Mr Manmohan Kishan Malik vs Mr Avtar Kishan Malik(Deceased) ...
2009 Latest Caselaw 4126 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   CS(OS) No.426/2008

%                      Date of decision: 13th October, 2009

MR MANMOHAN KISHAN MALIK                                     ....Plaintiff
                         Through: Mr. Rajiv Bahl, Advocate

                                  Versus

MR AVTAR KISHAN MALIK(DECEASED) ... Defendants
Though Legal Representatives & Ors.
                         Through: Mr Sandeep Sethi, Sr Advocate with Mr
                         Vikas Sharma and Mr Nikhil Bhalla, Advocates
                         for defendant No.1.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

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            YES
      in the Digest?


RAJIV SAHAI ENDLAW, J.

1. The suit though bears number of the year 2008 was instituted

in 1991 in this court. On 20th September, 2001 the following

preliminary issue was framed on the question of maintainability:

"Whether in view of various preliminary objections

taken by defendant No.1 in written statement to the

suit of the plaintiff is liable to be dismissed?"

2. During the course of hearing on the preliminary issue on 15th

December, 2005 it was felt by this court that it was necessary to

direct the Supreme Court Co-operative House Building Society

Limited, Niti Bagh to produce the complete file relating to plot No.

B-100, Niti Bagh, New Delhi. Notice was accordingly directed to be

issued to the said society. Thereafter on change in pecuniary

jurisdiction, the suit was transferred to the District Court. The

plaintiff applied for amendment of the plaint to enhance the

valuation in the plaint for pecuniary jurisdiction and upon no

objection from the only contesting defendant i.e., defendant No.1

(whose legal heirs had been substituted on 5th November, 2004) the

application for amendment was allowed and consequently the suit

transferred back to this court. The counsel for the plaintiff and the

senior counsel for the legal representatives of the defendant No.1

have been heard on two aspects of maintainability i.e., the effect of

nomination under the Delhi Cooperative Societies Act and on the

aspect of limitation. Neither of the counsels referred to the order

dated 15th December, 2005 directing the society to produce the

records of the property. Though the clerk from the society had

appeared before this court pursuant to the notice issued on 17th

February, 2006 but since the suit was on that date found to be below

the minimum pecuniary jurisdiction of this court, it appears that the

records sought were not perused. On none of the subsequent dates

was there any direction for reappearance of the clerk from the said

society or for summoning the records. After perusing the file, in my

view, the said record is not necessary for pronouncing on the aspect

of maintainability on which the counsels had been heard.

3. The plaintiff has instituted the suit for the reliefs of

declaration, partition, rendition of accounts and injunction. It is

pleaded that Malik Arjun Das was a member of the Supreme court

Bar Cooperative House Building Society Ltd and in the draw of lots

of the said society held on 15th December, 1971 was allotted a

residential plot bearing Municipal No. 100, Block B, Niti Bagh, New

Delhi; the said plot admeasures 513.40 sq yrds; that the plaintiff and

the 11 defendants on the date of institution of the suit were the suit

the natural heirs of Shri Malik Arjun Das who had died intestate and

the plaintiff and the defendant No.1 had inherited 1/6th undivided

share each in the said property of Malik Arjun Das and the other

defendants who were also the legal heirs of some of the original

heirs of Malik Arjun Das had the remaining share in the said

property; that Malik Arjun Das had desired that property B-100 Niti

Bagh, New Delhi should be jointly built by the plaintiff, defendant

No.1 and the defendant No.11,namely Shri Anand Kumar Malik;

consequently after the death of Malik Arjun Das it was mutually

agreed between the plaintiff and the defendant no.1 that since

defendant No.11 was residing in USA and was no more interested in

the aforesaid property, the property be jointly constructed for

residential purposes by the plaintiff and the defendant No.1; that

since the plaintiff was employed outside Delhi and was also likely to

be out of India for indefinite period, the property should be

constructed by the defendant No.1 on his own behalf as well as on

behalf of the plaintiff, out of the monies left by Malik Arjun Das and

the remaining costs of construction be shared between the plaintiff

and the defendant No.1; it was further agreed that after

construction, the premises be let out by defendant No.1 on his own

behalf as well as on behalf of the plaintiff to some good tenant and

the rent realized be divided equally between them; that the

defendant No.1 was also entitled to adjust the share of the rent of

the plaintiff from towards the share of the plaintiff for construction

of the super-structure on the said plot together with interest at 10%

per annum. It is further pleaded that on the basis of the said

understanding, construction was raised on the said property; that

the plaintiff was in America and defendant No.1 had visited the

plaintiff in the year 1987 and there the plaintiff requested the

defendant No.1 to render accounts to him. The defendant No.1 then

had assured the plaintiff to furnish the accounts but refused to

render accounts qua the property inspite of assurances; that the

defendant No.1 then started claiming that Malik Arjun Das had

nominated him as the sole owner of the property to the exclusion of

others and that a perpetual lease had also been executed in his name

as the sub-lessee by the society. The plaintiff accordingly filed the

suit for partition of the property, for rendition of accounts, for

declaration that perpetual sub-lease dated 20th November, 1974 in

favour of the defendant No.1 is null and void and not binding on the

plaintiff and the other defendants and for permanent injunction

restraining the defendants from alienating, encumbering or parting

with the property.

4. It appears that vide ex parte order dated 3rd July, 1991 in the

suit the defendant No.1 was restrained from alienating, encumbering

or parting with possession of the property. Subsequently, on 31 st

October, 1991 the defendant No.1 was permitted to change the

tenant in the property without, however, being entitled to sell or

encumber the property. Vide order dated 12th September, 1994 the

banks where Malik Arjun Das was having the accounts were directed

to retrain the documents containing the signatures of Shri Malik

Arjun Dass.

5. The defendant No.1 has contested the suit on several grounds.

He also claims a Will of Malik Arjun Dass in his favour. However, at

this stage we are not concerned with the said plea. The hearing on

the preliminary issue was confined, as aforesaid, to the aspect of

nomination of the defendant No.1 in the records of the society and to

the aspect of the claim in suit being within time. The facts which are

not in dispute are -

i. that Malik Arjun Dass had become a member of the society in

the year 1961;

ii. that Malik Arjun Dass had nominated the defendant No.1 as

his nominee in the society in the year 1968;

iii. the plot No. B-100 Niti Bagh, New Delhi was allotted to Malik

Arjun Dass on 15th December, 1971;

iv. that Malik Arjun Dass had paid the full dues of the society as

an allottee and had also paid the stamp duty and registration

charges for the perpetual sub lease with respect to the said

plot to be executed;

v. that Malik Arjun Dass expired on 29th January, 1974;

vi. the perpetual sub lease of the plot was executed by the Land

and Building Department of the Delhi Administration and the

society in favour of the defendant No.1 on 20th November, 1974

and,

vii. the construction on the aforesaid plot was carried out in 1978 -

79. The suit as aforesaid was filed in 1991.

6. The senior counsel for the defendant No.1 has contended that

since it is borne out / admitted that defendant No.1 had been

nominated by Shri Malik Arjun Dass as his nominee, the defendant

no.1 alone is entitled to and the owner of the aforesaid plot and the

plaintiff or any of the other defendants, who are the other natural

heirs of Malik Arjun Dass will have no share in the said plot.

7. The counsel for the plaintiff has contended that the aforesaid

plea is no longer res integra. Reliance is placed on -

i. Smt Sarbati Devi Vs Smt Usha Devi AIR 1984 SC 346

where in relation to a nomination qua the benefits of the LIC

policy, the Supreme Court held that Insurance Act

whereunder the nomination was made was not intended to

alter the law of succession and nomination does not make the

nominee the sole heir qua the insurance proceeds. It was

held that a nominee is not equivalent to a heir or a legatee.

     ii.    Ashok Chand Aggarwala Vs Delhi Administration 1998

            VII AD (Delhi) 639 DB

     iii. Gopal      Vishnu     Ghatnekar      Vs    Madhukar      Vishnu

            Ghatnekar AIR 1982 Bombay 482

     iv.    Priya Nath Mehta Vs Manju Aggarwal 54(1994) DLT 34

v. Sushila Devi Bhaskar Vs Ishwar Nagar Cooperative

House Building Society Ltd 45(1991) DLT 528.

In all of which, qua nomination in a Cooperative society also, it has

been held that the nominee does not take as a sole heir and the

principles as laid down in Smt Sarbati Devi (supra) apply. The

counsel for the plaintiff has thus contended that merely because

there is a nomination by the common predecessor of the parties,

Malik Arjun Dass in favour of the defendant No.1, does not make the

defendant No.1 the sole owner of the property.

8. The senior counsel for the defendant No. 1 has contended that

the facts of the present case are distinguishable and the law in the

judgments aforesaid would not apply. Though it is contended that

nomination under a special law as the Cooperative Societies Act

would displace succession under the ordinary law of succession but

in view of the judgments aforesaid including of the Division Bench,

that question would not be open at least to this court to consider. He

has, however, contended that in all the aforesaid cases the deceased

was the owner of the land allotted and/or had the perpetual lease

executed in his favour. It is contended that it was in those

circumstances, since the deceased had become the owner, that the

courts held that such ownership would devolve according to the

ordinary law of succession and not in accordance with the

nomination. It is argued that in the present case there was no

perpetual lease of land executed in favour of the deceased Malik

Arjun Dass. He thus had only a membership of the society and which

under Sections 20 and 26 of the Delhi Cooperative Societies Act,

1972 then applicable had a right to determine as who would become

a member. It is further urged that the right to become a member is

not a common law right but flows only from Section 26 and it is a

case of transfer of membership and not of substitution of succession.

It is urged that the rights are to be thus governed by Cooperative

Societies Act only and not by the common law rights. It is further

urged that since the title to the property by execution of perpetual

lease came into existence after the demise of predecessor and which

by virtue of nomination came to be in existence in favour of the

defendant No.1 only, the question of other natural heirs of Shri Malik

Arjun Dass having any right in the said property does not arise. The

judgments aforesaid relied upon by the plaintiff were read out to

show that in each of the said cases the title had vested in the

deceased by execution of the perpetual lease or by the courts in the

judgments having held the deceased to have become the owner.

Reliance was also placed on Santosh Kakkar Vs Ram Prasad 1998

I AD (Delhi) 938 where another Single Judge of this court had on the

basis of the nomination held the nominee alone to be the owner and

the other natural heirs to have acquired no rights. In the said case,

the deceased was merely a member and in fact the allotment of the

land had also been made several years after his demise and in such

facts it was held that the rights of the parties flow from the

nomination and not the natural law of succession . The senior

counsel for the defendant No.1 contended that the facts of the

present case are akin to Santosh Kakkar (supra)rather than to the

other judgments.

9. The counsel for the plaintiff has of course sought to distinguish

Santosh Kakkar (supra). He has contended that in that case the

court found the deceased to have paid only a minuscule portion of

the preliminary/dues of the society and the entire amount had been

paid by the nominee. It is contended that the facts of this case are

otherwise. Here the deceased had cleared the entire dues and in

fact also deposited monies for stamping and registration, as borne

out from the documents relied upon by the defendant No.1 himself

and merely because the perpetual lease remained to be executed,

would not deprive the other heirs of benefit of succession. He also

relied upon judgment dated 5th October, 2005 of another single

Judge in Deepak Vohra Vs Pankaj Vohra CS(OS) 20/2004 where

also provisions of the Cooperative Societies Act were considered and

the dicta in Smt Sarbati Devi and Ashok Chand Aggarwal (supra)

followed. It may be noted that this judgment gives yet another

reason. It has been held that Cooperative Societies Act is a local Act

while Hindu Succession Act is a Central Legislation dealing with law

of succession and generally, the law of succession under the Central

Act cannot be diluted or abrogated by the State Act being the

Cooperative Societies Act; the law of succession is an occupied field

in view of the Hindu Succession Act, 1956 and thus Cooperative

Societies Act, in that case of 2003, could not deal with the said

subject matter and in any case the endeavour has to be made to

harmoniously construe the provisions of the said Acts and the only

conclusion can be that insofar as the matter of succession is

concerned, the same is governed by either intestate succession or

testamentary succession, while the nominees are appointed to

facilitate the acts to be done for effecting the succession.

10. Insofar as the senior counsel for the defendant No.1 has sought

to distinguish the consistent view of this court for the reason of the

perpetual lease having not been executed in favour of Malik Arjun

Dass and having been executed for the first time in the name of the

defendant No.1 only, I had, during the hearing, enquired from him as

to what is the effect of allotment which in this case admittedly was in

the name of Malik Arjun Dass. He was asked to look up the matter

under the Rules for allotment of Nazul land framed under the DDA

Act. The senior counsel contended that under Rules 21, 22 and 23 of

the DDA (Disposal of Developed Nazul Land) Rules, 1981 the vesting

of the land is only on execution of the sub lease. However, I do not

find the position to be so. A reading of the said Rules, particularly

Rule 42 shows that rights accrue on allotment. In fact, Rule 42

provides that the allottee is deemed to be the sub-lessee on the

terms and conditions of the lease "to be executed". There is a

reason for the same. The form of the lease/perpetual sub lease is

also prescribed under the said Rules. It is thus not as if after the

allotment, the terms and conditions of the perpetual sub lease are to

be negotiated between the parties and if the parties are unable to

concur on the same, the allotment is of no avail. The allottee has no

choice in the matter of the terms and conditions of the perpetual sub

lease and is deemed to have accepted the allotment in acceptance of

the terms and conditions of the perpetual sub lease as set out in the

Rules themselves. The execution of the perpetual sub lease is thus

merely a ministerial act and the rights in the land accrue on

allotment, which in the present case admittedly happened three

years prior to the demise of Malik Arjun Dass.

11. Though during the hearing I had entertained certain doubts

whether the judgments aforesaid of this court continue to be good

law in the light of the dicta in Zorastrian Co-operative Housing

Society Limited Vs District Registrar Co-operative Societies

(Urban) AIR 2005 SC 2306 and Greater Bombay Cooperative

Bank Ltd Vs United Yarn Tex Pvt. Ltd. AIR 2007 SC 1584, though

not cited by either of the counsels, but nevertheless giving a special

status to the cooperative laws. However, on carefully perusing the

said two subsequent dicta of the Supreme Court, I am unable to, on

the basis thereof hold that the consistent dicta of this court

distinguishing a nominee from a successor requires any

reconsideration. I also find that Division Bench of the Bombay High

Court in Om Siddharaj Cooperative Housing Society Ltd Vs

State of Maharasthra MANU/MH/0400/1998 and a recent Division

Bench judgment of this court in Abhay Sapru Vs Chitralekha

Bukshi MANU/DE/2060/2008 have also taken the same view

and with which I am respectively bound and concur.

12. There is yet another reason for not disturbing the aforesaid

consistent dicta. The Supreme court in Smt Sarbati Devi (supra)

has also held that when all along the High Courts have taken the

view that mere nomination does not deprive the heirs of their rights

and when inspite thereof the Parliament has not chosen to make any

amendment to the act, in such situation unless there are strong and

compelling reasons to hold all these decisions to be erroneous, the

court should be slow to take a different view.

13. Another contention of the senior counsel for the defendant

No.1 on the basis of para 11 of Smt Sarbati Devi (supra) must also

be noticed. He has contended that while the Supreme Court, qua the

proceeds of the policy, has held the nomination to not interfere with

the general law of succession, qua the commission of insurance

agent under Section 44(1) of the Insurance Act, the nomination

prevails. The reason therefor given is that there is no right in

common law to such commission and since right has been created

under Section 44 itself, the same was also held entitled to provide

for the beneficiary of such right. Senior counsel for the defendant

No.1 has contended that the right of transfer of membership is also

not a right under the common law but a right created in the

Cooperative Societies Act and thus the said Act is entitled to provide

for the beneficiary thereof also.

14. I am however unable to accept the said position. Though the

right of membership of a society may be a right governed by the

Cooperative Societies Act but once such right has resulted in

acquisition of an immovable property by a member, the devolution of

such immovable property will be governed not by the Societies Act

but by the general law of succession as aforesaid.

15. I thus hold the defendant No.1 to have not acquired any

exclusive rights in the property subject matter of the suit by virtue of

nomination in his favour and the rights of the other heirs of the

deceased Malik Arjun Dass would not be defeated by such

nomination.

16. That brings me to the question of limitation. The senior

counsel for the defendant No.1 has contended that the suit has

admittedly been filed after more than 12 years of the execution of

the perpetual lease deed in exclusive favour of the defendant No.1

and after the defendant No.1 has raised construction thereon and is

thus barred by time and ought not to be entertained It is further

argued that no prayer for cancellation of the perpetual lease deed

has been made and the only prayer is for declaration of the lease

deed as void. Reliance is placed on Article 58 of the Limitation Act

providing a period of limitation of three years for obtaining a

declaration from the date when the right to sue first accrues and on

Dilboo Vs Dhanraji (2000) 7 SCC 702 laying that whenever a

document is registered, the date of registration becomes the date of

deemed knowledge. Reliance is also placed on Subodh Kumar

Gupta Vs Shrikant Gupta (1993) 4 SCC 1 laying down that if it is

the case of the plaintiff that document was obtained by fraud or

misrepresentation or by suppression of material facts or for any

other like reason, he must have the same set aside through court and

unless he does that, he cannot go behind the agreement, ignore it as

a void document and proceed to sue.

17. In my view once the court has come to the conclusion that the

defendant No.1 as a nominee was entitled to have the perpetual

lease deed executed in his favour on behalf of and/ or the benefit of

all the legal heirs, the execution thereof would not give any right to

the defendant No.1 and notwithstanding the execution of the

perpetual lease deed he would continue to hold the property for and

/ or for the benefit of all the heirs as per the law of succession. The

law being, that nomination is only for the purposes of discharging

the society and/or the perpetual lessor of the land, mere execution of

a perpetual sub lease in such situation cannot be said to be such an

Act which would give a cause of action to others who may have a

share in the property.

18. A perusal of the Schedule to the Limitation Act, particularly,

part V thereof dealing with the suits relating to immovable property

would show that limitation for a suit or any interest in an immovable

property based on title under Article 65 thereof is of 12 years and

commencing from the date when the possession of the defendant

becomes adverse to the plaintiff. If the defendant No.1 took

possession of the property and/or got the perpetual lease deed

executed in his favour for and on behalf of all the heirs, then all the

heirs of the deceased Malik Arjun Dass acquire a right in the

property immediately on his demise. Their such rights cannot be

defeated by long lapse of time howsoever long it may be. For one of

the co-owners to say that he has become the absolute owner of the

property, he has to show that he has for over 12 years prior to the

institution of the suit been claiming adversely to the other co-owners

and to the knowledge of the other co-owners. Such disputed

questions of fact, particularly in the light of averments in the plaint

as noted in the initial paragraph of this judgment cannot be decided

at this stage. Thus the question of limitation affecting

maintainability of the suit on which parties were heard is not found

to be such which can be disposed of without recording evidence and

is left open for consideration.

19. The suit otherwise is held maintainable notwithstanding the

nomination in favour of the defendant No.1.

RAJIV SAHAI ENDLAW (JUDGE)

October 13, 2009 M