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Nathu Ram Jain v. Registrar, Co-Operative Societies & Others

Delhi High Court
Jan 7, 2002
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Judgment Summary — Common Judgment disposing six writ petitions (draw of lots dated 31.12.2000)

Factual and Procedural Background

Six writ petitions, heard together and disposed by a common judgment, challenge the draw of lots conducted by Shivaji Co‑operative Group Housing Society Ltd. on 31.12.2000. The petitioners in these matters claim membership of the Society and seek quashing of that draw and directions for recovery of possession from those allotted flats pursuant to the impugned draw. The petitioners allege they were either wrongfully excluded from, or unsuccessful in, the draw and assert entitlement to consideration for allotment.

The judgment relies in particular on the factual pleading in C.W. No. 3497/2001: that petitioner became a member in 1971 (seniority Serial No. 52), was expelled under proceedings initiated under Rule 36 on the ground of default, and that the expulsion followed a representation by the Society's Secretary that misled both the petitioner and the Registrar about the sums outstanding. The Financial Commissioner set aside the expulsion by order dated 30.11.2000 and directed the Society to raise proper demand; the petitioner paid as demanded and claimed to have paid a total sum of Rs. 8,33,576/-. The petitioner further alleges the Society illegally enrolled 22 new members and conducted the draw of lots on 31.12.2000, allotting flats to some newly enrolled persons as well as to members.

Brief summaries of the other writ petitions at issue (as stated in the judgment):

  • C.W. No. 361/2001 — Petitioner (member since 10.10.1972) was expelled on 3.12.1999; expulsion set aside on revision; paid demanded amount; alleges the Society conducted the draw on 31.12.2000 in violation of the Registrar's directive dated 31.5.1984 (issued under Rule 77).
  • C.W. No. 532/2001 — Petitioner (member since 1993) complied with Registrar's direction dated 16.11.1999 to clear dues and paid, yet challenges the 31.12.2000 draw as illegal and in contravention of the directive dated 31.5.1984.
  • C.W. No. 637/2001 — Petitioner (member since June 1986; membership No. 333) had expulsion set aside on condition of payment; paid as directed and challenges the enrollment of 22 members and the Society's draw of 31.12.2000 as violating the directive dated 31.5.1984.
  • C.W. No. 2074/2001 — Petitioner claims clearance of dues and that expulsion proceedings were dropped; despite payment, name was not forwarded for allotment and petitioner challenges the draw of 31.12.2000 as in violation of the 31.5.1984 directive.
  • C.W. No. 4258/2001 — Petitioner (member since 6.6.1969) had expulsion dropped after clearing dues and had name cleared on 16.11.2000 for allotment; petitioner alleges wrongful exclusion from the 31.12.2000 draw in violation of the 31.5.1984 directive.

Legal Issues Presented

  1. Whether the draw of lots conducted by the Society on 31.12.2000 is valid, having regard to the directive dated 31.5.1984 issued by the Registrar of Co‑operative Societies under Rule 77 of the Delhi Co‑operative Society Rules.
  2. Whether the draw of lots, as conducted, complied with the directive's requirements that (a) membership be verified prior to allotment, and (b) allotments be conducted by the DDA through a draw of lots held by the DDA in consultation with the Society's office bearers and the Registrar (including notice of time/place and holding the draw in presence of office bearers and members).
  3. Whether the inclusion in the draw of 22 newly enrolled persons whose names had not been approved by the Registrar undermines the validity of the draw and allotments made pursuant thereto.

Arguments of the Parties

Petitioners' Arguments

  • The Society conducted the draw of lots on 31.12.2000 on its own authority, without the draw being conducted by the Delhi Development Authority (DDA) as required by the Registrar's directive dated 31.5.1984.
  • The membership list used for the draw was not verified or approved by the Registrar of Co‑operative Societies; as a result, 22 newly enrolled persons (not approved by the Registrar) were included in the draw.
  • Several petitioners had their expulsions set aside by the Financial Commissioner and had paid demanded amounts; they contend they were eligible but were either excluded or treated as unsuccessful due to the improper draw.
  • Counsel for petitioners relied on prior Single Judge decisions: Ashwani Kapoor v. DDA (Volume 86 (2000) DLT 50) and Sushila Devi Bhaskar v. INCHB Society Ltd. (45 (1991) DLT 518) to support the proposition that co‑operative societies, when allotting land/flats, act as an intermediary for State action and thus the involvement of a State functionary such as the DDA is necessary in the draw of lots.

Respondents' / Official Replies

  • Counter‑affidavits were filed by the Registrar of Co‑operative Societies and the Delhi Development Authority. The Administrator of the Society adopted the Registrar's reply.
  • The Registrar's reply expressly stated that the draw of lot held by the Society was in violation of the directive dated 31.5.1984 and admitted that the draw was not conducted by the DDA in the presence of the office bearers and a nominee of the Registrar.
  • The Registrar also admitted that some persons included in the draw were newly enrolled and their names had not been cleared by the Registrar of Co‑operative Societies.
  • The Registrar stated that civic authorities were informed not to provide basic amenities (as a response to the irregular draw/allotments).
  • During hearings, counsel for the erstwhile Managing Committee sought to have these petitions heard along with C.W. No. 3375/2001 (challenging supersession and appointment of the Administrator). The court declined to combine the hearings, treating the validity of the draw as separable and capable of independent adjudication.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ashwani Kapoor v. DDA, Volume 86 (2000) DLT 50 Placed before the court to support the contention that co‑operative societies act as intermediaries for Government action in allotment matters and that a State functionary (DDA) must be involved in the draw of lots. The court noted reliance on this decision by petitioners as part of their argument that DDA involvement is necessary; the court's conclusion to quash the draw was based on the admitted non‑compliance with the Registrar's directive and absence of DDA involvement.
Sushila Devi Bhaskar v. INCHB Society Ltd., 45 (1991) DLT 518 Relied upon to buttress the argument that co‑operative societies perform an intermediary role between the public and the State in allotment of land/flats. The judgment records petitioners' reliance on this authority to argue for mandatory State involvement; the court proceeded to quash the draw on the admitted facts that the draw was not conducted by the DDA and that the Registrar had not approved the members list.

Court's Reasoning and Analysis

The court framed the petitions' common grievance as the alleged violation of the Registrar's directive dated 31.5.1984 issued under Rule 77. The directive required a fresh verification of membership records prior to allotment, and mandated that allotments of flats be made by the DDA through a draw of lots held by the DDA in consultation with the Society's office bearers and the Registrar of Co‑operative Societies. The directive specified that the time and place of the draw be intimated, that draws be held in the presence of office bearers, and that members be invited; it also prescribed the manner for membership verification.

The petitioners' factual contention was that the Society itself conducted the draw on 31.12.2000 without the DDA's involvement and without the Registrar's verification/approval of the members list, and that 22 newly enrolled persons (not cleared by the Registrar) were included in the draw. The Registrar and DDA, through their counter affidavits, admitted non‑compliance with the directive: the draw had not been conducted by the DDA in the presence of the office bearers or a nominee of the Registrar, and some persons included in the draw were newly enrolled and not those cleared by the Registrar.

The court also recorded that petitioners relied on prior Single Judge decisions emphasizing the intermediary role of societies in State allotment processes and the necessity of State involvement. On the procedural point raised by counsel for the erstwhile Managing Committee (that the petitions should be heard along with a challenge to the appointment/supersession of the Managing Committee), the court treated the validity of the draw as a separable issue capable of adjudication independently (de hors) of the supersession question, and declined to combine hearings.

Given the admitted facts of non‑compliance with the Registrar's directive and absence of DDA conduct/oversight of the draw, the court found no option but to quash the draw of lots held on 31.12.2000 and to direct a fresh draw in accordance with the directive dated 31.5.1984. The court ordered consequential action by the Administrator and the Society to obtain possession of flats if already handed over.

Holding and Implications

Core Ruling: The court quashed the draw of lots dated 31.12.2000 and directed that a fresh draw of lots be conducted in accordance with the directive dated 31.5.1984 issued by the Registrar of Co‑operative Societies.

Implications and immediate consequences:

  • The impugned draw of 31.12.2000 is set aside.
  • The Administrator and the Society are directed to take consequential action required for obtaining possession of flats, where possession may already have been handed over pursuant to the quashed allotments.
  • The fresh draw must comply with the 31.5.1984 directive: membership verification, conduct of the draw by the DDA in consultation with office bearers and the Registrar (with proper intimation and presence requirements), and use of an approved members list.

The opinion does not articulate a novel legal principle or record that a new precedent has been established; it disposes of the petitions by applying the Registrar's directive and the admitted facts of non‑compliance to quash the impugned draw and order a fresh draw in accordance with the directive.

Ordered accordingly.
Show all summary ...

Manmohan Sarin, J.— By this common judgment, the above six writ petitions are being disposed as the questions arising for consideration are common. The petitioners who claim to be members of the Shivaji Co-operative Group Housing Society Ltd., are aggrieved by the draw of lot, held on 31.12.2000, by the Society. Petitioners have filed the writ petitions to assail the same. Petitioners seek quashing of the draw of lot dated 31.12.2000 and directions for possession being taken back from those who have been allotted the flats pursuant to the impugned draw of lot. Petitioners claim to be the eligible members who have either been unsuccessful or excluded in the draw of lot held and claim to be entitled to being considered for allotment.

2. The detailed facts as disclosed by the petitioner in C.W No. 3497/2001 are taken for the facility of reference. Petitioner claims to have become a member of the Society in the year 1971 with seniority at Serial No. 52. The Society is stated to have been allotted 2 acres of land on 15.7.1991 The Society had initiated proceedings for expulsion of the petitioner on the ground of alleged default in payment under Rule 36. The petitioner was expelled by the Society with the approval of the Registrar of Co-operative Societies. The petitioner's grievance is that the former Secretary of the Society misled him into believing that only Rs. 93,000/- were to be paid as against the original amount of Rs. 1,51,508/- which was claimed to be over due. The petitioner claims to have made the payment of Rs. 93,000/- as demanded, but on account of wrong information given by the Society's Secretary to the Registrar that petitioner had not paid the balance sum of Rs. 60,330/- petitioner was expelled. Aggrieved by this action, the petitioner preferred a revision petition against the order of expulsion before the Financial Commissioner. Financial Commissioner vide an order dated 30.11.2000, set aside the order of expulsion and the Society was directed to raise the demand against the petitioner, who was to make the payment as per the demand. Petitioner claims to have made the payment as demanded by the Society including interest. Petitioner claims to have paid a total sum of Rs. 8,33,576/-. As per the petitioner, the respondent Society illegally enrolled 22 new members and on its own conducted the draw of lot on 31.12.2000 The Society made the allotment of the flats illegally to the members but also allotted flats to some of the 22 non-members, who had been enrolled in place of genuine members. The possession of flats is stated to have been delivered to some members as well as to some of the illegally enrolled new members.

3. Relevant and material facts of the remaining writ petitions are also briefly noted below:

C.W No. 361/2001

Petitioner, Nathu Ram Jain claims to have become a member of the Society on 10.10.1972 and paid a sum of Rs. 6.95 lacs in all towards the cost and construction of the flat. Petitioner was expelled on 3.12.1999 with the approval of the Registrar. Petitioner preferred a Revision Petition before the Financial Commissioner. Order of expulsion was set aside and the respondent Society was directed to provide a statement of account to the petitioner. The Society demanded a sum of Rs. 54,754/-, which the petitioner paid. The Registrar also granted clearance to the petitioner's name as one of the persons in the list of 80 cleared. Petitioner claims that the draw of 31.12.2000 had been conducted by the Society on its own in violation of the directive dated 31.5.1984 of the Registrar issued under Rule 77.

C.W No. 532/2001

Petitioner claims to have become member of the Society in the year 1993. Petitioner claims that he was directed by the Registrar of the Co-operative Societies to clear the dues within one month from 16.11.1999 He complied with the said direction and there was no dispute as regards the petitioner's membership. He claims to have paid Rs. 5.64 lacs towards the cost of land and construction. The petitioner was illegally expelled by the Society from membership and his case was referred to the Registrar of Co-operative Societies for approval. The Registrar Cooperative Societies vide orders dated 16.11.1999, directed the petitioner to clear the dues within one month. Petitioner duly paid the amount within the stipulated period and hence continues to be a regular and bona fide member. Petitioner paid a further sum of Rs. 38,795/- on 14.12.1995 The petitioner is aggrieved by the draw of lot conducted on 31.12.2000, where possibly petitioner was not successful. The draw is assailed as illegal and without jurisdiction and in contravention of the directives dated 31.5.1984 issued by the Registrar.

C.W 637/2001

Petitioner claims to have become the member in June, 1986 and was granted membership No. 333. The petitioner claims to have been illegally expelled by the Society along with 20 other members. The petitioner challenged the same in a Revision Petition before the Financial Commissioner alongwith others. On the Society giving No Objection before the Financial Commissioner of admitting the petitioner among other defaulting members, subject to payment of remaining dues together with interest, within the stipulated period, the expulsion of the petitioner and others was set aside. The petitioner was called upon to pay the amount within 15 days, which he did. Petitioner assails the action of the Society in enrolling 22 members and holding the draw on its own in violation of the directive of 31.5.1984

C.W 2074/2001

Petitioner claims to be a regular member of the respondent Society. The petitioner claims to have been illegally expelled by the respondent Society by raising wrong demands. The expulsion proceedings were dropped by the Registrar, Co-operative Societies vide the order dated 3.12.1999 as the petitioner had cleared all its dues. The petitioners even paid the balance amount on 16.11.1999 making a total sum of Rs. 7,15,017/-. The petitioner's name was however wrongfully not included in the list of 80 members cleared by the Registrar of Co-operative Societies on 3.10.2000 Petitioner's name it appears was withheld on account of non-completion of the formality of not filing the affidavit. The petitioner's name despite dues being cleared and expulsion proceedings having been dropped was not forwarded. The petitioner assails the draw of lot held on 31.12.2000 as being in violation of the directive of 31.5.1984

C.W No. 4258/2001

Petitioner claims to have become member of the Society on 6.6.1969 The expulsion proceedings were initiated under Rule 36 against the petitioner. The Registrar, Co-operative Societies was however pleased to drop the same against the petitioner vide order dated 3.12.1999, since the petitioner had cleared the entire outstanding. The Registrar of Co-operative Societies had also cleared the petitioner's name on 16.11.2000 and sent the same duly approved for allotment of flat. The petitioner assails the draw of lot held on 31.12.2000, where his name was wrongfully excluded. The draw is assailed as having been held in violation of the directive of 31.5.1984

4. From the foregoing narration, it would be seen that the petitioners fall in the category of either persons who were unsuccessful in the draw of lot held on 31.12.2000 or whose names were wrongfully excluded or not sent. The petitioners' basic case is that the draw of lot dated 31.12.2000 has been conducted by the Society in violation of the circular/direction issued by the Registrar of Co-operative Societies on 31.5.1984, under Rule 77 of the Delhi Co-operative Society Rules.

5. The directive required the membership of each and every Society to be verified once again prior to the allotment of flats. It was directed that allotments of flats shall be done by the DDA through draw of lots. The draw of lots was to be held by the DDA in consultation with the office bearers of the Society and the Registrar of Co-operative Societies. The time and place of draw was required to be intimated to the Society and the Registrar. The draw was to be held in the presence of the office bearers and the members of the Society were to be invited. The said directive also prescribed the manner in which the verification of the membership was to be done.

6. The submission of the petitioners is that in the instant case the society on its own held the draw of lot on 31.12.2000, without the draw being conducted/held by the DDA or the list of members being verified by the Registrar of Co-operative Societies. The allegation is that the 22 members who were not eligible as per the petitioners and whose names had not been approved by the Registrar of Cooperative Societies were included in the draw of lots.

7. Counter affidavit has been filed on behalf of the Registrar of Co-operative Societies and Delhi Development Authority. Mr. R.N Bhardwaj appearing on behalf of Administrator, Shivaji Co-operative Group Housing Society Ltd. adopted the reply filed by the Registrar of Co-operative Societies as the reply on behalf of the Administrator also. In the reply the Registrar has stated that the draw of lot held by the Society was in violation of the directive dated 31.5.1984 It is also stated that Civic Authorities have been informed not to provide basic amenities. It is admitted that the draw of lot was not conducted by the DDA in the presence of the office bearers of the Society and the nominee of the Registrar of Co-operative Societies. Some of the members whose names were included in the draw of lot were not those whose names had been cleared by the Registrar of Co-operative Societies but were newly enrolled members. Learned Counsel for the petitioner also placed reliance on a decision of a learned Single Judge of this Court in C.W No. 4019/98 titled Ashwani Kapoor v. DDA, Volume 86 (2000) DLT 50. Learned Counsel has also placed reliance on a decision of a learned Single Judge of this Court in Sushila Devi Bhaskar v. INCHB Society Ltd., 45 (1991) DLT 518, in support of the contention that the Co-operative Societies in the allotment of land act as a medium for Government action as an intermediary between the public and the State. This is to buttress the argument that the involvement of the State functionary such as DDA has to be there in the draw of lots. In view of the foregoing discussion, and the admitted position that the draw of lot had not been held by the DDA and without the approval of the list of members by the Registrar of Co-operative Societies, there is no option, but to quash the draw of lot and direct a fresh draw of lot in accordance with the directive dated 31.5.1984 Ordered accordingly. The Administrator and the Society shall take consequential action as required for obtaining possession of the flats, if already handed over.

8. Before parting with these batch of writ petitions, it may be noted that during the course of hearing an opportunity of submissions was also provided to Mr. S.K Dubey, who is the Counsel for the petitioner in C.W No. 3375/2001 and was prior to the appointment of the Administrator, representing the erstwhile Managing Committee of the Society. Mr. S.K Dubey sought to urge that the erstwhile Managing Committee of the Society had challenged the order of supersession and the appointment of the Administrator and the hearing of the present petitions should be done alongwith the hearing of C.W No. 3375/2001, challenging the appointment of the Administrator. It was put to Mr. S.K Dubey that the issue of validity of supersession of the Managing Committee was a different one and the present issue of the validity of the draw of lot could be considered de hars and independently of the question of supersession of the Managing Committee. Mr. S.K Dubey attempted to urge that this was a case where members were habitual and persistent defaulters.

9. Be it may, the question for consideration in this writ petition is that the challenge to the draw of lots, which has been held in violation of the directive dated 31.5.1984 Request of Mr. Dubey was, therefore, declined.

Ordered accordingly.