Raj Kumar Gupta vs The Registrar Co-Operative ...
2016 Latest Caselaw 1211 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                               DECIDED ON: 16.02.2016
+              W.P. (C) 3255/2014, CM APPL.6729/2014
RAJ KUMAR GUPTA                                             ..... Appellants
                          Through: Dr. Sarabjit Sharma, Advocate.

                    Versus

THE REGISTRAR CO-OPERATIVE SOCIETIES & ANR..... Respondents

Through: Mr. Naushad Ahmed Khan, Addl.

Standing Council (Civil), GNCTD for Resp-1.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA S.RAVINDRA BHAT, J.(ORAL)

1. The petitioner invokes the power of this court under Article 226 of the Constitution of India, urging it to quash the award of an arbitrator (dated 10.09.2012 - hereafter "the impugned award"). The award turned down the petitioner's claim that he was a rightful member of the second respondent co-operative group housing society (hereafter "the society").

2. The petitioner had premised his claim to be a lawful member of the society, saying that an Administrator, Shri Bal Kishen had, during his brief tenure (when appointed to administer the affairs of the society after the supersession of its elected executive body) enrolled him. The petitioner claimed that further to the decision of the administrator, he had paid `105/- towards membership on 08.11.1976. The society had countered, saying that

W.P.(C)3255/2014 Page 1 there was no such record and, more importantly that the Administrator could not, keeping his limited mandate of purely managing the affairs of the society, have enrolled members. It was also urged that the society had a waiting list of 17 members and that its sanctioned or permitted membership strength was 173. The petitioner had approached the Registrar earlier with this claim and had also then relied on a letter dated 17.08.1990 said to have been issued by the society's then Secretary. The earlier round of litigation was inconclusive; this Court had, when the petitioner approached it, directed a remit- and asked the arbitrator to decide the issue; in the meanwhile, the society was directed to keep a vacant plot, to satisfy the petitioner's demand, in case he were to succeed. This time round, however, the arbitrator negatived the claim; the petitioner therefore seeks appropriate directions for quashing of the award and further orders to allot him the vacant plot reserved under orders of this Court.

3. The Arbitrator, in the impugned award, rejected the petitioner's claim that he was a valid member observing that:

"I have carefully gone through the records of the case and have also considered the arguments put forward by the counsel for the claimant as well as the arguments advanced on behalf of the respondent Society. The main point for consideration is whether the Administrator had powers under section 32 of the Delhi Co-operative Societies Act, 1973 (Now section 37 of the Delhi Co-operative Societies Act,2003 )to enroll new members and whether the letter Dt. 17thAugust,1990 purported to have been issued by the Secretary Sh.

B.S.Verma validates the decision of the Administrator to enroll the claimant Sh. R. K. Gupta and ten other persons as members despite the fact that there were already 17 members on the waiting list of the

W.P.(C)3255/2014 Page 2 respondent Society since 1972-73.In this regard it is pertinent to refer to letter Dt. 25/01/1977 issued on behalf of the then Registrar by the then Assistant Registrar informing the respondent Society that the Administrator has no powers to' enroll a new member. Even in the Judgement dt. January 1,2003 the Hon'ble High Court of Delhi while referring to the decision of the Hon'ble Supreme Court in case K. Shantaraj and another v/s Nagaraja and Ors. JT 1997(5) SC 680 has observed that

"It is settled proposition of law that power of Administrator given by the statute is only to conduct elections and also to control day to day functioning of the Society and such steps as are necessary for its proper functioning and by no provision of law, he has been conferred the power to enroll new members of the Society."

Thus the action on the part of the then Administrator Sh. Bal Krishan in enrolling the claimant and ten others as members of the respondent Society was not legal and the managing committee of the Society was not legally justified in endorsing the decision of the then Administrator in its meeting held on 16 th June, 1990 enrolling the claimant and 10 other persons as members, especially when there were already persons on the waiting list. Surprisingly neither the claimant nor the respondent Society has indicated whether 17 persons who were already on the waiting list when the claimant and 10 other persons were enrolled members were allotted any plot or not. Further, there is nothing on record to suggest if the directions issued by the Arbitrator in his award dated 20/1/1995 were carried out by the Respondent Society and Registrar Co-operative Societies."

4. Dr. Sarabjit Sharma, learned counsel for the petitioner urges that the Award is unsustainable in law. It is contended that the society had iterated on two occasions that the petitioner was a member. Even after the Administrator relinquished his charge, the lawfully elected Secretary of the

W.P.(C)3255/2014 Page 3 society had acknowledged that the petitioner was a member; therefore, the petitioner could not be denied membership and its benefits. It was contended, secondly that the conclusions of the Arbitrator are unsound because though the power of an Administrator appointed to manage the affairs of a given society may not expressly allude to the power to admit new members, there is yet no bar from doing so. It is submitted that acting within his powers the Administrator could have validly enrolled members because that fell within his managerial power.

5. We find the petitioner's claim insubstantial and unmerited. A society or association of persons, enjoys the full range of protection of its "core right" to admit to its membership those its existing members approve. Such right to admit new members - i.e., right to associate with others- is a fundamental right under Article 19 (1) (c) of the Constitution of India. The Supreme Court, in Damayanti Naranga v Union of India [1971] 3 SCR 840 declared that

"..the right to form an association, in our opinion, necessarily implies that the persons forming the Association have also the right to continue to be associated with only those whom they voluntarily admit in the Association. Any law, by which members are introduced in the voluntary Association without any opinion being given to the members to keep them out, or any law which takes away the membership of those who have voluntarily joined it, will be a law violating the right to form an association".

Thus, the right to association would lose meaning unless

W.P.(C)3255/2014 Page 4 "it is held to include within it the right to continue the Association with its composition as voluntarily agreed upon by the persons forming it."

A similar reasoning was adopted later in Asom Rastrabhasa Prachar Samiti and Anr. v. State of Assam & Ors AIR 1989 SC 2126. Therefore, it is for the members of an association- and members only- to decide who should be admitted to the society and under what terms and conditions. That essential part of the right cannot be ceded nor impliedly eroded by clothing a rank outsider- and a statutory authority having no accountability to the society's mechanisms nor even being its member - to decide for it, on this very fundamental issue.

6. It was keeping in mind this truth and principle that K. Shantaraj & Anr v M.L. Nagaraj&Ors1997 (6) SCC 37 held that an Administrator cannot enroll new members of a co-operative society. That decision was followed later in Joint Registrar Co-operative societies v T.A. Kuttappan2000(6) SCC 127 which contains a lucid enunciation of the principle:

"What is necessary to bear in mind is that nature of function or power exercised and not the manner in which it is done. Indeed this Court, while considering the provisions of Section 30-A of the Karnataka Act, which enabled a Special Officer appointed to exercise and perform all the powers and functions of the Committee of Management or any officer of the Cooperative Society (and not merely functions), took the view that the administrator or a special officer can exercise powers and functions only as may be required in the interests of the Cooperative Society. In that context, it was stated that he should conduct elections as enjoined under law, that is, he is to conduct elections with the members as on the rolls and by

W.P.(C)3255/2014 Page 5 necessary implication, he is not vested with power to enrol new members of the society. We may add that a Cooperative Society is expected to function in a democratic manner through an elected Committee of Management and that Committee of Management is empowered to enrol new members. Enrolment of new members would involve alteration of the composition of the society itself and such a power should be exercised by an elected Committee rather than by an administrator or a Committee appointed by the Registrar while the Committee of Management is under supersession. This Court has taken the view, it did, bearing in mind these aspects, though not spelt out in the course of the judgment. Even where the language of Section 30-A of the Karnataka Act empowered a special officer to exercise and perform all the powers and functions of Committee of Management of a Cooperative Society fell for consideration, this Court having expressed that view, we do not think, there is any need to explore the difference in the meaning of the expressions "have power to exercise all or any of the functions of the Committee" in the Act and "exercise all or any of the functions of the Committee" in the Karnataka Act as they are not different and are in substance one and the same and difference in language will assume no importance. What is of significance is that when the Committee of Management of the Cooperative Society commits any default or is negligent in the performance of the duties imposed under the Acts, rules and the bye-laws, which is prejudicial to the interest of the society, the same is superseded and an administrator or a Committee is imposed thereon. The duty of such a Committee or an administrator is to set right the default, if any, and to enable the society to carry on its functions as enjoined by law. Thus, the role of an administrator or a Committee appointed by the Registrar while the Committee of Management is under supersession, is, as pointed out by this Court, only to bring on

W.P.(C)3255/2014 Page 6 an even keel a ship which was in doldrums. If that is the objective and is borne in mind, the interpretation of these provisions will not be difficult."

7. This court therefore holds that whatever be the semantics of the provision, the essential fact, i.e., an Administrator (charged with a limited remit to set right the affairs of the society or to conduct election) cannot encroach upon the right of a co-operative society or its existing members to enroll fresh members. Barring regulatory provisions enacted under the reasonable restrictions clause (Article 19 (4)), which generally deal with public interest controls required to be placed on its functioning, it is doubtful whether such a power can ever be usurped through statute. Therefore, we find no infirmity with the impugned award. The writ petition has to fail and is accordingly dismissed. No costs.

S. RAVINDRA BHAT (JUDGE)

DEEPA SHARMA (JUDGE) FEBRUARY 16, 2016

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