P.P. Malhotra And S.S. Kanwal vs Regr. Coop. Socy. And Ors.
2002 Latest Caselaw 1605 Del

JUDGMENT

Khan, J.

1. Both petitions raise common issues of fact and law and are being disposed of by common order. The short point involved is whether Registrar (R-2) could have been in his supersession order dated 28.7.1994 passed under Section 32 of DCSA that exercise of voting rights by petitioners and their participation in elections was illegal in derogation of terms of award dated 23.10.1987 as affirmed by the Tribunal in appeal.

2. Petitioners became joint members of R-2 society on 18.3.1984 and 16.3.1986 respectively with their spouses. They also claim to have filed a declaration with the society that henceforth they would have exclusive right to vote and participation in elections and on this their name was shown first in their share certificates. Later some other members challenged this in AC No. 54/87 leading to passing of award dated 20.10.1987 upholding their voting rights and their participation in the elections. An appeal was taken against this award but it was affirmed by the Tribunal vide order dated 13.5.1988. Subsequently, R-1 issued show cause notice dated 8.7.1994 under Section 32 to R-2 society which was replied but he eventually passed supersession order dated 28.7.1994 holding petitioners' voting rights and their participation in the elections illegal. He also held that award dated 20.10.1987 had neither upheld their voting rights nor had Tribunal affirmed so which according to him had dismissed the appeal on the point of limitation only.

3. Petitioners took appeal against this before Financial Commissioner but failed.

4. Petitioners primary grievance is that Registrar could not have held so while passing an administrative order under Section 32 so as to upset the terms of Award dated 20.10.1987 which was later affirmed by the Tribunal. His order was also contrary to record because this award was not silent on the issue of their voting rights. Nor was the appeal against it dismissed on limitation plea only. All they want is that Registrar's observations/findings on this issue be expunged/struck off.

5. The society and the Registrar have filed a joint counter charging petitioners with superesso veri. They assert that petitioners were inducted as joint members later and thus could not enjoy any voting rights under Rule 27. They had manipulated their share certificates and had failed to produce the original certificates. It is also submitted by them that any finding given by the Arbitrator in his award cannot operate as res-judicata. All that falls for consideration thus is whether Registrar could have set at naught the terms of Award dated 20.10.1987 upholding petitioners' voting rights as affirmed by the Tribunal in Appeal in exercise of power under Section 32 of the Act.

6. The answer has to be in the negative for a variety of reasons. Firstly because the Registrar enjoys the power to supersede the committee of a society under Section 32 on formation of an opinion that it was persistently making default or was negligent in the performance of the duties imposed on it by the Act, rules or by-laws or was committing any act prejudicial to the interests of the society or its members. He has then to pass an order for removal of the committee after affording it an opportunity and either order fresh elections to the committee or appoint an Administrator to it. While doing so, he may catalogue or record acts of omission and commission committed by the committee but he has no competence or authority to upset the findings of an Award passed under Section 61 or to unsettle its terms, which can be only done by an appropriate remedy under the Act. The award is passed by the Arbitrator on the adjudication of rights and claims of the contesting parties and it can be set aside only on certain grounds by a remedy provided under law. Where the Award stand affirmed and has assumed finality, it becomes binding upon the parties and the question of negotiating its terms even in a co-related exercise of power does not arise. The issue, therefore, is not whether findings in an Award would operate as res-judicata but whether an affirmed award which had assumed finality and had upheld petitioners' right of vote could be set at naught and re-opened in an ancillary proceeding under Section 32 of the act.

7. The Registrar, in our view, had misdirected himself on both counts, firstly by holding that petitioners' had no voting rights which ran contrary to the term of award dated 20.10.1987 and secondly by recording that this Award was silent on the issue and that Tribunal had dismissed the appeal against the award on limitation plea only. He could have held or said anything which had the consequence of taken away petitioners voting rights at their back once these stood upheld by an award which had assumed finality between them and the society. His limited grief under Section 32 is to look into the affairs of the committee or to form an opinion whether it was to be removed on fulfillment of conditions set out in the provision and not to affirm or impinge upon the rights of the members.

8. Apart from this, we also find, that Registrar had gone contrary to the record while looking into the award dated 20.10.1987 and the appeal taken against it. A perusal of the award would show that it was not silent on the issue of petitioners' voting rights but had upheld these. Nor was the appeal against it dismissed on limitation plea only. On the contrary, it was rejected on merits also. That takes away the very basis of Registrar's findings that petitioners, being joint members had no voting rights or that their participation in the elections was illegal.

9. These petitions are accordingly allowed and any anything said or held by the Registrar in his supersession order dated 28.7.1994 and by Financial Commissioner in order dated 13.10.1994 in derogation of terms of Award dated 20.10.1987 as affirmed by the Tribunal in appeal and related to petitioners' voting rights and their participation in elections is set aside/expunged.