession or responsible for the custody of such books, accounts and cash or other properties. Surprisingly enough the petitioner instead of cooperating with the said Inquiry Officer and rendering him every possible help created all sorts of obstacles and hindrances (vide paras 12 and 13 of the counter affidavit filed by the respondents). The Registrar by the appointment of the Inquiry Officer incurred the wrath of the Secretary of the society as would be clear from para 2(f) of his letter, adverted to above. This Court is tempted to cite a few lines in support of the above view. It reads as under:- "NOW,as already mentioned above, you have brought about points for inquiry which are based on salacious gossips and-malicious vituperation which are not only vague but also appear to be tutored by M/s Shanti Developers and Promoters (lndia)Pvt. Ltd. and M/s Design India (Architects). the matter regarding whom is sub judice in the Hon'ble High Court of Delhi...... instead of appreciating the difficulties of the society on this matter, you are advocating the causes of the contractor and the architect for reasons best known to you......".

(27) It can thus be safely concluded from above that the petitioner society instead of cooperating with the Inquiry Officer levelled all sorts of allegations against the Registrar in the above said letter.

(28) The other factor for the supersession of the society which weighed with the Registrar while passing the impugned order was the audit report. The auditors in their report for the year 1990-91 pointed out several irregularities of serious nature in the working and functioning of the society.

(A)The society did not maintain any record for the material purchased; (b) quotations were not asked for for the purchase of the material; (c) purchase orders were not issued; (d) the society has paid a sum of Rs.l6,250.00 to M/s Design (India) Ltd. in excess of the amount to be paid as per the agreement.

(29) The said irregularities admittedly were of serious nature as is crystal clear from the audit reports placed on record for the years 1990- 91, 1991-92 and 1992-93.

(30) Learned counsel for the petitioner has contended that all the above defects and irregularities which were pointed out by the auditors during the course of the audit of the accounts of the petitioner society were removed. I am sorry, I am unable to agree with the contention of the learned counsel. To my mind, the lapses on the part of the society which were singled out by the auditors during the course of the audit report were of such a nature which could not have been removed. How the petitioner could have undone some thing which it had done in the past e.g. not maintenance of the record for the material purchased; not asking for the quotations while purchasing the material; non issue of the purchase orders. Moreover this court has also gone through the audit report for the years 1993 & 1994 and found that some of the irregularities were still persisting.

(31) Before parting with this judgment I would like to further observe that the petitioner in the instant case has prayed for a writ of certiorari. The petitioner through the present writ petition has prayed for setting aside the impugned order dated June 20,1995 for supersession of the management of the society. The said relief can be granted only when the petitioner succeeds in showing that the inferior court has acted without jurisdiction or in excess of its jurisdiction. Admittedly, this is not the case of the petitioner that the Registrar did not have the necessary powers to direct the supersession of the management. The petitioner has also failed to point out that the Registrar acted in excess of its jurisdiction. If this is so, this Court while exercising the jurisdiction under Article 226 of the Constitution of India does not sit in judgment as an appellate court over the orders passed by an inferior court and the order of the inferior court cannot be set aside simply because the said order is a wrong order. I am fortified in my above view by the observations of their Lordships of the Supreme Court as , T.C. Basappa v. T. Naglippa arid another, ..." In granting a writ of certiorari the superior Court does not exercise the power of an appellate Tribunal, the control exercised through it being merely in a supervisory and not appellate capacity. It does not review or reweigh the evidence upon which the determination of the inferior Court is based nor does it substitute its own views for those of the inferior Tribunal. A writ of certiorari is generally granted when a Court has acted without or in excess of its jurisdiction. A mere wrong decision cannot be corrected by a writ of certiorari as that would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceeding based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected."

(32) In the above stated circumstances I do not see any force in the present petition. It is hereby dismissed.