Delhi High Court
The Talagang Coop. G.H. Socy. Ltd. vs Financial Commr. And Ors. on 22 July, 2002
Author: Khan
Bench: B Khan, J Kapoor
JUDGMENT
Khan, J.
1. All these petitions involve common questions of
law and fact and are being disposed of by this common
judgment.
2. Private respondents in these petitions became
members of the petitioner-Society. It was but later
noticed that payment of the society. It was later
noticed that payment of the society's dues was made for
them by some third persons. They were accordingly put
on notice for cessation of their membership under Rule
40 of DCS Rules. Their membership was consequently
ceased, intimation whereof was sent to Registrar (R-2)
who, in turn, took upon himself to launch proceedings
under Rule 40 of DCS Rules 1973. He then interpreted
the terms of this Rule to hold that even a 'third
person' could be treated as "another member" as referred
in Rule 40. This interpretation triggered the instant
litigation in process. Private respondents took
revision petitions against this under Section 80 of the
Act and R-1 took a different view in the matter to hold
to the contrary and set aside the orders passed by R-2.
3. Petitioner-Society has filed these petitions
now for quashing of orders passed by R-1 dated
27.11.1998 and wants this court to interpret the term
"another member" so as to hold that a member of the
society would also include 'a third person' also.
4. Rule 40 reads thus:-
"Without prejudice to the provisions of
Section 27, a person shall cease to be a member
of a co-operative society on his resignation
from the membership thereof being accepted or on
the transfer of the whole of his share or
interest in the society to another member, or on
his death, removal or expulsion or incurring any
of the disqualifications specified in the Act
and the rules."
5. A plain reading of Rule 40 shows that a person
would cease to be a member of the cooperative society in
three eventualities viz. (i) on acceptance of his
resignation from membership, (ii) on transfer of whole
of his share or interest in the society to another
member, (iii) on his death, removal or explusion or
incurring any disqualification provided in the Act or
Rules. This Rule incidentally does not subject the
action taken there under to the approval of Registrar.
Nor was any provision in the Act or the Rules brought to
our notice in this regard. It is not, therefore,
understandable how R-2 had taken proceedings under Rule
40 to uphold the action of petitioner-Society to cease
the membership of private respondents. Even learned
counsel for petitioner society Mr. Tomar was not able to
explain the position and justify the Registrar's action.
He fairly conceded that there was no provision either in
the Act or the Rules empowering the Registrar to
initiate any proceedings for approval or otherwise of
cessation of the membership of a person under Rule 40.
6. In this view of the matter, we feel that the
whole exercise undertaken by R-2 was superfluous and so
was controversy arising out of it. That being so there
is no need for us to enter the arena and interpret terms
of Rule 40 for academic purposes. It was agreed on a
consensual view that the order passed by R-2 (Registrar)
to approve the cassation of membership of private
respondents was to be ignored for all practical
purposes. The order passed by the Appellate Tribunal
upsetting this order would also meet the same fate.
Having got rid of these two orders which arise out of
misconceived proceedings the position reverts to square
one bringing to focus the society's initial order of
cessation of membership. It is not for us at this stage
to test the validity of this order/action because
affected private respondents have efficacious alternate
remedy available against it. These petitions are
accordingly disposed of by the following order:-
"The impugned orders passed by R-1 and R-2
shall stand set aside. But the action of
petitioner society for cessation of membership
of private respondents shall revive and remain
suspended for three months and it shall be open
to private respondents to call in question this
if so advised by an appropriate remedy. plea
of limitation involved shall not come in their
way in doing so."
