Delhi High Court
Sanjay Bajaj vs Registrar Cooperative Societies on 28 March, 2016
$~3&4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 28.03.2016
+ W.P. (C) 2908/2014, CM APPL.6024/2014
SANJAY BAJAJ ..... Petitioner
versus
REGISTRAR COOPERATIVE SOCIETIES ..... Respondent
W.P. (C) 3641/2014
GOPAL BANSAL & ANR ..... Petitioners
versus
REGISTRAR OF COOPERATIVE SOCIETIES & ANR
..... Respondents
Appearance: Mr. Sanjay Kumar Pathak with Ms. Komudi Kiran
Pathak, Mr. Sunil Kr. Jha and Ms. Shreya Kasera, Advocates for
petitioner in W.P.(C)2908/2014.
Mr. C. Hari Shankar, Sr. Advocate with Mr. S. Sunil and Mr. N.
Jagdish, Advocates for petitioners in W.P.(C)3641/2014.
Mr. Gursharan Singh, Advocate for respondents with Mr. Ashok
Kumar, Asst. Registrar, in W.P. (C) 2908/2014.
Mr. Naushad Ahmad Khan, Standing Counsel (Civil), GNCTD with
Ms. Astha Nigam, Advocate for Resp-1/RCS in W.P.(C)3641/2014.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
S.RAVINDRA BHAT, J. (ORAL)
1. These two writ petitions urged common grievances. The
petitioner in W.P.(C) 3641/2014 is a member of the Belur
Cooperative Group Housing Society Ltd. (respondent in the
proceedings). The petitioner in W.P.(C)2908/2014 is a member of
W.P.(C)2908 & 3641/2014 Page 1
the Chinar Cooperative Group Housing Society Ltd.
2. The facts in both cases are brief; criminal proceedings were
initiated against both petitioners - who are members of the respective
Cooperative Group Housing Societies. Consequent upon
investigation, in the case of Sanjay Bajaj, member of Chinar
Cooperative Group Housing Society, charges were framed; however,
the criminal proceedings were stayed by the Supreme Court. In the
case of Gopal Bansal, the petitioner, a member of the Belur
Cooperative Group Housing Society, charges have not yet been made.
Their grievance is that the Registrar of Cooperative Society ("RCS")
has refused to process and forward their names for consideration and
eventually allotment of a flat constructed by it, to the DDA. The RCS
relies upon the policy/decision of the Lieutenant Governor ("LG") in
respect of 26 Societies dated 17.10.2011. The same is extracted
below: -
"However the member and other office bearers of CBI
investigated societies who have been charge-sheeted by CBI
shall not get the benefit of such regularization and their names
shall not be sent to DDA till the criminal cases pending against
them are finally decided as in the case of other CBI
investigated CBI Societies"
3. It is argued by the writ petitioners that the directions sought to
be relied upon by the Registrar cannot be applied blindly and that it is
applicable only in the cases of members of Societies who were given
the benefit of draw of lots wherever there was a self draw. In the
present case, however, no "self draw" was conducted and the
petitioners claim to be entitled to allotment of a flat on the strength of
W.P.(C)2908 & 3641/2014 Page 2
their memberships. Learned counsel also relies upon the Delhi
Cooperative Societies Act and the Rules framed thereunder to submit
that barring Rule-90, which expressly stipulates that such members
who indulge in any irregularity in respect of draw of lots are not
permitted to contest election in any office in the Society, and there is
no disqualification. Counsel relies upon Section 22 and Rule 20.
4. Counsel for the respondents, on the other hand, submits that
having regard to the large scale irregularity - in some cases even
suggestive of criminality - a conscious approach has been adopted.
Consequently, the impugned Circular was issued in public interest.
Section 22 and Rule 20 which are relevant for the purposes of these
proceedings read as follows: -
Rule-20 OF THE DELHI CO-OPERATIVE SOCIETIES
RULES, 2007
20. Disqualification of membership
(1). No person shall be eligible for admission as a member of a
co-operative society if he:-
(a) has applied to be adjudicated an insolvent or is an
undischarged insolvent; or
(b) has been sentenced for any offence other than an offence of
a political character or an offence not involving moral
turpitude and dishonesty and a period of five years has not
elapsed from the date of expiry of the sentence, or 16
(c) In the case of membership of a co-operative housing society,
(i) owns a residential house or a plot of land for construction of
residential house in any of the approved or un-approved
colonies or other localities in the National Capital Territory of
Delhi, in his own name or in the name of his spouse or any of
W.P.(C)2908 & 3641/2014 Page 3
dependent children, on lease hold or free-hold basis or on
power of attorney or on agreement for sale: Provided that
above clause shall not be applicable,
(a) in case of co-sharers of property whose share is less
than 66.72 sq. metres of land; or if the residential
property devolves on him by way of inheritance;
(b) in case of a person who has acquired property on
power of attorney or through agreement for sale and on
conversion of the property from leasehold to freehold on
execution of conveyance deed for it, if such person
applies for the transfer of membership of the housing
society concerned;
(ii) deals in purchase or sale of immovable properties either as
principal or as agent in the National Capital Territory of
Delhi; or
(iii) his spouse or any of his dependent children is a member of
any other cooperative housing society.
(2). Notwithstanding anything contained in the rules or the
bye-laws of the co- operative society, if a person becomes, or
has already become a member, subject to any disqualification
specified in sub-rule (1), he shall cease to be a member from
the date when the disqualifications were incurred. However,
before disqualifying a member, the Registrar shall give an
opportunity of personal hearing to the concerned member and
the society.
(3). A person who ceases to be a member of a co-operative
society under sub-rule (2), shall not be entitled to exercise
rights of memberships or incur liability as member with effect
from the date of order passed by the Registrar referred to in
sub-rule (2) but as from the date he becomes a creditor of the
co-operative society in respect of the amount due to him on
account of paid up share capital, deposit, cost of land deposited
or any other amount paid by him to the co-operative society as
its member. As from the date of his ceasing to be a member of
W.P.(C)2908 & 3641/2014 Page 4
the society under sub-rule (2), the amount standing to his credit
shall be paid to him by the co-operative society within three
months and if the co-operative society is already under
liquidation, the amount due to him will be credited as a debt
due to a third party from the co-operative society.
(4). If any question as to whether a member has incurred any of
the disqualification referred to in sub-rule (1) arises, it shall be
referred to the Registrar for decision. The decision of the
Registrar in this behalf shall be final and binding on all
concerned. The Registrar shall not delegate this power to any
other person appointed to assist the Registrar.
SECTION-22 OF THE DELHI CO-OPERATIVE SOCIETIES
ACT, 2003
22. (1) No person shall be admitted as member of a
co-operative society except the following, namely -
(a) an individual competent to contract under section 11
of the Indian Contract Act, 1872 (9 of 1872);
(b) any other co-operative society;
(c) the Government;
(d) a firm, a joint stock company, or any other body
corporate constituted under any law; and
(e) such class or classes of persons or association of
persons as may be notified by the Government in this
behalf :
Provided that the provisions of clause (a) shall not apply
to an individual seeking admission to a co-operative
society exclusively formed for the benefit of students of a
school or college :
Provided further that no individual shall be eligible for
admission as a member of any financing bank or federal
W.P.(C)2908 & 3641/2014 Page 5
co-operative society except as provided in clause (m) of
section 2.
(2) Notwithstanding anything contained in sub-section
(1), the Government may, having regard to the fact that
the interest of any person or class of persons conflicts or
is likely to conflict with the objects of any co-operative
society or class of co-operative societies by general or
special order, published in the official Gazette, declare
that any person or class of persons engaged in or
carrying on any profession, business or employment
shall be disqualified from being admitted, or for
continuing as member or shall be eligible for
membership only to a limited extent of any specified
co-operative society or class of co-operative societies, so
long as such person is or such persons are engaged in or
carrying on that profession, business or employment, as
the case may be."
5. The petitioners have relied upon two orders of the Supreme
Court dated 05.12.2008 (S.P. Saxena v. Registrar, Cooperative
Society & Ors.) and a later order of 31.03.2009 (in the same case).
The Court had referred the entire issue to a Committee constituted by
this Court and permitted the respondent (i.e., the members, who are
facing criminal proceedings) to be considered for purposes of
allotment; the relevant portion of the order reads as follows: -
"Accordingly, let this matter be listed on 5th February,
2009. Apart from usual service, let notice be served, in
addition, by way of dasti.
In the meantime, the Committee constituted by the High
Court in the impugned judgment, shall not proceed and
the respondents will be entitled to continue to process
with the applications made for allotment of flats under
W.P.(C)2908 & 3641/2014 Page 6
Rule 90 of the Delhi Cooperative Societies Rules, 2007,
but shall not make any final allotment till the disposal of
this matter. Pursuant to this order, the Rule 90
Committee shall also consider the petitioner's
application for allotment."
6. The order of 31.03.2009 confirmed the previous order even
while disposing of SLP in the following manner: -
"On 5th December, 2008, when the special leave petition
was initially taken up for consideration and notice was
issued, we had observed that as some of the respondents
had not been served, we were not in a position to dispose of
the same. In fact, an ad-interim order was made on that
date, which in effect, virtually disposed of the special leave
petition.
Now when the parties have been duly served, we make the
said interim order absolute. The special leave petition is
disposed of accordingly.
This order will also govern SLP(C) No. 512 of 2009, where
the same order was passed. Consequently, the process of
allotment shall continue."
7. This Court had thereafter on 12.09.2013 in a subsequent writ
petition filed by the same litigant S.P. Saxena (W.P.(C)5588/2013)
directed as follows: -
"The first prayer in the present Writ Petition is for issuance of
a writ, order or direction in the nature of certiorari thereby
quashing/setting aside the minutes of the meeting dated 11th
August, 2010 recorded by the Committee constituted under
Rule 90 of the Delhi Cooperative Societies Rules, 2007 in so far
as the same relate to the refusal by the said Committee to
recommend the name of the Petitioner to DDA for allotment
and consequently declare the order dated 26th July, 2013 as
W.P.(C)2908 & 3641/2014 Page 7
null and void and inoperative. The second prayer of the
Petitioner is for a direction to the Respondent No.1 to
recommend the name of the Petitioner to DDA for holding
draw of lots for allotment of a draw in favour of the Petitioner.
On the last date of hearing we had issued notice to the
Respondent No.1, Registrar of Cooperative Societies and
directed him to be present in person today. The Registrar is
present in person today and states that in view of the orders of
this Court and of the Hon'ble Supreme Court dated 5th
December, 2008 passed in CC No.15738/2008 which orders
were made absolute on 31st March, 2009, the application made
by the Petitioner for allotment of flat shall be considered under
Rule 90 of the Delhi Cooperative Societies Rules, 2007 and the
name of the Petitioner in case the Petitioner is found eligible,
will be recommended for allotment to DDA.
Learned counsel for the Petitioner states on instructions from
the Petitioner who is present in Court today that the Petitioner
is satisfied with the aforesaid statement made by the Registrar
Cooperative Societies since the final allotment has been stayed
by the Hon'ble Supreme Court.
In view of the aforesaid statement of the Registrar, Cooperative
Societies which is taken on record, nothing further survives to
be considered in the instant petition, which is accordingly
disposed of."
8. This Court is of the opinion that the tenor of the impugned
notification/order dated 17.10.2011 clearly suggests that the allotment
of flats to members in the 26 listed societies where self draws were
conducted was a subject matter of consideration. The L.G. exercising
powers under the Act directed that the self draw would not be
regularised in the cases of those charge-sheeted by the CBI. The
entire impugned order clearly states that it is only in the cases of self
W.P.(C)2908 & 3641/2014 Page 8
draw where the issue of regularisation arises. For purposes of that
benefit, the names of the members - who were given allotment
otherwise than in accordance with the Act and Rules - would not be
considered if any of them are charge-sheeted. However, one cannot
infer or deduce that the said order is per se applicable to all situations.
In other words, if a member who is otherwise qualified is entitled to
be considered in accordance with the provisions of the Act and Rules
and is not subjected to any of the disqualification set out in either
Section 22 or Rule 20 (particularly Rule 20 (i) (b) which talks of
conviction in criminal proceedings as a bar, the entitlement to be
considered in a draw of lots cannot be ruled out at all. This Court is
fortified by the conclusion further on account of the fact that that Rule
90 spells out only one consequence, i.e., that the concerned individual
is not permitted to contest the elections. In other words, barring a
conviction after completed proceedings in a duly conducted criminal
trial, a member who is merely charge-sheeted cannot be precluded
from participation in the draw of lots. Any other interpretation
would be contrary to the Act and even the Rules. It is well settled
that even the rule making authority cannot exceed the parent
enactment. In this case, the rule making authority clearly envisioned
only one circumstance, i.e., disqualification upon conviction of a
member. Clearly, that situation has not arisen and some of the
members, i.e., the present petitioners are named in a charge-sheet. In
the case of one petitioner apparently even charges have not been
framed.
9. For the above reasons, the petitions have to succeed. The
W.P.(C)2908 & 3641/2014 Page 9
respondent/Registrar of Cooperative Societies is directed to process
the claims of the petitioners for consideration of allotment in
accordance with law.
10. The writ petitions are allowed to the above extent.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
MARCH 28, 2016
/vikas/
W.P.(C)2908 & 3641/2014 Page 10
