Delhi High Court
Meenu Tomar vs The Registrar, Cooperative ... on 24 May, 2016
Author: Gita Mittal
*IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 22nd April, 2016
Date of decision : 24th May, 2016
+ W.P.(C) 6635/2014, CM Nos.15773/2014 & 15775/2014
MEENU TOMAR ..... Petitioner
Through : Mr. Abhimanue Shrestha,
Adv.
versus
THE REGISTRAR, COOPERATIVE
SOCIETIES & ORS ..... Respondents
Through : Mr. Tarique Siddiqui and
Mr. Vishwendra Verma,
Advs. for R-3.
Mr. S.K. Kaushik , Adv. for
R-4/DCHFC
+ W.P.(C) 8751/2015 and CM No.19324/2015
DELHI COOPERATIVE GROUP HOUSING SOCIETY
LTD. ..... Petitioner
Through : Mr. Tarique Siddiqui and
Mr. Vishwendra Verma,
Advs.
versus
ASHOK SINGH & ORS ..... Respondents
Through : Mr. Rajat Aneja and Ms.
Shifa Nagar, Advs. for R-1
to 9.
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL
HON'BLE MR. JUSTICE I.S.MEHTA
JUDGMENT
GITA MITTAL, J.
1. The present matters relate to the Delhi Co-operative Group
Housing Society Ltd. (hereinafter referred to as 'the society'). The
private parties are admittedly members and flat owners in the said
Society.
2. Before dealing with the rival contentions, we propose to note
some salient facts about the Society. The Society was registered
under the provisions of the Delhi Co-operative Societies Act, 1972
(hereinafter referred to as 'DCS Act') on the 17th of January 1980
with the sanctioned strength of 212 members.
3. It is also an admitted position that on 8th of April 1984, the
society applied to the Delhi Co-operative Housing Finance
Corporation (hereinafter referred to as 'DCHFC') for grant of loan
of `1.5 crores for construction of flats. A loan of `1.26 crores was
sanctioned on 17th November, 1985 pursuant to a loan agreement.
The society also executed a mortgage deed whereby the land
allotted to the society was mortgaged with the DCHFC.
A further loan of `18 lakhs was sanctioned and released to
the society against a supplementary loan agreement and a further
mortgage deed was executed with the DCHFC in November, 1987.
4. It is essential for us to note that out of the total strength of
212 members, the loan was granted for the benefit of only 162
members. The society admits that 50 of its members did not take
any benefit of the loan sanctioned and released by the DCHFC. On
the other hand, these 50 members were beneficiaries of financial
facilities taken by them from the government departments where
they were employed.
5. The private respondents in W.P.(C)No.8751/2015 did not
take any facility from DCHFC. However, Shri P.L. Jain,
predecessor-in-interest of Smt. Meenu Tomar (petitioner in
W.P.(C)No.6635/2014) did take the loan. The loan of some
members, including that of Shri P.L. Jain, was secured by a group
insurance with the Life Insurance Corporation.
6. On 10th of April 1986, the society obtained possession of the
Plot No.74, I.P. Extension, Patparganj, Delhi admeasuring 3.533
acres from the Delhi Development Authority for construction of
212 flats for its members.
7. In 1988, construction of the flats was completed. By a draw
of lots held on the 27th of March 1988, the constructed flats were
allotted to the members. While handing over the charge on the 4 th
of October, 1990 to the newly elected managing committee, the
Secretary of the outgoing Managing Committee duly noted that
construction jobs and fitting of the flats stood completed and keys
of the flats have been handed over to the members.
These facts establish that on these dates, construction of the
flats stood completed.
8. Mr. Rajat Aneja as well as Mr. Abhimanue Shrestha, learned
counsels for the private parties have asserted that this material
factor would clearly show that therefore, after these dates, there
was no occasion for requirement of any additional funds or
diversification of any funds of the Society towards construction
activities for the reason that the same stood completed.
9. We propose to decide the issues pressed before us in the
following manner :
I. Liability of the private members in these petitions
(paras 10 to 18)
II. Misappropriation of Societal funds and
Mismanagement of financial affairs by managing
committees (paras 19 to 25)
III. Redressal action taken by DCHFC and recovery
proceedings (paras 26 to 34)
IV. Resolutions of the Society (paras 35 to 48)
V. Individualisation Scheme (paras 49 to 52)
VI. Recovery from whom? (paras 53 to 63)
VII. Execution of what and against whom?
(paras 64 to 78)
VIII. Legal objection (paras 79 to 80)
IX. Diversification of funds (paras 81 to 87)
X. Objection to the maintainability of the writ petition
W.P.(C)No.6635/2014 under Article 226 of the
Constitution of India on the ground of availability of
an alternate remedy under the Delhi Cooperative
Society Act (paras 88 to 97)
XI. Submission that the DCHFC is having a first charge
over the entire project of the Society (paras 98 to 100)
XII. Challenge to conveyance deed (paras 101 to 104)
XIII. The decision of the General Body Meeting is binding
on all members (paras 105 to 114)
XIV. Conclusion (paras 115 to 120)
XV. Result (para 121 )
We now propose to discuss the above issues in seriatim :
I. Liability of the private members in these petitions
(a) No liability of the private respondents in W.P.(C)
No.8751/2015
10. It is an admitted position before us that the respondents in
W.P.(C)No.8751/2015 are the nine members of the society who did
not take any benefit of the loan taken by the society from the
DCHFC. They had taken financial assistance from their employers
and have duly repaid the same.
11. We are informed that so far as these private respondents are
concerned, most of them are holding title under registered
conveyance deeds in their favour, completing the transfer of all
rights in the flats in their favour.
(b) Why no liability of Meenu Tomar
12. So far as Smt. Meenu Tomar - petitioner in
W.P.(C)No.6635/2014 is concerned, the facts, though undisputed,
are a little truncated, and require to be noted. One Shri P.L. Jain
was enrolled as a member in the society against membership
no.528. Shri P.L. Jain unfortunately expired on the 24 th of April
1988 and his wife, Smt. Bhagwati Devi Jain, as his nominee
became a member of the society. On 7th of April 1988, Smt.
Bhagwati Devi Jain was informed by the society about the
allotment of Flat No.116 in A-1 category of the society against her
membership. An allotment letter dated 1st March, 1989 was issued
in this behalf.
13. As Smt. Bhagwati Devi Jain also expired on 26 th December,
1998, this flat was transferred by the society in the name of her son
- Shri C.P. Jain. This transfer was duly mutated on 11 th January,
2000 in the records of the Delhi Development Authority as well in
his favour.
14. It is also an admitted position that Late Shri P.L. Jain had
taken benefit out of the loan which was sanctioned and disbursed
by the DCHFC. Against this loan, a group insurance was taken
from the LIC.
15. Upon demise of Shri P.L. Jain, the loan amount against the
membership and flat allotted to Shri P.L. Jain was duly settled by
the LIC on 18th May, 1989. This fact stands admitted by the
society in several documents placed before us. The annual report
of the society for the year 2002 notes that LIC had duly settled the
loan account of Shri P.L. Jain. The Society has also placed before
us a list dated 21st December, 2015 of loanee members whose
accounts stood duly settled as full and final which includes the
name of Shri P.L. Jain at Sr.No.127 as having been duly settled by
LIC on 18th of May 1989. The Society also admits this fact in its
counter affidavit filed before us as well.
16. The fact that complete repayment of Shri P.L. Jain's loan
amount stood made was ratified by the Society on 31 st of January
2004 when it issued a no objection certificate in favour of Shri C.P.
Jain clearly stating thus :
"2. He has paid the outstanding dues of the society as
follows :
I. Loan of DCHFC settled.
II. Maintenance charges is paid upto Jan. 2004."
17. Shri C.P. Jain transferred the flat in favour of Smt. Meenu
Tomar on 11th of March 2004 against execution of the documents
as per general practice which inter alia included a General Power
of Attorney; Indemnity Bond; Special Power of Attorney;
Surrender Deed etc. The Society has admittedly duly transferred
the flat in the name of Smt. Meenu Tomar.
18. The factual assertions with regard to the repayment of the
loan by Shri C.P. Jain; issuance of the no objection certificate and
Shri C.P. Jain having sold the flat free from any encumbrance to
the petitioner - Meenu Tomar in the year 2004 have been set out in
paras 2.8 to 2.10 of the W.P.(C)No.6635/2014. The Society admits
these assertions in its counter affidavit.
Based on the above factual position, on 16th of November
2004, a registered Conveyance Deed was duly executed by the
Delhi Development Authority in favour of Smt. Meenu Tomar of
the subject flat completing vesting of title in the property in her
favour.
II. Misappropriation of Societal funds and Mismanagement of
financial affairs by managing committees
19. At this stage, it becomes necessary to note certain
background facts relating to the management of the affairs of the
society, and the resultant liability.
20. On the 24th of September, 1990, the then Secretary of the
Managing Committee - Shri M.C. Gupta handed over charge to a
newly elected managing committee along with a list of loanee
members against whom loan was due. This list does not contain
the name of Late Shri P.L. Jain or any of his legal heirs.
21. It is on record that there was misappropriation of a large sum
of money to the tune of `35,00,000/- by the Managing Committee
of the Society. As a result, while handing over the charge on 24 th
September, 1990 to a newly elected Managing committee, Shri
M.C. Gupta, Founder Secretary of the outgoing Committee gave an
undertaking dated 14th June, 1990 to repay the same.
22. The private parties before us i.e. the members of the society
have heavily relied upon the resolution dated 25th September, 2005
passed in the Annual General Body Meeting of the Society, when
the managing committee headed by Shri D.S. Malik as its
President, resolved to take appropriate action for recovery of this
amount. This resolution is of import and relevant portion is
extracted below :
xxx xxx xxx
Regarding DCHFC loan Mr. Malik, President RWA
requested all member to adopt a resolution so that the
default amount of the Society, if any may be recovered
from defaulters only and others are not pressurised to
part with their money for no fault of their own.
Accordingly, the House adopted the following
resolutions :
In view of the compliance of the two subsequent awards
in respect of DCHFC Ltd. Loan passed against the
Society in the courts of G.G. Saxena and U.R. Kapoor
respectively in the year 1998 and 2002, the present
M.C. resolved that any such member can not be asked
to pay extra amount than declared amount of loan
even after the default by the Society towards payment
of DCHFC loan if :
a) A member if regularly paying the society such
amount conveyed to him by the Society;
b) A member who has made a full and final
payment of loan to DCHFC Ltd.
c) Those who have not taken the loan from
DCHFC Ltd.
d) The MC will recover the amount from the
defaulted members."
Thereafter Mr. Roy raised the point of unrealised
amount of Rs.35 lacs from late Sh. M.C. Gupta. After
discussion the House requested Sh. R.K. Kapoor to take
up the matter with Sh. Angrish so that a claim could be
lodged with the heirs of late Sh. M.C. Gupta and the
same could be pursued. ..."
23. The society thus rightly recognized that any person who had
either not taken the loan or had effected full and final payment of
the loan to the DCHFC could not be burdened with any amount of
loan. Admittedly, no action for recovery of the amount from Shri
M.C. Gupta was taken as well as no claim was lodged against his
legal heirs. On the 6th of December 2009, elections to the
Managing Committee of the Society were held which has
generated much disputes.
The record placed before us establishes that it is this
unrecovered amount with interest thereon which has created the
DCHFC liability.
24. We may also note that the society has written letters dated
11th of October 2009 and 17th December, 2009 to the
Commissioner of Police complaining against the illegal activities
and the said misappropriation of funds by Shri M.C. Gupta
pointing out that the liability of the society for these acts had
escalated to `2 crores as on that date. Having regard to the nature
of the controversy, we may set down paras 3, 7 and 8 of the
complaint dated 17th December, 2009 in extenso which really sum
up the basis of the case of the parties before us as well :
"3. That in July, 1990 late Mr. Gupta had handed
over his charge to Mr. S.C. Angrish as Secretary
alongwith the "Undertaking" dated 14.06.1990 owing
all financial liabilities of DCHFC loan dues and other
deficits pertaining to the account of society besides
other documents.
xxx xxx xxx
7. That Mr. S.C. Angrish kept this undertaking in
his conscious physical possession till date. He neither
handed over it to the next Secretary nor took timely
action to recover the amount of Rs.35.00 lacs from late
Mr. M.C. Gupta. Had this amount been recovered
from him the society would have not been put in
financial loss. This proves that Mr. Angrish was in
league with Mr. M.C. Gupta to save his skin. Para 2nd
of an important message/appeal dated 25.10.1990
circulated by Sh. S.C. Angrish is self explanatory and
incriminating that the said undertaking was handed over
Mr. S.C. Angrish.
8. That Sh. Angrish with dishonest intention
misappropriated the valuable document to cause
wrongful gain to late Mr. Gupta or himself and
wrongful loss to the society. The said amount of
Rs.35.00 lakhs with interest thereon almost reaches
about Rs.2.00 crores till date and on account of that
the society is suffering financial obligation of about
Rs.2.00 crores which has to be repaid to DCHFC Ltd.
which had released loan mentioned above to the society
in the year 1985 to 1987."
(Emphasis by us)
25. There is no dispute at all that no action, civil or criminal, was
taken for recovery of the huge amount of `35,00,000/- or for that
matter to fix the liability, either against Shri M.C. Gupta or against
Shri S.C. Angrish. It is also not disputed that it is this very liability
which had escalated to about `2 crores when the above complaints
were made by the Society to the police. Clearly, persons who took
upon the task of managing the affairs of the society, either
misappropriated the funds of the Society, or shielded them.
Looked at from any angle, they would be guilty of criminal
offences of misappropriation, conspiracy or criminal negligence.
III. Redressal action taken by DCHFC and recovery
proceedings
26. It appears that in the above circumstances, there was a huge
default by the Society of the payment of the loan to the DCHFC
which was constrained to initiate arbitration proceedings under
Section 60 of the DCS Act, 1972. The private respondents in
W.P.(C)No.8751/2015 were not parties to these proceedings
inasmuch as they were not included in the 162 loanee members
against whom the complaint was filed.
27. Mr. Abhimanue Shreshtha, learned counsel for Meenu
Tomar has drawn our attention to the list of 162 members who
were shown as borrowers in these proceedings. The name of either
Shri P.L. Jain, his heirs or for that matter of Smt. Meenu Tomar
does not feature in this list.
28. These arbitration proceedings culminated in the first arbitral
award dated 20th November, 1998 by Shri G.G. Saxena, the learned
Arbitrator, the material extract whereof reads thus :
"As regards non payment of principal amount, interest
or dues in respect of those members who are claimed to
be members by DCHFC Ltd. but allegedly not admitted
by the society, which numbers around 60, defaulting
amount is to be calculated and shown against them and
society shall dig its own records to trace out such
persons and take proper action on the basis of
affidavits submitted by those members and settlement
of accounts at the time of expulsions or resignation of
those members. If present Management Committee
fails to trace out whereabouts of those persons or it is
not possible to settle their accounts, Management
Committee shall resort to proper provision under Rules
and Cooperative law to fix liability on those Secretaries
and Presidents and Management Committee members
who are responsible for accepting resignations of those
members or settling the accounts while inducting fresh
members in view of those persons. However, the
present Management Committee cannot be bailed out
merely by taking the plea that details of those persons
are not available unless it takes either criminal action
or civil action against those persons or those ex-
Management Committee members."
(Emphasis by us)
The Arbitrator had thus in 1998 itself clearly set out the
responsibility of the Society to effect recoveries and take action
against the persons responsible for mis-management of the affairs
of the society.
29. Our attention is drawn to the second arbitration proceedings
initiated by the DCHFC against the society and 162 loanee
members which resulted in a second Arbitral Award dated 21st
May, 2002 by Shri U.R. Kapoor, the learned Arbitrator. This
Award explicitly notes that the loan of Late Shri P.L. Jain had been
settled by the LIC as a death case and that his heirs were not
arrayed as a party. In the Award dated 21st May, 2002, the
Arbitrator has also noted the admission by the Society in his Award
in the following terms :
"4. In the reply it is also stated that LIC has not been
made a party to the proceedings since 10 beneficiary
loaning members had died and five cases have been
settled by LIC and five are still pending. It is also stated
that an earlier award is pending with the Hon'ble High
Court in the case of Mrs. Renu Malhotra v. Delhi
Cooperative Society & Ors. The respondent No.1
submitted list of loaning members, list of members
whose account have been settled and as on 31.1.02 list
of members who have been paying their loan regularly
and the list of defaulters as on 31.1.02. As per this list
there are 17 defaulters."
(Emphasis by us)
The case of Shri P.L. Jain (from whom Meenu Tomar
derives title) was one of the five settled cases which are noted here.
Clearly he was not one of the defaulters of the loan to DCHFC.
30. We find that this is also admitted as a fact by the Society in
its counter affidavit before us.
31. Matters did not end here. Arbitral proceedings were initiated
by the DCHFC which resulted against the Society and only 162
other members yet another time. A third Arbitral Award dated 24th
of April 2009 was passed by Mr. Surjan Singh, Arbitrator under
Section 71 of the DCS Act, 1972. So far as responsibility to settle
its claims is concerned, the Society alone was responsible for
payment to it. In this Award also, the Arbitrator has noted as
follows :
"... Since the loan agreement and other related
documents have been executed between the claimant
and the defendant society hence the defendant society
is solely responsible for making the payment of the
loan dues along with interest etc. to the claimant.
The beneficiary members who have already cleared
there loan dues by depositing the same with the society
or depositing with the claimant directly cannot be
forced to pay any extra amount in default from the
beneficiary members who defaulted in making payment
of their dues in time or to convince all the members to
cooperate with them in coming out of the situation
before them. ..."
(Emphasis supplied)
32. It appears that based on the third Arbitral Award dated 24th
April, 2009, the DCHFC initiated the first recovery execution
proceedings against the Society and the 162 loanee members which
resulted in the issuance of a recovery certificate dated 23 rd June,
2009 for the sum of `2,37,70,006/-. We are informed that
reconciliation of amounts was effected and the amount stands
reduced to `1,68,97,343/-.
33. On 14th January, 2010, the DCHFC issued a second demand
for the reconciled amount of `1,68,97,343/- against the Society.
34. The execution proceedings in respect of the third Arbitral
Award dated 24th April, 2009 resulted in reconciliation of the
accounts and issuance of the second demand for this amount.
There is merit in the contention of the private members/flat holders
that the second recovery proceeding in respect thereof would not
lie.
IV. Resolutions of the Society
35. We may now briefly examine the some decisions taken by
the Society with regard to the recovery of the amounts due to the
DCHFC from members of the Society.
36. Mr. Tarique Siddiqui, learned counsel has also drawn our
attention to the Minutes of the Annual General Body Meeting held
on 25th of October 2009 which has been extracted in the Arbitration
Award dated 16th December, 2011. This extract notes the anguish
expressed by one Dr. C.L. Mehra to the effect that "Shri S.C.
Angrish flat No.70 had promised the residents in a meeting held
on 28.6.2009 that he is in possession of original undertaking of
Rs.35.00 lacs which was given to him by late Shri M.C. Gupta but
later on he denied the commitment. Had the said amount been
recovered at that moment the society would have been got rid of
this liability and every resident would have been breathing in fresh
air and friendly atmosphere with dignity and honour. The
Committee succeeding late Shri M.C. Gupta is entirely
responsible for this lapse." After discussion, it was resolved that
"each flat including that of defaulters has to contribute Rs.1.00 lac
to meet the liability of the DCHFC loan dues. This is in addition to
the recovery of defaulted amount as land and revenue arrears.
Defaulted amount as and when recovered shall be refunded to the
members proportionately, as the case may be. The amount of
Rs.1,00,000/- shall be charged in three instalments i.e. Rs.30,000/-
by 31.12.2009, 2nd instalment Rs.30,000/- by 31.3.2010 and last
one Rs.40,000/- by 30.6.2010."
37. This resolution unequivocally declares that so far as the
payment of loan was concerned, a huge and whopping amount of
`35,00,000/- had to be recovered by the Society from its erstwhile
office bearers for which no steps have been taken. The effect of
the decision of 25th October, 2009 was to burden the persons who
had not taken the loan or repaid the loan with a liability of
`1,00,000/- each.
38. Elections to the Managing Committee were held on the 6th of
December 2009. A Special General Body Meeting was thereafter
called for on the 7th of March 2010 by this Managing Committee.
In this meeting, in an attempt to cover up for the above deliberate
negligence of the Managing Committee, Mr. D.S. Malik for the
first time advanced an explanation that the society underwent in
default of DCHFC loan by diverting the quarterly loan instalments
of June, 1989 and March, 1990 towards the construction money.
Inasmuch as this resolution is relied upon by the society in
maintaining its claim against the private members, we extract
hereunder the relevant portion relied upon by it :
"SPECIAL GENERAL BODY MEETING
xxx xxx xxx
i. It is a hard fact that the society under went in
default if, DCHFC loan dues by directing 2 quarterly
loan instalment of June' 1989 and March' 1990 towards
construction money.
ii. That because of this irregularity the society faced
to meet the demand of DCHFC loan of Rs.2,37,70,086/-
iii. That the printed role of MC after the
reconciliation, the above demand could be reduced to
Rs.1,69,97,343/-.
iv. That the difference of Rs.6872743/- was admitted
by DCHFC and agreed on the demand of
Rs.1,68,97,343/-.
xxx xxx xxx
vii. That as per Individualization Scheme the per flat
amount in finally settled for Rs.1,79,48,814/- (divided)
by 212 flats comes to Rs.84665/- which is
approximately Rs.15000/- less than Rs.10000/- already
resolved in AGM held on 25.10.2009.
viii. That the settle amount does not include the
defaulted amount recoverable from the defaulters in
addition to payable DCHFC.
ix. That the defaulted amount recoverable from the
defaulters shall be equally refunded to the members
except death cases as and when received to the society."
(Underlining by us)
These suggestions were passed in this Special General Body
Meeting.
39. It is noteworthy that the amount payable to DCHFC was not
divided amongst only those members who had availed the facility
of loan and were still owing the money, but amongst the entire 212
members of the society. No reference was made to effect the
recovery of `35,00,000/- from Shri M.C. Gupta or Shri S.C.
Angrish or the heirs of Shri M.C. Gupta. In para No.(viii) and (ix),
it is noteworthy that there is a clear reference to defaulters i.e. the
persons who had not paid the loan amounts due and payable to the
DCHFC. Thus, the liability was sought to be fastened upon
persons who had either not taken the loan or having taken the loan
as Shri P.L. Jain on whose behalf the LIC had paid the same. Most
importantly, no reference stands made to the earlier resolution of
25th September, 2005 which has also not been overruled and binds
the Society.
40. The resolution dated 7th of March 2010 is of no legal
consequence and effect for another reason as well. The elections
dated 6th December, 2009 were subject matter of challenge in the
arbitral proceedings and were set aside by the order dated 9 th July,
2010. On 6th September, 2010, the Registrar of Co-operative
Societies appointed an Administrator for managing the affairs of
the society. The challenge to the appointment of the Administrator
was rejected on 3rd December, 2010 by the Delhi Co-operative
Tribunal. On 13th December, 2010, W.P.(C)No.8297/2010
assailing the order of the tribunal was withdrawn. A review
petition was also filed before the DCT which on 15th of December
2010 was dismissed for non-prosecution.
41. The appointment of the Administrator by the Registrar on
the 16th December, 2010 opened up yet another avenue for
litigation by way of W.P.(C)No.416/2011. The challenge to this
appointment by the society laid before the Financial Commissioner
resulted in an interim order of stay, which proceedings were not
finally heard for a long time.
42. W.P.(C)No.416/2011 with regard to the proceedings before
the Financial Commissioner culminated in an order dated 21st of
January 2011 allowing the writ petition holding as follows :
"10. The Award of the Arbitrator has attained finality
and the Tribunal has clarified the effect of the Award. It
is thus not in doubt that the elections to the earlier
Managing Committee held on 06.12.2009 had been
declared as invalid and thus there was no Managing
Committee in existence. That being the position, no
decision could have been taken on 15.12.2010 after all
these proceedings were over, by the Managing
Committee to hold elections itself. xxx xxx xxx
The order of the Financial Commissioner dated
23.12.2010, in our considered view, shows complete
non-application of mind as he has not even cared to
consider as to how he could have granted a stay in view
of the orders passed by the Tribunal and the High Court
earlier, the effect of which is that the revision petition
filed on behalf of the R-1/Society could not be said to be
maintainable. The members of the erstwhile Managing
Committee of R-1/Society are like any other members
of the cooperative society and thus enjoy the rights only
in that behalf.
11. We thus consider this a fit case to exercise
jurisdiction under Article 226 of the Constitution of
India to dismiss the revision petition itself filed before
the Financial Commissioner and to vacate the order
passed on 23.12.2010 staying the letter of the
Administrator to take over charge of R-1/Society
communicated vide letter dated 22.12.2010 and direct
the Administrator to forthwith take over charge of R-
1/Society. xxx xxx xxx
12. Insofar as the other prayers made in the writ
petition to initiate enquiry into the functioning of R-
1/Society, to hold a special audit or to disqualify
existing members of the Managing Committee of R-
1/Society are concerned, it is for the RCS to take
necessary action in accordance with law.
13. The writ petition is accordingly allowed with
costs in view of the conduct of the Ex-Managing
Committee of R-1/Society and thus the costs quantified
at Rs.10,000/- will be paid by the Ex-President of R-
1/Society Sh. Rishi Dev equally to the petitioners which
he can recover proportionately from other members of
the Ex-Managing Committee who took the decision to
hold elections."
(Emphasis by us)
Thus, costs were imposed on the Society recoverable from
the members of the Ex-Managing Committee. This court has
clearly not only recognised but also unequivocally reinforced the
responsibility and liability of the members of the Managing
Committee for the affairs of the Society.
43. In this background, the reliance by the Society on the
resolution dated 7th of March 2010 is assailed by the private parties
submitting that on that date there was no validly constituted
Managing Committee which could have passed any resolution
legally imposing financial responsibility on the other members of
the society.
44. The Society has submitted that neither the resolution dated
25th October, 2009 nor the resolution dated 7th March, 2010 have
been challenged. However, in view of the judgment dated 21st
January, 2011, the very competence of the Managing Committee
(which called for the meetings in which these resolutions were
passed) stands rejected. As such all its actions are reduced ab initio
illegal. We also find that the earlier resolution dated 25th
September, 2005 wherein the society has clearly decided that the
members who had not taken the loan could not be burdened with
any portion of dues of the loan, , has not even been referred to, let
alone superseded. There are other grounds considered by us
hereafter for which reason as well, no separate challenge is
necessary.
45. Given the gross mis-management with the affairs of the
Society as well as the mis-appropriation of the funds of the Society,
what was the course open to the Society? Was the Society required
to take any action against the members of the Managing Committee
responsible for the illegality qua these amounts or was it open to
the Society to fasten liability thereon upon the members of the
Society?
46. In the present case, it is an admitted position that the
responsibility for the mis-management stood clearly ascertained. It
stood actually acknowledged in writing by the person concerned
i.e. Mr. M.C. Gupta by way of the undertaking given to Sh.
Angrish as noted above. The resolution of the Managing
Committee dated 25th September, 2005 also clearly notes that steps
have to be taken for recovery of this amount. In this background,
the amounts which have been claimed from the members of the
society do not relate to any expenditure incurred for the benefit of
the members or default in payment by members but are actually
amounts which have been misappropriated by the office bearers for
which the society had decided to take action against the person
concerned. The amounts have become due and payable not
because of any default by the members or on account of any
liability incurred upon the society, but because of failure to take the
action despite the specific resolution.
47. In this regard, our attention has been drawn by Mr.
Abhimanyu Shrestha to the pronouncement of the Supreme Court
reported in (1997) 10 SCC 752 Devi Singh v. State of Haryana &
Ors. Some reference to the facts noted in para 2 is important which
is set out hereunder :
"2. The only question is whether the appellant as
President of the Sardarajanti Kalan Cooperative
Agricultural Service Society along with other two
persons, namely, the Secretary and Treasurer, is
liable to account for a sum of Rs 65,726.59. It is an
admitted position that Tara Chand is Ex-Secretary, the
appellant, the Ex-President and Sardara Singh is the
Ex-Cashier. The dispute arose from award proceedings
under the Haryana Cooperative Societies Act. On a
reference made to the Registrar, the matter was
referred to the officer concerned for enquiry and
necessary action. On the basis thereof, after notice to
the parties and conduct of due enquiry, the award came
to be passed wherein it was held that the three officers,
namely, the appellant as President, Tara Chand as
Secretary and Sardara Singh as Cashier were jointly
and individually responsible for the unaccounted sum
of Rs 65,726.59. The Secretary and the Cashier had
allowed the award to become final. The appellant
carried the matter in appeal, which was confirmed; the
writ petition filed consequently stood dismissed. Thus,
this appeal by special leave granted by this Court.
3. Shri Maheshwari, learned counsel for the appellant,
contends that the appellate authority proceeded on the
premise that the appellant had admitted the
misappropriation and accordingly it confirmed the
award. This Court called for the record on perusal
thereof, found that there was no such admission.
Therefore, leave was granted. The appellant having not
admitted the misappropriation, it must be proved that
the appellant was a party thereto. It is argued that in the
absence of such a proof, he cannot be saddled with any
liability for the unaccounted money to the members of
the Society. We find no force in the contention. It is
true that the Registrar, who conducted the enquiry, had
noted the admission. The admission was only in
relation to the joint purchase of a tempo by the three
persons for use as a public carrier and the income
derived therefrom was required to be distributed to the
members of the Society. That does not amount to
admission by the appellant and others that they
misappropriated the amount. It is seen from the
evidence that certain amount, at the rate of Rs 1500 to
each of the members was credited towards purchase of
tempo and there is an admission by the appellant and
others that the tempo was purchased. Once it is proved
that the tempo was actually purchased, the burden is on
the said office-bearers of the society to account for the
profits derived by its use as public carriage. The
finding is that they have not accounted for. It is true
that under the bye-laws of the Society, as placed before
us, the responsibility is of the Treasurer and the
Secretary. But the appellant being the President bears
the overall responsibility. Being the President of the
Society, he owes the collective responsibility with the
Treasurer and the Secretary for its accounting. In the
absence of accounting of the funds, the necessary
inference is that there was improper management of
the institution and thereby they are liable for making
good the loss caused to the Society and the members.
The crime registered against them is in respect of an
offence; but the surcharge proceedings are for
unaccounted money by the officers or the persons
responsible therefor. Being the President of the
Society, the appellant bears the collective
responsibility to have the accounting properly done of
the funds of the Society. The omission thereof
constitutes misappropriation."
(Emphasis supplied)
48. In the present case as well, it was the responsibility of the
members of the Managing Committee to ensure proper accounting
of the funds of the society to ensure that no person was able to
misappropriate the same. Admittedly there was misappropriation
of the money for which an identified office bearer of the society
was admittedly responsible.
V. Individualisation Scheme
49. The Society has staunchly relied on the resolution dated 7 th
March, 2010 passed in the Special General Body Meeting fastening
the liability of `84,665/- on all the 212 flat owners by apportioning
`1,79,48,814/- upon all flats in the society.
This action has been termed as application of the
"Individualisation Scheme" by learned counsel for the society.
50. Unfortunately, this submission is a complete misreading of
the Individualization Scheme which actually is a scheme
formulated by the DCHFC. The DCHFC manual gives an
explanation for the scope and the intendment of the
"Individualisation Scheme" in the following terms:
"The DCHFC started the loaning operation on all India
pattern through a member co-operative Societies by
executing Loan Agreement and Mortgage Deed of the
land of the Society as a security for repayment of the
loan. This system remained in vogue up to 1992-93.
With the economic liberalisation in 1991-1921 and the
problems being faced with the existing system of giving
bulk loan to the societies and irregular recoveries from
them a new concept of individual loaning was
introduced in 1992-93.
The new scheme was broad-based to finance the
members of co-operative group housing societies, the
registrants of DDA's allottees and individuals owning
plots in the approved colonies. Under the said scheme,
the loan is sanctioned to an individual borrower. He is
enrolled as a nominal member alongwith requisite
sureties. In the case of co-operative group housing
societies, though the loan is sanctioned in favour of
individuals by executing Tripartite Agreement by
including society also, the loan is disbursed to the
society and the recovery is made from the individual.
In case of DDA's registrants, payment is made through
Bank Draft directly to the DDA; in case of plot holders,
payment is made directly to him; in case of Power of
Attorney Holders, the payment is made to seller and
recovery is done from individual loanee."
(Emphasis supplied)
51. This scheme came into existence only in the year 1992-93
and was not in existence in 1985 when the loan was disbursed to
the present society or 1987 when additional loan was granted. This
agreement envisages a tripartite agreement whereby the DCHFC
grants a loan to individual members through the society. It
certainly does not permit apportionment of the loan liability
amongst all individual society members irrespective of whether
they took the loan or not as has been done by the resolution dated
7th March, 2010 of Society before us. The individualization
scheme recognises that the loan would be disbursed to the society
on behalf of individual members.
52. The individualization scheme came into existence in the year
1992-93, long after the sanction of the loan in the present case.
There was no tripartite agreement as envisaged under the Scheme
but only a bipartite agreement between the DCHFC which granted
the loan and the beneficiary thereof. The reference to the
impugned demand of the Society as the 'individualisation' scheme
in the instant case is completely misconceived. This is also for the
reason that the society is attempting to recover loan liability from
persons who were not the beneficiary of any financial facility from
the DCHFC and have not entered into any agreement in relation
thereto with it. The Scheme as set out heretofore, does not create
any such liability upon persons who have either not taken any loan
or, if they had availed the facility, the loan stands repaid.
VI. Recovery from whom?
53. The question which arises is whether the DCHFC could have
proceeded against the persons who are private respondents in
W.P.(C)No.8751/2015 with whom it has no privity of contract or
against the petitioner - Meenu Tomar in W.P.(C)No.6635/2014
whose liability has admittedly been cleared by the LIC? The
question which also requires to be answered is whether the society
can utilize the agency of the General Body Meetings or Special
General Body Meetings to create a liability against the persons who
have not utilized the financial facility advanced by the DCHFC? It
is also questioned whether coercive execution proceedings can be
initiated to recover, an amount which is not the subject matter of an
arbitration award, judgment, decree or order.
54. The above narration would show that according to the
DCHFC in its claims, some of the persons who had taken the
benefit of the loan were defaulters in repaying the loan given to it,
compelling it to initiate arbitration proceedings culminating in the
Award.
55. Admittedly the DCHFC initiated the recovery proceedings
pursuant to the recovery certificate dated 23rd June, 2009 in the
year 2009 and having quantified the recoverable amount at
`1,79,48,814/- against the loanee defaulters.
56. On 31st December, 2012, the Society has submitted yet
another list of what it termed as 'defaulting members' to the
DCHFC. These include the private parties before us who
admittedly were not defaulters as per the loan agreement or the
Arbitral Awards. These parties have been so bracketed now only
for the reason that they had refused to comply with the demand of
the Society in terms of the resolution dated 7 th March, 2010 as they
were not beneficiaries of the loan from the DCHFC. These
included the private respondents in W.P.(C)No.8751/2015 as well
as Meenu Tomar (through her predecessor-in-interest).
57. The DCHFC and the Society confabulated and initiated
coercive recovery proceedings including attachment, not against
the persons in the defaulter list before the arbitration but against
those persons who were on the list given by the society who were
"defaulting" in respect of the amounts foisted by a resolution on
them by the Society.
58. The private respondents in W.P.(C)No.8751/2015 (filed by
the Society) raised claims under Section 70 of the DCS Act, 2003,
that the Society was not entitled to recover such amounts claimed
from them by virtue of the resolution dated 7 th March, 2010. These
were treated as arbitral disputes which was referred to arbitration
and culminated in the Arbitral Award dated 16th December, 2011
holding that these private parties were not liable to pay the
apportioned amount of `84,665/- which was being claimed by the
society from them primarily for the reason that they were not privy
to the contract between DCHFC and the Society or between the
Society and the loanee members nor had they undertaken any
liability on behalf of such members. It was therefore, held that the
private respondents could not be burdened to make payment of the
amount under the Individualization Scheme which was "being
grossly misinterpreted by the respondent society".
59. This Arbitral Award was assailed by the society by way of
Appeal No.21/2012 before the Delhi Co-operative Tribunal which
came to be rejected by the impugned order dated 16th July, 2015.
The Society has assailed the Arbitral Award dated 16th December,
2011 as well as the order dated 16th July, 2015 of the Delhi Co-
operative Tribunal by way of W.P.(C)No.8751/2015 herein.
Action taken against Meenu Tomar, owner of Flat No.116
60. DCHFC also initiated execution proceedings (premised on
Society's list of 2012) against Shri C.P. Jain and the Society
registered as Recovery Case No.1089/2009-10/958. In this case,
on 19th August, 2014, the Assistant Collector passed an order for
attachment of her Flat No.116. The order notes that an amount of
`1,06,02,489/- as on 31st March, 2005 as well as interest thereon is
recoverable from the Delhi CGHS Ltd. as arrears of land revenue
for realisation of the "decretal amount". It clearly also states that
the said "judgment debtor society furnished a list of defaulter
members as on 31st December, 2013 wherein it is indicated that a
sum of Rs.1,50,816/- is due against you" (Shri C.P. Jain).
Admittedly, only the Society was the judgment debtor in
accordance with law.
61. By this order, attachment of the Flat No.116 alleging that the
same was belonging to the judgment debtor "Shri C.P. Jain and
Smt. Meenu Tomar" was being attached.
62. Meenu Tomar submitted a reply to Mr. Ravi Kumar Jain,
Assistant Collector (who had issued the summons to her) placing
the copies of the documents in her favour including the NOC
issued by the Society; the registered Conveyance Deed and other
relevant documents. On 3rd April, 2014, the petitioner-Meenu
Tomar submitted further clarification before the Assistant
Collector.
63. A stand was taken by the DCHFC that Meenu Tomar had
failed to produce any NOC from the decree holder/mortgagee i.e.
DCHFC.
VII. Execution of what and against whom?
64. Execution proceedings pre-suppose a valid determination, if
not an adjudication, of a legal liability against a person. The
Society is unable to point out before us any such determination or
adjudication qua the private parties including Smt. Meenu Tomar
before us.
65. So far as execution proceedings are concerned, Section 105
of the DCT Act and Rules 1 to 4 of the Rules framed thereunder
are relevant. For expediency, these provisions of the statute and
the relevant Rules are set out hereunder :
"105. Execution of orders, etc.
Every decision, award or order duly passed by
the Registrar or the arbitrator or the Tribunal, or the
Government under section 31, section 32, section 33,
section 66, section 71, section 104, section 110, section
112, section 114, section 115, section 116 or any other
provisions of this Act shall, if not carried out -
(a) where the decision, award or order provides for
the recovery of money, be executed according to
the law for the time being in force relating to the
recovery of land revenue :
Provided that an application for the recovery of
any sum in the manner aforesaid shall be made to
the Collector and shall be accompanied by a
certificate signed by the Registrar or by any
person subordinate to him and empowered by the
Registrar in this behalf;
(b) in any other case be executed by the Registrar or
any person subordinate to him and empowered by
the Registrar in this behalf, in the same manner as
is provided in the case of a civil court by the Code
of Civil Procedure, 1908 (5 of 1908)."
"124. Procedure for execution by the Collector
(1.) In case any decision, award or order providing for
the recovery of money is executable by the Collector
under clause (a) of section 105 of the Act, it shall be
executed by a Revenue officer empowered by the
Collector by-general or special order to do so
(hereinafter referred to as the "Recovery Officer" which
shall include his successors and assigns) in accordance
with the provisions of the Punjab Land Revenue Act
(Act XVII of.1887)- which shall include any other Act
for the time being in force in the National Capital
Territory of Delhi relating to recovery of land revenue,
the rules, orders or regulations issued there- under from
time to time (hereinafter referred to as the "Land
Revenue Code").
(2.) In case any decree holder desires to have the decree
executed through the Collector under clause (a) of
section 105 of the Act, he shall apply to the Registrar in
Form no. 27 for the issue of a certificate for the
recovery of the decretal amount as arrears of land
revenue. The application shall be delivered in the office
of the Registrar personally and a receipt obtained or sent
by registered post.
(3.) Soon after the receipt of the above application, the
Registrar shall call for original records and shall check
up if the decision or the award had been given in
accordance with the Act and the rules and shall check
up contents of the application with reference to the
relevant original records of the case. If the Registrar is
satisfied about the correctness of the award or decision
and the application, the Registrar or any officer
authorised by him shall issue certificate in Form no. 28
to the decree holder. In case the Registrar is satisfied
that the decision or award is in contravention of the
provisions of the Act and Rules, the Registrar may refer
the arbitration case back to the arbitrator for necessary
rectification(s).
(4.) Within a period of sixty days after the issue of the
certificate referred to in sub-rule (3), the decree holder
shall apply in Form no. 29 to the Recovery Officer,
delivered in person and a receipt obtained or sent by
registered post. The application shall be accompanied
by:
(a) A certified copy of the award;
(b) original certificate issued by the Registrar under
sub-rule (3) ; and
(c) receipted pay-in-slip for deposit of execution fee in
the Office of the Registrar.
Provided that the Registrar may extend the period of
sixty days after hearing the reasons for delay by the
decree holder.
xxx xxx xxx"
(Emphasis by us)
66. A bare reading of the statutory provisions makes it amply
clear that it is only "decision, award or order", if passed by the
"Registrar/Arbitrator/Tribunal/Government" in exercise of
statutory powers, is executable under Section 105 of the DCS Act.
Admittedly in the present case there is neither any decision
nor award or any order by any of these authorities, execution
whereof is sought.
67. Furthermore the "decree holder" must comply with the
mandate of Rule 124 of the DCS Rules. There is a clear reference
to a "decree holder" in sub-rule 2 of Rule 124 set out above.
68. No such compliance is placed before us.
69. As per Rule 124(4) of the DCS Act, an execution application
can be filed only within 60 days after the issue of the certificate
referred to in sub-rule (3) of Rule 124. NO such certificate was
obtained. This was also admittedly not done. There is no
compliance with the mandate of Rule 124.
70. We find that Rule 124(5) refers to "suit" filed against a
"judgment debtor". Where is the suit against the private
respondents or against Meenu Tomar or, for that matter, Shri C.P.
Jain?
71. So far as the cooperative societies are concerned, we find
that both the expressions "defaulters" as well as "judgment
debtors" are also clearly defined in Rules 2(1)(e) and (k) of the
Delhi Co-operative Societies Rules, 2007. To facilitate
consideration, we set down hereunder the statutory definitions of
these expressions which read thus :
"2. Definitions.- (1) xxx xxx xxx
xxx xxx xxx
(e) "Defaulter" means any co-operative society,
member or other person committing default in payment
of loan installment, land money, construction money
or annual subscription payable as provided in the
byelaws of co-operative society for which due notice
for payment has been served on the member/cooperative
society or an award has been passed for recovery of
such sum;
xxx xxx xxx
(k) "Judgment-debtor" means any co-operative society
against which or any person against whom a decree has
been passed;
xxx xxx xxx"
72. It needs no elaboration that an execution petition envisages
adjudication by some authority or forum against the judgment
debtor which has not been complied with by the person against
whom it is filed. Neither Mr. Vishwendra Verma nor Mr. Tarique
Siddiqui, learned counsels on behalf of the society are able to point
out any order against the private respondents or Meenu Tomar (or
her predecessor-in-interest) requiring her to make payment.
73. Can it be said that the private respondents are "defaulters"
within the meaning of the expression under Rule 2(1)(e)
aforestated; the society is not alleging default in "payment of a loan
instalment, land money, construction money or annual subscription
provided under the bye-laws of co-operative society" and against
these private persons. The attachment can be issued only for
execution of dues ascertained in arbitration or by any authority
vested with the power to so determine. There is no award which
has been passed for the recovery of any dues with regard to which
the attachment order has been made.
74. Mr. Rajat Aneja, learned counsel for the private respondent
nos.1 to 9 in W.P.(C)No.8751/2015 has placed strong reliance on
our decision rendered by one of us (Gita Mittal, J.) on the 7 th of
May 2015 in decided W.P.(C)No.1454/2014, Praveen Mahajan &
Ors. v. Registrar Cooperative Societies & Ors. We set out
hereunder the relevant paras of this judgment in extenso for
expediency and clarity :
"1. W.P.(C)No.1454/2014 has been filed by 24
persons who are admittedly regular and bonafide
members of the Neelkamal Cooperative Group Housing
Society Ltd. - respondent no. 2 herein who had been
allotted flats which they are occupying for a
considerable period.
2. W.P.(C)No.2363/2014 has been filed by 23
persons who are admittedly regular and bonafide
members of the Neelkamal Cooperative Group Housing
Society Ltd. - respondent no. 2 herein who have been
allotted flats on different dates which they are
occupying for a considerable period.
xxx xxx xxx
6. The twenty four petitioners before us in
W.P.(C)No.1454/2014 are those members of the
respondent no.2 society who did not take any amounts
whatsoever from the amounts advanced by the
respondent no.4. This position is undisputed. The
names of these twenty four persons do not feature in the
list of 67 members of the society who are shown as the
persons on whose behalf the respondent no.2 society had
availed the loan of `51.52 lakhs.
xxx xxx xxx
11. The respondent no. 2 is categorical that the loan
amount was never apportioned towards any liability
which enured to the petitioners in W.P.(C)No.1454/2014
before us.
12. So far as the status of the borrower is concerned,
it is trite that a person can be a defaulter only if he had
availed a financial facility which he had not repaid.
xxx xxx xxx
14. It is noteworthy that no liability at all was
attributed by the society to the present petitioners. No
notice of these proceedings was issued to the petitioners.
There is also no admission by these petitioners to the
effect that they were liable for any amount to the
respondent no. 2 or respondent no.4.
xxx xxx xxx
16. Pursuant to the said order, it appears that the
Lieutenant Governor of Delhi appointed respondent no.3
herein (an employee of the respondent no. 4) as the
Assistant Collector Grade I/recovery officer. The
petitioners before us have objected that it was the
respondent no.3 who had been prosecuting or defending
all litigation on behalf of the respondent no.4 in respect
of the loan advanced to the respondent no.2 and
consequently ought not to have been appointed as the
recovery officer. It is submitted that no person can be a
judge in his own cause, least of all be responsible for
execution of such orders as well.
17. Despite the aforenoted position, subsisting on
record, the respondent no. 3 proceeded to pass an order
dated 14th August, 2013 at the instance of the defaulting
members of the respondent no.2 society. It appears that
the respondent no. 3 thereby apportioned the liability
of the defaulting members towards several members of
the society as the petitioners who have either not
obtained the loan at all or had duly repaid their dues at
the appropriate time in accordance with demands
raised by the respondent no.2 i.e. the petitioners in
these two writ petitions. In fact, the petitioners assail
this order on grounds of malafide. It has been
vehemently contended by Mr. Rajiv Dutta that this
order was for the benefit of the chronic defaulters and
was a malafide attempt to coerce the petitioners into
making payments of loans for which they were not
responsible. It is further submitted that the respondent
no.3 had acted negligently inasmuch as a huge liability
was being attributed to the petitioners which had
accumulated merely because no effective action for
recovery of amounts against the defaulting members
had been pursued by the respondent no.4.
xxx xxx xxx
22. So far as the observation that all parties were bound
by the orders passed by this court are concerned, the
same cannot be faulted. However, the petitioners had
raised specific objections to the recovery action initiated
by the respondent no. 3 against persons who had never
availed the loan or having taken the same had duly
repaid it. These objections had to be decided in
accordance with the specific directions made by the
court.
23. So far as the attribution of liability against
petitioners is concerned, the same is completely
without jurisdiction and basis. Before us Mr. Rajiv
Dutta has placed a list of 67 members who have actually
availed the loan and not paid their dues. The same list
has been placed by the respondent no. 4 as well. The
original record has been produced by the respondent no.
3 before us. There is not even the remotest suggestion
anywhere that the petitioners in W.P.(C)No.1454/2014
availed even a penny out of the loan advanced by the
respondent no.4 or got any benefit thereunder. So far as
the petitioners in W.P.(C)No.2363/2014 are concerned,
the respondents have verified the no dues certificates
after payments were made by these petitioners. In this
background, so far as the petitioners in the writ petitions
are concerned, no recovery action for the loan which
was applied for by the respondent no.2 from the
respondent no. 4 can either be initiated or be
proceeded with against the petitioners. The respondent
nos. 3 and 4 shall remain bound by this position
recorded by us."
(Emphasis by us)
75. This judgment was assailed by the Society by way of
SLP(C)No.25877/2015 entitled Delhi Cooperative Housing
Finance Corporation v. Dinesh Sharma & Ors. which came to be
dismissed by the Supreme Court vide its order dated 24th
September, 2015.
The judgment in Praveen Mahajan had, therefore, attained
finality.
76. No award or decree or order has been passed against either
against private respondents in W.P.(C)No.8751/2015 or against
Meenu Tomar or her predecessor-in-interest Shri C.P. Jain.
77. Neither of them fall within the definition of either
"defaulter" or "judgment debtor". Clearly, the execution
proceedings against these persons are completely without
jurisdiction.
Even if they could be held liable for paying the amount
demanded by the Society by virtue of the resolution dated 7th
March, 2010, such persons obviously were not 'defaulters' so far as
the loan of the DCHFC was concerned. The DCHFC has no
authority at all to proceed against the persons with whom it has no
privity of contract and have not taken any loan. If at all, only the
Society could proceed under the DCS Act for recovery of dues, if
legally payable dues to it.
It is submitted by Mr. Vishwendra Verma, learned counsel
for the Society that so far as the Recovery Officer is concerned, he
has no jurisdiction to question a decree or a certificate. It is
submitted that a recovery certificate issued by the Registrar under
Section 84 of the DCS Act read with Rule 98(2) of the DCS Rules,
2007 is conclusive of the matter. Mr. Verma has further contended
that by virtue of Rule 151 of the Rules, it is not open to the
Recovery Officer to examine the legality or correctness of the
decree and certificate.
78. So far as the submissions premised on the bindingness of a
decree and certificate are concerned, there can be no possible
dispute thereto. However, in the instant case, the question is even
more basic. We have repeatedly called upon Mr. Verma, learned
counsel for the society to show us any arbitral award or a decree
against Meenu Tomar - the petitioner or Shri C.P. Jain, her
predecessor in interest. As noted above, he has been unable to
point out the same. Nothing turns on this submission of the
Society as well.
VIII. Legal objection
79. Mr. Abhimanue Shreshtha, learned counsel appearing for
Meenu Tomar has taken strong objection to the fact that the
execution against his client has been filed by one Shri Ravi Kumar
Jain who was an Account Officer of the DCHFC. It is urged that
he had also prosecuted the arbitration proceedings on its behalf.
The submission is that therefore, his appointment as a Recovery
Officer is completely without jurisdiction.
80. In this regard, our attention is drawn to the Award dated 24 th
April, 2009 wherein it is mentioned that R.K. Jain, Account Officer
has appeared as a representative of DCHFC. The copy of the
summon issued by Shri R.K. Jain as Assistant Collector to Shri
C.P. Jain seeking to recover the disputed amount on behalf of the
DCHFC. For the view we have taken, it is not necessary to go into
this aspect.
IX. Diversification of funds
81. Mr. Tarique Siddiqui, learned counsel for the Society has
urged that the flats were under construction between the period
1989-90 and that the loan instalments paid by 157 loanees, instead
of being deposited with the DCHFC, were utilized by the society
for construction purposes. The submission is that there were no
defaulters of payment of the loan. It is submitted that therefore,
this amount which was diverted for construction purposes for the
benefit of all members of the Society has to be recovered from all
the members of the society and not from loanees alone.
82. Our attention has been drawn to the award dated 21st of May,
2002. The contentions of the Society have been noted in para 10 of
the Award. No such plea was pressed before the Arbitrator in the
first arbitral proceedings which culminated in the Award dated 20 th
November, 1998. It was also not raised in the second proceedings
resulting in the Award dated 21st of May 2002 or Even in the third
arbitral proceedings ending in the Award dated 24th April, 2009 it
was not advanced. Each time, the Award was passed against the
Society alone.
83. Our attention is also drawn to the resolutions of the General
Body dated 29th of July, 1989 wherein the Secretary had informed
the House that, members who had taken the loan from the DCHFC,
did not pay interest in time and that the society had to face
difficulty in payment of this interest of loan resulting in the Society
becoming a defaulter and having to pay interest for the quarter
ending June, 1989. A resolution was passed to the effect that the
members would have to pay interest on the loan on the 15 th of
every month, failing which penal interest of 24% would be
charged. In this meeting, a committee of expert of three members
was appointed to give a report with regard to the maintenance
expenditure. There was no reference to divergence of any amounts
received by the Society towards the DCHFC loan.
84. Again in the meeting held on 12th of July 1990, reference
was made only to non-payment of instalments of call money.
85. Mr. Rajat Aneja, learned counsel for respondent nos.1 to 9 in
W.P.(C)No.8751/2015 has placed before this court a copy of the
report dated 17th October, 1989 of the three member committee
captioned "Accounts Committee" which examined the contracts
and the demands which were made or required to be made with
regard to the construction activity. There was no reference at all to
any diversification of funds.
86. We have noted above that after completion of construction,
admittedly the draw of lots was held on 27th March, 1988 and the
allottees were permitted to occupy the allotted flats. In this
background, there would be no occasion for utilizing amounts
recovered between 1989-90 towards construction purposes. Nor is
it noted in any resolutions of the Society. There is not a single
document to support the diversification claim being made by the
Society before us. On the contrary, the same is falsified by the
admitted facts noted above.
87. No defence that any instalment money was diversified for
the purposes of construction was placed before the Arbitrator either
in any of the arbitration proceedings. The plea of diversification is
being asserted as a malafide and false explanation for the liability
being foisted on members who did not take any loan. The plea has
to be rejected.
X. Objection to the maintainability of the writ petition
W.P.(C)No.6635/2014 under Article 226 of the Constitution
of India on the ground of availability of an alternate
remedy under the Delhi Cooperative Society Act
88. Appearing against Meenu Tomar in W.P.(C) No.6635/2014,
Mr. Vishwender Verma has vehemently urged that, by way of this
petition under Article 226 of the Constitution of India, this
petitioner has challenged only the recovery proceedings. He
contends that the petitioner has available to her an equally
efficacious alternate remedy by way of a revision petition under
Section 116 of the Delhi Cooperative Societies Act, 2003. In
support of this submission, reliance is placed on the
pronouncements of the Supreme Court reported at (2004) 1 SCC
603 Commissioner of Income Tax & Ors. V. Chhabil Dass
Agarwal and (2015) 6 SCC 733 Union of India & Ors. V. Major
General Shri Kant Sharma & Anr.
89. In Union of India & Ors. V. Major General Srikant, the
Supreme Court was concerned with the issue as to whether the
right of appeal under Section 30 of the Armed Forces Tribunal Act,
2007 against an order of the Armed Forces Tribunal would bar the
jurisdiction of the High Court under Article 226 of the Constitution
of India regarding matters relating to the Armed Forces. Section
30 of the Armed Forces Tribunal Act, 2007 confers the right of a
statutory appeal against an order of the Armed Forces Tribunal
with the leave of the Tribunal under Section 31 of the Act. In this
background, the court was of the view that the High Court
entertaining the petition under Article 226 of the Constitution of
India against an order passed by the Armed Forces Tribunal under
Sections 14 and 15 of the Act bye-passing the machinery of statute
provided under Sections 30 and 31 of the Act, could result in the
likelihood of an anomalous situation for an aggrieved person
praying for relief from the Supreme Court. It was observed that by
virtue of the statute, a person aggrieved could seek leave to
challenge the same before the Supreme Court. If the order of the
Tribunal was assailed before the High Court under Article 226 and
resulted in an adverse adjudication, the person aggrieved could not
challenge both orders - one passed by the Armed Forces Tribunal
and the other by the High Court in one joint appeal. It was
consequently held that the High Court would not be justified in
entertaining the petition under Article 226 of the Constitution of
India.
The Supreme Court has noted that the power of judicial
review vested in the High Court under Article 226 is one of the
essential features of the Constitution and any legislation cannot
override or curtail the jurisdiction of the High Court. Of course, it
was cautioned that where a statutory forum is created by law for
redressal of grievances, a writ petition should not be entertained
ignoring the statutory disposition. This of course was subject to the
alternate remedy being effective and efficacious.
90. In (2004) 1 SCC 603, Commissioner of Income Tax & Ors.
v. Chhabil Dass Agarwal, the Supreme Court has reiterated the
well settled principles thus in para 15 :
"15. Thus, while it can be said that this Court has
recognised some exceptions to the rule of alternative
remedy i.e. where the statutory authority has not
acted in accordance with the provisions of the
enactment in question, or in defiance of the
fundamental principles of judicial procedure, or has
resorted to invoke the provisions which are repealed,
or when an order has been passed in total violation of
the principles of natural justice, the proposition laid
down in Thansingh Nathmal case [AIR 1964 SC
1419], Titaghur Paper Mills case [Titaghur Paper
Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 :
1983 SCC (Tax) 131] and other similar judgments that
the High Court will not entertain a petition under
Article 226 of the Constitution if an effective
alternative remedy is available to the aggrieved person
or the statute under which the action complained of
has been taken itself contains a mechanism for
redressal of grievance still holds the field. Therefore,
when a statutory forum is created by law for redressal
of grievances, a writ petition should not be entertained
ignoring the statutory dispensation."
(Emphasis supplied)
91. We may also note certain precedents placed before us by Mr.
Abhimanue Shrestha, learned counsel for Smt. Meenu Tomar. We
find that in (1998) 8 SCC 1, Whirlpool Corporation v. Registrar of
Trademarks, Mumbai & Ors. on the objection under
consideration, the principles have been authoritatively and
succinctly reiterated. We set out in extenso the relevant extract of
this judgment :
"14. The power to issue prerogative writs under Article
226 of the Constitution is plenary in nature and is not
limited by any other provision of the Constitution. This
power can be exercised by the High Court not only for
issuing writs in the nature of habeas corpus,
mandamus, prohibition, quo warranto and certiorari for
the enforcement of any of the Fundamental Rights
contained in Part III of the Constitution but also for
"any other purpose".
15. Under Article 226 of the Constitution, the High
Court, having regard to the facts of the case, has a
discretion to entertain or not to entertain a writ petition.
But the High Court has imposed upon itself certain
restrictions one of which is that if an effective and
efficacious remedy is available, the High Court would
not normally exercise its jurisdiction. But the
alternative remedy has been consistently held by this
Court not to operate as a bar in at least three
contingencies, namely, where the writ petition has
been filed for the enforcement of any of the
Fundamental Rights or where there has been a
violation of the principle of natural justice or where
the order or proceedings are wholly without
jurisdiction or the vires of an Act is challenged. There
is a plethora of case-law on this point but to cut down
this circle of forensic whirlpool, we would rely on
some old decisions of the evolutionary era of the
constitutional law as they still hold the field.
xxx xxx xxx
20. Much water has since flown under the bridge, but
there has been no corrosive effect on these decisions
which, though old, continue to hold the field with the
result that law as to the jurisdiction of the High Court
in entertaining a writ petition under Article 226 of the
Constitution, in spite of the alternative statutory
remedies, is not affected, specially in a case where the
authority against whom the writ is filed is shown to
have had no jurisdiction or had purported to usurp
jurisdiction without any legal foundation."
(Emphasis by us)
92. The challenge to an order of the High Court dismissing writ
petitions filed by the appellant in view of the availability of an
alternate remedy of a statutory appeal against an order of
assessment by the sales tax officer, was set aside by the Supreme
Court vide its order in (1998) 4 SCC 90, Paradeep Port Trust v.
Sales Tax Officers & Ors. for the reason that interpretation of sub-
clause (d) of Clause (29-A) of Article 366 of the Constitution and
the taxability of the transactions in question was involved.
93. Reliance has also been placed on the pronouncement in
(1987) 4 SCC 525, Dr. (Smt.) Kuntesh Gupta v. Management of
Hindu Kanya Maha-Vidyalaya, Sitapur (U.P.) & Ors. wherein a
challenge was laid to an order of dismissal from service of a
principal of a college by the vice-chancellor. The court held that a
writ petition under Article 226 of the Constitution against such
order was maintainable notwithstanding the existence of an
alternate remedy under Section 68 of the U.P. State Universities
Act observing thus :
"12. ......It is well established that an alternative
remedy is not an absolute bar to the maintainability
of a writ petition. When an authority has acted wholly
without jurisdiction, the High Court should not refuse
to exercise its jurisdiction under Article 226 of the
Constitution on the ground of existence of an
alternative remedy. In the instant case, the Vice-
Chancellor had no power of review and the exercise
of such a power by her was absolutely without
jurisdiction. Indeed, the order passed by the Vice-
Chancellor on review was a nullity; such an order
could surely be challenged before the High Court by
a petition under Article 226 of the Constitution and,
in our opinion, the High Court was not justified in
dismissing the writ petition on the ground that an
alternative remedy was available to the appellant under
Section 68 of the U.P. State Universities Act."
(Emphasis by us)
94. The above precedents recognise that the availability of an
alternate remedy is not an absolute prohibition to maintainability of
a writ petition and that the same is a rule of convenience. It is also
clearly stated that in order to bar a remedy under Article 226, the
alternate remedy has to be effective and efficacious. The Supreme
Court has itself drawn exceptions to the prohibition if the action
complained of in the writ petition is contrary to statutory provision
or is wholly without jurisdiction. It is thus well settled that in these
two eventualities, availability of an alternate statutory remedy shall
not bar maintainability of a writ petition under Article 226 of the
Constitution of India. We have to test the maintainability of the
writ petition on these well settled principles.
95. In the present case, Meenu Tomar has laid a challenge to the
very initiation of the recovery proceedings by way of the execution
petition in which an order dated 19th August, 2014 was passed.
96. We have found that recovery proceedings have not been
initiated in respect of any liability determined by any award or
decree or order but for enforcement of a liability claimed by the
society under the resolution dated 7th March, 2010.
97. We have held that there has been no determination of
liability of Meenu Tomar in arbitration proceedings or in any other
legal proceedings. A recovery certificate has been issued without
compliance of Section 105 of the DCS Act or the mandatory
requirement under the statutory rules. As such the entire execution
proceedings against Meenu Tomar and attachment of her flat are
completely without jurisdiction. The recovery officer has claimed
to exercise power under statute which he does not have. The action
of the respondents being contrary to statutory provision and
without jurisdiction is certainly amenable to correction by exercise
of writ jurisdiction by this court. Clearly, in the facts and
circumstances of the case, the objection to the maintainability of
this writ petition is devoid of legal merit and justification. The
same is hereby rejected.
XI. Submission that the DCHFC is having a first charge over
the entire project of the Society
98. It has been vehemently urged by Mr. S.K. Kaushik, learned
counsel appearing for DCHFC that his client had a first charge over
the entire project and therefore, any right, title or interest of any
other person is subject to the rights of the DCHFC.
99. In this regard, Mr. Rajat Aneja, learned counsel for the
private respondent in W.P.(C)No.8751/2015, has drawn our
attention to the letter dated 11th of September 1986 communicating
the following decision of the Board of Directors of the DCHFC to
all societies after considering the difficulties being faced by the
employees of public sector undertakings and banks etc. who raise
loans for their flats in group housing societies against the security
of mortgage of their flats :
"The matter was examined by the Board of Directors in
their meeting held on 28th Aug, 1986 and it was decided
that as and when, such cases are referred to the DCHFS
by the group housing societies DCHFS shall have no
charge, lien or encumbrances over the flat of a such
member in the group housing society although the land
of the society would always remain mortgaged with the
DCHFS. We request you to circulate this among the
members for their benefit and submit specific details in
respect of such member in the enclosed draft letter."
(Emphasis by us)
100. The objection of Mr. S.K. Kaushik, learned counsel
appearing for DCHFC is therefore, completely misplaced in view
of the above decision of the DCHFC communicated as back as on
11th of September 1986.
XII. Challenge to conveyance deed
101. An objection never ever before pressed has been placed by
Mr. S.K. Kaushik, learned counsel for DCHFC is to the effect that
the conveyance deed conveying the flat absolutely and exclusively
in favour of the flat owners (as Meenu Tomar and some of the
private respondents in the other writ petition) was void ab initio
and that it was in violation of the mortgage deed.
102. The copy of the mortgage deed dated 17 th November, 1985
and a further mortgage deed dated 18th November, 1987 executed
between the DCHFC and the Society, have been placed before us.
A description of the property which has been mortgaged is
contained in Clause 2 of the mortgage deed. We find that freehold
property has been clearly excepted out of the purview of the
mortgage.
103. It is an admitted position before us that there are valid and
binding Conveyance Deeds executed by the DDA in favour of
Meenu Tomar and most of the other private parties regarding their
flats in the Society. The DCHFC has never challenged the
conveyance in favour of these private parties by even a
representation or a communication to any authority. The same has
never been challenged in any legal proceedings in accordance with
law. The back-handed challenge during the course of oral
submissions before us is of no avail. It does not in law result in
cancellation of duly registered conveyance deeds.
104. We also find that in view of the exception contained in
Clause 2 of the mortgage deed (set out above), clearly these flats
being freehold are not the subject matter of the mortgage.
Therefore, the plea of the DCHFC before us is also contrary to the
terms of the mortgage deed.
XIII. The decision of the General Body Meeting is binding on all
members
105. Both Mr. Vishwendra Verma as well as Mr. Tariq Siddiqui,
learned counsels for the Society have vehemently submitted that
the decision of the General Body stands accepted by all members
except by Meenu Tomar and other private parties. This submission
finds endorsement by Mr. S.K. Kaushik, learned counsel for
DCHFC as well. This very plea was also the main plank of the
Society's case before the DCT.
106. It is contended on behalf of the Society that decisions taken
by General Body Meeting and the Managing Committee are also
binding on all members in view of Sections 30 and 88 of the DCS
Act.
107. Learned counsels for the Society have also placed reliance
on Section 39 of the DCT Rules to submit that the decision of even
a Managing Committee whose election has been successfully
challenged cannot be overruled.
108. Mr. Tarique Siddiqui, learned counsel for the Society has
placed reliance on the pronouncement of the Supreme Court
reported at (1998) 6 SCC 39, Myurdhwaj Cooperative Group
Housing Society Ltd. v. Presiding Officer, Delhi Cooperative
Tribunal & Ors. in support of his contention that the decision of
the General Body Meeting is supreme and would bind all members.
In this case, the court was concerned with the legality of a decision
by the General Body of the Society that only those who had
deposited a minimum amount specified by the General Body
towards the construction of the first phase of the flats would be
accommodated in the first phase of the construction on the five
acres of land and others would be accommodated on the
construction to be raised on additional land in second phase. This
decision was challenged by the respondent no.3 who was one of the
original members of the Society who had not paid the entire
requisite minimum amount who contended that his membership
seniority was the main criteria for seniority for the allotments,
irrespective of default of payment made by any member. The
submission of the defaulting member was that there was no
provision except Rule 36 of the Rules under which the Society
could have dealt with his case and that, under that Rule, a
defaulting member could only be expelled following due procedure
laid therein for his default. Therefore, the General Body
Resolution directing the defaulters to be accommodated in second
phase was illegal. This contention was rejected up to the Supreme
Court observing as follows :
"9. xxx xxx xxx The question is, can it be said
that the society has no option except to allot strictly by
seniority rule in spite of such members defaulting in
making the payment. If power could be said to be
limited then it means, let seniors default, let juniors wait
as long as seniors do not pay but in no case cancel or
even modify preferences in their allotment. In our
considered opinion, such an interpretation would be
squeezing the power of the general body of a society
within the limits of Rule 36 belying all the objectives of
the cooperative spirit of the Act. Thus by this, if this be
so, either bear with the defaults of such members at the
cost of non-defaulting members or expel them from
membership. Such an interpretation would be too harsh
even on senior members if the only recourse could be
the latter. Even a senior member may have financial
stresses resulting into default of not being able to pay
for a flat even the minimum fixed amount within the
stipulated time, then will it be fair to expel him? The
option has to be left with the society to deal with
different situations as may arise from time to time.
Taking away this discretion and binding it to exercise
powers under Rule 36 would be interpreting against
the very objective of the Act, leaving no option with the
cooperative society. The cooperative society is formed
with laudable objective to inculcate spirit to work in a
group freely for rendering benefit to its members
through the cooperative contributions. This is only
possible by conferring wide range of discretion on a
society, not restricting its discretions by interpreting a
law otherwise. This has to be for furthering the cause
of cooperative movement. That is why various rigours
of laws including taxes and fees are diluted for
enhancing the spirit of the cooperative movement. We
have no hesitation to hold that the power of society
cannot be circumvented within Rule 36 in a case of
default by its member of any of his dues. Such an
interpretation would be contradictory to the very
cooperative spirit or objectives of the creation of
cooperative societies. xxx xxx xxx"
(Emphasis by us)
109. After these observations, in the following para 11, the court
had concluded the parameter within which the power of the Society
was circumscribed :
"11. We find that Section 28 of the Act vests final
authority in the general body of a cooperative society.
It has wide powers including residuary power except
those not delegated to any other authority under the
Act, the rules and its bye-laws. In other words, its
power, if any, is only restricted by the Act, the rules,
the bye-laws and any order having force of law. This
exercise of power by the general body which is in issue
cannot be said to be excluded by Rule 36."
(Emphasis supplied)
110. This judgment was rendered in the context of the challenge
noted by us heretofore. The issue which was involved was with
regard to the options available to the Society against its defaulters.
The court has authoritatively laid down that the general body had
wide powers limited only by "Act, Rules, Bye-laws of the Society
and any order having the force of law". There was no issue before
the court of foisting liability created by managing committees upon
persons who were not defaulters for the defaults of the members of
the Managing Committee of the Society as in the present case.
111. Mr. Tarique Siddiqui, learned counsel for the Society has
also placed the Division Bench pronouncement of this court
reported at 217 (2015) DLT 1 (DB), Balraj Singh Malik v. Govt.
of NCT of Delhi & Anr. In this case, the court has noted the
question raised before it in para 7 to the effect that whether a
member of a cooperative society could challenge a decision taken
in the General Body Meeting of the Society. The court had
observed that the principle of courts not interfering in the internal
affairs of the Society or a Club would be attracted. This
observation cannot be read without reference to the factual matrix
which was before the court. The petitioner in this case was not a
member of the Society but was merely a tenant in a flat of one of
the members. The court had held that this tenant fell in a distinct
class as against members of the Society who had contributed to the
cost of land and construction of the Society and were occupying
the flats allotted to them. As such, it was held that the General
Body of the respondent Society which was permitted by Rules to
levy a higher rate of maintenance charges on tenants of flats in
cooperative society could not be said to be inequitable. This
judgment has no application to the factual matrix of the present
case.
112. Reliance has been placed by Mr. Verma, learned counsel, on
an order dated 18th May, 2010 in W.P.(C) No. 3384/2010 Dr. N.S.
Chawla v. Delhi Cooperative Group Housing Society. The order
placed before us was rendered in the facts of the case. The order of
two pages placed before us does not set out the complete factual
narration. It is not clear from the order with regard to what were
the nature of the dues being apportioned between the members who
were occupants of flats and what was the status of the member who
was disputing his liability. It is also not clear as to what were the
circumstances in which the amounts became due.
113. We have also perused the order dated 6th May, 2013 in
W.P.(C) No. 281/2013, Sh. Inderjeet Seth & Ors. v. The Registrar
of Cooperative Societies. This writ petition was filed by members
of the respondent no.2-society who were willing to clear any
outstanding on account of the loan availed by the society from the
bank. There was no issue of mis-management or mis-appropriation
of amounts of the society as in the present case. The order does not
lay down any binding principle of law.
114. Before us, learned counsels for the Society are unable to
source the power of the General Body of the Society to create such
liability to any provision of the statute, the rules, the Bye-Laws of
the Society or any lawful order. We are unable to hold that there is
any absolute proposition of law that each and every decision of the
General Body Meeting must bind the members, irrespective of its
legality.
XIV. Conclusion
115. We therefore, conclude that neither the General Body of the
society nor its Managing Committee have any authority to fasten or
create liabilities which cannot be fastened by law or to burden the
liability on a member which he had never incurred. A person who
had never taken the benefit of a financial facility from the DCHFC
cannot be burdened with default liability for the facility which was
taken for the benefit of other specific members. Decisions illegally
taken cannot be foisted on his clients taking the shelter of
Sections 30 and 88 of the DCT Act as these statutory provisions do
not vest legality in decisions which have no basis in law. There
exists no privity of contract between DCHFC and those members
(or their successors) who have never taken any loan or financial
benefit from or through DCHFC. It was so held in Praveen
Mahajan.
116. It is open to any member of the Society to volunteer to
accept such liability or to make payment, even if he/she had not
taken the loan. However, such payment cannot legally compel or
bind such members/persons who had not taken the loan or had
repaid their loan, if they were not agreeable to incurring the
liability. It cannot also bind their successors-in-interest, unless
they were willing to make such payment.
117. It is the prime responsibility of the Managing Committee to
diligently discharge its duties and responsibilities, especially to
ensure financial discipline. Mismanagement and misappropriation
of the finances of the Society cannot be permitted or tolerated at
all. Liability for the same as well as failure to discharge its duties
and responsibilities, remains that of the Managing Committee.
118. In the decision dated 16th of July 2015 impugned in
W.P.(C)No.8751/2015, the Delhi Cooperative Tribunal has rightly
held that none of the statutory provisions enabled even the General
Body of the co-operative society to override the settled principles
of law.
119. The private parties have been compelled to engage in
fruitless and pointless litigation by the Society before the several
forums as detailed above. The private respondents some of whom
were old and retired did not have enough means to engage a lawyer
and we were compelled to appoint an amicus curiae to assist us.
Instead of pursuing claims against powerful members of the
managing committee, hapless flat owners have been victimised
with unlawful demands and coercive attachments. The Society
must be burdened with costs of this litigation.
120. We also record the flawless assistance rendered by Mr.Rajat
Aneja, Amicus Curiae in the matter. His preparation was thorough
and presentation impeccable in a case where he was rendering pro
bono service. But for him, our adjudication through the
meandering facts and red herrings drawn by the Society as well as
the DCHFC may not have been possible.
XV. Result
121. We consequently, direct as follows :
(i) W.P.(C)No.8751/2015 filed by the Society is hereby
dismissed.
(ii) All proceedings in Recovery Case No.1089/2009-10/958
which are the subject matter of challenge in W.P.(C)No.6635/2014
initiated by the DCHFC and/or Delhi Co-operative Group Housing
Society Ltd. against Smt. Meenu Tomar or her predecessors-in-
interest (Shri P.L. Jain, Smt. Bhagwati Devi Jain and Shri C.P.
Jain) in respect of Flat No.116 seeking recovery of amounts shall
stand quashed.
(iii) The order of attachment dated 19th August, 2014 passed by
the Assistant Collector, Grade-I against the petitioner - Smt. Meenu
Tomar in W.P.(C)No.6635/2014 shall stand set aside and quashed.
W.P.(C) No. 6635/2014 is, therefore, allowed.
(iv) The Society shall pay costs of litigation to each of the private
respondents in W.P.(C) No. 8751/2015 which are quantified at
`2,500/- each. The total of this amount shall be paid to Mr. Rajat
Aneja, Amicus Curiae within six weeks from today.
(v) The Society shall pay costs of `5,000/- to Smt. Meenu
Tomar (petitioner in W.P.(C) No. 6635/2014).
(vi) The matter shall be placed before the Registrar (Appellate)
on 30th August, 2016 for reporting on payment of costs.
(vii) The costs paid as at Sr.Nos. (iv) and (v) above shall be
recovered by the present Managing Committee from the members
of the Managing Committee of the Society as on 7th March, 2010.
In view of the above, the pending applications do not survive
for adjudication and are disposed of.
GITA MITTAL, J
I.S.MEHTA, J
MAY 24, 2016
aj
