Delhi High Court

Sanjiv Kumar Dixit vs Registrar Co-Operative ... on 24 August, 2009

Author: Badar Durrez Ahmed

       THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment delivered on: 24.08.2009

+      W.P.(C) 3913/2007


SANJIV KUMAR DIXIT                                            ..... Petitioner

                    versus

REGISTRAR CO-OPERATIVE SOCIETIES                              ..... Respondent

Advocates who appeared in this case:-

For the Petitioner : Mr. Sudhir Nandrajog, Sr. Advocate with Mr. J.N. Gupta, Advocate.

For the Respondent : Ms. Sujata Kashyap, Advocate for respondent no. 1.

Mr. Vinod Mehta, Advocate for respondent no. 2.

CORAM:-

HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MS. JUSTICE VEENA BIRBAL

1. Whether reporters of local papers 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

BADAR DURREZ AHMED, J (oral)

1. The petitioner is aggrieved by the order dated 14.12.2006 passed by

the Financial Commissioner in a revision petition under Section 80 of the

Delhi Co-operative Societies Act, 1972 (hereinafter referred to as the said

Act) whereby the Financial Commissioner upheld the order of the Registrar

of Co-operative Societies passed on 05.04.2002 by the said Registrar in the

appeal by the petitioner under Rule 35 (7) of the Delhi Co-operative

Societies Rules, 1973 (hereinafter referred to as the said Rules) read with

Section 26 of the said Act. The petitioner had approached the Registrar of

Co-operative Societies for the reason that his name was not being included

as a member in place of his father who had passed away on 09.03.1997.

This was despite the fact that the petitioner was declared as a nominee by his

late father Mr Vidya Bhushan Dixit who was an original member having

membership no. 250 of the said society. The petitioner's appeal before the

Registrar of Co-operative Societies was dismissed by the order dated

05.04.2002 on three grounds.

2. The first ground was on the question of limitation. The second

ground was that no application had been filed by the petitioner seeking the

transfer of membership. The third ground was that the petitioner was not a

resident of Delhi and, therefore, stood disqualified in terms of Model Bye-

Law no. 5(1)(a) which was also applicable to the respondent society.

3. The learned counsel for the petitioner submitted that none of these

grounds can be legitimately used against the petitioner. He submitted that

the petitioner's father Mr Vidya Bhushan Dixit was an original member and

whose number was 250. The said Mr Vidya Bhushan Dixit died on

09.03.1997. The petitioner (Sanjiv Kumar Dixit) was admittedly a nominee

as declared by late Mr Vidya Bhushan Dixit in respect of the said

membership. There was another nominee also. He was none other than the

petitioner's brother Mr Rajiv Dixit. The said Mr Rajiv Dixit had already

given his "No Objection Certificate" in favour of the petitioner. The learned

counsel for the petitioner further indicated that the petitioner had informed

the Managing Committee of the Society about the death of his father

Mr Vidya Bhushan Dixit and had also made a request for transfer of

membership in his name. The said information was sent by the petitioner to

the Managing Committee by a letter dated 05.05.1998. According to the

learned counsel for the petitioner, no application is necessary for transfer of

membership to a nominee, particularly, in view of the provisions of Rule

35(1) read with Rule 35(6). In any event, he states that the application was,

in fact, made by virtue of the said letter dated 05.05.1998, a typed copy

whereof is at Page no. 30 of the paper book.

4. Thereafter, the Managing Committee passed a resolution in its

meeting held on 03.06.1998 to the following effect:-

"Resolution : As proposed by Shri R.P. Kathuria and seconded by Dr. Gyanendra Kumar, it was unanimously passed that Shri Sanjeev Kumar Dixit has apprised the Committee that a member of the society Shri Vidya Bhushan Dixit (Membership No. 161/250) has expired on 6th March, 1998. Along with his letter, he has sent a copy of the death certificate issued by the Registrar of Births and Deaths, Nagar Nigam, Jaipur. It was resolved that the death of Shri Vidya Bhushan Dixit be entered in the register and as per Section 26, Delhi Cooperatives Act, 1972, the interest of the deceased member be given to his nominee, Shri Sanjeev Kumar Dixit, in accordance with law."

5. Thus, according to the learned counsel for the petitioner, the

membership stood transferred to the petitioner and was duly approved by the

Managing Committee. Despite such transfer having been made, on

17.08.1998 the Society refunded the amount which had been deposited by

the petitioner's father and sent the said amount to petitioner's brother's

address at Jaipur. The said refund cheque was erroneously encashed by the

petitioner's brother. On coming to know of this error, the petitioner, by

virtue of a letter dated 30.11.1998 returned the said sum of Rs. 26,465/- to

the Society. The said letter along with the cheque for the said amount was

received by the Society on 02.12.1998.

6. Since no action was being taken on the said letter dated 30.11.1998,

the petitioner preferred an appeal under Rule 35(7) read with Section 26 of

the said Act before the Registrar of Co-operative Societies and the said

appeal came to be dismissed on 05.04.2002 on the said three grounds

mentioned above. The matter was taken up in revision under Section 80

before the Financial Commissioner who upheld the order passed by the

Registrar of Co-operative Societies. It is in these circumstances that the

petitioner is before this court.

7. The learned counsel appearing on behalf of the Society (respondent

no. 2) has taken the stand that the previous management was unjustified in

refunding the amount deposited by the petitioner's father, once the petitioner

had been recognized as a member in place of his father on account of his

being a nominee. It is categorically stated in paragraph 4 of the short

affidavit filed on behalf of the said respondent Society that it was

unanimously decided by the Managing Committee in a meeting held on

31.12.2008 that the rejection of the application for transfer of membership of

late Mr Vidya Bhushan Dixit to his son and nominee Mr Sanjiv Kumar

Dixit, the petitioner herein, by the previous management, was unjustified

and that the present management is not opposed to the transfer of the

membership in favour of the petitioner subject to the completion of all

formalities and clearance of dues as payable on date. A copy of the

resolution has been annexed as Annexure (R2/1) to the said counter

affidavit. The resolution insofar as it is relevant reads as under:-

               "EXTRACT            OF     THE      RESOLUTION
              UNANIMOUSLY              PASSED       BY      THE
              MANAGING COMMITTEE OF MAHARISHI
              DAYANAND CGHS LTD. AT ITS MEETING
              HELD ON AUGUST 31, 2008.
              RESOLUTION:
              1.     "The Managing Committee in its meeting

had earlier decided to review and withdraw all the pending cases. The committee has reviewed the matter of Sh. Sanjeev Kumar Dixit and observed that the membership of Shri V.B. Dixit was not transferred in the name of his nominee/son Sh.Sanjeev K. Dixit. The application of transfer of membership was rejected without any justification by the previous Managing Committee. The present Managing Committee has considered the facts of the case and the material on record and unanimously resolved to transfer the membership of late Shri Vidya Bhushan Dixit to his nominee/son Shri Sanjeev Kumar Dixit and the Secretary is duly authorized to make a statement to that effect in the honorable High Court.

XXXX XXXX XXXX XXXX XXXX"

8. The learned counsel for the respondent no. 1 (Registrar of Co-

operative Societies) has, however, opposed the plea of the petitioner as also

that of the respondent Society. According to her, the petitioner was not

eligible to become a member on account of the fact that he was not a

resident of Delhi on the date on which the application was moved by him.

She stated that the petitioner had applied on 05.05.1998 and on that date, in

terms of Model Bye-Law no. 5(1)(a), the petitioner was disqualified from

being a member inasmuch as he was not a resident of Delhi for the period of

three years immediately preceding the date of application.

9. We have heard the counsel for the parties. The first ground on which

the petitioner's appeal before the Registrar of Co-operative Societies was

dismissed was the ground of limitation. We agree with the learned counsel

for the petitioner who submitted that the question of limitation itself does not

arise because there was no formal rejection of the petitioner's application.

On the contrary, he has been able to show that the Managing Committee

had, in fact, approved the transfer of the membership of late Sh. Vidya

Bhushan Dixit to the petitioner by virtue of the resolution passed by the

Managing Committee in its meeting held on 03.06.1998. It is because no

action was being taken with regard to the handing over of the refund and

return of the amount earlier deposited by Mr Vidya Bhushan Dixit that the

petitioner had preferred the appeal under Rule 35(7) read with Section 26 of

the said Act. There is actually no formal order passed by the Society

rejecting the petitioner's claim/application. There is, of course, another

circumstance and that is the question of whether the petitioner had to file an

application at all in order to have his name substituted in place of his father's

name on the death of the latter. In case no application was necessary, the

question of limitation would not arise.

10. This takes us to the consideration of the second ground of rejection of

the petitioner's appeal and, that is, that there is no application on record.

Although, this is not factually correct inasmuch as the petitioner's

application dated 05.05.1998 is on record and had been filed before the

Society, we are of the view that no application, as such, would be necessary.

Section 26 to the extent relevant reads as under:-

"26 (1) On the death of a member a co-operative society may transfer the share or interest of the deceased member to the person nominated in accordance with the rules made in this behalf, or, if there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member, or pay to

such nominee, heir or legal representative, as the case may be, a sum representing the value of such member's share or interest as ascertained in accordance with the rules or bye-laws :

Provided that -

(i) in the case of a co-operative society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the society of the value of the share or interest of the deceased member ascertained as aforesaid;

(ii) in the case of a co-operative society with limited liability, the society shall transfer the share or interest of the deceased member to such nominee, heir or legal representative, as the case may be, being qualified in accordance with the rules and bye- laws for membership of the society or on his application within one month of the death of the deceased member to any person specified in the application who is so qualified;

(iii) no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be.

(2) ............................................. (3) ............................................."

11. Section 26(1) is clear that on the death of a member, the Co-operative

Society may transfer the share or interest of the deceased member to the

person nominated in accordance with the Rules made in this behalf. It also

provides that if no person is nominated, then a transfer may be made to such

person as may appear to the committee to be the legal heir or legal

representative of the deceased member. The other option, as an alternative

to transfer the share or interest of the deceased member of the nominated

person or such other person, is to pay such nominated person, heir or legal

representative, as the case may be, a sum representing the value of such

member's share or interest as ascertained in accordance with the rules or

bye-laws. Thus, there are two alternatives available to the Co-operative

Society whenever there is death of a member. The first alternative is that a

Society may transfer the share or interest to a nominated person or if there is

no such nominated person, to such other person as may appear to the Society

to be the deceased person's heir or legal representative. The other

alternative is that, instead of transferring the share or interest to the nominee

or such other person, the Co-operative Society may pay to such nominee,

heir or legal representative as the case may be, a sum representing the value

of such member's share or interest as ascertained with the rules or bye-laws.

12. These are two alternatives and cannot exist at the same time. It is

apparent that in the meeting held on 03.06.1998, the Managing Committed

had resolved to adopt the first alternative and had transferred the share and

interest of the deceased member to the petitioner who was the deceased

member's nominee. Once this decision was taken, there was no question of

paying any amount to the nominee. Therefore, the refund of the amount

paid by the petitioner's father was clearly erroneous. Since the petitioner's

brother had erroneously encashed the refund cheque, the petitioner had, by

his letter dated 30.11.1998, returned the said amount to the Society. As the

Society was not taking any action on the said letter, the petitioner was

constrained to file the appeal before the Registrar of Co-operative Societies.

13. The second proviso to Section 26(1) also makes it clear that in the

case of a Co-operative Society with limited liability, which is the case of the

respondent (society herein), the society shall transfer the share or interest of

the deceased member to such nominee, heir or legal representative as the

case may be, being qualified in accordance with the rules and bye-laws for

the membership of the society or on his application within one month of the

death of the deceased member to any member specified in the application

who is so qualified. Thus, it is clear that an application within one month is

necessary only in case the person seeking membership is not a nominee or

an heir or legal representative of the deceased member. No application

would be necessary when the deceased member has nominated a person to

whom the membership is to be transferred. Rule 35(6)(1) of the said Rules

also makes this clear. The said Rule prescribes that where a member of the

Co-operative Society has not made any other nomination, the Society shall

give a public notice inviting claims or objections for the transfer of share or

interest of the deceased within the time specified. This makes it clear that

where a nomination has been made by a deceased member, there is no

requirement for the Society to give any public notice inviting claims or

objections in respect of the deceased member's share or interest. The

position, therefore, is that insofar as a nominee is concerned, no application

is necessary and his right to seek transfer would be crystallized on the date

of death of the deceased member, that is, in this case, on 09.03.1997 when

Mr Vidya Bhushan Dixit passed away.

14. This takes us to the third ground for dismissal of the petitioner's

appeal and that was that the petitioner was not a resident of Delhi. Insofar as

this is concerned, the learned counsel for the petitioner has drawn our

attention to Notification No. F.47/Legal/Policy/Coop./92/2305-2316 issued

by the Government of National Capital Territory of Delhi (Cooperative

Department) on 05.12.2001. The said notification reads as under:-

"GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI (Cooperative Department)

No. F.47/Legal/Policy/Coop./92/2305-2316 Date : 05-12-2001

NOTIFICATION In exercise of the powers conferred under Section 88 of the Delhi Cooperative Societies Act, 1972, the Hon'ble Lt. Governor of the National Capital Territory of Delhi is pleased to exempt the operation of the condition of Model Bye-laws No. 5(1)(a) during the period from 16.12.1992 to 22.04.1997 with regard to the proof of Residence in respect of the members of Group Housing/House Building Societies.