Topic : Judgement of Anjuman CGHS


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Judgement of Anjuman CGHS
« Posted on : Sep 3, 2008, 4:15:24 AM »


Date of decision: August 29, 2008

WP(C)No. 1064/2007


Anjuman Cooperative Group Housing Society
Ltd. (Regd.) ..Petitioner

Mr. Ravinder Sethi, Sr. Advocate with Mr.Sumit Bansal, Advocate


Registrar of Cooperative Societies and Ors. ..Respondent

Ms. Sujata Kashyap, Advocate for respondent No.1-RCS
Mr. Rajiv Bansal, Advocate for respondent No.2-DDA
Mr. Harish Gulati with Mr. Anidya Malhotra, Advocates for CBI
Mr. R.K. Gupta with Mr.Vimal Wadhawan, Mr. M. Goel and Mr. V.K. Mehra, Advocates
for Objectors
Mr. V.K. Tandon with Mr. Prem Mishra for Objector
Mr. S.M. Chopra, Amicus Curiae

Coram :

Hon'ble Mr.Justice Manmohan Sarin
Hon'ble Mr.Justice Sudershan Kumar Misra

(1) Whether reporters of local paper may be
allowed to see the judgment? Yes

(2) To be referred to the reporter or not? Yes

(3) Whether the judgment should be reported
in the Digest ? Yes

Manmohan Sarin, J.

1. Petitioner Society through its Secretary Mr. V.Subramaniam, has filed
the present writ petition seeking a direction to the Delhi Development
Authority, respondent No.2 herein, to issue the Completion Certificate and grant
Provisional Occupancy Certificate to the Society. A writ of mandamus is also
sought directing the respondent No.1 Registrar, Cooperative Societies and

respondent No.2, DDA to hold a draw of lots for allotment of flats to the
members of the petitioner Society.
1. Background facts:
(i) It is averred in the petition that originally, employees of Bharat
Electronics Limited, Ghaziabad, had founded the Society in the year 1983 with 90
members having a freeze strength of 120 members. The Society had on 14.8.1990,
resolved that members should contribute towards future cost of land @ Rs.2,000/-
per quarter from October, 1990. The amount of contribution was reduced to
Rs.1,000/- per quarter. Finally, on 16.10.1991, it was capped at 5 instalments
of Rs.1,000/- each, totaling to Rs.5,000/-. The Society resolved to expel 29
members for default in payment towards the future cost of land. These members,
it is claimed, had failed to make the payment despite repeated notices. On
8.11.1992, their share money was forfeited. On 23.4.1993, a list of 111
members was forwarded to the Registrar?s office in which 9 persons, whose
membership had been withdrawn, were to be excluded. This list was not approved
on 16.12.1993. On 25.9.1994, the Society decided to refund the deposit towards
cost of land as DDA had increased the land prices and members were keen for
allotment of land in trans Yamuna area, near to their place of work. It is at
this juncture that Mr. Ashok Goswami and Mr.S.P.Saxena, against whom the CBI
after investigations, has registered cases, got involved in the affairs of the
(ii) On 5.4.1998, S.P. Saxena, Ashok Goswami and Pramod Kumar became President,
Secretary and Treasurer of the Society and the registered office of the Society
was shifted to C-34, Madhu Vihar, Delhi. On 23.3.1999, Ashok Goswami applied
for allotment of land. S.P. Saxena wrote a letter informing that Registrar,
Cooperative Societies had approved list of 120 members to DDA. On 12.11.1999,
an offer of allotment of land was made to the Society and finally on 3.5.2000,
7,000 sq. mtrs. of land at Plot No.20, Sector12, Dwarka was allotted to the
Society @ Rs.4,063/- per sq. mtr., which was reduced in a Lok Adalat to
Rs.3,533/- per sq. mtr. on an application made by S.P. Saxena. The payment in
respect of the land was made to the DDA and possession received by Society. It
is claimed that the Society applied for the sanction of the lay out and building
plans and after its sanction, construction was raised on the plots.
(iii) It is averred that in August, 2005, the scam relating to allotment of land
to cooperative societies surfaced. It was learnt that an FIR had been lodged
and the CBI-respondent No.3 was investigating the numerous illegal acts,
omissions and offences of the office bearers of the Societies as also the
officers of the Registrar of Cooperative Societies on the direction of the
Court. The affairs of the Society were also being investigated. Accordingly, a
meeting was called on 21.8.2005. An Ad hoc Managing Committee was elected.
The Ad hoc Committee was asked to continue pursuant to an extraordinary general
body meeting held on 22.10.2005. The Registrar of Cooperative Societies was
asked to appoint a Returning Officer for holding of the elections of the
Society. In another extraordinary general body meeting held on 6.11.2005,
members were informed of the progress in relation to the construction and
development work. The Society took several steps towards completion of
construction by getting the sewerage scheme sanctioned on payment of Rs.11.28
lacs. Further deposit of Rs.14.82 lacs was made with the Delhi Jal Board in
September, 2005 towards Infrastructure Funds. ?No Objection? for the
installation of lifts was also obtained. The Society accordingly notified
respondent No.1 regarding completion of construction and also applied for
issuance of Provisional Occupancy Certificate.
(iv) The society on its own submitted the requisite documents to respondent No.1
for allotment and draw of lots. Public notice was also published in newspapers
regarding the proposal for clearance of names of 120 members for allotment of
flats and inviting objections. The publication was stated to have been in the
?Statesman? on 19.12.2005 in English and in ?Veer Arjun? on 16.12.2005 in Hindi.

Petitioners also claim that it was their understanding that their name had been
removed from the list of 133 Societies against whom investigations were in
progress. Petitioner Society is also stated to have deposited penalty to the
extent of Rs.12,93,000/- (Rupees Twelve Lakh Ninety Three Thousand only) for
grant of extension of time. In short, the petitioners claim to have complied
with all the requirements for issuance of the Provisional Occupancy Certificate.
It is claimed that although all formalities have been complied by the petitioner
Society, the grant of the Provisional Occupancy Certificate as also the case for
extension of time was being delayed. The Society had also applied to the BSES
for construction of Electric Sub-Station. It is averred that in fact, there is
no impediment as the petitioner Society has completed all the requirements and
formalities required for grant of Provisional Occupancy Certificate.
(v) Members of the Society claim to be belonging to lower and middle class
strata of the society. It is averred that the individual members have raised
loans from financial and other institutions and contributed about Rs.17,00,000/-
each towards cost of the flats. Despite the flats being ready, the members are
living in rented accommodation and are paying rent for the accommodation as well
as instalments to the financial institutions for the loans taken. It is claimed
that members of the Society are not party to any illegal actions or fraud
practised by the members of the erstwhile Managing Committee, who are sought to
be prosecuted.
2. Cooperative Scam
(i) The position of the petitioner Society vis-?-vis the Cooperative Societies?
scam is best reflected in the counter affidavit filed by the Registrar of
Cooperative Societies. The present Society was amongst one of the 101 Societies
being investigated by the CBI under orders of the Court passed in
WP(C)No.10066/2004 titled ?Yogi Raj Krishna Cooperative Group Housing Society
Ltd. Vs. DDA and Ors.? The affidavit highlights the attempts of the Land and
Building Mafia to take over the societies. The modus operandi of the Land and
Building Mafia to take over the cooperative societies and subvert the
cooperative movement was sought to be achieved by purchasing defunct societies,
obtaining resignations of members and enrolling new members of their choice by
charging premium, after having obtained the benefit of allotment of land at
concessional/subsidized rates by the DDA to the Society. It was averred that
the group housing societies had been revived by promoters and builders having
vested interest after forging the signatures of the original members and
thereafter, submitting forged affidavits. Fake resignation letters of the
original members had been submitted. Manipulation of record had taken place and
there appeared to be a strong nexus between the Builders? Lobby, officials of
the Registrar, Cooperative Societies and DDA in the whole process of revival of
the defunct societies. It was also averred that advantage was taken of the
unamended Rule 24(2) of the Delhi Cooperative Societies Rules, which required
notifying of the vacancies for membership in newspapers only where lay out and
building plan had been approved and not in other cases. The affidavit also sets
out the steps being taken by the Registrar, Cooperative Societies to ensure
transparency in the process of enrolment of members.
(ii) As regards the present Society, it was averred that the FIR had been
registered and as per the FIR filed by CBI, one Mr.Uttam Kumar Sharma had
contacted Mr. R.K. Bansal, the then Treasurer of the Society, proposing transfer
of the control of the Society to others. Thereafter, Mr.Ashok Goswami was
introduced to Mr. R.K. Bansal and Mr. Rakesh Kumar Sharma, the then Secretary.
Mr.Ashok Goswami offered to pay a sum of Rs.5,100/- in lieu of each resignation
letter arranged by the Managing Committee. Undated resignation letters were
obtained from some members for which, they were paid Rs.5,100/-. The scrutiny
of the records revealed that the resignation letters and receipt of refund of 29
expelled members, who were expelled in 1992, were available in the file even
though the resignation letter was shown to have been submitted in the year 2000.

(iii) During the investigation, 10 out of the 29 members stated that they had
never resigned from the Society and the resignation letters did not bear their
signatures. The DDA in its affidavit has averred that Plot No.20 in Sector 12
was allotted in the year 2000. It averred that till the inquiry and
investigation was completed, it was not possible to issue Completion Certificate
and Provisional Occupancy Certificate. Further, that the draw of lots for
allotment of flats can be done when approved list of members of the Society for
allotment of flats is received from respondent No.1.
3. Proceedings and Investigation
(i) During the proceedings of the writ petition, the Court was informed that the
CBI has been carrying on investigations and was in the process of preparing
final complaint and in some cases was awaiting sanction. The CBI filed its
action plan as also status report with regard to the societies under
investigation. Several documents had been sent to the Examiner of questioned
documents and their reports were awaited. On 5.7.2007, the Bench had taken up
the present case separately from the other societies, when the Court was
informed that the construction was complete and the flats were suffering
attrition due to disuse. CBI investigation had revealed that out of 120
original members, resignations had been furnished by nearly 91 members over a
period of 10 months. 29 members were expelled resulting in 125 new members
being enrolled. It was claimed that the resignations of original members were
not genuine and had been fraudulently obtained or were forged and dishonestly
(ii) Mr.Harish Gulati, counsel for CBI, informed that Charge Sheet had been
filed against Mr. S.P. Saxena and Mr.Ashok Goswami, former office bearers of the
Society. There was also the question of premium being paid by the newly
enrolled members. Investigations had further revealed that M/s. N.G.
Constructions had advanced a sum of Rs.25 lacs for payment of land cost to DDA
in lieu of the understanding that the contract for construction would be awarded
to them.
(iii) Vide orders passed on 5.7.2007, it was directed that the exercise of
ascertaining and verifying the original members and their current addresses
should be undergone and they be given an opportunity of putting their case with
regard to the resignation/expulsion and cessation of their membership. The
modalities of reconciling the interests of members, who had been enrolled, were
also to be considered. Further, directions were given vide our order of
11.7.2007 to the CBI to verify the factum of resignations. CBI was also
directed to indicate whether the investigations had revealed any relationship,
business or otherwise or close proximity of the new members, who had been
inducted, with any of the accused persons.
(iv) The Court appointed Mr.S.M. Chopra, retired Additional Sessions Judge, to
act as a Local Commissioner and Amicus Curiae with the task of considering the
objections as may be received in respect of the resignations/expulsion of the
original members. During the course of proceedings, the Local Commissioner and
Amicus Curiae had filed the interim report as also the final report to which, we
shall advert later on.
(v) Pursuant to the directions given, public notices inviting objections against
cessation of membership following the resignations/expulsion, were published in
the newspaper. A copy of the notice inviting objections was also despatched by
the Amicus Curiae directly to the original members, who had resigned or had been

4. Evaluation of Objections
(i) The Local Commissioner and Amicus Curiae in his report, has noted the
saga of resignations/inductions for various periods and the numberings being
given. It is not feasible for us in these proceedings to deal with each of

those resignations and re-inductions, which have finally culminated in the list
of 120 members as forwarded by the Society in March, 2005. The Local
Commissioner noted that the Registrar of Cooperative Societies proceeded on the
basis of resignation letters and not approved the resolution of the Society for
expulsion of members due to non-observance of complete statutory formalities.
The Local Commissioner, therefore, had rather than giving the evaluation in
respect of the members, who had been expelled, recommended that their objections
could be offloaded to the Registrar of Cooperative Societies and the contesting
parties could be left to avail of their statutory remedies. We are, however,
of the view, considering the construction, which is complete, and objections
having been invited, that any case, which has complex facts and which requires
further probe, can be decided on the lines of the decision taken on the basic
issues raised in the objections and decided in the writ petition.
(ii) We are first dealing with the issues emanating from the objections
filed by members whose resignations are stated to have been forged or wrongfully
obtained or those, who have challenged their expulsion as being contrary to the
provisions of the Delhi Cooperative House Building Society and its Rules and
thereafter, specifically with the case of 9 objectors.
(iv) We may, at this stage, notice that 44 objections were received in response
to the public notices issued inviting objections. In 30 out of these 44 cases,
the factum of submission of resignation is admitted before CBI and otherwise.
In 11 cases, the resignations are stated to be forged. Learned Amicus Curiae in
his report dated 17.3.2008, submitted that out of 11 cases, 9 objectors namely,
Chand Singh, R.D. Trivedi, Vijay Shankar, P.C. George, Sajan Prasad, Shashikant,
C.V. Verghese, P.Shankar Nair and R.P. Saini, the resignation letters have been
found to be forged by the General Examiner of Questioned Documents (GEQD). The
opinion in respect of Jitendra Nath and Ms. Maninder Kaur was awaited. As
regards the resignation of 30 objectors wherein the resignations are admitted.
It is sought to be urged that the same have been accepted in contravention of
the Rules, norms and directions laid down by the RCS in dealing with the
objections. Ms. Shashi Verma would also fall in the category of these 30
persons whose resignations are sought to have been accepted contrary to the
prescribed norms or Rules of the Delhi Cooperative Societies Rules.
4(A). Submissions of the Objectors:
(i) It would be appropriate at this stage to take note of the written
submissions filed by Shri R.K. Gupta and Mr.Vimal Wadhawan, Advocates, who
represent most of the objectors and whose submissions have also been adopted by
the other objectors.
(a) The first submission of Mr.R.K. Gupta is that the office of the Registrar of
Cooperative Societies has issued directives from time to time dealing with the
cases of involvement and acceptance of resignations and the Rules relating to
enrolment, resignations, cessation of membership and expulsion have to be
strictly adhered to and in the absence of strict compliance with the same, the
acceptance of resignation, cessation of membership or expulsion would not be
valid. Reference was invited to Rule 30 of the DCS Rules regarding filling up
of vacancies required, advertisement in the newspapers in terms of Rule 30 and
its consideration thereof by the Managing Committee under Sub-Rule (4). It is
submitted that the petitioner Society has failed to place on record the
resolution passed by the Managing Committee enrolling the new members or record
of the meetings where the procedure as required under Rule 30 had been followed.
(b) Similarly, the resignation under Rule 40 postulates that on a resignation of
a member being accepted, there has to be a transfer of whole or of his share or
interest in the Society to another member on his death, removal or expulsion.
In the instant case, it is urged that petitioner Society had failed to prove on
record that alleged resignation letters were tendered by some of the objectors
were theirs and these have been placed before the Managing Committee and so
accepted. These could not, therefore, be treated as valid resignations.

(ii) It is urged that objections cannot be decided against the objectors who,
the Society is claiming, had resigned, since the controversies and disputed
facts require evidence. Regarding expulsion, it was submitted that a member
could be expelled either on account of persistent default in payment or such
member having committed an act which is detrimental to the interest and proper
working of the Society. Prior to expulsion, the requirement was service of a
registered notice and provision of an opportunity to represent his case.
Reliance was placed on the directives issued under Rule 77 of the Cooperative
Society Rules 1973 as also on the judgment of the High Court of Delhi in ?R.K.
Aggarwal Vs. Registrar, Cooperative Societies, Delhi and Ors.? reported at 45
(1991) DLT 105 in support of the strict compliance with Rule 36 and in the
absence of proof of registered notices having been sent, the action of expulsion
would be non est.
(iii) We have considered the reports and response as filed by the CBI as also of
the Registrar of Cooperative Societies, the reports of the Amicus Curiae and the
objections filed by the Objectors. The following position emerges:
30 objectors which appear at Sl. Nos. 3, 5, 6, 8, 11, 12, 13, 15, 16, 17, 18,
19, 21, 25, 27, 29, 30 to 39, 41, 42 and 44 in the affidavit by the Registrar,
Cooperative Societies are persons, who have confirmed their respective
signatures on the resignation letters before the CBI. These objections are
without merit and not sustainable. Eleven objectors have denied their
signatures on the resignations which have been found to be forged by the GEQD.
These are objectors at Sl. Nos. 2, 7, 9, 10, 14, 20, 22, 23, 24, 26 and 43. The
objectors at Sl. No.40 did not cooperate or give information to the CBI as
required. Hence, verification and input from CBI could not be received and
objection remained unsubstantiated. The objector at Sl. No.4 has not yet been
recognized as a member by RCS and his objection, therefore, is misplaced and
does not deserve any consideration. Another objector referred to at Sl. No.1
expired in 1995 and it is his LR who is agitating the claim and is being
separately considered.

(iv) We are of the view that members of the Society, who had tendered their
resignations in this case to the Society and received refund of membership fee
and the amount paid by them, cannot be permitted belatedly after a gap of a
number of years to wake up like ?rip van winkle? and then seek to claim
membership from which they had tendered resignation. This is especially so when
it is obvious that the realization and urge to stake a claim for membership and
consequently a flat, has been ignited by the spiraling prices in the value of
real estate. These objectors cannot be permitted to displace others who have
been enrolled in their place especially when the latter have during this
interregnum of a number of years, made payments towards the price of flat.
(v) Learned Senior Counsel Mr.Sethi is right in his submission that the
petitioner Society after allotment of the land got the building and other plans
approved and with the contribution from the newly enrolled members,
constructions have been raised and flats are now ready for occupation. The
objectors, who had chosen to resign from the Society cannot now be permitted to
take advantage of any non-compliance or non-observance of all the Rules
concerning acceptance of resignation to urge that their resignations be now
ignored and they continued to be members, entitled to allotment of flats for
which they had not paid any consideration but are now willing to do so in view
of the spiraling and manifold rise in the cost of the real estate. The
objectors after resigning and having received their refund of membership fee and
other dues, merrily stayed back, while the others toiled and made the payment
for construction of the flats. The flats being ready for occupation, they
cannot now be permitted to urge that their resignations were not valid and
hence, they are members and they should be allotted flats. It is rightly said

that ?Vigilantibus, et non dormientibus, jura subveniunt ? The vigilant, and not
the sleepy, are assisted by the laws.
(vi) Similar will be the position of the members, who claimed that their
resignations had not been furnished by them voluntarily and had been obtained
under coercion. As regards members, who had been expelled, petitioner Society
contends that they had, despite notices, failed to tender the amounts due.
Various opportunities were given to them to make the payment of the costs of the
land in instalments but they failed to do so and consequently, as a result of
resolution passed in the meetings duly held, were expelled. It is also
significant that none of these objectors after their expulsion when the flats
were to be constructed and instalments were being paid by others enrolled in
lieu of them, took any steps to assert their rights. Without even going into
the question of their forged resignations and treating the same as non est, the
situation would not change because of their persistent default in making payment
of the amount demanded followed by expulsion and their failure to challenge or
dispute the same. We may note here that none of the objectors had on their
own, initiated any proceeding or action to assert their rights. It is only
when after the public notice had been taken out and a communication had been
sent by the Local Commissioner that the claim is sought to be asserted.
(vii) We have also perused the reports of the CBI to ascertain whether any of
the members enrolled in lieu of the earlier ones were involved in the commission
of any of the offences or were in peri delicto with the office bearers against
whom the charge sheets have been filed. The charge sheet and the investigation
reports do not reveal any involvement of the person enrolled in lieu of the
renewed or expelled members except the office bearers and one or two of their
immediate relations to whom we shall revert later. Rather, at present, persons
who were taken as members in lieu of the resigning or expelled members, may have
had to pay a higher premium to those, who were in charge of the affairs and have
been charge sheeted. Hence subjected to increased costs by way of some
premium. Denial of membership at this stage to them without their being in any
way involved or having been in pari delicto with the charge sheeted persons,
would amount to increasing their suffering.
(viii) With a view to satisfy our judicial conscience that no injustice is done
to the objectors, we have also examined cases of forged resignations. One Mr.
Ashish Gaur, who is the objector at Sl. No.1, claims that the resignation letter
of his father late R.P. Sharma, was a forged one since he had expired on
2.4.1995, while the resignation letter that had been submitted by S.P. Saxena,
President of the Society, was of the year 2000. The fact remains that the
entire amount and deposit was duly refunded by the Society vide cheque No.752852
dated 8.3.1995. It was sought to be urged by Mr.V.K. Tandon for Objector that
the said amount has not been credited to the account of the deceased. The
cheque had been duly received by deceased?s brother-in-law Narender Kumar Gupta,
under a receipt and the factum of receipt of cheque was not even denied during
the investigation by CBI. Mr. Narender Kumar Gupta had also resigned from the
membership of the Society and received the refund on behalf of his brother-in-
law also. The CBI on investigation, has confirmed that the amount has been
debited to the account of the Society. The objection now sought to be filed
more than 13 years later from the date of receipt of refund of deposits and
membership fee is not a bona fide one and is devoid of merit.
(ix) The objector at Sl. No.2 was one Chand Singh having membership No.114. He
claimed that he had never resigned. The said Chand Singh happened to be one of
the 29 members, who were expelled on account of the failure to pay the 5
quarterly instalment of Rs.1,000/- each towards the land cost. This was done
taking note of three notices dated 7.12.1991, 26.12.1991 and 17.1.1992 having
already been served on them and their failure to make the payment, the
resolution was passed on 3.5.1992 expelling them.

(x) Similar is the position in respect of R.D. Trivedi at Sl. No.7, who has been
expelled from the membership of the Society for default in payment of the land
cost as above, being one of the total of 35 members, who were so expelled. His
resignation dated 23.8.2001 even if treated as non est, was a redundant one and
of no consequences. The said Mr.R.D. Trivedi did not protest or file any
complaint with the Society.
(xi) The case of Jitender Nath (membership registration No.80), who claims that
he had never resigned, is also one where he is stated to have been expelled by
the previous management in 1993 for non-payment. He did not file complaint to
the Society nor lodged any criminal complaint with regard to the alleged forged
(xii) Cases of Jitender Nath, Vijay Shankar Singh and P.C. George are on same
lines, where expulsion was done by the previous management in 1993. No
complaint was lodged with the Society or Registrar, Cooperative Societies.
(xiii) The Objector Sajan Prasad never claims to have resigned. He denies his
signatures on the resignation letter submitted in the year 2000. The Society
claims to have expelled him in the year 1992 due to non-payment. Case is now
belatedly sought to be raised.
(xiv) Cases of Shashikant, C.V. Verghese, P. Shankar Nair and R.P. Saini are
also those where members were expelled due to non-payment by previous
management. No action was taken by them. Factum of resignation has also been
denied. In case of Ms.Maninder Kaur and Shashi Verma, the amounts have been
received back.
(xv) We have dealt with cases of these members, who had claimed that their
resignations were forged and we find that these are cases where they have been
expelled due to non-payment by previous management in 1993 and are now claiming
their membership. As per the CBI report, most of them admit in their statements
that they live in their own houses and accordingly, may not be eligible for
allotment of a flat on that account. However, it is not necessary for us to go
into that except to notice the same as one of the equitable considerations.
(xvi) We may also notice that objections have also been filed by Ramesh Kumar
Bansal, Jagdish Kumar Sharma and Rakesh Kumar Sharma. These happen to be the
ex-Treasurer, President and Secretary of the Society, who were responsible for
the induction of Ashok Goswami and others, who obtained resignations from
original members. It is indeed ironical that these members who were responsible
for the management of the Society passing into the hands of the charge sheeted
officers are now themselves claiming that they were forced to resign. Their
objections are indeed meritless and do not deserve consideration.
The decision on the objections is for the purpose of eligibility as a member and
entitlement to a flat, it shall have no bearing with the pending prosecutions by
the CBI and/or the right of any individual member, who may wish to institute
criminal action against those, who he claims have cheated or defrauded him.
(xvii) We may also notice the decision of a Division Bench of this Court in
?Modern Cooperative Group Housing Society Vs. Registrar of Cooperative
Societies? reported at 101 (2002) Delhi Law Times 341 wherein the Court
?Defaulting members cannot be allowed to enjoy fruits and claim the allotment of
those flats which have been constructed with the finance of members enrolled in
their slots. No Society can be faulted or put in the dock for the delinquent
act or remissness of the authority which in this case is the Registrar. It is
the defaulting members, who have to bear the brunt and not those who have been
rule abiding and regular in making payments and who have accelerated the process
of construction of the flats which is the ultimate goal of a housing society.
Any laxity or sympathy towards the defaulting member is misplaced.?

(xviii) We are in full agreement with the views expressed above. Members, who
had, either of their own volition, chosen to resign or those who had been

induced to resign and did not participate in the activities of the cooperative
society, cannot be permitted now after a decade and a half to turn around and
seek allotment of flat. These members chose to receive the refund of the
membership fee and/or their contribution and took no steps to assert their legal
rights or participate in the activities of the Society. This would also apply
to members, who were either expelled and are now seeking to stake their claims
questioning the validity and legality of the expulsion after flats have been
constructed with the funds and money provided by the members enrolled in lieu of
(xix) We have also noted that the CBI has not found any nexus or connection of
the newly enrolled members with those who were perpetrators of fraud or takeover
of the Society. Rather, the newly enrolled members have been burdened with
increased costs and had bonafide contributed to the funds of the Society without
being in peri delicto with those responsible for the cooperative scam. In case
these members are sought to be deprived of the fruits of their investments, it
would be highly inequitable to them.
5. Directions:
(i) We have heard learned counsel for the petitioners, objectors, intervenors
and the counsel for Registrar of Cooperative Societies on the modalities to be
followed for determining the list of eligible members to be forwarded to the DDA
for allotment of flats. Learned counsel for the petitioners Mr. Ravinder
Sethi, Sr. Advocate and Mr.Sumit Bansal, Advocate, initially submitted that
since the public notice had been issued and objections invited and evaluated by
the Court and even fresh notices sent to original members through the Local
Commissioner by way of abundant caution, the petitioner should be exempted from
following the procedure under Schedule VII sub-rule (1) of Rule 90 of the Delhi
Cooperative Societies Rules. Counsel for the Registrar of Cooperative Societies
and the objectors submitted that several aspects and requirements would still be
left out and the eligibility of the members enrolled in lieu of the original,
resigned or expelled members, also need to be determined.
(ii) The matter was listed for directions on 28th August, 2008 to decide the
modalities in this regard. We heard Mr.Ravinder Sethi, Senior Advocate and Mr.
Sumit Bansal, learned counsel for the petitioner, Ms. Sujata Kashyap, counsel
for Registrar of Cooperative Societies, Mr. R.K. Gupta, counsel for the
objectors and Mr. V.K. Tandon, appearing for an Objector Mr. Gaur. After
hearing learned counsel and deliberations, a consensus was arrived that the
Society should furnish information as per Schedule VII, sub-rule (1) of Rule 90
of the Delhi Cooperative Societies Rules subject to the exception that those
objections which have already been considered and evaluated by this Court in
these proceedings, would not be gone over again and the findings would be
adhered to.
(iii) Parties are also agreed that in these special and peculiar circumstances
where the flats have been lying ready since 2005 and suffering attrition, it was
of utmost importance that the eligibility of members and disputes, if any with
regard thereto, are resolved at the earliest and the flats are put to use.
Towards this end, it was agreed that the findings and recommendations of the
Registrar of Cooperative Societies and the Rule 90 Committee be approved by an
independent Committee comprising a retired Judge of this Court with a member of
the Committee from the Registrar?s office, who would not be involved either in
the exercise of making recommendations by the Registrar or in the Rule 90
Committee. The time frame for reference and furnishing of information by the
Society and the time to be taken by the Registrar in making the recommendation
and review by the Rule 90 Committee as also by the Judicial Committee to be
nominated were discussed and agreed between the parties.
(iv) Accordingly, with the consent of the parties and the objectors, we
constitute a Committee comprising Justice S.K. Mahajan (retired) and Mr. S.K.
Jha, Joint Registrar in the office of Registrar of Cooperative Societies as the

Committee that would have the task of reviewing and approving the
recommendations made by the Registrar of Cooperative Societies and the Rule 90
Committee. The fee of Justice S.K. Mahajan, in the first instance, is fixed at
Rs.1.10 lacs. Mr. S.K. Jha shall also be paid an honorarium of Rs.30,000/-.
The petitioner Society shall deposit a sum of Rs.1.40 lacs with the Registrar
General of this Court within 10 days of the order to be remitted to Justice S.K.
Mahajan and Mr. S.K. Jha. The Judicial Committee may in its discretion
approve, modify, alter, remit any recommendation or part thereof of the Rule 90
Committee?s report and that of the Registrar of Cooperative Society. The
Committee shall be entitled to call for any record or information and documents
or hear any aggrieved party in its discretion as it considers necessary for the
purpose of executing its mandate. The following time schedule is to be

(a) The Society shall furnish within one month the documents and information
along with list of members in compliance with schedule VII under the Delhi
Cooperative Societies Rules, 2007 and take out the public notices as required
inviting objections on the proposal regarding clearance of membership. It shall
also submit the revised proposal, if any, within 30 days of publication of the
public notice. The Registrar shall dispose the objections after hearing the
parties including the issuance of ?Deficiency Memo?, if any, within a period of
15 days and verify the documents and complete the scrutiny within a further
period of 15 days. A representative of the Society duly authorized, shall be
present with the requisite documents in original as per Clause 23 of Schedule
VII for verification. It would be open for the Society to submit certified
copies of the originals in case the same are in the custody of the CBI. The
petitioner may approach CBI directly or through the Registrar of Cooperative
Societies for obtaining certified copy of the original record. The Registrar of
Cooperative Societies would render all assistance to the Society, if required in
obtaining the certified copy of the originals, if seized by the CBI.
(b) The Registrar shall refer the matter to Rule 90 Committee with its
recommendation also taking into account inputs by CBI for approval. Rule 90
Committee shall examine and review the recommendations made by the Registrar of
Cooperative Societies and take a decision within a month of receipt of the
report from the Registrar.

(c) Report of the Registrar of Cooperative Societies together with the Rule 90
Committee?s report, shall be placed before Justice Mahajan?s Committee for
consideration, review and approval. Justice Mahajan?s Committee shall consider
the reports and recommendations made and in its discretion, may approve, modify,
reject or remit the reports or any part thereof or any recommendation as made.
It would also be open for the Justice Mahajan?s Committee to hear in its
discretion any of the objectors or aggrieved persons and seek any further
information/document or clarification that it may require and have a decision
thereon with regard to the position of such a person, his entitlement,
eligibility or otherwise. Justice Mahajan?s Committee shall submit its report
within one month regarding the approval, rejection, modification, remission of
the report of the Registrar of Cooperative Societies and the report of the Rule
90 Committee. The Court upon receipt of the report of Justice Mahajan?s
Committee together with the recommendations from the Registrar of Cooperative
Societies and the report of the Rule 90 Committee shall pass suitable orders and
direct the Registrar of Cooperative Societies to forward the list as approved to
DDA for draw of lots and allotment.
(v) We direct that each member of the petitioner Society who is allotted a flat
in the draw of lots, shall furnish an undertaking that he would not sell,
transfer or alienate the flat in question without the leave of the Court for a
period of five years or such further time as may be fixed by the Court.

(vi) We also direct that the charge sheeted office bearers and/or members of the
petitioner society including former members, shall not be eligible for
consideration for allotment of a flat till they are found blemishless after the
acquittal and exoneration in any inquiry by the Registrar of Cooperative
The writ petition stands disposed of with these directions.

Manmohan Sarin, J.

August 29, 2008 Sudershan Kumar Misra, J.

WP(C)No. 1064 of 2007
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