Beena Singhal vs The Presiding Officer Delhi ...
2000 Latest Caselaw 97 Del

ORDER

Mukul Mudgal, J.

1. This writ petition challenges the order dated 28.5.92 passed by the Delhi Co-operative Tribunal in 36/92-CA as well as the order dated 4.3.92 passed by the Lt.Governor in 27/90-CA.

2. This writ petition in effect seeks an allocation of the remaining plot of the land in the respondent No. 4 society to the petitioner. The petitioner's case is as follows :-

3. The petitioner was inducted as a prospective member on the waiting list for allotment of plot and placed at number 8 in seniority. The first six members, who were earlier on the waiting list have been allotted plots and have constructed houses thereon. The respondent No. 5 H.C. Jain was expelled on account of failure to clear his dues and on 26.8.78 has in fact accepted his termination in writing. H.C. Jain requested the society to refund the amount paid by him on 11.3.79 and thereafter filed an affidavit stating that he had lost the share certificate and would return the same as and when he found it. The society wrote to the Registrar about the expulsion and the only report filed by the society showed H.C. Jain's name as an expelled member. On 20.12.84 the society had written to the Registrar seeking clearance of the membership of the petitioner to enable it to allot the concerned plot to the petitioner. On 3.12.85 the Registrar replied to the society stating that the petitioner's membership was under consideration for allotment of plot. On 31.7.86 an order was passed by the Assistant Registrar Co-operative Societies directing the society to re-instate H.C.Jain on finding his expulsion to be invalid. On 14.5.90 one Mrs. Sudesh Talwar challenged her expulsion and her challenge was upheld by the Lt. Governor who directed that one of the two remaining plots be allotted to her. It was also found by the said order that Mr. V.K. Aggarwal, respondent No. 6, who stood immediately above the petitioner in the waiting list was wrongly enrolled and failed to fulfill the eligibility criteria. Since Aggarwal did not challenge the order dated 14.5.90 in favour of Mrs.Sudesh Talwar holding her to be eligible for a plot and H.C. Jain having been expelled earlier, the petitioner was the only person entitled to be allotted the remaining plot. On 4.3.92 the petitioner preferred a Revision Petition to the Lt.Governor seeking a direction to the Registrar and the Society to regularise her membership and allotment of the plot. The petition was dismissed on the ground that the petitioner has not yet been formally enrolled as a member. H.C. Jain respondent No.5, had challenged the price asked for by the Secretary of the respondent No.4 Society for purchase of the plot. It was held by the Joint Registrar that H.C. Jain, respondent No. 5, having been expelled could not prefer any petition challenging the price. The Delhi Co-operative Tribunal in Appeal against the order of the Joint Registrar held on 28.5.92 that H.C. Jain was entitled to raise the pricing issue. In August, 1992 the Society filed CWP No.2690/92 challenging the order dated 28.5.92 of the Tribunal and averred in para 23 that the petitioner herein was waiting for the allotment of the plot. The Society averred in para 17 of the said writ petition that the Secretary of the society had acted in collusion with H.C. Jain and had no authority to offer the plot and ask for any price from H.C. Jain since he stood expelled long ago.

4. On 9.12.92, the petitioner seeking the regularisation of the petitioner's membership and a direction to the Society to allot her plot, filed the present writ petition. The reliefs claimed in the writ petition are as follows:-

(a) Issue a writ in the nature of certiorari, or any writ, order or direction in the nature thereof quashing the impugned order dated 28.5.92, passed by the Tribunal in case No.36/92-CA, entitled Mr. H.C. Jain Vs. the Delhi Housing and Land Development Cooperative Society Ltd.

(b) Issue a writ of certiorari or any writ, order or direction in the nature thereof, quashing the impugned order dated 4.3.92, passed by the Lt.Governor, the respondent No. 3 herein in case No. 271/90-CA entitled Mrs. Beena Singhal Vs. Registrar Cooperative Societies & Ors.

(c) Issue a writ of mandamus, or any writ, order or direction in the nature thereof to the respondents, directing them to allot the remaining plot of land to the petitioner after regularising her enrolment as a member.

5. On 20.12.1992 the Society decided to withdraw the expulsion order of Mr. H.C. Jain and regularized his membership and sought to handover the plot to him which was restrained by an order of the Court dated 6.1.93. On 15.3.1993 the Society withdrew its writ petition No. 2860/92 in collusion with H.C. Jain.

6. The main contention of the petitioner is that the Registrar not having acted after communication of Resolution expelling a member within the stipulated period, becomes functous officio and the power to accord approval or disapproval of the Resolution passed by the Society for expulsion of the member under sub-Section (1) of Section 36 lapses. It is submitted that the Resolution of the society is self-operative upon the expiry of the period of six months from the date when it was sent to the Registrar for approval. Reliance is placed on behalf of the petitioner on the judgment of the Hon'ble Supreme Court in The Balasinor Nagrik Co-operative Bank Ltd. Vs. Babubhai Shankerlal & Ors., and judgment of this Court in Anand Lok Co-operative Group Housing Society Ltd. Vs. The Registrar .

7. The response on behalf of respondent No. 5 H.C. Jain is that the petitioner is not a member of the society. She was neither a member nor deposited any share money under Rule 24 and 30 of the Delhi Co-operative Society Rules, 1973. The petitioner at best figured only in a panel of 15 prospective new members. It is further stated that according to the directive issued by the Registrar, no housing society can maintain a waiting list and such a waiting list was scrapped in the General Body Meeting of the respondent dated 8.4.92. The order dated 9.3.92 of the Co-operative Tribunal held that the expulsion of respondent No. 5 never took place and he continued to be a valid member of the society. It is also submitted that any expulsion of a member not in accordance with Rule 36 of the Co-operative Society's Rules has no effect. In so far as the judgment of Anand Lok Co-operative Group Housing Society Ltd. Vs. The Registrar is concerned an Appeal is pending against the said judgment and on 3.2.97 an interim order was passed in appeal that the order of the learned Single Judge may not be treated as a precedent for other cases. It has been pleaded by Mr. Ramesh Chandra, learned senior counsel that admittedly the petitioner had neither made and payment nor was enrolled in 1973. He further pleaded that even assuming that the Resolution of the General Body Meeting dated 29.1.78 is accepted, if no payment is made, no rights fructify.

8. It has also been contended on behalf of the society respondent No. 4 that respondent No. 5 is a member senior to the petitioner and once the expulsion is held to be invalid he is entitled to a preference over the petitioner. It has also been submitted after relying upon the judgment reported in Myurdwaj Co-operative Group Housing Society Ltd. Vs. The Presiding Officer Delhi Co-operative Tribunal & Ors., reported as 1998 (5) AD (S.C.) 213 = 1998(4) JT 555 para 9 that it is the society's discretion whether or not to expel a member and it was submitted that only if the society decides to expel a member, then Rule 36 comes into operation.

9. The respondent No. 5 has also pleaded that the petitioner's claim was rejected by the Joint Registrar on 8.5.90 and the revision filed by the petitioner was dismissed on 4.3.92 by the Lt. Governor and these orders were not challenged in any higher court and the petition is thus barred by latches. It is also submitted that the petitioner was only at best on waiting list and had no rights as a member of the respondent No. 4 society. Reliance was also placed upon the order of the Registrar Co-operative Society dated 31.7.86 informing the society that the respondent No.5 was not validly expelled and continued to be the member of the respondent No. 4 society. Finally on 5.4.89 the Registrar directed the respondent No. 4 society to accept the payment from respondent No.5 and forward his case for clearance of membership. It was further submitted that the dispute leading to the present writ petition at best arose from the dispute raised by the respondent No. 5 qua the pricing and the petitioner had no locus standi to challenge any order. It was finally submitted that in any event assuming that the petitioner was entitled to be a member of the respondent No.4 society she at best could only be junior to the respondent No. 5 and could not claim membership ahead of the respondent No. 5.

10. The learned counsel for the respondent No.5 further submitted that the petitioner's claim for allotment even if accepted would not affect the rights of a more senior member like respondent No. 5. He further relied upon Rule 36 to contend that the Resolution expelling the respondent No. 5 could not be effective unless approved by the Registrar and since the Registrar did not approve the proposed expulsion of respondent No. 5, he continued to be a regular and bona fide member of the respondent No. 4 society.

11. Reliance has also been placed on a judgment of the Hon'ble Supreme Court in Myurdwaj Co-operative Society's case to contend that the Rule 36 deals with the procedure for expulsion of members and it was held in the said judgment that in case of a persistent default the expulsion of a member could only be resorted to as per the aforesaid Rule 36. The Hon'ble Supreme Court also held that whether or not a resort to Rule 36 can be taken is a question for the society to decide and this Rule does not take away the discretion of the society to expel a member which precedes the exercise of the power under Rule 36.

12. The reliance is also placed on a decision of this Court in R.K. Aggarwal Vs. Registrar Co-operative Societies, Delhi & Ors., wherein it was held that Rule 36 is mandatory in character and if the procedure prescribed by Rule 36 is not strictly complied with and adhered to by a co-operative society the action for expulsion taken by the respondent society was honest. The respondent No. 5 has relied upon the aforesaid judgment in Myurdwaj's case(supra) of the Hon'ble Supreme Court to contend that it is clear that once a society decides not to resort to Rule 36, such discretion cannot be challenged and mere fact that there was persistent default cannot take away the right of the society to choose not to expel its member.

13. There is force in the submission of the learned counsel for respondent No.5. It is very clear that the Hon'ble Supreme Court has held in the Myurdwaj case that whether or not a particular member should be expelled is a decision not to be taken by the Society. In the present case the society had decided to expel the respondent No. 5 and in this view of the matter the society cannot be directed to forego its discretion and resort to Rule 36(3) at the behest of the petitioner. In the Myurdwaj case (supra) the Hon'ble Supreme Court while interpreting the Co-operative Society's powers under Rule 36 of the Delhi Co-operative Rules observed as under:-

"The option has to be left with the society to deal with different situations as may arise from time to time. Taking away this discretion and binding it to exercise powers under Rule 36 would be interpreting against the very objective of the Act, leaving no option with the Co-operative Society. The Co-operative Society is formed with laudable objective to inculcate spirit to work in a group freely for rendering benefit to its members through the cooperative contributions. This is only possible by conferring wide range of discretion to a society, not restricting its discretions by interpreting a law otherwise. This has to be for furthering the cause of cooperative movement. That is why various rigorous of laws including taxes and fees are diluted for enhancing the spirit of the cooperative movement. We have no hesitation to hold, the power of Society cannot be circumvented within Rule 36 in a case of default by its member of any of his dues. Such an interpretation would be contradictory to the very cooperative spirit or objectives of the creation of Co-operative Societies."

"This Rule deals with the procedure for the expulsion of members. In case Society decides to expel its member who is persistently defaulting in making the payment of his dues the procedure to be followed could only be what is provided under this rule and no other. The principle referred earlier that if a thing is required to be done in a manner as provided under the law has to be done in that manner alone and no other manner will apply with equal force under Rule 36, when a Society decides to expel its member. In case of expulsion the procedure provided under it and the expulsion has to be only under the mode provided therein and no other which is mandatory in nature. But this is only after decision is made to expel its member. This rule does not take away discretion of the Society to expel a member or not which is preceding the exercise of power under Rule 36. For this there is nothing under this Rule which either circumscribes of webs this discretion. Since this Rule is for the expulsion of its members, it is stringent in its application. Even after giving opportunity and even after general body passes such a resolution, it requires approval of the Registrar. Outside this, there is nothing which restricts a Society to act freely and to lay down its own policies. It is always open to it to decide on a fact to expel him or not, its discretion to act is curtailed only by a statutory provision or any order having force of law. A policy may depend on various factors, its planning, projects undertakings including its financial capacity etc. One Society may be in a sound position and other in limping position thus may give to its ember larger or lesser benefits as the case may be. Thus it is always open to a Society to law down its own principle for making such allotments. So consideration of prompt payment in shaping its policy which helps it to complete its project to confer to its member its fruits at the earliest may be justified exercise of its discretion. That what extent a default is going to effect a Society will depend on facts and circumstances of each case which has to be left at the discretion of each Society. It is not proper even for the courts to interfere with such a discretion, except when it is arbitrary, irrational, mala fide, against any statutory provisions or against orders having force of law."

14. The learned counsel for the petitioner has however relied upon a judgment of the Hon'ble Supreme Court in The Balasinor Nagrik Co-operative Bank Ltd. Vs. Babubhai Shankerlal & Ors. to contend that the Registrar becomes functus officio within three months from the date of sending the resolution seeking approval. No doubt the Hon'ble Supreme Court has held as follows in paragraph 5 of the aforesaid judgment:-

"After the society communicates a resolution for the expulsion of a member for acts detrimental to the working of the society passed in the manner required by sub-sec. (1) of Section 36 to the Registrar for his approval under the first proviso, there is a duty cast on the Registrar to exercise his power of according approval or disapproval within a period of three months from the date of such submission, as provided by the second proviso. According to its plain terms, the second proviso places a limitation on the powers of the Registrar. It appears to us that the obvious intention of the Legislature was that once the period of three months stipulated expires, the registrar becomes functus officio and his power to accord approval or disapproval to the resolution passed by the society for expulsion of a member under sub. sec (1) of Section 36 of the Act lapses."

15. However this interpretation was based upon the wording of Section 36 of the Gujarat Co-operative Society's Act which reads as follows :-

"36. Expulsion of members. - (1) A society may, by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society:

Provided that, no resolution shall be valid, unless the member concerned is given an opportunity of representing his case to the general body, and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him:

Provided further, that the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of such submission, and in the absence of such communication the resolution shall be effective."

(underlining supplied)

16. This judgment is founded on the basis of the underlined words used in the said Section 36 which require that in absence of a communication from the Registrar the Resolution shall be effective. In the present case this Court is concerned with the Delhi Co-operative Society's Rule 36(3) providing for expulsion of members which reads as follows:-

"36. Procedure for Expulsion of Members.

(3) When a resolution passed in accordance with sub-rule(1) or (2) is sent to the Registrar or otherwise brought to his notice, the Registrar may consider the resolution and after making such enquiry as to whether full and final opportunity has been given under sub-rule (1) or (2) give his approval and communicate the same to the society and the member concerned within a period of 6 months. The resolution shall be effective from the date of approval.

17. It will thus be seen that the aforesaid judgment relied upon by the learned counsel for the petitioner would not be applicable in the present case. The above decision relied upon by the petitioner was based on a provision in the Gujarat Co-operative Society's Act which provided that in the absence of a communication of approval or dis-approval of the Resolution of the expulsion of the members by the Registrar the Resolution shall be effective within three months from the date of its submission to the Registrar. Insofar as the Delhi Co-operative Society's Rule is concerned it specifically states that the Resolution shall be effective from the date of the approval. There is no provision for deemed approval akin to the Gujarat Statute in the Rule 36 of the Delhi Co-operative Society's Rules. Therefore, the judgment relied upon by the petitioner would not be applicable to the facts of the present case which are governed by Rule 36 and would therefore be governed by the judgment of the Hon'ble Supreme Court in Myurdwaj case (supra) which arose from the present Rule 36 applicable to Delhi.

18. In this view of the matter the writ petition fails and is dismissed but in circumstances of the case without costs. However, it is also made clear that this dismissal will not come in the way of the petitioner's claims which may be otherwise available to her for allotment of a plot in the society as an applicant junior in seniority to the respondent No. 5.