Anjuman Cooperative Group ... vs Registrar Of Cooperative ...
2008 Latest Caselaw 1492 Del

*                       HIGH COURT OF DELHI

%                  Date of decision: August 29, 2008

+                          WP(C)No. 1064/2007


Anjuman Cooperative Group Housing Society
Ltd. (Regd.)                                       ..Petitioner

                           through
                           Mr. Ravinder Sethi, Sr. Advocate with
                           Mr.Sumit Bansal, Advocate

                                  Versus

Registrar of Cooperative Societies & Ors. ..Respondent

                            through
                           Ms. Sujata Kashyap, Advocate for
                           respondent No.1-RCS
                           Mr. Rajiv Bansal, Advocate for respondent
                           No.2-DDA
                           Mr. Harish Gulati with Mr. Anidya Malhotra,
                           Advocates for CBI
                           Mr. R.K. Gupta with Mr.Vimal Wadhawan,
                           Mr. M. Goel and Mr. V.K. Mehra, Advocates
                           for Objectors
                           Mr. V.K. Tandon with Mr. Prem Mishra for
                           Objector
                           Mr. S.M. Chopra, Amicus Curiae

Coram :

Hon'ble Mr.Justice Manmohan Sarin
Hon'ble Mr.Justice Sudershan Kumar Misra

     (1) Whether reporters of local paper may be
         allowed to see the judgment?                    Yes

     (2) To be referred to the reporter or not?          Yes

     (3) Whether the judgment should be reported
          in the Digest ?                                Yes

     Manmohan Sarin, J.

1. Petitioner Society through its Secretary Mr. V.Subramaniam,

has filed the present writ petition seeking a direction to the Delhi

Development Authority, respondent No.2 herein, to issue the

Completion Certificate and grant Provisional Occupancy Certificate

to the Society. A writ of mandamus is also sought directing the

respondent No.1 Registrar, Cooperative Societies and respondent

No.2, DDA to hold a draw of lots for allotment of flats to the

members of the petitioner Society.

1. Background facts:

(i) It is averred in the petition that originally, employees of

Bharat Electronics Limited, Ghaziabad, had founded the

Society in the year 1983 with 90 members having a

freeze strength of 120 members. The Society had on

14.8.1990, resolved that members should contribute

towards future cost of land @ Rs.2,000/- per quarter from

October, 1990. The amount of contribution was reduced

to Rs.1,000/- per quarter. Finally, on 16.10.1991, it was

capped at 5 instalments of Rs.1,000/- each, totaling to

Rs.5,000/-. The Society resolved to expel 29 members for

default in payment towards the future cost of land.

These members, it is claimed, had failed to make the

payment despite repeated notices. On 8.11.1992, their

share money was forfeited. On 23.4.1993, a list of 111

members was forwarded to the Registrar‟s office in which

9 persons, whose membership had been withdrawn, were

to be excluded. This list was not approved on

16.12.1993. On 25.9.1994, the Society decided to refund

the deposit towards cost of land as DDA had increased

the land prices and members were keen for allotment of

land in trans Yamuna area, near to their place of work. It

is at this juncture that Mr. Ashok Goswami and

Mr.S.P.Saxena, against whom the CBI after investigations,

has registered cases, got involved in the affairs of the

Society.

(ii) On 5.4.1998, S.P. Saxena, Ashok Goswami and Pramod

Kumar became President, Secretary and Treasurer of the

Society and the registered office of the Society was

shifted to C-34, Madhu Vihar, Delhi. On 23.3.1999, Ashok

Goswami applied for allotment of land. S.P. Saxena wrote

a letter informing that Registrar, Cooperative Societies

had approved list of 120 members to DDA. On

12.11.1999, an offer of allotment of land was made to the

Society and finally on 3.5.2000, 7,000 sq. mtrs. of land at

Plot No.20, Sector12, Dwarka was allotted to the Society

@ Rs.4,063/- per sq. mtr., which was reduced in a Lok

Adalat to Rs.3,533/- per sq. mtr. on an application made

by S.P. Saxena. The payment in respect of the land was

made to the DDA and possession received by Society. It

is claimed that the Society applied for the sanction of the

lay out and building plans and after its sanction,

construction was raised on the plots.

(iii) It is averred that in August, 2005, the scam relating to

allotment of land to cooperative societies surfaced. It

was learnt that an FIR had been lodged and the CBI-

respondent No.3 was investigating the numerous illegal

acts, omissions and offences of the office bearers of the

Societies as also the officers of the Registrar of

Cooperative Societies on the direction of the Court. The

affairs of the Society were also being investigated.

Accordingly, a meeting was called on 21.8.2005. An Ad

hoc Managing Committee was elected. The Ad hoc

Committee was asked to continue pursuant to an

extraordinary general body meeting held on 22.10.2005.

The Registrar of Cooperative Societies was asked to

appoint a Returning Officer for holding of the elections of

the Society. In another extraordinary general body

meeting held on 6.11.2005, members were informed of

the progress in relation to the construction and

development work. The Society took several steps

towards completion of construction by getting the

sewerage scheme sanctioned on payment of Rs.11.28

lacs. Further deposit of Rs.14.82 lacs was made with the

Delhi Jal Board in September, 2005 towards Infrastructure

Funds. „No Objection‟ for the installation of lifts was also

obtained. The Society accordingly notified respondent

No.1 regarding completion of construction and also

applied for issuance of Provisional Occupancy Certificate.

(iv) The society on its own submitted the requisite documents

to respondent No.1 for allotment and draw of lots. Public

notice was also published in newspapers regarding the

proposal for clearance of names of 120 members for

allotment of flats and inviting objections. The publication

was stated to have been in the "Statesman" on

19.12.2005 in English and in "Veer Arjun" on 16.12.2005

in Hindi. Petitioners also claim that it was their

understanding that their name had been removed from

the list of 133 Societies against whom investigations were

in progress. Petitioner Society is also stated to have

deposited penalty to the extent of Rs.12,93,000/- (Rupees

Twelve Lakh Ninety Three Thousand only) for grant of

extension of time. In short, the petitioners claim to have

complied with all the requirements for issuance of the

Provisional Occupancy Certificate. It is claimed that

although all formalities have been complied by the

petitioner Society, the grant of the Provisional Occupancy

Certificate as also the case for extension of time was

being delayed. The Society had also applied to the BSES

for construction of Electric Sub-Station. It is averred that

in fact, there is no impediment as the petitioner Society

has completed all the requirements and formalities

required for grant of Provisional Occupancy Certificate.

(v) Members of the Society claim to be belonging to lower

and middle class strata of the society. It is averred that

the individual members have raised loans from financial

and other institutions and contributed about

Rs.17,00,000/- each towards cost of the flats. Despite the

flats being ready, the members are living in rented

accommodation and are paying rent for the

accommodation as well as instalments to the financial

institutions for the loans taken. It is claimed that

members of the Society are not party to any illegal

actions or fraud practised by the members of the

erstwhile Managing Committee, who are sought to be

prosecuted.

2. Cooperative Scam

(i) The position of the petitioner Society vis-à-vis the

Cooperative Societies‟ scam is best reflected in the

counter affidavit filed by the Registrar of Cooperative

Societies. The present Society was amongst one of the

101 Societies being investigated by the CBI under orders

of the Court passed in WP(C)No.10066/2004 titled "Yogi

Raj Krishna Cooperative Group Housing Society Ltd. Vs.

DDA & Ors." The affidavit highlights the attempts of the

Land and Building Mafia to take over the societies. The

modus operandi of the Land and Building Mafia to take

over the cooperative societies and subvert the

cooperative movement was sought to be achieved by

purchasing defunct societies, obtaining resignations of

members and enrolling new members of their choice by

charging premium, after having obtained the benefit of

allotment of land at concessional/subsidized rates by the

DDA to the Society. It was averred that the group

housing societies had been revived by promoters and

builders having vested interest after forging the

signatures of the original members and thereafter,

submitting forged affidavits. Fake resignation letters of

the original members had been submitted. Manipulation

of record had taken place and there appeared to be a

strong nexus between the Builders‟ Lobby, officials of the

Registrar, Cooperative Societies and DDA in the whole

process of revival of the defunct societies. It was also

averred that advantage was taken of the unamended

Rule 24(2) of the Delhi Cooperative Societies Rules, which

required notifying of the vacancies for membership in

newspapers only where lay out and building plan had

been approved and not in other cases. The affidavit also

sets out the steps being taken by the Registrar,

Cooperative Societies to ensure transparency in the

process of enrolment of members.

(ii) As regards the present Society, it was averred that the

FIR had been registered and as per the FIR filed by CBI,

one Mr.Uttam Kumar Sharma had contacted Mr. R.K.

Bansal, the then Treasurer of the Society, proposing

transfer of the control of the Society to others.

Thereafter, Mr.Ashok Goswami was introduced to Mr. R.K.

Bansal and Mr. Rakesh Kumar Sharma, the then

Secretary. Mr.Ashok Goswami offered to pay a sum of

Rs.5,100/- in lieu of each resignation letter arranged by

the Managing Committee. Undated resignation letters

were obtained from some members for which, they were

paid Rs.5,100/-. The scrutiny of the records revealed that

the resignation letters and receipt of refund of 29

expelled members, who were expelled in 1992, were

available in the file even though the resignation letter

was shown to have been submitted in the year 2000.

(iii) During the investigation, 10 out of the 29 members

stated that they had never resigned from the Society and

the resignation letters did not bear their signatures. The

DDA in its affidavit has averred that Plot No.20 in Sector

12 was allotted in the year 2000. It averred that till the

inquiry and investigation was completed, it was not

possible to issue Completion Certificate and Provisional

Occupancy Certificate. Further, that the draw of lots for

allotment of flats can be done when approved list of

members of the Society for allotment of flats is received

from respondent No.1.

3. Proceedings and Investigation

(i) During the proceedings of the writ petition, the Court was

informed that the CBI has been carrying on investigations

and was in the process of preparing final complaint and in

some cases was awaiting sanction. The CBI filed its

action plan as also status report with regard to the

societies under investigation. Several documents had

been sent to the Examiner of questioned documents and

their reports were awaited. On 5.7.2007, the Bench had

taken up the present case separately from the other

societies, when the Court was informed that the

construction was complete and the flats were suffering

attrition due to disuse. CBI investigation had revealed

that out of 120 original members, resignations had been

furnished by nearly 91 members over a period of 10

months. 29 members were expelled resulting in 125 new

members being enrolled. It was claimed that the

resignations of original members were not genuine and

had been fraudulently obtained or were forged and

dishonestly induced.

(ii) Mr.Harish Gulati, counsel for CBI, informed that Charge

Sheet had been filed against Mr. S.P. Saxena and

Mr.Ashok Goswami, former office bearers of the Society.

There was also the question of premium being paid by

the newly enrolled members. Investigations had further

revealed that M/s. N.G. Constructions had advanced a

sum of Rs.25 lacs for payment of land cost to DDA in lieu

of the understanding that the contract for construction

would be awarded to them.

(iii) Vide orders passed on 5.7.2007, it was directed that the

exercise of ascertaining and verifying the original

members and their current addresses should be

undergone and they be given an opportunity of putting

their case with regard to the resignation/expulsion and

cessation of their membership. The modalities of

reconciling the interests of members, who had been

enrolled, were also to be considered. Further, directions

were given vide our order of 11.7.2007 to the CBI to

verify the factum of resignations. CBI was also directed

to indicate whether the investigations had revealed any

relationship, business or otherwise or close proximity of

the new members, who had been inducted, with any of

the accused persons.

(iv) The Court appointed Mr.S.M. Chopra, retired Additional

Sessions Judge, to act as a Local Commissioner and

Amicus Curiae with the task of considering the objections

as may be received in respect of the

resignations/expulsion of the original members. During

the course of proceedings, the Local Commissioner and

Amicus Curiae had filed the interim report as also the

final report to which, we shall advert later on.

(v) Pursuant to the directions given, public notices inviting

objections against cessation of membership following the

resignations/expulsion, were published in the newspaper.

A copy of the notice inviting objections was also

despatched by the Amicus Curiae directly to the original

members, who had resigned or had been expelled.

4. Evaluation of Objections

(i) The Local Commissioner and Amicus Curiae in his report,

has noted the saga of resignations/inductions for various

periods and the numberings being given. It is not

feasible for us in these proceedings to deal with each of

those resignations and re-inductions, which have finally

culminated in the list of 120 members as forwarded by

the Society in March, 2005. The Local Commissioner

noted that the Registrar of Cooperative Societies

proceeded on the basis of resignation letters and not

approved the resolution of the Society for expulsion of

members due to non-observance of complete statutory

formalities. The Local Commissioner, therefore, had

rather than giving the evaluation in respect of the

members, who had been expelled, recommended that

their objections could be offloaded to the Registrar of

Cooperative Societies and the contesting parties could be

left to avail of their statutory remedies. We are,

however, of the view, considering the construction, which

is complete, and objections having been invited, that any

case, which has complex facts and which requires further

probe, can be decided on the lines of the decision taken

on the basic issues raised in the objections and decided

in the writ petition.

(ii) We are first dealing with the issues emanating from the

objections filed by members whose resignations are

stated to have been forged or wrongfully obtained or

those, who have challenged their expulsion as being

contrary to the provisions of the Delhi Cooperative House

Building Society and its Rules and thereafter, specifically

with the case of 9 objectors.

(iv) We may, at this stage, notice that 44 objections were

received in response to the public notices issued inviting

objections. In 30 out of these 44 cases, the factum of

submission of resignation is admitted before CBI and

otherwise. In 11 cases, the resignations are stated to be

forged. Learned Amicus Curiae in his report dated

17.3.2008, submitted that out of 11 cases, 9 objectors

namely, Chand Singh, R.D. Trivedi, Vijay Shankar, P.C.

George, Sajan Prasad, Shashikant, C.V. Verghese,

P.Shankar Nair and R.P. Saini, the resignation letters have

been found to be forged by the General Examiner of

Questioned Documents (GEQD). The opinion in respect of

Jitendra Nath and Ms. Maninder Kaur was awaited. As

regards the resignation of 30 objectors wherein the

resignations are admitted. It is sought to be urged that

the same have been accepted in contravention of the

Rules, norms and directions laid down by the RCS in

dealing with the objections. Ms. Shashi Verma would also

fall in the category of these 30 persons whose

resignations are sought to have been accepted contrary

to the prescribed norms or Rules of the Delhi Cooperative

Societies Rules.

4(A). Submissions of the Objectors:

(i) It would be appropriate at this stage to take note of the

written submissions filed by Shri R.K. Gupta and Mr.Vimal

Wadhawan, Advocates, who represent most of the

objectors and whose submissions have also been adopted

by the other objectors.

(a) The first submission of Mr.R.K. Gupta is that the

office of the Registrar of Cooperative Societies

has issued directives from time to time dealing

with the cases of involvement and acceptance of

resignations and the Rules relating to enrolment,

resignations, cessation of membership and

expulsion have to be strictly adhered to and in

the absence of strict compliance with the same,

the acceptance of resignation, cessation of

membership or expulsion would not be valid.

Reference was invited to Rule 30 of the DCS

Rules regarding filling up of vacancies required,

advertisement in the newspapers in terms of

Rule 30 and its consideration thereof by the

Managing Committee under Sub-Rule (4). It is

submitted that the petitioner Society has failed

to place on record the resolution passed by the

Managing Committee enrolling the new

members or record of the meetings where the

procedure as required under Rule 30 had been

followed.

(b) Similarly, the resignation under Rule 40

postulates that on a resignation of a member

being accepted, there has to be a transfer of

whole or of his share or interest in the Society to

another member on his death, removal or

expulsion. In the instant case, it is urged that

petitioner Society had failed to prove on record

that alleged resignation letters were tendered by

some of the objectors were theirs and these

have been placed before the Managing

Committee and so accepted. These could not,

therefore, be treated as valid resignations.

(ii) It is urged that objections cannot be decided against the

objectors who, the Society is claiming, had resigned,

since the controversies and disputed facts require

evidence. Regarding expulsion, it was submitted that a

member could be expelled either on account of persistent

default in payment or such member having committed an

act which is detrimental to the interest and proper

working of the Society. Prior to expulsion, the

requirement was service of a registered notice and

provision of an opportunity to represent his case.

Reliance was placed on the directives issued under Rule

77 of the Cooperative Society Rules 1973 as also on the

judgment of the High Court of Delhi in "R.K. Aggarwal Vs.

Registrar, Cooperative Societies, Delhi and Ors." reported

at 45 (1991) DLT 105 in support of the strict compliance

with Rule 36 and in the absence of proof of registered

notices having been sent, the action of expulsion would

be non est.

(iii) We have considered the reports and response as filed by

the CBI as also of the Registrar of Cooperative Societies,

the reports of the Amicus Curiae and the objections filed

by the Objectors. The following position emerges:

30 objectors which appear at Sl. Nos. 3, 5, 6, 8, 11,

12, 13, 15, 16, 17, 18, 19, 21, 25, 27, 29, 30 to 39,

41, 42 and 44 in the affidavit by the Registrar,

Cooperative Societies are persons, who have

confirmed their respective signatures on the

resignation letters before the CBI. These objections

are without merit and not sustainable. Eleven

objectors have denied their signatures on the

resignations which have been found to be forged by

the GEQD. These are objectors at Sl. Nos. 2, 7, 9,

10, 14, 20, 22, 23, 24, 26 and 43. The objectors at

Sl. No.40 did not cooperate or give information to

the CBI as required. Hence, verification and input

from CBI could not be received and objection

remained unsubstantiated. The objector at Sl. No.4

has not yet been recognized as a member by RCS

and his objection, therefore, is misplaced and does

not deserve any consideration. Another objector

referred to at Sl. No.1 expired in 1995 and it is his

LR who is agitating the claim and is being

separately considered.

(iv) We are of the view that members of the Society, who had

tendered their resignations in this case to the Society and

received refund of membership fee and the amount paid

by them, cannot be permitted belatedly after a gap of a

number of years to wake up like „rip van winkle‟ and then

seek to claim membership from which they had tendered

resignation. This is especially so when it is obvious that

the realization and urge to stake a claim for membership

and consequently a flat, has been ignited by the spiraling

prices in the value of real estate. These objectors cannot

be permitted to displace others who have been enrolled

in their place especially when the latter have during this

interregnum of a number of years, made payments

towards the price of flat.

(v) Learned Senior Counsel Mr.Sethi is right in his submission

that the petitioner Society after allotment of the land got

the building and other plans approved and with the

contribution from the newly enrolled members,

constructions have been raised and flats are now ready

for occupation. The objectors, who had chosen to resign

from the Society cannot now be permitted to take

advantage of any non-compliance or non-observance of

all the Rules concerning acceptance of resignation to

urge that their resignations be now ignored and they

continued to be members, entitled to allotment of flats

for which they had not paid any consideration but are

now willing to do so in view of the spiraling and manifold

rise in the cost of the real estate. The objectors after

resigning and having received their refund of

membership fee and other dues, merrily stayed back,

while the others toiled and made the payment for

construction of the flats. The flats being ready for

occupation, they cannot now be permitted to urge that

their resignations were not valid and hence, they are

members and they should be allotted flats. It is rightly

said that "Vigilantibus, et non dormientibus, jura

subveniunt - The vigilant, and not the sleepy, are

assisted by the laws.

(vi) Similar will be the position of the members, who claimed

that their resignations had not been furnished by them

voluntarily and had been obtained under coercion. As

regards members, who had been expelled, petitioner

Society contends that they had, despite notices, failed to

tender the amounts due. Various opportunities were

given to them to make the payment of the costs of the

land in instalments but they failed to do so and

consequently, as a result of resolution passed in the

meetings duly held, were expelled. It is also significant

that none of these objectors after their expulsion when

the flats were to be constructed and instalments were

being paid by others enrolled in lieu of them, took any

steps to assert their rights. Without even going into the

question of their forged resignations and treating the

same as non est, the situation would not change because

of their persistent default in making payment of the

amount demanded followed by expulsion and their failure

to challenge or dispute the same. We may note here

that none of the objectors had on their own, initiated any

proceeding or action to assert their rights. It is only

when after the public notice had been taken out and a

communication had been sent by the Local Commissioner

that the claim is sought to be asserted.

(vii) We have also perused the reports of the CBI to ascertain

whether any of the members enrolled in lieu of the earlier

ones were involved in the commission of any of the

offences or were in peri delicto with the office bearers

against whom the charge sheets have been filed. The

charge sheet and the investigation reports do not reveal

any involvement of the person enrolled in lieu of the

renewed or expelled members except the office bearers

and one or two of their immediate relations to whom we

shall revert later. Rather, at present, persons who were

taken as members in lieu of the resigning or expelled

members, may have had to pay a higher premium to

those, who were in charge of the affairs and have been

charge sheeted. Hence subjected to increased costs by

way of some premium. Denial of membership at this

stage to them without their being in any way involved or

having been in pari delicto with the charge sheeted

persons, would amount to increasing their suffering.

(viii) With a view to satisfy our judicial conscience that no

injustice is done to the objectors, we have also examined

cases of forged resignations. One Mr. Ashish Gaur, who is

the objector at Sl. No.1, claims that the resignation letter

of his father late R.P. Sharma, was a forged one since he

had expired on 2.4.1995, while the resignation letter that

had been submitted by S.P. Saxena, President of the

Society, was of the year 2000. The fact remains that the

entire amount and deposit was duly refunded by the

Society vide cheque No.752852 dated 8.3.1995. It was

sought to be urged by Mr.V.K. Tandon for Objector that

the said amount has not been credited to the account of

the deceased. The cheque had been duly received by

deceased‟s brother-in-law Narender Kumar Gupta, under

a receipt and the factum of receipt of cheque was not

even denied during the investigation by CBI. Mr.

Narender Kumar Gupta had also resigned from the

membership of the Society and received the refund on

behalf of his brother-in-law also. The CBI on

investigation, has confirmed that the amount has been

debited to the account of the Society. The objection now

sought to be filed more than 13 years later from the date

of receipt of refund of deposits and membership fee is not

a bona fide one and is devoid of merit.

(ix) The objector at Sl. No.2 was one Chand Singh having

membership No.114. He claimed that he had never

resigned. The said Chand Singh happened to be one of

the 29 members, who were expelled on account of the

failure to pay the 5 quarterly instalment of Rs.1,000/-

each towards the land cost. This was done taking note of

three notices dated 7.12.1991, 26.12.1991 and 17.1.1992

having already been served on them and their failure to

make the payment, the resolution was passed on

3.5.1992 expelling them.

(x) Similar is the position in respect of R.D. Trivedi at Sl.

No.7, who has been expelled from the membership of the

Society for default in payment of the land cost as above,

being one of the total of 35 members, who were so

expelled. His resignation dated 23.8.2001 even if treated

as non est, was a redundant one and of no consequences.

The said Mr.R.D. Trivedi did not protest or file any

complaint with the Society.

(xi) The case of Jitender Nath (membership registration

No.80), who claims that he had never resigned, is also

one where he is stated to have been expelled by the

previous management in 1993 for non-payment. He did

not file complaint to the Society nor lodged any criminal

complaint with regard to the alleged forged resignation.

(xii) Cases of Jitender Nath, Vijay Shankar Singh and P.C.

George are on same lines, where expulsion was done by

the previous management in 1993. No complaint was

lodged with the Society or Registrar, Cooperative

Societies.

(xiii) The Objector Sajan Prasad never claims to have resigned.

He denies his signatures on the resignation letter

submitted in the year 2000. The Society claims to have

expelled him in the year 1992 due to non-payment. Case

is now belatedly sought to be raised.

(xiv) Cases of Shashikant, C.V. Verghese, P. Shankar Nair and

R.P. Saini are also those where members were expelled

due to non-payment by previous management. No action

was taken by them. Factum of resignation has also been

denied. In case of Ms.Maninder Kaur and Shashi Verma,

the amounts have been received back.

(xv) We have dealt with cases of these members, who had

claimed that their resignations were forged and we find

that these are cases where they have been expelled due

to non-payment by previous management in 1993 and

are now claiming their membership. As per the CBI

report, most of them admit in their statements that they

live in their own houses and accordingly, may not be

eligible for allotment of a flat on that account. However,

it is not necessary for us to go into that except to notice

the same as one of the equitable considerations.

(xvi) We may also notice that objections have also been filed

by Ramesh Kumar Bansal, Jagdish Kumar Sharma and

Rakesh Kumar Sharma. These happen to be the ex-

Treasurer, President and Secretary of the Society, who

were responsible for the induction of Ashok Goswami and

others, who obtained resignations from original members.

It is indeed ironical that these members who were

responsible for the management of the Society passing

into the hands of the charge sheeted officers are now

themselves claiming that they were forced to resign.

Their objections are indeed meritless and do not deserve

consideration.

The decision on the objections is for the purpose of

eligibility as a member and entitlement to a flat, it shall

have no bearing with the pending prosecutions by the CBI

and/or the right of any individual member, who may wish

to institute criminal action against those, who he claims

have cheated or defrauded him.

(xvii) We may also notice the decision of a Division Bench of

this Court in "Modern Cooperative Group Housing Society

Vs. Registrar of Cooperative Societies" reported at 101

(2002) Delhi Law Times 341 wherein the Court

observed:

"Defaulting members cannot be allowed to enjoy fruits and claim the allotment of those flats which have been constructed with the finance of members enrolled in their slots. No Society can be faulted or put in the dock for the delinquent act or remissness of the authority which in this case is the Registrar. It is the defaulting members, who have to bear the brunt and not those who have been rule abiding and regular in making payments and who have accelerated the process of construction of the flats which is the ultimate goal of a housing society. Any laxity or sympathy towards the defaulting member is misplaced."

(xviii) We are in full agreement with the views expressed above.

Members, who had, either of their own volition, chosen to

resign or those who had been induced to resign and did

not participate in the activities of the cooperative society,

cannot be permitted now after a decade and a half to

turn around and seek allotment of flat. These members

chose to receive the refund of the membership fee and/or

their contribution and took no steps to assert their legal

rights or participate in the activities of the Society. This

would also apply to members, who were either expelled

and are now seeking to stake their claims questioning the

validity and legality of the expulsion after flats have been

constructed with the funds and money provided by the

members enrolled in lieu of them.

(xix) We have also noted that the CBI has not found any nexus

or connection of the newly enrolled members with those

who were perpetrators of fraud or takeover of the

Society. Rather, the newly enrolled members have been

burdened with increased costs and had bonafide

contributed to the funds of the Society without being in

peri delicto with those responsible for the cooperative

scam. In case these members are sought to be deprived

of the fruits of their investments, it would be highly

inequitable to them.

5. Directions:

(i) We have heard learned counsel for the petitioners,

objectors, intervenors and the counsel for Registrar of

Cooperative Societies on the modalities to be followed for

determining the list of eligible members to be forwarded

to the DDA for allotment of flats. Learned counsel for the

petitioners Mr. Ravinder Sethi, Sr. Advocate and Mr.Sumit

Bansal, Advocate, initially submitted that since the public

notice had been issued and objections invited and

evaluated by the Court and even fresh notices sent to

original members through the Local Commissioner by

way of abundant caution, the petitioner should be

exempted from following the procedure under Schedule

VII sub-rule (1) of Rule 90 of the Delhi Cooperative

Societies Rules. Counsel for the Registrar of Cooperative

Societies and the objectors submitted that several

aspects and requirements would still be left out and the

eligibility of the members enrolled in lieu of the original,

resigned or expelled members, also need to be

determined.

(ii) The matter was listed for directions on 28th August, 2008

to decide the modalities in this regard. We heard

Mr.Ravinder Sethi, Senior Advocate and Mr. Sumit Bansal,

learned counsel for the petitioner, Ms. Sujata Kashyap,

counsel for Registrar of Cooperative Societies, Mr. R.K.

Gupta, counsel for the objectors and Mr. V.K. Tandon,

appearing for an Objector Mr. Gaur. After hearing

learned counsel and deliberations, a consensus was

arrived that the Society should furnish information as per

Schedule VII, sub-rule (1) of Rule 90 of the Delhi

Cooperative Societies Rules subject to the exception that

those objections which have already been considered and

evaluated by this Court in these proceedings, would not

be gone over again and the findings would be adhered to.

(iii) Parties are also agreed that in these special and peculiar

circumstances where the flats have been lying ready

since 2005 and suffering attrition, it was of utmost

importance that the eligibility of members and disputes, if

any with regard thereto, are resolved at the earliest and

the flats are put to use. Towards this end, it was agreed

that the findings and recommendations of the Registrar

of Cooperative Societies and the Rule 90 Committee be

approved by an independent Committee comprising a

retired Judge of this Court with a member of the

Committee from the Registrar‟s office, who would not be

involved either in the exercise of making

recommendations by the Registrar or in the Rule 90

Committee. The time frame for reference and furnishing

of information by the Society and the time to be taken by

the Registrar in making the recommendation and review

by the Rule 90 Committee as also by the Judicial

Committee to be nominated were discussed and agreed

between the parties.

(iv) Accordingly, with the consent of the parties and the

objectors, we constitute a Committee comprising Justice

S.K. Mahajan (retired) and Mr. S.K. Jha, Joint Registrar in

the office of Registrar of Cooperative Societies as the

Committee that would have the task of reviewing and

approving the recommendations made by the Registrar of

Cooperative Societies and the Rule 90 Committee. The

fee of Justice S.K. Mahajan, in the first instance, is fixed at

Rs.1.10 lacs. Mr. S.K. Jha shall also be paid an

honorarium of Rs.30,000/-. The petitioner Society shall

deposit a sum of Rs.1.40 lacs with the Registrar General

of this Court within 10 days of the order to be remitted to

Justice S.K. Mahajan and Mr. S.K. Jha. The Judicial

Committee may in its discretion approve, modify, alter,

remit any recommendation or part thereof of the Rule 90

Committee‟s report and that of the Registrar of

Cooperative Society. The Committee shall be entitled to

call for any record or information and documents or hear

any aggrieved party in its discretion as it considers

necessary for the purpose of executing its mandate. The

following time schedule is to be observed:

(a) The Society shall furnish within one month the documents and information along with list of members in compliance with schedule VII under the Delhi Cooperative Societies Rules, 2007 and take out the public notices as required inviting objections on the proposal regarding clearance of membership. It shall also submit the revised proposal, if any, within 30 days of publication of the public notice. The Registrar shall dispose the objections after hearing the parties including the issuance of „Deficiency Memo‟, if any, within a period of 15 days and verify the documents and complete the scrutiny within a further period of 15 days. A representative of the Society duly authorized, shall be present with the requisite documents in original as per Clause 23 of Schedule VII for verification. It would be open for the Society to submit certified copies of the originals in case the same are in the custody of the CBI. The petitioner may approach CBI directly or through the Registrar of Cooperative Societies for obtaining certified copy of the original record. The Registrar of Cooperative Societies would render all assistance to the Society, if required in

obtaining the certified copy of the originals, if seized by the CBI.

(b) The Registrar shall refer the matter to Rule 90

Committee with its recommendation also taking into

account inputs by CBI for approval. Rule 90

Committee shall examine and review the

recommendations made by the Registrar of

Cooperative Societies and take a decision within a

month of receipt of the report from the Registrar.

(c) Report of the Registrar of Cooperative Societies

together with the Rule 90 Committee‟s report, shall be

placed before Justice Mahajan‟s Committee for

consideration, review and approval. Justice Mahajan‟s

Committee shall consider the reports and

recommendations made and in its discretion, may

approve, modify, reject or remit the reports or any

part thereof or any recommendation as made. It

would also be open for the Justice Mahajan‟s

Committee to hear in its discretion any of the

objectors or aggrieved persons and seek any further

information/document or clarification that it may

require and have a decision thereon with regard to the

position of such a person, his entitlement, eligibility or

otherwise. Justice Mahajan‟s Committee shall submit

its report within one month regarding the approval,

rejection, modification, remission of the report of the

Registrar of Cooperative Societies and the report of

the Rule 90 Committee. The Court upon receipt of the

report of Justice Mahajan‟s Committee together with

the recommendations from the Registrar of

Cooperative Societies and the report of the Rule 90

Committee shall pass suitable orders and direct the

Registrar of Cooperative Societies to forward the list as

approved to DDA for draw of lots and allotment.

(v) We direct that each member of the petitioner Society who

is allotted a flat in the draw of lots, shall furnish an

undertaking that he would not sell, transfer or alienate

the flat in question without the leave of the Court for a

period of five years or such further time as may be fixed

by the Court.

(vi) We also direct that the charge sheeted office bearers

and/or members of the petitioner society including former

members, shall not be eligible for consideration for

allotment of a flat till they are found blemishless after the

acquittal and exoneration in any inquiry by the Registrar

of Cooperative Societies.

The writ petition stands disposed of with these directions.

Manmohan Sarin, J.

August 29, 2008 Sudershan Kumar Misra, J. rk