Neeraj Jain vs The Registrar Of Cooperative ...
2017 Latest Caselaw 2766 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                        RESERVED ON: 10.03.2017
%                                       PRONOUNCED ON: 30.05.2017

+              CM APPL.5172/2015, 17009/2015, 27393/2015 & 5305/2017
               IN W.P.(C) 5785/2012
NEERAJ JAIN                                                 ..... Petitioner
                       Versus

THE REGISTRAR OF COOPERATIVE SOCIETIES THROUGH ITS
AUTH. OFFICER AND ORS.                    ..... Respondents

               REV.PET.558/2016, CM APPL.47499/2016, 47500/2016,
               47501/2016, 47502/2016 & 6295/2014 IN W.P.(C) 6906/2012
JAGBIR SINGH KALRA AND ORS.                                 ..... Petitioner
              Versus
REGISTRAR COOPERATIVE SOCIETIES AND ORS.                  ..... Respondents

Appearance: Ms. Monika Arora, Advocate.
Mr. Manoj Sharma, Advocate for applicants in W.P.(C) 5785/2012.
Ms. Mini Pushkarna, Standing Counsel for North DMC with Ms. Anushruti
and Ms. Vasundhara Nayyar, Advocates in both matters.
Mr. Bhrigu Dhami, Advocate for petitioner no.14 in W.P.(C)6906/2012.
Mr. Arun Birbal, Advocate for DDA with Mr. Sanjay Singh, Advocate, in
W.P.(C) 6906/2012.
Mr. Fanish K. Jain, Advocate for non-applicants in W.P.(C) 6906/2012.

CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
S.RAVINDRA BHAT, J.

1. In these proceedings, review is sought of a judgment and order dated 7th November 2016, disposing off a batch of writ petitions (which had been

W.P.(C) 5785 & 6906/2012 Page 1of 14 preferred by the contesting respondents, hereafter called the "writ petitioners"; they were referred to as Petitioners, or as "formerly expelled members" in the main judgment). The review petitioners (who were the private respondents, in the writ petition) complain that their rights are adversely affected by the said judgment, and seek its review, arguing that several vital aspects were not considered.

2. Briefly the facts are that the Maitri Co-operative group housing society (hereafter "the society") constructed flats upon the land allotted to it by the Delhi Development Authority (DDA) in accordance with the procedure prescribed for the purpose by the Registrar Cooperative Societies [hereafter "the Registrar"]. There were 99 constructed flats on 10.08.1988, for which a draw of lots was conducted for 69 flats. The Registrar did not conduct any other draw of lots in accordance with the prescribed or approved procedure. In the meanwhile, the Society had expelled about 22 members on various grounds, which had to be approved by the Registrar under the Delhi Cooperative Societies Rules ("the Rules"). On 16.08.1994, after hearing the parties, the Society and the expelled members, the Registrar directed the expulsion as unjustified and, therefore, without authority of law. The Financial Commissioner upheld the order of the Registrar and dismissed the revision proceedings. The office bearers of the society at that time thought it appropriate to challenge the order disapproving the expulsion and the order of the Financial Commissioner; accordingly, the Society filed W.P.(C) 2890/1995. Another writ petition, i.e. W.P.(C) 5398/1997 was filed during the pendency of the society's writ petition by one Savitri Jain

W.P.(C) 5785 & 6906/2012 Page 2of 14 [hereafter "Savitri"], who had succeeded before the Registrar and the Financial Commissioner.

3. During pendency of the said writ petitions (filed by the society), several individuals- some including the review petitioners, were inducted by the Society as members and given possession of flats. The procedure adopted was contrary to the procedure prescribed, because the Registrar was not a party to the allotment. For a valid allotment, the Society had to furnish a list of eligible members that requires verification by the Registrar after which the draw of lots is conducted in the presence of the Registrar or his nominee in the Society's premises or other agreed premises and in the presence of the representative of the DDA. Flouting these norms, possession of 22 flats was given to the subsequently inducted members.

4. This Court, on 17.04.2009, by its judgment, upheld the order of the Registrar as confirmed by the Financial Commissioner, holding that the expulsion of 16 members was invalid. The Court also disposed of the pending writ petition filed by Savitri for the implementation of the Registrar's order. Since the dismissal of that writ petition was inadvertent, the review proceedings initiated on 16.07.2010 [R.P.313-314/2009 (in W.P.(C) 5398/1997)] was allowed. The Court directed that the said proceedings, i.e. W.P.(C) 5398/1997 should be heard in the normal course.

5. On 21.07.2010, the Court virtually allowed the claim in W.P.(C) 5398/1997, when it observed as follows:

"The next question which, thus, arises as to how this order is to be given effect to. In our considered view, there can be no doubt that in

W.P.(C) 5785 & 6906/2012 Page 3of 14 view of the restoration of the membership of the petitioners a fresh seniority list would have to be prepared as per the original membership. We are also informed that there is only one authentic draw of lots held under the supervision of DDA on 10.8.1988.

The Registrar, Co-operative Societies to carry out the necessary exercise of drawing up of the seniority list within two (2) months from today and the current management of the Society will give all assistance.

Needless to say that if the Society still does not give the requisite assistance, that aspect can be brought to the notice of the Court as it would amount to violation of our direction. On the fresh seniority list being prepared and it being worked out as to how many flats are available for allotment, the Registrar, Co-operative Societies will forward the necessary papers to the DDA for holding a draw of lots and the DDA will carry out the exercise within one (1) month thereafter.

Needless to say that if any persons have been put in possession of any flats in the mean time contrary to the aforesaid seniority list, they would have to surrender possession."

6. Contempt proceedings were initiated by the erstwhile expelled members who had succeeded in W.P.(C) 5398/1997 in which an order was made on 15.11.2011, following directions were issued:

"By judgment dated 17.04.2009 delivered in W.P(C) 2890/1995, the Division Bench of this Court had upheld the membership of respondent nos.1 and 4 to 18 (sixteen, in all) in that writ petition. It is not in dispute that these 16 members were also originally registered as member of the society in question. The restoration of their membership would, therefore, relate back to their original date of enrolment. Since their membership has been restored, there is no

W.P.(C) 5785 & 6906/2012 Page 4of 14 question of the Registrar of Co-operative Societies seeking to verify their membership at this stage. These 16 members and the 69 members who were made allotments in the year 1988 by the DDA would rank senior to all others. The purpose of determining seniority of the members at this stage is to find out who, amongst the members, are first entitled to be considered for being accommodated in the society flats. There is no question of disturbing the seniority of the 69 members and the 16 members, as aforesaid. There inter se seniority is not necessary to be determined, as the number of flats in the society is 99, and they add up to 85. Determination of their inter se seniority would be an academic exercise with no purpose being served. The Registrar of Co-operative Societies is, therefore, not required to determine the inter se seniority of the 69 + 16 = 85 members, since their number, aggregating to 85, is less than the number of flats available for allotment i.e. 99.

The question of drawing up the inter se seniority is relevant only qua the other members, apart from the said aforesaid 85 members. There is competition amongst them, as the members who rank senior from No.s 86 to 99 would be entitled to be considered for allotment. The Registrar of Co- operative Societies may now carry out the exercise only in relation to these other members, and not in relation to the aforesaid 85 members. The Administrator is directed to provide the relevant records to the Registrar of Co-operative Societies in relation to these other members. The other members (apart from the 85 members, as aforesaid) are also directed to co- operate with the Registrar of Co-operative Societies and produce the documents on which they wish to place reliance, to establish their inter se seniority. In case the documents are not produced by these members, the Registrar of Co-operative Societies may draw adverse inference. The seniority list be compiled positively within the next two months. List for compliance on 02.02.2012."

W.P.(C) 5785 & 6906/2012 Page 5of 14

7. In the above background, the writ petitioners initiated the present round, i.e. W.P.(C)5785/2012 & 6906/2012 arguing that despite the orders of the Court in W.P.(C) 5398/1997 and in the contempt proceedings, effective steps had not been taken to implement the court's directions and rather the Registrar and all the authorities have dragged their feet, resultantly even though the petitioners' membership and seniority have been restored, they did not derive any advantage from it and those in illegal possession of the flats continue there. In these circumstances, the Court was asked to pass appropriate orders ensuring that vacant possession is handed to those entitled to it. The petitioners argued that though their primary aim is to secure restitution and ensure that the flats, which should have been allotted to them- instead of which those premises were illegally given to those in possession, they had also sought for drawing of seniority and holding of fresh allotments; in addition they sought for direction to construct more flats. They submitted that though the society faced adverse orders for over 22 years and those orders were upheld more than 7 years ago, there has been no restitution; instead the previous orders of this court have shown an entirely different direction. The writ petitioners had submitted that after the filing of the petition, various verification exercises were conducted; in this process, out of the original 16 formerly expelled members, the details and papers relating to 5 could be verified; consequently, the number of members who succeeded before the Registrar in 1994 is now only 5. In these circumstances, the seniority of those among the 22 members who are to make way can be worked out independently; the management should thereafter finalize arrangements to ensure that those who are to be evicted are in fact evicted.

W.P.(C) 5785 & 6906/2012 Page 6of 14

8. The writ petitions were in effect allowed, by the judgment dated 7th November 2016. The operative directions in the said judgment are as follows:

"25. This Court is of opinion that the formerly expelled members are to be handed over the flats, which shall be vacated by the nine newly added members. Further, all the newly inducted members should bear the cost of construction of nine additional flats and the additional funding towards extra costs at 2013 rates are to be borne by the four petitioners in WP (C) 106/2013. In the light of this, the following directions are hereby issued:

(a) A draw shall be held within four weeks from the date the 26 members deposit the money as per direction (c) under the supervision of the Registrar of Cooperative Society and DDA. We direct that instead of getting all the 22 flats vacated before allotment to 9 members, the flat numbers of the 22 newly added members only shall be included in the draw of lots: of these the appropriate categories of flats (12 in the Higher Income group (HIG) and 10 in the Lower income group-LIG), according to entitlement of the nine previously expelled members, shall be allotted.

(b) This draw shall determine the flat numbers of the nine flats to be allotted to the erstwhile-expelled members from the appropriate categories (i.e. HIG and LIG). The occupants of flats so allotted/chosen, (i.e. the present occupants of nine flats in the appropriate categories, from the 22 newly added members) shall, vacate their flats within six months from the date of this order so as to facilitate the handing over of these flats to the nine members to whom the flats stand allotted as per the draw of lots.

(c) Before the conduct of the draw of lots, each of the 22 said individuals and the four erstwhile members, (who had filed WP (C)

W.P.(C) 5785 & 6906/2012 Page 7of 14 106/2013) - i.e. 26 individuals shall deposit `4,50,000/- within three months from today, with the Administrator/Registrar. This amount shall be kept in a separate deposit, to be exclusively used for construction of 9 additional flats to be allotted according to the appropriate category, amongst the 9 evicted individuals. Any shortfall in the amount required for construction, shall be borne by the four erstwhile members, (who had WP (C) 106/2013) in equal shares and in case of surplus money, the same shall be equally distributed amongst the four petitioners of W.P.(C) No. 106/2013. This would result in balancing the equities and complying with the order in WP 106/2013. The flats so constructed shall simulate and be identical to the flats originally allotted by the society to its members, i.e., as per the old sanctioned plan of the Society of HIG and LIG flats. In case any of the 22 members currently occupying the flats fail to deposit the money within the stipulated period, their flat/flats shall be considered vacant and Society shall immediately take vacant possession of the same. In case any of the petitioners in W.P.(C) No. 106/2013, fail to comply with this order, they shall stand debarred from participating in the draw.

(d) The Administrator/society shall contemporaneously take up the issue of building of 9 additional flats, with the concerned Municipal Corporation, which is directed to decide the application having regard to building norms applicable in that regard, sanction necessary plans etc. in accordance with law within the next 4 months. While carrying out such exercise, the society as well as the Municipal Corporation shall keep in mind that the final sanctioned plans shall be identical to that of the other flats in the society.

(e) Upon completion of construction of the nine additional flats another draw similar to the one indicated in direction (a) shall be conducted to ensure that allotment is made thereof, to the 9 evicted individuals as per the category of flats, they were occupying before eviction."

W.P.(C) 5785 & 6906/2012 Page 8of 14

9. The review petitioners (in RP 558/2017, filed in WP 6906/2012) argue that the main judgment should be recalled as it overlooks vital and necessary facts. It is argued on their behalf by Ms. Monika Arora, learned counsel, that the directions of this Court (in para 25, requiring the review petitioners to pay further amounts and vacate the flats occupied by them) has failed to consider the fact that all the 22 newly inducted members have already paid the entire amount of ` 1,60,000/- and ` 2,40,000/- as cost of construction for the allocation of their L.I.G. and H.I.G. flats respectively.

Learned counsel also stated that the review petitioners had, additionally paid ` 8,500/- towards land cost and `5,100/- as share money. On the other hand, the erstwhile expelled members, i.e., the petitioners made only part payments of the required amount necessary for the allocation of the flats.

10. It is also highlighted that the judgment- of which review is sought, is at variance with the order dated 12/08/2005 passed by the Division Bench of this Court in W.P.(C)No.3871/1991 wherein 5 erstwhile-expelled members were directed to pay` 8,00,000/- each, before they can be given possession by the society of the flats allotted to them.

11. Ms. Arora also submitted that the directions contained in the judgment sought to be reviewed, failed to consider Section 51 of the Transfer of Property Act,1882 which states that any bonafide holder of the property will have to be paid either the value of improvement or the market value of the property by the person causing the eviction. It was submitted that the society had allotted the flats to the review petitioners and the membership to them. In these circumstances, the court should have taken continuous possession and occupation of the flats by such newly inducted

W.P.(C) 5785 & 6906/2012 Page 9of 14 members and protected their rights appropriately. The erstwhile expelled members could have been given the flats to be additionally constructed, according to its cost of construction.

12. Learned counsel, who had appeared for some of the contesting respondents, argued that this court should not review its judgment, because it was made after considering all available options and making it known to the contesting respondents, who at that time were represented through counsel, that since the writ petitioners were wronged parties, who had awaited for justice for 22 years, they should not be made to wait, but rather those who derived advantage from the society's fault, who should surrender possession and make way for those unjustly denied participation in the draw of lots and unfairly kept away from possession.

13. It is evident from the above discussion, that the review petitioners are that class of occupants, who were given possession of flats by certain office bearers of the society, without a valid draw of lots. They were inducted as members in place of the 22 members who were expelled without just reason. That expulsion was no completed or valid expulsion, because according to the mandate of the Delhi Co-operative Societies Rules, it had to be approved by the Registrar. That official did not approve the expulsion (by his rejection order of 16.08.1994). The higher authority, i.e the Financial Commissioner too endorsed the rejection of the approval application. That authority's decision was challenged by the society. The present review petitioners, as newly inducted members, took the flats subject to the outcome of the litigation. Eventually, the society's writ petition (challenging the dismissal of its approval application) was rejected by a Division bench on 17.04.2009.

W.P.(C) 5785 & 6906/2012 Page 10of 14 A review of that decision was sought; the review was rejected. Despite these developments, the expelled members (writ petitioners in this round) were unable to secure possession of the flats, which by rights ought to have been theirs. They could not; they initiated contempt proceedings, and eventually, filed W.P.(C)5785/2012 & 6906/2012.

14. The history of this litigation shows that the review petitioners do not premise their claim on any legal right; it is essentially based on continuous occupation. Their arguments about previous orders, concerning new or additional constructions to be undertaken by the society to accommodate the erstwhile expelled members, was considered and rejected by the main judgment. In the main judgment, the court had held as follows:

"22. The dictat of Rule 36 (3) that "The resolution shall be effective from the date of approval" is decisive and admits no debate; it is only if and only if, the registrar, after inquiry, approves the expulsion that it is effective. In this case, clearly the registrar did not so approve; the Financial Commissioner and this court confirmed that order concurrently. No principle embodied in any rule or statute was cited in support of the later inducted members' argument that their membership - and later possession of the flats in their present occupation was nevertheless valid. Therefore, their memberships could never have been given primacy. In the light of this conclusion, the court holds that the contesting respondents' rights to the flat are tenuous and have to yield to the legitimate rights of the petitioners and other reinstated members. Furthermore, these contesting respondents were also not subjected to the same allotment process as in the case of the original 69 members- verification of membership by the society, its due consideration and embodiment in the Registrar's order, and subsequent allotment process under the supervision of the Registrar and DDA. These contesting or later inducted members

W.P.(C) 5785 & 6906/2012 Page 11of 14 therefore, can only claim some relief - if at all, based on long occupation, not premised on equity. Certainly it is not the kind of equity, of which restitution is prominent.

23. The cornerstone of the contesting respondents' argument is their inter se seniority and its determination. To our mind, that issue is subsidiary. Having concluded that the petitioners and those like them have primacy in regard to the flats, which were never allotted validly to the contesting respondents, the court's effort primarily is to secure their possession to these aggrieved parties. The consequent inconvenience is to be addressed differently. The previous orders of this court have shown that the primary focus of the litigation meandered to the construction of additional flats, needed directions to the authorities for the purpose, etc. Along the line, the inter se seniority of the contesting respondents got twined with that issue.

However, during the hearing, the court had expressed its opinion that since the identity and verification of the five expelled members is known (as well as the other 4 members, who were given relief, but of a different kind, subject to payment of current costs (those in WP 106/2013)) it would be just and fair that nine individuals among the contesting respondents vacate their flats and their flats are allotted to the erstwhile expelled members. To determine which among the 22 individuals are to vacate the flats, the court is of opinion that since almost all of them applied together and were granted membership, it would be fair that they are placed at the same footing. The appropriate procedure would be in such case to hold a draw for the erstwhile members, to first decide which of them should secure flats of the category of their entitlement. This draw would determine in turn, which nine out of the 22 existing occupants have to vacate their flats, according to the categories of entitlement of the erstwhile-expelled members. The DDA and Registrar would carry out the exercise of holding a draw of lots for allotment flats to be vacated by later entrants. The second step - to be simultaneously carried out - would be to ensure that the cost of the 9 flats are recovered from all the

W.P.(C) 5785 & 6906/2012 Page 12of 14 newly or subsequently added/inducted members. This is essential, because if they are to salvage their rights, the entire burden of cost for the additional construction cannot be placed on those asked to vacate their flats, but on all the newly added members. Of course, the current cost of construction is to be recovered for four additional flats, from the petitioners in WP 106/2013.

24. The pleadings in the contesting respondents' application and affidavits- as well as documents enclosed thereto, show that some controversy is made in respect of transferees of the newly added members (about 6). The newly added members argue that such power of attorney holders are not really members and that their names should be at the bottom of the list; it is urged that they should first make way for the original members whose expulsion was not approved. This court is of opinion that this distinction is unfounded. The newly added members could not have been inducted without proper approval; as long as proceedings for approval of expulsion were pending, their induction was not only unwarranted, but without legal authorization. That some of them were given possession and have occupied the flats for a long time is purely fortuitous, given the vicissitudes of litigation in the country and the attendant delay in deciding cases. However, the transferees of some of those inducted members are blameless; they cannot be singled out for the purpose of eviction. Therefore, it is held that subsequent transferees (said to be

6) stand on the same footing as all the newly inducted 22 members."

It was after recording the above conclusions- which have not been impeached as contrary to facts or any legal principle, that the court issued the directions in Para 25.

15. In the opinion of this court, there is no error, apparent on the record relating to the facts, or their appreciation, that requires review of the main judgment. The rationale cited by the review petitioners, i.e long and

W.P.(C) 5785 & 6906/2012 Page 13of 14 continued occupation, and bona fide nature of their allotment, was unpersuasive when the main judgment was delivered; it continues to be unpersuasive now. The review petitioners do not complain that their interests were not considered; counsel on behalf of some of them had addressed arguments, which are reflected in the judgment. Their submission now, that they had paid for the flats whereas the original (expelled) members had not is not only insubstantial; it is specious. The original members' names could not be - but was rightfully entitled to be- included in the draw of lots. The review petitioners' names were never entered in any valid or legal draw of lots. They took their memberships subject to the outcome of the expulsion proceedings. The expulsions were never approved. Therefore, the original members continued to always be members. Given all these facts, the only manner by which the court took note of the later developments and balanced the equities was to issue the directions that it did in Para 25 of the main judgment. The correctness of such exercise of discretion, on its merits, is not what falls within the legitimate scope of review jurisdiction.

16. For the above reasons, this court is of opinion that the present review petition lacks in merit. It is therefore dismissed.

S. RAVINDRA BHAT (JUDGE)

DEEPA SHARMA (JUDGE) MAY 30, 2017

W.P.(C) 5785 & 6906/2012 Page 14of 14