2006 Supreme(SC) 432

2006(4) Supreme 169
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
S.B. Sinha and P.P. Naolekar, JJ.
A. Jitendernath—Appellant
versus
Jubilee Hills Coop. House Bld. Soc. & Anr.—Respondents
Civil Appeal Nos. 306-307 of 2005
Decided on 2-5-2006
Counsel for the Parties :
For the Appellant : S. Muralidhar, G. Seshagiri Rao, A. Raghunath, Advocates.
For the Respondents : H.S. Gururaja, T.L.V. Iyer, L. Nageswara Rao, M.N. Rao, Sr. Advocates, G. Ramkrishna Prasad, Y. Raja Gopala Rao, Y. Ramesh, K. Maruthi Rao, Mrs. K. Radha, Mrs. Anjani Aiyagari, D. Mahesh Babu, Ms. Promila, Advocates.

IMPORTANT POINT
The Cooperative Society having been formed for the purpose of allotment of plots to its members must strictly and scrupulously follow the statutory rules as also the bye-laws framed by it.

Headnote:(i) Andhra Pradesh Cooperative Societies Act, 1964—Bye-laws 19 to 22—Allotment of plots to members—Non-payment of development charges on death of a member—Application for transfer of membership and for allotment of a new site—Conduct of Society being deplorable—Respondent Society is directed to consider question of allotment amongst its members upon strict compliance of extant rules.(Paras 55 to 57)

       (ii) Andhra Pradesh Cooperative Societies Act, 1964—Allotment of plots to members—Cancellation of allotment for non payment of development charges—Validity—Father of one ‘S’ and mother of appellant were members of that Society—Society intended to allot one plot to the family of the member concerned—A plot No. 39 admeasuring 600 sq. yards was allotted in favour of appellant’s mother—Mother of appellant had expired on 15-8-1977 but it was not notified to the Society—Plot No. 39 was allotted in her favour on a provisional basis by the society on 20-6-1982—No payment was made on or before 30-11-1982, specified date for confirmation of allotment of plot—On 6-8-1983, ‘S’ was admitted as a member of the Society—Plot No. 39 was allotted in his favour—On request of appellant, membership had been transferred to him—However, no allotment made in favour of appellant—Conduct of Society was not fair—Whether in view of the conduct of the respondent Society, appellant should be monetarily compensated—(Yes).

       Held : The Appellant became a member of the Cooperative Society in place of his mother. As a member of a Society, nobody had a right to be allotted a plot far less a particular plot. Plot No. 39 was indisputably allotted in favour of his mother. But before the provisional allotment could fructify by making a formal allotment and executing a deed of sale in her favour, she had expired. This fact was not communicated by the Appellant to the First Respondent - Society for a long time. He in his letter dated 16.3.1985 accepted that he was out of Hyderabad for more than two and half years. He did not deny or dispute that in the mean time the Society issued several letters in the name of all allottees to deposit the development cost. A notice had also been issued to all the allottees asking them to deposit the development charges failing which the order of allotment would stand cancelled. It stands admitted that the development charges had not been deposited in respect of plot No. 39. It may be that normal letter of cancellation of the said plot was issued but in view of the admitted position that the requirements as contained in letter dated 30.9.1982 of the First Respondent having not been complied with, the allotment would in law, be deemed to be cancelled.(Para 32)

       An inference as regards cancellation of the said allotment must be drawn in view of the fact that plot No. 39 admittedly was allotted in favour of Mr. Srinivas. Even if there had been no express cancellation of allotment of the said plot, by reason of a fresh allotment, the provisional allotment made in favour of mother of the appellant must be held to have come to an end. The allotment of plot No. 39 in favour of the mother of the Appellant was a provisional one. By reason of such provisional allotment, the allottee did not derive any legal right far less an indefeasible right. Such provisional allotment would have acquired permanence provided the requirements therefor were complied with.(Para 33)

       Furthermore, the Appellant in its letter dated 16.3.1985 requested for allotment of another site in lieu of plot No. 39 in Phase III as the same had been given to someone else. He was informed thereabout. He never put forward his case before the First Respondent to allot plot No. 39 in his favour upon cancellation of such allotment made in favour of Mr. Srinivas. Even in his other letters, similar requests were made. The Appellant was also aware of the fact that allotment made in favour of her mother had been cancelled due to non-payment of the development charges. He had specifically asked for allotment of another site wherefor he was even ready to make extra-payment. He had, thus, consistently been asking for allotment of a new plot. He despite such knowledge that allotment of plot No. 39 made in favour of his mother had been cancelled and subsequently made in favour of somebody else, while questioning the refusal on the part of the First Respondent herein to allot another plot in his favour and initiating the arbitration proceeding only prayed for an order of injunction restraining the Society from allotting plot No. 39 to any other member of the Society. His main prayer, however, was that an allotment of an alternative plot in the same block to the extent of 600 sq. yards be made and the vacant possession thereof be delivered.(Para 34)

       It is beyond any cavil of doubt that the conduct of the First Respondent-Society was not fair. When it had made an allotment in favour of Mr. Srinivas, it was obligatory on its part of disclose all the facts before the Registrar so as to enable him to arrive at an independent opinion. It failed and neglected to do so and, thus, it created all sorts of confusions.(Para 35)

       Despite knowledge, that plot No. 39 has been allotted to somebody else, the Appellant did not make the said Srinivas a party in his application before the Registrar. Ex facie the award being in violation of the principles of natural justice would be a nullity.(Para 47)

       It is true that even in the suit filed by the Second Respondent herein against the First Respondent being OS No. 3702 of 1992 the Appellant was not impleaded as a party. The decree passed, therefore, may not be binding on the Appellant. For the self-same reasons we have assigned hereinbefore, the said decree may not operate as a res judicata but we have to consider the matter from a different angle. The Second Respondent did not enforce the decree as against the Appellant herein where as the award, in view of the peculiar facts and circumstances of this case, was required to be enforced by the Executing Court as against the Second Respondent besides the First Respondent herein and in that view of the matter the Second Respondent in law could file an appropriate application not only for his impleadment but also to show that the award is not enforceable in law.(Para 51)

       The question which now arises for consideration is that what would be the effect of allotment of plot No. 400 in Phase III by the First Respondent during pendency of the proceedings before this Court. We have noticed hereinbefore that this Court, while asking the learned counsel appearing on behalf of the First Respondent, was of the opinion that interest of justice may be subserved if some plot which was available for allotment could be directed to be allotted in favour of the Appellant herein. A representation was made, which now turns out to be wrong, on behalf of the First Respondent that the plot No. 400 was available for allotment. It was in that situation, the offer of the First Respondent as regard allotment of the said plot to the Appellant was accepted. The Appellate paid a huge sum therefor. The said amount has also been appropriated by the First Respondent. However, in law only because an order of allotment has been issued in favour of the Appellant herein by the First Respondent, the same by itself would not mean that thereby the right of the others for being considered therefor or for that matter any other plot which was available for allotment could be put in jeopardy. This Court whence proceeded to consider the matter of allotment of another plot in favour of the Appellant by the First Respondent, it had evidently in its mind that same plot may be available for allotment but by reason thereof, the right of somebody else was not meant to be nor could be affected. Even in exercise of its jurisdiction under Article 142 of the Constitution while making an attempt to do complete justice to the parties this Court cannot pass an order which could cause injustice to others and in particular to those who are not before it. The correctness or otherwise of the contentions raised by the impleaded parties, thus, need not be gone into. We must, however, place on record that our attention has been drawn to the fact that several proceedings as regard allotment of plot at the hands of the society are pending adjudication before several forums. Even a direction has been issued by a Cooperative Tribunal as regard allotment of plot No. 400. It goes without saying that the courts of law would always see to it that while making allotment of plot by a cooperative society, no discrimination is caused amongst the members. The Cooperative Society having been formed for the purpose of allotment of plots to its members must strictly and scrupulously follow the statutory rules as also the bye-laws framed by it. It must also act within the four corners not only of the statute and statutory rules but also the bye-laws framed by it. In terms of the extent law, seniority rule would govern the matter of allotment of land amongst the members of the Society. This Court is not in a position to determine the inter se dispute, if any, even as regard the seniority amongst the members. In fact this Court has not been called upon to do so nor in view of the lis between the parties we can go thereinto. Whether the Appellant would be senior in the matter of allotment of plot over the others is a disputed question of fact. Such disputed question of fact, as and when any occasion arises therefor, must be gone into and adjudicated upon by an appropriate forum. The Appellant as a member has a right, although not indefeasible, to be considered for allotment of a plot along with other members similarly situated. Such a right, therefore, could not have been taken away nor directed to be taken away by any court of law.(Para 54)

       We, therefore, are of the opinion that interest of justice would be sub-served if the First Respondent is directed to consider the question of allotment amongst its members upon strict compliance of the extant rules including its bye-laws wherefor cases of all persons eligible therefor must be considered.(Para 55)

       This brings to the fore another question viz. as to whether, in view of the conduct of the First Respondent, the Appellant should be monetarily compensated. We think so. The First Respondent despite the knowledge that the award dated 22.4.1991 was not enforceable appears to have taken some amount from the Appellant. It compelled the Appellant to fight litigations before various forums. The Appellant also had to initiate an execution proceeding for execution of the award passed by the Registrar. It succeeded at least before one court. Even before this Court, a wrong representation was made by the First Respondent that plot No. 400 was available for allotment to the Appellant. The said representation was turned to be wrong. As we are not in a position to consider the correctness or otherwise of one representation or the other by the First Respondent herein as also the contentions raised by the impleaded parties, we are of the opinion that the conduct of the First Respondent is deplorable. It being a Society was obligated to render all assistance to this Court so as to enable it in turn to render a decision in accordance with law. It could not have made any mis-representation before us. We are not bothered as to whether at the relevant point of time the First Respondent was represented by an Administrator or an elected body. It was admitted being represented who could do so before us in law.(Para 57)

       We, therefore, direct the Registrar of the Cooperative Society to initiate an enquiry against the persons concerned who were responsible for making a wrong representation before us and take suitable action against them in accordance with law. We further direct that all amounts deposited by the Appellant before the First Respondent be refunded to him with penal interest at the rate of 24% per annum, subject, of course, to deduction of such amount to which the First Respondent was entitled to for admitting him as a member of the Society. The First Respondent shall also pay a further sum of Rs. 1,00,000/- (Rupees one lakh only) to the Appellant herein by way of compensation. The First Respondent shall also pay a sum of Rs. 1,00,000/- (Rupees one lakh only) to the Second Respondent by way of compensation. Such payments be made to them within a period of four weeks from date. The First Respondent shall be at liberty to recover the amount of interest as also the amount of compensation directed to be paid to the Appellant herein from such persons who may be found responsible therefor.(Para 58)